December 2010 Longshore Update

December 2010

Notes From Your Updater - On November 29, 2010, the U.S. Supreme Court granted the petition of certiorari, from the 7th Circuit Court of Appeals, in the case of CSX Transportation v. McBride, Docket No.10-235. The issue before the court is: Whether the Federal Employers' Liability Act, 45 U.S.C. §§ 51-60, requires proof of proximate causation. The petition, reply and other briefs may be reviewed here.

The Office of Administrative Law Judges has adopted new use-specific subpoena forms effective November 23, 2010. Previously, a single form was used regardless of the nature of the subpoena. The new forms are specific to the intended use of the subpoena and are similar to those used in Federal District Courts. Beginning on Wednesday, December 1, 2010, use of the following new subpoena forms will be mandatory: Subpoena to Appear and Testify at a Hearing; Subpoena to Appear and Testify at a Deposition and Subpoena to Produce Documents, Information or Objects, or to Permit Inspection of Premises. For additional information, see the Subpoenas page

The 5th Circuit’s recent decision in the case of Great Lakes Dredge & Dock Co. LLC, et al v. La. State, et al. [see November 2010 Longshore Update] was recently revised on November 4, 2010. However, the outcome remained unchanged and the district court’s dismissal of the claims against the dredging companies remained affirmed in all respects.

A petition for writ of certiorari has been filed in the case of Pacific Operations Offshore, LLP v. Valladolid, Docket No: 10-507 [see June 2010 Longshore Update]. The question presented to the U.S. Supreme court is: When the Outer Continental Shelf Lands Act, 43 U.S.C., §§ 1331-1356, provides that workers are eligible for compensation for "any injury occurring as the result of operations conducted on the outer Continental Shelf," under what circumstances is an outer continental shelf worker (or his heir) who is injured on land eligible for compensation?

Out of work or looking for a better job and have some Longshore background? A stevedore company in Nashville, TN is looking for an adjuster who has 3-5 years experience in Longshore Act claims handling and is willing to relocate to Nashville, TN. Relocation expenses will be included in the employment package. If you have any interest, contact Kirby D. Ford, Vice President, Workers' Comp. Administration, 565 Marriott Drive, 4th Floor, Nashville, TN 37214 Telephone 800-293-1420, Fax: 615-232-7887.

Chalk up another win for corporations, insurance carriers, and attorneys against the federal government. An Alabama federal court recently dismissed a U.S. government lawsuit, filed in 2009, against attorneys, corporate defendants, and their insurers for failing to take Medicare’s interests into account in a 2003 $300 million dollar settlement, citing the statute of limitations. In the case of U.S. v. Stricker, 2010 U.S. Dist. LEXIS 106981, decided on September 30, 2010, the U.S. District Court, Northern District of Alabama, the corporate defendants argued that the government’s claim against them for Medicare reimbursement was founded upon tort and therefore the three-year bar should apply. The government, however, strongly argued that an implied contract at law established a contractual relationship between itself and the corporate defendants, allowing for a six-year statute of limitations. The court concluded that logic and reason compelled the application of the three-year statute of limitations founded upon tort, because the government’s MSP claims are founded upon allegations of the corporate defendant’s tort activity and the resulting tort settlement.

9TH CIRCUIT DECIDES THE ISSUE OF WHEN COMPENSATION IS “AWARDED”
ROBERTS V. DIRECTOR, OWCP, ET AL.

Circuit Court Opinion
BRB Decision
ALJ Decision

While working as a gatehouse dispatcher, for Sea-Land Services, Inc., Dana Roberts allegedly slipped on a patch of ice and claimed injuries to his neck and shoulder. Roberts immediately ceased work and sought compensation under the LHWCA. After paying voluntary compensation for over three years to Roberts, Sea-Land and its insurer stopped paying him compensation. Roberts requested a formal hearing and the ALJ found that Roberts' disability was temporary total from March 11, 2002, to July 11, 2005; permanent total from July 12, 2005, to October 9, 2005; and permanent partial beginning on October 10, 2005. The ALJ calculated Roberts' average weekly wage at the time of injury to be $2,853.08 and his residual wage-earning capacity while partially disabled to be $720.00 per week. Based on these figures alone, Roberts was entitled to weekly compensation in the amount of $1,902.05 during his periods of permanent total and temporary total disability, and $1,422.05 during his period of permanent partial disability. The ALJ concluded, however, that the applicable maximum rate with respect to Roberts’ TTD period of disability was $966.08 per week-200% the national average weekly wage for fiscal year 2002, the year Roberts first became disabled, and $1,073.64-200% of the national average weekly wage with respect to the period of PTD based on fiscal year 2006. The ALJ denied reconsideration of a higher PTD rate based on payments awarded for fiscal year 2005. The Benefits Review Board affirmed the ALJ's decision and his order denying reconsideration. Roberts timely appealed, arguing that the ALJ erred by holding that he was “newly awarded compensation” in fiscal year 2002, when he first became disabled. Instead, Roberts argues that he was not “newly awarded compensation” until fiscal year 2007, when the ALJ issued his decision making a formal award of compensation, and that therefore the ALJ should have used the national average weekly wage with respect to fiscal year 2007 in calculating the maximum rate that governs his compensation for temporary total and permanent partial disability. The appellate court disagreed, finding that §908 uses the terms “award” and “awarded” to refer to an employee's entitlement to compensation under the Act generally, separate and apart from any formal order of compensation. The court observed that, by use of the term “awarded,” Congress could not have meant “assigned by formal order in the course of adjudication,” given that employers are obligated to pay such compensation regardless of whether an employee files an administrative claim. Congress apparently used “awarded compensation” and “entitled to compensation” to mean the same thing. Thus, “awarded” as used in §906 does not mean “assigned by formal order in the course of adjudication.” The appellate court held that, consistent with the meaning of “awarded” in §§908 and 910, “newly awarded compensation” in §906 means “newly entitled to compensation.” The court further noted that to apply the national average weekly wage with respect to a year other than the year the employee first becomes disabled would be to depart from the Act's pattern of basing calculations on the time of injury. Roberts also argued that the ALJ erred by applying the national average weekly wage with respect to fiscal year 2002 in calculating the maximum rate of compensation for his permanent total disability between July 12, 2005, and September 30, 2005. Roberts contended that he could not have been “currently receiving compensation for permanent total disability” until fiscal year 2005 at the earliest, when he began suffering such disability. The appellate court initially noted that it construed §906(c)'s reference to the period “during” which an employee is “currently receiving compensation for permanent total disability” to mean the period during which an employee is entitled to receive such compensation, regardless of whether his employer actually pays it. Roberts was entitled to receive compensation for permanent total disability during the period between July 12, 2005, and September 30, 2005. Therefore, the court held that he was “currently receiving compensation for permanent total disability during such period, even though Sea-Land was not paying him. The applicable maximum rate should be based on the national average weekly wage with respect to fiscal year 2005. The appellate court concluded that the ALJ erred by applying the national average weekly wage with respect to fiscal year 2002, rather than fiscal year 2005, in calculating the applicable maximum rate under §906(c). The BRB order affirming the ALJ order was affirmed in part and reversed in part and the case was remanded with respect to Roberts' compensation for permanent total disability between July 12, 2005, and September 30, 2005. (9th Cir, November 10, 2010) 2010 U.S. App. LEXIS 23340

EMPLOYER MADE THE CREW MEMBER EXCLUSION ARGUMENT TOO LATE
GREAT SOUTHERN OIL AND GAS CO., ET AL. V. DIRECTOR, OWCP [MEYERS]

Circuit Court Opinion
BRB Decision
ALJ Decision

Tony Meyers was employed as a mechanic on a work-over rig mounted on a barge, which was spudded in at a well location in Louisiana state waters. Meyers allegedly injured his left knee, when he slipped and fell between two barges. Meyers was initially paid state workers’ compensation benefits, but then sought retroactive and future total disability benefits under the LHWCA. Following a formal hearing, the ALJ concluded that Meyers was not a covered employee under the LHWCA because the barge was a fixed platform and not a vessel and Meyers was not engaged in a traditional maritime activity. The BRB reversed and held that Meyers was injured in the course of his employment on navigable waters and, therefore, under Perini, Meyers was a covered employee. The BRB remanded the case to the ALJ to award appropriate benefits. The ALJ awarded temporary total disability. The BRB affirmed and this appeal followed. The only significant issue on appeal was whether Meyers qualifies for benefits under the LHWCA. Great Southern argued that performing oilfield work does not qualify as maritime employment and therefore Meyers had not satisfied the "status" requirement of the LHWCA to qualify for benefits. The appellate court disagreed, pointing out that when a worker is injured on that actual navigable waters in the course of his employment on those waters, he satisfies the status requirement and is covered by the LHWCA. The appellate court held that the case was controlled by Perini and Bienvenu and there was need for a showing that Meyers was engaged in maritime employment. Because Meyers was injured while working on a vessel in navigable waters, the BRB correctly determined that Meyers was indeed covered under the Act. The court also rejected Great Southern's argument that Meyers' presence on navigable waters at the time of his injury was transient or fortuitous, because the BRB's conclusion to the contrary was supported by substantial evidence in the record. The appellate court declined to consider Great Southern's argument that Meyers is foreclosed from coverage under the LHWCA because his work assignment on the barge rendered him a member of the crew of a vessel, because that issue was not raised before the ALJ. The appellate court affirmed the BRB's award of benefits to Meyers under the LHWCA. (5th Cir, November 17, 2010, UNPUBLISHED) 2010 U.S. App. LEXIS 23658

NO SHOWING OF A NAVIGABLE WATERWAY
JULIEN V. DYNAMIC INDUSTRIES, INC.

