Case Summaries (January 2016-June 2016)

Case Summaries (January 2016-June 2016)

First Circuit

Maintenance and Cure – Maximum Medical Recovery – On March 3, 2016, the United States District Court for the District of Massachusetts entered an Opinion in Block Island Fishing, Inc. v. Rogers declaring November 18, 2014, as the termination date of Block Island’s maintenance and cure obligation to Rogers, denying Block Island’s motion for summary judgment on Count I (seeking declaratory judgment as to the amount of retroactive maintenance owed to Rogers), request for attorney’s fees and Count IV (negligent or intentional failure to provide maintenance and cure) of Roger’s counterclaim, and allowing Block Island’s motion for summary judgment on Count III of Roger’s counterclaim (continuing maintenance and cure). In August of 2013, Plaintiff Rogers moved to Bristol, Rhode Island and joined the crew of the Holy Brenna in September of 2013. On October 3, 2013, Rogers injured himself during a fishing voyage and was not cleared to work as a fisherman until November 18, 2014. A seaman is entitled to maintenance and cure if he is injured or falls ill while in service of the ship and it extends during the period when he is incapacitated to do a seaman’s work and continues until he reaches maximum medical recovery. The obligation to provide maintenance extends only so long as a seaman is capable of improving through medical treatment, and terminates when medical science can do no more. The court and the Fifth Circuit recognize two conflicting values: protecting seaman from the dangers of the sea and employers from dishonesty. Admiralty law favors protecting the seaman as a ward of the admiralty and therefore Rogers was awarded maintenance and cure from the date of his injury until he was cleared to work. Block Island Fishing, Inc. v. Rogers, 2016 U.S. Dist. LEXIS 27307

Jones Act Negligence – Transfer at Sea – On January 14, 2016, the United States District Court for the District of Rhode Island entered an Opinion in Nevor v. Moneypenny Holdings, LLC awarding $1,460,458 to Mr. Nevor for loss of earnings, loss of future earning capacity, and for pain, suffering, and mental anguish after an injury sustained during a vessel transfer that left him unable to continue his career as a professional sailor. The Jones Act creates an affirmative duty for a seaman’s employer to provide its employees with a reasonably safe place to work, and the court held that Moneypenny was negligent in failing to do so. Specifically, the court lists (1) the staff was not adequate to perform a safe transfer at sea; (2) the captains of the two ships did not appropriately stabilize them in order to perform a safe transfer at sea; (3) the captains failed to bring the vessels to safer waters before conducting the personal transfer and failed to provide a safe method of ingress and egress from the vessel; (4) Moneypenny failed to have appropriate non-skid surfaces on the tubes of the vessels; and (5) Moneypenny failed to have proper safety procedures in place and failed to properly train personnel concerning at sea transfers. Nevor v. Moneypenny Holdings, LLC, 2016 U.S. Dist. LEXIS 5580.

Declaratory and Injunctive Relief Sought to Challenge Ordinance Prohibiting Loading of Crude Oil – Ripeness of Suit – On February 11, 2016, the United States District Court for the District of Maine denied Defendants’ Motion to Dismiss the Complaint pursuant to Rule 12(b)(1). South Portland enacted an Ordinance prohibiting the loading of crude oil in Portland Harbor to prevent Portland Pipe Line from using its infrastructure to transport oil by pipeline from north to south. Portland Pipe Line brought suit seeking declaratory and injunctive relief, and South Portland moved to dismiss the suit on the justiciability grounds that the suit was unripe, that Portland Pipe Line lacked standing, and that the Court must not render an advisory opinion. The Court found the dispute to be ripe because Portland Pipe Line has expressed its intention to import oil and cannot do so as long as the Ordinance remains in place. Other approvals may be required, but Portland Pipe Line has won these approvals in the past and should not be made to pursue them again while the question of the Ordinance’s legality remains unanswered. The Defendants’ standing and advisory opinion claims are similarly unavailing. Portland Pipe Line Corp. v. City of S. Portland, 2016 U.S. Dist. LEXIS 17870.

Submitted by George M. Chalos, CHALOS & Co., P.C.

Second Circuit

Maritime Insurance Contracts – Uberrimae Fidei – On May 20, 2016, the United States Court of Appeals for the Second Circuit affirmed a decision of the Southern District of New York in Fireman’s Insurance v. Great American Insurance, holding under the doctrine of uberrimae fidei, as well as Mississippi Common law, an insurance contract is void ab initio if the insured is found guilty of misrepresenting material facts which a prudent and reasonable insurance underwriter would have otherwise taken into consideration when determining whether to issue a policy. Signal had failed to disclose material information regarding the poor condition of the dock and the repairs needed when contracting with Great American and MSI for insurance coverage. In addition, Signal was aware of the negative reports on the state of the dry dock and had ignored several repair recommendations from various sources. After obtaining pollution and excess property insurance coverage for the dry dock from Great American and MSI, Signal’s dock sank. The Second Circuit held the Great American policy was void under the doctrine of uberrimae fidei because when marine commerce is affected, an insurance contract can be considered a marine contract, and therefore Signal should have disclosed all facts within its knowledge that were material to the risk being insured. Because Signal did not reveal to Great American the numerous reports detailing the poor condition of the dock, the contract was declared void ab initio. Furthermore, the Second Circuit also reached a similar conclusion under Mississippi Common law, affirming the District Court’s opinion that insurer MSI could also void ab initio its insurance contract with Signal. The Second Circuit presently stands clear on the issue that, under admiralty law, insurance contract must be entered into with the utmost good faith as required by uberrimae fidei. Fireman’s Fund Ins. Co. v. Great Am. Ins. Co., 2016 U.S. App. LEXIS 9306.

Admiralty Jurisdiction – Application of Modern Test to Recreational Activities – On June 1, 2016, the United States Court of Appeals for the Second Circuit reversed a decision of the United States District Court for the Northern District of New York in In Re Germain, finding admiralty tort jurisdiction was present and holding that a vessel owner may bring a limitation of liability action for injuries sustained by a passenger while diving off the recreational vessel when it was anchored in shallow, yet navigable waters in Lake Oneida. On June 16, 2014, Ficarra sued Germain in the New York State Supreme Court, asserting claims for negligence under New York law. Germain removed the action to the United States District Court for the Northern District of New York, and petitioned that he be exonerated, or his liability limited, under the Limitation of Liability Act of 1851, 46 U.S.C. §§ 30501-12 (“Act”), and Rule F of the Supplemental Rules for Admiralty of Maritime Claims and Asset Forfeiture Actions (“Rule F”). The District Court found that Ficarra’s claim did not meet the modern test for admiralty tort jurisdiction, and thus admiralty subject matter jurisdiction over Germain’s petition for limitation did not exist. On appeal, the Second Circuit held the “location” test for jurisdiction had been met because the incident took place in navigable waters. The Second Circuit then applied the “modern test” for admiralty tort jurisdiction, which contains two prongs: (1) whether a tort occurring in a body of water presents a potential disruption to maritime commerce; and (2) whether the general character of the activity giving rise to the incident has a substantial relationship to traditional maritime activity. The Second Circuit stated Ficarra’s maritime emergency response could have affected other vessels in the area and found that a passenger who jumped from a vessel onto open navigable waters has a “more than fanciful potential to disrupt maritime commerce.” In addition, the Second Circuit stated Germain’s maritime activity was the transport and care of passengers onboard of a vessel on navigable waters, which constituted a substantial relationship to traditional maritime activity. Accordingly, the Second Circuit held the modern test was met because it does not matter whether a vessel is taking part in commercial or recreational activities, as long as it is on navigable waters. Thus, the District Court’s emphasis on the recreational nature of Germain’s vessel was held to be misplaced and admiralty tort jurisdiction was found. Germain v. Ficarra, In re Germain, 2016 U.S. App. LEXIS 9892.

Maritime Insurance – Loss Pursuant to “All-Risk” Policy – AGCS Marine Insurance Co. (AGCS), issued an “all-risk” policy to World Fuel Services, Inc. and World Fuel Services Europe, Ltd. (together, World Fuel). World Fuel were the victims of an impostor purporting to work for the U.S. Government, who contracted with them to purchase a supply of marine gasoil (“MGO”) worth about $17 million. After receiving the fuel via a ship-to-ship transfer, the impostor absconded with it. World Fuel, upon realizing that it had been duped, filed a claim with its insurer, plaintiff AGCS Marine Insurance Company (“AGCS”), seeking to recover under an “all-risk” clause in its policy. To qualify for coverage under the all-risk clause, the insured only had to show that the fuel was lost between attachment of coverage and delivery to a bona fide customer, and as such delivery never occurred, and the fuel was physically lost, the insurer made out a prima facie case that the fuel was fortuitously lost while covered under the all-risk policy. AGCS denied the claim. It then sought a declaratory judgment that the loss was not covered. After discovery, the parties cross-moved for summary judgment—World Fuel seeking a declaratory judgment that its loss was covered, AGCS seeking a declaratory judgment that it was not. The Court granted summary judgment for World Fuel. The Court found that World Fuel’s loss was covered under the All-Risk Clause, and therefore World Fuel was entitled to summary judgment because it established a loss within the period of coverage since the fraudulent scheme was in place from the outset of the imposter’s dealings with the insured and thus, delivery was not effected and transit had not ceased when the insured lost the fuel. AGCS Marine Ins. Co. v. World Fuel Servs., 2016 U.S. Dist. LEXIS 65119.

