Maintenance and Cure
In Stemmle v. Interlake Steamship Co., the court held that a seaman reached maximum cure three years after the completion of a heart transplant. Plaintiff’s claims arose out of a cardiac illness that he suffered while working as a Jones Act seaman aboard defendant’s commercial ship. He was subsequently afforded maintenance, cure, and wages. Three years had passed since the plaintiff’s heart transplant. A review was conducted of the medical opinions regarding his cardiac cure and follow-up treatment. The court highlighted the Second Circuit’s recognition of a distinction between treatments that effectuate further cure, and those that are aimed at preventing relapse. A seaman treating pursuant to the latter category of treatments may nonetheless have achieved maximum cure. Ultimately the court analogized that the plaintiff’s condition is similar to that of a diabetic seaman who requires access to life-saving medications to manage his condition. The court reasoned that serious medical conditions can be diagnosed, treated and managed to avoid serious adverse medication complications, but nevertheless are not subject to further cure. Thus, the court concluded the plaintiff’s post-transplant condition has progressed to the point of stability, and the plaintiff had achieved maximum medical cure.
Other Issues Affecting Jones Act Seamen
In Long v. TowLine River Service, Inc., 568 F. Supp. 3d 535, 537 (W.D. Pa. 2021), the court struck down a seaman’s settlement agreement. The alleged oral settlement agreement between injured seaman and vessel owner to settle seaman’s claims under Jones Act and general maritime law purportedly occurred during mediation but was not entered into by seaman voluntarily and with a full understanding of his rights as a seaman and was not judicially approved as required by local rule of Western District of Pennsylvania. Accordingly, the United States District Court for the Western District of Pennsylvania refused to enforce the agreement and denied summary judgment in favor of the vessel owner. The District Court reasoned that, although seaman are technically able to enter into a valid oral agreement to settle an admiralty action, a seaman’s release of claims must be subject to careful scrutiny. In this case, the record evidence did not indicate that both vessel owner and injured seaman expressed a present intent to be bound by purported oral settlement agreement at the mediation session, the District Court ruled that there was no meeting of the minds on all of the essential terms necessary to form a binding oral agreement to settle seamen’s claims under Jones Act and general maritime law.
The United States District Court for the Eastern District of Virginia granted a motion to dismiss, finding that the plaintiff was not entitled to recover pre-death pain and suffering or medical expenses in a maritime wrongful death action. The plaintiff sought recovery for the wrongful death of Herbert H. Mullinex, Jr. under general maritime law, contending the decedent was exposed to asbestos aboard Navy ships, and that the defendant, a manufacturer of gaskets and gasket packaging, failed to warn about the asbestos risk associated with the use of their products. The defendant filed a motion to dismiss, arguing that in accordance with the Death on the High Seas Act (DOHSA), 46 U.S.C. §§ 30301–30308, the plaintiff was not entitled to survival damages. In response, the plaintiff alleged that there is a survival remedy for seaman under the general maritime law, in accordance with the Jones Act, 46 U.S.C. §§ 30101–30106. The district court applied the three-part test set forth in Dutra Group v. Batterton, 139 S. Ct. 2275, 2014 L. Ed. 2d 692 (2019), which provides that damages are available only if one of the following factors is met: “(1) the damages ‘have traditionally been awarded’ for the instant claim; (2) ‘conformity with parallel statutory schemes would require such damages’; and (3) the court is ‘compelled on policy grounds’ to allow the damages.” Working its way through this analysis, the district court first concluded there was no clear historical pattern of awarding survival damages, as the United States Supreme Court’s holding in Miles v. Apex Marine Corp., 498 U.S. 19, 111 S. Ct. 317 (1990) is “dispositive on this issue.” Second, neither the Jones Act nor DOSHA require survival damages be awarded for pre-death pain and suffering or medical expenses in a wrongful death claim by a seaman brought against a non-employer. And third, the district court found there were no policy considerations that warranted survival damages under the general maritime law, as the plaintiff could have pursued a claim under state law.
In a district court decision following Sanchez v. Smart Fabricators of Texas, LLC, 997 F.3d 564 (5th Cir. 2021), the Eastern District of Louisiana in Meaux v. Cooper Consolidated, LLC, 2022 A.M.C. 165 (E.D. La. 2022) held that a flagger working aboard a crane barge was not a Jones Act seaman, because his duties did not take him to sea and his assignment to any vessel was limited to the performance of discrete tasks. The plaintiff, an employee of a temporary labor service company, was assigned to work for Cooper Consolidated, LLC (Cooper), a stevedore providing midstream cargo loading and unloading services in the Mississippi River at three locations. Cooper owns and operates a fleet of crane barges that work at various locations in the Mississippi River loading and unloading ships and other barges. The plaintiff worked for Cooper as a flagger and utility man. When working as a flagger, the plaintiff was positioned aboard oceangoing vessels that were being unloaded to cargo barges by the crane barges owned and operated by Cooper (i.e., ship to barge). When working as a utility man, the plaintiff was positioned aboard the cargo barges that were being loaded into the oceangoing vessels (i.e., barge to ship). As a flagger and utility man, the plaintiff was not assigned as a member of the crew of any of the crane barges. On February 19, 2019, the plaintiff suffered injuries and subsequently filed suit against both his employer and Cooper. The plaintiff asserted claims as a Jones Act seaman and both the employer and Cooper denied the plaintiff qualified as a seaman. After a one-day bench trial on the limited issue of the plaintiff’s seaman status, the district court, applying Sanchez, held that the plaintiff was not a Jones Act seaman. The district court found that on balance, the Sanchez factors weighed against a finding of Jones Act seaman status. Accordingly, the district court held that the plaintiff was not a Jones Act seaman.
