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June 7, 2007
Welcome to the June 7, 2007, issue of AdmiraltyUpdate, the copyrighted and trademarked e-newsletter on developments in U.S. Coast Guard regulations and state and federal court decisions of interest to the commercial and recreational marine communities, written, edited, and produced by Frederick B. Goldsmith,
E. Richard Ogrodowski, and Russell D. Giancola, of the firm of Goldsmith & Ogrodowski, LLC, based in Pittsburgh, Pennsylvania, U.S.A.
If you wish to unsubscribe or modify your subscription details, just click on the link at the bottom of the e-mail which alerted you to the posting of this issue on our website.
We are pleased to announce that
our firm celebrated its one-year anniversary on April 1, 2007, and
that on May 1, 2007,
Russell D. Giancola joined our firm as an associate.
If you have friends or colleagues who wish to subscribe, they can use the signup box appearing below, which also appears on the AdmiraltyUpdate homepage. We will not share your e-mail address and related information with anyone. We hope you enjoy the newsletter and wholeheartedly encourage your feedback.
This issue's photo depicts the M/V ALGORAIL on the Detroit River. The vessel is
operated and managed by
Seaway Marine Transport.
For further background on the
vessel, see
http://www.boatnerd.com/pictures/fleet/algorail.htm and
http://www.seawaymarinetransport.com/vesselspecs/acc_su_master_fs.asp?name=Algorail.
Our thanks go out to Allen Park, Michigan-based photographer Mike
Nicholls,
Seaway Marine Transport, and the Great Lakes and Seaway
Shipping website, "boatnerd."
Recent U.S. Coast Guard Notices in the Federal Register
Coast Guard Seeks to
Fill Merchant Marine Personnel Advisory Committee Vacancies
In the May 15, 2007, Federal Register, the Coast Guard announces
it seeks applications for appointment to MERPAC, which provides
advice and makes recommendations to the Coast Guard on matters
related to the training, qualification, licensing, certification,
and fitness of seamen serving in the U.S. merchant marine.
Applications should reach the Coast Guard by July 1, 2007. The
notice provides specifics on the professional background of
applicants the agency is hoping to attract. The Coast Guard
does not compensate MERPAC members, but it does reimburse and pay a
per diem for travel expenses. Interestingly, the last time we
checked, members of TSAC, the Coast Guard's Towing Safety Advisory
Committee, receive neither.
Coast Guard Seeks to
Fill National Maritime Security Advisory Committee Vacancies
In the May 15, 2007, Federal Register, the
Secretary of the Department of Homeland Security (which department
houses the Coast Guard) advertises for members of NMSAC, which
provides advice and makes recommendations on national maritime
security matters to the Secretary of Homeland Security via the
Commandant of the U.S. Coast Guard. Applications must be
postmarked by June 29, 2007. Members serve 5-year terms and
receive per diems and travel expenses for attending Committee
meetings. More details on who is sought and the work of the
Committee appears in the notice.
Coast Guard Seeks to
Fill Vacancies on Chemical Transportation Advisory Committee
In the May 9, 2007, Federal Register, the
Coast Guard seeks applications for membership on CTAC, which advises,
consults with, and makes recommendations to the Coast Guard on matters
relating to the safe and secure transportation and handling of hazardous
materials in bulk on U.S.-flag vessels in U.S. ports and waterways.
Like TSAC, members receive no travel reimbursement or per diem from the
Coast Guard. One CTAC member will be very difficult to replace. Alice K. Johnson, Sr. Supervisor, PPG
Industries, Inc., Natrium Plant--Chemicals Group, New Martinsville, West
Virginia, a longtime friend of ours, who was a very active, devoted, and
hardworking member of CTAC and the [Pittsburgh region's] Three Rivers Pollution Response Council, in addition to all her duties within PPG--including but not
limited to PPG's Hazmat Team--passed away this past January
after a short illness. She is missed by her family including two
daughters, Kristy and Ann-Marie, and many, many friends within PPG and
throughout the maritime industry.
Coast Guard Extends
Suspension of Vessel Response Plan Info on Salvage and Marine
Firefighting
In the February 9, 2007, Federal Register, the
Coast Guard announces that it is suspending for another two years--until
February 12, 2009--the requirement that owners or operators of vessels
carrying Groups I through V petroleum as a primary cargo to identify in
their VRPs (vessel response plans) a salvage company with expertise and
equipment, and a company with firefighting capability that can be
deployed to a port nearest to the vessel's operating area within 24
hours of notification or a discovery of a discharge. The reason:
to allow the Coast Guard more time to draft the regulations that will
revise the salvage and marine firefighting requirements.