In Rem Proceeding – Docked Vessel – Billybey Marina Services, LLC (Billybey) and Affairs Afloat, Inc. entered into a contract where Billybey would permit AAI to dock its vessel at one of Billybey’s ports. AAI docked their vessel and it remained at Billybey’s dock for several months. After obtaining a default judgment against AAI, Billybey filed a motion on the default judgment as to the award of damages and also sought to enforce a maritime lien against the Vessel (to bring the action in rem to enforce the maritime lien). To do so, Billybey had to show that (1) it furnished repairs, supplies or other necessaries, (2) to a vessel, (3) upon the order of the owner of such vessel, or the person authorized by the owner. The term “necessaries” has been interpreted broadly to include any goods and services “reasonably needed” for a vessel’s continued operation. Billybey provided necessaries to the Vessel by allowing it to be docked at Pier 4. The Vessel has remained continuously docked at Pier 4 for several months. Moreover, the Vessel was docked there by order of the owner, AAI, pursuant to its Berthing Location Permit with Billybey. Accordingly, Billybey has established that it is entitled to enforce the maritime lien in rem over the docked Vessel. Billybey Marina Servs., LLC v. Affairs Afloat, Inc., 2016 U.S. Dist. LEXIS 34151.

Force Majeure – Changes in Commercial Conditions – Containership Co., TCC AS (TCC) a debtor involved in foreign insolvency proceedings had valid maritime contacts with shippers. TCC agreed to transport the shippers’ cargo at rates below published tariffs. In exchange, U.S. Pacific Transportation, Inc. (USPTI), agreed to ship a minimum volume of goods, regardless of the Containership Co.’s retention of the right to reschedule shipments. USPTI put forth an argument that the force majeure clause of the contract was triggered and that their performance under the contract was excused. The Court did not accept this argument as the contracts expressly provided that changes in commercial conditions did not constitute force majeure. However, the shippers were excused from any further obligation to ship a minimum quantity of goods once TCC terminated its Trans-Pacific service. Containership Co., TCC AS v. US Pac. Transp., Inc., In re Containership Co. TCC, AS 2016 B.

Maritime Liens for Necessaries – O’Rourke Marine Service L.P., L.L.P (“O’Rourke”) brought this action against China Ocean Shipping Company (“COSCO”) the owner/charterer of a vessel who contracted with a O.W. Far East Singapore Pte. Ltd (“O.W. Far East) to supply bunkers. O.W. Far East subcontracted with O’Rourke to actually supply the bunkers. O.W. Far East then declared bankruptcy without paying the physical supplier. The vessel owners and charterers are now facing multiple claims for payment for the same bunkers from both the physical supplier and from the O.W. Bunker entity, or the entity to which O.W. Bunker’s interest has been assigned. As maritime liens are disfavored by the law and can only arise by operation of law and not agreement, to assert a cognizable maritime lien for necessaries, O’Rourke must show: 1.) it furnished repairs, supplies, or other necessaries; 2.) to any vessel; and, 3.) upon the order of the owner or the person authorized by the owner. It was clear that O’Rourke supplied necessaries to a vessel. However, O’Rourke could not demonstrate it did so on the order of the owner or a person authorized by the owner. O’Rourke argued that, notwithstanding the nature of the relationship between O’Rourke and COSCO, the fact that the COSCO Vessels’ chief engineers signed receipts for the bunkers is sufficient to create a maritime lien. The text of the receipts includes language purporting to create a lien against the vessels until such time as O’Rourke is paid in full for the bunkers it supplies. However, maritime liens can only be formed by operation of law—not by contract. Thus, the mere signature of a receipt alleging the existence of a lien cannot create such a lien if the statutory requirements for the lien are not met. O’Rourke Marine Servs. L.P. L.L.P. v. MV Cosco Haifa, 2016 U.S. Dist. LEXIS 48276.

Funds Subject to Maritime Attachment – Rule B of the Supplemental Rules for Admiralty or Maritime Claims – Attorneys’ Fees – Defendant JCF Norvik Banka, the alter ego of Volans Shipping Co., sought to reduce the amount of funds subject to a maritime attachment issued pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims. Golden Horn argued that funds totaling more than $1.3 million should remain attached. Included in that total were more than $803,424.58 in damages awarded during arbitration, $327,318.68 in costs from the arbitration, $75,000 in estimated prejudgment interest and $120,000 in estimated attorneys’ fees. The court held that the funds included in the attachment that related to attorneys’ fees were not eligible for Rule B treatment. Although the attorneys’ fees were incurred in a maritime proceeding, they are not essentially maritime in nature. Accordingly, the court reduced the funds attached by $120,000 (the total for the attorney’s fees previously attached). Golden Horn Shipping Co. v. Volans Shipping Co., 2016 U.S. Dist. LEXIS 51037

Jones Act – “Seaman” Defined – Dinome has brought this case under the Jones Act. Dinome filed a motion for partial summary judgment on the issue of his status as a seaman. As a general rule, in order to qualify for seaman status, the employee’s duties must contribute to the function of the vessel or to the accomplishment of its mission. Also, the worker generally must spend at least 30% of their time in service of a vessel in navigation, which does not exclude time where the vessel is moored. Here, there were questions as to whether Dinome spent at least 30% of his time in service of a vessel in navigation. Accordingly, the court denied Dinome’s motion for partial summary judgment. Dinome v. City of New York, 2016 U.S. Dist. LEXIS 70769

Applicability of U.S. Maritime Law – Foreign Relations – An explosion and fire aboard the MSC Flaminia (the “Vessel”), a cargo ship owned by Conti and operated by NSB, resulted in the deaths of three crew members, including Cezary Siuta (“Siuta”), the Chief Mate of the Vessel. His Estate filed a claim against NSB seeking damages under the Jones Act, the Death on the High Seas Act, and the general maritime law of the United States. The court refused to hold NSB liable for the death of Siuta for several reasons: 1.) Siuta was neither an American national nor a domiciliary and his death occurred in foreign waters; 2.) NSB and Conti are foreign companies (not nominal foreign companies); 3.) aside from the Principal of NSB-USA, none of the owners or directors of NSB or Conti reside or were citizens of the U.S.; 4.) neither NSB nor Conti pay taxes to a U.S. agency; 5.) aside from NSB-USA, neither NSB nor Conti had offices or a subsidiary in the U.S.; 6.) none of the vessels managed by NSB were registered in the U.S.; and, 7.) the vessels charterer, MSC, is also a foreign company. Moreover, the application of the Jones Act is not supported by any of the seven Lauritizen factors, the Estate received the full benefits to which it was entitled to under the laws of Germany and there was no substantial contact between the transaction at issue and the U.S. Accordingly, the court refused to apply U.S. law and granted NSB’s motion to dismiss this case. In re MV MSC Flaminia, 2016 U.S. Dist. LEXIS 56785.

Ex Parte Arrest Warrants – Bankruptcy Context – Hapag-Lloyd Aktiengesellschaft (“Hapag-Lloyd”) owns or charters a fleet of shipping vessels, three of which—the M/V Seaspan Hamburg, the M/V Santa Roberta, and the M/V Sofia Express—are involved in this case. In 2014, Hapag-Lloyd placed orders with O.W. Germany (a non-appealing defendant in this case) for bunkers to be supplied in Tacoma, Washington. The fuel was delivered to Hapag-Lloyd’s fleet and shortly thereafter, O.W. Denmark, O.W. Germany’s parent company, and several of its affiliated entities filed for bankruptcy. A litigation frenzy began once O.W. Denmark and its affiliates began filing for bankruptcy. In fact, United States Oil Trading LLC (“USOT”), secured ex parte arrest warrants for the vessels named above. That same day, Hapag-Lloyd interpleaded and moved ex parte for an anti-suit injunction. The court was slightly uneasy with the idea of proceeding on the motion without the presence of defendant USOT. However, USOT’s general counsel failed to make a formal appearance in connection with the anti-suit injunction (counsel said that he did not have the authority to speak on behalf of the company). The District Court enjoined Defendant USOT from arresting Hapag-Lloyd’s vessels and ordered Hapag-Lloyd to post bond. In an effort to promote judicial economy, the court remanded the case back to the District Court with instructions to enter an order that eliminates or retains the foreign scope of the injunction, with specific determinations applying the China Trade test. Hapag-Lloyd Aktiengesellschaft v. United States Oil Trading LLC, 814 F.3d 146.

Negligence – Personal Injury – Tutor Perini Corporation (“Tutor Perini”) a general contractor, was engaged to rehabilitate a bridge. In order to perform the work, Tutor Perini entered into a subcontract with Bridge Construction Services of Florida, Inc. (“Bridge”) and chartered various barges from Hughes Bros., Inc. (“Hughes”) that were used as floating work platforms. The barge of importance in this case was named the HUGHES 660. Various workers, including electricians, worked on the barges on which their tools, equipment, and supplies were also stored. Ayala, a worker employed by Tutor Perini, was the sole deckhand on the HUGHES 660. At some point in the process of moving the HUGHES 660 along the Bridge to a new position, Ayala fell into the river. Both Tutor Perini and Bridge claim that Ayala’s fall was due to the fault of the other party. Bridge claims that Tutor Perini was responsible for the fall because, among other reasons, Ayala slipped on the icy surface of the barge, Tutor Perini failed to keep the barge clear of ice, Ayala should have cleared the ice, and Ayala ignored his training and was not properly trained. Tutor Perini and Hughes claim that Bridge is responsible for Ayala’s fall because the tug was under the command of an unlicensed captain who failed to maintain sufficient communication with Ayala and who was responsible for bumping the barge and causing Ayala’s fall.

The court held that Tutor Perini’s negligence caused 60% of Ayala’s damages, whereas Bridge’s negligence only accounted for 40% of Ayala’s damages (the court did not find any defect in the barge supplied by Hughes and did not apportion any liability to Hughes for Ayala’s damages). In re Bridge Constr. Servs. of Fla., 2016 U.S. Dist. LEXIS 63411.

