August 2018
Notes From Your Updater: President Donald Trump issued an executive order eliminating the competitive examination and selection procedures for appointing administrative law judges, citing “sound policy reasons” for making the exception in the wake of the U.S. Supreme Court’s Lucia v. SEC ruling last month. Also note that the Order provides: Except as required by statute, the Civil Service Rules and Regulations shall not apply to removals from positions listed in Schedules A, C, D, or E (E is applicable to ALJs). Thanks to Ken Engerrand, of Brown Sims, Houston, TX, for bringing this to my attention.
The Department of Labor Administrative Review Board (ARB) issued a Decision and Order affirming the decision of the Administrative Law Judge in favor of a seafarer who had filed a complaint alleging that his employer had violated the Seaman's Protection Act by discharging him in retaliation for making protected safety reports to the US Coast Guard and ABS. The ARB upheld the award $655,198.90 in back pay plus interest compounded daily; $10,000 in compensatory damages for emotional distress; and reasonable litigation costs including attorney fees, finding that the ALJ had not abused his discretion. Loftus V. Horizon Lines
JURY’S DENIAL OF §905(B) CLAIM AFFIRMED ON APPEAL
PRICE, ET AL. V. MOS SHIPPING CO., LTD., ET AL.
Troy D. Price, Jr., appealed the district court's order entering judgment in favor of Mos Shipping Co., Ltd., following a jury trial on his LHWCA §905(b) claim, and the district court's order denying Price's FRCP 59(a) motion for a new trial. Price, a former longshore worker, alleged that, due to Mos' negligence, he was injured while unloading freight in the hold of a Mos' ship when a forklift being operated by another longshore worker fell through an unprotected hatch in the deck above Price and struck him. Mos cross-appealed, challenging the district court's orders denying its pretrial motion for summary judgment and granting the pretrial motion in limine and motions for summary judgment filed by third-party defendant Rukert Terminals Corporation. Price first argued that the district court abused its discretion in denying his Rule 59(a) motion. The appellate court’s review of the record led it to conclude that the district court committed no abuse of discretion in denying Rule 59(a) relief. The undisputed evidence established that Mos maintained active control over the cargo elevator that was lowered to produce the hatch opening through which the errant forklift fell. However, it was also is undisputed that the accident did not take place in the context of matters over which Mos clearly exercised control, but instead during stevedoring operations on the deck after the cargo was unloaded from the elevator. The trial record contained at least some evidence to support a finding that Mos had no involvement or control over this portion of the stevedoring operation. Price also failed to identify any circumstances giving rise to a manifest miscarriage of justice. Thus, the appellate court concluded that the district court did not abuse its discretion in denying Rule 59(a) relief. Price also contended that the district court abused its discretion in admitting the evidence of Mos' expert witness. Price argued that the expert’s testimony was not reliable or relevant. The appellate court found that the expert’s testimony was not misleading or unduly confusing to the jury, and therefore found no abuse of discretion in the district court's admission of the evidence. Because the appellate court affirmed the district court's judgment in Mos' favor, it dismissed as moot Mos' cross-appeal of the court's pretrial orders. The district court’s judgment was affirmed. (4th Cir, July 5, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 18296
INJURY IN FOREIGN TERRITORIAL WATERS FAILS TO MEET LHWCA SITUS TEST
WILLEY V. ORION MARINE CONSTRUCTION, INC.
Richard Orin Willey worked for Orion Marine Construction, Inc., where he allegedly sustained injuries while he was working on the construction of a dock facility in the Dominican Republic. Willey fell while on navigable waters when he was attempting to cross from a tug to a barge. Willey filed a four-count complaint alleging various causes of action, including one for negligence under §905(b) of the LHWCA. Willey later dismissed the first three counts and only the §905(b) claim remains. Willey alleged that he was entitled to damages under §905(b) because Orion negligently operated the tug and the barge which caused his injuries. Orion moved for judgment on the pleadings as to Willey’s claim for §905(b) negligence, arguing that Willey’s claim failed the "situs test" required under the LHWCA, and therefore it was entitled to judgment as a matter of law. Under federal law, an injury must occur on the navigable waters of the United States, which includes the "high seas," to sustain a claim under the Act. Because the "high seas" do not include foreign territorial waters, and Willey alleged that his injury occurred in the Dominican Republic, Orion was entitled to judgment as a matter of law. Upon examining the legislative history of the Act, the policy considerations underlying the extension of the Act's coverage to the high seas, as well as comparing the facts of Willey’s case with those of cases in which coverage has been afforded to injuries occurring in foreign territorial waters as cited above, the court concluded that the Act did not cover Willey's injuries. The court, having giving due deference to the Benefit Review Board's interpretation of the Act, and reviewing the available case law, concluded, as in Keller, that the term "navigable waters of the United States" which includes the "high seas" does not include foreign territorial waters. Since Willey sustained his injury while in the waters of the Dominican Republic, his claim did not meet the situs requirement of the Act and Orion was entitled to judgement in its favor as a matter of law. Because Willey dismissed his remaining claims before this Court, no other matters remain for this Court's consideration. Orion’s motion for judgment on the pleadings was granted. (USDC MDFL, July 9, 2018) 2018 U.S. Dist. LEXIS 113317
COURT IS UNCLEAR AS TO WHETHER COMPLETE DIVERSITY EXISTS IN CASE
ELVIR, ET AL. V. TRINITY MARINE PRODUCTS, INC., ET AL.
Nelin Xiomara Gonzalez Elvir and Estevan Lopez Coello (collectively, plaintiffs) filed a petition for damages in state court, asserting a wrongful death claim and survival action against Trinity Marine Products, Inc., Lincoln Electric Company, and their insurers for the personal injuries and death of the plaintiffs' adult son during an incident allegedly involving equipment manufactured by Trinity Marine and Lincoln Electric. Plaintiffs alleged that their son, Jose Ariel Aguilar Gonzalez was electrocuted while performing welding work for his employer, NSC Technologies, Inc., on the premises of Trinity Marine. Lincoln Electric removed the matter to federal court, asserting that the court had diversity jurisdiction pursuant to 28 U.S.C. §1332. Alternatively, Lincoln Electric asserted that the court had subject matter jurisdiction under 28 U.S.C. §1331, federal question jurisdiction. After the amendment deadline established in the scheduling order had expired, plaintiffs filed a motion, seeking to add Trinity Industries Services, LLC, Trinity Industries, Inc. Trinity Corporate Services, LLC and Legrand North America, LLC as defendants. The court noted that Trinity Marine's Motion for Summary Judgment was pending, which raised the issue of its immunity under the LHWCA, the consideration of which may involve the question of the applicability of the LHWCA to the case. The court then pointed out that was not clear whether complete diversity existed because citizenship has not been adequately alleged with respect to three of the limited liability companies plaintiffs sought to add as defendants, noting that for purposes of diversity, the citizenship of a limited liability company is determined by considering the citizenship of all its members. Accordingly, the court ordered that the plaintiffs would have seven days to file a motion to substitute the amended and supplemental complaint with a proposed pleading that was a comprehensive amended complaint that included all of plaintiffs' numbered allegations, as revised, supplemented, and/or amended, and adequately alleges the citizenship of all parties, which would, if granted, become the operative complaint in the matter without reference to any other document in the record. (USDC MDLA, July 5, 2018) 2018 U.S. Dist. LEXIS 111598
COURT ORDERS LONGSHOREMAN’S ADMIRALTY CASE TO BE A JURY TRIAL
BOWIE V. CHERAMIE GLOBAL MARINE, LLC
This is a personal injury case in which Jarvis Bowie, alleged he was injured when the personnel basket in which he was being transported struck the side of the vessel due to it being lowered too far below the vessel's bulwarks. Cheramie Global Marine, LLC provided its vessel to work in Energy XXI's field. Island Operating is a company that worked as a contractor at offshore platform and rigs and it provided two crane operators, Jarvis Bowie and Herman Johnson, to perform personnel basket transfers. Jarvis Bowie worked as a crane operator for Island Operating. The manner in which Bowie was injured was disputed. Cheramie claimed that Bowie stepped off the personnel basket and onto the vessel bulwarks, then jumped down off the bulwarks. Bowie claimed that the basket hit the vessel and caused Bowie to fall to the deck of the vessel and injure his back. Bowie sued Cheramie under the general maritime law, seeking to recover for its negligence in failing to provide him a safe basket transfer. He sought to recover for maritime negligence of the vessel as well as for unseaworthiness. Bowie demanded a jury trial. Bowie is a longshoreman covered by the LHWCA, and was receiving LHWCA medical and indemnity benefits at the time he filed suit. Although Bowie initially demanded a jury trial in his complaint, there is no dispute that diversity jurisdiction is lacking, that this case arises under the court's admiralty jurisdiction, and that general maritime law applies. Because the parties agreed that this is a maritime case, they likewise agreed that Bowie had no right to a trial by jury. Even so, the court noted that Bowie's initial jury demand had never been stricken. Instead, the case had proceeded as if it would be tried to a jury since its inception. Given that no federal right to a jury trial existed in the case, the only issue was whether the parties had consented to a jury sufficient to trigger Rule 39(c)(2) such that the court may in its discretion allow this case to be tried by a jury. Because Cheramie for the first time had recently informed Bowie and the Court of its intention to move to strike the jury demand, the court found that Cheramie had heretofore implicitly consented to a jury trial. Therefore, the court ordered that the case would proceed to a jury by consent. (USDC EDLA, July 19, 2018) 2018 U.S. Dist. LEXIS 120682
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #288. 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 . . .