Recent State & Federal Court Maritime Decisions
U.S. Supreme Court: Federal
Employers' Liability Act [Which Jones Act Incorporates by Reference]
Standard for Employee's Contributory Negligence is Same as Employer's
We sent out an AdmiraltyUpdate alert on this back in January, but thought
we'd follow-up. In Norfolk Southern Railway Co. v.
Sorrell, 127 S.Ct. 799 (Jan. 10, 2007), Timothy Sorrell, a trackman for NS
was hurt when his truck veered off the road and tipped on its
side. He sued NS in Missouri state court under FELA. The trial
court's jury instructions stated an employee is contributorily
negligent if his negligence “directly
contributed to cause” his injury, while the same instructions allowed
the jury to find the railroad negligent if the railroad’s negligence contributed “in
whole or in part” to the injury. After the jury returned a verdict in favor
of the employee, NS appealed, arguing that FELA does not permit
different causation standards for railroads and their employees. The
Supreme Court agreed, finding it would be difficult to reduce damages
“in proportion” to the employee’s contributory negligence (as required under
Section 3 of FELA) if “the relevance of each party’s negligence to the
injury was measured by a different standard of causation. . . . [I]t is far
simpler for a jury to conduct the apportionment FELA mandates if the jury
compares like with like—apples to apples.” The Supreme Court vacated the
Missouri Court of Appeals’ affirmation of the jury verdict, but left open
the question of whether the application of different standards was harmless
error. The Supreme Court declined to set forth the precise language that
should be used in the jury instruction, holding there are a variety of
ways to instruct a jury to apply the same causation standard to railroad
negligence and employee contributory negligence. Missouri was apparently
the only jurisdiction to apply different standards of negligence to
railroads and employees. The recodified Jones Act, 46 U.S.C. § 30104, entitled "Personal injury to or death of
seamen," provides in section (a), entitled "Cause of action": "A seaman
injured in the course of employment or, if the seaman dies from the injury,
the personal representative of the seaman may elect to bring a civil action
at law, with the right of trial by jury, against the employer. Laws of the
United States regulating recovery for personal injury to, or death of, a
railway employee apply to an action under this section." (Emphasis
supplied)
U.S. Supreme Court: Juries Cannot Award
Punitive Damages to Punish Defendant for Harm Caused to Nonparties
In Philip Morris USA v. Williams,
127 S.Ct. 1057 (Feb. 20, 2007), an Oregon jury awarded the widow of a
heavy smoker $821,000 in compensatory damages and $79.5 million in punitives. The Supreme Court held that the trial court erred in
rejecting an instruction that would have advised the jury not to punish the
defendant for the impact of its alleged misconduct on other persons not
involved in the lawsuit. The high court emphasized that while “punitive
damages may be imposed to further a State’s legitimate interests in
punishing unlawful conduct and deterring its repetition,” safeguards must be
used “to avoid arbitrary determination of an award’s amount.” While
evidence of harm to nonparty victims is relevant to show the
“reprehensibility” of the defendant’s conduct (an element of punitive
damages), the Court held that juries may not use punitive damages to punish
a defendant directly for harm caused to nonparties. The Supreme Court
declined to decide whether the punitive damages award—which was nearly 100
times the amount of compensatory damages—was grossly excessive.
U.S. Ninth Circuit Court
of Appeals: 9:1 Punitives to Compensatory Ratio Too High in Exxon VALDEZ
Case
In In re The Exxon Valdez, 472 F.3d
600 (9th Cir. Dec. 22, 2006), the Ninth Circuit reduced the district court’s
$4.5 billion award of punitive damages against the oil company for the 1989
grounding of its supertanker that spilled 11 million gallons of crude
oil into Prince William Sound and Lower Cook Inlet. The court held that due
process requires that a ratio of 9:1 between punitive damages and
compensatory damages be reserved for only the most egregious circumstances.
Although Exxon’s conduct was reckless, the company had engaged in
substantial mitigation efforts since the oil spill. The court thus held
a 5:1 ratio was appropriate. Accordingly, the court reduced
the punitive damages
award to $2.5 billion. In May, the Ninth Circuit
denied Exxon’s petition for rehearing en banc. In re The Exxon Valdez,
2007 WL 1490455 (9th Cir. May 23, 2007). Many expect Exxon to petition
the Supreme Court for further review.