Asbestos – Application of Maritime Law to Manufacturer Defendant – Mr. Osterhout alleged he was injured as a result of exposure to asbestos while serving in the United States Navy, and while aboard the USS Charles H. Roan. The alleged asbestos exposure was related to products supplied by Crane Co. (on behalf of its former business). For maritime law to apply, Mr. Osterhout’s exposure underlying a products liability claim must meet both a locality test and a connection test. The locality test requires that the tort occur on navigable waters or, for injuries suffered on land, that the injury be caused by a vessel on navigable waters. In determining whether the work was on ‘navigable waters,’ work performed aboard a ship that is docked at the shipyard is sea-based work, performed on navigable waters.

The Court stated generally that Crane did not have a duty to warn of the hazards of products, including products from other manufacturers, if it did not supply the materials. However, the Court did carve out an exception. Specifically, Crane would have a duty to warn if it manufactured a product that, by necessity, contained asbestos components, where the asbestos-containing material was essential to the proper functioning of its product, and where the asbestos-containing material would necessarily be replaced by other asbestos-containing material, whether supplied by the original manufacturer or someone else.

The undisputed facts establish that Mr. Osterhout served in the U.S. Navy aboard the USS Roan from December 1947 through October 1950. Further, Mr. Osterhout alleged that he was exposed to asbestos related to Crane Co. products while aboard the USS Roan, while working in the fireroom. Based on these allegations, the Court concluded that Plaintiff’s claims against Defendants satisfy both the locality and the connection test; and, therefore, the Court applied maritime law to Plaintiff’s claims and denied Crane’s motions for summary judgment. Osterhout v. Crane Co., 2016 U.S. Dist. LEXIS 39890.

Maritime Insurance – Coverage for Commercial Arrests – Swift, the owner of a bulk cargo vessel known as the M/V Swift Spindrift (“the Swift Spindrift”), sought damages from the Underwriters for what it alleged were breaches of two insurance policies that provided coverage for the Swift Spindrift if it was subject to ‘arrest’. The policies covered certain named perils, including, in certain circumstances, ‘arrests.’ Swift claims that it was entitled to recover under both policies after the Swift Spindrift was arrested in Libya—where it remained for more than six months—pursuant to a commercial dispute between Swift and the importer that had purchased the vessel’s cargo.

The Court held that the ‘Perils’ clause, ‘War Risks and Strikes’ clauses or the various other clauses Swift directed them to do not cover commercial arrests. The term arrest in each of the clauses defined ‘Arrest’ in the context used in the ‘Perils’ clause, which means an arrest by a sovereign authority. Swift Spindrift Ltd. v. Alvada Ins. Inc., 2016 U.S. Dist. LEXIS 41895.

Submitted by George M. Chalos, CHALOS & Co., P.C.

Third Circuit

Who Gets To Keep the Cargo? – In a bankruptcy proceeding, a non-vessel operating common carrier (“NVOCC”) asserted maritime liens on goods then in its possession, which were opened by various business entities (“Owners”). The Owners enter into a series of contracts with the NVOCC where the Owners granted the NVOCC a security interest in goods the NVOCC shipped and stored for the Owners. The application for credit by the Owners to the NVOCC and the NVOCC’s published tariff both indicated that the NVOCC would hold liens against any of the Owners’ in its possession as security for charges incurred for any shipment of the Owners’ goods, and that such liens would “survive delivery”. The Owners filed for bankruptcy, and the NVOCC promptly filed a motion for relief from the automatic stay imposed by Bankruptcy Code. The NVOCC argued that it was a secured creditor with a possessory maritime lien on the Owners’ goods in its possession and was entitled to refuse to release such goods unless and until its claims were satisfied. The district court held that the NVOCC did not possess a valid maritime lien on the goods because provisions in NVOCC’s contract with the Owners purporting to give NVOCC a lien on goods in its possession for freight charges for the goods are unenforceable. Accordingly, it held that the NVOCC could not assert a maritime lien to supersede interests secured according to the Uniform Commercial Code as adopted in various jurisdictions. The Third Circuit reversed and held since parties had agreed that the NVOCC’s liens would “survive delivery,” this was compelling evidence that the NVOCC did not clearly intend to waive its cargo liens on goods upon delivery, irrespective of whether this language was fully enforceable in and of itself. Therefore, the NVOCC never waived its maritime lien upon goods already delivered, and its maritime lien would attach to any goods that entered the carrier’s possession at a future date, resulting in the NVOCC having a maritime lien on the Owners’ goods in its possession for freight and retention charges associated with those goods and for unpaid freight and retention charges associated with goods already delivered by the NVOCC. In re World Imports Ltd., 820 F.3d 576 (3rd Cir. 2016).

Submitted by S. Scott Bluestein, Bluestein Law Firm, P.A.

Fourth Circuit

Seaman’s Claim Not Covered Under Insurance Policy As He Was Not Listed As Crew Under An Endorsement – The carrier insured the Jones Act employer for personal injury claims arising aboard employer’s vessels, subject to an endorsement that listed six crew members to whom the insurance policy applied. The injured seaman was a vessel crew member who was not listed in that endorsement. He suffered an injury aboard an the employer’s vessel and sued the employer. Asserting that the insurance policy did not afford coverage for the seaman’s claim, the carrier declined to provide a defense to the employer. The employer sued the carrier for breach of contract, and the district court granted the carrier’s motion for summary judgment. The Fourth Circuit affirmed the summary judgement. Due to the endorsement providing that the individuals listed in the endorsement were the named crew members covered under the policy, and, giving “cover” its ordinary meaning, a reasonable person would find that policy did not cover liability arising from crew members not listed in the endorsement. The court found that this interpretation was consistent with other sections of the policy, and the fact that endorsement contained no limiting language or explicit disclaimers found elsewhere in the policy did not render it ambiguous to provide coverage. Brawner Builders, Inc. v. N. Assur. Co. of Am., 637 Fed.Appx. 703, 2015 WL 8758068 (4th Cir. 2015).

“Zone of Danger” Test Held No Place In Determining Eligibility For LHWCA Benefits For Psychological Injury – This case arises from a horribly tragic work-related accident. A longshoreman was operating a forklift when he accidently struck and killed his coworker. After this event, the longshoreman, who was diagnosed with posttraumatic stress disorder, filed a claim for disability benefits under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”). The Administrative Law Judge reviewing the claim determined that longshoreman was entitled to benefits under the LHWCA. The carrier/employer appealed the decision, claiming that a person bringing a claim under the LHWCA is required to satisfy the “zone of danger” test outlined by the Supreme Court’s decision in Consolidated Rail Corp. v. Gottshall, 512 U.S. 532, 114 S.Ct. 2396, 129 L.Ed.2d 427 (1994). “Under this test, a worker within the zone of danger of physical impact will be able to recover for emotional injury caused by fear of physical injury to himself, whereas a worker outside the zone will not.” 512 U.S. at 556. The court reasoned that the zone of danger was applicable only to theory of recovery under common law negligence, not to workers’ compensation laws and that the LHWCA does not contain any language about the zone of danger, only requiring a claimant to suffer work-related psychological injury and not mandating actual or threatened physical harm to be a prerequisite for coverage. Ceres Marine Terminals, Inc. v. Dir., Office of Workers’ Comp. Programs, 2016 WL 1161452 (4th Cir. Mar. 24, 2016).

Court Sua Sponte Transfer of Vessel Arrest – This case began with a vessel arrest by a bank to enforce a maritime lien for failure to pay for bunkers supplied to the ship. The sale of bunkers was arranged by O.W. Bunker & Trading A/S, which assigned all right, title, and interest in customer accounts receivable for bunker deliveries to the bank, pursuant to a security agreement. Incorporated into O.W. Bunker & Trading’s Terms and Conditions was a forum-selection clause, which reads “Without prejudice to any other Clause herein any disputes and/or claims arising in connection with these conditions and/or any Agreement governed by them, any dispute and/or claim arisen in connection with a Vessel detained by Seller at any port, place or anchorage within the United States shall be submitted to the United States District Court for the Southern District of New York.” Transfer to another district is warranted under 28 U.S.C. §1404(a) “[f]or the convenience of parties and witnesses, in the interest of justice.” Where a forum-selection clause is involved, a transfer promotes “the interest of justice” because such a clause “should be given controlling weight in all but the most exceptional cases.” The court held the interest of justice was further bolstered by many, similar cases involving bunker contractors, physical bunker suppliers, and vessels that already exist in Southern District of New York, resulting in the court transferring the case to New York after several motions were filed by the various parties. ING Bank N.V. v. M/V Temara, 2016 WL 67254 (D. Md. Jan. 6, 2016).

Marine Surveyor Allowed to Testify Over Daubert Objection – In a maritime personal injury case under the general maritime law where a vessel repairer was injured due to the alleged negligence of the vessel owner and operator, a marine surveyor, who had extensive experience in vessel repair and marine safety, was permitted to testify as an expert witness over the vessel owner’s Daubert objection. The vessel owner asserted that the marine surveyor’s failure to use any recognized data or standards, along with his reliance on common sense in the formation of his opinions, prevents his testimony from being admissible. The court rejected this argument and permitted the expert to testify due to his opinions being based on his experience, work history, witnesses’ testimony, and his inspection of the vessel. Quarterman v. Spirit Line Cruises, LLC, 2016 WL 374787 (D. S.C. Feb. 1, 2016).