I WALKED INTO A TABLE, SO MY EMPLOYER IS NEGLIGENT (CONT.)
ALLEN V. NCL AMERICA LLC, ET AL.
NCL America LLC hired Marvin Allen to work on its cruise ship. On Allen's first day of work, he twice struck his knee on the leg of a steel table. His injuries allegedly resulted in a total knee replacement. Allen sued NCL and alleged, in a series of amended complaints, violations of the Jones Act, general maritime law, and federal admiralty law. The district court dismissed Allen's
Jones Act and general maritime law claims three times. Allen opposed the first two motions to dismiss those claims, but not the third. On appeal, Allen argues that the district court erred by dismissing his Jones Act and general maritime law claims [see June 2016 and April 2017Longshore Updates]. On appeal, Allen argued that the district court erred by dismissing counts I and II against NCL. Allen does not challenge the stipulated dismissals of Count III against NCL and Count IV against Cigna Corporation and Life Insurance Company of America. At the time that Allen filed his notice of appeal regarding NCL, the dismissal of Counts I and II against NCL was not yet appealable, since Cigna Corporation and Life Insurance Company of America remained parties to the action, there was no final judgment in the action, and no FRCP 54(b) order had been entered. Allen's notice of appeal was therefore premature. But the district court dismissed the remaining parties, Cigna Corporation and Life Insurance Company of America, from the action on January 29, 2018, making the district court's earlier dismissal of Counts I and II against NCL reviewable once a final judgment for purposes of appeal was entered. Because the January 29, 2018 order did not comply with the separate document requirement of FRCP 58(a), the final judgment for purposes of appeal was not entered until 150 days after the entry of that order. Since was past June 28, 2018, there was a final judgment for purposes of appeal. NCL first argued that Allen waived his right to appeal the district court's dismissal because he failed to oppose NCL's motion to dismiss that complaint. In response, Allen pointed out that he did oppose NCL's motion to dismiss. The appellate court noted that it was not aware of any case in which it had applied its waiver rule in circumstances like these where a plaintiff initially opposed a defendant's motion to dismiss but later failed to oppose a motion to dismiss identical claims while negotiating a settlement of the remaining claim against the defendant in an attempt to secure a final and appealable judgment. And applying our waiver rule here would not further the goals it is designed to promote. Therefore the appellate court agreed to consider Allen's appeal on the merits. To survive a motion to dismiss, Allen was required to provide direct or inferential factual allegations respecting all material elements of his Jones Act negligence claim. The district court dismissed Count I because 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. 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. The appellate court agreed with the district court. Even a lengthy recitation of conclusory allegations and legal conclusions presented as facts will not defeat a motion to dismiss. As the district court noted, Allen alleged no facts showing what was dangerous about a steel table in a ship galley, elevated or otherwise. In Count II, Allen alleged that NCL violated the seaworthiness doctrine under general maritime law. Allen's unseaworthiness claim relied on the same factual allegations as those on which his Jones Act negligence claim relied. The district court dismissed Allen's unseaworthiness claim because Allen failed to allege plausible facts demonstrating defective equipment, inadequate staffing, or unsafe instruction. The appellate court also agreed with this conclusion. To survive the motion to dismiss, Allen was required to provide direct or inferential factual allegations respecting all material elements of his unseaworthiness claim. The district court gave Allen ample opportunity to cure the factual insufficiency of his complaints. It twice dismissed Allen's Jones Act negligence and unseaworthiness claims for failing to state a claim, but twice allowed Allen to file an amended complaint with sufficient facts to support his claims. Notwithstanding a rather lame dissent from Judge Moore, the appellate panel affirmed the judgment of the district court. (6thCir, July 10, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 18682
ROBINS DRY DOCK BARS ADMIRALTY CLAIM FOR ECONOMIC DAMAGES
IN RE: DEEPWATER HORIZON, ET AL.