U.S. Fifth Circuit Court
of Appeals: Upholds Arbitration Agreement in Seaman's Release
In Terrebonne v. K-Sea
Transportation Corp., 477 F.3d 271 (5th Cir. Jan. 26, 2007), Dextel
Terrebonne appealed the district court’s order refusing to set aside an
arbitration award. He had sustained a hernia aboard a tug in
November 2000 and underwent surgery in December 2000. In March 2001,
Terrebonne and K-Sea executed a “Partial Release and Claims Arbitration
Agreement,” which settled the seaman’s claims from November 2000 to March
2001, and required that any further damages be arbitrated. Terrebonne
then filed suit after he re-injured himself in April
2001. The district court granted the employer’s motion to compel
arbitration. The Fifth Circuit rejected Terrebone's argument that the
arbitration agreement was subsumed into the seaman’s employment contract,
even though the agreement touched upon maintenance and cure. The court
emphasized that maintenance and cure is an essential part of the employment
relationship, but it is separate from the actual employment contract.
Accordingly, the agreement was not exempt from the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 1, which provides that “contracts of employment by
seamen” are outside its scope. The court also held the arbitration agreement was not
unenforceable under FELA (which voids contracts that exempt common carriers
from liability) because the seaman did “not forgo the substantive rights
afforded by the Jones Act”; rather, he merely “submit[ted] to their
resolution in an arbitral, rather than a judicial, forum.” The Fifth
Circuit strongly underscored the strong federal policy favoring arbitration
under the FAA. Lastly, the court held that the arbitration clause was broad
enough to include the seaman’s claim for damages arising from his re-injured
hernia.
U.S. First Circuit Court
of Appeals: Even Innocently-Made Misrepresentation, By Insured's Broker, Entitles Insurer to Void Policy
In Commercial Union Insurance Co. v.
Pesante, 459 F.3d 34 (1st Cir. Aug. 9, 2006), the First Circuit held
that under Rhode Island law, the falsity of any statement in an insurance
application that materially affects either the insurer’s acceptance of the
risk or the hazard assumed by the insurer serves as a basis for rescinding
the policy, even if the misrepresentation is innocently made. Thus, an
insured’s misrepresentation in an application that its gill netting vessel
was a lobster vessel rendered the policy voidable, because the premiums
would have been 25% higher if the application had properly identified the
vessel. The court’s analysis was not affected by evidence that the
insured’s broker had completed the portion of the application
identifying the type of vessel.
Puerto Rico Federal
District Court: Broker Not Responsible When Insurer Voids Policy Due to
Application Misrepresentations
In Sealink, Inc. v. Frenkel & Co.,
441 F.Supp. 2d 374 (D.P.R. July 31, 2006), the court held the insured's broker is not responsible
for verifying the accuracy of statements made in a marine insurance application. Thus, when the insurer voided the assured’s policy due to
material misrepresentations in the application, the broker could not be held
liable to the assured, because "it is the sole responsibility of the assured
to complete the insurance application and ensure its accuracy."
U.S. First Circuit Court
of Appeals: Affirms Coverage Denial for Breach of Lay-Up Warranty
In New Hampshire Insurance Co. v.
Dagnone, 475 F.3d 35 (1st Cir. Feb. 2, 2007), the First Circuit affirmed
the district court’s declaratory judgment that a marine insurer had no duty to
insure against damages sustained by a yacht during the period of time the
insurance policy required that the yacht be “laid-up and out of
commission.” The policy required that the yacht be laid-up and out of use
from October 31 to April 15. The owner had contracted with a local captain
to winterize his yacht and place it in dry storage. In late November, the
captain had performed all of the procedures for winterizing the yacht except
for anti-freezing the engines. In early December, a storm struck the marina
where the yacht was stored, causing the yacht to break loose and
sustain damage. The First Circuit held the yacht was still “being
used” in the sense that it was in the water, having been motored to the
marina awaiting hauling out, and was not inoperable. The yacht was not
“laid-up and out of commission” by virtue of it not being fully winterized.
Therefore, the court held that the policy exclusion barred coverage for the
yacht’s damage.