Appellate Court Opinion

Harold Julien worked as an equipment operator for Dynamic Industries, Inc. at its yard where Dynamic built offshore oil and gas platforms. Julien's primary duties entailed operating cranes and cherry pickers to transport equipment and material from the yard to the dock area to be loaded onto barges by the riggers. Occasionally, he would give the riggers a helping hand. It was on one of these occasions that Julien was injured as a result of a fall, when a gangplank came apart from a barge causing Julien and a rigger to fall twelve to fifteen feet to the ground. Julien was initially represented by an attorney who filed a claim for compensation under the LHWCA. Thereafter, Julien discharged his original attorney and retained new counsel of record. Believing that the LHWCA did not cover Julien's claim, new counsel filed a claim pursuant to the Louisiana Workers' Compensation Act on Julien's behalf. Following a formal hearing, Julien was awarded benefits and penalties under the state act. Dynamic timely appealed, contending that the workers’ compensation judge (WCJ) erred in failing to find that Julien's claim fell within the jurisdiction of the Longshore Act and erred in awarding Julien compensation and medical benefits. Dynamic contended that the "situs" requirement for coverage under the Longshore Act had been satisfied in this case because Julien admitted that his accident occurred at a dock or an adjoining area customarily used by Dynamic in loading or unloading vessels. With respect to the "status" requirement, Dynamic contended that because the evidence showed that Julien played a significant and regular role in the loading/unloading operations of Dynamic, the trial court erred in concluding that Julien was not covered under the Longshore Act. Julien countered that there was no evidence that there were navigable waters anywhere near him at the time of the accident or that Dynamic was in the business of loading, unloading, repairing, dismantling, or building vessels. The court found that the record before it contained no evidence on the issue of whether Julien was injured upon the navigable waters of the United States or any adjoining area Dynamic customarily used in loading, unloading, repairing, dismantling, or building vessels. Accordingly, the appellate court held there was no basis to conclude that the WCJ erred in finding that Julien's claim fell within the jurisdiction of the State Act. With respect to the award of compensation and medical benefits, the record showed that the WCJ was presented with two views of Julien's current medical condition. Julien testified that he continued to suffer from pain, and he presented evidence from his treating physician which indicated that he is in need of further testing to determine the source of his pain and disability. Dynamic submitted that all of the diagnostic tests performed on Julien showed normal results or have failed to show any disc involvement and that none of the tests have revealed the source of Julien's continued complaints. The WCJ concluded that Julien had met his burden of proving his continued entitlement to benefits under the State Act. After considering the record in its entirety, including all of the medical records the parties submitted, the appellate court declined to say that the WCJ erred in awarding Julien compensation and medical benefits. Julien’s answer to the appeal, seeking additional attorney fees and costs for having to defend the appeal, was not considered as it was untimely filed. The judgment of the WCJ was affirmed. (La. App. 3 Cir, November 3, 2010) 2010 La. App. LEXIS 1496

GIVE ME LHWCA BENEFITS; THEN I’LL FRAUDULENTLY PLEAD SEAMAN STATUS
MENDEZ V. ANADARKO PETROLEUM CORPORATION, ET AL.

Grixi Mendez sued Anadarko Petroleum Corporation in Texas state court, seeking benefits under the Jones Act. Mendez alleged that he sustained severe injuries while working on Anadarko's floating gas-production platform and that he was a seaman covered by the Jones Act. Anadarko removed the case to federal court on the basis that Mendez fraudulently pled that he was a Jones Act seaman because the platform was not a vessel. Mendez moved to remand and Anadarko responded. The court held that based on the pleadings, the motions and responses, the extensive record evidence, the arguments of counsel, and the applicable law, the platform was not a vessel for the purposes of the Jones Act and remand was not appropriate. Instead, the court held that the platform is a permanently moored work platform designed to process gas extracted from the seabed and is not practically capable of marine transportation as defined under the applicable case law. As a result, the court held that Mendez was not a Jones Act seaman because he had no connection with a vessel in navigation. The court also noted that Mendez had applied for, and received, LHWCA benefits. (USDC SDTX, November 9, 2010) 2010 U.S. Dist. LEXIS 118893

THESE DUAL CAPACITY DOCTRINE CASES ARE TOO CONFUSING FOR ME
SMITH V. MARINE TERMINALS OF ARKANSAS, INC.

Billy D. Smith worked for Marine Terminals of Arkansas, Inc. driving 50-90 ton trucks, hauling various types of loose iron or steel from a dock barge owned by Marine Terminals to a scrap yard owned by Nucor Corporation. Occasionally, Smith would walk along the roadway between the dock barge and the scrap yard to retrieve scrap steel that fell off the trucks. The dock barge was a floating dock near the riverbank tied to the shore by suspension cables and connected to land by a ramp. Smith would back the truck down the ramp onto the dock barge where a crane operator would transfer iron or steel from river barges to the truck using a hydraulic crane fitted with a clamshell bucket. Smith was allegedly injured when he placed his hand in a clamshell bucket, without the knowledge of the operator, and the operator closed the bucket. Smith filed a Jones Act and general maritime suit against Marine Terminals for negligence, unseaworthiness and maintenance and cure; and for damages under the LHWCA under §905(b). Marine Terminals moved for summary judgment on Smith's claims under the Jones Act, for unseaworthiness, and for maintenance and cure, arguing that, as a matter of law, Smith is not a seaman. As to Smith's claim under §905(b), Marine Terminals argued that, as a matter of law, no negligence can be attributed to it in its capacity as a vessel owner—a sine qua non for §905(b) liability. The first issue the court addressed was whether Smith was a seaman or a longshoreman. Marine Terminals argued that Smith's duties were not of a seagoing nature but rather land based and, therefore, Smith's employment duties were not substantially connected to the dock barge in nature. Marine Terminals also argued that since Smith is not a seaman, but rather a longshoreman protected under the LHWCA, Smith is barred from recovering for unseaworthiness under maritime law. Focusing on "the essence of what it means to be a seaman" and "the congressional purpose" in enacting the Jones Act, the court concluded that Smith was not a seaman. Apart from "tests that tend to become ends in and of themselves," the court held that no reasonable person would classify Smith's job as that of a seaman. Smith was a land-based worker whose duties included assisting in unloading barges from a floating dock a few feet from the riverbank. His primary job was driving a truck. As noted, he also assisted to some extent in unloading cargo from barges into the truck that he drove. He was therefore a truck driver and a longshoreman. Because Smith was a longshoreman, the court turned to Smith's §905(b) claim. On that claim the issue is whether the negligence that caused Smith's injury is attributed to Marine Terminals in its capacity as a vessel owner or in its capacity as employer engaged in stevedore operations. The court found that Smith was injured while working on a vessel the sole purpose of which was to engage in stevedore operations. The court declined to say as a matter of law that Smith was not engaged in vessel operations because in this instance vessel operations and stevedore operations were one and the same. The court noted that a jury could find that the dock barge did play a direct role in Smith's injury on the ground that Marine Terminals as vessel owner failed to provide a vessel with equipment required to safely draw the slack from the suspension cables. Marine Terminals’ motion for summary judgment was granted on Smith's Jones Act claim, unseaworthiness claim, and maintenance and cure claims, but denied on Smith's §905(b) claim. (USDC EDAK, November 17, 2010) 2010 U.S. Dist. LEXIS 121909

REMOVAL OF THE CASE TO FEDERAL COURT HELD TO BE PREMATURE
NIKITJUKS V. STOLT-NIELSEN, S.A. ET AL.

Andrejs Nikitjuks, a Latvian citizen, was a seaman employed by Stolt-Nielsen, S.A. and assigned to work on board one of its vessel. Nikitjuks was allegedly injured when a Teflon envelope gasket of a cargo tank's hydraulic valve burst and sprayed a dangerous chemical, caustic soda, on him. Nikitjuks filed a Complaint in state court asserting claims against under the Jones Act and §905(b) of the LHWCA. Stolt-Nielsen removed the case to federal court, contending that removal was proper in this case because the Jones Act does not apply and asking the court to apply the Lauritzen-Rhoditis factors and hold that it was not an "employer" for the purposes of the Jones Act. The court declined Stolt-Nielsen’s invitation, finding that it would be inappropriate for the court to engage in a Lauritzen-Rhoditis analysis at this time, noting that the Lauritzen-Rhoditis analysis should be used to determine choice of law, not subject matter jurisdiction. The court pointed out that, since a Lauritzen-Rhoditis analysis would implicate choice of law questions concerning Stolt-Nielsen’s contacts with the United States, an analysis of these issues before the parties undertake discovery would be inappropriate. The court also noted that this was not a case where the inclusion of a Jones Act claim appeared to be fraudulent. It opined that it is far from certain that discovery will show that Nikitjuks’s Jones Act claims will fail. Although several factors favor Stolt-Nielsen, such as the foreign citizenship of Nikitjuks and the foreign corporate status of Stolt-Nielsen, the court found it may only deny remand if, as a matter of law, there is no reasonable basis for predicting that Nikitjuks will prevail. The court concluded that the removal was improper and remanded the case to state court. (USDC EDPA, October 28, 2010) 2010 U.S. Dist. LEXIS 115525

OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS

Digest #226

The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #226. 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 . . .