The plaintiffs in this case, Tobatex, Inc. and M.R.M. Energy, Inc. owned and operated two service stations in the state of Georgia under the BP name and logo when the Deepwater Horizon disaster occurred. Plaintiffs filed suit in federal district court, seeking to recover damages, alleging that BP’s negligent actions caused them to suffer economic losses-including a loss of profits, goodwill, and earning capacity, due to the injury and destruction of the BP name and logo. Defendants filed motions to dismiss under FRCP 12(b)(6), arguing that general maritime law precluded plaintiffs' claims. The district court granted defendants' motions to dismiss and also denied plaintiffs the opportunity to amend their complaint, stating that even if it were to grant plaintiffs' request, the result would not change. The court issued a final judgment dismissing plaintiffs' claims. This appeal followed, challenging the district court's Rule 12(b)(6) dismissal and its denial of their request for leave to file an amended complaint. The district court assessed plaintiffs' complaint in light of Grubart and concluded that the claims asserted sounded in admiralty. The appellate court agreed plaintiffs' claims satisfied the location test because their alleged injuries were proximately caused by the Deepwater Horizon. As for the connection test, the appellate court found that the district court did not err in concluding that the type of incident involved was potentially disruptive of maritime commerce, and that the general character of the activity giving rise to the incident had a substantial relationship to traditional maritime activity. While plaintiffs contended that their claims were based entirely on actions that defendants took on land and that had "no connection" with traditional maritime activity, their complaint was bereft of well-pleaded factual allegations supporting that assertion. Even if plaintiffs had amended their complaint, their claims would still have sounded in admiralty. Like their original complaint itself, plaintiffs' request for leave showed that the Deepwater Horizon was a proximate cause of their injuries. Defendants' public misrepresentations might have contributed to the harm suffered by the BP, but the oil rig's explosion and the resultant oil spill remained vital and inextricable components of plaintiffs' ultimate injuries. Accordingly, the district court did not err when it denied plaintiffs' request for leave to amend their complaint. As plaintiffs’ were seeking purely economic damages, and their claims were sounded in admiralty, Robins Dry Dock barred their claim. Under Robins Dry Dock, to recover for a maritime casualty the plaintiff must suffer physical damage to some property in which the plaintiff had a proprietary interest. The district court's judgment was affirmed. (5th Cir, July 3, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 18180
CONTRACTED PLUG AND ABANDON OPERATION HELD TO BE MARITIME
IN RE: CRESCENT ENERGY SERVICES, LLC
In 2015, Carrizo Oil & Gas, Inc. needed a contractor to plug and abandon three no longer producing wells located on small fixed platforms in coastal waters of Lafourche Parish, Louisiana. State law obligated Carrizo to decommission these wells. Crescent Energy Services, LLC, an oil and gas industry contractor, submitted a bid for the work. Carrizo accepted Crescent's bid. Crescent's employee was severely injured during the plug and abandon operation. Crescent filed a limitation of liability action, asserting the seaworthiness of its vessel and its proper operation, disclaiming any negligence, identified the value of the vessel and offered security in that amount to the court, sought to require all who had claims arising out of the accident to file them in this suit, requested the enjoining of prosecution of claims elsewhere, and demanded exoneration from liability. Carrizo in its answer rejected that Crescent had brought a valid limitation of liability action. It claimed the benefit of the insurance applicable to the incident, and also identified Crescent's agreement to indemnify it for claims such as these. Crescent and its insurers would deny that indemnity was owed despite the contractual language, arguing that Louisiana's Oilfield Anti-Indemnity Act applied. Crescent’s injured employee and Carrizo both filed claims along with their answers. Carrizo also filed claims against four companies that it alleged were Crescent's insurers. The parties all filed for summary judgment. The district court granted Carrizo's motion and denied the others. The court relied on the provision in the Master Service Agreement in which Crescent agreed to indemnify Carrizo for injuries to Crescent employees. The court held that indemnification was enforceable against Crescent because the parties had entered a maritime contract. Such a contract made federal maritime law applicable and precluded application of the Louisiana Oilfield Anti-Indemnity Act. Crescent's insurers timely appealed. The appeal posed the question of whether a particular contract to plug and abandon three offshore oil wells was a maritime contract. The appellate court found that the contract anticipated the constant and substantial use of multiple vessels. It was known that the OB 808 would be necessary as a work platform, that essential equipment would need to remain on that vessel, including a crane, that the wireline operation would be substantially controlled from the barge, and that other incidental uses of the vessel would exist such as for crew quarters. This vessel and the other two vessels were expected to perform an important role, indeed, a substantial one, under the parties' contract. Therefore, applying the new test from Doiron, the appellate court held that the contract was, indeed, a maritime contract and the Louisiana Oilfield Anti-Indemnity Act did not apply. The judgment of the district court was affirmed. (5th Cir, July 13, 2018) 2018 U.S. App. LEXIS 19284
LIABILITY FOR DAMAGE TO UNPERMITTED BUT KNOWN MOORING DOLPHIN
ENTERGY MISSISSIPPI, INC. V. MARQUETTE TRANSPORTATION CO., LLC, ET AL.
A barge being pushed down the Mississippi River by a tow boat came loose and hit a mooring dolphin structure. Entergy Mississippi, which operated the dock as part of a fuel unloading facility, filed this maritime suit seeking the cost of repairs from the owner (Marquette Transportation) and operator (Bluegrass Marine) of the tow boat. The district court found the defendants liable at the summary judgment stage and after trial awarded damages of just over $1 million. Defendants appealed, arguing they should not have been liable because the dolphin was unpermitted, it was error to allow Entergy to amend its pleading to increase the amount of damages sought, the court should not have used the damages amount from a related state suit, and the prejudgment interest was excessive. The appellate court rejected defendants' contention that Entergy’s failure to obtain a permit under 33 U.S.C. §403 for a mooring dolphin meant that defendants were not liable for causing the allision between a towed barge and the dolphin. The court held that the fact that the dolphin had not been permitted by the US Army Corps of Engineers was of no consequence since the master of the tug was aware of the existence and location of the mooring dolphin. Defendants provided no evidence that the dolphin actually obstructed navigation, that it was inherently dangerous, or that any change in its design or placement would have prevented the collisions, and the district court properly held defendants liable. Assuming that Entergy needed to increase the amount it sought for repairs, the district court did not err in giving it leave to do so under FRCP 15(a). The district court also did not err in refusing to deduct depreciation from its award. The judgment of the district court was affirmed in all respects. (5th Cir, July 16, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 19472
FIFTH CIRCUIT DEALS WITH COMPETING LIENS
STEMCOR USA INC. V. CIA SIDERURGICA DO PARA COSIPAR, ET AL.
This case involved a dispute between two creditors, each of which attached the same pig iron owned by America Metals Trading LLP (AMT). Daewoo International Corp. sued AMT seeking an order compelling AMT to arbitrate and an attachment of the pig iron. Daewoo invoked both maritime attachment and the Louisiana non-resident attachment statute, which allows attachments in aid of any action for a money judgment. Citing both types of attachment, the district court granted Daewoo its attachment. Following Daewoo's attachment, Thyssenkrupp Mannex GMBH (TKM) attached the same pig iron in Louisiana state court. TKM then intervened in the federal suit, arguing that Daewoo's attachment should be vacated because maritime jurisdiction was improper and Louisiana non-resident attachment was inapplicable. The district court agreed with TKM and vacated Daewoo's attachment. Specifically, the district court found that because Daewoo's underlying suit sought to compel arbitration, it was not an "action for a money judgment" and therefore Daewoo could not receive a non-resident attachment writ. Daewoo appealed only the district court's conclusion that its Louisiana non-resident attachment writ was invalid. The appellate court first noted that both it and the district court had federal subject matter jurisdiction because both Daewoo’s arbitration agreement with AMT and the action itself fell under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Daewoo was not entitled to attachment because La. Code Civ. Proc. Ann. art. 3542 allowed for attachment in aid of actions for money judgment, and a suit to compel arbitration was not an action for a money judgment. Although Daewoo might have attached the pig iron under La. Code Civ. Proc. Ann. art. 3502, it did not comply with the statute's requirements. Getting way down in the weeds and over an equally obtuse dissent by Judge Grant, the appellate court upheld the state lien against the cargo of pig iron onboard a vessel over a maritime lien against the same cargo. The judgment of the district court was affirmed on other grounds. (5th Cir, July 11, 2018) 2018 U.S. App. LEXIS 18885
APPELLATE COURT REVERSES SUA SPONTE DISMISSAL FOR LACK OF NOTICE
CHEMOIL ADANI PVT. LTD., ET AL. V. M/V MARITIME KING
ING Bank, N.V. and Chemoil Adani Pvt. Ltd. appealed from a judgment of the district court, granting summary judgment to in rem M/V MARITIME KING on a competing maritime lien claim brought against it by ING and Chemoil under the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. §31301 et seq., for the provision of bunkers (marine fuel) to the vessel. Chemoil asserted that as the party that physically supplied the bunkers to the vessel on the order of someone authorized to bind the vessel, it was entitled to a maritime lien. Chemoil further argued, in the alternative, that it was entitled to recover on a theory of unjust enrichment. ING asserted that, as the purported assignee of O.W. Bunker's receivables, it was entitled to a maritime lien against the vessel because O.W. Bunker "provided" necessaries to the vessel within the meaning of CIMLA. The appellate court disagreed with Chemoil's assertions but agreed with ING's assertion. Whether ING was entitled to assert a maritime lien depended on whether its purported assignor, O.W. Switzerland, was entitled to assert such a lien. The key to this inquiry is whether O.W. Switzerland "provided" necessaries under CIMLA when it agreed to supply necessaries and then contracted with intermediaries to supply them. The court held in ING Bank N.V. v. M/V TEMARA that the answer was yes, guided by straightforward principles of contract law. A supplier may provide necessaries to a vessel indirectly through a subcontractor because when a subcontractor does so pursuant to its contract with a contractor, the subcontractor's performance is attributable to the contractor. That was what occurred in this case. Accordingly, the appellate court held that O.W. Switzerland provided necessaries under CIMLA and was therefore entitled to assert a maritime lien, and that the district court erred in dismissing ING's maritime lien claim against the vessel. The appellate court also concluded that the district court erred when it, sua sponte, granted summary judgment to the vessel. Accordingly, the judgment of the district court was vacated in part, affirmed in part and remanded for further proceedings. (2nd Cir, July 10, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 18656
ANOTHER SECOND CIRCUIT BUNKERING CASE
O'ROURKE MARINE SERVICES L.P., L.L.P. V. M V COSCO HAIFA, ET AL.