Penalty For Lying to Authorities That Results In Coast Guard Search – Government authorities responded to a report that an unauthorized boat had drifted into a restricted marine area at the Newport News Shipbuilding Company (“the shipyard”). When they arrived at the shipyard, the officers discovered an intoxicated boat operator in a small vessel. The officers questioned the boat operator about how the vessel came to be in the restricted area of the shipyard. He explained that he had gotten in a fight with someone else on the vessel and eventually threw the other man overboard. Upon hearing the boat operator’s “very detailed” version of events, the Coast Guard and other local agencies immediately set out to find the man the person allegedly tossed into the water. During the search, law enforcement determined that the boat had in fact been stolen. The police thereafter arrested boat operator for public intoxication and took him to jail. While he was in custody, the boat operator disclosed that he had taken some medication that may have caused him to imagine that another man was on the boat. The search was eventually called off—the Coast Guard could not find any evidence indicating that someone had been thrown off the boat. In total, the rescue efforts cost the Coast Guard $117,913. The boat operator plead guilty to knowingly and willfully communicating a false distress message, in violation of 14 U.S.C. § 88(c). The district court sentenced the boat operator prison and ordered him to pay the Coast Guard $117,913.00 in restitution for the costs it incurred responding to the false distress call. The boat operator appealed the decision that he was required to pay restitution. The court of appeals found that the district court had the power to require the boat owner to pay restitution. United States v. Serafini, ___ F.3d ____, 2016 WL 3209482 (4th Cir. June 10, 2016).

Submitted by S. Scott Bluestein, Bluestein Law Firm, P.A.

Fifth Circuit

Oil Record Book Prosecution – Only Master has continuing responsibility for “Maintenance” of Record – Chief Engineer on a foreign-flagged vessel, who failed to record “without delay” into the Oil Record Book the oily bilge discharge which occurred while vessel was still in international waters, was acquitted of charges for failing to “maintain” the oil record book in violation of 33 USC §1908(a) once the vessel was in a U.S. port. According to the Court, the duty to “maintain” an Oil Record Book once the ship enters U.S. waters under 33 CFR §151.25, is assigned “explicitly and exclusively to the ‘master or other person having charge of the ship.’” The prosecuted presented no evidence that as chief engineer, the defendant was either the master or person in charge of the vessel. The Court noted that chief engineers could be prosecuted for failure to sign an Oil Record Book when the failure occurs on U.S.-flagged vessels or in U.S. waters, for aiding and abetting the failure to maintain an accurate record book and/or for making false statements to a Coast Guard investigator regarding the accuracy of the Oil Record Book. However, the chief engineer cannot be prosecuted for having previously failed to maintain or update the Oil Record Book where that discharge occurred outside of U.S. waters. US v. Fafalios, 817 F.3rd 155 (5th Cir. 2016). (See additional description in “Featured Case Summary” Section above)

Maritime Master Service Contract – “Invitee” – In an action involving a maritime Master Service Contract (MSC) used in the offshore oil industry between an oil company and a vessel owner, the Court defined the term “invitee” as used in both definitions of “Company Group” and “Contractor Group” referred to in the reciprocal indemnity provisions. Finding that the oil company, rather than the vessel owner, contracted, funded and directed the third party contractor’s work on the vessel and was the entity that “explicitly invited” the third party contractor to work on the project, including on the vessel, the Court determined that the overall conduct during the operations confirmed that the oil company was “ultimately responsible” for the third party contractor’s presence on the vessel, making the third party contractor the “invitee” of the oil company. While holding that the injured plaintiff was not the “co-invitee” of both parties, the Court declined to express an opinion on whether an MSC would permit a “dual invitee” situation for a particular third party on board the vessel to assist or provide a benefit to both parties. Grogan v. W&T Offshore and Triton Diving Services, 812 F.3rd 376 (5th Cir. 2016).

Rule B Attachment of Fuel Bunkers on Bareboat Chartered Vessel Affirmed – A shipyard was seeking recovery from Oceanografia for outstanding invoices for repair services performed by the shipyard at the request of Oceanografia at an earlier time on a different vessel. Thereafter, Oceanografia bareboat chartered a vessel from another company in an unrelated matter. In the bareboat charter agreement, Oceanografia agreed to “purchase the bunkers” which were onboard the bareboat chartered vessel “at the time of delivery” of the vessel under charter for the market price of the fuel at that time. The shipyard attached the fuel bunkers aboard the chartered vessel at the time of delivery the vessel under Admiralty Rule B. The vessel owner contended that Oceanografia did not yet have an attachable interest in the bunkers since Oceanografia did not “own” the bunkers, not having paid for nor even being invoiced for the fuel bunkers as of the date of delivery of the vessel under charter. Looking to State law to determine when title to the fuel bunkers passed to Oceanografia, the Court determined that bareboat charter provision was a “credit transaction” which did not delay passage of title of the fuel bunkers to Oceanografia until full payment made. Therefore, the Court held that the title to the fuel bunkers passed to Oceanografia on delivery of the bareboat chartered vessel and that the fuel bunkers were the “tangible or intangible personal property” of Oceanografia within the district at the time of attachment under Rule B. Malin International Ship Repair v. Oceanografia, S.A. De C.V., 817 F.3rd 241 (5th Cir. 2016).

Marine Protection & Indemnity Policy Does Not Provide Coverage to Insured for Land-Based Incident – An insured under a P&I policy was found negligent for a land-side accident involving their work on a land-based crane. The P&I Policy provided coverage to the insured for its liability “as owner of the Vessel” for “any casualty or occurrence.” Affirming the District Court’s ruling, the Court held that the unambiguous wording in the P&I policy did not provide coverage for land-based actions of the insured not arising from its ownership of a vessel. The Court relied upon the 1971 Lanasse case, which determined that where the platform crane operator’s fault in operating the crane had no “causal operational relation between the vessel and the resulting injury” and the vessel was merely the inert locale of the injury, the crane operator was not liable as shipowner and therefore the P&I Policy with the “aw owner” language does not provide coverage to the crane operator for platform-based negligence. Naquin v. Elevating Boats, L.L.C., 817 F.3rd 235 (5th Cir. 2016).

Damage to Outer Continental Shelf Tethered Production Facility Not Governed by Maritime Law – A floating production/storage facility located on the Outer Continental Shelf was damaged when the chain that tethered the floating facility to the seabed broke and caused the pipe riser and related equipment to collapse to the sea floor. Initially, the parties contended that maritime law applied to the casualty, but subsequently the Underwriters sought leave to amend their allegations in the lawsuit to assert that Louisiana law, rather than maritime law, applied under the Outer Continental Shelf Lands Act (OCSLA). The District Court denied the leave to amend, but the Court of Appeals reversed, holding that the choice of law prescribed by the OCSLA is “statutorily mandated and is consequently not waivable by the parties.” The Court confirmed that maritime law did not “apply of its own force” because the rupture of the tether chain “fails the admiralty connection test” as the incident “does not have the potential to disrupt maritime commercial or navigational activities on or in the Gulf of Mexico.” The Court also noted that the tether failure was “inextricably intertwined” with the oil and gas production and development operations on the OCS, which is not a traditionally maritime activity. Petrobras America, Inc. v. Vicinay Cadenas, S.A., 815 F.3rd 211 (5th Cir. 2016).

Outer Continental Shelf Spar Facility Attached to Seabed is Immovable Property within Louisiana Statute of Peremption – Injured plaintiff filed suit in state court against designer and manufacturer of spar platform facility which was installed on the Outer Continental Shelf in 2004 and had remained there until the plaintiff’s accident in 2011. The defendant manufacturer removed the state court case to federal court based on the OCSLA and then moved to dismiss the plaintiff’s claims based on a Louisiana statute which perempted any actions “arising out of” deficient design or construction of “immovable property” filed more than five years after the date on which the property was accepted by the owner. (La. R.S. 9:2772). The Court affirmed the District Court’s holding that the spar facility constituted an immovable “building” within the meaning of the Louisiana peremption statute, just as if it were a fixed offshore platform which have long been held to be immovable property under the Louisiana peremption statute. The Court declined the suggestion by the plaintiff to certify the question of the immovable nature of the spar to the Louisiana Supreme Court, finding “sufficient guidance in the existing caselaw to decide” the question. Hefren v. McDermott, Inc., _____ F.3rd ____ (5th Cir. 2016) 2016 WL 1637811 (April 25, 2016).

Marine Insurance –Occurrence Definition – In an action involving a Jack-up rig damaged by an initial storm which caused a misalignment of the jacking legs, which misalignment was not repaired and which misalignment later contributed to the Jack-up rig being further damaged in a subsequent storm where the Jack-up rig was unable to jack up out of harm’s way, the Court affirmed the District Court’s finding that there were two separate “occurrences” and therefore two separate deductibles ($10 Million each), such that the hull underwriters properly denied the Jack-up rig owner’s claim for cost of repair (over $17 Million total) for the damages caused during the 10 month period. The Marine insurance policy was construed under Texas law, finding that the two storms approximately five months apart were both “occurrences” under the ordinary meaning of the term and not a continuous sequence of losses “arising from” the initial storm which damaged the Jack-up legs that contributed to the subsequent rig damage during the second storm. Noting that the Texas courts had not yet addressed the phrase “arising from” in the context of determining the number of occurrences in relation to deductibles, the Court made “an Erie guess as to how the court would interpret ‘arising from’ in this context.” The Court concluded that where “occurrence” is “technically defined to include a series of losses arising from the same event, it includes only those losses proximately caused by that event” and not for damages where the event was just a contributing or “but-for” cause. Seahawk Liquidating Trust. v. Certain Underwriters at Lloyds London., 810 F.3rd 986 (5th Cir. 2016).

Master Service Agreement – OCSLA and LOIA Platform Salvage – In an action involving a Master Service Agreement (MSA) between an oil company and a contractor supplying riggers to work off a barge to salvage a decommissioned oil platform located on the Outer Continental Shelf off the coast of Louisiana, the question was presented as to whether under the Outer Continental Shelf Lands Act (OCSLA), the adjacent state law of Louisiana, applied to the contract as surrogate federal law. And if Louisiana law was made applicable, the question was whether the Louisiana Oilfield Indemnity Act (LOIA), which voids indemnity provisions in contracts that “pertain to a well,” would then be applicable to the contract in question. On the initial issue, the Court remanded for a determination by the District Court of whether the controversy arose on an OCSLA situs based on the “focus-of-the-contract” test as there was insufficient evidence in the record as to where the majority of the work under the contract was to be performed – on the stationary platform or on the vessel. Additionally, if the nature of the contract arose on an OCSLA situs, the District Court was instructed to further make a determination as to whether federal maritime law applied of its own force. The Court, however, held that if the District Court concluded that Louisiana law and the LOIA was adopted as surrogate federal law under the OCSLA, then the indemnity provision would be void under LOIA, since a contract for salvaging of a platform of a decommissioned oil well still had a sufficient nexus to a “well” within the meaning of LOIA to be an agreement that “pertains to” an oil or gas well. Tetra Technologies, Inc. v. Continental Insurance Co., 814 F.3rd 733 (5th Cir. 2016).