U.S. Fifth Circuit Court of
Appeals: Subsea Engineer Not Seaman When MODU Out of Navigation
In Hyman v. Transocean Offshore U.S.A.,
Inc., 207 Fed.Appx. 485 (5th Cir. Dec. 5, 2006), Bruce Hyman, a subsea engineer,
injured himself in 2001 aboard a mobile offshore drilling unit he had been
constructing for the past three years in the Gulf of Mexico. He continued
to work for his employer through 2004, at which time he was terminated after
disassembling the stairs where he had fallen so as to take pictures of the
scene as it appeared at the time of his injury. Hyman sued Transocean for his injuries and for retaliatory discharge. The
Fifth Circuit held Hyman was not a seaman at the time of his
injury aboard the vessel because the drilling unit was only partially
constructed, and thus was not a “vessel in navigation.” Rather,
he became a seaman after the vessel was fully constructed and became a
vessel in navigation. Thus, Hyman was a seaman when Transocean fired
him in 2004. Regardless, Hyman's retaliatory discharge
claim could not survive Transocean's summary judgment
motion because he failed to present sufficient evidence to establish a
question of fact regarding whether his filing a lawsuit played a
substantial part in his employer’s decision to discharge him.
The court found Hyman was not let go for filing a Jones Act claim, but
rather for "placing his own personal interest in his lawsuit above
Transocean's interests in operating its vessel."
U.S. Ninth Circuit Court of
Appeals: Defendant Must Show Prejudice to Surmount Laches Defense
In Huseman v. Icicle Seafoods, Inc.,
471 F.3d 1116 (9th Cir. Dec. 27, 2006), Lanny Huseman, a seafood processor, failed
to file suit until nearly three and one-half years after
his injury (the statute of limitations for his claims was three years).
He had been receiving Alaska workers’ compensation benefits, but had not received benefits
under maritime law. When he began working for his
employer, he received a pamphlet titled “Terms of Employment,” which stated his employer would process any claims through the Alaska workers’
compensation system and coordinate any additional benefits that may be due
under federal maritime law, however workers needed to request to opt out of
the Alaska workers’ compensation system in favor of federal benefits. The
Ninth Circuit held Huseman was not entitled to equitable tolling
because he had made no effort to inquire from his employer about available
options with respect to his potential federal claims. Likewise,
Huseman failed to establish actual or reasonable reliance as required for
equitable estoppel because he was not misled by anything his
employer said, did not say, or did. The trial court refused to extend the “wards
of the court” doctrine—which provides special protections to seamen under
certain circumstances—to impose a fiduciary duty on shipowners to serve as
legal advisers to their employees, requiring them to provide unsolicited
explanation of the availability of potential federal claims. The Ninth
Circuit reversed the district court’s finding that Huseman's
maintenance and cure claim (for which there is no specific statute of
limitations) was barred by laches, because the employer failed to make any
showing of prejudice in light of Huseman's relatively brief delay
in filing suit.
U.S. Fifth Circuit:
Plaintiffs' Cancer Expert Properly Struck Under Daubert
In Knight v. Kirby Inland Marine Inc.,
482 F.3d 347 (5th Cir. Mar. 19, 2007), two former tankermen, who had
allegedly been
exposed to various toxic chemicals, including benzene, sued their employer
after one was diagnosed with Hodgkin's lymphoma and the other with bladder
cancer. The district court held a Daubert hearing,
after which the
court excluded all of the studies offered by the plaintiffs’ expert on
grounds that (1) the studies failed to isolate benzene as a cause of cancer
or (2) the studies were “statistically insignificant.” None of the studies
gave an adequate basis for the opinion that the types of chemicals the
plaintiffs were exposed to can cause their particular injuries in the
general population. Thus, the district court reasoned, the studies
were not reliable or relevant to general causation. The Fifth Circuit
agreed, holding the district court’s assessment of the studies was not
clearly erroneous, and the exclusion of the studies was not an abuse of
discretion. The Fifth Circuit also affirmed the district court’s finding
that the plaintiffs were not entitled to reimbursement for costs relating to
their expert witness because a Daubert hearing is not a discovery
proceeding (for which reimbursement is allowable under Fed.R.Civ.P.
26(b)(4)(C)), but rather an evidentiary hearing.
Maryland Federal District
Court: ABS Not Liable for Seaman's Death in Crane Accident
In In re Complaint of Eternity Shipping,
Ltd., 444 F.Supp.2d 347 (D.Md. Aug. 3, 2006), the court held no basis existed for holding classification society
the American Bureau of Shipping liable for fatal injuries sustained by a seaman.
