July 2017On June 19, 2017, a petition for certiorari was filed with the U.S. Supreme Court in the case of Price v. Director, OWCP [Longnecker Properties], Docket No. 16-1523 [see April 2017 Longshore Update]. The question presented is, “Did the three tribunals below -- the Administrative Law Judge, the Benefits Review Board, and the Fifth Circuit Court of Appeals -- employ the proper legal standard to evaluate the Claimant's prima facie cases under section 20(a) of the Act?" The Petition involves the interpretation and application of the presumption that is contained within section 20(a) of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950.
On May 26, 2017, a petition for certiorari was filed with the U.S. Supreme Court in the case of Dallas v. United States of America, Docket No. 16-1434 [see October 2016 Longshore Update]. The question presented is whether the Judicial Branch overreached its authority by ignoring the language that Congress inserted into 5 U.S.C. §8116(c) that exempted "a master or member of the crew of a vessel" from FECA's exclusive remedy provision? This was a case in which the Fifth Circuit affirmed the district court’s holding that FECA precluded Jones Act and general maritime claims by civil service employees of the United States.
On June 12, 2017, the U.S. Supreme Court denied the petition for certiorari in the case of Tanner Services, LLC v. Guidry, Docket No.16-1280, [see November 2016 Longshore Update]. The two questions presented in the case were, “Do the duties of a land-based worker, who is welding a bulkhead for a dock, “take him to sea” when his work extends no farther from land than the welding leads to his pick-up truck or the leads from a docked barge, contrary to the decisions of this Court, the Ninth Circuit, the Eleventh Circuit, and the Maryland courts?, and Can a worker who spends only 5 percent of his employment with his employer on vessels satisfy the 30 percent rule of thumb for the duration test when he had not undergone a permanent change in his essential duties, contrary to the decisions of this Court and the Fifth Circuit?”
GEORGIA PORTS AUTHORITY NOT ENTITLED TO 11THAMENDMENT IMMUNITY
GEORGIA PORTS AUTHORITY V. LAWYER
This lawsuit arose out of Bruce Lawyer's claim for damages based his alleged injury while in the course of his employment as a longshoreman working aboard a vessel docked at a Georgia Ports Authority (GPA) facility. Lawyer contended his injuries arose out of the negligent acts of a GPA employee, who negligently operated a crane while loading the cargo onto the ship. As a result of this negligence, a heavy metal twist lock was knocked off a container and struck Lawyer in the head, causing alleged injuries to Lawyer. Mr. Lawyer subsequently brought this suit against GPA, stating causes of action for negligence under both state law as well as federal admiralty and maritime law. GPA moved to dismiss Lawyer's claims brought under maritime and admiralty law, claiming it was entitled to Eleventh Amendment immunity from suit on such claims. The court deferred ruling on the motion because, in addition to the disputed maritime and admiralty claims, Lawyer was also seeking relief under state law for the same tortious conduct, and it was undisputed that there was a limited waiver of state conferred immunity up to $1,000,000.00 for these state law claims brought under the Georgia Tort Claims Act. Following a trial, the jury rendered a verdict in favor of Lawyer and against GPA in the amount of $4,500,000.00, with 100 percent of the fault apportioned to GPA. Following the jury’s verdict, the court took up GPA’s immunity claim. In considering the issue of immunity, the court primarily relied on Hines v. Georgia Ports Authority and Misener Marine Construction. Inc. v. Norfolk Dredging Co., which both utilized the same analysis in order to determine the key question of whether GPA was an "arm of the state" such that it was entitled to Eleventh Amendment immunity from federal maritime and admiralty tort claims brought in state court; or whether it was a "lesser entity" that is not an "arm of the state" and not entitled to Eleventh Amendment immunity. After considering the Hines factors, the court found that none of them weighed in favor of immunity. In considering the purpose of Eleventh Amendment immunity and in balancing the appropriate factors, the court found that the evidence failed to show that GPA was an arm of the state that was entitled to Eleventh Amendment immunity. Thus, the court concluded that GPA was not entitled to immunity and was instead subject to suit for federal maritime and admiralty tort claims. GPA's motion to dismiss was denied and the court entered judgment against GPA for the full amount of the jury's $4,500,000.00 verdict [see July 2016 Longshore Update]. GPA appealed the trial court’s judgment, arguing that the trial court erred in finding that the GPA was not an instrumentality of the State and therefore was not entitled to immunity from suit under the Eleventh Amendment to the United States Constitution. Additionally, the GPA contended that the trial court erred in denying its motion for a directed verdict on Lawyer's maritime claim because Lawyer failed to come forward with any evidence that his injury occurred on navigable waters. The appellate court pointed out that it was bound by the Georgia Supreme Court's holding that the GPA is not entitled to immunity under the Eleventh Amendment, and affirmed the trial court's denial of the GPA's motion to dismiss Lawyer's maritime claim. In its second enumeration of error, GPA contended that the trial court erred in denying its motion for directed verdict on Lawyer's maritime claim because he failed to present any evidence that the accident in question occurred on navigable waters. The appellate court found that this argument ignored the admissions contained in the GPA's answer to Lawyer's complaint. Accordingly, the appellate court found no error in the trial court's denial of the GPA's motion for a directed verdict on Lawyer's claim under federal maritime law. The appellate court affirmed both the denial of the GPA's motion to dismiss for lack of subject matter jurisdiction and the denial of its motion for a directed verdict. (Ga. 5th App. Ct., June 28, 2017) 2017 Ga. App. LEXIS 325
Updater Note: My sincere thanks to Brian McElreath, of Lueder, Larkin & Hunter, LLC, Mt. Pleasant, SC, for sharing this important opinion with me.
BORROWING EMPLOYER ALLEGATION DENIED ON SUMMARY JUDGMENT (CONT.)
