February 2012
Notes From Your Updater - The 2012 Loyola Annual Longshore Conference will be held at the Sheraton New Orleans Hotel, New Orleans, Louisiana, from March 15 &16, 2012. There are still openings remaining at this time. You can even register online.
SAVE THE DATE - Signal/LCA Maritime Conference, May 21st to May 23rd, 2012, Longshore Practice in the 21st Century: Enhancing the Maritime Industry’s Vision and Voice through the Pursuit of Educational Excellence. Two days of intriguing topics at The Hyatt Regency Penn’s Landing, Philadelphia, PA. There will be pre-registration on May 21, 2012, followed by a Welcome Reception. There will also be optional shipyard tours for early bird registrants. Stay tuned for more details.
The United States Supreme Court heard oral argument in the case of Roberts v. Sea-Land Services , Docket 10-1399, on Wednesday, January 11, 2012. You can also listen to an audio version of the argument, courtesy of the Oyez Project at Chicago-Kent, available here (it’s much more interesting then reading a boring transcript, I might add). The question was limited to: Whether the phrase “those newly awarded compensation during such period” in Longshore Act §6(c), applicable to all classes of disability except permanent total, can be read to mean “those first entitled to compensation during such period,” regardless of when it is awarded. While listening to Josh Gillelan argue his position, Justice Breyer twice referred to feeling like he was in an Abbott and Costello movie. My impression was that none of the Justices were receptive to Gillelan’s idea of making every claimant seek a formal order, either on their own volition or at the insistence of the employer, to lock in a maximum rate. You may use these links to review the Petition for Certiorari, the Brief in Opposition, and the Reply Brief in the case. Jack Martone also wrote up a great post-argument recap, which you can read here.
SUPREME COURT SAYS THE NINTH CIRCUIT DIDN’T BLOW IT (FOR A CHANGE)
PACIFIC OPERATORS OFFSHORE, LLP, ET AL. V. VALLADOLID ET AL.
Juan Valladolid worked for Pacific Operations Offshore as a roustabout, stationed primarily on one of Pacific Operations' two offshore drilling platforms. He was killed, however, on the grounds of Pacific Operations' onshore oil-processing facility when he was crushed by a forklift. Valladolid's widow, received death benefits under California's workers' compensation scheme. She also filed a claim for benefits under the LHWCA, both directly under the LHWCA and via the Outer Continental Shelf Lands Act extension to outer continental shelf workers. The ALJ denied the widow’s OCSLA claim on the grounds that Valladolid's injury had occurred outside the geographic situs of the outer continental shelf. The ALJ denied the LHWCA claim on the grounds that Valladolid was not engaged in maritime employment, and he was not injured on a maritime situs. The BRB upheld the ALJ's denial of the OCSLA benefits under the "situs-of-injury" test, and affirmed the denial of LHWCA benefits on the maritime situs ground. The BRB did not reach the maritime employment issue. The widow appealed the Board’s denial of benefits, contending that the BRB impermissibly applied a "situs-of-injury" requirement for OCSLA workers' compensation, denying her claim because her husband was killed on shore and not on the outer continental shelf. This was an issue of first impression in the Ninth Circuit. The Ninth Circuit reversed, rejecting tests used by the Third and the Fifth Circuits, holding that the claimant need only establish a substantial nexus between the injury and extractive operations on the outer continental shelf. To meet the standard, the court held that a claimant must show that the work performed directly furthers outer continental shelf operations and is in the regular course of such operations [see June 2010 Longshore Update]. Pacific filed a petition for certiorari, which was granted by the U.S. Supreme Court on February 22, 2011 [see March 2011 Longshore Update]. After hearing oral argument in the case on October 1, 2011, the U.S. Supreme Court issued its opinion affirming the 9th Circuit’s opinion and holding that the OCSLA extends coverage to an employee who can establish a substantial nexus between his injury and his employer's extractive operations on the OCS. The Court rejected the Fifth Circuit's "situs-of-injury" test, finding nothing in the text of §1333(b) suggesting that an injury must occur on the OCS. The Court also noted that the text of §1333(b) also gives no indication that Congress intended to exclude OCS workers who are eligible for state benefits from LHWCA coverage. To the contrary, the LHWCA scheme incorporated by the OCSLA explicitly anticipates that injured employees might be eligible for both state and federal benefits. The Court also rejected Pacific's alternative argument that §1333(b) imports the LHWCA's strict situs-of-injury requirement, which provides benefits only for injuries occurring "upon the navigable waters" of the United States, finding it unlikely that Congress intended to restrict the scope of the OCSLA workers' compensation scheme through a non-intuitive and convoluted combination of two separate legislative Acts. The Court similarly rejected the Solicitor General's suggested status-based inquiry and the Third Circuit's "but for” test, holding the neither were compatible with §1333(b), and found the Ninth Circuit's “substantial-nexus" test is more faithful to §1333(b)'s text. Whether an employee injured while performing an off-OCS task qualifies (i.e. the test requires the injured employee to establish a significant causal link between his injury and his employer's on-OCS extractive operations) will depend on the circumstances of each case. Thus, the Court held it was proper for the Ninth Circuit to remand this case for the Benefits Review Board to apply the "substantial-nexus" test. Justice Scalia wrote separately to note that the majority opinion indulged in considerable understatement when it acknowledges that the 9th Circuit’s test "may not be the easiest to administer." He went on to point out that "substantial nexus" is novel legalese with no established meaning in the present context, and that he would prefer a “proximate cause” test. Justice Thomas delivered the opinion of the Court, in which Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan, joined. Justice Scalia filed an opinion concurring in part and concurring in the judgment, in which Justice Alito joined. (U.S. Sup. Ct, January 11, 2012) 2012 U.S. LEXIS 577
Updater Note: Richard Epstein authored a very insightful opinion analysis, which can be viewed here. I commend it to me readers as a refreshing change from my less engaging reviews.
YOU NEED A VESSEL TO SUPPORT A §905(B) CAUSE OF ACTION (CONT.)
BILLIOT V. BOH BROS. CONSTRUCTION CO., LLC
Tilden Billiot was a longshoreman working for Boh Brothers Construction Co., LLC, on a marine construction project, when he died in the territorial waters of the United States. Billiot's cherry picker crane tipped over on its side and, after about six minutes of the cab dangling over the water, Billiot’s unconscious body slipped through the broken glass and into the water where he drowned. Billiot’s widow, Glenda Billiot, contended that she had a cause of action under §905(b) of the LHWCA. Boh Brothers moved for summary judgment contending that there were no genuine issues of material fact regarding the widow’s claim for "vessel negligence." The widow argued that the vessel was a cause of Billiot's drowning, considering that Boh Brothers was required to have a lifesaving vessel immediately available, including the ability to secure the worker onboard for safe transportation and immediate first aid. The court initially noted that the issue before it was not whether the widow made proper allegations of negligence against Boh Brothers, but whether any such alleged negligence, if proved, constituted "vessel negligence" within the meaning of §905(b). The court noted that the undisputed fact remained that the accident complained of occurred on the bridge deck and not on a Boh Brothers’ vessel. The court concluded that the widow had failed to come forward with even a scintilla of competent evidence tending to suggest that Billiot's death was caused by any act or omission on the part of Boh Brothers in its capacity as owner of the rescue vessel. Instead, the evidence demonstrated that Mr. Billiot's fatal injuries were all sustained before the rescue boat arrived. Accordingly and because of the complete absence of evidence on crucial elements of the widow’s 905(b) claim of "vessel negligence" being causally related to Billiot's accident, Boh Bros’ motion for summary judgment was granted [see May 2011 Longshore Update]. Glenda Billiot appealed the district court’s grant of summary judgment in favor of Boh Brothers, asserting the district court erred in failing to apply the Pennsylvania rule and/or negligence per se rule regarding violations of safety rules, which would have placed the rebuttable presumption of negligence upon Boh Brothers and that vessel negligence caused her husband’s death. The appellate court found that Billiot’s arguments lacked merit. The district court acknowledged these arguments but rejected them implicitly through its finding that Billiot had not properly shown any genuine issue of fact as to vessel negligence, a threshold requirement of her LWHCA claim. Finding that none of Billiot’s arguments on appeal properly target the district court’s finding, the appellate court affirmed in full. (5th Cir, January 31, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 1907
FIFTH CIRCUIT HOLDS THAT DEFENSE BASE ACT IS THE EXCLUSIVE REMEDY
FISHER, ET AL. V. HALLIBURTON, ET AL.
