November 2018
Notes From Your Updater: The Longshore Claims Association will be hosting Roundtable Luncheons in the Port of Portland on Thursday, November 8, 2018, from 11:00 AM to 1:00 PM and in Seattle, WA on Friday, November 9, 2018, from 11:00 AM to 1:00 PM. The subject of the Port of Portland roundtable will be, “Making the Case: Shield Extended Opioid Use Under the LHWCA.” The subject of the Seattle roundtable will be, “Essential Cover Letter.” Please see the LCA website for more information. Please RSVP to stacy.franz@ssamarine.com by November 5, 2018.
On October 30, 2018, the Texas Court of Appeals, Fourteenth District, withdrew their prior opinion in the case of Fredieu v. W&T Offshore, Inc. [see July 2018 Longshore Update] and substituted a new majority opinion. The outcome of the case remained the same.
On October 3, 2018, a petition for certiorari was filed with the U.S. Supreme Court in the case of Liberty Mutual Insurance Co. v. Carrizo Oil & Gas, Inc., Docket No. 18-436 [see August 2018 Longshore Update]. The question presented is, “Is a contract to provide services to oil wells located on fixed platforms in navigable waters within a State a ‘maritime’ contract when a vessel played a substantial role in the performance of the contract?”
On September 24, 2018, a petition for writ of certiorari was filed with the U.S. Supreme Court in the case of Parker Drilling Management Services v. Newton, Docket No. 18-389 [see March 2018 Longshore Update]. The question presented to the Court is, “Whether, under OCSLA, state law is borrowed as the applicable federal law only when there is a gap in the coverage of federal law, as the Fifth Circuit has held, or whenever state law pertains to the subject matter of a lawsuit and is not preempted by inconsistent federal law, as the Ninth Circuit has held.”
APPELLATE COURT AGREES . . . NO INFORMAL CONFERENCE EQUALS NO FEE
SMITH V. DIRECTOR, OWCP [NICOR NATIONAL]
This case involved an appeal from a Benefits Review Board decision denying attorney's fees under Sections 928 (a) & (b) of the Longshore and Harbor Workers' Compensation Act. The Board concluded that there was no informal conference and therefore Leroy Smith could not prevail on his application for attorney fees. The Board noted that, even assuming arguendo that Smith’s communications were an informal conference, Smith never received a written recommendation from the director or the Board. Smith appealed the Board’s decision, arguing that correspondence between the parties, including a request for an informal conference, served as the functional equivalent of an informal conference. The appellate court pointed out that, while a Department of Labor regulation allows some cases to be handled by written correspondence, there was no evidence that such an informal conference occurred in Smith’s case. Nor was there evidence that the district director offered a recommendation. The appellate court agreed with the Board that these deficiencies were disqualifying. The Board concluded that the employer voluntarily paid compensation to claimant within 30 days of receipt of the claim, and thus did not decline to pay any compensation . . . on the ground that there was no liability for compensation. Smith did not contest this finding. The appellate court agreed with the Board and Smith’s petition for review was denied. (5th Cir, October 9, 2018, UNPUBLISHED) 2018 U.S. App. LEXIS 28451
THE ONGOING DILEMMA: JONES ACT OR LONGSHORE ACT
SMITH V. H&E TUGS LLC, ET AL.
This is yet another case involving the Deepwater Horizon drilling rig explosion, which spilled millions of gallons of oil into the Gulf of Mexico. As a result, BP Exploration and Production, Inc., and/or BP America Production Company, (hereinafter BP) engaged numerous companies to assist in performing response services. Ultimately, thousands of vessels participated. One such entity, Lawson Environmental Service, LLC, was contracted by BP to assist. BP also engaged O'Brien's Response Management Inc. (ORM) to provide personnel and oil spill response services. ORM then subcontracted with Center for Toxicology and Environmental Health, LLC (hereinafter CTEH), who supplied workers for the cleanup effort. CTEH employed Nathanial Smith to work as a safety observer. While working aboard a vessel, Smith was injured when the another vessel rear ended Smith’s vessel. Smith filed a petition for damages alleging claims under general maritime law against Lawson. In response, Lawson filed a third party demand against ORM, seeking indemnification. Although ORM agreed to indemnify Lawson, it filed a third party demand against CTEH, pursuant to a separate contractual indemnity agreement and sought contractual defense, indemnity, and insurance coverage. Smith subsequently reached a settlement and dismissed all claims against all parties with prejudice. Only ORM and CTEH's claims against each other remain. CTEH filed a motion for summary judgment, seeking a determination that Smith was a LHWCA employee, and requesting that the indemnity agreement between ORM and CTEH be declared void. After taking the matter under advisement, the trial court granted CTEH's motion for summary judgment, finding Smith was an employee under the LHWCA and dismissed ORM's third party demand. In the trial court's reasons for judgment, it concluded that Smith failed to meet the requirements to qualify as a Jones Act seaman, based upon Smith's statement that his work as a safety observer was done on the beaches that were being cleaned. ORM appealed, arguing the trial court erred in granting summary judgment, finding that Smith's employment falls under the LHWCA rather than the Jones Act. In its motion for summary judgment, CTEH argued ORM's potential recovery against it for contractual defense, indemnity, and insurance coverage was contingent on Smith's status as an LHWCA employee or a Jones Act seaman. CTEH contends the trial court was correct in granting summary judgment and dismissing ORM's third party demand because the undisputed facts prove Smith was an employee under the LHWCA as a matter of law. In opposition to CTEH's motion, ORM maintained there were material factual disputes regarding whether Smith worked on a fleet of vessels under common ownership or control. Based upon its review of the record, the appellate court found there was a genuine issue of material fact regarding the applicable maritime workers' statute under which Smith fell. Factual inferences on these issues were germane to the issue of seaman status. Thus, it requires the weighing of evidence which was improper on a motion for summary judgment. Different factual inferences could be drawn by the trier of fact regarding who controlled the vessels. The only evidence CTEH submitted in support of their argument that each vessel ultimately controlled operations for the day, was the deposition of Smith, which offered little insight. ORM offered an affidavit, which attested the U.S. government ultimately controlled the mission, which created a genuine issue of material fact. Further, the question of which entity ultimately controlled the vessels upon which Smith worked necessarily touched upon the appropriate method to calculate Smith's total time spent aboard vessels. Therefore, the record before the appellate court did not provide the necessary undisputed facts as to Smith's seaman status which would justify the grant of summary judgment. Accordingly, the appellate court reversed the judgment of the trial court granting summary judgment in favor of CTEH and remanded the matter for further proceedings. (La. 4th App. Ct, October 24, 2018) 2018 La. App. LEXIS 2107
QUESTION OF FACT ON LONGSHORE STATUS AS TO TRANSIENT OR FORTUITOUS
PAYANO V. ENVIRONMENTAL, SAFETY & HEALTH CONSULTING SERVICES, INC.