In Jarvis v. Hines Furlong Line, Inc., the United States Court of Appeals for the Sixth Circuit rejected a claimant’s seaman status, finding the vessel on which he was injured was not in navigation at the time of his injury. Joseph Jarvis (Jarvis), a deckhand, suffered a back injury while working on a tug owned by his employer, Hines Furlong. At the time of the injury, the tug was undergoing repairs at a shipyard, where it had been for nearly two years. The repairs consisted of “extensive hull work,” including “bow work,” “a new cooling system for the engines,” and repairs to fix a hole in the vessel’s starboard fore compartment. While in the yard, the tug could not move under its own horsepower and occasionally could not even float without assistance. Jarvis’ injury occurred towards the end of the tug’s time in the yard, when Jarvis was there, along with some other Hines Furlong employees, to conduct work such as “demolition work,” “painting,” “pulling wires,” and generally helping with the repairs. Jarvis sued his employer under the Jones Act and general maritime law. At issue was whether Jarvis qualified for seaman status, which turned on whether the tug was “a vessel in navigation.” The court began by noting that generally a vessel is not removed from navigation by virtue of being laid-up undergoing repairs in a shipyard, but at some point the repairs may become significant enough to take the vessel out of navigation. To determine if the tug had passed that point, the court looked to its sister courts that considered the duration the vessel was undergoing repairs, whether the crew was onboard, and the type of work performed. The tug was in the yard for “well over a year,” spent most of that time in dry dock and incapable of self-propulsion, had most of its hull and interior replaced, and the crew was not on board. Taken together, these facts pushed the tug out of navigation such that Jarvis could not claim seaman status as a matter of law.
Longshoremen Claims
On March 21, 2022, the United States District Court for the Western District of Virginia reversed course on whether an off-loader barge is a vessel, and granted summary judgment to the defendant on all claims. In 2016, an employee of the defendant fell on a steel walkway that was part of defendant’s off-loader barge at its terminal in Ceredo, West Virginia. The plaintiff received workers’ compensation benefits pursuant to the Longshore and Harbor Workers’ Compensation Act (LHWCA), but then pursued tort claims against the defendant under 33 U.S.C. § 905(b). Over ten years before the instant action, the district court had concluded that a similar off-loader barge owned by the defendant was a vessel. At the time of the 2022 decision the facts “remain[ed] mostly the same,” as they had been in 2011, but the law had changed following the Lozman v. City of Riviera Beach, Fla., 568 U.S. 115 (2013) decision, and there was a “subsequent development of facts,” that caused the district court to reconsider vessel status. The district court decided the off-loader barge was not a vessel, because a “reasonable observer, looking to the structure’s physical characteristics and activities, would not consider it designed to a practical degree to carry people or things over water.” Although there was a battle of the experts regarding how quickly the off-loader barge could be detached from its moorings, the record evidence showed it “was extensively connected to land by a variety of devices, many of which were permanent, and its removal would take at least some significant effort and time.” The district court analyzed a numbers of cases (all post-Lozman) that looked to factors including the infrequency of moves, the lack of self-propulsion, and dependency on shoreside connections for utilities to determine a structure was not a vessel, as well as multiple cases that found barges used as docks were not vessels. As a result, and although previously determined to be a vessel, the off-loader barge in question was no longer a vessel for purposes of a § 905(b) claim.
Passenger Claims
In In re Katz, the court held the vessel owner/operator was not presumptively liable for the grounding of his vessel that caused injuries to passengers. In this case, several couples were onboard a 29-foot pleasure craft vessel navigating in the vicinity of Fire Island when the vessel experienced a soft grounding. The vessel owner/operator called Sea Tow for assistance, but as time elapsed, decided to try to steer the vessel toward the beach, using the waves to maneuver the vessel. When the vessel was approximately 4 feet from the beach, some of the passengers began departing the vessel as it was still in motion and were injured in the process. The injured passengers brought suit against the vessel owner/operator in New York state court, and the vessel owner brought a limitation action in United States District Court for the Eastern District of New York. Both the injured parties and vessel/owner operator brought cross-motions for summary judgment. The court held that the duty owed by the vessel owner/operator was reasonable care under the circumstances. Finding the law in the Second Circuit was unclear whether a presumption of fault arises from a grounding, the court held that the mere grounding did not establish a rebuttable presumption of negligence against the party responsible for the grounding and that the party claiming negligence must introduce proof of negligent conduct by a preponderance of the evidence. Due to conflicting lines of evidence, the court denied the cross-motions due to the factual questions as whether the owner/operator’s actions were reasonable and whether his alleged breach of duty caused the injuries. Finally, court noted that the vessel owner/operator was in privity with himself and therefore could not limit his liability under the Limitation Act.
In Brady v. Carnival Corp., the Eleventh Circuit Court of Appeals reversed the district court’s grant of summary judgment finding questions of fact existed for the jury. The plaintiff alleged a maritime personal injury claim after slipping on a puddle of water resulting in a broken hip. The district court granted summary judgment on the basis that the cruise ship company owed no duty because its crewmembers had neither actual nor constructive notice of the particular puddle that caused her fall. The Court disagreed holding that a jury could find for the passenger on two questions: (1) whether the cruise ship company had notice that the area where the passenger fell had a reasonable tendency to become wet; and (2) whether it had actual or constructive knowledge that the pool deck where the passenger fell could be slippery.
In Newbauer v. Carnival Corp., the Eleventh Circuit Court of Appeal affirmed district court’s dismissal. The Court found that the passenger failed to allege that the cruise ship company was on either actual or constructive notice of the hazard in question and thus failed to satisfy their pleading standard. The Court explained that the passenger did not allege a facially plausible claim that the cruise ship company knew or “ought to have known of ” the hazardous wet surface that caused her to slip. Rather, the court found that the passenger’s complaint contains only conclusory allegations as to actual or constructive notice.
In Taylor v. Royal Caribbean Cruises, LTD, the Eleventh Circuit Court of
Appeal affirmed district court’s dismissal after construing the Plaintiff’s complaint as a “shot gun” pleading amounting to a failure to properly allege causation. The passenger plaintiff alleged a litany of theories as to potential negligence that caused their fall on the gangway of a cruise ship. Ultimately, the Court ruled that the passenger-plaintiff: (i) failed to plausibly plead causation because they never identified which failure caused the alleged unevenness of the gangway flooring; (ii) failed to plausibly allege causation as to their claim of negligent failure to follow policies; and (iii) did not allege facts concerning which company policy was violated thereby causing her injuries.