Steven Fisher and Timothy Bell, who were civilian drivers in a United States military supply-truck convoy in Iraq, were killed when insurgents attacked. Decedents were working for a civilian contractor as drivers in a United States military supply-truck convoy in Iraq when insurgents attacked. State tort claims were brought on behalf of plaintiffs, decedents, their spouses, and family members, against Halliburton, Kellogg Brown & Root, Inc. and its various subsidiaries or affiliates, who employed the decedents. The district court denied defendant's motions to dismiss and for summary judgment based on the exclusivity of the Defense Base Act (DBA) remedy and preemption, after determining genuine issues of material fact existed as to whether the DBA covered the decedents’ injuries. The defendants appealed, contending that the district court erred in denying the motion to dismiss and motion for summary judgment in which it argued that the DBA provides plaintiffs' exclusive remedy and preempts all state tort claims that have been asserted. The district court certified its order regarding the DBA for immediate appeal under 28 U.S.C. § 1292(b). The appellate court reversed, holding that the DBA did, indeed, preempt plaintiffs' claims. The appellate court held that the only plausible inference to be drawn from the facts in the case was that the decedents were attacked because of their employment. Indeed, plaintiffs' case was the quintessential case of a compensable injury arising from a third party's assault. There could be no reasonable dispute that a clear connection existed between the decedents’ employment and the insurgents' attacks on their convoys. Accordingly, the attacks occurred "because of" employment. Decedents, as drivers of trucks in the convoys, suffered injuries because of their role in those operations. Thus, the injuries qualified for coverage under the DBA. Based on the DBA’s exclusivity provision, plaintiffs were precluded from pursuing their tort claims in this case. As all state-law claims were barred by the DBA, the court did not consider whether it had jurisdiction to consider the employer's challenges to other orders of the district court. The appellate court also held that coverage of an injury under the DBA precludes an injured employee from recovering from his employer under a "substantially certain" theory of intentional-tort liability. The appellate court vacated the district court order on the issue certified for appeal and remanded the case with instructions to dismiss plaintiffs' state tort claims. (5th Cir, January 12, 2012) 2012 U.S. App. LEXIS 641
ANOTHER LONGSHOREMAN CLAIMING TO BE A SEAMAN
NAQUIN V. ELEVATING BOATS, LLC, ET AL.
Larry Naquin, Sr. worked for Elevating Boats, L.L.C.'s as a repair supervisor, where he oversaw the repair of lift boats and cranes. Naquin. often worked on board the vessels, which were usually either jacked up or moored at a dock, depending on the specific repair required. While on board, Naquin would perform inspections and repairs on various parts of the vessels, including engines, hulls, and cranes. Additionally, Naquin, a licensed crane operator, sometimes operated the cranes on board the lift boats to load or unload heavy pieces of machinery or other materials from the dock and also performed tasks traditionally assigned to the deckhands, including painting, fixing leaks, fixing cracks in the hull, chipping, and cleaning the vessels while they were stationed at the dock, as well as other routine maintenance. At the time of his alleged injury, Naquin was operating a land-based cranes to move a thirty-ton test block from an eighteen-wheeler trailer to its normal storage location. Just before the move was completed, the pedestal snapped, sending the crane toppling to the ground and into an adjacent building. As a result of the accident, Naquin allegedly suffered injuries to both his left ankle and right heel, which required surgery. Elevating Boats reported the injuries to the OWCP District Director and began paying benefits under the LHWCA. Nevertheless, Naquin filed suit asserting claims under the Jones Act, and in the alternative, reserving his claims and benefits under the LHWCA. Elevating Boats moved for summary judgment, arguing that the undisputed facts show that Naquin is not a Jones Act seaman, but a longshoreman, contending that Naquin’s undisputed testimony regarding his employment duties revealed that he did not meet either prong of the Chandris test for seaman status, and spent less than .01% of his employment at Elevating Boats working aboard vessels in navigation. Naquin opposed Elevating Boats’ motion, argued that Elevating Boats mis-characterizes the nature of his duties and that he spent about seventy to seventy-five percent of his time on board vessels, performed many of the same tasks actually performed by deckhands, that he was on board moving Elevating Boats vessels at least two to three times per week. The court rejected Elevating Boats’ arguments, regarding the first prong of the Chandris test, finding that a jury could reasonably conclude that Naquin’s duties contributed to the function of Elevating Boats’ vessels. Turning to the second Chandris prong, the court rejected Elevating Boats’ argument that Naquin only spent 0.01% of his work hours spent aboard a vessel in navigation, because that contention assumed that the only time its vessels were "in navigation" was when they were actually sailing or performing work offshore in the Gulf. The court found the totality of Naquin’s duties sufficient to raise a triable issue of fact as to whether Naquin satisfied the second Chandris prong, observing that the nature of Naquin’s employment fell somewhere between the dichotomous extremes of a land-based longshoreman and a Jones Act seaman, where reasonable minds could draw different conclusions. Because a jury could reasonably conclude that Naquin’s work contributed to the mission of Elevating Boats’ vessels, and that his connection to Elevating Boats’ fleet was substantial in terms of both its duration and nature, summary judgment was improper. Elevating Boats’ motion for summary judgment was denied. (USDC EDLA, January 3, 2011) 2012 U.S. Dist. LEXIS 211
HEADACHE BALL CAUSES VESSEL OWNER LITIGATION HEADACHE
BOLFA V. OFFSHORE MARINE CONTRACTORS, INC., ET AL.