Georges Payano alleged that he sustained a tear of his right bicep while attempting to retrieve an oil boom from the water while aboard a vessel. Environmental, Safety, & Health Services, Inc. hired Payano to work as a technician. Prior to the day of his accident, Payano had performed land-based cleaning work in a warehouse and had never before performed cleanup work aboard a vessel at sea. On the morning of his alleged injury Payano and four other ES&H employees boarded the vessel to conduct oil spill cleanup work. The vessel, which was owned by NOLA Boat Rentals, LLC, was time chartered by ES&H pursuant to a Master Service Agreement. The ES&H crew was instructed to retrieve damaged sections of a containment boom from the water and load it onto the vessel. As Payano was grasping a segment of the still-anchored boom, the bow of the vessel jerked upwards due to wave action, and he sustained a tear of his right bicep. Payano received compensation benefits under the LHWCA while recuperating from his injury until he was cleared to return to work. Upon returning to work, Payano was placed on light duty status, for which he was allegedly harassed by his supervisors. He submits that he ultimately resigned because of this harassment. Payano subsequently ES&H, alleging claims under the Jones Act, the LHWCA, and the general maritime law. Moreover, he alleged damages for physical pain and suffering, mental suffering, lost wages, scarring and disfigurement, disability, medical expenses, maintenance and cure, workers' compensation benefits, and/or compensation benefits under the LHWCA. Payano subsequently stipulated that he: was not a seaman at the time of the incident, did not have a Jones Act negligence claim, did not have an unseaworthiness claim under the general maritime law, and (4) did not have a general maritime law maintenance and cure claim. ES&H moved for summary judgment, contending that it was entitled to judgment as a matter of law that Payano was covered under the LHWCA such that his recovery was limited to compensation benefits from ES&H and a possible vessel negligence claim under §905(b) of that Act and ES&H was not liable for vessel negligence under §905(b). ES&H contended that because Payano was injured on navigable waters and in the course of his employment with ES&H, he satisfies the situs and status elements of the LHWCA. And because he qualifies as a covered worker under the LHWCA, his remedy is limited to compensation payments from ES&H, and a potential § 905(b) action against the vessel owner. Payano countered that ES&H improperly conflated the situs and status elements of the LHWCA, noting that the Fifth Circuit has clarified that a worker injured in the course of his employment on navigable waters is engaged in maritime employment and meets the status test only if his presence on the water at the time of injury was neither transient nor fortuitous. Payano further submitted that he was employed as a technician, worked inside of an ES&H warehouse, and had never worked on a vessel until the day of his injury. Because he was an exclusively "land-based employee" who was injured while fortuitously working on navigable waters, Payano averred that he was covered by the Louisiana Workers' Compensation Act, rather than the LHWCA. Because a factual dispute remained as to whether Payano's presence on navigable waters was more than fortuitous at the time of his injury, summary judgment in favor of ES&H that Payano is covered under the LHWCA and only eligible to recover under that Act is inappropriate. The court denied ES&H’ds motion in part, as to Payano’s coverage under the LHWCA. It was undisputed that ES&H did not own the vessel on which Payano’s alleged injury occurred. However, the parties disagreed as to whether ES&H was liable under §905(b) in its capacity as time charterer of the vessel. ES&H contended that there was no allegation or evidence demonstrating that ES&H owed and/or breached a duty by an act taken in its capacity as time charterer. Although Payano pointed to evidence in the summary judgment record indicating that ES&H may have been negligent, there was no evidence in the summary judgment factual record to support a finding that these alleged acts of negligence occurred in ES&H's capacity as time charterer, rather than as employer. Therefore, the court granted in part, as to ES&H’s liability for vessel negligence under §905(b). In addition, Payano’s claims for unseaworthiness, maintenance and cure, and Jones Act negligence were dismissed with prejudice, in light of Payano’s binding stipulation that he did not have these claims. Payano’s status as a longshoreman or a land-based worker, as well as his claim for negligence under the general maritime law, remained before the court. (USDC EDLA, October 2, 2018) 2018 U.S. Dist. LEXIS 170061
BENEFITS REVIEW BOARD AFFIRMS POST-DEATH MODIFICATION OF AWARD
GUESS V. ELECTRIC BOAT CORPORATION, ET AL.