IN RE: COOPER MARINE & TIMBERLANDS CORPORATION
Two wrongful death cases were consolidated for discovery because the decedents, Juan Nieves and Nicolas Perez Hernandez, were killed in the same accident while unloading steel coils from a barge as workers for Kinder Morgan Bulk Terminals, Inc. In addition to three Kinder Morgan entities, the decedents' estates sued the manufacturer of the steel coils, the company that loaded the steel coils onto the barge, and the company whose tug took custody of the barges and delivered them to a Kinder Morgan Marine Services fleet terminal in Arkansas. The defendants other than the Kinder Morgan entities have asserted third-party claims against two staffing agencies that supplied Nieves and Hernandez to Kinder Morgan. The staffing agencies moved for summary judgment. Temps Plus, Inc. and Dawson Employment Service, Inc. supplied workers at the request of Kinder Morgan. Both Nieves and Hernandez remained on the payrolls of the respective staffing agencies while continuing to work for Kinder Morgan until the incident that caused their deaths. Kinder Morgan's agreement with both agencies provided for Kinder Morgan to pay at markup rate for longshore and harbor positions. Temps Plus was never informed by Kinder Morgan that Nieves was working on a barge or in any other capacity that required coverage under the LHWCA. Dawson, in contrast, had a record showing that Hernandez's classification was changed, and he was moved to a position that required coverage under the LHWCA. The contracts between Kinder Morgan and the staffing agencies provided that no worker placed by the staffing agencies with Kinder Morgan would be deemed an employee of Kinder Morgan, and the workers were paid and insured by the staffing agencies. The steel coils that were being unloaded weighed more than thirty tons each. The first barge was unloaded without incident. At some point while the second barge was being unloaded, one or more of the coils rolled to a side, which caused the barge to list and then to sink, and Nieves and Hernandez were killed. Dawson and Temps Plus filed substantially similar motions for summary judgment, arguing that they were immune from liability as employers of Nieves and Hernandez under the LHWCA. In the alternative, they argued that they had no common-law duty to train Nieves and Hernandez. Logistic Services and Steel Dynamics disagreed, arguing the Act permits only one immune employer for each employee and contended that genuine disputes of material fact remain as to whether Kinder Morgan was the employer entitled to immunity under the Act or whether the staffing agencies were. Kinder Morgan previously filed a motion for summary judgment asserting as a matter of law that it was a borrowing employer entitled to immunity under the Act. The court denied that motion because Kinder Morgan failed to show that there was not a genuine dispute of material fact as to whether it was a borrowing employer [see January 2017 Longshore Update]. Steel Dynamics and Logistic Services argued that since the Act permits only one immune employer for an employee, and since the court had previously determined that a genuine dispute of material fact existed as to whether Kinder Morgan was a borrowing employer, the motions for summary judgment filed by Temps Plus and Dawson must be denied. As to the staffing agencies' alternative argument, Steel Dynamics and Logistic Services contend that the contracts between Kinder Morgan and the staffing agencies obligated the staffing agencies to train Nieves and Hernandez, and that those contractual obligations gave rise to a common-law duty that was breached. The court noted that neither Steel Dynamics nor Logistic Services had cited a case holding that there can be only one immune employer under the LHWCA. The common-law rule acknowledges that an employee may have two masters if the service to one does not involve abandonment of the other. The court also noted that, in Spinks, the Fifth Circuit has held that under the Jones Act a staffing agency that provided an employee to an oil company remained an employer under the Jones Act even though the employee was the borrowed servant of the oil company. Holding dual employers jointly and severally liable guarantees that an injured employee will not go without compensation benefits while the employers battle to determine which is liable. Here, Temps Plus employed Nieves and provided compensation as required by section 904. Dawson did the same for Hernandez. Temps Plus and Dawson were therefore immune from tort liability and were entitled to summary judgment. The court also held that the staffing agencies also prevailed under their alternative argument that they owed no duty to train Nieves and Hernandez on how to unload steel coils from barges or ensure that they were qualified to do so. The motions for summary judgment filed by Temps Plus and Dawson were granted. (USDC EDAR, June 8, 2017) 2017 U.S. Dist. LEXIS 87996
Updater Note: This was a very interesting case, in that it addressed a question that has gone unanswered by the courts for some time . . . can a LHWCA employee have both a nominal and borrowing employer? While this case is certainly not a definitive answer, it definitely seems to point in the affirmative direction.
COURT FINDS PORT PROTECTED BY SOVEREIGN IMMUNITY (CONT.)
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 and punitive damages; alternatively, he brought claims under the Jones Act as a seaman, and alternatively, 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 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 argued that it was 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. 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. The MTCA governed Welch's remaining claims against the Port. 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 [see April 2017 Longshore Update]. Welch then moved to alter the court's order granting Greenville Port Commission's motion for partial summary judgment dated March 10, 2017, alleging that the Port was liable under state law for general negligence and under general maritime law for unseaworthiness. The court noted that, as related to the MTCA, its prior order addressed only whether that act's limitation on compensatory damages and prohibition of punitive damages in tort suits against political subdivisions applied to a state cause of action for negligence asserted in federal court. The order did not address the issue of whether the state statutory damages limitations applied to a general maritime claim for negligence. The court finds it proper to address such issue in the instant order. After examining the factors to be examined in order to determine whether state law is preempted by maritime law, the court found that the damage limitations provisions of the MTCA did not apply to Welch's claims for general maritime negligence against the Port in as much as the state law would limit his rights to the recovery otherwise available under general maritime law. As such, the damage limitations were preempted by general maritime law, since the Fifth Circuit has held that while state law may supplement federal maritime law, state law may not conflict with federal maritime law, as it would be redefining the requirements or limits of a remedy available at admiralty. The court found the Port’s arguments to the contrary to be without merit. Accordingly, the court held that the damages limitations of the MTCA did not apply to Welch's claim for negligence under general maritime law. (USDC NDMS, June 1, 2017) 2017 U.S. Dist. LEXIS 83983
In a separate ruling in the same case, the court addressed Prop Transport’s amended motion to set aside default. After examining the time line, of the various motions and amended pleadings, addressing the balancing factors to determine whether to set aside the entry of default, the court found good cause to do so was present. Prop Transport contended it inadvertently, rather than willfully or intentionally, failed to timely file its answer after its motion to dismiss was denied. This assertion was certainly plausible in light of Welch’s own failure to bring the omission to the court's attention for over three months while continuing to actively litigate with Prop Transport. Given both Welch’s and Prop Transport's active prosecution and defense of the case, albeit while apparently both overlooking the fact that no formal answer had been filed, the court found good cause for setting aside the entry of default. Prop Transport's motion was granted. (USDC NDMS, June 1, 2017) 2017 U.S. Dist. LEXIS 83984
LHWCA SETTLEMENT APPROVAL INSUFFICIENT FOR PERSONAL JURISDICTION
ROLLO V. ESCOBEDO, ET AL.
Robert Rollo brought this legal malpractice action against George P. Escobedo and Carabin & Shaw, P.C., in connection with a foot injury he allegedly suffered while doing construction work for a Texas-based defense contractor at Al Assad, a United States defense base in Iraq. Because of that injury, Rollo was allegedly unable to work and sought compensation under the Defense Base Act, which incorporates the provisions of the LHWCA. Seeking representation for his claim, Rollo contacted the Texas law firm, Carabin Shaw, who referred him to Escobedo. Rollo retained Escobedo to represent him for his claims after a dispute arose between Rollo and the contractor relating to the nature and extent of his benefits. The parties elected to submit the dispute to mediation, and reached a settlement, which was approved by the District Director. Nearly three years after the approval of that settlement, Rollo filed this action, claiming that Escobedo failed to adequately represent him during the mediation and settlement process, because he was unprepared for the mediation and never explained the terms of the settlement agreement to him. Escobedo and Carabin Shaw moved separately to dismiss the complaint for lack of personal jurisdiction. The court noted that Rocco, a Scottish citizen, retained a Texas attorney to represent him in Scotland for injuries that occurred in Iraq. The only argument for establishing jurisdiction rested on the requirement for formal approval by the District Director, who happened to be located in New York. But, throughout his engagement, Escobedo performed all legal work in Texas and Scotland. Nevertheless, Rollo argued that jurisdiction was appropriate because any appeal from the District Director's determination would have been heard by the Second Circuit. However, the court pointed out that no appeal was taken. Additionally, approval of the settlement was a purely administrative task too tenuous to rise to the "the nature and quality" sufficient to subject someone to jurisdiction. Accordingly, the court concluded that it lacks jurisdiction over Escobedo. Finally, because it lacked jurisdiction over Escobedo, jurisdiction cannot be imputed to Carabin Shaw and the agency theory of personal jurisdiction necessarily failed. Defendants' motions to dismiss were granted and the complaint is dismissed without prejudice to refiling in a court where personal jurisdiction exists. (USDC SDNY, June 15, 2017) 2017 U.S. Dist. LEXIS 92415
COURT REFUSES TO DISMISS THIRD PARTY IN LIMITATION ACTION
IN RE: HEALY TIBBITTS BUILDERS, INC.