Joseph K. Bolfa was employed as a rigger by Knight Well Services, Inc., which was contracted by Energy Partners of Delaware, Ltd. to assist in the plug and abandon operations of an Energy Partners' well. Bolfa alleged that Energy Partners contracted with Offshore Marine, Inc. and Offshore Marine Contractors, Inc. to provide the vessel and her crew to assist in the plug and abandon operations. Bolfa also alleged that he was struck in the head by the headache ball of a crane that was an appurtenance of the vessel, while he was hosing cement off the deck of the vessel. Bolfa asserted claims under §905(b) of the LHWCA, the general maritime law, and Louisiana law. The defendants moved for summary judgment arguing that Louisiana law does not apply, and that they did not breach a duty owed to plaintiff under §905(b) because the headache ball was an open and obvious condition. They argue that, because plaintiff testified that he knew about the headache ball prior to the accident and it was painted yellow, that they did not have a duty to warn plaintiff of the condition. Instead, the defendants argued that Bolfa’s carelessness caused the accident. Bolfa responded by arguing that he informed the vessel's captain about the swinging headache ball, and that the captain told him not to touch it and would look into it. Bolfa also argued that summary judgment was premature because discovery was in its early stages, and he is the only person that has been deposed in this matter. The court found that Bolfa’s testimony demonstrated that defendants may have retained active control over the cranes such that they had a duty to exercise due care to avoid exposing longshoremen to hazards arising from that equipment. Since Bolfa was the only witness who had been deposed, the court concluded there were outstanding issue of fact that were germane to the issue of defendants' exercise of active control over the cranes, and they were not entitled to summary judgment on this issue at this time. The defendants' Motion for Summary Judgment was granted as unopposed as to Bolfa’s Louisiana state law claims, and those claims were dismissed. However, defendants’ motion was denied as to Bolfa’s §905(b) claim. (USDC EDLA, January 17, 2012) 2012 U.S. Dist. LEXIS 5025
COURT FINDS RETALIATORY DISCHARGE ALLEGATION “TENUOUS”
GEORGE V. COIL TUBING SERVICES, LLC
In this case, Kenneth George brought suit against his former employer, Coil Tubing Services, L.L.C. , for retaliatory discharge. George was allegedly injured in the course and scope of his employment. Although George was released to return to work the following day, George chose to seek out another physician who placed him on a "no work" Thereafter, George filed a claim for worker's compensation benefits under the LHWCA and began receiving voluntary workers compensation benefits from his employer. Coil tubing eventually requested a second medical opinion from an independent medical examiner (IME), who found that George could return to work immediately with restrictions and limitations at a moderate level, and could return to full duty 21 days thereafter. Pursuant to its IME’s finding, Coil Services sent George a certified letter, reiterating its IME’s finding and informing George that it had a position that would accommodate his restrictions. The letter requested that George contact Coil Services within 10 days and that if he did not, Coil Services would assume that George was not interested in the position. Not having heard from George within the requested 10-day period, a follow-up letter was sent and requested George to undergo a Functional Capacity Evaluation. George never contacted Coil Services. As a result, Coil Services terminated voluntary compensation and terminated George’s employment. George brought a Motion for Summary Judgment, arguing that his termination was clearly retaliatory in nature for filing for workers compensation benefits in violation of Louisiana Revised Statute 23:1361(B). Coil Services opposed the motion, contending that George is unable to show, by a preponderance of the evidence, that his discharge was in any way related to his filing for workers compensation benefits. The court found that the facts of the case did not support entering summary judgment. Although there was a genuine dispute between the two physicians involved regarding George’s ability to work, the facts are clear that the link between George’s filing for workers compensation and his termination was tenuous. Specifically, George had received workers compensation benefits from Coil Services for six months prior to his termination and the time between his filing for benefits and his termination was seven months. Even more significant, Coil Services sent George two letters requesting communication, which he never responded to. At the very least, the court noted, George could have responded reiterating his inability to work or could have requested his physician to send a letter; however, nothing was done. This total lack of communication is questionable. For these reasons, the court denied George’s motion, holding that George was unable to assert facts sufficient to justify entering summary judgment. (USDC WDLA, January 25, 2012) 2012 U.S. Dist. LEXIS 9498
TOO MANY QUESTION OF FACT. LET THE JURY SORT IT OUT
GEORGE V. ATLANTIC RO-RO CARRIERS OF TEXAS, INC., ET AL.
Fitzroy George was working onboard a vessel, owned/operated by Atlantic Ro-Ro Carriers of Texas, Inc. and CSAL Canada-States-Africa-Line, Inc., when a crane operator allegedly negligently dropped steel pipes on him, causing injuries to his right foot. George filed suit against both entities in state court, seeking recovery under §905(b) of the LHWCA and under the general maritime law. The defendants removed George’s suit to federal court, denying liability and moving for summary judgment. The defendants asserted that George was unable to fully satisfy the elements of a longshore personal injury action brought pursuant to §905(b) of the LHWCA, as there is no evidence that the ship's crew was in active control of cargo operations when George was injured, and therefore the "active control duty" was not applicable to this case. Additionally, defendants maintained that neither the "intervention duty" nor the “turnover duty” were at issue in the case. Based on George’s deposition testimony and that of the crane operator, defendants argued that the condition that George alleged caused his injury was open and obvious. George opposed the motion, arguing that the "turnover duty" is applicable to his case and that the crane in his hold was defective, as evidenced by the testimony of the crane operator. George also argued that even if the crane defects were open and obvious, no reasonable alternative existed for him and had any longshoreman refused to use the crane to perform the cargo operations, they would have been fired. The court observed that the parties had submitted divergent theories regarding the stevedores' knowledge and responsibilities. As evidenced by the differing accounts of the events, the court found that multiple issues of fact existed in the case. Which of the two interpretations of the deposition testimony is true, and whether that interpretation satisfies the "open and obvious" exception to vessel liability, were both questions of fact for a jury to decide. As a result, the court denied the Motion for Summary Judgment. (USDC EDLA, January 5, 2011) 2012 U.S. Dist. LEXIS 1251
IF YOU ARE GOING TO RE-WELD CHAIRS, YOU HAD BEST DO IT RIGHT
MATHERIN V. MOON RISE SHIPPING CO. S.A., ET AL.
This action involves injuries allegedly sustained by Yonni Mathurin as a result of a fall while aboard a vessel owned by Moon Rise Shipping Co. Mathurin was employed as a dock attendant for HOVENSA. In furtherance of his duties as a dock attendant (loading master) for HOVENSA, Mathurin boarded the Moon Rise vessel to attend a key meeting. Near the end of the meeting, the left front leg of the chair upon which Mathurin had been sitting broke and the chair collapsed, causing Mathurin to fall to the floor. Mathurin filed suit under §905(b) of the LHWCA, claiming Moon Rise had actual or constructive knowledge that the chair which broke and resulted in his fall constituted a hazard. Moon Rise moved for summary judgment dismissing the action on the grounds that, under any applicable negligence standard, they neither created nor had knowledge of the allegedly dangerous condition, and therefore could not be held liable as a matter of law. The court denied the motion for summary judgment, noting that post-accident inspection of the chairs, including the one upon which Matherin had been sitting, revealed that all of the chairs appeared to have been re-welded at the joints with the legs. At some point in the past, the right rear leg of the chair at issue had cracked, and a decision was made to re-weld that leg, as well as all the legs of the other chairs. In addition, some of the chair legs were provided with additional support in the form of cross-bars. The court observed that the welding was done by person with very poor welding skills, demonstrated by cracking at the site of the secondary welds, as well as a lack of fusion. Given this evidence, the court concluded that a reasonable jury could determine that, at some undetermined point in the past, Moon Rise was made aware of problems with the chairs and ordered that secondary welds be made to the chair legs, and that, concurrent or subsequent to that time, additional cross bar support be applied to some of the chairs. The court found that an issue of fact existed as to whether or not Moon Rise knew or should have known of a hazardous condition on the vessel, which resulted in the injury to Matherin. (USDC VI, January 5, 2012) 2012 U.S. Dist. LEXIS 1538
DBA CLAIMANT LACKS CREDIBILITY
TARVER V. SERVICE EMPLOYEES INTERNATIONAL, INC., ET AL.