Gerald Guess allegedly sustained injuries to his left and right wrists during the course of his employment, and he filed a claim for LHWCA benefits. An ALJ awarded Guess continuing temporary total disability benefits from December 19, 2012. His employer, Electric Boat Corporation, paid those benefits until August 3, 2015, when it learned Guess had died on July 23, 2015. Electric Boat filed a motion for summary decision and modification, seeking termination of the temporary total disability award. Guess’s estate opposed the motion, asserting decedent's estate's entitlement to scheduled permanent partial disability benefits for decedent's impaired hands, pursuant to Section 8(d) of the Act. Electric Boat objected and filed a cross-motion for modification, asserting decedent's condition had become permanent and total as of August 6, 2013, when his left hand condition reached maximum medical improvement. Thus, Electric Boat asserted that entitlement to all benefits terminated upon decedent's death and that there were no unpaid scheduled benefits due. The administrative law judge denied the claim for permanent partial disability benefits pursuant to Section 8(d). He found that the present claim was that of decedent's estate and a decedent's estate is not entitled to benefits pursuant to Section 8(d). He also found that decedent's total disability did not end, and his temporary total disability status was never modified, during his lifetime, such that he never had a vested interest in permanent partial disability benefits. The administrative law judge also found that decedent's bilateral hand condition became permanent and total on April 10, 2014, and remained so until his death, warranting an award under Section 8(a) from that date until his death on July 23, 2015. Therefore, the administrative law judge modified the prior award of temporary total disability benefits to one for permanent total disability benefits. As a claimant cannot receive concurrent permanent total and permanent partial disability benefits for the same injury, the administrative denied the claim for scheduled benefits. The administrative law judge found that Electric Boat was entitled to a credit for any benefits due against its payment of temporary total disability benefits. Guess’s estate appealed the denial of permanent partial disability benefits pursuant to Section 8(d). The Director, OWCP also responded, asserting that because Section 8(d) of the Act, on which the estate relied, applied only to survivors, and not decedents' estates, remand may be necessary to determine if decedent had any statutory survivors. The Board found that the administrative law judge properly concluded that decedent's disability remained total upon reaching maximum medical improvement, and properly awarded decedent's estate accrued permanent total disability benefits plus annual adjustments from that date. As decedent was entitled to permanent total disability benefits at the time of his death, he was not entitled to permanent partial disability benefits under the schedule. Thus, absent either accrued or unaccrued permanent partial disability benefits at the time of death, the administrative law judge properly found that Section 8(d) was wholly inapplicable. Therefore, as it was supported by substantial evidence and in accordance with law, the Board affirmed the administrative law judge's award of permanent total disability benefits to decedent's estate from April 10, 2014 to July 3, 2015. Accordingly, the administrative law judge's grant of modification was affirmed. (BRB No. 17-0589, August 9, 2018) 2018 DOLBRB LEXIS 257
ANOTHER REMOVAL ACTION BITES THE DUST
MATTE V. MOBIL EXPLORATION AND PRODUCING NORTH AMERICA INC., ET AL.
This case involved a toxic tort wherein Kenneth Matte alleged that he developed chronic meylomonocystic leukemia (CMML) as a result of exposure to benzene and benzene-containing products. Matte alleged that the harmful exposure occurred between 1972 and 1979 when he worked as a seaman aboard a vessel owned and operated by The Superior Oil Company, predecessor-in-interest to Mobil Exploration and Producing North America, Inc. Matte alleged that he contributed to the mission of the vessel, while it was operating on navigable inland waters, by aiding in general maintenance, coming into contact with benzene and benzene-containing products, such as oil-based drilling fluids, crude oil, penetrators, paint thinners, paints, fuel, and solvents while he performed his work aboard the vessel. Matte filed suit in state court against multiple defendants. Defendants removed the case to federal court, invoking federal question subject-matter jurisdiction pursuant to the Outer Continental Shelf Lands Act (OCSLA) and federal question subject-matter jurisdiction under 28 U.S.C. §1331, because OCSLA is a federal law. Defendants also alleged that the court had supplemental jurisdiction over Matte's claims against all other defendants pursuant to 28 U.S.C. §1367(a). Matte moved to remand arguing that the notice of removal was untimely filed. Defendants opposed Matte's motion to remand arguing that the removal was timely filed. The court initially found that the removal was timely filed. The court then turned to the claim of OCSLA original federal jurisdiction, finding that the first two prongs of the test were satisfied. Matte testified that he was exposed to benzene-containing products, when he worked on an OCSLA situs for three months. The court found that this was an inconsequential amount of time when balanced against the seven years Matte alleged that he was exposed to benzene and benzene-containing products while working as a seaman for Superior. Accordingly, the court held that OCSLA jurisdiction had not been demonstrated. Matte's motion to remand was granted. Since defendants were not objectively unreasonable in removing the action based on the potential application of OCSLA jurisdiction, the court denied Matte's request for fees and costs. (USDC EDLA, October 17, 2018) 2018 U.S. Dist. LEXIS 178388
LOUISIANA CONSTRUCTION ANTI-INDEMNITY STATUTE APPLIED TO THE MSA
BARRIOS, ET AL. V. CENTAUR, LLC, ET AL.
Devin Barrios alleged that he was injured while working for Centaur, LLC as a Jones Act seaman. Barrios was hired by Centaur, a marine construction company, to work on a construction project to build a concrete containment wall around the edge of a dock facility owned by United Bulk Terminals Davant, LLC (UBT). Centaur leased a barge to house its equipment during the project. UBT contracted with River Ventures, LLC to provide a crew boat to transport Centaur's employees to and from the project. Barrios alleged that he was injured while transferring a portable generator from the crew boat to the barge when the crew boat separated from the barge and he fell into the river, followed by the 100lb generator. Barrios brought claims under the general maritime law and Jones Act against both Centaur and River Ventures. River Ventures then filed a cross-claim against Centaur seeking indemnity and insurance pursuant to a Master Service Agreement entered into between UBT and Centaur regarding all construction projects performed by Centaur for UBT. Centaur and River Ventures filed cross-motions for summary judgment regarding Barrios’s seaman status. Centaur argued that Barrios was not a seaman and therefore his only remedy was compensation under the LHWCA. River Ventures argued the barge at issue is a vessel in navigation, but that material issues of fact existed as to Barrios’s seaman status. In addition, Centaur moved for summary judgment on River Venture's cross-claim, arguing that the Louisiana Construction Anti-Indemnity Statute applied to the MSA to prohibit the indemnity and additional insured provisions therein. Centaur argued that the facts show that the barge was a work platform and not a vessel in navigation. The court found no evidence that the barge was permanently attached to land, and although it lacked a means of self-propulsion, it did in fact move frequently. It could not be said that this movement was merely incidental because it was necessary to provide supplies and equipment to the dock construction project. The movement of the barge at issue here was not simply theoretical, but it was actually used for the transportation