O'Rourke Marine Services L.P., L.L.P. appealed from a judgment of the district court, which entered judgment in favor of ING Bank N.V. and the vessels M/V COSCO HAIFA and M/V COSCO VENICE pursuant to their stipulation. O'Rourke physically supplied bunkers to the vessels and then never paid for the bunkers. O'Rourke brought an action against the vessels, asserting claims for maritime liens in an attempt to recover for the unpaid bunkers. Following discovery, O'Rourke moved for summary judgment on its maritime lien claims and, for the first time, argued it was entitled to summary judgment on the basis of breach of contract and unjust enrichment. The district court denied O'Rourke's motion, concluding that O'Rourke could not assert a maritime lien against the vessels, and declined to address O'Rourke's unpleaded assertions of breach of contract and unjust enrichment. O'Rourke then filed a motion for reconsideration, which the district court denied. On appeal, O'Rourke argued that the district court erred in granting judgment to ING and in finding that it was not entitled to a maritime lien under statute or in equity. The appellate court disagreed with these contentions, finding that the district court properly concluded that O'Rourke could not assert a maritime lien because it did not meet the requirements for a maritime lien as set out by the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. § 31301 et seq., noting its recent ruling ING Bank N.V. v. M/V TEMARA, 892 F.3d 511 (2d Cir. 2018). The appellate court agreed with the district court’s finding that O'Rourke did not supply the bunkers upon the order of a statutorily authorized person, thus failing to meet CIMLA's third requirement for a maritime lien. Instead, O'Rourke was hired to supply the bunkers to the vessels by a subcontractor, O.W. USA, who, in turn, was contracted by the bunker contractor, O.W. Far East (Singapore) Pte, Ltd., who, in turn, was hired to provide bunkers to the vessels by the corporate affiliate of the agent of the vessels' owners. The judgment of the district court was affirmed. (2nd Cir, July 10, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 18657
ANOTHER SECOND CIRCUIT BUNKERING CASE
AEGEAN BUNKERING USA LLC V. M T AMAZON, ET AL.
Aegean Bunkering (USA) LLC appealed from a judgment of the district court, dismissing its maritime lien and related claims arising from the provision of bunkers to a vessel. Aegean asserted that as the party that physically supplied the bunkers to the vessel on the order of someone authorized to bind the vessel, it was entitled to a maritime lien against the vessel for the value of the bunkers. Aegean contended that the district court erroneously concluded that Aegean was not entitled to assert a maritime lien and that the court should not have granted judgment in favor of ING Bank N.V. The appellate court disagreed, finding that the district court correctly observed, there was no dispute that Aegean provided the bunkers to the vessel, thus Aegean was entitled to a maritime lien so long as Aegean met the requirements of the Commercial Instruments and Maritime Lien Act ("CIMLA"), 46 U.S.C. § 31301 et seq. The district court correctly concluded, Aegean's entitlement to a maritime lien under CIMLA turned on whether it provided the bunkers on the order of the owner or a person authorized by the owner. However, Aegean did not supply the bunkers on the order of a statutorily authorized person. Instead, Aegean was hired to supply the bunkers to the vessel by a subcontractor, Bergen, who was contracted by another subcontractor, O.W. USA, who in turn was contracted by the bunker contractor, O.W. Malta, who was hired to provide bunkers to the vessel by the commercial manager of the vessel's owner. Accordingly, the judgment of the district court was affirmed. (2ndCir., July 10, 208, UNPUBLISHED) 2018 U.S. App. LEXIS 18659
ANOTHER SECOND CIRCUIT BUNKERING CASE
ING BANK N.V. V. JAWOR M/V
ING Bank N.V. appealed from a judgment of the district court, which entered summary judgment to JAWOR M/V on ING's maritime lien claim against it for the provision of bunkers to the vessel. The claim was brought under the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. § 31301 et seq. In addition, the Court reduced the amount of security posted to permit the vessel's release from arrest. As relevant to this appeal, ING was the purported assignee of the O.W. Bunker Group, a global collection of entities and subsidiaries that was engaged in the business of supplying bunkers to ships in maritime commerce. The charterer of the vessel, a Chinese entity called Able Glory Maritime Co., Ltd., ordered bunkers from O.W. Bunker Middle East DMCC to fuel the vessel in Singapore in preparation for the vessel's voyage to Australia. O.W. Bunker Middle East then used the services of a subcontractor, O.W. Bunker Far East (S) Pte Ltd. to supply the bunkers to the vessel. O.W. Bunker Far East then subcontracted with Coastal Energy Pte Ltd. for the supply of the bunkers, who, in turn, subcontracted the actual supply of the physical bunkers to a local physical supplier, Triton Bunkering Services Pte Ltd. Triton delivered the bunkers to the vessel in Singapore. The O.W. Bunker Group then entered bankruptcy, and the bunkers were never paid for. ING, acting as assignee of the O.W. Bunker Group, filed a complaint in rem in district court, asserting a maritime lien against the vessel for the unpaid bunkers. The vessel was then arrested but was released shortly after the district court approved the deposit of $926,053.93, with an interest rate of 6%, into the registry of the court to serve as security. ING moved for summary judgment on its maritime lien claim. The district court denied ING's motion and instead sua sponte entered summary judgment in favor of the vessel. The district court also entered an order reducing the security to $457,305.99 and reducing the interest rate to 3.5%. On appeal, ING argued that the district court erred in granting summary judgment sua sponte to the Vessel on ING's maritime lien claim, and that the district court erred in reducing the security and the interest rate. The appellate court agreed with the first contention and disagreed with the second. The district court denied ING's application for a maritime lien on the ground that its assignor, O.W. Bunker Middle East, had not provided bunkers to the vessel, as required by CIMLA, because it hired subcontractors to undertake the actual supply of the bunkers and because, in the district court's view, the record did not establish that O.W. Bunker Middle East faced any financial risk in its contractual obligations with its subcontractors. The appellate court pointed out that this rationale was inconsistent with CIMLA. Instead, to assert a maritime lien, all a bunker contractor must establish is that it contracted with a statutorily-authorized person for the delivery of bunkers and that the bunkers were delivered pursuant to that contractual arrangement. A supplier may provide necessaries to a vessel indirectly through a subcontractor because when a subcontractor does so pursuant to its contract with a contractor, the subcontractor's performance is attributable to the contractor. Moreover, the manner in which the district court granted summary judgment to the vessel, sua sponte and without notice or an opportunity to be heard, was inconsistent with FRCP 56(f) and was thus improper. The district court's risk analysis was an incorrect application of CIMLA. As to the district court's order reducing security, there was no abuse of discretion. Accordingly, the judgment of the district court was vacated in part, affirmed in part, and remanded for further proceedings. (2ndCir, July 10, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 19061
APPELLATE COURT HOLDS MARITIME LIEN EXTINGUISHED BY LACHES
LEOPARD MARINE & TRADING, LTD. V. EASY ST. LTD.