Franklyn Tarver worked as a bus driver in Kuwait and Iraq for Service Employees International, Inc. ("SEII"). Tarver filed a claim for benefits under the LHWCA, as extended by the Defense Base Act, 42 U.S.C. § 1651. Tarver claimed that he was entitled to benefits because he was disabled due to a right knee injury, hypertension, hepatitis C, and depression and stress, and that all of these conditions were attributable to his employment. Tarver alleged that, on two occasions, he came into contact with blood on the bus he was driving during his employment. However, Tarver did not report either of the alleged exposures on the bus to SEII. Tarver also claimed two other exposures to human blood during his employment, both of which he alleged occurred in his living quarters, which he shared with other employees. Finally, Tarver claimed that he also injured his right knee during his employment, while walking to the restroom during an airplane flight that encountered turbulence, but again did not report the incident. Tarver had a hearing before an ALJ, during which he admitted to intravenous drugs in 1978. The ALJ heard the testimony of a medical expert, who testified that there are no reported instances of hepatitis C transmission through intact or cut skin, but rather that transmission occurs through injection of the virus into the body. The expert concluded that Tarver's intravenous drug use in 1978 was the most likely source of his infection and stated that it is not uncommon to be asymptomatic for twenty or thirty years after contracting the disease. As for Tarver's hypertension, the expert testified that Tarver's blood pressure reading of 164/90 at his pre-deployment examination would be consistent with hypertension. A psychiatric evaluation of Tarver did not disclose PTSD, major depression, or any other disorder, although he did display some paranoia. Tarver was simply described as a "symptom magnifier." The ALJ denied benefits to Tarver on causation grounds, holding that Tarver had failed to show that his impairments arose out of his employment. The ALJ also held that Tarver had not established a compensable injury. Tarver timely filed a motion for reconsideration with the ALJ, submitting several additional documents in support of his positions regarding his hypertension and hepatitis C. The ALJ considered all of the newly submitted documents and concluded that none were material so as to justify reconsideration of the previous order. Tarver appealed the ALJ's decision to the BRB, arguing that the ALJ erred in denying benefits and that SEII had withheld relevant documents that would establish a causal connection between his medical impairments and his employment with SEII. The BRB affirmed the ALJ's decision and Tarver's timely motion for reconsideration was denied. Tarver filed a petition for review with the 5th Circuit Court of Appeals, which granted SEII’s motion to transfer the petition for review to the district court, noting it lacked jurisdiction until the United States District Court issued a final ruling on Tarver's appeal. The district court reviewed the record, noting the ALJ denied benefits for Tarver's knee injury based on his finding that the injury occurred after Tarver's employment ended, finding Tarver's testimony not credible that Tarver had injured his knee on three occasions and had failed to report the injuries at subsequent doctor's appointments. The court held that the ALJ's determination was supported by substantial evidence. The court also affirmed the ALJ’s conclusion that there was no competent evidence that Tarver's hepatitis C was caused by his work for SEII. The ALJ's determination that Tarver did not make out a prima facie case of causation wais supported by substantial evidence. The court also found that the psychiatric evidence demonstrated that Tarver did not have any mental disorder that was related to his employment with SEII, but rather that his stress or mental or emotional issues were attributable to his diagnosis of and treatment for hepatitis C. Finally, the court affirmed the ALJ's holding that Tarver's hypertension pre-existed his employment, based upon Tarver's pre-deployment physical examination and the medical testimony. Tarver’s petition for review was dismissed with prejudice. (USDC SDTX, December 30, 2011) 2011 U.S. Dist. LEXIS 149709
NO PRIORITY FOR SPECIAL FUND ASSESSMENTS IN BANKRUPTCY PROCEEDING
SOLIS V. THE HOME INSURANCE COMPANY, ET AL.
The Home Insurance Company was declared insolvent in 2003 by the New Hampshire Superior court, which ordered its liquidation and appointed the New Hampshire Commissioner of Insurance as liquidator. During the subsequent insolvency proceeding, the United States Department of Labor filed a proof of claim seeking over $2.6 million in assessments allegedly owed by Home to the Special Fund, pursuant to the LHWCA. Applying state law, which establishes the priority in which payments from the assets of liquidated insurers are to be made, the Liquidator assigned DOL's claim to priority Class III. Since Home's assets were thought to be insufficient to cover Class III claims, the DOL brought suit against Home and the Liquidator, seeking a declaration that the LHWCA preempted the state's priority-setting statute. The DOL also asserted, on alternative state law grounds, that its claim against Home's assets is entitled to either a Class I or Class II priority. In response, defendants pointed out that the Assessment Provision of the LHWCA contains no explicit priority requirement or impliedly create one. Absent such a priority requirement, defendants contended there is no conflict between federal law and the state's priority law. So, no federal preemption issue arises. The court agreed with defendants that there is no express preemption, because neither §944, nor the Assessment Provision of subsection 944(c)(2), contains explicit preemptive language. However, DOL argued that its position rested, instead, on the implied preemption theories of "impossibility" and "obstacle" preemption. Specifically, DOL argued that it is impossible for the defendants to comply with both their duty under §944 to pay Home's assessment to the Special Fund and their duty under the state's priority law to pay Class I and Class II claims ahead of DOL's claim. In addition, DOL contends that, in the present case, the state law stands as an "obstacle" to the purposes and objectives of the federal law. The court rejected this argument, finding that since neither §944 as a whole, nor its Assessment Provision in particular, assigns a preferential priority status to DOL's claim there is no actual conflict with the state's priority law assigning DOL's claim Class III status. In sum, it is not "impossible" for defendants to comply with both the state and federal laws because federal law does not command something that state law forbids. Additionally, the state's priority law, as applied in the case, poses an obstacle neither to the primary purposes of the Special Fund nor to the Assessment Provision's subsidiary purpose of spreading Special Fund costs among industry participants. As to both its impossibility and obstacle preemption arguments, therefore, the court finds that DOL had failed to overcome the presumption that Congress did not intend, when it created an assessment mechanism to fund the Special Fund, to displace state priority laws operating in the field of insurer insolvency proceedings, a field traditionally occupied by the states. Even assuming that §944, and the Assessment Provision of subsection 944(c)(2), preempt, under normal preemption principles, the state's priority law, the court noted that the McCarran-Ferguson Act prohibited that result. The court concluded that the DOL had failed to show a clear and manifest Congressional intent to preempt the state priority law in §944, or in the Assessment Provision of subsection 944(c)(2). That law, in any event, is protected from federal intrusion under the McCarran-Ferguson Act. DOL's motion for summary judgment was denied. (USDC NH, January 27, 2012) 2012 DNH 120; 2012 U.S. Dist. LEXIS 9551
MEDICAL TRAVEL REIMBURSEMENT RATE DECREASED
IRS INCREASES MILEAGE REIMBURSEMENT RATE EFFECTIVE 1/1/12
On December 9, 2011, the Internal Revenue Service released the optional standard mileage rates to use for 2012 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. Beginning January 1, 2012, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
• 55.5 cents per mile for business miles driven;
• 23 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service to a charitable organization.
The charitable standard mileage rate is set by law. The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile.
Updater Note: You can check out the revised IRS mileage rates here. The Office of Government-wide Policy, GSA also sets mileage reimbursement rate for use of a privately owned automobile (POA) on official travel. GSA published their 2012 rates, announcing no change in the rates for 2012, on January 17, 2012, and you may review the bulletin here. However, by law, GSA may not exceed the standard mileage reimbursement rate for a privately owned automobile (POA) established by the Internal Revenue Service (IRS). Which rate should you be using to reimburse travel under the Longshore Act? That is a question you may want to consult with your attorney on.