Contract
In Freepoint Commodities LLC v. Ridgebury Kilo LLC, the court held that a breach of implied covenant of good faith was sufficiently different from the claim for breach of contract to withstand a motion to dismiss. In the case, Ridgebury Kilo time chartered a vessel to Seawolf Tankers, and Seawolf voyage chartered the vessel to Laurel Shipping for the carriage of fuel oil from the Caribbean to Singapore. Bills of lading were issued to Freepoint Commodities as the shipper of the cargo, and Freepoint Singapore listed as the consignee (collectively, “Freepoint”). Freepoint asserted that, as a result of a delay, it was unable to market the cargo and suffered a loss in excess of $29 million. Seawolf filed a suit against Laurel Shipping seeking payment for alleged unpaid freight and port costs under the voyage charter. Freepoint brought action against Ridgebury Kilo, seeking a maritime attachment and subsequently added Seawolf in an amended complaint, asserting breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, conversion, tortious interference, and misrepresentation. Seawolf moved to dismiss the claims for breach of contract, breach of implied covenant of good faith, and conversion, arguing that Freepoint was not a third-party beneficiary of the voyage charter.
The court held that, as the language of the charter strongly suggested, the parties intended to give Freepoint rights to enforce seaworthiness guarantees and speedy delivery of the cargo. Freepoint plausibly alleged they were intended beneficiaries of the charter to maintain a claim for breach of contract. The court also reasoned the difference between the claim for breach of contract depended on whether Seawolf breached the guarantees in the voyage charter, while the claim for breach of the implied covenant of good faith f lowed from whether Seawolf failed to inform the Freepoint about the condition of the vessel. Therefore, breach of implied covenant of good faith was sufficiently different from the claim for breach of contract to withstand a motion to dismiss. Additionally, although the conversion claim was premised on the assertion that Seawolf wrongfully exercised control over the cargo, Seawolf never appropriated the cargo for its own use and did deliver the cargo to Freepoint. Thus, the conversion claim was dismissed.
Marine Insurance
In Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, 47 F.4th 225 (3d Cir. 2022), a yacht insured by Great Lakes Insurance (GLI) ran aground and its owner’s submitted a claim, GLI denied owner’s claim on the sole basis that the yacht’s fire-extinguishing equipment had not been timely recertified or inspected, notwithstanding the fact that the vessel had not sustained any fire damage. GLI filed a declaratory judgment action and owners counterclaimed under Pennsylvania law for breach of fiduciary duty, insurance bad faith, and breach of Pennsylvania’s Unfair Trade Practices and Consumer Protection. However, because the insurance policy contained a choice-of-law provision mandating the application of New York law, the District Court for the Eastern District of Pennsylvania dismissed the owner’s Pennsylvania-law-based counterclaims. On appeal, the Third Circuit vacated the Eastern District of Pennsylvania’s dismissal and remanded the matter for further proceedings on whether Pennsylvania has a strong public policy that would be thwarted by applying New York law under a choice-of-law provision in marine insurance policy to dismiss the insured vessel owner’s counterclaims for breach of fiduciary duty, bad faith liability, and violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) arising from the insurer’s denial of coverage. The Supreme Court granted cert. and will review the Third Circuit’s decision.
In Clear Spring Property & Casual Co. v. Matador Sportfishing, LLC, 2022 WL 884267 (M.D. Pa. Mar. 24, 2022), after the partial sinking of a vessel insured by Clear Spring Property & Casualty, Clear Spring denied the owner’s claim for several reasons, including that the vessel’s owners had failed to disclose that the vessel had been chartered once earlier in the 2021 policy period and that the vessel’s fire extinguisher system had not been certified or tagged since 2014. Clear Springs filed a declaratory judgment action and the vessel’s owners filed three counterclaims including a statutory bad faith claim under Pennsylvania law. Clear Spring moved for judgment on the pleadings on the owner’s Pennsylvania statutory bad faith claim citing the insurance policy’s choice-of-law provision mandating the application of New York law. The vessel owner argued that Pennsylvania has a strong public policy that would be thwarted by applying New York law under a choice-of-law provision in a claim for wrongful denial under an insurance policy. The District Court for the Middle District of Pennsylvania dismissed the owner’s Pennsylvania-law-based counterclaims, holding that the under federal maritime choice-of-law principles “public policy of a state where a case was filed cannot override the presumptive validity of a provision in a marine insurance contract” where the law chosen “has a substantial relationship to the parties or the transaction.” The Middle District of Pennsylvania thus ruled that the owner’s Pennsylvania statutory bad faith claim was precluded where it did not arise under federal admiralty or New York law. NOTE: This decision is currently on appeal to the Third Circuit Court of Appeals.
In Progressive Garden State Ins. Co. v. Metius, 581 F. Supp. 3d 661 (D.N.J. 2022), a vessel insured by Progressive Garden State Insurance for “pleasure use exclusively” caught fire and sank at her marina slip. Progressive denied coverage after discovering that the vessel’s owner had purchased the vessel as a liveaboard and had been living aboard it prior to the fire, describing the vessel as his “home” in deposition. Progressive filed a declaratory judgment action on the basis that the vessel was its owners “primary or permanent residence” and that the policy language expressly excluded coverage for “injury or property damage arising out of an accident while using a watercraft as a primary or permanent residence.” The vessel owner countersued claiming that another property he owned in Blairstown and referred to in deposition as his “weekend home” was his primary residence, as opposed to the vessel. In an apparent matter of first impression, the United States District Court for the District of New Jersey interpreted the term “primary residence” within the specific context of a marine insurance policy. The District Court held that the Policy term “primary residence” was unambiguous as a matter of law and refers to the main, principal place where the insured maintains a physical presence as an inhabitant. In the instant case, the Court ruled that the vessel owner was using the vessel as his primary residence at the time of the fire, where it was the main, principal place at which he physically lived and the place he returned to when he said he was going home according to his deposition testimony.