Maritime Lien – Foreign Contracts Apply General Maritime Law of U.S. – The Court found that a bunker supply contract between a foreign fuel supplier and a foreign charterer was governed by Singapore law and under such law, properly incorporated the General Terms found on the website by reference. The Court further found that the General Terms adoption of a General Maritime Law of the United States choice-of-law provision was valid and enforceable under Singapore law against the non-party ship owner and operator. The Court further held that the choice-of-law provision choosing “General Maritime Law of the United States,” included not only the judicially-crafted maritime common law, but the statutory maritime liens, such as found in the Federal Maritime Lien Act (FMLA), as the parties referenced in the choice-of-law provision an intention to make maritime liens available, despite the fact that maritime liens are not available under Singapore law. The Court also noted that the shipowner had waived a recognized exception to the enforcement of the choice-of-law provision where such provision is used for the sole purpose of avoiding other applicable law by not raising that argument in the lower court. Finally, the Court found that since the foreign charterer had “presumptive authority” to bind the vessel for necessaries under the FMLA, the maritime lien in rem was valid against the vessel even though the shipowner was not a party to the bunker contract. World Fuel Services Singapore PTE, Ltd. v. Bulk Juliana M/V, 2016 WL 1295041 (5th Cir. April 1, 2016).

Maritime Cases Still Non-Removable after 2011 Amendments to FRCP – After a short flurry of removed savings clause state court cases in Texas (and at least one in Louisiana) beginning with the case of Ryan v. Hercules Offshore, Inc., most of the recent District Courts in both Texas and Louisiana have declined to follow the Ryan rationale based on “the long history of maritime removal jurisdiction” which prohibited removal based solely on maritime jurisdictional grounds. Most District Courts have been remanding state court cases which were removed solely on maritime grounds, “given the absence of clear indication that Congress intended to disrupt the ‘long-established and deeply rooted’ prohibition on removing saving clause cases from state court.” Darville v. Tidewater Marine Service, Inc., 2016 WL 1402837 (E.D. La. April 11, 2016); Harrison v. Crowley Maritime Corp., 2016 WL 858678 (S.D. Tx. March 3, 2016).

Non-Seaman Status after Permanent Re-Assignment to Platform Rig – Plaintiff, a 12 year employee of the drilling company, was assigned by his employer to a stacked platform rig (a non-vessel) a year and a half before his accident. Over his years of employment with the same company, plaintiff was transferred at least to 25 different drilling rigs, the majority of which were jack-up and barge drilling rigs (vessels), such that “considerably more than 30% of his time” with his employer was spent on vessels owned and operated by his employer. The District Court granted the employer a summary judgment holding that the plaintiff was not a Jones Act seaman as a matter of law by finding that the undisputed facts show that the plaintiff’s reassignment to the non-vessel rig “constituted a substantial change in status under Chandris” and that the reassignment was permanent. Felder v. Nabors Offshore Corp., 2016 WL 1161281 (E.D. La. March 24, 2016) on appeal to 5th Circuit April 22, 2016 with Appellant Brief due on July 5, 2016.

Maritime Salvage – Helicopter Landing on Vessel – A vessel owner brought an action for maritime salvage with regards to a helicopter which made a precautionary landing due to mechanical issues on the deck of the vessel owner’s anchored vessel without first calling for permission to land. The vessel owner sought an award based on the value of the helicopter in addition to any out-of-pocket expenses incurred. There was some dispute as to whether the helicopter crew secured the helicopter without assistance from any vessel crew members or used vessel equipment other than the cleats. However, the vessel suffered no damage, but ultimately did transport the helicopter on its deck into a port where the helicopter and crew was then removed. The District Court denied the helicopter company’s motion for summary judgment to dismiss the claim for maritime salvage under general maritime law and the Salvage Convention, holding that a reward for salvage is available to the owner of the salving vessel, even if the owner did not personally take part in the salvage and even if the salving vessel did not face a significant risk of damage from the helicopter. Alternatively, the summary judgment was denied as there was a genuine issue of fact as to whether the helicopter did pose such a risk to the salving vessel. However, the Court did hold that, as a matter of law, the helicopter was salvageable property under maritime law as the helicopter bore a sufficient maritime nexus to warrant a salvage award. The Court held that the helicopter mainly transported passengers to and from offshore platforms over navigable waters, which is a function traditionally performed by waterborne vessels, so maritime nexus was established. Additionally, the motion for summary judgment was denied as there were potential issues of fact as to whether the helicopter actually faced a “marine peril” at the time of the landing, and whether the vessel voluntarily rendered services. Because discovery had not yet been completed on these issues due to an agreement to extend deadlines for such additional depositions, the Court denied the motion. Sunglory Maritime Ltd. v. PHI, Inc., 2016 WL 852476 (E.D. La. March 2016) 2016 A.M.C. 760.

State Court – Punitive Damages for Maintenance and Cure Payment under Protest – In an action involving a seaman’s claim for maintenance and cure, the Louisiana Third Circuit Court of Appeals affirmed a District Court’s award of $300,000.00 in punitive damages and $309,174.00 in attorney’s fees against the seaman’s employer for arbitrarily and capriciously refusing to pay her maintenance and cure for two and one-half years, even where the employer ultimately paid the maintenance and cure “under protest” thereafter and where at the time of trial, the employer had already paid all outstanding maintenance and cure (approximately $56,000.00) up to the date of maximum cure. The Court held that the attorney’s fees were owed on the maintenance and cure claim even after the conditional payment was made “under protest” where the employer reserved its right to argue that the seaman was not entitled to maintenance and cure. The Court of Appeals also added an additional $10,000.00 in attorney’s fees to the plaintiff for the work done by the plaintiff’s attorney on the appeal. Stermer v. Archer-Daniels-Midland Co., 186 So.3rd 319 (La. App. 3th Cir. 2016).

Submitted by Douglas W. Truxillo, Onebane Law Firm

Sixth Circuit

Sixth Circuit Dismisses Interlocutory Appeal on Meaning of “Collision” – A woman was injured when the pleasure boat she was on hit a wake or a wave. The district court certified for interlocutory appeal the question of whether a “collision” within the meaning of the Inland Navigation Rules can occur when a vessel hits a wake or a wave, rather than another vessel. The Sixth Circuit dismissed the appeal for lack of jurisdiction. The court held that the appellant could not meet the requirement that “substantial ground for difference of opinion” exists on the meaning of “collision.” The Court noted that the question is not difficult from a “common sense perspective:” a boat cannot “collide” with a wake or a wave because boats hit waves continuously when they enter the water. There are no circuit splits or differences of opinion within the Sixth Circuit on the issue. Bessemer defines “collision” as “when two moving vehicles strike each other,” and Luckenbach holds that “a collision involves two vessels.” Bessemer & Lake Erie R.R. Co. v. Seaway Marine Transp., 596 F.3d 357, 362 (6th Cir. 2010); Luckenbach S.S. Co. v. The Thekla, 266 U.S. 328, 340 (1924). The court also explained that this personal-injury suit is not the extraordinary case for which interlocutory appeals were designed. In re Buccina, No. 16-0303, 2016 U.S. App. LEXIS 12213 (6th Cir. 2016).

Jones Act Negligence – No Recovery for Loss of Consortium – A man injured his neck while working on a barge. He and his wife sued under the Jones Act, and his wife sought damages for purported loss of consortium. The barge company moved to dismiss the loss-of-consortium claim, arguing that loss of consortium is not an available remedy in Jones Act negligence causes of action. The court granted the barge company’s motion to dismiss, noting that neither the Jones Act nor general maritime law allows recovery for nonpecuniary damages, including loss of consortium. Scarborough v. Ingram Barge Co., No. 5:14-CV-00080-GNS-LLK, 2016 U.S. Dist. LEXIS 2052 (W.D. Ky. Jan. 8, 2016).

Jones Act and General Maritime Law – Duty to Provide Medical Care – After an engineer aboard a vessel died from an asthma attack, his wife sued the ship owner for negligent assignment and breach of duty to provide prompt and adequate medical care under the Jones Act and general maritime law. She argued that the employer unreasonably delayed in evacuating her husband from the vessel, that the employer should have monitored her husband after he informed the captain that his asthma was acting up, and that she is entitled to nonpecuniary damages. The shipowner moved for summary judgment, arguing that the Jones Act imposed no duty on it to monitor or evaluate decedent’s asthma condition. The Court acknowledged that the shipowner had no duty to monitor or evaluate decedent’s asthma on a preventative basis, but that the ship owner had a duty to provide prompt and adequate medical care once it became aware that decedent was experiencing respiratory distress. The scope of such a duty “depends upon the circumstances of each case – the seriousness of the injury or illness and the availability of aid.” Regarding the scope of aid the shipowner defendant was required to furnish in the circumstances, shipowner defendant argued that it did not breach its duty to provide prompt and proper medical treatment because decedent never requested to leave the vessel. The court held that the “law imposes a duty on the ship owner to provide medical care without regard to whether the crewmember ‘make[s] a distinct request’ for such aid.” The motion for summary judgment was denied. Tindle v. Hunter Marine Transp., Inc., No. 5:14-CV-00110-TBR-LLK, 2016 U.S. Dist LEXIS 7053 (W.D. Ky. Jan. 21, 2016).