LIAR, LIAR, PANTS ON FIRE (CONT.)
ATLANTIC SOUNDING CO. INC. V. PETREY

Circuit Court Opinion

Timothy Petrey was a seaman employed by Atlantic Sounding Co. Inc., as a crewmember of a tug. Petrey alleged that he was injured while taking a Great Lakes Dredge & Dock dump scow under tow to dump dredge spoil (Great Lakes settled with Petrey before trial). Atlantic filed a declaratory judgment action against Petrey, arguing that Petrey’s alleged “injury” was the result of a dislocation of his pre-existing prosthetic hip, which Petrey had concealed at the time he was hired. Atlantic asked the court to declare that it did not owe Petrey maintenance and cure because of this intentional concealment. Petrey filed a counterclaim under the Jones Act and the general maritime law against Atlantic, alleging Jones Act negligence, unseaworthiness, and a claim for maintenance and cure. Petrey contended that he is not barred from receiving maintenance and cure because he did not conceal his hip replacement. Petrey argued that the entire crew knew about his hip replacement, that he had carelessly filled out the medical questionnaire, and that he had disclosed the hip condition to the examining physician at the time of his physical for Atlantic. Petrey also maintained that his “injury” did not occur as the result of the spontaneous dislocation of his hip, but was the result of the popping of a fouled tow cable that hit him. After initially denying Atlantic’s motion for summary judgment [see December 2009 Longshore Update], the court held a bench trial on the maintenance and cure and negligence causes of action, holding that Petrey’s unseaworthiness cause of action had been abandoned when he settled with Great Lakes. Based upon the testimony of the physician who conducted the post-offer medical examination, that had he known of Petrey’s hip prosthesis he would not have cleared Petrey as capable of performing the duties of a deckhand, combined with the testimony of Atlantic representatives that they would not have hired Petrey, had he properly disclosed his condition, the court held that Petrey had forfeited his right to maintenance and cure because he had intentionally concealed his pre-existing hip replacement which was material to Atlantic’s decision to hire him. Turning to Petrey’s negligence cause of action, the court found that Petrey had failed to prove by a preponderance of the evidence, even under the featherweight standard of proof of causation under the Jones Act that the negligence of Atlantic caused his injury, in whole or in part [see April 2010 Longshore Update]. Petrey appealed the trial court’s ruling in favor of the employer, arguing that the district court erred when it denied him recovery of maintenance and cure benefits, arguing that the district court incorrectly applied the McCorpen defense. Specifically, Petrey argued that the court had established a fourth element to the McCorpen defense, which the district court failed to address in its decision. Affirming, the appellate court ruled that Petrey’s argument was incorrect; the McCorpen defense had only three elements. Based on the record, the district court did not err by finding that Petrey had misrepresented or concealed his hip replacement from his employer. The district court did not err by determining that this misrepresentation was material to the employer's decision to hire Petrey. In addition, the district court did not err in concluding that the employer would not have hired Petrey as a deckhand if the company had known during the hiring process about his hip replacement and prescription medication consumption. And, the district court correctly determined that the seaman's hip replacement was connected to his workplace injury. Thus, the trial court correctly determined that the employer had established a McCorpen defense that precluded Petrey’s collection of maintenance and cure benefits. (5th Cir, November 23, 2010) 2010 U.S. App. LEXIS
Updater Note: Another great win for Matt Popp of Waits, Emmett & Popp, New Orleans, LA.

FALLON’S CORRECTED MAINTENANCE & CURE FOLLY AFFIRMED ON APPEAL
SALIS V. L&M BOTRUC RENTAL, INC.

Circuit Court Opinion

Raymond Salis was employed as a deckhand aboard a vessel owned and operated by L&M Botruc Rental, Inc., when he claimed that he injured his neck and upper back carrying a box containing water jugs from the cooler on the rear deck of the vessel to the galley. Nevertheless, Salis continued working. Four months later, Salis alleged that he further aggravated his previous injuries when transporting boxes of groceries from the shore to the vessel. After this injury, Salis was transported from the vessel for medical care but, because Salis would not undergo the Coast Guard's mandatory drug test, he was not examined or treated by the doctor. Salis was later seen by another physician of his own choosing, who recommended cervical surgery if conservative treatment failed. Salis eventually returned to his regular duty on L&M’s vessel, until his seaman's license was suspended by the U.S. Coast Guard for failure to take the required drug test. Salis filed suit contending that his injuries were the result of L&M’s negligence and the unseaworthiness of its vessel. L&M denied any liability and moved for summary judgment on Salis’s claims. Following oral argument the court granted L&M’s motion with respect to Salis’s negligence and unseaworthiness claims [see April 2010 Longshore Update]. Salis appealed the judgment rendered by the trial court. The appellate court determined that Salis’s Jones Act negligence claim failed because (1) the ship's captain could not recall another individual injuring himself in such a manner or reporting such an injury, and (2) the bare existence of another transportation method by which Salis’s particular injury might not have occurred, with no additional citations or legal arguments, could not demonstrate a lack of "ordinary prudence" by L&M in allowing crewmen to transport the goods in that manner. At the time Salis returned to work, he had no right to maintenance or cure because he reached maximum medical recovery since he had no pain or symptoms and 100% functional improvement. The appellate court affirmed the district court's grant of summary judgment in favor of L&M. (5th Cir, November 3, 2010, UNPUBLISHED) 2010 U.S. App. LEXIS 22885

PORT RISKS INCLUDES CONTAMINATION OF SEDIMENTS
ZRZ REALTY CO., ET AL. V. BENEFICIAL FIRE & CASUALTY INS. CO., ET AL.

State Supreme Court Opinion

The Supreme Court of Oregon ruled that a protection and indemnity insurance policy for “port risks” includes coverage for contamination of sediments that occurred when the ship was scrapped. ZRZ Realty Company acquired and dismantled, at its shipyard, decommissioned military and commercial ships in the years following World War II. Defendant insurers wrote various lines of insurance to ZRZ, including P&I coverage for the various ships. The policies included coverage for “port risks,” defined as including loss or damage to any fixed or moveable thing whatsoever, or to any goods or property in or on the same howsoever caused. In 1994, the State of Oregon asserted that ZRZ was responsible for contamination of sediments on the bottom of the river in the vicinity of the old shipyard. When the insurers declined to cover the costs of cleanup, ZRZ brought suit. The court ruled that the “port risks” language was sufficiently broad as to require the defendant insurers to indemnity ZRZ to the extent that the sediment in the river was contaminated by reason of ZRZ’s interest in the insured ships. (Ore. Sup. Ct., October 14, 2010)

COURT REFUSES TO ALLOW ATTEMPT AT DOUBLE DIPPING IN JONES ACT CASE
HUGHES V. SHEPLER, INC., ET AL.

Appellate Court Opinion

Michael Hughes allegedly injured his right shoulder while moving a loaded luggage cart during the course of his employment as a senior deckhand aboard a vessel owned by Shepler Inc., that ferries people between an island and the mainland. Shepler's workers' compensation carrier paid Hughes benefits for wage loss and medical expenses totaling $98,487. While receiving workers' compensation benefits, Hughes filed a Jones Act and general maritime law suit against Shepler. The trial court denied a motion for summary disposition filed by Shepler, finding that Hughes was indeed a seaman for purposes of the Jones Act. Thereafter, a settlement agreement and release was executed whereby Shepler, agreed to pay Hughes $230,000. Shepler’s workers’ compensation carrier filed a notice of lien in the admiralty suit, wherein it asserted a right to a lien in the amount of $98,487 against any recovery by Hughes against Shepler. The trial court ruled that Shepler’s workers’ compensation carrier was entitled to the full recovery of the $98,487 pursuant to a lien against the settlement, which was necessary to avoid a double recovery. Hughes appealed the trial court's order placing a $98,487 lien on his $230,000 settlement recovery, contending that the trial court erred in allowing the workers’ compensation carrier to maintain the lien against the settlement amount, where the Jones Act settlement recovery already reflected or took into account a reduction equal to the $98,487 lien. Hughes also asserted that the trial court erred in allowing the lien, where there is no statutory support for the lien under the Workers' Disability Compensation Act (WDCA). Finally, Hughes argued that, under MCL 418.833(2), the insurance carrier was only permitted to recoup workers' compensation benefits paid to Hughes within one year of its efforts to recoup the payments. The appellate court held that the underlying principle against double recovery applied to the case, finding the Hughes essentially recognized the potential of a double recovery when he filed the admiralty suit and requested maintenance and cure, and the complaint indicated that any award entered needed to be subject to a credit for all compensation payments. The appellate court rejected Hughes’ argument that there was no double recovery because the settlement took into consideration the $98,487 already paid to him, finding there was nothing in the record, including the settlement agreement and release, supporting the contention that the $230,000 settlement amount reflected consideration of and reduction by the $98,487 already paid to Hughes. Indeed, the settlement agreement and release reflected the contrary. Because Hughes’s admiralty suit included a claim for maintenance and cure, which is analogous to a claim for workers' compensation benefits, and because the settlement agreement did not delineate between maintenance and cure payments and damages relative to what comprised the $230,000 settlement agreement, The court held the insurer was entitled to a lien in order to prevent a double recovery by Hughes. Nevertheless, the court also held that the insurer’s lien was subject to the limitations set forth in MCL 418.833(2), holding that remand was necessary to calculate the extent of the lien amount under MCL 418.833(2). The trial court’s decision was affirmed with respect to the imposition of a lien on the settlement, but reversed and remanded for a calculation as to the extent of the lien amount under MCL 418.833(2). (Mich. App Ct., October 26, 2010, UNPUBLISHED) 2010 Mich. App. LEXIS 2066