of equipment and supplies over water. Accordingly, the court held that the barge was a vessel in navigation. The court found that there was sufficient conflicting evidence that a jury might draw more than one inference regarding the amount of time that Barrios spent working aboard the barge, and ultimately his seaman status. Accordingly, summary judgment on seaman status was denied. In its cross-claim against Centaur, River Ventures sought indemnity and insurance pursuant to the MSA between UBT and Centaur. Centaur argued that the Louisiana Construction Anti-Indemnity Statute applies to the MSA to prohibit the indemnity and additional insured provisions therein. River Ventures argued that maritime law, not Louisiana law, applied to the MSA to allow these provisions. The court held that the land-based construction contract at issue was non-maritime. Because the MSA was non-maritime, the parties agree that it is governed by Louisiana law. River Ventures responded that the indemnity and insurance provisions in the MSA fell within a particular exception to the LCAIS's prohibition. The court found that River Ventures had not carried its burden to show that UBT paid the full amount of its insurance premium and that the LCAIS exception applied. Accordingly, the court held that the LCAIS applied to prohibit the indemnity and insurance provisions of the MSA. Centaur's Motion for summary judgment was denied and River Venture's motion for partial summary judgment was granted. Centaur's motion for summary judgment on River Venture's cross-claim was granted and River Venture's cross-claim against Centaur was dismissed with prejudice. (USDC EDLA, October 22, 2018) 2018 U.S. Dist. LEXIS 180626
PLEADINGS SUFFICIENT FOR PRIMA FACIE SHOWING OF SEAMAN STATUS
CRISANTO V. CALADAN OCEANIC, LLC
Brayan Nunez Crisanto was allegedly injured while working as an oilman and a crewmember aboard Caladan Oceanic, LLC's vessel. Crisanto sued Caladan in state court, asserting common-law negligence under general maritime law. Caladan removed the case to federal court and Crisanto’s motion to remand was denied. Caladan then filed a FRCP 12(b)(6) motion to dismiss, arguing that Crisanto's Jones Act claims should be dismissed because Crisanto had not adequately pled his seaman status. Caladan did not challenge Crisanto's alternative claims under the LHWCA. The court observed that at all material times, Crisanto was employed as an oilman by Caladan, in service of a vessel, and Crisanto was a member of the vessel's crew. At all material times, the vessel was owned and/or operated by Caladan operating in navigable waters. Caladan argued that Crisanto had not pled sufficient facts. But the court found that on the face of the pleadings, Crisanto had pled factual content that allowed the reasonable inference that Caladan was liable to Crisanto as a seaman. The court found that any further fact-intensive inquiry into Crisanto's seaman status was best left to later in the proceedings. The court denied Caladan's motion to dismiss. (USDC NDTX, October 30, 2018) 2018 U.S. Dist. LEXIS 185403
COURT AWARDS DAMAGES AND CONSIDERS LHWCA LIEN
LEBLANC V. PANTHER HELICOPTERS, INC., ET AL.
The Court held a non-jury trial to determine the amount of Nicholas Miller sustained as a result of a helicopter crash, while Miller was employed by Wood Group, PSN, Inc. as a B Operator on a fixed offshore production platform. Miller and two of his coworkers boarded a Bell 206L-3 helicopter to return home after completing a fourteen-day hitch on the platform. Shortly after lifting off from the platform, the helicopter lost power and fell roughly 200 feet into the Gulf of Mexico. Miller and his coworkers survived the crash, albeit with varying injuries. The helicopter's pilot also survived the initial impact, but drowned before rescuers could free him from the helicopter. Miller, his two coworkers, and the pilot's survivors brought actions seeking damages for the helicopter crash. The Court subsequently granted defendants' motion to bifurcate the trial on Miller's claim. Consequently, the only issue presently before the court was what amount reasonably compensates Miller for his injuries caused by the helicopter crash. The court found that the helicopter crash was a traumatic event, both physically and psychologically. The impact was physically painful and caused compression fractures to four of Miller's vertebrae. Miller also suffered from PTSD, guilt, and anxiety as a result of the crash. Although some of these injuries resolved, others remain. As compensation for his future physical pain and psychological injuries, as well as the diminished enjoyment of life resulting therefrom, the court found that Miller was entitled to damages in the amount of $100,000.00. The court estimated Miller's past lost wages to be $149,000.40 and found that a reasonable estimate of Miller's after-tax future lost wages was $400,000. Miller and the defendants stipulated that Miller's past medical expenses total $64,302.49. No evidence was presented regarding future medical expenses. Total damages equaled $1,013,302.49. Signal Mutual was responsible for discharging Wood Group's liabilities to its employees under the LHWCA. The court found the total amount of Signal/Wood Group's lien was $182,812.65. (USDC EDLA, October 26, 2018) 2018 U.S. Dist. LEXIS 183626
MOTION TO DISQUALIFY ATTORNEY IS DENIED BY THE COURT
MAURIELLO V. BATTERY PARK CITY AUTHORITY ET AL.
This LHWCA case involved an attempt to disqualify an attorney from the case. Defendants Pier A Battery Park Associates LLC, D'Onofrio General Contractors Corp. ("D'Onofrio") and D7 Construction Pier A, LLC (all collectively Pier A) moved to have counsel for co-defendant Battery Park City Authority (BPCA) disqualified. The motion was supported by the affirmation of Gail L. Ritzert, Esq., Pier A's counsel, who states that Christopher Gibbons, Esq. was employed by her firm, Havkins Rosenfeld Ritzert & Varriale, LLP (HRRV) and actively represented Pier A in this action for approximately three years. Gibbons left HRRV and joined Hannum Feretic, Pendergast & Menino, LLC (HFPM), which is counsel for BPCA. Attorney Ritzert maintained that during the course and scope of HRRV's representation of Pier A, Attorney Gibbons was privy to extensive, confidential, privileged information and worked closely to develop litigation strategy. Further, Attorney Ritzert stated that during his tenure at HRRV, Attorney Gibbons represented D.'Onofrio in three other matters, two of which involved the same barge crew the plaintiff herein worked with. In opposition, Jason A. Stewart, Esq., attorney for BPCA, acknowledges that Attorney Gibbons should not be involved in this action. However, BPCA maintains that the motion should be denied because movants had not met their heavy burden, Attorney Gibbons gained no significant client confidences in the course of his representation of Pier A, and even if he did, HFPM has instituted an ethical wall and screening program to prevent the exchange of any information from Attorney Gibbons and HFPM's attorneys working on BPCA's case. HFPM has also provided an affirmation by Attorney Gibbons attesting to those facts. Contrary to HFPM's contention, the court found that movant had met its prima facie burden on the motion by showing that Attorney Gibbons played a significant, active role in movants' defense. HFPM had, however, rebutted the presumption that it should be disqualified as BPCA's counsel by coming forward with proof that the even the possibility that Attorney Gibbons could accidentally exchange information pertaining to this action with HFPM's handling attorneys. Based upon the total record before it, the court found that HFPM had established that disqualification was not warranted under the circumstances. There was no indication that Attorney Gibbons would in any adversely use or disclose to HFPM any information he obtained by virtue of his representation of movants prior to joining HFPM. Moreover, as Attorney Stewart points out, granting the motion would set a dangerous precedent which would have a chilling effect on the ability of attorneys to move between firms. Accordingly, the motion to disqualify was denied. (NY Sup. Ct, October 11, 2018) 2018 N.Y. Misc. LEXIS 4822
And on the Admiralty front . . .