These consolidated admiralty limitation-of-liability petitions brought under 46 U.S.C. §§30501-30512 arise from an incident at Pearl Harbor, where two Healy Tibbitts Builders, Inc. construction employees were killed and several others allegedly were injured. Third-party defendant Owl International, Inc., d/b/a Global Government Services moved to dismiss the third-party complaint filed by Truston Technologies, Inc., citing Twombly and Iqbal, and arguing that the third-party complaint failed to allege sufficient facts that establish Global's duty, because Global did not own the buoy involved in the fatalities and alleged injuries, and Global's contract did not require Global to "maintain" the buoy. Truston responded to the motion by pointing out that Rule 14(c)(2) regarding admiralty claims applied, and required third-party defendant Global to be responsive not only to Truston's indemnity/joint liability claims, but also to claims of the plaintiffs. The court found that Truston responded on the merits with ample evidence creating a genuine issue of material fact as to Global's alleged actions and duties. For example, the evidence specifically indicates that the Navy contracted with Global to inspect, repair and refurbish the buoys. At minimum, there was a question of fact as to whether Global's duties include "maintaining" the buoys. The court was not persuaded by Global's attempt to cabin its admitted duty to "inspect, repair and refurbish" as not including a duty to "maintain" buoys. Construing the evidence in the light most favorable to the non-moving parties, Global's motion to dismiss was denied. (USDC DHI, June 15, 2017) 2017 U.S. Dist. LEXIS 92278
COURT INTERPRETS DBA PAY ISSUE UNDER AFGHANISTAN LAW
ALLEN, ET AL. V. FLUOR CORPORATION
This case was a putative class action by United States citizen plaintiffs seeking unpaid overtime pay under provisions of Article 67 of the Afghanistan Labor Code. Fluor Corporation contracted with the U.S. Army to provide non-combat logistical support. Plaintiffs alleged that they were past or present non-managerial, hourly Fluor employees who worked as contractors, providing civilian support in the form of construction, housing, transportation, fuel, meal, or laundry services for U.S. soldiers serving in Afghanistan. They asserted that Fluor paid them an annual "salary" of $45,000, classified them as exempt from overtime wages, paid them at a straight time rate for overtime hours worked rather than at the premium overtime rates required by Afghanistan law, and required that they work twelve hours per day, seven days per week, without overtime premium pay. Plaintiffs argued that, despite their classification as "exempt," their weekly compensation was paid at an hourly rate and that they performed duties typically performed by hourly, non-exempt employees. They alleged that the exempt classification and resulting failure to pay them overtime pay for overtime hours worked was unlawful because they did not satisfy the requirements of any applicable exemption to overtime laws. Fluor moved to dismiss, arguing that under the Afghanistan Labor Code, Fluor cannot be held liable to the United States citizen plaintiffs for unpaid overtime pay. Fluor also contended that the use and cost of contractors in a theater of war is a sensitive military matter that should be insulated from judicial scrutiny as a political question, and U.S. courts are ill-suited to decide questions of Afghan law, which derives from a different legal culture and regulates a much different economy. Plaintiffs opposed Fluor’s motion, responding that their claim was suited to judicial resolution because it was an employment dispute between a private company and its employees, which does not significantly touch on U.S. military operations or foreign affairs. The court concluded that resolution of plaintiffs' cause of action did not require an impermissible judicial review of military or foreign affairs decisions and the case did not present a non-justiciable political question, and the court declined to dismiss plaintiffs' lawsuit for lack of jurisdiction. The court concluded that Fluor was not entitled to immunity from the application of foreign law based on its status as a private military contractor. Accordingly, the court concluded that it had subject matter jurisdiction to apply local civil law to a private military contractor that provides non-combat logistical support services. Finally, the court addressed Fluor’s contention that it was not liable under the Afghanistan Labor Code because, according to Article 6(1), the Code applied to foreign citizens only if they obtained a work permit. Fluor maintained that U.S. contractor employees were exempted from obtaining work permits by BSA Article 11(2). According to Fluor, this interpretation was consistent with guidance that the United States has given to its contractors exemption from the Afghanistan Labor Code. Based on the evidence of foreign law submitted by the parties, including expert declarations, the court concluded that the Afghanistan Labor Code did not apply to plaintiffs. The Code, by its terms, applies to foreign citizens who have obtained or will later obtain work permits, and not to other foreign citizens. Accordingly, the court concluded that plaintiffs' first amended complaint did not state a claim on which relief could be granted. Accordingly, the court granted Fluor's amended motion to dismiss and dismissed the action with prejudice. (USDC NDTX, June 15, 2017) 2017 U.S. Dist. LEXIS 92443
BRB CONTINUES TO MAKE A FRIVOLOUS RULINGS IN HEARING LOSS CASES
ROY V. COOPER/T. SMITH, INCORPORATED, ET AL.