NO PUNITIVE DAMAGES WITHOUT THE PROPER EVIDENTIARY SHOWING
ROYAL CARIBBEAN CRUISES, LTD. V. DOE & DOE

Appellate Court Opinion

Alexander Rutta, an extremely intoxicated crewmen who was employed by Royal Caribbean, Cruises, Ltd., attacked several passengers during a cruise. Respondent passengers sued Royal Caribbean, seeking damages arising out of the incident. The trial court entered orders granting the passengers leave to amend the complaint to seek punitive damages and allowing the passengers to depose the cruise line's representative in a number of areas. The cruise line sought certiorari relief quashing both orders. The appellate court initially noted that the passengers' motion was filed approximately one month before the trial was scheduled to begin. The appellate court found that the record indicated that trial court did not made an evidentiary inquiry and/or factual determinations. Under §768.72, Fla. Stat., no claim for punitive damages was permitted unless there was a reasonable evidentiary showing of a reasonable basis for such damages. The trial court relied on a case under which punitive damages would only have been potentially available if the cruise line participated or ratified the employee's behavior. The trial court made no such finding, and a review of the complaint, proffer, and depositions revealed no such claim. The appellate court concluded that the trial court's failure to adhere to the § 768.72 procedure was a departure from the essential requirements of the law, reviewable by certiorari. The requests made in three paragraphs and a portion of a paragraph of the order allowing the deposition were barred by a prior appellate ruling. The passengers were entitled to their requests in two other paragraphs because they were not departures from the essential requirements of law. The petitions were granted, the trial court's order granting the passengers' motion to amend their complaint to assert a punitive damages claim was quashed, and portions of the trial court's order regarding the discovery issues were also quashed. (Fla. 3rd App, September 29, 2010) 44 So. 3d 230; 2010 Fla. App. LEXIS 14492

HAVE YOU EVER HEARD OF AN OBSCURE RULING KNOW AS MCCORPEN?
JVA ENTERPRISES, I, LLC, ET AL. V. PRENTICE

Appellate Court Opinion

James Prentice, chief engineer on a yacht owned and operated by JVA Enterprises I, LLC and Enterprises, Inc. (collectively “JVA”) respectively, sued JVA, seeking damages for alleged neck and shoulder injuries allegedly suffered on the yacht. JVA sought dismissal because Prentice failed to disclose a prior documented neck and shoulder injury. The trial court declined to dismiss on this basis, and then ordered in limine that evidence of the prior injury was precluded. A jury then returned a verdict for Prentice. JVA appealed. The appellate court found that the trial court properly declined to dismiss. The engineer disclosed in his interrogatory answers a prior back injury and that he had a workers' compensation claim and a third party claim. This disclosure led to discovery of the prior neck and shoulder injuries. While the prior injuries may not have been the identical injuries sustained while employed by JVA aboard the yacht, it involved the same area of Prentice’s body, and was relevant to his credibility. The appellate court concluded that JVA should have been allowed to cross-examine Prentice on the prior injury, complaints, and workers' compensation claim and, therefore, the trial court abused its discretion by excluding such evidence. The prejudice to JVA by this improper exclusion of evidence was compounded by comments made in final argument by Prentice’s counsel. The judgment against JVA was reversed and the case was remanded for a new trial. The final judgments awarding pre-judgment interest, attorney's fees and costs, were likewise reversed. (Fla. 4th App, November 10, 2010) 2010 Fla. App. LEXIS 17151

WHAT DOES IT MEAN TO "MANIFEST" A DISEASE FOR ADMIRALTY PURPOSES?
MESSIER V. BOUCHARD TRANSPORTATION

Richard Messier asserted that he was entitled to maintenance and cure pursuant to general maritime law, because he suffered from B-cell lymphoma while serving as a seaman aboard Bouchard’s tug. Messier’s illness was asymptomatic during the entire time he was serving on the vessel, and that was not diagnosed until over a month after his service ended — but which he undoubtedly contracted some months earlier, and suffered from (albeit without exhibiting any symptoms) while he was in the service of the Bouchard’s ship. The final day of what was ultimately Messier's last hitch aboard Bouchard’s vessel was October 23, 2005. Following some routine blood work on October 25, 2005, Messier’s physician called him on October 28, 2005 and advised him that the blood test revealed some elevation in his creatinine level. Messier's blood was tested a second time, on November 2, 2005; in just a week his creatinine level had risen to 8.0mg/dL. In late December 2005 — two months after he left Bouchard’s vessel— Messier was diagnosed with B-cell lymphoma. From January 2006 until October 2006, Messier suffered bouts of debilitating symptoms resulting from his lymphoma and the effects chemotherapy and radiation treatment. He did not return to work until October 2006. By that time, his illness had subsided, and Messier was able to begin working for a different shipping company. Both parties moved for summary judgment on the issue of whether Messier is entitled to maintenance and cure. Messier suggested two possible theories of recovery: first, that his illness manifested while he was in the service of Bouchard's ship; and second, that his illness manifested at a time when he was otherwise entitled to maintenance and cure. The court observed that the outcome would depend on a pure question of law: whether the word "manifest" is a synonym for "have" — even if the disease is asymptomatic throughout the period of the seaman's work for the defendant — or whether one must "show symptoms" of a disease while in service of the ship in order to "manifest" it. The court noted that the question was one of first impression in the Circuit. Messier argued that a person "manifests" a disease if he has it — even if the disease is completely asymptomatic and does not interfere with a seaman's work on board the ship, and even if it is not diagnosed (or even suspected) until after the seaman has left the service of the ship. Bouchard urged that "manifesting" a disease requires exhibiting symptoms of the disease during the period while the seaman is in the service of the ship. Since Messier forthrightly testified that he did not recall suffering any symptoms that might have been related to his lymphoma during his final hitch aboard the vessel, Bouchard argued that this concession bars Messier from recovering for maintenance and cure. Following a thorough review of cases in other circuits that had touched on the issue, the court held that the dictionary definition of "manifest" is consistent with the numerous cases holding that a seaman is entitled to maintenance and cure, regardless of when the disease was definitively diagnosed, as long as he showed symptoms of the disease during his tour of duty. The court declined the invitation to extend the applicability of maintenance and cure to diseases that were not made evident or certain by showing or displaying symptoms during service to a ship. Because Messier’s own testimony indicated that he failed to manifest his lymphoma while he was in the service of the ship, the court held that he was precluded from receiving maintenance and cure under his first theory. The court also rejected Messier’s alternative argument that he is entitled to maintenance and cure for his lymphoma because it manifested at a time when he was entitled to maintenance and cure an alleged back injury that he suffered while in the service of the ship, noting that Messier admitted that he never sought maintenance or cure for his back injury, let alone was collecting same when the first symptom of his lymphoma appeared. As neither of Messier’s theories entitled him to relief, Bouchard’s cross motion for summary judgment dismissing the complaint was granted, and Messier’s motion for summary judgment was denied. (USDC SDNY, November 22, 2010) 2010 U.S. Dist. LEXIS 123994

COURT POURS OUT AMPUTEE SEAMAN ON ALL CLAIMS WITH NO PRE-HIRE EXAM
FIRESTONE V. GIBSON , ET AL.