VESSEL PULLING SONAR TOWFISH QUALIFIES AS A TOWING VESSEL
SHELL OFFSHORE, INC. V. TESLA OFFSHORE, LLC, ET AL.
Tesla Offshore, LLC was using a sonar device, known as a towfish, to survey the ocean floor. Tesla had chartered a vessel from International Offshore Services, LLC to pull the towfish. The underwater sonar device struck the mooring line of an offshore drilling rig owned by Shell Offshore, Inc. Shell sued Tesla and International for damages arising out of the accident. After a trial on the merits, the jury returned a verdict in favor of Shell and apportioned 75% of the liability to Tesla and 25% to International. Consistent with the jury verdict, the district court denied International's limitation of liability defense. The district court also denied Tesla's post-trial motion for judgment as a matter of law, a new trial, and to alter or amend judgment. International and Tesla each appealed. While the appeal was pending, Tesla and Shell entered into a settlement agreement, and Shell executed a full satisfaction of judgment. After a limited remand, the district court found that Tesla was entitled to contribution from International toward the settlement amount. Another appeal followed. Tesla and International were the sole remaining parties in the litigation, and their respective appeals were consolidated. International disputed the district court's legal conclusion that its vessel was a towing vessel and subject to towing regulations. Tesla challenged the jury's allocation of fault and the district court's calculation of the contribution owed by International. The appellate court invited the views of the U.S. Solicitor General on whether applicable laws and regulations at the time of the allision required the master of International’s vessel to have a towing license. The Government filed an amicus brief supporting the district court's legal conclusion that the International vessel was a towing vessel whose captain was required to hold a towing license. The U.S. Code defines a "towing vessel" as "a commercial vessel engaged in or intending to engage in the service of pulling, pushing, or hauling alongside, or any combination of pulling, pushing, or hauling alongside." The statutory definition does not encompass any vessel that pushes, pulls, or hauls. Rather, it is limited to commercial vessels engaged in the service of pulling, pushing, or hauling alongside. This provision defines a towing vessel in terms of the service it provides. The appellate court interpreted this language to exclude vessels that engage in some incidental pulling, pushing, or hauling activities as part of a distinct commercial endeavor. A vessel's transportation function must be more than incidental to its primary purpose. Accordingly, the district court did not err in instructing the jury that International’s vessel was a towing vessel and that its captain lacked a towing credential. Turning to Tesla challenge of the jury's allocation of fault and the district court's calculation of International's contribution liability, the appellate court found that the jury's allocation of 75% fault to Tesla and 25% to International had ample support in the record. Although there was some evidence of fault by International and its employees, a reasonable jury could nonetheless find Tesla more responsible for Shell's damages. Finding no error in the district court's contribution calculations, the appellate court affirmed the district court’s judgment. (5th Cir, October 5, 2018) 2018 U.S. App. LEXIS 28298
CASE REJECTED AS THERE WAS NO FINAL DETERMINATION OF RIGHTS
STATE BANK & TRUST COMPANY V. C & G LIFTBOATS, LLC, ET AL.
State Bank & Trust Company sought to foreclose on four ship mortgages and seize three vessels owned by C&G Liftboats, LLC and AMC Liftboats, Inc. The defendants argued in the district court that there was no subject matter jurisdiction to hear the plaintiff's claim in admiralty because the underlying mortgages used to secure the vessels were invalid under Louisiana law, and therefore could not be valid preferred ship mortgages under the Ship Mortgage Act. The district court denied the defendants' motion to dismiss and granted in part the plaintiff's motion for summary judgment, holding that a collateral chattel mortgage, even if invalid under Louisiana law, meets the requirements of the Ship Mortgage Act. The limit of the district court's order was to recognize that the plaintiff had a preferred ship mortgage under the Ship Mortgage Act, allowing the plaintiff to proceed in its foreclosure action in federal court. The district court did not grant judgment on the plaintiff's claim that the defendants defaulted nor hold that the relevant mortgage was enforceable. The defendants appealed the district court's order. Jurisdiction was claimed under 28 U.S.C. § 1292(a)(3). The district court stayed further proceedings pending resolution of the appeal. The appellate court pointed out that the district court's order did not finally determine the rights or obligations of the parties in the dispute, which left it without jurisdiction. The limit of the district court's order was to recognize that the lender had a preferred ship mortgage under the Ship Mortgage Act on a named vessel. The order deferred all other requests for relief. The district court's order did not ultimately determine the rights and liabilities of the parties, as set forth in 28 U.S.C. §1292(a)(3). The appellate court dismissed the appeal, ruling that it lacked jurisdiction in the ongoing litigation since the ruling below did not finally determine the rights or obligations of the parties in the dispute. (5th Cir, October 16, 2018) 2018 U.S. App. LEXIS 29072
BUNKERS AND MARITIME LIENS
BUNKER HOLDINGS LTD. v. YANG MING LIBERIA CORP.