Leopard Marine & Trading, Ltd. sought a declaratory judgment that a maritime lien held by Easy Street Ltd., a Cypriot fuel supply company, has been extinguished by the doctrine of laches. Easy Street contended that the court should dismiss the case on grounds of international comity because of a pending in rem proceeding in Panama regarding the lien that was the subject of this case. Easy Street also disputed that laches barred exercise of the lien. The district court, sitting in admiralty, declined to abstain on grounds of international comity and issued a declaration that laches barred exercise of the lien. Easy Street appealed the district court's decisions not to abstain on grounds of international comity, and to bar exercise of the lien on grounds of laches. The appellate court determined, first, that the federal courts have jurisdiction to declare a maritime lien unenforceable, even where the vessel is not present in the district, so long as its owner consents to adjudication of rights in the lien. The appellate court then held that abstention on the basis of international comity was not required in the case, and that the district court did not abuse its discretion in ruling that laches barred exercise of the lien. Over a strong dissent, the appellate court affirmed the declaratory judgment in favor of Leopard Marine that Easy Street’s maritime lien had been extinguished by laches. The dissent contended that the court did not have subject matter jurisdiction to hear the case since jurisdiction over the res (the vessel) was a prerequisite and was not present here. (2nd Cir, July 13, 2018) 2018 U.S. App. LEXIS 19673
LINGERING CASE FROM EXXON VALDEZ OIL SPILL
IN RE EXXON VALDEZ
In this unpublished decision, the Ninth Circuit ruled in favor of Exxon Mobil Corporation and Exxon Shipping Company on the amount of pre-judgment and post-judgment interest to be paid on a prior settlement. Nautilus Marine Enterprises, Inc. and M. Thomas Waterer (collectively NME) sued Exxon for damages arising from the 1989 Exxon Valdez oil spill. In 2006, the parties entered into a settlement agreement. Exxon agreed to pay NME for damages incurred in 1992 and 1993. The parties disagreed on the amount of interest to be paid, and have been litigating the issue ever since. The district court held that NME was entitled to pre-judgment interest through November 1, 2006, as per the parties’ agreement. NME argued the court erred in limiting the interest period and argued for a larger award which included a longer period of interest. On appeal, the appellate court affirmed the district court, finding that by executing the agreement, NME agreed to limit its recovery of pre-judgment interest to this period. Both the district court and the Ninth Circuit strictly interpreted the parties’ prior agreement. The district court awarded post-judgment interest running from the issuance of its February 14, 2017 judgment. NME argued post-judgment interest should have accrued from the date a prior 2007 judgment was entered. The 2007 judgment was appealed by Exxon, and was subsequently reversed and vacated. The appellate court again affirmed the district court, holding post-judgment interest runs from the final 2017 judgment, not from the earlier judgment which was vacated. In rendering its opinion, the appellate court considered argument from Exxon that the district court violated the best evidence rule when it considered testimony of NME’s counsel about how settlement payments would be allocated. In a declaration, NME’s counsel referenced several written agreements, which were never provided to the court. The appellate court ultimately determined the district court’s consideration of this testimony was harmless and likely did not change the outcome of the case.
APPELLATE COURT REVERSES TRIAL COURT’S LIMITS ON EMPLOYER’S EXAM
IN RE KIRBY INLAND MARINE, LP
Rodrick Benson sought damages under the Jones Act for physical and psychological injuries, due to exposure to ammonia gas, allegedly incurred while in the course and scope of employment for Kirby Inland Marine. Although Benson's neuropsychologist performed a two-day examination that included a battery of tests, the trial court denied Kirby's request for its neuropsychologist to perform a 6.5-hour evaluation with no duplicative testing. Instead, the trial court limited Kirby's examination to two hours and required advance disclosure of the tests its expert planned to administer. Kirby filed a motion for reconsideration, attaching an affidavit from Kirby’s expert which explained that the time restriction essentially would prevent him from performing an effective evaluation of the disorders diagnosed by Benson’s expert. Kirby’s expert also stated that assessment of these disorders would require administration of multiple tests, some of which take two hours to administer. Finally, Kirby’s expert urged the court not to require advance disclosure of the tests as it could permit Benson to anticipate and prepare for them, which could skew the results. The trial court denied the motion for reconsideration. Kirby moved for mandamus relief from the appellate court, contending that by so doing, the trial court abused its discretion. The appellate court concluded that the trial court abused its discretion in limiting Kirby’s neuropsychological examination to two hours and requiring advance disclosure of the tests its expert planned to administer. The appellate court concluded that limitations imposed by the trial court would unreasonably hamper Kirby’s ability to present a defense and to challenge Benson’s expert witness, and therefore appeal would not be an adequate remedy. Because Kirby had established that the trial court's limitations on Kirby’s expert’s examination were an abuse of discretion for which there is no adequate remedy by appeal, the appellate court conditionally granted mandamus relief and ordered the trial court to vacate its order to the extent it limits Kirby’s evaluation to a two-hour period and required advance disclosure of tests to be administered. (Tex 1st App Ct., July 18, 2018) 2018 Tex. App. LEXIS 5475
CLAIM FOR LOSS WAGES FIZZLES OUT (CONT.)