In Atlantic Specialty Insurance Co. v. Bindea, 2022 AMC 361, 2022 U.S. Dist. LEXIS 178942 (W.D. Va. Sep. 30, 2022), the United States District Court for the Western District of Virginia found Plaintiff Atlantic Specialty Insurance Company (ASIC) entitled to judgment as a matter of law in a marine insurance dispute, holding ASIC was not required to cover the claim of Defendant Bogdan Bindea (Bindea), arising out of the capsize of Bindea’s offshore supply vessel in the Caribbean Sea. ASIC sought a declaratory judgement that its policy was “null and void,” or, in the alternative, that it was not required to cover the claim because Bindea breached the policy. Bindea filed a counterclaim, asserting that the policy covered his vessel—“even though he admits that he was not aware of and never agreed to the Policy’s terms, conditions, and exclusions on coverage.” Bindea’s vessel was transporting cement off the waters of Haiti when it hit rough waters and capsized; five members of the crew were recovered, but two remained missing and are presumed dead. The Commercial Marine Package policy at issue established a Navigation Area for the vessel “[w]ithin the east coast of Florida,” limited the crew coverage to three crew members, and required all statements in the Declarations be accurate and complete. Bindea claimed that he did not “complete, sign, or submit” the application for insurance, nor did he authorize anyone else to do so on his behalf, but believed he conveyed the need for insurance coverage in and around Haiti to his insurance broker. ASIC moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Applying the principles of Lauritzen, the district court found Virginia law governed the insurance policy’s “validity and scope.” As the policy was issued in Virginia and delivered to Bindea in Charlottesville, the policy was “made” in Virginia, supporting the application of Virginia law.
In Great Lakes Ins. SE v. Wave Cruiser LLC, the Eleventh Circuit held a choice-of-law provision is enforceable under federal maritime law—a case of first impression. Wave Cruiser LLC purchased an “all risks” insurance policy from Great Lakes covering a vessel that Wave Cruiser LLC had recently acquired. This policy excluded coverage for engine damage except if the engine damage was “caused by an accidental external event. . . .” After Wave Cruiser LLC purchased the policy, the vessel suffered catastrophic engine failure and a dispute arose as to whether the insurer or the insured had the burden to prove the exception was satisfied. To resolve this dispute, the Court looked to the policy’s choice-of-law provision to determine what law to apply. The choice-of-law provision stated that disputes should be “adjudicated according to well established, entrenched principles and precedents of substantive United States Federal Admiralty law and practice but where no such well-established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of New York.” The Court elected to apply New York law only after the Court determined no maritime authority or principle applied to the issue of who bears the burden to prove an exception when coverage was contingent on an exclusion that was subject to an exception. The Court held that New York law applied resulting in Wave Cruiser LLC bearing the burden to prove at trial that an external event caused the engine failure. This resulted in the Court upholding the district court’s grant of summary judgment to Great Lakes.
Maritime Liens
In Atlantic Power & Electric Co. v. Big Jake, 583 F. Supp. 3d 631 (D.N.J. 2022), the plaintiff, an electrical contractor, claimed he entered into a valid and enforceable contract for electrical work on a tug by a text message exchange with the principal of the vessel’s owner, Safer Tug. According to the plaintiff, he performed the agreed work on the tug and submitted a “Tugboat Invoice Summary” demonstrating all work as completed to Safer Tug, following which Safer Tug refused to pay the associated charges. The plaintiff subsequently sued for breach of contract and sought enforcement of a maritime lien under Commercial Instruments and Maritime Lien Act
(CIMLA) for the supply of necessaries to the tug. Safer Tug denied the plaintiff’s account and disputed the authenticity of the text messages. The plaintiff moved for summary judgment. The United States District Court for the District of New Jersey granted in part and denied in part, holding that while questions of fact remained as to whether the text message exchange constituted a contract that was breached, the plaintiff had established a valid maritime lien against vessel under CIMLA because the electrical work and services he provided to the vessel on order of the vessel owner were “necessaries.” The District Court reasoned that maritime liens arise by operation of law, not from parties’ understanding or expectations, and an enforceable maritime contract is not necessary to establish a necessaries lien.
The Fourth Circuit affirmed the decision of the United States District Court for the Eastern District of Virginia denying a maritime lien under the Commercial Instrument and Maritime Lien Act, 46 U.S.C. § 31301 et seq. (CIMLA) to a trader of bunkers. In Sing Fuels Pte Ltd. v. M/V Lila Shanghai, the vessel was time chartered, then sub-time chartered to another company. The terms of the charter party required the charterers to supply and pay for bunkers, and prohibited them from placing any liens on the vessel. Approximately $530,000 in bunkers for the vessel were ordered from the plaintiff, Sing Fuels Pte Ltd (Sing Fuels) by an individual employee that Sing Fuels considered to be the sub-charterer’s fuel broker. The bunkers were delivered to the vessel in South Africa in July 2019 by a fuel supplier. After several months passed with the bill for bunkers unpaid, Sing Fuels sought payment from the vessel’s owner. When the vessel’s owner refused Sing Fuels’ demand, Sing Fuels began to track the vessel. It passed on opportunities to arrest the vessel in other ports, instead filing a complaint against the vessel in the Eastern District of Virginia, seeking to arrest the vessel and requesting relief in the form of a maritime lien. The vessel was arrested and released a few days later, after substitute security was posted.
Following a bench trial, the district court found in favor of the vessel owner. In relevant part, the district court found that the employee who ordered the bunkers lacked authority to bind the vessel, and held the employee “did not possess any actual, apparent, or presumed authority” to bind the vessel. Additionally, equitable laches barred the lien claim because Sing Fuels “never presented a satisfactory excuse” in waiting to bring suit. On appeal, the Fourth Circuit upheld the district court’s findings, noting a “glaring absence of proof ” that the employee had apparent authority to bind the vessel. Of note, Judge Wilkinson issued a concurrence, agreeing that Sing Fuels failed to show the employee was acting as an agent “of anyone with authority to bind the vessel,” but writing “to note the pitfalls that may arise in the future with cases like these, which threaten to destabilize the basic principle of admiralty law that suppliers of necessaries such as bunker fuel must be able to rely on maritime liens to ensure payment.” The concurrence focused on current issues with supply chains, and cautioned, “I would not want this ruling to require too much of suppliers. And I hope that courts in the future will review with skepticism attempts to obscure or confuse agency relationships on the part of those who accept necessaries and then resist strenuously any payment for them.”