This was an in rem action for a maritime lien brought by Bunker Holdings Ltd. against the containership M/V YM Success. Bunker Holdings supplied bunkers to the YM Success while the ship was docked in Russia. Bunker Holdings provided necessaries to a vessel, as the statute requires. The only issue was whether Bunker Holdings provided the bunkers on the order of the owner or a person authorized by the owner. On cross-motions for summary judgment, the district court held that Bunker Holdings could not satisfy this last requirement. On appeal, the Ninth Circuit joined the Second, Fifth and Eleventh Circuits in finding that the physical supplier of bunkers to a vessel does not have a maritime lien on the vessel where the vessel’s owner or charterer contracted for the supply with a bunker trader, not the physical supplier. This case featured the same basic fact pattern as the cases from the other circuits. The owner of the vessel ordered the bunkers from an OW Bunker entity, which then subcontracted with the physical supplier. The appellate court ruled that Bunker Holdings did not have a maritime lien under the U.S. maritime lien act because it did not provide the bunkers on the order of a person authorized by the vessel owner. The appellate court held that summary judgment was properly granted against Bunker Holdings in its in rem action for a maritime lien. The appellate court also reversed the district court's award of costs to the vessel owner under a local rule for the cost of keeping in place a letter of undertaking that enabled the owner to secure the release of the ship, which had been arrested at the outset of the action, because premiums paid on undertakings or bonds were not authorized by 28 U.S.C. §1920 or by any other statute. The district court’s judgment was affirmed in part and reversed in part. (9th Cir, October 11, 2018) 2018 U.S. App. LEXIS 28668
Updater Note: Given that four circuit courts have each ruled in the same direction, it seems unlikely that the U.S. Supreme Court would accept an invitation to review the question of whether a physical supplier has a maritime lien in such circumstances.
APPELLATE COURT AFFIRMS UNTIMELY GRANT OF SUMMARY JUDGMENT
COLLINS V. GREAT LAKES DREDGE AND DOCK CO., LLC OF LOUISIANA, ET AL.
Tracy Collins filed his seaman’s complaint in state court against his employer, Great Lakes Dredge and Dock Co., LLC, alleging that he was injured while performing deckhand duties aboard a Great Lakes vessel Great Lakes Dredge and Dock Co., LLC Great Lakes Dredge and Dock Co., LLC. Great Lakes sought to remove the case to federal district court, but the federal court remanded the matter to state court. Great Lakes then answered the suit. The district court fixed the matter for jury trial. Collins then filed a motion for partial summary judgment to have Great Lakes assessed with 100% fault in the accident that allegedly caused his injuries. The trial court entertained argument on Collins's motion and rendered judgment in his favor. In its written reasons, the trial court found that Collins was a Jones Act seaman injured in the course and scope of his duties and granted his motion for summary judgment as to the issue of liability of Great Lakes. Great Lakes appealed the trial court’s judgment granted in favor of Collins, which found Great Lakes 100% at fault and liable to Collins. Great Lakes argued the trial court's ruling was untimely, since it was rendered less than twenty days prior to trial. The ruling was also was legally erroneous because it made determinations of liability without having made the requisite causation determinations and made determinations regarding fault and causation that were improper for summary judgment and should have been decided by the jury and genuine issues of fact regarding Great Lakes’ liability and Collins comparative fault existed, thereby precluding granting summary judgment. The appellate court first addressed Great Lakes’ timeliness argument, holding that, in the context of the present matter, the trial court designated this judgment as final and appealable. There was no need for Great Lakes to seek supervisory writs. It was granted a suspensive appeal. The late grant of summary judgment did not deprive Great Lakes of a substantive right and did not constitute reversible error. The remainder of Great Lakes' assignments of error substantively complain of the grant of summary judgment. The appellate court found that reasonable minds could not disagree that Collins was a seaman. He was assigned to a Great Lakes’ vessel as a deckhand at the time of his injury. Testimonies clearly confirmed that the chain binder and other equipment provided by Great Lakes was inadequate for the job at hand. Evidence showed that appropriate and adequate equipment was available, and the decision to proceed with the operation without them was negligent. Conversely, nothing in the submissions supporting or opposing the motion for summary judgment hints at any improper or substandard conduct on Collins' part. Accordingly, the appellate court affirmed the judgment of the trial court, but amended the judgment to find that Great Lakes was 100% at fault in the accident. All other issues, including causation, were reserved for trial on the merits. (La. 3rdApp Ct, October 3, 2018) 2018 La. App. LEXIS 1934
APPEALS COURT UPHOLDS DENIAL OF CLAIMS FOR CONTRIBUTION & INDEMNITY
ROYAL CARIBBEAN CRUISES LTD. V. SWEDISH HEALTH SERVICES, ET AL.
Jacqueline Almonte worked as a crew member aboard the Royal Caribbean Cruises Ltd. (RCCL) cruise ship and received treatment for abdominal pain. When the ship docked in Juneau, Alaska, the ship doctor referred Almonte to a hospital, which diagnosed Almonte with an acute peptic ulcer and prescribed medication. After Almonte returned to work aboard the ship, her symptoms got worse. She was eventually diagnosed with Crohn's disease with an inflammatory obstruction of the terminal ilium, fistulas and free fluid in the pelvis. RCCL settled the federal maritime lawsuit Almonte filed for $700,000. In exchange, Almonte signed a release of all claims against RCCL and all medical care providers. RCCL then filed a lawsuit against Swedish Health Services, Seattle Radiologists, the Polyclinic, Dr. Frederick Mann, Dr. Peggy Headstrom, and Dr. Kyung Han (collectively, health care providers) for equitable contribution and indemnity under federal maritime law and breach of an implied maritime contractual claim. In the alternative, RCCL asserted claims for contribution and indemnity under state law. The health care providers filed answers and asserted a number of affirmative defenses, including the statute of limitations. RCCL appealed, contending the court erred in dismissing the federal maritime law claim for equitable indemnity and contribution, the federal maritime claim for breach of an implied contract, and the alternative state law claims for contribution and indemnity, equitable subrogation, and unjust enrichment. Because there was no agency relationship between the parties under the Jones Act, the appellate court affirmed the summary judgment dismissal of RCCL's federal maritime claim for equitable indemnity and contribution. Absent any evidence that the payments were made as the result of a referral by RCCL, the payments alone did not establish an implied contract. A reasonable trier of fact could only conclude there was no special relationship between the parties. Therefore, the appellate court concluded the court did not err by dismissing the implied contractual indemnity under federal maritime law. The appellate court also held that the court did not err by dismissing the claim for contribution under RCW 4.22.040 and .070. None of the cases RCCL cited address equitable contribution between tortfeasors. Therefore, the court did not err by dismissing the claim for equitable contribution. RCCL did not argue that the health care providers acted in bad faith or made false assurances, nor did the record support such a conclusion. The appellate court held the court did not err by granting summary judgment dismissal of RCCL's claim for equitable subrogation. Because Almonte's claim against the health care providers was barred by the statute of limitations when the parties entered the settlement and release, the court did not err in dismissing the claim for unjust enrichment. The appellate court affirmed summary judgment dismissal of the claims under federal maritime law and state law. (Wash. 1stApp. Ct., October 22, 2018) 2018 Wash. App. LEXIS 2379