MUSLEH V. AMERICAN STEAMSHIP COMPANY
Ahmed Musleh allegedly injured his shoulder and thumb while working for American Steamship Company (ASC) as a seaman aboard ASC’s vessel. The court had previously granted ASC's motion for summary judgment in a wage loss action between these same parties, regarding damages allegedly related to this same injury [see October 2017 Longshore Update]. ASC then moved for dismissal in this action, arguing that Musleh’s claims were barred by principles of res judicata and collateral estoppel. It was undisputed that Musleh received maintenance and cure benefits from ASC throughout the six month period that he was recovering from his injury and not fit for duty. After being declared fit for duty, Musleh attempted to return to work for ASC, but was deemed not qualified to return to work on an ASC vessel because he failed to obtain a Vessel Personnel and Designated Security Duties certificate. The court had previously determined that Musleh’s entitlement to unearned wages ceased when Musleh’s voyage aboard the vessel ended, coincidentally the same date on which Musleh allegedly suffered his injury. In its prior ruling, the court decided that Musleh was not entitled to unearned wages as a result of his injury and decided that Musleh had received all of the maintenance and cure benefits to which he was entitled as a result of that injury. In resolving these claims, the court necessarily found that Musleh was a seaman, and that he was injured in the course and scope of his employment for ASC. The parties did not dispute the first and second elements of the res judicata analysis were met. The court’s prior ruling resulted in a final judgment on the merits and the parties were identical. And Musleh put up minimal resistance with regard to the third factor. The real dispute focused on the fourth element; whether there was "an identity of the causes of action in the prior adjudication and here. The requirement that there be an identity of the causes of action is satisfied if the claims arose out of the same transaction or series of transactions, or whether the claims arose out of the same core of operative facts. The court found that all of Musleh’s claims in both in the original action and this action arose out of the same accident and injury and Musleh conceded that the claims asserted could have been, and typically would have been, asserted in the original adjudication. Therefore the court found that the claims asserted were barred by res judicata. Accordingly, the court granted ASC’s motion to dismiss. (USDC EDMI, July 2, 2018) 2018 U.S. Dist. LEXIS 110122
COURT GRANT DEFAULT JUDGMENT IN MAINTENANCE & CURE CLAIM
DIAMOND B INDUSTRIES, LLC V. BANCROFT-BROWNLEE
Jaymie L. Bancroft-Brownlee was formerly employed with Diamond B Industries as the captain on board a towing vessel owned and operated by Diamond B Industries. Bancroft reported an unwitnessed incident to Diamond B Industries, claiming he slipped and fell in the engine room on board the tug, causing injuries to himself. He was sent in-shore for medical treatment and was released that same day. Diamond B Industries received a fax from an attorney on behalf of the Bancroft, in regard to his alleged injury. In response, Diamond B Industries, requested that Bancroft submit any and all medical information regarding his alleged injury. Diamond B Industries subsequently received a letter from Bancroft, requesting that Diamond B Industries pay maintenance and cure in relation to his alleged complaints; however, this correspondence failed to provide the previously requested medical information. Diamond B Industries continuously requested any and all present and past medical records related to Bancroft’s complaints. Although Bancroft provided partial medical records from three medical providers, he failed to provide his full medical records, including those from the date of the accident, and refused to execute a medical authorization in order for Diamond B Industries to obtain such records. The partial medical records received by Diamond B Industries reveal that Bancroft had a pre-existing history of neck surgery and a foraminatomy of C5-C6 in 2014, all prior to his employment with Diamond B Industries. At the time he applied for employment with Diamond B Industries, Bancroft was asked to complete a medical history questionnaire. Therein, Bancroft failed to disclose, intentionally misrepresented and/or concealed from Diamond B Industries his pre-existing medical history, specifically, with respect to the above-described two surgeries. In the questionnaire, Bancroft replied "NO" to having ever had a "ruptured or herniated disk" or "spinal fusion or surgical removal of intervertebral disk." Diamond B Industries later discovered that Bancroft had also previously sued his former employer, Blake Towing, Inc., alleging injuries to his back from an accident for which he received medical treatment for his back and neck problems. During his employment physical on June 16, 2017, Bancroft also intentionally misrepresented and/or concealed from Diamond B Industries and the physician examining him this relevant pre-existing surgical history and back injuries when he responded "NO" to the questions regarding any prior back pain, joint problems or orthopedic surgery or any hospital admissions within the preceding six years. Diamond B Industries filed a complaint for declaratory judgment. In accordance with FRCP 4, certified copies of the summons and the complaint were served, by a commercial courier (FedEx), on Bancroft. The FedEx proof-of-delivery evidences the signed receipt from R. Bancroft, an agent of the Bancroft, of the parcel containing the summons and complaint upon completion of delivery. Bancroft never answered or otherwise defended the allegations set forth in the complaint. Upon Bancroft’s failure to answer, the clerk of court entered an entry of default, notice of which was mailed to Bancroft that same day. Pursuant to FRCP 55, and well after the requisite fourteen days had elapsed, Diamond B Industries filed its motion for entry of default judgment in this action for declaratory judgment. Attached to the motion and admitted into evidence Diamond B Industries has submitted the affidavit of Robert J. Bonin, Jr., who is the managing member of Diamond B Industries. Pursuant to Mr. Bonin's affidavit, the facts have been established. This court found that an actual controversy existed, because Bancroft had made a written demand for maintenance and cure payments, and Diamond B Industries sought a judgment declaring that Bancroft was not entitled to such payments as a matter of law. Diamond B Industries established that both subject matter and personal jurisdiction existed and had shown that there was no pending state court action between the parties in the case. There were no material issues of fact in dispute, as Bancroft was served with the complaint, which triggered his duty to respond, and by his default, admitted Diamond B’s well-pleaded allegations of fact. Therefore, the court granted the motion for default judgment and judgment was entered against Bancroft and in favor of Diamond B Industries, LLC. (USDC WDLA, June 29, 2018) 2018 U.S. Dist. LEXIS 121545
COURT REFUSES TO ALLOW SEAMAN TO CHERRY PICK HIS EARNINGS YEAR
LAWRENCE V. GREAT LAKES DREDGE & DOCK COMPANY, LLC OF LOUISIANA
Earl K. Lawrence, Jr. was allegedly injured while working as a seaman aboard a Great Lake Dredge & Dock Company (GLDD) vessel. He filed a Jones Act suit alleging that his injuries were the direct result of GLDD's negligence and the vessel's unseaworthiness. GLDD filed a motion in limine challenging the admissibility of Lawrence's expert economist. The court granted GLDD's motion with respect to the expert’s testimony, concluding that he would not be permitted to testify at trial as to a lost wages calculation based solely on Lawrence's 2013 earnings. The disputed order did not grant GLDD's motion in limine in its entirety. Lawrence then moved the court to reconsider its ruling "to correct legal error" and "prevent manifest injustice." Lawrence argued that the court's ruling limits a Jones Act seaman from presenting evidence to the jury that his personal earnings capacity should be based on the 2013 figure. The court pointed out that this was a mischaracterization of the court's order. First, Lawrence overgeneralized the order, which simply prohibited this particular expert from testifying about his particular calculation because the calculation's factual foundation was contrary to law. Second, the court never precluded Lawrence generally from proffering expert testimony based on a single year's earnings other than the year in which a plaintiff was injured. The court found that had yet to offer any suggested facts that warrant his expert’s approach, which ran counter to the traditional calculation method set out in Culver II, which requires the court to use a plaintiff's gross earnings at the time of the injury. According to Lawrence, the law permits him to present evidence to a jury to demonstrate that he had the capacity to earn an amount equivalent of the 2013 income figure but for this accident in light of the inconsistency in his income levels between 2012 and 2015.1 The court noted that the Fifth Circuit has permitted departures from Culver II's general rule when earnings data is inconsistent, and the court agreed with Lawrence that his earnings data was inconsistent. Often, permissible variations of Culver II’s benchmark involve averaging a plaintiff's earnings from several prior years. Alternatively, the Fifth Circuit and other sections of the court have determined a plaintiff's earning base by annualizing his income from the year he was injured. However, Lawrence’s economist’s calculations did not involve averaging Lawrence's past earnings or annualizing his 2015 income, but, instead, relied exclusively on Lawrence's 2013 actual earnings to compute his earnings base, which he then used to calculate lost wages. The Fifth Circuit has never permitted a plaintiff's expert to cherry-pick earnings from a year other than the year the injury occurred without providing any rationale. In its order granting GLDD's motion in limine in part, the court noted Lawrence's failure to provide such a rationale. Finally, Lawrence argued that if the court maintained its prior ruling, the court should certify its prior order for interlocutory appeal. The court noted that interlocutory appeals are not warranted simply to determine the correctness of a judgment. Accordingly, Lawrence's motion for reconsideration was denied and it was further ordered that Lawrence's request that the court certify its prior order for interlocutory appeal was denied. (USDC EDLA, July 26, 2018) 2018 U.S. Dist. LEXIS 125131
COURT FINDS FOR EMPLOYER IN JONES ACT AND UNSEAWORTHINESS CLAIMS
DEAN V. SEA SUPPLY, INC. ET AL.