Gerry Niles Firestone was employed as a crewman on the fishing vessel operated by Richard C. Gibson and owned by Billy B. Inc., when he was allegedly injured. Firestone claimed that as the vessel was anchored up and fishing, and as he was walking the boat rolled (from waves) and his right foot caught in the bird that was positioned in the walkway. However, at his initial medical evaluation, Firestone denied any trauma to the foot and just complained of the insidious onset of pain two days prior. The clinical impression was arterial insufficiency of the right lower extremity and Firestone later underwent amputation of his right leg below the knee. Firestone had an extensive medical history of prior injuries, including a judgment from an ALJ the concluded that he was totally disabled in October of 2002 because he had a severe medical impairment to his right ankle including degenerative disease status post open reduction, internal fixation of pelvic and right ankle fractures with residual right foot drop. When Firestone came to work for Gibson, he was 100% disabled and had been for almost 6 years, but he did not tell Gibson this information. Gibson did not require a pre-employment physical as a prerequisite to hiring crewman for the vessel. Nor, did Gibson conduct an interview with Firestone to determine his physical fitness. Instead, Gibson relied on Firestone to tell him of any physical conditions he had that would affect his safety offshore and his ability to perform as a crewman. Gibson contended that if Firestone had revealed his total disability, Firestone never would have been hired. as a crewman. Firestone filed a Jones Act and general maritime law complaint against Gibson and the vessel owner (collectively “Gibson”), seeking damages for negligence, unseaworthiness, maintenance & cure and punitive damages. Gibson filed a motion for summary judgment as to all of Firestone’s causes of action, arguing that Firestone’s amputation had no connection to his alleged injury and that Firestone’s concealment of his past medical should bar maintenance and cure. The court found that even if it were to assume that Firestone could prove negligence and that he injured his foot on the bird (twisting his right ankle) while employed on the vessel, even Firestone conceded that he was unable to provide evidence to establish proximate causation (i.e., that this injury, rather than his chronic medical condition, proximately caused his right leg to be amputated). Additionally, the medical evidence suggested a contrary finding. Notwithstanding the fact that Gibson did not require Firestone to submit to a pre-hiring medical examination or interview, and Firestone was asked no pre-hire questions concerning his medical history, the court also held that Firestone forfeited his entitlement to maintenance and cure because there was nothing in the record suggesting that Firestone believed that he was fit for duty when hired by Gibson. Instead, the court had Gibson had established that Firestone could reasonably be expected to have considered his medical history a matter of importance to Gibson, noting the Firestone had been a fisherman with over 20 years of fishing experience and who was 100% disabled at the time of pre-hire. The court granted Gibson’s Motion for Summary Judgment as to all of Firestone’s causes of action. (USDC SDAL, November 12, 2010) 2010 U.S. Dist. LEXIS 120381

JUDGE WANTS PALLIATIVE CARE INCLUDED IN EMPLOYER’S CURE OBLIGATION
HANEY V. MILLER'S LAUNCH, INC., ET. AL.

Deckhand, Robert Haney, was allegedly injured when his vessel ran into a pier and then a bulkhead, while docking in choppy seas, and Haney was thrown to the deck of the vessel. The accident was supposedly caused by the failure of a cotter pin on the vessel’s transmission control lever. Haney sued Miller's Launch, Inc. for negligence, alleging that his employer failed to properly maintain and operate the vessel he was assigned to, that the vessel was unseaworthy; and that Miller's Launch failed to provide him with prompt medical care for injuries he sustained when the vessel hit a pier. Haney sought additional maintenance and cure payments for back and neck pain and surgery. Miller's Launch moved for summary judgment or, in the alternative, a limitation on liability, arguing the vessel was not negligently operated, the vessel was not negligently maintained and was seaworthy; and Haney is not entitled to additional maintenance and cure payments because he had obtained maximum medical improvement and residual pain and suffering is not compensable. Miller's Launch also moved to limit their liability to $75,000, the claimed value of the vessel. The court found that, while Miller’s Launch’s expert had examined Haney and determined that he had reached maximum medical cure and was fit to return to work, Haney was seeking additional payments for spinal surgery and his treating physician had opined that his medical condition, degenerative disk disorder, would improve with such surgery. There was also a question of whether Haney's preexisting disk disorder is unrelated to the accident, or whether the accident exacerbated a preexisting condition. The court concluded that these questions of fact required a trial. The court also found that there were sufficient questions of fact surrounding the issues of negligence and unseaworthiness that required a jury’s consideration. The court found that Miller’s Launch had not established limitation of liability, because Haney had provided sufficient evidence to raise a genuine issue as to the competence of the vessel captain and seaworthiness of the vessel as well as the negligence of the Vice President of Operations when he ordered a return of the vessel to the pier at Staten Island before providing Haney with medical care. Control by Miller's headquarters was sufficient to indicate knowledge on the part of an executive in charge. (USDC EDNY, November 15, 2010)
Update Note - The really scary part of this decision is the dicta espoused by this Senior District Court Judge. After surfing the internet and visiting, of all places, the site of the American Academy of Pain Medicine, he came to the conclusion that, “The cost of palliative medical attention to reduce pain, even after physical injuries have been corrected to the extent practicable, should be included in treatment and cure of injured seamen.” Read the law judge! There is nothing ambiguous about Farrell, which holds explicitly that the duty of maintenance and care ends when a disability has been found to be permanent. The only exception it recognizes is the possibility of recovering for curative treatment in a later proceeding, and of maintenance while receiving such treatment. In the context of the Farrell opinion, this reference is clearly to treatment of a curative nature such as a new drug or a new surgical technique, and not to the palliatives which seaman Farrell still required. (also see Desmond v. United States, 217 F.2d 948 (2nd Cir. 1954)). In commenting on the vessel owner’s limitation of liability claim, he remarked, “The underlying theory of limited liability as a policy to encourage investment in risky, long sea voyages has little relevance to [Miller’s Launch vessel’s] meanderings within New York harbor, in sight of its home port.” I agree that the policies espoused in support of maintenance and cure should not be applicable to the harbor seamen, but the remedy is that maintenance and cure should not be extended to them, not to overturn established principles. This Senior Judge needs to be put out to pasture.

COURT THROWS OUT BACK CLAIM BASED ON INTENTIONAL CONCEALMENT
LUCE V. C&E BOAT RENTAL, LLC

Mark Luce alleged that he is a Jones Act seaman who had been hired as a deckhand by C & E Boat Rental, L.L.C. and injured his lower back while working. Before being hired by C&E Luce had sought treatment for back pain on a number of occasions. However, Luce signed a C&E employment application form denying that he ever had problems with his back and/or a back injury. Luce also denied any prior back treatment on his pre-employment medical questionnaire. According to C&E's general manager, C&E would not have hired Luce if it had known of the back problems he had before applying for work with C&E. Luce filed a lawsuit against C&E seeking, among other forms of relief, maintenance and cure. Asserting a McCorpen defense, C&E filed a motion for partial summary judgment with respect to its obligation to provide Luce with maintenance and cure. The court found that Luce intentionally misrepresented medical facts on the form he filled out during his pre-employment medical examination and that this misrepresentation was sufficient to satisfy McCorpen's intentional concealment prong. The court also found that Luce had failed to provide any compelling evidence or argument suggesting that C&E has not fulfilled McCorpen's second prong. Finally, the court found that by establishing that Luce's old and new injuries both occurred at the L5-S1 region of Luce's spine, C&E had made sufficient showing of causal relationship. As no material issue of fact existed with respect to whether C&E had fulfilled McCorpen's third prong, the court granted C&E's motion for partial summary judgment with respect to maintenance and cure. (USDC EDLA, November 2, 2010) 2010 U.S. Dist. LEXIS 116620

LEFT OR RIGHT? AREN’T WE SPLITTING HAIRS HERE?
BILLIOT V. CHERAMIE MARINE, LLC, ET AL.

Keith Billiot was employed by Cheramie Marine, LLC as a deckhand aboard one of its vessels, when he allegedly sustained an injury to the left shoulder and back, when the bitt on a platform, to which his vessel was tied, broke and he was hit with the rope. Cheramie required Billiot to complete a medical questionnaire when he was hired, which inquired whether he had any significant medical history. Billiot responded “No” to all questions, including those regarding back injuries and back pain. Billiot eventually underwent arthroscopic shoulder surgery and his physician has recommended lumbar fusion surgery. Billiot filed suit against Cheramie, alleging that Cheramie is liable for negligence, unseaworthiness, and maintenance and cure. Cheramie filed a motion for summary judgment arguing that it is not liable for maintenance and cure because Billiot failed to reveal a preexisting back injury in his pre-employment medical questionnaire, it was not negligent, and the vessel involved was seaworthy. The court observed that Billiot’s current injuries were to his left shoulder and left lower back and that his prior undisclosed injury was an injury to his right lower back. The court ruled that Cheramie had not presented any medical evidence regarding the similarities of the injuries and whether the injuries were connected, holding that the third element of the McCorpen defense had not been satisfied. The court noted that Billiot argued that Cheramie was negligent because the vessel continued to work in seven to nine foot seas, with peak wave heights of eleven to fifteen feet, and the captain left the stern controls, making it difficult for him to reach the controls once he noticed the stretching of the line that parted and struck Billiot. The court found that there were genuine issues of material fact regarding whether Cheramie was negligent for continuing the operations in the weather conditions, and whether the vessel captain was negligent for allowing the vessel to be held in place by the current, and standing in a position which prevented him from reaching the stern controls once he noticed the rope stretching. Finally, the court found that Billiot’s accident occurred when a bitt on the platform broke. The court concluded there was no evidence that there was any unseaworthy condition of Billiot’s vessel, holding that Cheramie was entitled to summary judgment on Billiot’s unseaworthiness claim. Cheramie’s Motion for Summary Judgment was denied as to the maintenance and cure and Jones Act negligence claims, but granted respecting the unseaworthiness claim.