Melvin Roy worked as a longshoreman for at least 20 years until 1991, when he retired. During his career, he worked for Cooper/T. Smith, Inc., Ryan Walsh, and Ports of America. Roy’s last day of work was for Cooper on September 11, 1991. Roy’s second to last day of work was for Ryan Walsh and Roy testified that he was exposed to noise while working for both employers. On April 5, 2012, Roy underwent an audiogram which showed a 31.9% in the left ear and 28.1% in the right ear with a 33.8% binaural impairment, which included 5% for tinnitus. Following a formal hearing on the LHWCA claim that Roy subsequently filed, the ALJ found Roy’s testimony to be credible, in particular his testimony that his last day of work occurred on September 11, 1991. However, the ALJ also stated that he could not accord significant probative value to Roy’s testimony regarding his overall working conditions on his last day of employment with Cooper on September 11, 1991 “because his testimony was vague and, at times, he could not recall any factual details about his working conditions.” The ALJ specifically noted that claimant’s testimony on direct examination differed somewhat from his responses on cross-examination because on cross, he could not remember what he was doing on the ship on his last day, whereas, on direct, when asked if he worked in the hold with pipes, steel, and coil and if it was “noisy,” claimant answered simply, “yes.” The ALJ found that Roy’s 2012 audiogram was not presumptive evidence of a hearing loss under 20 C.F.R. §702.441 because the ALJ was unable to determine who actually administered the audiogram and the record was devoid professional credentials. Nonetheless, the ALJ went on to state that Roy “arguably” established that he suffered a hearing impairment because of his own credible, subjective complaints of symptoms. The ALJ concluded, however, that Roy did not establish the second element of a prima facie case, i.e., that conditions existed at work which could have caused the harm. Thus, the ALJ denied the claim for benefits because he found that Roy did not establish that he suffered a work-related injury. Roy appealed the ALJ’s denial of benefits, contending that the ALJ judge erred in not according the audiological report any probative weight. Roy also assigns error to the ALJ’s conclusion that he failed to establish the second element of his prima facie case. Cooper and Ryan Walsh each filed a response brief, urging affirmance. The BRB, in its infinite wisdom, agreed with Roy’s contention that the ALJ’s conclusion that the audiogram was not entitled to any probative weight was not supported by the evidence in the record. The record clearly disclosed adequate credentials on both the audiogram and the report. In addition, there were no other audiograms of record, and thus the 2012 audiogram was uncontradicted. From this evidence, the ALJ could conclude that the audiogram was presumptive of the degree of Roy’s hearing loss. The BRB, in its unquestionable understanding of the law, agreed with Roy that the ALJ did not address all the relevant evidence in the record to determine whether the evidence was sufficient to establish a prima facie case. Finally, the Board addressed Roy’s ascription of error to the ALJ’s conclusion that, although Roy had a hearing impairment as of 2012, he failed to establish that he had a measurable hearing impairment at the time he left covered employment with either Cooper or Ryan Walsh. The BRB agreed that the ALJ must reconsider this finding as well, noting that the Board had previously held that in cases of retirees alleging occupational hearing loss, it is not required that claimants recreate the precise extent of their hearing loss at the date their covered longshore employment terminated. Rather, in the absence of credible evidence regarding the extent of claimant’s hearing loss at the time he leaves covered employment, the ALJ may evaluate all the relevant evidence of record to determine the extent of the claimant’s work-related hearing loss. The administrative law judge’s decision and order denying benefits was vacated and the case was remanded for further proceedings. (USDOL BRB, May 18, 2017) BRB No. 16-0603
Updater Note: As my long-suffering readers know, I rarely review BRB cases. But this case deserves attention as a perfect illustration of what is wrong with the adjudication of hearing loss claims under the LHWCA. Here, the claimant filed a hearing loss claim 21 years after his last day of work on the waterfront, against the employer for whom he worked for that one last day, asking that his hearing loss be associated with his employment. The ALJ made a credibility determination on the basis of which he found that the claimant did not establish his prima facie case. The standard of review is very clear. The BRB must affirm the ALJ’s finding that a claimant is not a credible witness unless the credibility determination is itself inherently incredible or patently unreasonable. Not this time. The Board grasped at straws, finding a second hand report of a statement made by a claimant that the ALJ found to be non-credible, to hold that the second prong of the prima facie case could have been established. This was an absolutely horrible and overreaching decision. I hope the ALJ stick to his guns on remand.
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #281. Although you get great up-to-date information as a subscriber to the Longshore Update, you can use this excellent resource to keep your Judges’ Benchbook up to date. Just follow the above link to the OALJ web site.
The last full supplement to the Longshore Benchbook was published in January 2005. However, OALJ has published an index that provides a cross-reference between Benchbook Topics and U.S. Supreme Court, Federal District and Circuit Courts, and Benefits Review Board decisions, issued since 2004 and covered in OALJ's "Recent Significant Decisions Monthly Digest."
And on the Admiralty front . . .
COURT MAY NOT EXERCISE OF JURISDICTION OVER OUT-OF-STATE PLAINTIFFS
BRISTOL-MYERS SQUIBB V. SUPERIOR COURT OF CALIFORNIA
First, let me point out that, while this is not a maritime case, it is extremely important to all corporate employers on the issue of personal jurisdiction. In a suit brought by plaintiffs, most of whom were not California residents, against Bristol-Myers Squibb Company (BMS) in California state court, alleging that the pharmaceutical company's drug Plavix had damaged their health, the Supreme Court of California's judgment concluded that BMS's 'wide ranging' contacts with the State were enough to support a finding of specific jurisdiction over the claims brought by the nonresident plaintiffs. Following on the heels of BNSF Railway Company v. Tyrrell [see June 2017 Longshore Update], the Supreme Court, by an 8-1 margin, reaffirmed the jurisdictional holding of its 2014 Daimler AG v. Bauman opinion. By reversing the California Supreme Court’s use of a “sliding scale” to find jurisdiction over out-of-state purchasers of the prescription drug Plavix, the Court emphasized that, under the 14th Amendment, a corporate defendant may only be subject to the general jurisdiction of the courts sitting in either its state of incorporation or principal place of business. In Daimler, the Court stated that a corporate defendant may only be considered “at home” for the purposes of a general jurisdiction analysis in its state of incorporation or where it operates its principal place of business. That decision was largely perceived as an attempt to curtail forum shopping by reigning in state courts’ abilities to exercise general jurisdiction over out-of-state corporate defendants. The unusual facts of Daimler, however, had left some lingering doubts about its general applicability, and lower courts were split on how to apply its holding. Some courts chose to follow a bright-line rule limiting general jurisdiction to only the state of incorporation and principal place of business, while others found more creative ways to exercise jurisdiction. The California Supreme Court fell into the latter category. The eight complaints at issue were filed in San Francisco Superior Court on behalf of 678 purchasers of Plavix, which was manufactured and marketed by BMS. Of the plaintiffs, 86 were residents of California and 592 were residents of other states. BMS is a Delaware corporation headquartered in New York. While it maintains five offices and four research facilities in California, BMS did not develop or manufacture Plavix in the state. That work was done primarily in New York and New Jersey. Accordingly, BMS moved to dismiss the claims of the non-California plaintiffs for lack of personal jurisdiction. Ultimately, the California Supreme Court held that because BMS engaged in nationwide marketing and distribution efforts, a “substantial nexus” existed between the similar claims of the California and out-of-state plaintiffs, which was sufficient to subject BMS to California’s general jurisdiction. The Supreme Court granted certiorari and reversed. In so doing, Justice Alito, writing for the eight-justice majority, took the opportunity to reinforce the bright-line rule governing general jurisdiction over corporate defendants. The Court rejected the “sliding scale” approach used by the California court as an impermissible use of specific jurisdiction absent any clear connection between BMS’s activities in California and the injuries alleged by the out-of-state plaintiffs. The Court noted that its holding did not leave plaintiffs without recourse because the non-California plaintiffs may still pursue their claims in Delaware, New York, or their own home states (the place of injury). This latest opinion provides new certainty for corporations by limiting the ability of plaintiffs to shop for a favorable, yet unconnected, forum.
5TH CIRCUIT CONTINUES TO ABIDE BY FONTENOTWHEN ENFORCING INDEMNITY
INTERNATIONAL MARINE, LLC, ET AL. V. INTEGRITY FISHERIES, INC., ET AL.