COURT STAYS EMPLOYER’S DECLARATORY JUDGMENT ACTION
SCANDIES ROSE FISHING COMPANY, LLC V. PAGH
Henry Pagh allegedly suffered two injuries while aboard a fishing vessel owned and operated by Scandies Rose Fishing Company, LLC. Scandies and Pagh disagreed as to Pagh’s maintenance rate. Scandies filed a motion for declaratory judgment in federal court. Pagh filed an action in state court, asserting Jones Act, unseaworthiness, and maintenance and cure claims. Pagh moved to dismiss Scandies’ declaratory judgment action, arguing that the federal action was filed solely as a litigation strategy and the parties’ dispute over the rate of maintenance should be decided together in state court. Pagh argued that allowing the declaratory judgment action to go forward in this case would potentially prejudice his right to have a jury make relevant findings of fact related to his maintenance and cure claim. On balance, the court found that dismissal or a stay of the federal action was appropriate under the circumstance. The record supported that the court could maintain jurisdiction and avoid interfering with the state court action. But the record does not establish that the Court should maintain jurisdiction in furtherance of practicality, wise judicial administration, comity, and fairness. The federal declaratory judgment action will not resolve the whole controversy between the parties and the state court action will still have to proceed. Accordingly, the court stayed the declaratory judgment action pending resolution of the state court action. Pagh’s motion was granted in part. (USDC WDWA, October 24, 2018) 2018 U.S. Dist. LEXIS 182644
COURT FINS QUESTION OF MATERIAL FACT AS TO DATE OF INJURY
BAUTISTA V. TRANSOCEANIC CABLE SHIP COMPANY LLC
Transoceanic Cable Ship Company LLC moved to dismiss Jose Bautista's seaman’s complaint filed on April 26, 2018, arguing that the action was barred by the three-year limitations period set forth in 46 U.S.C. § 30106.1, contends that Bautista had made a binding admission that the incident giving rise to his suit occurred on March 15, 2015, more than three years before his action was filed. But the court quickly pointed out that, even if the incident occurred on March 15, 2015, as Transoceanic asserted, the applicable statute of limitations only begins to run when the cause of action arose. Applying the discovery rule, the court found that Bautista had demonstrated that there were at least disputes of material fact indicating that his cause of action did not accrue until April 26, 2015, when he attested that his back felt extremely painful after transferring dirty cable and heavy dragging lines. Although Bautista alleged (and admitted) a March 15, 2015 incident with a large wave that may well have been a cause of his injuries, he also attested that after that incident at that time, he did not feel like he had been injured. This testimony was consistent with a medical report of an independent orthopedic examination.
Assuming Bautista’s declaration is true, he did not discover his injury, its cause, or the link between the two, until April 26 or,27, 2015 - within the three-year statute of limitations. In short, because there was a genuine issue of material fact as to when Bautista's claim arose, Transoceanic’s motion was denied. (USDC DHI, October 17, 2018) 2018 U.S. Dist. LEXIS 178634
COURT DISMISSES NON-PECUNIARY DAMAGES CLAIMS (CONT.)
IN RE: AMERICAN RIVER TRANSPORTATION, CO., LLC
This matter came before the court on motion of petitioner in limitation, American River Transportation Co., LLC (ARTCO). Claimants, Ronald D. Neal and Philip and Rebecca Graves, individually and as co-administrators of the Succession of Spencer William Graves, opposed the motion. ARTCO had moved to enforce the court's order and to dismiss claims for punitive damages brought by claimants. On August 22, 2018, the court entered an order dismissing claimants' claims for non-pecuniary damages, including punitive damages [see September 2018 Longshore Update]. Subsequently, claimants filed an amended and superseding master answer, in which they once again sought punitive damages. In opposing the instant motion to dismiss, claimants did not suggest there had been any change in the law governing this question that would entitle them to punitive damages, but rather state that the punitive damages claims were included in an abundance of caution and as a prophylactic measure. The court found claimants' motives in filing legally unfounded claims were not relevant to the pending motion. Accordingly, the court granted ARTCO’s motion to enforce the court's order and to dismiss claims for punitive damages. The claims for punitive damages brought by claimants were dismissed. (USDC EDLA, October 17,2018) 2018 U.S. Dist. LEXIS 178389
COURT DENIES MOTION TO COMPEL IMES AND OTHER DISCOVERY
MAGNOLIA FLEET, LLC V. GREY
Rick Grey, an employee of Magnolia Fleet, contended that he slipped and fell in the shower stall of the vessel upon which he was working as a deckhand. He alleged that he sustained lower back injuries as a result of the fall. Magnolia Fleet immediately provided him with medical care Grey was diagnosed with cervicalgia, pain in the thoracic spine, and given a "no work" status. Grey later began complaining of neck pain radiating into his left arm, left elbow, and left hand into the left third and fourth fingers with pain, numbness, and weakness. Grey also complained of bowel incontinence, ringing in the ears, blurred vision, mild back pain, bilateral upper shoulder pain, chest pain, low back pain radiating into the right lateral leg, right ankle pain with numbness and weakness, short-term memory loss, and headaches. An MRI with diagnostic imaging was performed, and it was read to reveal a positive L5-S1 disc herniation and a positive L4-5 disc bulge. Grey’s physician assessed Grey as suffering clinically isolated syndrome of brainstem, post-concussion syndrome, concussion without loss of consciousness, meningismus, pain in the thoracic spine, acute bilateral low back pain with right-sided sciatica, and thyroid mass. He was concerned Grey could have an intracranial vascular malformation causing the alleged high-pitched sound in his head with brainstem syndrome causing the alleged left arm weakness and right leg weakness associated with abnormal reflexes and recommended an MRI scan of the brain with