Limitation of Liability
In In re Bonvillian Marine Service, Inc., 19 F.4th 787 (5th Cir. 2022), the Fifth Circuit held that the six month filing requirement imposed in the Limitation of Liability Act, 46 U.S.C. §§ 30501, et seq., merely acted as a claim-processing rule that had no bearing on a district court’s subject matter jurisdiction. In so ruling, the Fifth Circuit overturned the prior rule announced in In re Eckstein Marine Services, LLC, 672 F.3d 310 (5th Cir. 2012) (holding that the Limitation Act’s 6 month deadline contained in 46 U.S.C. § 30511(a) was jurisdictional).
In SCF Waxler Marine, LLC v. Aris T M/V, 24 F.4th 458 (5th Cir. 2022), the Fifth Circuit considered whether three vessel owners could limit their liability for a marine casualty in accordance with the Limitation of Liability Act, 46 U.S.C. §§ 30501, et seq. On the evening of January 31, 2016, three vessels were navigating the Mississippi River. Specifically, the Aris T was moving upriver at the same time the Elizabeth and the Loretta were moving downriver. As the Aris T was passing the Loretta, the Loretta was also overtaking the Elizabeth, resulting in “not enough room” for the three vessels and a marine casualty involving damage to several moored vessels and other facilities along the Mississippi River. At the time of the incident, the Aris T was piloted by a compulsory pilot. The Elizabeth and the Loretta were both mastered by their respective captains. The Aris T and the Elizabeth were in good working order; however, the Loretta’s face-wiring system had failed resulting in decreased maneuverability. The three respective vessel owners filed limitation actions, which were consolidated. Following a bench trial, the district court found the Elizabeth, the Loretta, and the Aris T all liable for damages caused in the accident. The court allocated 45% fault each to the Elizabeth and the Loretta and the remaining 10% to the Aris T. As for limitation of liability, the district court held that the Elizabeth and the Loretta could not limit their liability because they were negligent themselves; however, the Aris T could limit liability, because the culpability rested solely with the compulsory pilot. Appeals ensued.
On appeal, the Fifth Circuit considered two main issues: (1) the allocation of fault; and (2) the limitations of liability. As for respective fault, considering the testimony and evidence, the Fifth Circuit concluded that the district court did not clearly err in allocating liability amongst the offending vessels. With respect to limitation of liability, the Fifth Circuit particularly focused on the “compulsory pilot defense.” The Fifth Circuit explained that the compulsory pilot defense could be traced back to the early nineteenth century. Under this defense, “the vessel is liable in rem for a maritime collision caused by the fault of its compulsory pilot; if the pilot alone was at fault, the shipowner will not be liable in personam; however, if the negligence of the master or crew contributed to the collision, then in addition to the vessel’s liability in rem the shipowner also will face in personam liability.” As for a master’s negligence, the Fifth Circuit noted that the negligence of a master can contribute to an allision either through actions or omissions. That said, generally speaking, the master is entitled to assume the compulsory pilot is an expert on local conditions and practices, and may defer to his command. Nevertheless, the master may not free himself of every obligation to attend to the safety of the vessel, when a compulsory pilot is aboard.
In Martz v. Horazdovsky, the United States Court of Appeals for the Ninth Circuit examined what constitutes sufficient “written notice of a claim” to start the running of the six month limitation period under 46 U.S.C. § 30511(a) and whether the statute of limitation is a jurisdictional rule. The Ninth Circuit reversed two district court orders, consolidated for decision, which granted summary judgment in favor of the defendants in two limitation actions brought by the vessel owners involved in accidents. In reversing both cases, the court reasoned that both of the victim’s letters did not state their intention to bring a covered claim against the vessel owner, and thus, neither constituted sufficient “written notice of a claim” to trigger the start of the limitations period. Accordingly, both defendants did not receive sufficient “written notice of a claim” under 30511(a) until the complaint was filed in state court, and therefore, their limitation action was timely.
In Ehart v. Lahaina Divers Inc., the United States District Court for the District of Hawaii struck the captain and boat owner’s affirmative defense of waiver and release following a fatal dive boat accident because the waiver signed by the plaintiff and decedent was void under 46 U.S.C.§ 30509. The defendant claimed that § 30509 did not apply because the vessel departed and returned to the same port so the vessel was not “transporting passengers between ports in the United States” as the statute requires. The court examined the plain meaning of the terms in the statute to determine that transporting passengers from a port back to the same port satisfies the “between ports” criteria. The court determined that since all the elements of § 30509 were met, the Ehart’s waiver was void, and therefore, the court struck the defendant’s affirmative defense asserting waiver and release.
In Roen Salvage Company v. Sarter, 17 F.4th 761 (7th Cir. 2021), the Seventh Circuit held that the vessel owners seeking exoneration from liability under the Limitation Act are not entitled to have their exoneration claims determined by a federal judge. Roen involved a single-claimant who sought to pursue her claims in state court and had filed a “concession” that the “federal court’s decision about the owner’s maximum liability will control even if a state court sets a higher figure in a Savings-to-Suitors action,” but refused to make any such concession on the issue of exoneration. The court held that the vessel owner had no right to have its exoneration case heard in federal court, and that only the issue of limitation is guaranteed to be heard by a federal judge.
In In re Talbott, 572 F. Supp. 3d 564 (N.D. Ind. 2021), the court dismissed the limitation action of a recreational yacht owner for failing to meet the requirements of 46 U.S.C. § 30511(a). The court specifically found that a letter of representation, which contained no specific information concerning the quantum of the claimant’s damages, was insufficient to trigger the Limitation Act’s six-month written notice requirement. Accordingly, it was held that the vessel owner’s imitation complaint was “premature, if necessary at all.”