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #238. Although you get great up-to-date information as a subscriber to the Longshore Update, you can use this excellent resource to keep your Judges’ Benchbook up to date. Just follow the above link to the OALJ web site.
The last full supplement to the Longshore Benchbook was published in January 2005. However, OALJ has published an index that provides a cross-reference between Benchbook Topics and U.S. Supreme Court, Federal District and Circuit Courts, and Benefits Review Board decisions, issued since 2004 and covered in OALJ's "Recent Significant Decisions Monthly Digest."
And on the Admiralty front . . .
5TH CIRCUIT REVERSES ARBITRARY & CAPRICIOUS HOLDING
MANDERSON V. CHET MORRISON CONTRACTORS, INC.
Leon Manderson began working as chief engineer aboard a Chet Morrison Contractors, Inc. (CMC) dive vessel. Manderson contended that he worked on a 24/7 basis while engaged as the sole licensed engineer. Manderson filed suit alleging CMC failed to adequately man the dive vessel engine room resulting in Manderson having to work weeks at a time as the sole caretaker of the engine room and remain on call 24/7, all in violation of 46 CFR 15. Manderson also claimed that CMC violated the Jones Act and claimed that his ulcerative colitis and diabetes were exacerbated by his lack of sleep which was a result of his working 24/7 aboard CMC’s vessel. Manderson further contended that CMC’s persistent violation of work hours statutes and its failure to follow U.S. Coast Guard regulations designed for the safety of seaman was negligence per se. and that CMC’s decision to operate the dive vessel in violation of its Certificate of Inspection and the manning statutes rendered the vessel unseaworthy. Manderson also sought punitive damages for CMC’s arbitrary and capricious denial of maintenance and cure. CMC maintained that it did not violate Coast Guard work/rest hour regulations, in that Manderson always had the assistance of other vessel crew members available to him, such as able-bodied seaman. CMC also argued that Manderson cannot establish a causal link between any negligence or unseaworthiness and his medical condition and that Manderson’s history of Hepatitis C, ulcerative colitis, diabetes, and coronary artery disease were not caused by or related to any of his work related activities aboard their vessel. As to maintenance and cure, the CMC argued that there is no evidence that it caused or contributed to any aggravation of Manderson’s pre-existing conditions such that maintenance and cure would be available. CMC insisted that Manderson failed to reveal his pre-existing history of high glucose levels and diabetes at the time he was hired. Following a two-day bench trial, the district court denied relief under the Jones Act and general maritime law, but awarded maintenance and cure and attorney’s fees incurred in obtaining that relief. Regarding its attorney’s-fees finding the court found CMC had acted “in an arbitrary and capricious manner in failing to pay maintenance and cure” and, as a result, awarded Manderson $110,950 in attorney’s fees and costs on those claims. The court found that CMC was aware of Manderson’s ulcerative colitis at the time of his application for employment and held that Manderson was entitled to maintenance and cure. Manderson appealed, challenging the denial of his claims under the Jones Act and general maritime law. CMC challenged the amount awarded for cure; attorney’s fees being awarded; and the amount of that award. The appellate court initially reviewed the denial of Manderson’s Jones Act and unseaworthiness claims and, based on its review of the record, found that it was not left with the requisite “definite and firm conviction that a mistake had been made”. Accordingly, the findings denying the Jones Act and unseaworthiness claims were not clearly erroneous. The appellate court held that the district court did not clearly err in finding Manderson did not establish a violation of any statute or Coast Guard regulation. Therefore, it was not necessary to address negligence per se, comparative fault, or burden shifting. It was also plausible for the court to find causation was lacking. In a pre-trial order the district court had granted Manderson’s motion in limine, precluding CMC from referring to or seeking to introduce evidence of payment by Manderson’s medical insurers of his medical expenses. CMC challenged the district court’s application of the collateral-source rule for determining the amount of cure awarded Manderson. In an issue of first impression for the appellate court, CMC contended the cure award should not have included the difference between the amount Manderson’s medical providers charged and the lesser amount they accepted from his insurer as full payment. The appellate court agreed with CMC’s assertion, noting that while there was no case law on point, it had repeatedly held an injured seaman may recover maintenance and cure only for those expenses “actually incurred”. Accordingly, the relevant amount of cure is that needed to satisfy the seaman’s medical charges. Thus, in Manderson’s case, regardless of what his medical providers charged, those charges were satisfied by the much lower amount paid by his insurer. Consequently, the appellate court held that the district court erred by awarding the higher, charged (but not totally paid) amount. The appellate court modified Manderson’s award of cure accordingly. Finally, the appellate court addressed CMC’s contest of the district court’s “arbitrary-and-capricious” holding and its contention that the district court erred because: it made no underlying findings in support of that ultimate finding; and the record does not support it. The appellate court initially noted that CMC presented evidence at trial to support its contention that Manderson was not owed maintenance and cure. Although the district court ultimately rejected CMC’s contentions, and CMC’s appeal did not challenge the court’s awarding maintenance and cure, the supporting evidence for CMC’s contentions cuts against the related arbitrary-and-capricious finding. Furthermore, upon receiving a formal demand for maintenance and cure from Manderson’s counsel, CMC promptly referred the matter to its underwriter to investigate the claims, and the underwriter did so. The appellate court concluded that CMC’s conduct could not be found to be “egregiously at fault,” “recalcitrant,” “willful,” “persistent,” etc. Accordingly, the court held that the requisite bases were lacking for, and the district court clearly erred in, finding CMC arbitrary and capricious in denying maintenance and cure to Manderson. The court therefore vacated the district court’s award of attorney fees. (5th Cir, January 3, 2011) 2012 U.S. App. LEXIS 18
Updater Note: I commend to my readers the important issue of first impression decided in this case - that the employer is only responsible for those charges satisfied by an insurer’s reduced payments to the medical providers, regardless of what the seaman’s medical providers originally charged. A recurring issue in personal injury litigation is the amount of medical expenses a plaintiff is entitled to recover from the defendant. The health care providers charge or bill the plaintiff for the treatment provided, but typically accept as payment in full significantly less from insurers or self-insured employers. It does not strain the imagination to realize that awards based on the invoiced amount will result in a windfall to the plaintiff based on the spread between the amount billed and the amount accepted by the health care provider. All too often, plaintiff’s counsel come into court with listings of gross medical expenses, ignoring the fact that audited and reduced medical expenses already paid, have fully satisfied the medical providers. There is now precedent to challenge this type of windfall to the seaman. You also have to love the fact that the arbitrary and capricious ruling was thrown out in this case. I commend it to you, Ginny Berrigan
YOU SAID YOURSELF IT WAS YOUR OWN “DUMB, STUPID MISTAKE.”
MOORE V. OMEGA PROTEIN, INCORPORATED, ET AL.