MR angiography. Magnolia Fleet provided Grey with maintenance and cure benefits under protest. Following his physician’s recommendation Grey consult a neurosurgeon, neurologist, and an ENT. Magnolia Fleet requested that Grey submit to an independent medical examination with a neurologist and neurosurgeon. However, Grey refused to undergo an IME. Grey has also refused to execute blank medical and employment records authorizations. Magnolia Fleet filed a declaratory judgment action so that the necessary investigation/discovery could be conducted, and the rights, obligations and liabilities of Grey and Magnolia Fleet may be determined. Magnolia Fleet insisted that an IME must occur prior to any surgery to avoid the spoliation of evidence. Magnolia Fleet asserted was entitled to declaratory relief to resolve the controversy regarding Grey's right to maintenance and cure benefits and whether it was entitled to an IME. Grey refused to answer to the complaint, but instead filed a motion to dismiss, contending the motion was premature because no scheduling conference has been set and no conference under FRCP 26(f) had been held. There was no dispute that Grey's physical condition was at issue or that Grey was treating with a neurosurgeon. Grey did not challenge the qualifications of Magnolia Fleet’s proposed neurosurgeon. Grey primarily opposed the timing of the IME, and at oral argument, counsel for Grey also insisted that an IME with a neurologist would not be appropriate because Grey is not treating with one. Magnolia Fleet responded that Grey had been referred to a neurologist, although Magnolia Fleet had no reason to believe Grey was actually treating with a neurologist at the time. The court indicated that it was sympathetic to Magnolia Fleet's concern that it be permitted to promptly investigate Grey's alleged injuries in light of the extent of the injuries complained of following his unwitnessed incident and in light of the fact that it was paying maintenance and cure. However, in considering whether Magnolia Fleet had established good cause for an IME where discovery had not yet begun, the court was swayed by counsel's representation that Grey had not been recommended or scheduled for surgery. Grey's counsel also certified on the record that if surgery was recommended, he will provide notice to Magnolia Fleet's counsel at least six weeks in advance, barring an emergency. Under these circumstances, the court found there was no urgency requiring an IME at this time. Accordingly, the court refused to compel Grey to submit to the proposed IMEs. Although Grey opposed executing the medical and employment authorization forms because they were blank, Grey's primary objection to producing them was that discovery was premature. Because Magnolia Fleet had not established good cause to expedite its discovery requests for IMEs and for Grey to sign medical and employment authorizations, the motion to compel was denied. (USDC EDLA, October 30, 2018) 2018 U.S. Dist. LEXIS 185231
COURT AGREES TO LIFT STAY IN LIMITATION ACTION
IN RE: DEVALL TOWING & BOAT SERVICE OF HACKBERRY LLC
Jason Lanclos, a deckhand employed by Devall Towing & Boat Service of Hackberry, LLC, was assigned to work on the push boat owned and operated by Devall Towing, on navigable inland waters. While assisting on a barge, Lanclos alleged he was hit in the head by some object which fell off the cover of the barge. Lanclos also alleges he asked for a hard hat when he arrived at work that day but learned that hard hats were not required for the crew nor were they available. Lanclos alleged he suffered a trauma to his head and has been unable to return to work since the accident and he is scheduled for a one-level cervical discectomy and fusion. Lanclos made a cure demand on Devall Towing. Thereafter, this limitation proceeding was filed and the court stayed prosecution of claims. Thereafter, Lanclos filed a timely answer and claim, reserving his right to petition the Court to lift the stay order allowing him to proceed on his Jones Act claims against Devall Towing pursuant to his Saving to Suitors Clause. Lanclos then moved to seek relief from the limitation stay so that he could file a lawsuit in the in state court against Devall Towing. Lanclos attached a stipulation which he contended protected Devall Towing's right to have its claim for limitation decided in federal court. In its opposition, Devall Towing argued that because the court had discretion in deciding whether to lift the injunction, the court should deny Lanclos' motion as his stipulations were vague and inadequate. Specifically, Devall Towing contended that the stipulations failed to state the venue where Lanclos intends to bring suit and that he intends to bring all claims against all alleged tortfeasors in one proceeding. Devall Towing further contended that Lanclos refused to stipulate to the value of the push boat and its pending freight, arguing that the value of the limitation fund must be finalized before Lanclos can be allowed to proceed. Alternatively, Devall Towing contended that in the event the court granted Lanclos' motion, this proceeding should proceed in a parallel fashion so that necessary discovery will not be duplicated. In response to Devall Towing's opposition, Lanclos filed an amended stipulation, which the court found sufficient to protect Duvall Towing's rights under the Limitation Act. Further, as to Devall Towing's contention that discovery in this limitation action should be conducted with Lanclos' state court action, the court agreed with Lanclos that such action would needlessly increase the time, resources and expenses incurred by the parties. In the event it is determined in the state court proceeding that Devall Towing has no liability or that Lanclos' damages were less than the value of Devall Towing's vessel, then the question of limitation will be moot. In summary, as Lanclos, the sole claimant in the limitation proceeding, had proffered stipulations to give the court certainty that the federal forum will remain the sole forum for the adjudication of the plaintiff in limitation's rights to limitation and/or exoneration of liability under the Limitation Act, it was ordered that Lanclos' motion to lift stay was granted and the stay was lifted. (USDC WDLA, October 26, 2018) 2018 U.S. Dist. LEXIS 184238
COURT GRANTS DAMAGES MOTIONS
RIGSBEE V. CITY AND COUNTY OF HONOLULU
Clifford Rigsbee was engaged in rescue watercraft training as part of his duties as a firefighter with the Honolulu Fire Department. The training was conducted on the navigable waters, within the State of Hawaii, less than one marine league from shore. During the ocean training, Rigsbee suffered blunt force injury to his head and neck and died as a result of his injuries. The personal representative of the estate of the decedent filed suit asserting claims for negligence and sought damages on behalf of the estate as a result of the decedent's death. Plaintiff then moved to court damages pursuant to general maritime law for the future lifetime loss of the decedent's earnings and to supplement the damages available to the estate pursuant to general maritime law with hedonic damages pursuant to Hawaii state law. The City and County of Honolulu took no position on either of plaintiff's motions, so the court granted both motions. (USDC DHI, October 16, 2018) 2018 U.S. Dist. LEXIS 177891
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