This case arose out of injuries allegedly sustained by Johnny Dean, Sr. while he was employed as a captain on a Sea Supply, Inc. vessel. Dean alleged that he slipped and fell in the engine room and sustained injuries to his shoulder, neck, and back. Dean subsequently filed a complaint against Sea Supply, Inc., Sea Supply, Inc. COB, and the vessel, seeking damages under the Jones Act and general maritime law for defendant's alleged negligence and vessel unseaworthiness. He also sought maintenance and cure. Sea Supply denied liability claiming that Dean’s injuries were caused in whole or in part by Dean’s own actions. Following a three day bench trial, the court entered judgment in favor of Sea Supply. The court found that the credible evidence supported the conclusion that the paint on the engine room floor did not create an unseaworthy condition. Dean’s fall and resulting injuries were caused by the Dean’s failure to use proper slip resistant shoes and failure to clean surfaces and shoes that he knew had oil on them. Having considered the testimony of the fact witnesses and expert witnesses presented by both sides, the court determined that Dean violated the company's safety rule regarding proper footwear in the engine room and was therefore negligent. Additionally, the court found that he was negligent in failing to properly prepare for his task and to clean his shoes after exiting the bilge and to clean the walking surfaces before beginning the task, and that these negligent acts were the sole cause of Dean’s accident and injuries. The court found that Dean’s actions in failing to properly prepare for the conditions he knew he was likely to encounter while fixing the starter were not reasonable under the circumstances. Accordingly, as a matter of law, the court held that Dean was 100% as fault for his accident and injuries. The evidence demonstrated that Sea Supply had paid maintenance and cure from the date of Dean’s injury until the date of trial. The credible evidence supported the conclusion that Dean sustained injuries to his shoulder, neck, and back and that he was unfit for duty as a result of this injury from that date until the time he is deemed to have achieved MMI. The weight of credible evidence indicated that Dean had not yet reached MMI. Sea Supply had paid all of Dean’s past medical bills which were submitted at the time of trial. However, Dean submitted additional medical expenses on the day of trial. Therefore, Sea Supply was given 60 days to review the charges and to reimburse Dean for same. Judgment was entered in favor of Sea Supply, dismissing Dean’s claims for damages based on the Jones Act and general maritime law with prejudice. (USDC EDLA, July 12, 2018) 2018 U.S. Dist. LEXIS 115816
COURT DENIES REMITTITUR ON COMPENSATORY DAMAGE AWARD
DARDAR V. T&C MARINE LLC
Raymond Dardar alleged that he was injured aboard his assigned vessel while working for the vessel's owner, T&C Marine. Specifically, he alleged that his foot was injured when it was slammed in a door while aboard the vessel. Dardar brought claims for Jones Act negligence, unseaworthiness, maintenance and cure, and failure to pay maintenance and cure. At the conclusion of a jury trial, the court entered judgment in favor of T&C Marine on Dardar’s Jones Act and unseaworthiness claims and in favor of Dardar on his claims for maintenance and cure and the failure to pay maintenance and cure. The jury awarded Dardar damages in the amounts of $4,180 for maintenance, $3,500 for cure, $72,500 in compensatory damages, and $20,000 in punitive damages. T&C Marine then moved for judgment as a matter of law, new trial, or remittitur. At oral argument on its motion, the court denied all of T&C Marine’s arguments save one regarding the reasonableness of the amount awarded in compensatory damages. This Court will address that issue here. T&C Marine argued that the jury erred in awarding Dardar compensatory damages in the amount of $72,500.00. Compensatory damages can be awarded for injuries that resulted from an employer's unreasonable failure to pay maintenance and cure. These are the damages that have resulted from the failure to pay, such as the aggravation of the seaman's condition, determined by the usual principles applied in tort cases to measure compensatory damages. Dardar claimed that he presented evidence at trial showing that he was owed compensatory damages for the financial distress caused by T&C Marine’s failure to pay, including the stress related to unpaid medical bills being sent to collections. At trial, Dardar testified that he suffered financial hardship as a result of T&C Marine’s failure to pay maintenance and cure, including having to take out small loans and refinance his house and car to keep afloat. He also testified that T&C Marine’s failure to pay negatively affected his credit score. A jury's monetary award for intangible harm is inherently subjective and is entitled to deference. Such deference should be abandoned, however, if the verdict is clearly excessive. While the court acknowledged that the jury's award was in the upper range of reasonableness, it was not so high that the court could say that it was excessive. The court found that the financial distress described by Dardar could reasonably be worth the amount awarded by the jury. Accordingly, T&C Marine’s request for judgment as a matter of law or remittitur was denied. (USDC EDLA, July 19, 2018) 2018 U.S. Dist. LEXIS 120678
COURT FINDS QUESTIONS OF FACT EXIST IN EMPLOYER’S MCCORPENDEFENSE
ALEXANDER V. C/W RE CHS INC OF MINNESOTA
This maritime action arose from an alleged slip and fall that Cory Alexander allegedly suffered working aboard CHS Inc. of Minnesota’s vessel while employed as a seaman. Alexander alleged that he slipped and fell on hydraulic fluid that had leaked from a hydraulic line onto the stern deck of the vessel, injuring his right knee and lower back. In order to obtain employment as a deckhand, Alexander underwent a pre-employment physical. As part of the exam, Alexander filled out a medical history questionnaire, circling "no" next to "Back injury (upper)" and "Back injury (lower). One week earlier, Alexander had seen his personal physician, with a chief complaint of back pain and reporting that he had been experiencing the pain intermittently for the previous three years, that the pain was aggravated by activity, that nothing relieved the pain, and that his last episode was three months before the visit. It was undisputed that Alexander immediately reported his injury, left the vessel, and received maintenance and cure from CHS. Alexander later returned to work and a month later alleged another injury, claiming that he was struck by a cable, injuring his lower back. At the time, Alexander said that he was fine and refused medical treatment. He continued to work for CHS, until he sought medical treatment 5 months later. One month prior to seeking medical treatment, Alexander was rear-ended by another car while driving on the highway, allegedly sustaining injuries to his head, neck, shoulder, back, and hips. Alexander’s first demand for maintenance and cure related to his second accident was seven months after the incident. CHS paid maintenance totaling $20,480.00 and cure totaling $21,064.54, but then denied further cure on the basis of the McCorpen defense and because it believed that Alexander had failed to produce credible evidence that his condition was caused by his reported incident. Alexander then filed suit, asserting claims for Jones Act negligence, unseaworthiness, maintenance and cure under the general maritime law, and punitive damages for the alleged failure to pay maintenance and cure. CHS filed a complaint for exoneration and limitation of liability and then moved for summary judgment dismissing Alexander’s claims for maintenance and cure, punitive damages, and Jones Act liability. CHS argued that, by circling "no" next to the back injury questions on his pre-employment medical history questionnaire in 2010, Alexander concealed medical facts relevant to his employment and connected to his present injury, thereby entitling CHS to the McCorpen defense. The court agreed that CHS had established prongs one and two as a matter of law. However, the court believed there was a question of material fact as to the third prong, whether Alexander’s preexisting injury was sufficiently connected to the injury complained of in his lawsuit. Alexander testified that his preexisting injury was to his upper back. CHS argued that Alexander was lying, but offered no evidence to support their theory that the injury was actually to Alexander’s lower back. Regardless, issues of credibility were generally not appropriate for summary judgment. Accordingly, summary judgment on CHS’s McCorpendefense was denied.