This case arose from an ankle injury suffered by William Moore aboard a commercial fishing vessel owned and operated by Omega Protein, Inc.. Moore alleged that he was injured when his leg became caught in the coil of a rope he was using to secure the vessel to a piling. Moore filed suit, bringing a claim for negligence under the Jones Act, alleging that his accident was caused by the negligence of the vessel's master, and a claim of unseaworthiness, alleging that the accident was caused by the condition of the vessel. The case was tried to a jury and the jury returned a unanimous verdict in favor of the Omega. The district court entered judgment and dismissed Moore's claims with prejudice. The court also denied Moore’s motion for a new trial finding that the verdict was not against the great weight of the evidence. Moore appealed the district court’s judgment, appealing only the denial of his motion for a new trial. In response, Omega filed a conditional cross-appeal, arguing that the district court erred in refusing to include a jury instruction on comparative fault. The appellate court found that there was evidence in the record supporting the jury's finding that Moore’s accident was not caused by the negligence of a member of the crew and that the equipment and conditions on the vessel were reasonably safe for their intended purpose. Other evidence adduced at trial indicated that Moore was sufficiently trained and experienced for his job and that attaching the line to the piling was normally a one-person task. Based upon the trial record, the appellate court declined to conclude that there was an "absolute absence" of evidence supporting the jury's verdict. Therefore, given the highly deferential standard of review, the appellate court affirmed the district court's judgment. The issues raised in the conditional cross-appeal were dismissed as moot. (5th Cir, January 20, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 1145
U.S. ENTITLED TO JUDGMENT ON CLAIMS AGAINST DREDGER
UNITED STATES OF AMERICA V. RENDA MARINE, INC.
Renda Marine, Inc. contracted with the Army Corps of Engineers to dredge a portion of the Houston Ship Channel and to construct containment levees and other structures at a disposal facility for dredge material. Renda experienced difficulties with the dredging and construction work, including allegedly unexpected site conditions that made completion of the work at the original contract price impossible. Renda submitted its claims for additional compensation to a contracting officer ("CO") pursuant to the Contracts Dispute Act ("CDA"), 41 U.S.C. § 601, et seq. The CO issued a unilateral contract modification in favor of Renda that increased the contract price by $3,083,833. The Army Corps of Engineers paid Renda this amount. Unsatisfied with the decision, Renda filed suit in the Court of Federal Claims ("CFC") to recover an additional $906,364. The CFC determined that Renda was entitled to neither the additional $906,364 it sought, nor the equitable adjustment of $3,083,833 made by the CO. The United States moved to enforce a decision of a contracting officer (CO) on counterclaims against Renda and the decision of the CFC on the government's overpayment claim. Renda appealed the denial of its motions for partial dismissal and summary judgment and the grant of judgment on the pleadings to the government. Because the government could not take legal action on its claim until it first made it the subject of a decision by a contracting officer (CO), time under 28 U.S.C.S. § 2415(a) could not run against the government until it was procedurally possible for it to sue. Because the government filed suit within 6 years of the CO's decision on the counterclaim, finding that Renda owed the government, the government's suit to enforce the CO's decision was timely. It was not obvious from the CO's decision letter whether the retainage was an offset, and any effort to make that determination would require a revisitation of the merits of the CO's decision. Renda did not appeal that decision, and could not collaterally attack it through the federal suit. The appellate court held that when Renda filed suit in the CFC for additional money, the CFC considered the entire amount awarded pursuant to a modification, and ultimately found that Renda was entitled to less than the CO granted. Renda’s CFC appeal put its entire award at issue, thus, the district court had subject matter jurisdiction over the government's overpayment claim and properly granted judgment to the government that claim. The district court's judgment was affirmed. (5th Cir, January 13, 2012) 2012 U.S. App. LEXIS 796
IT’LL BE VOID CAUSE I’M A DRUNK. I KNOW IT. HOPE I DON’T BLOW IT (CONT.)
HARRINGTON V. ATLANTIC SOUNDING CO., INC., ET AL.
In his ongoing Jones Act case [see February 2011, May 2010, and October 2007 Longshore Updates], Frederick J. Harrington, Jr. moved to compel his former employer, Atlantic Sounding Co., Inc., to produce videotapes made while he was under surveillance by a private investigator they hired, as well as any written reports of that surveillance. Atlantic Sounding opposed the motion on the ground that the videotapes and reports were work product, and that Harrington had not established a basis for overcoming the qualified protection afforded to such materials. The court initially noted that the work-product doctrine, as articulated in FRCP 26(b)(3)(A), provides qualified protection for documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative. Given this definition, the court had no difficulty concluding that the surveillance materials at issue here fall within the scope of work product. The videotapes are "tangible things" and the reports are "documents." They were prepared by a private investigator who was hired by Atlantic Sounding to provide surveillance services, and who thus fell comfortably within the meaning of "representative" and/or "agent" of Atlantic Sounding. There was also no question that the surveillance materials were prepared "because of existing or expected litigation," which is the standard in this circuit for determining whether the "in anticipation of litigation" requirement is met. The court went on to note that the work product protection afforded to the surveillance materials is not absolute, but rather qualified, because discovery of work product may be obtained if the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. Thus, where a party intends to introduce surveillance tapes at trial, either as "substantive" evidence or solely for impeachment purposes, virtually all courts have found that the "substantial need" requirement is satisfied and that the tapes must be produced. However, the court noted that Atlantic Sounding had unconditionally asserted that they would not use some of the videotapes for any purpose whatsoever at trial, and wish to reserve decision on whether they will use others until after Harrington has completed his deposition. The court held that there was no basis for compelling production of any of the videotapes at this point. The court went on to hold that if Atlantic Sounding eventually chose not to use any videotapes at trial, none need be produced. Finally, as to the investigator's written surveillance reports, the court found that Harrington has offered no substantial need that overcame the work product protection afforded to those materials, and they therefore need not be produced. Harrington’s motion to compel production of surveillance evidence was denied. (USDC EDNY, December 30, 2011) 2011 U.S. Dist. LEXIS 149743
DOUBLE DIPPING SEAMEN ARE FINALLY BEING STOPPED BY MCCORPEN
KOSTOSKI V. STEINER TRANSOCEAN, LTD.
Ljupco Kostoski, a seaman, filed a three-count complaint, against his former employer Steiner Transocean Ltd., for negligence, failure to provide maintenance and cure, and failure to treat. Steiner filed a counterclaim against Kostoski arguing that it had paid Kostoski maintenance and cure for a right leg injury and that an undisclosed preexisting injury is directly related to the "new" injury. The counterclaim also specifically cited to McCorpen, seeking to recoup the maintenance payments under a theory of unjust enrichment. Kostoski moved to dismiss Steiner’s counterclaim under FRCP12(b)(6), arguing that it cited only the bare elements of a cause of action without factual support. The court rejected this argument, finding that the counterclaim stated the date on which Kostoski submitted to a physical examination and was declared fit for duty, alleged that Kostoski did not disclose any preexisting injuries during the examination, and further asserts that through discovery Steiner had learned that Kostoski was previously treated for right leg pain. The counterclaim further alleged that Steiner had paid Kostoski maintenance and cure for a right leg injury and that the preexisting injury is directly related to the "new" injury. The court concluded that this was enough factual material to infer each element of a McCorpen claim and to put Kostoski on notice of the same. Kostoski also argued argues that Steiner had not pled its McCorpen claim with particularity, as required by FRCP 9(b). The court also rejected this argument, noting that Rule 9(b) provides that conditions of a person's state of mind can be generally alleged. The fact that Steiner specifically cited to McCorpen in its counterclaim was held to be sufficient to put Kostoski on notice of this claim. Because the counterclaim satisfied Rule 9(b)'s particularity requirement and contained sufficient factual material to suggest that Kostoski knowingly concealed his condition under McCorpen, the court denied Kostoski’s motion to dismiss the counterclaim or convert it to a motion for summary judgment. Kostoski was ordered to timely answer Steiner’s counterclaim. (USDC SDFD, January 11, 2012) 2012 U.S. Dist. LEXIS 3533
Updater Note: Another great McCorpen decision, allowing the employer to proceed in a counterclaim for reimbursement of maintenance and cure already paid. We need more!