Jones Act and General Maritime Law – Daubert Exclusion in Maritime Action – An engineer aboard a vessel died from an asthma attack. His wife sued the employer for negligent assignment and breach of duty to provide prompt and adequate medical care under the Jones Act and general maritime law. Both sides moved to exclude expert testimony. The ship-owner defendant sought to exclude the plaintiff’s medical expert from offering the opinion that crewmembers “should have been trained on the hallmark symptoms, risks, and appropriate treatment protocol for someone suffering from asthma” and could have removed the decedent from the vessel sooner. The court excluded the doctor’s opinions on those topics because he was not qualified to opine about the proper protocol for “operating vessels, training vessel crewmembers, or developing emergent care plans for river towboats.” The wife sought to exclude the defendant’s expert, a captain, from opining that the decedent “knew his symptoms and potential problems better than any other person” and that the crew “did everything possible to save [decedent’s] life.” The court excluded this testimony because the captain cannot make statements about the decedent’s state of mind and because the captain was not qualified to give medical conclusions. The defendant also sought to exclude the plaintiff’s expert, also a captain, from testifying that the way the crew obtained and administered the medicine lost a “significant amount of valuable time” and that the decedent likely decided to stay on the vessel because of the pay. The court held that the captain could testify that a “significant” amount of time was lost but was not qualified to testify about the medical consequences. The court also held that the captain could testify about the decedent’s pay but could not speculate as to why the decedent stayed on the vessel. Tindle v. Hunter Marine Transp., Inc., No. 5:14-CV-00110-TBR-LLK, 2016 U.S. Dist LEXIS 7053 (W.D. Ky. Jan. 21, 2016).

Jones Act and Unseaworthiness – Claims Dismissed for Insufficient Pleadings – The plaintiff hit his knee on the leg of a table while carrying dishes on a vessel and sued the ship-owner for negligence under the Jones Act, unseaworthiness, and breach of maintenance and cure. The complaint recited the elements of the claims and made conclusory statements not supported by many facts. The U.S. District Court for the Northern District of Ohio granted the defendant’s motion to dismiss the Jones Act and unseaworthiness claims because the complaint was not pled with sufficient specificity to support the claims. The court denied the defendant’s motion to dismiss the maintenance-and-cure claim because the plaintiff needed to plead only that he became injured and incurred medical expenditures while working as a seaman. The complaint met this burden. Allen v. NCL America, LLC, No. 1:15CV2090, 2016 U.S. Dist. LEXIS 41293 (N.D. Ohio Mar. 29, 2016).

Submitted by Eric S. Daniel, Thompson Hine LLP.

Seventh Circuit

2011 Amendment to 28 U.S.C. § 1441(b) Does Not Interfere with 28 U.S.C. § 1333’s Saving-to-Suitors Clause – Case in which a passenger was injured on a leisure-boat ride on Lake Michigan fell within the § 1333 admiralty jurisdiction, so the federal court had subject-matter jurisdiction. The court held, however, that the passenger was entitled to have the case remanded to state court. § 1333’s saving-to-suitor’s clause allows a plaintiff to prevent removal when admiralty jurisdiction is the only basis for federal jurisdiction. The court held that the amendment to § 1441(b) from 2011 is limited to cases involving federal question jurisdiction under § 1331 or diversity jurisdiction under § 1332(a) and does not interfere with § 1333’s saving-to-suitor clause. Neither the amendment nor its legislative history mentions § 1333. Brown v. Porter, No. 15 C 8482, 2016 U.S. Dist. LEXIS 17634 (N.D. Ill. Feb. 12, 2016).

Rivers and Harbors Act Does Not Displace the Federal Right to Assert a Public Nuisance Claim – Inland Marine Services, Inc. (“IMS”) attempted to help a barge, the Dale Heller, navigate past a dam during high water. The Dale Heller’s tow broke, causing extensive damage and flooding. IMS filed a complaint to limit its liability, and the United States filed a three-count claim against IMS, alleging, among other things, public nuisance. IMS moved for summary judgment, arguing that “by enacting the RHA, Congress has provided a complete statutory scheme for recovery by the United States for damage to its navigation facilities and obstruction of its waterways, which displaces any common law nuisance claim for said damage.” The court held that the government still has a federal right to assert a public nuisance claim in equity and that the RHA has not displaced the federal right to assert such a claim regarding obstructions to navigable waterways and damages to navigational improvements. The court therefore denied IMS’s summary-judgment motion as to the public-nuisance claim. In re Ingram Barge Co., No. 13 C 4292, 2016 U.S. Dist. LEXIS 49319 (N.D. Ill. Apr. 13, 2016).

Marine Insurance – Damages and Lost Earnings – Lakeshore Sail Charters claimed that Acadia Insurance Company breached its contract to insure Lakeshore against damage to its 79-foot sailing vessel and against lost earnings as a result of damage to the vessel. Lakeshore also claimed that it is entitled to consequential damages because Acadia acted in bad faith. The vessel was damaged on its way to the Great Lakes to participate in summer festivals. Lakeshore submitted a claim to Acadia for $100,700.64 for damage to the vessel and for $385,000 for lost earnings. Acadia paid only $63,000 to repair the vessel and denied the lost-earnings claim entirely. Both parties filed motions for summary judgment. The U.S. District Court for the Northern District of Illinois, sitting in admiralty jurisdiction, granted summary judgment for Lakeshore for the lost-earning claim because the insurance policy unambiguously covered lost earnings. The court granted summary judgment for Acadia for the repair claim because Lakeshore did not present enough evidence to show that the additional money it requested was related to the repair costs. Circuits are split on whether state statutes that allow for attorneys' fees and statutory damages apply to admiralty-insurance cases. The court here did not reach the question because it held that Lakeshore was not entitled to consequential damages because it did not present enough evidence to establish that Acadia acted in bad faith. Lakeshore Sail Charters, LLC v. Acadia Ins. Co., No. 14-cv-2410, 2016 U.S. Dist. LEXIS 30257 (N.D. Ill. Mar. 7, 2016).

Motions to Dismiss and to Abstain Denied in Sinking-Barge Case – An excavating company chartered a barge and loaded it with construction debris. The company allegedly overloaded the middle of the barge, causing it to sink. The barge owner filed suit seeking to recover the value of the barge and attorneys’ fees. Defendant filed a motion to dismiss the case and a motion to abstain from hearing the substantive claims, arguing that admiralty law does not allow for recovery of attorneys’ fees or for economic damages for negligence claims. The U.S. District Court for the Northern District of Illinois denied the motion to dismiss because the barge owner has a proprietary interest in the damaged barge, which means economic damages are available, and because a court may give attorneys’ fees when a party has acted in bad faith. The company argued that the court should abstain from hearing the substantive claims because the parties also have a case pending in state court. The court denied this motion as well because the two suits do not involve substantially similar issues. River Docks, Inc. v. Roy Strom Excavating & Grading Co., No. 15-cv-5709, 2016 U.S. Dist. LEXIS 4453 (N.D. Ill. Jan. 13, 2016).

Submitted by Eric S. Daniel, Thompson Hine LLP

Eighth Circuit

Tortious Interference with Charter Agreement Not Within Admiralty Jurisdiction – In an action brought by a vessel owner against another company for tortious interference with the vessel owner’s “contract to lease a barge and crane to a third party,” otherwise known as a charter agreement, the Eighth Circuit Court of Appeal affirmed the District Court’s decision dismissing the suit as being time barred by applying a state law two-year statute of limitation rather than the maritime doctrine of laches. The action was filed more than two years after the date that the defendant contacted the third party charterer and directed the charterer to terminate the charter agreement with the plaintiff vessel owner and ultimately charter a vessel from the defendant. The issue in the District Court centered around which of three different States’ statute of limitation would apply. The issue of whether maritime or admiralty jurisdiction and the doctrine of laches were applicable to the tortious interference claim was not discussed or considered in the District Court’s decision. However, the plaintiff vessel owner raised the issue of the applicability of maritime law on appeal. The Court of Appeal held that admiralty jurisdiction was lacking because the plaintiff failed to show that the alleged tortious interference occurred on navigable waters or “was caused by a vessel on navigable water.” The Court noted that the plaintiff’s damages “consisted of lost future income from the charter, but any such damages were not sustained at sea.” The Court further noted that the cost the plaintiff incurred in obtaining the barge “arose solely on land” at the time of the breach. Blake Marine Group v. CarVal Investors, LLC et al., 2015 WL 5008710 (Dist. Minn. August 20, 2015) affirmed on appeal 2016 WL 3743075 (8th Cir. July 13, 2016).

Submitted by Douglas W. Truxillo, Onebane Law Firm

Ninth Circuit

Asbestos – Products Liability – The heirs of a decedent who allegedly was exposed to asbestos while serving aboard two U.S. Navy ships could not recover from the shipbuilders under a strict liability theory, as the ships were not “products” under federal maritime products liability law. The question of whether a naval warship is to be considered a “product” in this context was one of first impression for the federal courts of appeals. When analyzing the products-liability claim under maritime law, the Court relied on the Restatement of Torts for guidance and defined a “product” subject to strict liability as “tangible personal property distributed commercially for use or consumption.” The Court ruled that only when the complained-of injury was allegedly caused by a defect in something within this definition of “product” should the defendant manufacturer or seller be strictly liable for the harm caused. Accordingly, the Court determined that the Restatement would exclude warships that were never “distributed commercially” from the realm of strict products liability. McIndoe v. Huntington Ingalls, Inc., 817 F.3d 1170 (9th Cir., March 31, 2016).