CHS also moved for summary judgment dismissing Alexander’s claims for Jones Act negligence and unseaworthiness on the ground that Alexander had failed to carry his burden to prove that his injuries were caused by the incident aboard its vessel. The court disagreed, noting that Alexander’s treating physician, opined that Alexander’s injuries to his lower back and the resulting need for a fusion were caused by his fall aboard CHS’s vessel. After being presented with evidence of the car crash that Alexander suffered, his treating physician concluded that the crash aggravated the injuries that Alexander sustained in the fall. Accordingly, summary judgment that Alexander had failed to prove causation was denied. CHS also moved for summary judgment dismissing Alexander’s claim for punitive damages resulting from the denial of maintenance and cure on the grounds that Alexander had failed to produce evidence that CHS was arbitrary and capricious in its denial. The court noted that CHS relied on its own medical experts to contradict the opinions of Alexander’s treating physicians and deny his further maintenance and cure. Although the court was mindful of the inconsistencies that CHS pointed out in Alexander’s stories, the court found that there was sufficient evidence in the record for a trier of fact to find that CHS was arbitrary or capricious in doing so. CHS’s motion for summary judgment was denied in its entirety. (USDC EDLA, July 24, 2018) 2018 U.S. Dist. LEXIS 123106
COURT QUASHES SUBPOENA FOR FLAUNTING SCHEDULING ORDER
ROSCISZEWSKI V. MARQUETTE TRANSPORTATION COMPANY, LLC
Michael Rosciszewski was a mate aboard a vessel owned and operated by Marquette Transportation Company, LLC, when he was allegedly injured when he slipped and his leg was pinned between the pontoon and vessel allegedly crushing it. Rosciszewski filed suit, contending Marquette was negligent in the operation of the vessel, the vessel was unseaworthy, Marquette had the duty provide him maintenance and cure, and punitive damages were alleged due to the failure to pay maintenance and cure as well as for any gross negligence or unseaworthiness of the vessel as allowed by law. Shortly before trial in the case, Rosciszewski moved to quash a subpoena issued to a non-party seeking information in the personnel and employment files of managers in the weight and cardio areas of the Bear Levin Studer Family YMCA during a period of six-months, because they were issued outside of the discovery period, required a response one week before trial, and were overbroad. The court noted that the scheduling order required that all discovery be completed June 12, 2018. The subpoena that Rosciszewski sought to quash was issued on July 12, 2018 and required a return on July 30, 2018. The subpoena was issued one month after the discovery deadline had passed and requires production of information only seven days before trial. The court found that the subpoena issued by Marquette flaunted the scheduling order by seeking discovery outside of deadlines imposed such that it must be quashed. As a result, the court quashed the subpoena at issue as it was facially in violation of the deadlines set forth by the court. (USDC EDLA, July 19, 2018) 2018 U.S. Dist. LEXIS 120684
COURT ADDRESSES CROSS MOTIONS IN LIMITATION ACTION (CONT.)
IN RE: TAPPAN ZEE CONSTRUCTORS, LLC
Timothy Marion was employed by Tappan Zee Constructors, LLC (TZC) and was assigned to and operated the vessel that is the subject of this limitation action. While operating said vessel, Marion allegedly sustained traumatic injuries requiring medical and surgical care. Marion named TZC in a personal injury lawsuit filed in state court. TZC filed a complaint for exoneration from or limitation of liability, pursuant to 46 U.S.C. §§30501, et seq., for any damages and/or injuries caused by or resulting from an incident occurring on or about September 17, 2013, in the navigable waters of the Hudson River. TZC sought approval of security, a restraint on all actions and proceedings against it, and the requisite publication of notice. The court granted TZC’s motions to approve security, enjoin suits, and direct issue of notice. Marion then moved to vacate the court’s injunction and lift the stay of state court action, contending that as a single claimant, state court was the appropriate forum. TZC moved for an order of default, asserting that a default judgment was appropriate because, although Marion filed an answer in response to petitioner's complaint, he failed to file a claim as required by Supplemental Admiralty and Maritime Claims Rule F(5). The court initially addressed TZC’s motion for a default order, and pointed out that its assertion that failure to file a claim must result in a default judgment was erroneous, as the court may enlarge the time within which claims may be filed. To demonstrate cause for neglecting to file a claim, Marion asserted that said failure was a good faith error in an attempt to contest TZC’s right to limitation of liability. TZC’s motion for default judgement was therefore denied and the court granted an extension for Marion to file his claim. Neither party contested the fact that Marion was a lone claimant and no other parties had filed claims against petitioner. However, the court pointed out that it must examine the sufficiency of the stipulation in light of a four-part test designed to allow a claimant to proceed in another forum under the lone claimant exception. The court declined to examine Marion’s motion to vacate until a proper claim was filed. Both motions were denied [see April 2018 Longshore Update]. After filing his claim, Marion renewed his motion to vacate the injunction and lift the stay of state court action, which would allow him to proceed with the state court action. Neither party contested the fact that Marion was the lone claimant. The court found that Marion’s stipulation met all relevant parts of the Dammers test. Nevertheless, TZC argued that Marion’s renewed motion to vacate the injunction and lift the stay of the state court action must be denied because Marion had not conceded the sufficiency of the security. The court disagreed and found that Marion was not required to stipulate to the precise value of the limitation. Accordingly, Marion’s motion to lift the stay was granted. (USDC NDNY, July 26, 2018) 2018 U.S. Dist. LEXIS 125058
CONTRACT FOR WHARFAGE AND DOCKSIDE SERVICES IS NOT MARITIME
LIGHTERING LLC, ET AL. V. TEICHMAN GROUP, LLC ET AL.
This case involved a contractual-indemnity dispute arising out of underlying wrongful-death and personal-injury lawsuits filed after a crane accident. The underlying plaintiffs sued the Teichman Group, LLC, T&T Offshore, Inc., and OSG Lightering, LLC, seeking damages for the deaths and injuries. OSG and its insurers sued Teichman and T&T seeking a declaratory judgment that there was no contractual obligation to defend, indemnify, or provide additional insurance coverage to Teichman or T&T for the underlying wrongful-death and personal-injury lawsuit, invoking the court's admiralty and maritime jurisdiction under 28 U.S.C. §1333. T&T moved to dismiss under FRCP 12(b)(1), arguing that admiralty jurisdiction was improper and the court lacked subject matter jurisdiction. Following a careful review of the motion, the response, and the reply; the record; and the applicable law, the motion to dismiss for lack of subject matter jurisdiction was granted. The court found that the two main components of the agreement between T&T and OSG were wharfage and dockside services. T&T concedes that the vessel loading and unloading services it provided are maritime in nature, but argues that those services are only a small part of the agreement, insufficient to make it maritime in nature. The court pointed out that the case law was clear that the wharfage component of the agreement, which contained no reference to any particular vessel, was not maritime in nature. The parties both agree that the other component of the agreement - dockside services - was maritime in nature. Nevertheless, the court concluded that in this particular agreement, neither wharfage nor equipment storage was a maritime commerce activity, but vessel loading and unloading was. The only part of the agreement that involved "work from a vessel" was the equipment loading and unloading. Because it was a mixed contract, the final issue was whether the maritime portion was the "principal objective" of the agreement. The court concluded it was not. The court concluded that the agreement did not have a principal objective of maritime commerce. Because the Agreement was non-maritime in nature and character, the court lacked admiralty and maritime jurisdiction under 28 U.S.C. §1333. The case was dismissed for lack of subject matter jurisdiction. (USDC SDTX, July 16, 2018) 2018 U.S. Dist. LEXIS 118281
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