An ABS surveyor had inspected the ship’s crane seven months before a
wire rope on the crane broke, causing a work basket holding two crew members
to fall. The crew members died as a result of their injuries, and the
ship’s crane hit and damaged a pier operator’s shore crane. The
trial court held there was no basis in law or fact to hold the
classification society liable under a theory of negligence or breach of the
implied warranty of workmanlike performance: "In surveying a ship or marine
equipment such as cranes, a classification society does not guarantee that
the vessel is seaworthy. Rather, the society determines whether the
ship or equipment conforms to certain published rules or standards issued by
the society itself, and the resulting certificate allows the shipowner to
take advantage of lower insurance rates available to certified or classed
vessels. The ultimate responsibility for the vessel's seaworthiness
rests on the shoulders of the shipowner, and the shipowner cannot delegate
this duty to a classification society or to any other entity."
Florida Federal District
Court: Negligent Infliction of Emotional Distress Claims with No
Physical Impact Require Physical Manifestation
In Tassinari v. Key West Water Tours,
L.C., 2007 WL 942093 (S.D.Fla. Mar. 29, 2007), the court held “stand-alone” claims of negligent
infliction of emotional distress (“NIED”) require physical manifestation
of emotional injury before a plaintiff may recover. This rule stands in
contrast to claims for NIED where the plaintiff also sustained a physical
impact as a result of the defendant’s negligent conduct. The plaintiff in Tassinari had raised a claim of NIED against the defendant for the
emotional injury of watching the defendant collide with her daughter’s
watercraft. The court dismissed her NIED claim because the
plaintiff suffered no physical impact and had no physical manifestation of
emotional injury.
Louisiana Federal
District Court: Intentional Concealment of Prior Injury Voids
Maintenance & Cure Claim
In Johnson v. Cenac Towing Inc., 468
F. Supp.2d 815 (E.D.La. Dec. 27, 2006), the court found Cenac Towing not liable
for maintenance and cure to its injured tankerman employee, Leroy Johnson, who had intentionally
concealed from Cenac prior work-related injuries. The court held that under McCorpen v. Central
Gulf Steamship Corp., 396 F.2d 547 (5th Cir. 1968), an employer is not
liable for maintenance and cure where an employee: (1) intentionally
misrepresents or conceals medical facts; (2) the misrepresented or
concealed facts were material to the employer’s hiring decision; and (3)
there exists a causal link between the pre-existing disability that was
concealed and the disability incurred during the voyage. The court held,
however, that Johnson's concealment of his prior injuries did not
constitute contributory negligence. Therefore, the tankerman was able to
recover damages under his Jones Act negligence claim against his employer,
although he was unentitled to maintenance and cure.
Michigan Federal District
Court: Jones Act Employer Entitled to Amend Answer to Assert Fraud
Counterclaim for Continuing to Receive Maintenance & Cure While
Misrepresenting Not Yet Fit for Full Duty
In Schoen v. Grand River Navigation Co.,
2007 WL 127913 (E.D.Mich. Jan. 11, 2007), the court refused to dismiss the defendant’s counterclaim for
fraud against Jason Kurry Schoen, the plaintiff seaman, represented by
O'Bryan, Baun, Cohen et al., for failure to plead
with particularity. Simultaneously with the plaintiff’s motion to dismiss,
the defendant had filed a motion for leave to amend its answer and
counterclaim. The defendant’s proposed counterclaim satisfied Federal Rule
of Civil Procedure 9(b)’s requirement of pleading fraud with particularity,
and Schoen failed to demonstrate that granting leave to amend
would cause him prejudice or be futile. Thus, the court granted Grand
River's motion for leave to amend and denied Schoen's motion to dismiss.
Louisiana Federal District
Court: Seaman Cannot Back Out of Settlement Once His Lawyer Has Agreed Case
is Settled
In Nelson v. Chet Morrison Diving, LLC,
2007 WL 442220 (E.D.La. Feb. 5, 2007), the court held a settlement agreement in a Jones Act case
must be enforced once the plaintiff’s attorney (who had apparent or actual
authority to negotiate a settlement on the plaintiff’s behalf) agrees to
settlement terms with the defendant, even if the plaintiff subsequently
attempts to repudiate the agreement. The defendant was not, however,
entitled to attorney fees because the settlement agreement did
not provide for such. Here, there was an exchange of letters
confirming the settlement.
Ed. Note: Other courts have also enforced oral agreements to settle, as oral agreements of all types are generally
enforceable in admiralty.
Texas Federal District Court:
Act of God Defense Won't Fly in Barge Breakaway During (Well-Predicted)
Tropical Storm Allison
In Union Pacific Railroad Co. v.