This case involved an allision causing significant damage to a submerged mooring line for a mobile offshore drilling unit used by Shell Offshore, Inc., to conduct drilling operations. The principal dispute before the court concerned whether third parties were contractually obligated to pay for that damage. Tesla, an offshore survey company, was tasked with performing an archaeological sonar survey. in the Gulf of Mexico. To perform this survey, Tesla required two vessels: a larger vessel, called the "tow vessel," and a smaller vessel, called the "chase vessel." Tesla contracted with International Marine, LLC and International Offshore Services, LLC to provide and operate the tow vessel. As to the chase vessel, Tesla initially contracted with Integrity Fishers, Inc., but after Integrity's vessel developed mechanical issues, Integrity substituted a different chase vessel owned and operated by Sea Eagle Fisheries, Inc. The tow vessel traveled along a survey grid while towing a "towfish," owned by Tesla. The towfish was attached to a cable, nearly two miles long, and was towed close to the bottom of the ocean, where it emitted sonar signals and transmitted the echo of those signals to Tesla equipment on the chase vessel. Tesla personnel, rather than the crew of the chase vessel, operated the Tesla equipment. The precipitating incident for this litigation was an allision between the towfish cable and a submerged mooring line for the mobile offshore drilling unit. The contractual relationships between Tesla, Integrity, and Sea Eagle were set out in two identical master service agreements ("MSAs"). The insurance obligations purchased under the MSAs were required to be independent of the indemnity obligations contained in the contract and to apply regardless of whether the indemnity provisions contained in the contract were enforceable. The insurers filed three motions to dismiss. The district court, however, never explicitly decided these motions. While they were still pending, Integrity and Sea Eagle filed motions for summary judgment. Tesla and International responded with their own cross-motions for summary judgment. The district court granted Integrity's and Sea Eagle's motions and denied Tesla's and International's motions, concluding that Shell's claims for damages based on the incident did not arise out of, and were not related to, the operation of the chase vessel. Furthermore, because it found that there was no indemnity obligation, the district court also concluded that the insurers did not have any obligations to Tesla or International, and it dismissed all claims against the insurers. Tesla and International timely appealed. The appellate court noted that, when two vessels and the party for whom they were working are involved in the same operation, but the indemnitor is not at fault, its being involved in the same operation is not enough to trigger indemnity when the obligation provides that the accident must arise out of or be related to, the operation of the innocent vessel. The indemnitee’s negligence must be connected to the operations of the indemnitor. The appellate court noted that it continues to subscribe to the general rule articulated in Fontenotthat indemnity agreements containing language such as "arising out of" should be read broadly, and it is only when the alleged indemnitor’s contractual performance is completely independent of another party’s negligent act that caused damage, that the court will find the indemnity obligation is not triggered. The insurance provisions of the contracts provided that the indemnitor would provide insurance coverage for “third party claims arising out of or connected with the performance of Service hereunder,” and name the indemnitees as additional insureds. The district court held that, as the indemnity failed, the additional insured obligation also failed. The appellate court reversed, however, because the insurance policies were not in evidence. As additional insured status is determined from the insurance policy, and the policy provisions could be broader than the contract, the case had to be remanded to consider the policy language. The appellate court affirmed in part and vacated and remanded in part. (5th Cir, June 21, 2017) 2017 U.S. App. LEXIS 11041
MAJOR OVERHAULS REMOVE CRAFTS FROM "VESSEL IN NAVIGATION" STATUS
HELIX ENERGY SOLUTIONS GROUP, INC., ET AL. V. GOLD
This case required the Texas Supreme Court to determine whether a ship taken out of service, subjected to a 20-month conversion process, and unable to engage in transportation during the entirety of the claimant's onboard employment, was "out of navigation" and thus outside the Jones Act. The court was also forced to determine whether the question could be answered as a matter of law. Helix Energy Solutions Group purchased a drill ship, with plans to convert it into a well-intervention ship. Due to the extent of the conversion, Helix turned the vessel over to the control of contractors at the shipyard for completion of the bulk of the overhaul; though, Helix employees assisted with minor repairs. Though Helix initially expected the conversion to take five or six months, unanticipated work, labor issues, and trouble procuring certain parts delayed the conversion. In total, the conversion took 20 months. Kelvin Gold, a Helix employee, was hired as an able bodied seaman at the beginning of the conversion process. During the entire time Gold worked aboard the vessel (almost five months), the vessel lacked the ability to navigate on her own due to the overhaul of her engines. Gold reported injuries allegedly suffered aboard the vessel and stopped work, and his employment with Helix ceased. Helix paid Gold maintenance and cure benefits, but terminated the payments after Gold allegedly failed to follow his doctor's orders. Gold then sued Helix and Helix's affiliated entities for additional maintenance and cure benefits as well as actual and punitive damages. Gold claimed these remedies under the Jones Act as a "seaman" aboard a "vessel in navigation." Helix disagreed that the Jones Act applied to Gold's lawsuit and moved for summary judgment on the ground that the vessel, while undergoing a major overhaul, was not a vessel in navigation. The trial court agreed and granted Helix's motion. Gold appealed, and the court of appeals reversed, observing that Helix failed to "conclusively prove that the vessel was totally deactivated or out of service for an extended period of time before Gold's injury. In turn, the appellate court held that a reasonable fact-finder could determine, based on the vessel’s physical characteristics and activities, that the ship was designed to a practical degree for carrying people or things over water, and that the vessel’s use as a means of transportation on water was a practical possibility. The Texas Supreme Court granted Helix's petition for review. The high court initially noted that Gold was employed in anticipation of being an offshore worker, and his duties plainly contributed to the function of the vessel. Helix did not contend that Gold's job description that rendered him outside Jones Act coverage; Helix simply argued that the vessel’s conversion took her out of navigation and that a Jones Act seaman must bear a requisite connection-one that is "substantial in terms of both its duration and its nature"-to a vessel in navigation. Prior to Helix's purchase of the vessel, the drill ship functioned as a seafaring vessel and the conversion, though giving her an added well-servicing capacity, did nothing to change her transportation-facilitating design. Helix did not suggest otherwise. Different entirely, though also under the vessel-in-navigation umbrella, is the principle that major renovations can take a ship out of navigation, even though its use before and after the work will be the same. The high court emphasized that the distinction between routine, temporary repairs and major overhauls was not an arbitrary one. The distinction made good sense in the greater context of the Jones Act, which codified "a feature of maritime law compensating or offsetting the special hazards and disadvantages to which they who go down to sea in ships are subjected. When a maritime worker suffers an injury during a routine repair, the worker's injury can easily be attributed to a risk associated with going down to the sea in ships. But a maritime worker whose only connection is to a ship undergoing a non-routine, major overhaul incurs risks more akin to those faced by land-based construction workers-a danger better addressed by the LHWCA. The high court observed that, in Stewart the Supreme Court appeared to have clarified that only overhauls that render ships practically incapable of transportation will take those ships out of navigation. Whether a vessel is or is not “in navigation” for Jones Act purposes is a fact-intensive question that is normally for the jury and not the court to decide. However, the high court found that the vessel’s extensive overhaul did, in fact, render her incapable of self-transportation during the entirety of Gold's onboard employment. If, at the end of the day, Helix