Admiralty Jurisdiction
In a matter of first impression, the First Circuit held that a dredging contract was a maritime contract and, therefore, within the court’s admiralty jurisdiction in J-Way Southern, Inc. v. United States Army Corps of Engineers. The case involved a contract awarded to J-Way by the Army Corps of Engineers for dredging work to be performed in Menemsha Harbor, Martha’s Vineyard. The Army Corps terminated the contract for J-Way’s alleged deficient performance and J-Way initiated suit. The Army Corps secured a dismissal in the district court, arguing that J-Way’s claims were time barred. J-Way appealed and, after discussion of admiralty jurisdiction, the First Circuit affirmed for the same reasons provided by the district court. The Army Corps argued that the dredging contract was not a maritime contract because it contemplated “digging earth” rather than navigation over water. J-Way argued that the dredging contract involved a traditional maritime activity and promoted maritime commerce by making a waterway more navigable. Typically, government contract cases are tried to the United States Court of Federal Claims, but the Contract Disputes Act allows for district courts to hear cases that arise out of maritime contracts, so the determination of the nature of the contract was material to the First Circuit’s analysis. Relying on the “principal objective” analysis set out by the Supreme Court in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 25 (2004), the First Circuit reasoned that the primary purpose of the dredging contract was to facilitate maritime commerce. The court held that the dredging contract’s “nature and character sound in maritime services, with the contract aimed at protecting and effectuating maritime commerce via the goal of improving navigability of the waterway.”
In Nederland Shipping Corp. v. United States, 18 F.4th 115 (3d Cir. 2021), the M/V Nederland Reefer was held in the Port of Wilmington, Delaware pending investigation after the Coast Guard discovered evidence the vessel was illegally discharging bilge water. In an effort to return to sea as quickly as possible, Nederland, the owners of the cargo vessel carrying fruit entered into a contract with the U.S. Government allowing for the immediate release of the vessel in exchange for the posting of a security bond covering potential fines and other consideration. Nederland posted the bond and met all requirements under the contract, but the U.S. Government detained the vessel for at least two more weeks. Nederland sued for breach of maritime contract in the United States District Court for the District of Delaware for unreasonable delay in clearing the M/V Nederland Reefer for departure, but the District Court dismissed the case for lack of subject matter jurisdiction. On appeal, notwithstanding the U.S. Governments’ argument that the Agreement primarily sought to facilitate a criminal investigation pursuant to the Act to Prevent Pollution from Ships (APPS) and was not a maritime contract, the Third Circuit ruled that the contract was maritime in nature and thus invoked the District Court’s admiralty jurisdiction. The Third Circuit held that the essential character and purpose of the contract was to set the vessel free to pursue maritime trade not to secure the vessel in port during an investigation and that the dispute, which implicated both the federal APPS and international concern with sea-going commerce and ocean pollution, was not inherently local. For those reasons, the Third Circuit reversed the District Court’s dismissal and remanded Nederland’s claims for consideration.
In Seaward Services, Inc. v. United States, 584 F. Supp. 3d 167 (E.D. Va. 2022), the United States District Court for the Eastern District of Virginia granted the defendant’s motion to dismiss, finding actions based on a maritime lien theory could not be brought against a public vessel, and as this was prohibited, there was no basis for federal maritime jurisdiction over the plaintiff’s claims. The United States contracted with Great Eastern Group, Inc. (GEG) to provide services to four training vessels, and GEG, in turn, subcontracted with plaintiff Seaward Services, Inc. (Seaward) to provide certain crew and services. Seaward performed under the contract, but GEG failed to provide payment. Seaward informed the United States it had not been paid, and eventually stopped work. Seaward then claimed that as a result of the nonpayment, it had a maritime lien against the training vessels. The United States filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The United States asserted that the Commercial Instruments and Maritime Liens Act, 46 U.S.C. § 31342 et seq. (CIMLA) prohibits maritime liens on public vessels, while Seaward argued CIMLA only prohibits in rem actions, and that the Suits in Admiralty Act (SAA) and Public Vessels Act (PVA) permit in personam actions on public vessels. The district court noted the “jurisprudential landscape of this issue is unique,” citing an Eleventh Circuit decision finding CIMLA does not prohibit in personam actions against public vessels, but explained that the “overwhelming majority of district courts,” including those within the Fourth Circuit, have held CIMLA “prohibits any action, in personam or in rem, against public vessels.” After delving into the framework of the SAA, PVA, and CIMLA, as well as the history of the Bonanni ruling, the district court further confirmed that maritime lien actions are not allowed to be brought against public vessels under the CIMLA. The CIMLA prohibits actions, both in personam and in rem, “based on a maritime lien theory against a public vessel.” And, as “the fixing of maritime liens on public vessels is prohibited by statute, there is no cause of action to serve as a basis for federal maritime jurisdiction or for a claim upon which relief may be granted.”
In Markel American Insurance Co. v. Islands Marine Center, the United States District Court for the Western District of Washington, raised the issue of subject matter jurisdiction sua sponte, and found that the subject matter of a sailboat storage contract at issue was not sufficiently maritime in nature to justify admiralty jurisdiction. In that case, the defendant was retained to haul out, block, and store a sailboat. However, it fell over almost a year later causing approximately $46,355.99 worth of damages. The complaint brought causes of actions breach of maritime contract, breach of bailment, negligence, and violation of the Washington State Consumer Protection Act. The court found that it lacked subject matter jurisdiction under admiralty and the amount in controversy was less than the threshold for diversity jurisdiction and therefore dismissed all claims.
In City and County of Honolulu v. Sunoco LP, the United States Court of Appeals for the Ninth Circuit discussed whether climate related claims against numerous oil and gas companies belong in federal or state court. In this case, the City and County of Honolulu and the County of Maui sued the defendant oil companies in Hawaii state court, asserting state-law public and private nuisance, failure to warn and trespass claims. The defendants removed to federal court, asserting eight jurisdictional grounds, and the Plaintiffs sought to remand. The panel reasoned that the case was primarily about whether oil and gas companies misled the public about the dangers of fossil fuel. Accordingly, the connection between the plaintiffs’ injuries and the defendant’s OCS activities was too attenuated to warrant federal jurisdiction under OCSLA.