COURT FINDS EMPLOYER’S DENIAL OF SECOND SURGERY REASONABLE
REDNER V. ICICLE SEAFOODS, INC.
Robert Redner was working for Icicle Seafoods when he allegedly injured his back in the course of a short ride in a small skiff across rough seas. He did not report any injury or back pain at the time, and did not go to the infirmary for any care for back pain until two weeks later. He had been treated for back pain numerous times over the previous four months, but did not fill out any injury reports. Redner was eventually diagnosed severe degenerative changes with spondylolistheses at L4-5. His treating physician opined that these conditions probably preexisted the Redner’s reported work injury but the injury could have aggravated the conditions and rendered them symptomatic. Redner was initially treated conservatively, but finally underwent a laminectomy and fusion. Four month after his surgery, Redner was found to be at maximum medical improvement. Shortly after being found at MMI, Redner switched doctors and his new doctor recommended a fascectomy and multi-level fusion, for an alleged disc herniation. Icicle Seafoods declined to authorize this second surgery, and filed a motion to request a ruling from the court that it is not required to pay for it as part of its maintenance and cure obligation. Icicle introduced evidence from its medical expert showing that, up through the time of Redner’s postoperative MRI following his initial surgery, no herniated disk was noted by anyone. The court found Icicle’s expert extremely credible and noted that Redner had previously been declared at MMI by his original surgeon. The court also found that there was no evidence connecting Redner’s alleged herniated disk to the boat ride. The court granted Icicle’s motion regarding their obligation to provide maintenance and cure, in the form of the second surgery recommended by Redner’s new physician. The court noted that issues of causation, and of whether Redner had reached MMI following his surgery, were questions of fact for the jury to determine. In the interim, the court held that Icicle was acting reasonably in declining to pay for the second recommended surgery. (USDC WDWA, January 11, 2012) 2012 U.S. Dist. LEXIS 3373
Updater Note: Great decision. It is not often we see these jurists question the necessity of surgery or the casual relationship of the need for that surgery to the alleged work injury.
POTENTIAL MCCORPEN DEFENSE DEFEATS PUNITIVE/COMPENSATORY DAMAGES
ROSE V. MISS PACIFIC, LLC, ET AL.
Perry L. Rose, a seaman employed by Miss Pacific, LLC, slipped and allegedly injured his left knee on board a fishing vessel, while the vessel was in port. Rose’s treating physician eventually recommended surgery of the left knee because of a torn meniscus. Approximately two weeks after the incident, Rose's claim for maintenance and cure benefits was denied based on his failure to disclose his prior knee injuries and surgeries. Rose filed suit, against both his employer and Pacific Fishing, seeking damages under the Jones Act and general maritime law alleging injuries and damages due to negligence and unseaworthiness and seeking maintenance and cure and unearned wages. Rose also sought compensatory damages, punitive damages, attorney fees, prejudgment interest, and costs and other disbursements. Both defendants moved for partial summary judgment on the claims for maintenance and cure and unearned wages and on all claims alleged against Pacific Fishing, based on the undisputed facts that Rose fraudulently concealed his material preexisting medical history and the undisputed fact that Pacific Fishing was not Rose’s Jones Act employer. The evidence disclosed that Rose worked as a manual laborer prior to his employment by Miss Pacific and over the years sustained some injuries which healed and never limited his ability to work. Rose had surgeries on both knees, including arthroscopic surgery to the left knee to remove the prepatellar bursa and a later arthroscopic surgery to correct an internal derangement. The court found that while the defendants had submitted some evidence to support their contention that Rose knew about the importance of disclosing his prior left knee injuries, Rose had submitted evidence that the employer had some knowledge of Rose's left knee surgeries and pre-existing gout, creating a genuine issue of material fact exists as to whether the pre-hire interview of Rose and later medical disclosure requests were designed to elicit information that Rose intentionally chose not to disclose. The court also found there was a genuine issue of material fact exists as to what Rose disclosed and whether that disclosure was material. Differing medical expert opinions also created a fact issue concerning causation. Due to the genuine issues of material fact as to all three McCorpen elements, the court concluded that the defendants were not entitled to summary judgment on their fraudulent concealment defense. However, since the defendants submitted evidence, although disputed, that supported each of the three elements of the fraudulent concealment defense, the court granted the defendants' motion for summary judgment as to Rose's claims for punitive damages Moreover, based on the reasonable assertion of the fraudulent concealment defense, the court concluded that Rose could not recover compensatory damages or attorney fees. Pacific Fishing sought dismissal of all claims alleged against it on the basis that it was neither the shipowner nor the employer and, thus, is not a proper party. With respect to whether Pacific Fishing is the shipowner, the court found that no factual dispute existed. However, with respect to whether Pacific Fishing is Rose's employer, the court found that a factual dispute existed, noting that Rose had submitted other evidence which casts doubt on Pacific Fishing's role, including Pacific Fishing's name at the top of two fishing agreements that he was required to execute. The court granted defendants’ Motion for Partial Summary Judgment as to compensatory damages, punitive damages and attorney fees and as to all claims alleged against Pacific Fishing as a shipowner. (USDC OR, January 10, 2012) 2012 U.S. Dist. LEXIS 2997
COURT UPHOLDS VENUE SELECTION AGREEMENT IN JONES ACT CASE
RILEY V. TRIDENT SEAFOODS CORPORATION
David L. Riley worked as a seaman crew member aboard Trident Seafoods Corporation’s fishing vessel on three different occasions. Riley entered into employment agreements with Trident each of the three times he commenced employment with the company, which contained a venue selection clause that provided in relevant part that any lawsuit for illness, injury or death arising under the Jones Act, the General Maritime Law, or otherwise, shall be only in the federal or state courts in King County, Washington. Riley filed suit in the District of Minnesota, under general maritime law and the Jones Act, seeking damages associated with the injuries he allegedly sustained while working aboard the Trident’s fishing vessel. Trident moved the court to dismiss or transfer venue to the Western District of Washington, seeking to enforce the venue selection clause in Riley’s employment agreement. Riley argued that the venue selection clause was barred by FELA, as incorporated into the Jones Act and unenforceable as unreasonable and unjust. The court initially noted that while many of the provisions of FELA were expressly incorporated into the Jones Act, venue was not such a provision. Until recently, the Jones Act contained its own specific venue provision. Relying on this separate venue provision, the majority of courts have found that FELA's prohibition against venue selection clauses is not incorporated into the Jones Act. The court also found that the 2008 repeal of the Jones Act venue provision was not meant to alter the existing law. Accordingly, the Court found that FELA's venue provisions should not be read into the Jones Act and the Jones Act did not void the venue selection clause in Riley's agreement with Trident. Additionally, the court found that Riley had failed to show the sort of fraud or coercion by Trident necessary to overcome the presumption of validity of the venue selection clause. Nor had Riley shown that enforcement of the venue selection clause would deprive him of his day in court. Finally, the court found that enforcement of the venue selection clause would not contravene a strong public policy of the forum. Noting that it the discretion to either dismiss or transfer this case, the court concluded that justice would be best served by transfer, rather than dismissal. Trident’s Motion to Dismiss or Transfer Venue was granted and the court ordered the case transferred to the Western District of Washington. (USDC MN, January 9, 2012) 2012 U.S. Dist. LEXIS 9002
PLAINTIFF’S CAN’T CREATE TRIABLE ISSUE IN CASE OF SEAMAN LOST AT SEA
KENNEDY, ET AL. V. LAFAYETTE WORKBOAT RENTALS, INC.