conclusively negated the "in-navigation" piece of the equation, the other variables become immaterial. Helix argued that the appellate court misread Stewartand in effect tied in-navigation status to whether a ship was expected to sail again. Helix maintained that this standard cannot comport with the well-established rule that major overhauls take ships out of navigation. The high court agreed with Helix that the court of appeals misconstrued Stewartand thereby skewed the threshold for summary judgment. If mere expectation that a ship will return to sea was enough to create a fact question on in-navigation status, the precedential value of countless major overhaul cases would crumble. Major overhauls often occur with the precise goal of returning a ship to sea. In fact, Stewart did just the opposite; it reaffirmed West-the quintessential overhaul case. The high court also pointed out that whether an overhaul takes a vessel out of navigation is not decided by looking at the timing of the plaintiff's injury. In an overhaul case, the in-navigation inquiry depends on the status of the ship and the extensiveness of the overhaul. If the project is extensive enough to take a vessel out of navigation, it matters not whether the claimant suffered his or her injury early or late in the process. Consequently, the high court held that Helix conclusively established the above matters concerning the vessel and the extent of her conversion, took her out of navigation. All in all, because Gold must have had a substantial connection to a vessel in navigation, and because he had no vessel in navigation upon which to connect, Gold was not a Jones Act seaman for the purposes of this lawsuit. Notwithstanding a dissenting opinion, the high court majority held that major overhauls that render watercraft practically incapable of transportation are sufficient to remove those crafts from "vessel in navigation" status. As the Supreme Court has said time and again, analyzing that issue will often involve fact questions worthy of jury consideration. But here, absent any such disputes about relevant facts, and faced with conclusive proof above and beyond the threshold for summary judgment, the high court held as a matter of law that the vessel was not in navigation and therefore that the Jones Act did not apply during the course of Gold's employment. Because the court of appeals held otherwise, the high court reversed, and we reinstated the trial court's summary judgment in favor of Helix. (Tex. Sup. Ct., June 16, 2017) 2017 Tex. LEXIS 561
LOUISIANA SUPREME COURT DEFINES “GOOD FAITH” FOR THE 5TH CIRCUIT
BORCIK V. CROSBY TUGS, LLC
Eric Borcik brought a whistleblower suit against Crosby Tugs, alleging that Crosby had fired him in retaliation for reporting environmental violations. Under Louisiana law, Borcik could only recover if he reported the violation in "good faith." The case was tried to a jury, which was instructed that "good faith" meant that "the plaintiff had an honest belief that an environmental violation occurred and that he did not report it either to seek an unfair advantage or to try to harm his employer or another employee." The jury found via special interrogatory that Borcik did not report the violation in good faith, resulting in a defense verdict. Borcik appealed, arguing that the district court erred by failing to instruct the jury correctly on the definition of "good faith." The appellate court determined that it was not in a position to make an Erie guess as to the meaning of "good faith" and certified the question to the Louisiana Supreme Court. The Louisiana Supreme Court accepted the question and answered it as follows: “The term ‘good faith,’ as used in R.S. 30:2027, means an employee is acting with an honest belief that a violation of an environmental law, rule, or regulation occurred.” Based on the definition of the term provided by the Louisiana Supreme Court, the appellate court concluded that the district court erred by instructing the jury that "good faith" required more than "an honest belief that a violation of an environmental law, rule, or regulation occurred." The language that the employee did not report the violation to seek an unfair advantage or to harm his employer or another employee is not grounded in the statute and should not have been in the instruction. Accordingly, the appellate court remanded the case for such orders and further proceedings as the district court, in its discretion, deemed necessary and appropriate. (5thCir, June 1, 2017) 2017 U.S. App. LEXIS 9734
5TH CIRCUIT GIVES A LESSON IN THE FEDERAL RULES OF CIVIL PROCEDURE
LEE V. OFFSHORE LOGISTICAL AND TRANSPORT, LLC
Elwood Lee appealed the summary judgment entered against him in favor of Offshore Logistical & Transports LLC on his Jones Act and maritime claims for negligence and unseaworthiness arising out of an alleged injury Lee suffered. The appellate court began by observing that the appeal turned on the procedural ruling of the district court. Lee claimed that he was employed by Offshore, and fell while walking on the decks of its vessel. Offshore filed a motion for summary judgment challenging various aspects of Lee's proof. Ultimately, the district court concluded that Lee failed to bring forward evidence that would support a finding of causation between Offshore's acts or omissions and Lee's injuries. In so doing, the district court discounted as inadmissible the signed but unsworn report of the captain, which Lee filed in the record. The district court did not make a finding that the report could not be placed in admissible form. In discounting the captain’s opinions, the appellate court found that the district court relied on a prior version of FRCP 56 and cases thereunder, specifically old Rule 56(e) regarding affidavits. In 2010, Rule 56 was amended to clarify and streamline the procedures regarding summary judgment motions and to make clear the process for supporting assertions of fact and objecting thereto. The revised rule expressly contemplates that affidavits are only one way to "support" a fact; documents, declarations, and other materials are also supportive of facts. To avoid the use of materials that lack authenticity or violate other evidentiary rules, the new rule allows a party to object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible as evidence. The burden is on the proponent to show that the material is admissible as presented or to explain the admissible form that is anticipated. The district court dismissed the captain’s report solely because it was not sworn without considering Lee's argument that Captain Jamison would testify to those opinions at trial and without determining whether such opinions, as testified to at trial, would be admissible. Before the district court, Offshore made other arguments and contentions about the captain’s report that were not addressed by the court. However, no alternate ground for affirmance was briefed before the appellate, and, on the record before it, the appellate court declined to rule upon these points in the first instance. The appellate court vacated the district court’s summary judgment ruling in favor of Offshore and remanded for consideration of the summary judgment evidence under current Rule 56 including whether the particular material to which objection is lodged can or cannot be presented in a form that would be admissible at trial. (5thCir, June 9, 2017) 2017 U.S. App. LEXIS 10387
5TH CIRCUIT HOLDS THAT OPA 90 OVERRIDES ROBINS DRY DOCK
IN RE: SETTOON TOWING, LLC V. MARQUETTE TRANSPORTATION COMPANY, LLC
In this case of first impression, the US Court of Appeals for the Fifth Circuit ruled that the contribution provision of the Oil Pollution Act of 1990 prevails over the Robins Dry Dockrule, so as to allow the responsible party in an oil spill to obtain contribution for pure economic damages from another tortfeasor. Two towboats and their flotillas of barges collided and oil was spilled into the Mississippi River. The owner of one towboat, Settoon Towing, LLC was named by the Coast Guard as the responsible party. Settoon paid for the response effort and then sought contribution from the owner of the other towboat, Marquette Transportation Company, LLC.. Marquette contended that, since only economic damages were involved, the Robins Dry Dock rule barred a suit for contribution. At the conclusion of a four-day bench trial on the issue of liability, the district court determined both parties were at fault and apportioned 65% of the fault for the collision to Marquette and 35% to Settoon. The district court also considered a question for which, surprisingly, there is little authority: Is a responsible party entitled to contribution for purely economic damages from a third party found to be partially liable? The district court found that such contribution was permitted, and allowed contribution determined by the percentage of fault of each party. Marquette timely filed its notice of appeal. Marquette claimed the district court erred in two ways, arguing the OPA does not allow a responsible party to obtain contribution from a partially liable third party, and even if it did, the district court erred in its allocation of relative fault. The principal issue before the appellate court was whether Settoon could receive contribution under the OPA from Marquette for its payment of purely economic damages, i.e., for the cleanup costs. The appellate court acknowledged that a hoary bit of maritime law has traditionally said, "no." However, the appellate court concluded that the OPA clearly says, "yes." Marquette's arguments to the contrary tried to make the statutory question seem a whole lot harder than it really is. Contribution was available under the OPA where 33 U.S.C.S. §2709 contemplated that one tortfeasor may sue another for less than complete reimbursement. The legislative history recognized OPA's comprehensive nature and identified the significance of contribution in the overall remedial scheme. Therefore, the appellate court concluded that a responsible party may recover from a jointly liable third party any damages it paid to claimants, including those arising out of purely economic losses. The appellate court also found that, while the district court did not provide a detailed explanation for its apportionment of fault, it made the requisite allocation of fault based on the facts before it. Nothing in Marquette's argument on apportionment convinced the appellate court that the district court clearly erred. The judgment of the district court was affirmed. (5th Cir, June 9, 2017) 2017 U.S. App. LEXIS 10388
APPELLATE COURT UPHOLDS FORUM SELECTION CLAUSE
CASTRO V. PULLMANTUR, S.A.