Longshore & Harbor Workers’ Compensation Act (LHWCA) – The Claimant sustained an on-the-job injury to his knee, but continued to work until the pain became too severe. The Claimant’s employer terminated treatment and the Claimant filed for disability under the LHWCA. The employer contended that the disability should be classified as temporary because knee replacement surgery was an option. The Court, however, held that for purposes of the LHWCA, a covered employee should be classified as permanently disabled where he incurred a protracted period of disability and faced the prospect of future surgery that “may” alleviate some of his disability. The Court held that the prospect of a hypothetical future surgery and its anticipated benefits cannot transform an otherwise permanent disability into a temporary one for purposes of the LHWCA. The court explained that the appropriate question to ask is not whether a future surgery would ameliorate the Claimant’s knee condition, but whether there was actual or expected improvement to his knee after a normal and natural healing period. SSA Terminals & Homeport Ins. Co. v. Carrion, 2016 U.S. App. LEXIS 8637 (9th Cir., May 11, 2016).

Jurisdiction and Choice of Law – As a threshold matter prior to determining whether the parties were required to arbitrate this insurance dispute, the Court was required to decide whether federal maritime, New York or Montana law governed the interpretation of the policy. The Court decided that federal maritime law applied. To determine the applicable law, the Court first determined whether its subject matter jurisdiction derived from diversity of citizenship or from the maritime nature of the policy. The Court explained that diversity jurisdiction and admiralty jurisdiction were not mutually exclusive, could exist concurrently and, despite the procedural differences between proceeding under diversity or admiralty jurisdiction, the Court confirmed that the same substantive law pertains to the claim regardless of the forum to ensure the uniform application of admiralty law. The Court further explained that if the suit justified the exercise of admiralty jurisdiction, the choice of substantive law to be applied in the case is governed by federal maritime choice-of-law rules. Ultimately, the Court held that the insurance policy was a marine insurance policy, and therefore was a maritime contract subject to federal maritime jurisdiction. Galilea, LLC. v. AGCS Marine Ins. Co., 2016 U.S. Dist. LEXIS 22634, 2016 AMC 808 (D. Montana, February 24, 2016).

Jury Trial Demand – Defendant filed a motion to strike a jury demand made by a Plaintiff who was a crew member aboard a vessel operating in navigable waters in Alaska when he sustained serious injuries. Plaintiff filed the action at issue against two diverse defendants and premised the court’s jurisdiction on diversity jurisdiction under 28 U.S.C. § 1332. The complaint contained claims for negligence, negligence per se, and unseaworthiness under the general maritime law of the United States. Subsequently, the Plaintiff filed an amended complaint adding a non-diverse defendant. The amended complaint still maintained that subject matter jurisdiction was premised on diversity jurisdiction and asserted claims under the general maritime law of the United States against all defendants, including the non-diverse defendant. Accordingly, the defendants argued that the addition of the non-diverse defendant to the action, destroyed complete diversity, and asserted that the only remaining basis for the court’s subject matter jurisdiction was based on admiralty pursuant to 28 U.S.C. § 1333, which did not carry a right to a jury trial. Plaintiff argued that his right to a jury trial should be preserved.

The Court held that whether a party is entitled to a jury trial in federal court is a question of law and pointed out that the Seventh Amendment guarantees a jury trial in cases at common law. However, in admiralty cases, the Seventh Amendment neither requires jury trials nor forbids them. Following Ghotra v. Bandila Shipping, Inc., the Court explained that the Ninth Circuit expanded the rationale in Fitzgerald to situations where admiralty in rem claims are combined with diversity in personam claims. Nonetheless, the Court found that the Ninth Circuit had not weighed in on the issue of whether complete diversity is required in order to proceed with a jury trial in a mixed admiralty-diversity case. Ultimately, the court ruled that while the Plaintiff could potentially remedy the problem by dismissing the non-diverse defendant, the presence of the non-diverse defendant in the case destroyed complete diversity and the Plaintiff’s demand for a jury trial was stricken. Barry v. Shell Oil Co., 2016 U.S. Dist. LEXIS 42685 (Dist. Of Alaska, March 30, 2016).

Maritime Liens – Plaintiff, City of Newport Beach, commenced a putative in rem action against the M/Y Bad Habit. The Plaintiff alleged that the vessel was impounded after it was found attached to a mooring without authorization within the city. The vessel owner apparently had been arrested and remained in custody. By letter, the Plaintiff advised the vessel owner that he could retrieve the vessel upon payment of certain towing and storage fees. The vessel owner failed to respond. Accordingly, the Plaintiff filed an in rem action asserting a maritime lien and seeking to recover accumulated storage fees under theories of trespass by vessel, implied contract, and quantum meruit. Coincident with the filing of the action, the Plaintiff moved the court for issuance of a warrant of arrest. The Court, however, explained that as a rule, a maritime action in rem will be available only in connection with a maritime lien. The Court further stated that the only maritime liens recognized today are those created by statute and those historically recognized in maritime law. While the Plaintiff asserted a maritime lien because it provided certain “necessaries” such as wharfage services to the vessel, the court found that under the Federal Maritime Lien Act, a person providing necessaries to a vessel must provide them on the order of the owner or a person authorized by the owner. The Court found that the Plaintiff failed to allege that it provided services on the order of the owner or a person authorized by the owner of the vessel and noted that neither the owner nor anyone on his behalf responded to Plaintiff’s Letter concerning the impoundment of the vessel. Accordingly, the Court found that the Plaintiff did not properly allege a maritime lien for the provision of necessaries. The Court continued to likewise rule that there was no authority for a maritime lien for “trespass by vessel”, implied contract or quantum meruit. The motion seeking the issuance of a warrant of arrest was therefore denied. City of Newport Beach v. M/Y Bad Habit, 2016 U.S. Dist. Lexis 36387 (Central Dist. Of California, March 18, 2016).

Maritime Liens – This action arises out of a dispute over charges for electrical service work that Plaintiff performed on the defendant vessel. The contract was terminated with the job 99% complete. The Plaintiff sent a final invoice along with all accounting, including labor charges. The Defendant refused to pay the charges and demanded that all of the monies he paid for parts costs be returned to him. There was no complaint about the quality of Plaintiff’s electrical work. The reasonableness of the charges was, however, disputed.

The Plaintiff filed a Verified Complaint to Foreclose Maritime Lien In Rem in admiralty stating claims for breach of maritime contract, maritime lien for providing a necessary, and for reasonable value of labor and services. The Court explained that in order to establish a maritime lien for necessaries, a supplier must show: (1) that the goods or services were provided to the vessel; (2) that the goods or services were ‘necessaries’; (3) that the charges are reasonable in amount; and (4) that they were ordered by someone with the appropriate authority. The Court further stated that modern admiralty jurisprudence interprets “necessaries” as anything that facilitates or enables a vessel to perform its mission or occupation and that the reasonableness of charges in the maritime lien context is measured by whether they are “customary” and “in accord with prevailing charges for the work done and the materials furnished.” Accordingly, the only element in dispute was whether the Plaintiff’s charges were reasonable. Ultimately, the Court ruled that the Plaintiff satisfactorily established that the rate of $85 per hour was in accord with prevailing charges for the work done and the materials furnished. Accordingly, the Court concluded that the charges in dispute were reasonable, and the claim for a maritime lien for necessaries under 46 U.S.C. § 31342 was valid. Shugart v. Gypsy Official No. 251715, 2016 U.S. Dist. LEXIS 786 (W. Dist. Washington, January 4, 2016).

Maritime Liens – The Plaintiff, Bunker Holdings, brought an in rem action against the M/V YM Success claiming a maritime lien against the vessel under the Commercial Instruments and Maritime Lien Act (CIMLA), 46 U.S.C. §§ 31301-31343. The YM Success is a Liberian-flagged containership that transports cargo containers around the world.

In the summer of 2014, Yang Ming contacted OW Bunker Far East by email to negotiate terms for the delivery of fuel to Yang Ming’s ships in Russia. The YM Success received fuel in two separate deliveries on October 13 and 14, 2014. The invoices were not paid and Bunker Holdings arrested the vessel to foreclose its lien rights. Yang Ming, however, contended that Bunker Holdings could not satisfy the requirements for a maritime lien under CIMLA. The Court explained that to obtain a maritime lien under CIMLA, Bunker Holdings must show (1) it furnished repairs, supplies, or other necessaries, (2) to a vessel, (3) on the order of the vessel’s owner or a person authorized by the owner. The Court further stated that the dispute hinged on whether Bunker Holdings could prove that it supplied the fuel on the order of either Yang Ming or someone authorized by Yang Ming. In this regard, it was uncontested that Yang Ming did not order the fuel from Bunker Holdings, but rather ordered the fuel from OW Far East, which in turn, engaged Bunker Holdings to supply the fuel. The question therefore was whether OW Far East was authorized by Yang Ming to bind the YM Success.

The Court recognized two lines of cases that provide a framework for answering this question: the general contractor/subcontractor line and the principal/agent, or middleman, line. The Court stated that “simply put”, to obtain a maritime lien against the YM Success, Bunker Holdings must demonstrate that either (1) OW Far East was acting as an agent for Yang Ming, or (2) Yang Ming directed OW Far East to engage Bunker Holdings as the specific subcontractor to supply the fuel. Ultimately, Bunker Holdings failed to prove that it provided fuel to the vessel on the order of the vessel’s owner or a person authorized by the owner and failed to establish entitlement to a maritime lien under CIMLA. Bunker Holdings Ltd. v. M/V YM Success (IMO 9294800), 2016 U.S. Dist. LEXIS 73499 (W. Dist. Washington, June 6, 2016).