AN INFECTION CAUSED MY KNEE TO GIVE WAY - YEAH RIGHT!
MEIER V. GLOBAL INDUSTRIES OFFSHORE LLC, ET AL.

Bernhard Meier worked as a mechanical engineer for Global Industries Offshore LLC on one of its barges. Meier was diagnosed with an infection that he alleged he contracted while working on the barge. The infection was diagnosed as cellulitis and Meier was prescribed antibiotics, released for work, and he eventually returned to the barge. Less than three weeks later, Meier alleged that the infection caused his right knee to become unstable, causing him to fall and injure his knee. Thereafter, Meier filed suit asserting causes of action for Jones Act negligence and unseaworthiness of the barge. After the close of discovery, Global moved for summary judgment, asserting that Meier had failed to present medical or other scientific evidence of causation and, therefore, his claims should fail. The court agreed, finding that Meier had failed to present evidence from an infectious disease specialist regarding the true incubation period for his infection. Consequently, the court held that Meier had not presented evidence to raise a fact issue regarding a causal connection between his presence on the barge and his infection. Additionally, Global presented uncontroverted evidence that it cannot be determined to a reasonable medical probability that any infection Meier contracted would have caused or contributed to the knee problems. Meier’s own treating orthopedic surgeon informed him that there was no connection between his knee complaints and any type of infection. The court concluded that Meier had not presented medical or other scientific evidence that raises a genuine issue of material fact regarding the causation element of his Jones Act and unseaworthiness claims. Global’s motion for summary judgment was granted. (USDC SDTX, October 29, 2010) 2010 U.S. Dist. LEXIS 115490

DIVE PLATFORM IS A VESSEL AND DIVER IS A JONES ACT SEAMAN
PETTIS V. BOSARGE DIVING, INC.

Brian Pettis worked for Bosarge Diving, Inc. primarily as a diver. On one occasion during his employment, Pettis required treatment in a hyperbaric chamber but was released and resumed diving for Bosarge. Subsequent to the termination of his employment with Bosarge, Pettis sought medical treatment for dizziness, nausea, and light-headedness which was diagnosed as vertigo. Pettis alleged that the decompression sickness he experienced with Bosarge, caused this damage, and as a result, he has continuous recurrence of these symptoms as well as memory problems, confusion, and insomnia. Pettis also alleged that he is no longer able to work as a diver. Pettis filed his maritime personal injury action against Bosarge alleging Jones Act negligence and general maritime law causes of action. Bosarge argued that the diving platform, which Pettis dove from while he was employed, was not a vessel in navigation and not subject to the perils of the sea. Pettis asserted that the diving platform was a special purpose watercraft and therefore, a vessel as contemplated under the Jones Act. Upon consideration of the facts adduced at trial and in the trial briefs, and applying the broad provisions of Stewart, the court found that the diving platform was a watercraft used as a means of transportation on water and vessel in navigation as required for seaman status under the Jones Act. Examining Pettis’s overall work duties, the court found that his duties contributed to both the function and the accomplishment of the mission of the vessel. The court also found that Pettis had presented sufficient evidence to establish that he had a connection to the vessel and the Bosarge fleet which was substantial in terms of both its duration and its nature. Accordingly, the court found that Pettis was a seaman at the time of his alleged injury. Turning to the case in chief, the court denied Pettis’s claim of negligence per se, finding that Bosarge had met its burden to show that no violation of Coast Guard regulations was causally related to, or the proximate cause of, Pettis suffering from decompression sickness. However, the court did find that Bosarge was negligent in monitoring the depth of Pettis' dives and was negligent in its control of Pettis' ascent rate. Since Bosarge failed to present any evidence that Pettis failed to act with ordinary prudence based upon his experience, training or skill, in the dive, no contributory negligence was found. The court found for Bosarge as to Pettis’s unseaworthiness claim. The court found that Pettis was only entitled to damages of $10,000 for pain and suffering, and held that Pettis was not entitled to recover future wages because he had failed to show that he is unable, as a result of the single episode of decompression sickness, to earn comparable wages. The court also found that Pettis was not entitled to recover future medical expenses because he has failed to prove that he has any residual disability as a result of the episode of decompression sickness. (USDC SDAL, November 2, 2010) 2010 U.S. Dist. LEXIS 116575

SLAM DUNK
DIXON V. THE BRIDGEPORT & PORT JEFFERSON STEAMBOAT COMPANY

James A. Dixon, Jr. was employed as a purser and an able bodied seaman by Bridgeport & Port Jefferson Steamboat Co. (B&PJS). Shortly following an on-board emergency drill, called by the officers of the vessel, Dixon tragically had a heart attack and died. Ina Dixon, admimstratrix of the decedent’s estate, filed a suit under the Jones Act and general maritime law, alleging negligence and unseaworthiness of the vessel. B&PJS filed a motion for summary judgment, arguing that it is entitled to summary judgment on the Jones Act claim because the plaintiff had failed to produce any evidence showing an act or omission by which B&PJS breached a duty to the decedent. B&PJS also argued that it is entitled to summary judgment on count two of the complaint because the plaintiff had failed to show an unseaworthy condition that caused injury to the decedent. The plaintiff responded by arguing that the supporting affidavits submitted by B&PJS should not be considered and that, even if they are, there are genuine issues of material fact in dispute regarding both counts. The court found that each of the affidavits submitted by B&PJS, in support of its motion, were based on personal knowledge. Each affiant had personal knowledge of the events aboard the B&PJS vessel on the date of the decadent's death and the affidavits submitted reflect that knowledge. The court also found that plaintiff's hearsay argument failed. While it is undoubtedly true that hearsay evidence is inadmissible for the purpose of supporting or defeating a motion for summary judgment, exclusion of such statements does not prevent a court from considering other portions of the affidavit. To the extent the affidavits reflected personal knowledge they were held admissible. The evidence submitted by B&PJS demonstrated that the lifeboat and fire drills occurred every few weeks on the vessel and consisted primarily of lowering and raising a wooden lifeboat by using two winches. The fire drill involves deploying a hose and using it to shoot water off of the side of the vessel. The drills are required by the United States Coast Guard. The equipment on the boat was in good working order and was inspected on a weekly basis. Finally, the evidence shows that while the decedent did perspire some in the heat, as did the other members of the crew, he did not look sick or otherwise injured during the drills. Applying these facts to the case, the court found that B&PJS would not have foreseen the type of harm suffered by the decedent. These short emergency drills were the same ones the crew had performed many times before, the work was disbursed among multiple individuals and the decedent showed no sign of illness. Consequently, the harm suffered was not foreseeable and B&PJS owed the decedent no duty to protect him from it. Absent such a duty, the court found B&PJS entitled to summary judgment as a matter of law. Tuning to the unseaworthiness cause of action, the court noted that there was no claim that the vessel was defectively equipped. Instead, the plaintiff alleged that the vessel was unseaworthy because B&PJS failed to: (1) train its staff in the performance of emergency drills, (2) staff the boat adequately, (3) give employees more advance notice of the drills, (4) require medical examinations of its crew before holding the drills, (5) perform the drills at an appropriate time, and (6) install certain labor saving devices. The court rejected these charges, noting that the undisputed evidence submitted by B&PJS indicated that these emergency drills were performed aboard the vessel on a regular basis using the same equipment under similar conditions. The court found that the plaintiff had failed to submit any evidence showing that any of the alleged deficiencies were a factual or proximate cause of the decedent's death. Absent such evidence, no reasonable jury could conclude that the above mentioned conditions caused the injury. Therefore, the court also granted summary judgment in favor of B&PJS on the unseaworthiness count of the plaintiff's complaint. (Conn. Super, October 15, 2010) 2010 Conn. Super. LEXIS 2676

NO GENERAL OR SPECIFIC JURISDICTION TO HEAR JONES ACT CASE
LEEBOLT V. HORNBECK OFFSHORE SERVICES, INC.

Thomas Leebolt, an employee of Hornbeck Offshore Services, Inc. and resident of California, filed suit, seeking relief for injuries he allegedly suffered while aboard Hornbeck’s vessel, while it was docked pierside in Louisiana. Hornbeck is a Delaware corporation with its principal place of business in Covington, Louisiana. After being served with Leebolt’s lawsuit, filed in Southern California, Hornbeck filed a motion to dismiss the complaint, on the grounds that the court lacked both general and specific jurisdiction over Hornbeck, pursuant to FRCP Rule 12(b)(2). Leebolt opposed Hornbeck’s motion. The court noted that Leebolt failed to dispute the fact that Hornbeck’s only contact with California consisted of one Hornbeck vessel, not associated with Leebolt’s lawsuit, docked at North Island for four days. The court held that this minimal contact clearly does not amount to substantial or systematic and continuous contact with California subjecting Hornbeck to the court’s general jurisdiction. Leebolt did not dispute Hornbeck’s contention that specific jurisdiction was also lacking, instead just focusing on his attempt to relax the general jurisdiction rules. Hornbeck noted that Leebolt had failed to presents any allegations in his complaint or his opposition brief to support the prongs of the specific jurisdiction analysis test and, thus, had failed to meet his burden of presenting a prima facie showing that such jurisdiction existed. Following a review of the record the court agreed with Hornbeck. Hornbeck’s motion to dismiss pursuant to Rule 12(b)(2) of the for lack of personal jurisdiction was granted and Leebolt’s complaint was dismissed without prejudice. (USDC SDCA, November 12, 2010) 2010 U.S. Dist. LEXIS 120211