A cabin steward on a cruise ship, Miguel Antonio Alvarado Castro, brought a personal injury lawsuit against his employer under the Jones Act in state court. The cruise ship company, Pullmantur, S.A., and its related entities moved to dismiss because of a forum selection clause in Castro's employment contract that required him to bring the lawsuit in Malta. The trial court concluded that the forum selection clause was valid and enforceable, and dismissed the case against Pullmantur. Castro appealed the trial court’s ruling, contending that the trial court erred in finding the forum selection clause in his contract was valid and enforceable because the clause was unreasonable and was void after the 2008 amendments to the Jones Act. Castro argued that Malta was no forum at all for him because he lives in a poor, rural community in Honduras. He is unemployed, has no savings, and has barely enough money to support his family. Malta, Castro contended, is one thousand miles away from Honduras, and he does not have the money to hire an attorney, or to pay for airfare and hotel expenses to litigate his case. The appellate court initially observed that forum selection clauses are important in international cases because there is much uncertainty regarding the resolution of disputes. Ocean-going vessels travel through many jurisdictions, and could become subject to the laws of a particular jurisdiction based solely upon the fortuitous event of an accident. The elimination of all such uncertainties by agreeing in advance on a forum acceptable to both parties is an indispensable element in international trade, commerce, and contracting. The appellate court distinguished the cases cited by Castro in support of his unreasonableness argument, holding that Malta does not strip Castro of his rights to assert Jones Act-like injury claims. Malta is a signatory to European Union conventions that assure fair treatment of workers on Malta-flagged ships. The appellate court found that the forum selection clause was presumptively valid, and Castro bore a heavy burden to show that Malta was an unreasonable and unfair forum, which he had failed to do. The appellate court pointed out that Castro was already litigating his personal injury case away from his home forum, and in a foreign country. Castro lives in Honduras, as does his family. Castro, however, brought his Jones Act claims in the Miami-Dade County circuit court. Castro does not explain why, on the one hand, he is able to afford to bring this case in one foreign jurisdiction (Miami) and, on the other hand, he cannot afford to litigate the same claim in a different foreign jurisdiction (Malta). The appellate court also rejected Castro’s contention that the forum selection clause was void because Congress in 2008 amended the Jones Act to delete its venue provision, noting it had recently rejected this argument in Durkovic v. Park W. Galleries, Inc. The prohibition on forum selection clauses was gloss that was added to the railway worker statute by the United States Supreme Court in Boyd. That court had the right to say what federal law is, but the appellate court declined to extend that gloss to a completely different statutory scheme, in a completely different industry, where forum selection clauses have been specifically authorized since M/S Bremen. After conducting its de novo review, the appellate court agreed with the trial court that the forum selection clause Castro entered into as part of his employment contract with Pullmantur was valid and enforceable and affirmed the trial court's judgment dismissing the case. (Fla. 3rdApp. Ct., June 7, 2017) 2017 Fla. App. LEXIS 8314
COURT DISMISSES PREEMPTIVE DECLARATORY JUDGMENT ACTION (CONT.)
COASTAL DRILLING COMPANY, LLC V. CREEL
Coastal Drilling Company, LLC employed Brandon Creel as a floorhand on an inland drill barge operating in navigable waters. Creel reported that he was involved in an accident on the drill floor, and alleged that he sustained injuries to his neck, right shoulder, multiple sections of his spine, and his hips. Following the alleged injury, Coastal received a notice of representation from Creel's attorney in regard to the assertion of a LHWCA claim. When Creel did not return to work, Coastal began maintenance payments to Creel. But Coastal also began surveillance and Creel was observed and documented engaging in physical activity inconsistent with his alleged injuries. Based on its surveillance, Coastal scheduled an independent medical evaluation. During the IME, Creel allegedly made statements inconsistent with the physical activity observed through surveillance. The IME report stated that there was no evidence that Creel required right shoulder surgery, and after reviewing the surveillance footage, the IME physician stated that he would not recommend surgery. Based on the IME report and recommendation, Coastal declined to authorize the surgery that Creel had requested. Coastal then filed an action seeking declaratory relief that Creel was not entitled to maintenance and cure, damages, punitive damages, or attorney fees, and that Creel is obligated to reimburse Coastal for the maintenance already paid to Creel. Coastal also filed a motion to compel a mental examination of Creel. Creel moved to dismiss Coastal's action, arguing that as a Jones Act seaman he has the right to have a jury decide his maintenance and cure claim, and that granting Coastal's declaratory judgment would deprive Creel of his right to a trial. Relying in part on Creel's filing of a Jones Act complaint, the court granted Creel's motion to dismiss Coastal's declaratory judgment action [see May 2017 Longshore Update]. The next day, Creel filed his motion to voluntarily dismiss his Jones Act complaint without prejudice. Coastal opposed the motion, and reasserted its motion to compel a mental examination of Creel. Coastal's motion to compel a mental examination was granted by the magistrate. Additionally, one day after filing his motion to dismiss, Creel filed an identical Jones Act suit against Coastal and Peak Energy in state court. Coastal argued that Creel's actions in filing his Jones Act suit, only to seek to dismiss it after the court dismissed Coastal's declaratory action were a clear attempt to avoid an adverse decision by the court ordering Creel to submit to a psychological evaluation. Although Coastal's opposition was filed before the magistrate resolved Coastal's motion to compel, the court agreed that Coastal correctly predicted that the court would order Creel to submit to a psychological examination. An order granting Creel's motion to dismiss would allow Creel to avoid compliance with that order. The Fifth Circuit has explained that granting a voluntary dismissal after an adverse trial court ruling can inflict legal prejudice on the defendant. The court observed that the psychological examination to which Creel must now submit may determine that Creel is malingering and does not require surgery, a finding that may be dispositive of Creel's claims for medical expenses. In addition, the court found that Creel's actions in the case were indicative of abuse and were likely designed to at least delay, if not avoid, a decision on Coastal's motion to compel. Accordingly, Creel's conduct favored denying his motion. In sum, the court found that granting Creel’s motion would cause Coastal to suffer legal prejudice in allowing Creel to avoid an adverse ruling, and that Creel's conduct in the case was abusive. Thus, Creel's motion to voluntarily dismiss his claims was denied. (USDC EDLA, June 1, 2017) 2017 U.S. Dist. LEXIS 83612
PRODUCT CAUSED HARM UNDER COLOR OF FEDERAL AUTHORITY (CONT.)