Salvage
Although potentially “distasteful,” the court in Curran v. Wepfer Marine stuck with traditional marine salvage principles and refused to award a salvage claim based solely on saving a human life. The plaintiff, a crewmember on a salvage vessel, claimed he was owed additional compensation as a reward under maritime salvage law for preserving the health and safety of one of the defendant’s employees. The court recognized that plaintiff’s fast action to provide immediate trauma care to the injured crewmember mitigated additional injury, but such was not sufficient to sustain a claim for compensation under maritime salvage law. The court found that in this instance, the plaintiff did not save any of the defendant’s property in the act of providing medical aid to defendant’s employee. The plaintiff tried to argue that his action saved the defendant from hypothetical future losses because the injured employee was able to return to work in less time than in the absence of medical aid. The court denied this argument, reasoning that “there is no property interest in potential future expenses.” Rather, the “[p]laintiff’s only recompence [was] the knowledge that he acted in accordance with the demands of moral obligation and sounds professional practices.”
Practice, Procedure, and Uniformity
The First Circuit waded into what it called “the mind-numbing complexities of federal removal jurisdiction” in Rhode Island v. Shell Oil Products Co., L.L.C. Addressing this issue in the same case for a second time, the First Circuit grappled with whether removal of a case brought by the state of Rhode Island against several energy companies was proper. The state, like many other state and local governments, sued the energy companies in state court seeking damages for the harm that burning fossil fuels has done and will do to the earth’s atmosphere. The energy companies removed the case to federal court under the federal-officer removal statute, the federal question doctrine, the Outer Continental Shelf Lands Act (OCSLA), admiralty jurisdiction, and the bankruptcy removal statute. The district court remanded the case, finding no basis of jurisdiction under any of the theories advanced by the energy companies. On the first appeal, the First Circuit only reviewed the federal-officer removal statute and affirmed the district court’s remand order. The energy companies appealed to the Supreme Court, which vacated and remanded the case with instruction to consider the appeal in light of BP p.l.c. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532 (2021), a case requiring a full examination of the district court judge’s entire remand order, and all theories of removal. In the instant case, the First Circuit examined all of the removal theories advanced by the energy companies and again affirmed the district court’s decision to remand the case to Rhode Island state court. After dispensing with federal question jurisdiction as a basis for removal, the court turned to whether OCSLA could provide a basis for removal of the case. The court noted that OCSLA jurisdiction involves either “a direct physical connection to an OCS operation” or “a contract or property dispute directed related to [that] operation.” Because Rhode Island’s claims against the energy companies related to their overall conduct, not just oil and gas production on the OCS, the court held that OCSLA jurisdiction did not apply to this suit. Similarly, when examining whether the court had admiralty jurisdiction, the First Circuit determined that the tortious injury was suffered on land and was not caused by a vessel on navigable water, and therefore, the court lacked admiralty jurisdiction over the claims. Finding no basis for removal, including bankruptcy jurisdiction, the First Circuit affirmed the district court’s order remanding the case to Rhode Island state court.
In MSC Mediterranean Shipping Company v. Airlift Marine Services, MSC Mediterranean Shipping Company S.A. (MSC) was awarded more than $900,000 for indemnification from Airlift (U.S.A.) (Airlift) when the court applied a broad scope of indemnification liability initially conferred by a carrier’s bill of lading. In the underlying lawsuit, a stevedore engaged in the unloading of a container when he suffered injuries. He sought recovery for his injuries from MSC, the ocean common carrier that transported the cargo, and Airlift, the NVOCC that arranged for the cargo to be carried by MSC. Upon payment of the settlement, MSC sought indemnification from Airlift to recover the amount paid for the stevedore’s compensation. Airlift argued that the bill of lading was no longer applicable because the injury occurred during the unloading of the cargo at the importer’s facility in New Jersey after the container left the port of New York City. Airlift also argued that MSC’s liability stemmed from its own negligence and it was outside the scope of the indemnity agreement.
The court found that the terms and conditions of the bills of lading, including the indemnity provision, continued to apply such that Airlift had an indemnity obligation even though the cargo had already left the port of discharge. The narrow reading of the contractual indemnity was rejected, as the court found that an express contractual indemnity can be interpreted using the “usual rules of contract interpretation” and that public policy arguments or other common law indemnity principles were inapplicable to the terms of the bill of lading. The court also highlighted that liability did not stem from MSC’s negligence because MSC had settled the matter at least in part due to poor packing of the cargo, which the court found had caused the stevedore’s injuries. Most notably, the court also found that the terms of MSC’s bill of lading did not indemnify MSC for damages resulting from its own negligence for the matters covered due to the breath of the indemnity language covering “any loss, damage, liability or expense whatsoever and howsoever.”
In VL8 Pool, Inc. v. Glencore, the court held an exculpatory clause prevented recovery for contaminated bunkers. In the case, Glencore obtained contaminated marine fuel from Valero and subsequently sold it to fuel suppliers and vessels around the world. VL8 alleged Glencore sold contaminated fuel to VL8, which caused damages to vessels in Panama to which VL8 supplied the fuel. While the vessel claim against VL8 was in arbitration, VL8 brought this suit against Glencore for breach of contract, negligence and product liability, and indemnity and contribution. The court initially ruled that the contractual limitation of liability/exculpatory clause in the General Terms and Conditions for the sale barred the contractual, negligence, and strict liability claims. VL8 subsequently filed an amended complaint, asserting that Glencore was guilty of gross misconduct because it had actual or constructive knowledge that marine fuel stored at its facility was contaminated. Citing Kalisch-Jarcho, Inc. v. New York that upholds exculpatory clauses unless “the misconduct for which it would grant immunity smacks of intentional wrongdoing,” the court found the allegations did not suggest that Glencore engaged in explicit conduct that was fraudulent, malicious, or prompted by bad intentions. Accordingly, the court dismissed the contract and warranty claims. Turning to the indemnity and contribution claims, the court dismissed the indemnity claim finding that VL8 had not yet incurred any liability, had not proven it was free from negligence, and had not alleged any contractual indemnity. Additionally, since contribution requires some negligence of the party from which contribution is sought and as VL8 chose not to allege negligence in its amended pleading, the court held that VL8 was not entitled to seek contribution.