COURT ALLOWS BIFURCATION OF CASE IN LIMITATION OF LIABILITY CASE
IN RE: MISSISSIPPI LIMESTONE CORPORATION

A small crew boat owned and operated by Mississippi Limestone Corporation overturned in the Mississippi River while transporting Jeffrey Dean Holloway, Adam Bennett, and Jeffrey Allen Holloway (Plaintiffs). Plaintiffs later filed suit in state court under the Jones Act and general maritime law against Limestone. Shortly thereafter, Limestone filed its Complaint for Exoneration from or Limitation of Liability in federal court and the court entered an order restraining all claims outside the limitation proceeding as required by Rule F. Plaintiffs moved to bifurcate the case in order to ensure that the only issue resolved in the federal forum is the exoneration from or limitation of liability question and to reserve to the state court all non-limitation issues and requested that a jury be allowed to decide those remaining issues. Limestone moved to strike plaintiffs’ request for a jury trial. The court was of the opinion that bifurcation was the sensible approach and also appeared to be the preferred approach, at least within federal district courts of the Fifth Circuit; that is to decide the limitation issues and then allow claimants to return to state court if they so desire. The court concluded that at trial it would only whether Limestone is entitled to the protections of the Limitation Act. If limitation is denied, plaintiffs may elect (1) to keep the case in federal court, or (2) to have this court lift the stay of the state court proceeding and proceed in state court with a jury trial on the remaining issues. In regards to Limestone's Motion to Strike, the court held that while the limitation action was pending, there is no right to trial by jury. The court granted Limestone’s Motion to Strike Demand for a Jury Trial insofar as it relates to the limitation action. (USDC NDMS, October 7, 2010) 2010 U.S. Dist. LEXIS 114987

VESSEL OWNER NOT OBLIGATED TO PROVIDE LARS FOR DIVE OPERATION
KOPROWSKI V. LEGACY OFFSHORE, LLC, ET AL.

Mariusz P. Koprowski was a commercial diver employed by Legacy Offshore, LLC. Newfield Exploration Company contracted with Legacy to provide divers and dive equipment for Newfield's operations onboard a vessel it had chartered from Aries Marine Corporation. Aries and Legacy were parallel independent contractors of Newfield Exploration. Koprowski alleged he was injured when he was improperly decompressed while surfacing from a depth of approximately 115 feet of sea water on two occasions. Koprowski filed suit on against his employer, Legacy and Aries Marine, the vessel owner, alleging negligence on the part of both defendants and unseaworthiness on the part of the vessel, alleging that as a result of the foregoing negligence and unseaworthiness, he sustained severe disabling injuries to his mind and body. Aries moved for summary judgment, contending it had no liability for either negligence or unseaworthiness in the instant case because there is no evidence to support Koprowski’s claim that his injuries were caused by a breach of duty owed by Aries or its employees, or by a condition of the vessel itself or its crew. Aries acknowledged it had a general maritime law duty of exercising reasonable care toward those lawfully aboard the vessel who are not members of the crew, but argued Koprowski had presented no evidence demonstrating Aries breached that duty of reasonable care. In response, Koprowski argued Aries was negligent when it failed to provide a dedicated handling system, in this case, the Launch and Recovery System ("LARS"), to ensure the safe and expedient transfer of divers to and from the water and to provide a stable platform on which to complete in-water decompression. In failing to provide a LARS system for the dives in question, Koprowski also contended Aries Marine violated Coast Guard Regulation 46 C.F.R. §197.320, which Koprowski argued regulates the use of diving ladders and stages, arguing further that the violation of this regulation constituted negligence per se. The court found that Koprowski had failed to demonstrate Aries violated the regulation, since the regulation does not, as Koprowski argued, "mandate the use of diving ladders and stages." Rather, it merely mandated certain characteristics of diving ladders and stages that are utilized. Similarly, the court found that Koprowski argued Aries owed a duty to provide a LARS system. without citing any authority, whether factual or jurisprudential, for the existence of such a duty. On the other hand, Aries argued and presented evidence to support its argument that it owed no duty, by way of contract, operation of law, or otherwise, to provide a LARS system. In addition to not carrying his burden to meet Aries’ evidence and argument submitted with respect to the duty and breach elements, the court held that Koprowski also failed to offer satisfactory evidence to dispute Aries’ argument there was no causation demonstrated. Consequently, the court concluded Aries was entitled to summary judgment and dismissed Koprowski’s causes of action against Aries. (USDC WDLA, November 12, 2010) 2010 U.S. Dist. LEXIS 120296

ARBITRATION AGREEMENT HELD TO BE A CONTRACT OF EMPLOYMENT
IN RE: OIL SPILL

Clay Whittinghill was employed by Abdon Callais Offshore as captain aboard one of Abdon’s vessels. As a condition of his employment with Abdon, Whittinghill was required to sign an Arbitration Agreement. During the latter part of Whittinghill’s employment with Abdon, the vessel led clean-up efforts in the aftermath of the Deepwater Horizon explosion. During the clean-up efforts, Whittinghill alleged that he suffered various ailments because of his exposure to contaminants. Whittinghill also alleged that he was constructively terminated after taking time off to tend to the alleged ailments. Whittinghill filed a Seaman's Complaint against Abdon, alleging that because of Abdon’s negligence, he suffered severe, painful, and disabling injuries. He also claimed that his constructive termination was an unlawful violation of the Family and Medical Leave Act. Abdon filed a motion asking the court to compel arbitration and stay litigation in this matter pursuant to the Federal Arbitration Act. Whittinghill objected to arbitration, alleging that the agreement was not enforceable under the FAA. After hearing the parties arguments the court noted that its decision would hinge on whether the agreement in question was classified as a contract of employment. The court pointed out that the agreement at issue case was signed by Whittinghill approximately one month prior to the beginning of his employment and that his employment was contingent on signing the agreement. The court distinguished the arbitration agreement in this case, from other cases where arbitration agreements had not been held to be contracts of employment, by observing that no language in the agreements in those cases indicated that the acceptance of the agreement was a condition of continued employment. In this matter, the agreement was signed well before Whittinghill’s alleged injury and was not an agreement between Whittinghill and a third party. The court concluded that Whittinghill’s arbitration agreement constituted a contract of employment of a seaman and therefore, was not enforceable under the FAA. (USDC EDLA, October 25, 2010) 2010 U.S. Dist. LEXIS 120335

GET FAMILIAR WITH TWOMBLY AND IQBAL OR THIS WILL HAPPEN TO YOU
DE LA CRUZ, ET AL V. GULF COAST MARINE & ASSOCIATES, INC, ET AL.

This lawsuit is based on an accident that occurred on a mobile drilling rig and oil production platform in Mexican territorial waters. Plaintiffs are all Mexican residents, and they, or their decedents, were employed by Compañia Perforadora Central, "Sercomosa and/or Comodatoria," or Petroleos Mexicanos ("PEMEX"), Mexico's state owned oil company. PEMEX owned the production platform and rented the drilling rig on which Plaintiffs or their decedents were working at the time of the accident for purposes of the exploration, development, and production of Mexican oil and gas resources. Plaintiffs filed suit asserting negligence, gross negligence, products liability, and wrongful death claims against various defendants under general federal or international maritime law or, in the alternative, under Texas law or the relevant law of Mexico. Schlumberger Technology Corporation and Schlumberger Limited (collectively "Schlumberger") moved to dismiss the complaint pursuant to FRCP Rule 12(b)(6) for Failure to State a Claim, arguing that the complaint did not state a cognizable claim under the general maritime law of the United States because any claim was barred by the Jones Act. Schlumberger further argued that the Jones Act bared Plaintiffs' foreign and state law claims and, thus, that the entire complaint should be dismissed. The court agreed and granted-in-part and denied-in-part the motions to dismiss, holding that the complaint did not properly allege a claim under federal maritime law and dismissed Plaintiffs' claims under federal maritime law without prejudice. The court also held that the Jones Act did not bar Plaintiffs' claims under foreign law or international maritime law and declined to dismiss these claims. Finally, the Court held that Plaintiffs' claims under Texas law were preempted by the Jones Act and, thus, were barred by 46 U.S.C. §30105(b). The Court granted Plaintiffs leave to file an amended complaint, but they failed to do so, so Schlumberger moved to dismiss Plaintiffs suit in its entirety for failure to abide by the Court's order and for failure to state a claim under FRCP 12(b)(6). The court found that Plaintiffs' claims maintained under international maritime law and/or Mexican law were vague and ambiguous. However, rather than dismissing the complaint in its entirety, as requested by Schlumberger, the court granted the motion for more definite statement of a proper cause of action, and ordered Plaintiffs to file an amended complaint containing a more definite statement of the legal theories upon which they are relying under international maritime law and/or Mexican law within 20 days. (USDC EDTX, November 9, 2010) 2010 U.S. Dist. LEXIS 119292

LIMITATION ACTION HELD TO BE TIMELY
IN RE: WEBER MARINE INC.