SAVOIE V. HUNTINGTON INGALLS, INCORPORATED, ET AL.
From 1952 through 1976, the great majority of ocean-going vessels built at Avondale Shipyard in Louisiana fulfilled contracts from the federal government. The specifications for these Navy and Coast Guard vessels required asbestos insulation through at least 1968. In this lawsuit brought by survivors of a worker who allegedly contracted mesothelioma while working at the shipyard during this time, the question presented to the court was whether strict liability claims based on the existence of asbestos at the shipyard gave rise to federal jurisdiction under the federal officer removal statute. Joseph Savoie was employed at the shipyard between 1948 and 1996. The plaintiffs contended that although the government supervised the construction of the vessels to ensure that they were in compliance with the contractual requirements, the government did not control the shipyard's safety department. The defendants countered that the Navy inspectors were heavily involved in overseeing the construction process and had final control over any safety issues that arose. Savoie ultimately contracted mesothelioma, allegedly as a result of asbestos exposure from working on these vessels. Before his death, he filed this suit in state court. The defendants timely removed the case under the federal officer removal statute, but the plaintiffs sought remand. The district court construed all of the plaintiffs' claims as negligence claims. It then found that federal jurisdiction did not exist because the shipyard retained discretion in its safety policies and could have complied with both the government's requirements for the vessels' construction and its state law duties of care, ordering that the case be remanded to state court. Defendants filed a timely appeal. The appellate court found that the negligence claims of Savoie’s survivors did not support removal because those claims challenged discretionary acts of the shipyard free of federal interference, and thus, the government's directions to the shipyard via the contract specifications did not cause negligence. However, the government's specifications, to which the shipyard was contractually obligated to follow, required the use of asbestos that caused the worker's death, and that was enough to show a causal nexus between the survivors' strict liability claims under La. Civ. Code Ann. §2317 and the shipyard's actions under the color of federal authority. The court noted that it had previously recognized that strict liability claims support federal officer removal when the government obligates the defendant to use the allegedly defective product that causes the plaintiff's harm. The district court’s remand order was vacated and the case was remanded [see April 2016 Longshore Update]. In accordance with the Fifth Circuit's remand directive, the district court readdressed plaintiffs' motion to remand to determine whether defendants could demonstrate the existence of a colorable federal defense. Following the Fifth Circuit's ruling, the court held a telephone conference during which it ordered Avondale to produce certain government contracts upon which it based its government contractor defense. After Avondale produced this information, the court allowed both parties to submit supplemental briefing on whether Avondale possessed a colorable federal defense. Plaintiffs argued that defendants failed to make a colorable showing of a federal defense, arguing that defendants should be precluded from providing any supplemental evidence at this point because the Fifth Circuit's opinion did not indicate that further briefing was necessary. In opposition, defendants argued that they should be permitted to provide supplementary evidence because 28 U.S.C. § 1653 is to be broadly construed. Defendants also argued that removal is proper because they have demonstrated all necessary elements of a colorable federal defense. The court noted that it was satisfied that documents which clarify allegations already made in the notice of removal may be used to supplement the record pursuant to §1653. Despite plaintiffs' arguments to the contrary, the court also found that defendants had made a colorable showing of all the Boyleelements. The affidavits submitted by defendants clearly stated that the majority of the ships built at Avondale were built pursuant to contracts with the federal government, the federal government required the use of asbestos-containing materials, the federal government provided oversight, and Avondale would have breached these contracts if it failed to use the asbestos-containing materials. Defendants also demonstrated that the federal government was aware of the dangers of asbestos at the time of the alleged exposure. With this evidence, the court held that defendants had made a colorable showing that the government was aware of the dangers of asbestos and that Avondale was not responsible for presenting its own warning. Accordingly, plaintiffs' motion to remand was denied. (USDC EDLA, June 2, 2017) 2017 U.S. Dist. LEXIS 84804
SIMPLE CASE, BUT QUESTION OF FACT REMAINS DISPUTED
GEORGE V. MARQUETTE TRANSPORTATION COMPANY GULF INLAND, LLC, ET AL.
Anthony L. George, a lead deckhand, claimed that he twisted his ankle and injured his back and hip after tripping over rigging equipment cluttering the fleet deck on which he was working, while he was working for Marquette Transportation Company Gulf-Inland, LLC. Marquette argued that it was industry practice to store rigging equipment on the fleet deck, where it would be accessible for building tow. George sued Marquette alleging that defendants' negligence under the Jones Act caused his injuries; he also alleged that the defendants owed him maintenance and cure. Marquette moved for summary judgment on George’s Jones Act claim, arguing that it did not breach a duty to warn George about the presence of rigging equipment on the fleet deck. The court noted, however, that this duty to warn theory was not the one advanced by George in support of his Jones Act claim. George’s testimony was there were no walkways and, no matter which way one went, you had to step on something. By contending that the cluttered fleet deck had no walkways, the plaintiff's theory for recovery was that Marquette (whose employees on the prior watch allegedly left the fleet deck in this unsafe condition, which George felt too rushed by the captain to clean up himself before completing the task of building tow) breached its general duty to provide a reasonably safe work environment. Although the court noted that it was a simple case, triable issues remained. There was one factual controversy that precluded summary judgment on the issue of whether Marquette beached its duty to provide George with a reasonably safe place to work. In his opposition papers, George argued the merits of an unseaworthiness claim. In its reply paper, Marquette contended that no unseaworthiness claim was alleged in either the complaint or amended complaint. The court agreed. Accordingly, no such claim needed to be addressed by the defendant or by the court. In its motion for summary judgment, Marquette did not mention George’s allegation that he was owed maintenance and cure or damages associated with failure to pay maintenance and cure. Because the court had no facts before it on this issue, and there was no indication by either party regarding whether or not George had reached maximum medical improvement, the issue of entitlement to maintenance and cure or damages for wrongful failure to pay maintenance and cure could not be considered. Marquette’s motion for summary judgment was denied. (USDC EDLA, June 28, 2017) 2017 U.S. Dist. LEXIS 100003
Quotes of the Month . . .“Half the harm that is done in this world is due to people who want to feel important. They don't mean to do harm-- but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.”-- T. S. Eliot
"Cowardly dogs bark loudest." - - John Webster
“Rudeness is the weak man's imitation of strength.”--Eric Hoffer
Please note that these opinions and statements are my own. They do not represent the position of my employer or any other organization to which I belong. These opinions may not even represent my own opinion at a later time or place. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.
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