At issue in Douglass v. Nippon Yusen Kabushiki Kaisha, 46 F.4th 226 (5th Cir. 2022) (en banc), was whether the federal court could exercise personal jurisdiction over a foreign corporation for claims arising from a collision at sea. Finding that the foreign corporation did not have such contacts with the United States such as to render it essentially “at home” in the United States, the Fifth Circuit affirmed the district court’s ruling dismissing the foreign corporation for lack of personal jurisdiction. The Fifth Circuit held that the Japanese company was not amenable to the general jurisdiction of American courts under the facts presented. As such, the court affirmed the district court’s dismissal for lack of personal jurisdiction.
At issue in Shallow Water Equipment, LLC v. Pontchartrain Partners, LLC, 2022 A.M.C. 276 (E.D. La. 2022), was whether a vessel owner had a sufficient proprietary interest in a vessel to recover for lost charter hire, even though the vessel was under a bareboat charter at the time of the damage. The case arose out of the charter and subcharter of a spud barge. The owner of the vessel, TK Boat Rentals, LLC (TK Boat), chartered the vessel to Shallow Water Equipment, LLC (Shallow Water), which in turn subchartered the vessel to Pontchartrain Partners, LLC (Pontchartrain). The spud barge allegedly suffered damages as a result of improper use by Pontchartrain. Thereafter, TK Boat and Shallow Water filed suit against Pontchartrain seeking damages for unpaid charter hire and consequential damages resulting from Pontchartrain’s alleged failure to return the spud barge in her original condition.
In defending the claims and in pertinent part, Pontchartrain argued that TK Boat’s maritime tort claim was barred by the rule in Robins Dry Dock & Repair v. Flint, 275 U.S. 303 (1927). As developed by the Fifth Circuit, the Robins Dry Dock Rule holds that “maritime tort damages for economic loss can be awarded only when the plaintiff has suffered physical damage to a proprietary interest.” In short, Pontchartrain contended that because TK Boat had chartered out the spud barge, it no longer had a proprietary interest in the vessel and could not recover. In analyzing the issue at a bench trial of the matter, the district court citing to other Fifth Circuit precedent, held that TK Boat had a sufficient proprietary interest sufficient to satisfy Robins Dry Dock, because TK Boat was the owner of the damaged property and it did not relinquish all “proprietary interest” by chartering the vessel. In conclusion, the district court held that even though a bareboat charterers may have a sufficient interest to satisfy Robins Dry Dock, this interest does not imply that the vessel owner is stripped of its proprietary interest in the very vessel it owns. Considering the foregoing, the district court found in favor of TK Boat and awarded damages to the vessel owner for the tortious conduct of the subcharterer.
In Saunders v. Consumers Energ y Co., the plaintiff, a seasoned and experienced sailor, was sailing through a narrow channel when his mast allided with an overhead powerline, causing him severe injuries. Prior to setting sail that day, plaintiff checked the relevant NOAA charts, weather forecasts, DNR gaming maps, Google Earth, and individuals with local knowledge before determining that the channel was safe to sail. However, the chart plaintiff consulted showing a ninety-foot clearance under an overhead powerline was “at best ambiguous.” Unbeknownst to Plaintiff, when he reached the powerline, his thirty-foot mast struck the twenty-eight-foot powerline, owned and operated by Defendant Consumers Energy Company (“Consumers”). As a result of the allision, plaintiff suffered severe burns across his face, ears, hands, and arms, as well as debilitating mental and emotional injuries. Consumers moved for a directed verdict on two issues: (1) that it was entitled to the “open and obvious” defense in relation to the negligence claim, and (2) that plaintiff failed to present evidence to support any award of damages for medical bills or lost wages. The court denied Consumers’ argument that it was entitled to the open and obvious defense. Then, considering all the evidence and the entire record, the court “apportion[ed] liability on the basis of fault according to the rules of comparative negligence.” Ultimately, given both parties’ respective responsibilities and duties, the court found Consumers was 70% at fault, and the plaintiff was 30% at fault.
In Cox v. Lippus, 570 F. Supp. 3d 547 (N.D. Ohio 2021), the court found that removal of a wrongful death and survival claim, while falling under a federal court’s maritime jurisdiction, was improper because the saving to suitors clause in 28 U.S.C. § 1333(1), and the defendant’s owed any actual expenses incurred by plaintiff as a result of the removal. There, plaintiff filed in state court a wrongful death claim and a survival claim on behalf of decedent who fell from a boat and drowned. The court recognized that while federal courts have original jurisdiction over “[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled,” 28 U.S.C. § 1333(1), falling within federal maritime jurisdiction does not necessarily make a case removable. Rather, the saving to suitors clause generally bars removal of maritime actions brought in state court.
In Deem v. William Powell Co., the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal of a wrongful death claim and held that a wrongful death claim in admiralty can only accrue on or after a seaman’s death, and not before. The Ninth Circuit explained that unlike a personal injury claim which accrues when the seaman discovers the injury, a wrongful death action can only logically accrue until after the death of the injured seaman.
In Savage Services Corp. v. United States, the Eleventh Circuit affirmed the district court dismissal of a vessel owner’s claims for oil-removal damages against the U.S. Army Corp. of Engineers under Suits in Admiralty Act (the “SAA”). In a matter of first impression, the Eleventh Circuit held that specific provisions of the Oil Pollution Act of 1990 (OPA) preempted the broad waiver of sovereign immunity afforded under the SAA. Given the OPA’s comprehensive remedial scheme and no mention of the United States in the list of “persons” responsible under OPA. The Court held that the OPA did not authorize a claim against the U.S. federal government. The Court went further stating that the OPA’s comprehensive nature displaced the waiver provision in the SAA.