Jerry Billiot was working as a tugboat captain in the employ of Weber Marine, Inc. aboard one of Weber’s vessels, when he was allegedly exposed to chemicals that were spilled in the Mississippi River. Because of this alleged exposure, Billiot claims that began feeling nauseated and coughing up a foam-like substance. On February 6, 2009, Billiot’s attorney sent a letter to Weber Marine stating that Billiot had been hospitalized because of his alleged exposure and seeking documentation regarding any investigation done with respect to the incident. On September 24, 2009, Billiot filed suit in state court claiming injuries and damages as a result of the chemical spill incident. On December 30, 2009, Weber Marine filed its limitation of liability complaint in federal court. Billiot moved to dismiss Weber’s limitation action claiming it was not timely filed. Alternatively, Billiot sought a grant of summary judgment that Weber had privity or knowledge of the unseaworthiness of the vessel and Weber’s negligent safety procedures and training. A written notice of claim must inform the owner of both the details of the incident and that the owner appeared to be responsible for the damage in question. While written notice may be in the form of a letter, the court found that the letter sent by Billiot's counsel to Weber on February 6, 2009 did not constitute a written notice of claim under § 30511(a). Although the letter provided details of the incident, it fails to inform Weber that the owner appeared to be responsible for the damage in question. The letter also fails to inform Weber of its intention to seek damages from the owner. Deficient in several respects, the court held that the letter was insufficient notice to trigger the six-month statutory period within which a limitation of liability complaint must be filed. Since Weber Marine filed its limitation of liability action less than six months after Billiot's filing of his state court claim, Weber’s limitation pleadings were held timely filed. Because there were genuine issues of material fact regarding whether Weber was negligent and whether its negligence caused Billiot's injury, including: (1) whether Weber had a duty to supply on-board equipment responsive to chemical exposure; (2) whether there was a respirator on board at the time and whether the absence or presence of the respirator breached or fulfilled the duty; and (3) whether Weber’s alleged failure to provide a respiratory device was the proximate cause of Billiot's injury, the court also denied Billiot’s motion for summary judgment regarding Weber’s privity or knowledge of its negligent safety procedures and training and the unseaworthiness of its vessel. (USDC EDLA, November 23, 2010) 2010 U.S. Dist. LEXIS 124149

NEED FOR CONCURSUS RESULTS IN DENIAL OF STAY OF LIMITATION ACTION
IN RE ARAMARK SPORTS AND ENTERTAINMENT SERVICES, LLC

Aramark Sports and Entertainment Services, LLC maintains a fleet of boats that it rents to the public. Aramark rented a 20-foot powerboat (allegedly designed and manufactured, in part, by Baja Marine) to Robert Prescott for a one-day trip. Prescott was accompanied on the trip by Katherine Prescott, James Brady, Heather Brady, Terry Taranto, and Maryanne Taranto. While the three couples were on Lake Powell, the boat sank. Only the Bradys were able to swim to shore; the Prescotts and the Tarantos drowned. Aramark filed a complaint to limit its liability to the current value of the boat, which, undisputedly, was $0. The estates and heirs of the Prescotts and the Tarantos moved to stay the limitation of liability proceeding in order to pursue their claims related to the boating accident in state court. In a proposed stipulation, the estates and heirs of the Prescotts and the Tarantos agreed that Aramark had the right to litigate the issue of whether it is entitled to limit its liability in federal court, and that court had exclusive jurisdiction to determine the issue. They also waive any res judicata/collateral estoppel effect that the decisions, ruling or judgments of any other court might have on the limitation issues. Finally, they agreed not to seek to enforce any judgment against Aramark or any other person or entity that would be entitled to seek indemnity or contribution from Aramark until the federal court decided Aramark's limitation of liability claim. The court found, however, that although the estates and heirs of the Prescotts and the Tarantos had waived collateral estoppel in an effort to allow the court to determine de novo whether Aramark was negligent, Baja Marine and the Bradys had not given up the protections afforded by collateral estoppel. As a result, if the court were to stay the limitation action and Baja Marine were found liable in state court, Baja Marine could bind the federal court to the rulings made in state court. Having determined that the proposed stipulation does not adequately protect Aramark's right to have the court determine all issues related to its limitation of liability claim, the court denied the motion to stay. (USDC UT, November 18, 2010) 2010 U.S. Dist. LEXIS 122734

INSURED TAKES DEFAULT JUDGMENT BECAUSE OF INSURER’S ACTIONS
HENDERSON V. ATLANTIC PELAGIC SEAFOOD, LLC

Mark Henderson filed suit against Atlantic Pelagic Seafood, LLC (APS) seeking damages for injuries he allegedly sustained when a dock hatch closed on his head during the course of his duties as a crewman aboard APS’s fishing vessel. He brought Jones Act, unseaworthiness, and maintenance and cure causes of action. A little over a year after Henderson’s injury, the members of APS sold 100 percent of their interests to Marine Recycling Corporation. Nevertheless, service was effectuated upon APS through its Delaware agent. Following the grant of a motion by Henderson to extend time for APS to answer the complaint, its answer became due, but no answer was timely filed. Henderson moved for the entry of default against APS, and that motion was granted the following day. Henderson then moved for a default judgment against APS and requested the scheduling of a damages hearing. The court scheduled the requested damages hearing, but then continued it until such time as the court adjudicated APS's motion to set aside default. The court initially noted that burden of demonstrating good cause rests with the party seeking to set aside a default. Henderson argued that APS had failed to present any argument that the default against it should be set aside. Rather, its insurer, The American Club, exercising its option to hire counsel to defend its insured, sought to show good cause on its behalf. The court found the excuse offered - that APS was a de facto defunct entity, incapable of having acted willfully, and had no independent ability to make a timely response to the complaint - fell short on its merits. The American Club argued that it never was in contact with APS and was unsuccessful in efforts to locate anyone in a position to speak for that entity. The court found this argument simply tried to minimize the import of the fact that, for purposes of Delaware law, APS continues to exist, because no certificate of cancellation had been filed with the state. As an extant legal entity, APS was required by Delaware law to maintain in Delaware a registered office and registered agent for service of process and to provide to its registered agent, and update from time to time as necessary, the name, business address, and business telephone number of a natural person who was a member, manager, officer, employee, or designated agent of the limited liability company and authorized to receive communications from its registered agent. Henderson served the summons and complaint upon APS by three different means, and no one contested the validity of that service. The court also pointed out that the American Club had been on notice of the existence of Henderson’s claim since on or shortly after the date of his alleged injury and had been kept apprised of every major development in the instant suit. Its decision not to hire counsel at the outset was willful. Its change of heart, evidently for its own strategic purposes, was the moving force behind the motion to set aside the default. A change of heart is not the sort of change that justifies the requested relief. Weighing all relevant factors in toto, the court concluded that APS had not met its burden of showing good cause to lift the entry of default against it. Rather, the court observed that the motion itself stemmed from an insurer's strategic decision, several months after the passage of its absent insured's deadline to answer the complaint and on the eve of a scheduled damages hearing, to step in and litigate this case. The motion of APS to lift the entry of default against it and permit the late filing of an answer was denied. (USDC ME, November 17, 2010) 2010 U.S. Dist. LEXIS 122742

BE CAREFUL OF YOUR PLEADINGS IF YOU WANT TO REMAIN IN STATE COURT
ADAMS V. MARATHON PETROLEUM CO., LLC, ET AL.

Gary Adams was working for Marathon Petroleum Co, LLC as a crew member on a towboat, when he was allegedly knocked off the boat and drowned. Plaintiff brought this action in state court under the “savings to suitors” clause, as estate administrator, under the Jones Act. The Complaint also included an in rem action against the towboat and an admiralty law designation under Rule 9(h) of the Federal Rules of Civil Procedure. Based upon the in rem action and the Rule 9(h) designation, Marathon removed the action to federal court. Upon removal, Plaintiff quickly filed an Amended Complaint, removing his in rem cause of action against the towboat and his Rule 9(h) designation. Plaintiff then filed his remand motion. Marathon opposed the motion to amend by arguing that Plaintiff could not defeat the federal court’s jurisdiction simply by eliminating certain federal jurisdictional claims. Plaintiff countered that he amended his Complaint not merely to remove those claims for jurisdictional purposes, but also to ensure that he can receive a jury trial. However, the court was not persuaded to remand the case on the basis of the request for a jury trial. The court pointed out that Plaintiff is entitled to a jury trial on his remaining claims whether his case be tried in federal or in state court. Thus, his right to a jury trial was protected regardless of where the case is tried. The court also noted that it was not likely it would be called upon to rule on predominately state law issues with respect to Plaintiff's Jones Act claim. The court denied the Plaintiff’s motion to remand the case to state court. (USDC SDWV, November 4, 2010) 2010 U.S. Dist. LEXIS 117974

Quotes of the Month . . . “The uncreative mind can spot the wrong answer, but it takes a creative mind to spot the wrong question.” --Anthony Jay

“Impossible is a word only to be found in the dictionary of fools.”--Napoleon Bonaparte

“Genius is there in all of us, just waiting for us to tap into it.” - - Robert R. Toth

Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.

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