Maritime Liens – Bankruptcy – A trustee who was appointed to administer a Chapter 7 bankruptcy case established by clear and convincing evidence that a seaman’s attorneys should be held in contempt of court because they violated the stay that was imposed pursuant to 11 U.S.C.S. § 362. The seaman’s attorneys had attempted to persuade a federal district court to disregard the bankruptcy court’s order granting only limited relief from the stay and to arrest a vessel owned by the debtor. The Court determined that it had the power under 11 U.S.C.S.§ 105 to award damages and compensate the trustee for expenses incurred because of the seaman’s attorneys’ actions. Accordingly, the Court granted the trustee’s motion for sanctions for violation of the automatic stay and directed the trustee’s counsel to submit an appropriate separate judgment which awarded the trustee $43,277. In re Sea Haw Rafting, LLC, 2016 Bankr. LEXIS 1710; (U.S. Bankruptcy Court, District of Hawaii, April 15, 2016).

Removal of Jones Act Claims – Plaintiff originally filed this action in the state Circuit Court against the Defendants under 46 U.S.C. § 30104 (“Jones Act”), 33 U.S.C. § 905(b) (“Longshore and Harbor Workers’ Compensation Act”), and the general maritime law alleging unseaworthiness of a vessel, failure to pay maintenance and cure, and vessel negligence. The Defendants filed a timely Notice of Removal to the U.S. District Court relying on diversity jurisdiction. The Plaintiff filed a Motion to Remand. The primary substantive question presented was whether the Plaintiff qualified as a Jones Act seaman. The Court explained that a defendant may remove an action filed in state court to federal court if the federal district courts have original jurisdiction based on diversity of citizenship. 28 U.S.C. § 1441. However, the removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand. The presumption against removal means that the defendant always has the burden of establishing that removal is proper. Significantly, the Court found that in assessing whether a plaintiff’s claims were properly removable, the Ninth Circuit looks to the plaintiff’s pleadings. In this regard, the Court recognized that Jones Act claims are typically not removable, even in the event of diversity jurisdiction. The Defendants, however, argued that the Jones Act claim was plead fraudulently to avoid removal, and therefore, removal was appropriate on grounds of diversity jurisdiction. The Defendants relied on a minority rule applied in the Fifth Circuit that allows defendants to pierce the pleadings to show that a Jones Act claim has been fraudulently plead to prevent removal.

The Court denied the invitation to adopt the 5th Circuit rule and stated that the 9th Circuit’s procedure for remand of Jones Act claims considers only the Complaint. The Court recognized that the Ninth Circuit had not directly addressed whether it is permissible for a court to look beyond the pleadings to determine if a plaintiff’s Jones Act claim was removed properly. Nonetheless, as a general instruction, the Ninth Circuit has held in assessing whether a plaintiff’s claims were properly removable under § 1441(c), that the review is limited to the plaintiff’s pleadings. The Court also found Green v. Ross Island Sand & Gravel Co., 2014 U.S. Dist. LEXIS 9194, 2014 WL 262133 (N.D. Cal. Jan. 23, 2014) analogous and persuasive suggesting that a district court’s determination should be limited to the pleadings. Accordingly, the Court limited its review to the pleadings and determined that the case could not be removed finding that the Plaintiff had properly plead Jones Act status alleging that the injured person was a seaman who was acting within the scope of his employment when he was injured. Leloff v. Georgia-Pacific Consumer Prods., Ltd., 2016 U.S. Dist. LEXIS 82375 (Dist. Oregon, January 23, 2016).

Submitted by Michael McLeod, Rumrell, Bate, McLeod & Brock, PLLC

Tenth Circuit

Admiralty Jurisdiction Existed Where Boy Was Shocked After Jumping into Water – A boy jumped into the water at a marina, was electrocuted, and drowned, allegedly due to an amperage outlet from a nearby boat that purportedly was hanging in the water and emitted an electric shock. The issue before the U.S. District Court for the District of Utah was whether the court had admiralty jurisdiction over the case. Applying the locality test, the Court held that it had admiralty jurisdiction because the injury occurred on navigable waters, and the amperage outlet was related to maritime activity. McQueen v. Aramark Corp., 2:15-CV-492-DAK, 2016 U.S. Dist. LEXIS 43958 (D. Utah Mar. 30, 2016).

Submitted by Eric S. Daniel, Thompson Hine LLP

Eleventh Circuit

Marine All-Risk Insurance Policy Not Ambiguous Due to an Exclusion Provision which Limited Coverage for Damages to Certain Listed Covered Property - Court holds that vessel owner was able to prove that a sinking was a “fortuitous loss” when the vessel sank at its home pier due to a blown fuse to the bilge pump. However, Court of Appeals vacated a finding that policy was “ambiguous” because of the “all-risk” coverage of “engines, mechanicals and electrical parts” was thereafter excluded or limited from coverage by an Exclusion provision in the policy that excluded coverage to those items “unless caused by an accidental external event.” The Court noted that Exclusions in insurance policies typically do pull back coverage or limit coverage to globally covered items without rendering the policy ambiguous, so long as it is clear. However, since the District Court had not addressed the issue of whether the phrase “accidental external event” was itself ambiguous, and the Court of Appeals remanded the case for further proceedings, including potential fact finding regarding the cause of the event. Great Lakes Reinsurance (UK) PLC v. KAN-DO, Inc., GREAT LAKES REINSURANCE (UK) PLC v. KAN-DO, INC. 2016 A.M.C. 716. (11th Cir. 2016) (This case was not selected for publication by the Court in West’s Federal Reporter.)

In Rem Maritime Lien Dismissed for Forum non conveniens – Court of Appeals vacates the arrest and dismisses a lawsuit to enforce a maritime lien against a vessel arrested in Alabama under the doctrine of forum non conveniens with regards to a bunker supply agreement governed by Hong Kong law. Based on the choice-of-law analysis, despite the language in the choice-of-law clause which provided that the “Seller may apply and benefit from any law granting a maritime lien and/or right to arrest the Vessel in any country . . . ,” the parties had clearly chosen Hong Kong law to govern the agreement. While the U.S. laws recognize a maritime lien for necessaries, the laws of the other nations connected to the dispute [Hong Kong, China and Denmark] do not. The Court noted that the only connection the U.S. had to the contract dispute was that the vessel was arrested in Alabama and that all other factors pointed to Hong Kong law being applicable to the interpretation of the supply agreement provisions. The issue of whether to enforce the disputed language in the choice-of-law provision allowing the Seller to “apply and benefit” from a maritime lien under U.S. law was, therefore, for the Hong Kong courts to determine. A/S Dan-Bunkering Ltd. v. M/V Centrans Demeter, 633 Fed.Appx. 755 (11th Cir.2015).

Arbitration Agreement Enforceable Regarding Jones Act and General Maritime Claims of a Foreign Seaman – Suit by a Nicaraguan cruise ship employee injured on vessel is subject to an enforceable arbitration agreement in his employment contract governed by the New York Convention and Chapter 2 of the Federal Arbitration Act. The Court determined from the record that the plaintiff seaman failed to establish his cost-based (public policy) defense (“effective vindication doctrine”- that the costs of arbitration would preclude him from arbitrating his federal statutory claims) and therefore granted the employer’s motion to compel arbitration. Without actually reaching the issue of whether the effective vindication doctrine could be asserted at the arbitration-enforcement stage rather than the arbitral award-enforcement stage, the Court did comment that “the Supreme Court has never invoked the effective vindication doctrine to justify the refusal to enforce an arbitration clause.” Suazo v. NCL (Bahamas), Ltd., __F.3rd __ (11th Cir. 2016) 2016 WL 2642065 (May 10, 2016).

No Loss of Consortium Damages under General Maritime Law for Passengers – The District Court dismissed, as a matter of law, the loss of consortium claims filed by a passenger’s wife as a result of her husband’s injuries in a maritime personal injury lawsuit against a cruise line. The District Court rejected the plaintiffs’ argument that the Supreme Court’s decision in Atlantic Sounding Co. v. Townsend in 2009 reversed the long-standing 11th Circuit precedent which prohibited loss of consortium claims in non-fatal personal injury maritime cases based on Miles v. Apex Marine. In determining the motion, the District Court commented that the 11th Circuit had not yet had the opportunity to address the issue of loss of consortium claims for non-seaman injured on navigable waters following Townsend, but noted that the Fifth, Eighth and Ninth Circuits as well as “the overwhelming majority of courts (District Courts) within the Eleventh Circuit” have held “that Townsend did not derail the precedential value” of the prior 11th Circuit jurisprudence disallowing such loss of consortium claims. Williams v. Carnival Corp., 2016 WL 245312 (S.D. Fla. January 21, 2016).

Rule B Attachment and Release without Security Divests Court of Jurisdiction – Fuel company brought in personam action for breach of maritime contract against vessel owner obtaining a writ of attachment pursuant to Rule B(1) of the vessel within the jurisdiction of the District Court. However, plaintiff immediately released vessel from attachment without requesting substitute security be posted by the vessel owner in the District Court where the attachment occurred. (Vessel owner had posted security in a different foreign court between the same parties involving the same contract). The vessel owner filed an answer raising “insufficiency of Service of Process,” but then defended the case for four months including the filing a motion for Rule E(4)(f) relief for the release of the vessel which was no longer attached. The vessel owner did not actually file a motion to dismiss on personal jurisdiction grounds. However, in ruling on the motion for Rule E relief, the District Court noted that the quasi-in-rem jurisdiction in a Rule B attachment proceeding is “predicated upon the presence of the defendant’s property within” the jurisdiction of the Court. Finding that the defendant had not waived or forfeited the personal jurisdiction defense by making a “restricted appearance” under Rule E(8), the District Court held that because the vessel was immediately released without the posting of substitute security within the District, there was no continuing personal jurisdiction over the vessel owner under Rule B, and thus the suit was dismissed for lack of personal jurisdiction over the defendant vessel owner. World Fuel Services Europe, Ltd. v. Thoresen Shipping Singapore Private Ltd., 2015 WL 9275008 (S.D. Ala. December 18, 2015) appeal filed January 11, 2016 but settled and dismissed May 2016.

Submitted by Douglas W. Truxillo, Onebane Law Firm

select
select
select
select

Connect With Us...