Brandon Mouton was employed as a seaman by Lafayette Workboat Rentals, LLC, and assigned to a barge doing oil cleanup, when he disappeared off the deck of the barge, while the barge was approximately 2.5 to 3 miles off shore, and was never seen again and his body was never found. Mouton’s parents filed suit against Lafayette, on behalf of Mouton's estate and in their individual capacities, alleging Mouton's death was caused by negligence or the unseaworthiness of the barge. Lafayette denied liability and moved for summary judgment on plaintiffs' claims of unseaworthiness and Jones Act negligence. Citing discovery responses, Lafayette contended that there was a complete lack of evidence regarding the circumstances of Mouton's disappearance and accordingly a complete lack of evidence that the barge was unseaworthy or that Lafayette was negligent in any way that contributed to the disappearance. In opposition, the plaintiffs attempted to articulate genuine factual disputes regarding the timing of Mouton's disappearance, arguing that summary judgment is inappropriate because the doctrine of res ipsa loquitur permits an inference of negligence, and because Lafayette may be liable on a theory of failure to rescue Mouton. The court pointed out that, while plaintiffs were correct that there is uncertainty regarding how, when, and from where Mouton disappeared, that uncertainty supported the motion for summary judgment and was not an impediment to it. Even if the trier of fact heard testimony from all witnesses, assessed their credibility, and decided whether Mouton was last seen at 8:00 a.m. or 8:30 a.m., there was still no suggestion from the record that any of those witnesses could testify when Mouton disappeared and under what circumstances. In the absence of any such evidence, a reasonable jury could not link the disappearance to any condition of the boat or to any action or inaction by Lafayette. Plaintiffs also failed to produce any evidence regarding Lafayette’s efforts to search for Mouton that might possibly support a finding of a breach of that duty. Lafayette’s motion for summary judgment was granted. (USDC EDLA, January 3, 2011) 2012 U.S. Dist. LEXIS 210
COURT REJECTS APPLICATION OF “FLOTILLA DOCTRINE” IN LIMITATION ACTION
IN RE: AEP RIVER OPERATIONS, LLC
AEP River Operations LLC was the bareboat charterer of a tow boat was towing three barges of scrap metal through the Houston Ship Channel when one of the barges in tow hit an electrical tower owned by CenterPoint Energy Houston Electric, LLC. AEP commenced this litigation by filing a complaint for exoneration from or limitation of liability, asserting that it was not liable for the damage caused or, alternatively, that its liability is limited by statute to the value of the tug and her freight then pending, which it stipulated to be $2,700,000. The stipulated value of the towing vessel is not contested. However, CenterPoint moved to increase the limitation fund, declaring that the estimated cost of repair will exceed $5,000,000, and arguing that the security must be increased to include the value of the three AEP barges in tow at the time of allision; or another $1,095,000. AEP countered that the term "vessel" is it limited to the tug itself. CenterPoint claimed the flotilla of vessels included the barges in tow. The court observed that in "pure tort" cases, where no contractual or consensual relationship exists between owner and claimant, only the offending vessel itself need be tendered for limitation purposes, citing Liverpool for the proposition that for the purposes of liability the passive instrument of the harm does not become one with the actively responsible vessel by being attached to it. This rule was not changed by common ownership of the vessels in the flotilla. The court went on to point out that the rule is different when there is a contractual relationship between the claimant and the offending vessel owner. This was the situation in Sacramento Navigation, decided eight years after Liverpool. The court concluded, contrary to CenterPoint's claim, that Sacramento Navigation in no way overruled or "superseded" Liverpool. CenterPoint alleged that AEP was negligent in its operation of its tug, and asserted a claim based upon maritime collision and tort principles. Neither CenterPoint nor AEP alleged the existence of any contractual arrangement between them, and CenterPoint did not base any claim on a contractual obligation. Finding this to be a "pure tort" situation, where there was no contractual obligation between the claimant and the offending vessel owner, CenterPoint's motion to increase security was denied. (USDC SDTX, January 23, 2012) 2012 U.S. Dist. LEXIS 7488
COURT GIVES WIDOW ANOTHER CHANCE TO PROVE HER FRIVOLOUS CLAIMS
IN RE: JAMES T. ANDERSON
James T. Anderson purchased a catamaran from her South African builder and, pursuant to South African law, Anderson took title to the catamaran prior to departure. The purchase price included delivery by Voyage Yachts' "in-house delivery crew" to Port Townsend, Washington. When it came time for delivery, however, Voyage Yachts informed Anderson that its crew would not be available to deliver the ship and, instead, contracted with Reliance Yacht Deliveries, Ltd., to deliver the catamaran to Anderson. Unfortunately, the crew never reached their destination. The ship was caught in a severe storm, in winds in excess of 100 mph, and was believed to have capsized and broken apart. The entire crew is believed dead, though, only one of the crew members, Richard Beckham's, body was ever recovered. Anderson filed a Motion for Limitation and Summary Judgment, pursuant to the Limitation of Liability Act, asking the court to conclude that he was entitled to limit his liability for any action arising from the loss of his vessel and its crew to the catamaran’s value at the end of the voyage. He also asked the court to dismiss the Jones Act and common law wrongful death claims brought against him by Sonia Beckham, the widow of Richard Beckham. Anderson raised three points in his motion for summary judgment. First, he contended that he is entitled to limit his liability pursuant to §30511 because there was no evidence that any unseaworthy condition caused the loss of the ship and its crew or, if there is, that he had no "privity or knowledge" of that condition. Second, he argued that the decedent was employed by Reliance, not him, and thus he cannot be liable under the Jones Act. Finally, he asserted that the widow’s own judicial admissions established that the Death on the High Seas Act( DOHSA) applied to preclude the common law claims and that the widow lacked standing under DOHSA to bring a claim. The court agreed that the widow’s allegations established that the DOHSA was applicable. Accordingly, the court held that the widow’s common law claims were precluded, and her causes of action were limited to either a DOHSA or Jones Act claim. However, because the widow conceded that she had not been appointed her deceased husband's personal representative, she lacked statutory standing to bring either claim. Thus, since there was no basis for liability, as the case currently stood, the court noted that it could simply enter summary judgment in Anderson’s favor on his §30505 action. The court declined to do so; however, finding it would inequitable to penalize the widow so heavily for what appeared to be a fundamental error on the part of her counsel. Thus, while the court noted that it harbored serious doubt as to whether the widow’s substantive claims had any merit, the court exercised its discretion to continue the case to afford the widow a reasonable opportunity to undertake the actions necessary to obtain standing. The court granted Anderson’s motion in part, dismissing the widow’s common law claims. In all other respects, the court continued the matter for 60 days to allow the widow to demonstrate statutory standing. (USDC WDWA, January 24, 2012) 2012 U.S. Dist. LEXIS 7663
Quotes of the Month . . . "Half the work that is done in this world is to make things appear what they are not." -Elias Root Beadle
“I count him braver who overcomes his desires than him who conquers his enemies; for the hardest victory is over self.” - - Aristotle
"Talent is God given. Be humble. Fame is man-given. Be grateful. Conceit is self-given. Be careful." - - John Wooden
Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.
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