Heartland Barge Management, LLC, 2007 WL 101813 (S.D.Tex. Jan. 8,
2007), the court found a
fleeter negligent when its superintendent left the facility at
1530 hrs despite an 1100 hrs Flash Flood Watch issued by the National Weather Service of
severe weather that would cause “very dangerous flooding” later that day.
Had the superintendent stuck around longer, the court found, "he would
have received the updated weather warnings and he could have ensured
that other [fleeting facility] employees remained at the facility to
assist him in monitoring the barges and adjusting their lines, if
necessary." The other workers who stayed or returned to the fleet,
the court found, did not know how to add or adjust mooring lines:
"On his
way home, after hearing a radio weather announcement, [the
superintendent] realized the severity of the situation and sent [the
fleeting facility's] truck driver to add two more lines onto one of the
barges. The truck driver was not qualified to monitor or adjust the
lines. Later, [the fleeting facility's] general foreman called [the
superintendent] suggesting they return to the dock. [The superintendent]
never made it back that night due to flooding. The general foreman made
it back and monitored the barges, but he too was unqualified to add or
adjust lines. In fact, he did not even know where the additional lines
were stored. No facility at which barges are moored can be considered
prepared for rising water unless all lines by which a barge is moored
are properly adjusted to even the strain on the lines and experienced
personnel are on hand to adjust the lines as the water rises. These
improvised steps taken in the last hours before the flood demonstrate
that [the fleeting facility] did not exercise ordinary care."
(Emphasis supplied)
The
court further held:
"While
it may have been inevitable that the barges would eventually either sink
or breakaway, [the fleeting facility] still had a duty to display proper
skill and take adequate precautions prior to the breakaway. [The
fleeting facility] failed to properly exercise this duty."
*
* *
"Though
weather warnings citing the extreme nature of the storm were not issued
until late in the evening on June 8, 2001, the 11:00 a.m. warning gave
[the fleeting facility] adequate notice that there would be flooding.
The Court also determined that beyond updating its facility, [the
fleeting facility] could have taken additional steps to ensure safety at
its facility during severe weather. [The fleeting facility's] expert
witness...testified that it was feasible, prior to June of 2001, for
[the fleeting facility] to revise its hurricane preparedness plan to
provide phased responses to weather watches and warnings and to provide
for the training of all personnel in how to properly take appropriate
precautions. Further, [the fleeting facility] concedes the dock
was not lighted, which precluded any personnel from adding or adjusting
the lines. Perhaps, if any of these actions were taken prior to June,
2001, the breakaways may have been avoided."
The
court concluded:
"...[the fleeting facility] failed to take 'all reasonable steps
necessary for safety' and therefore cannot avail itself of the Act of
God defense."
Louisiana Federal District Court: Louisiana Statute Providing Peremptive
Period for Claims Barred Post-Katrina Suits Against Contractors for
Levee Failures
In In re Katrina Canal Breaches
Consolidated Litigation, 2006 WL 3627749 (E.D.La. Dec. 8, 2006), the
court (Judge Duval) held that, under
Louisiana law, a five-year statute of limitation enacted after the
contractor defendants had finished working on the levees but before the
plaintiffs had sustained their injuries was retroactive and, as such, the
plaintiffs’ claims were time-barred. The defendants had performed service
on the levees at various times, but no later than May 2000. The new peremptive statute was enacted in 2003, and the plaintiffs’ injuries were
incurred when the levees broke in the wake of Hurricane Katrina in late
August 2005. The court further held that absent an allegation in any of the
complaints of fraud, the plaintiffs had not raised a material issue of fact
(and were not entitled to conduct discovery) with respect to whether the
defendants had misrepresented the dates they last performed work on the
levees. Accordingly, Judge Duval granted the contractor defendants’ motions for summary
judgment.
Louisiana
Federal District Court: Katrina/MRGO Flooding Suit Discovery Can Proceed,
Claims Not Barred as Matter of Law by Section
702c
of the Flood Control Act of 1928
In another Hurricane Katrina case, In re
Katrina Canal Breaches Consolidated Litigation, 471 F.Supp.2d 684 (E.D.La. Feb. 2, 2007),
Judge Duval held the plaintiffs’ claims for damages resulting from flooding of the
Mississippi River Gulf Outlet (“MRGO”) were not barred as a matter of law
under section 702c of the Flood Control Act of 1928 (which provides that “no
liability of any kind shall attach to or rest upon the United States for any
damage from or by floods or flood waters at any place”). The court held
section 702c relates only to damage that results from negligence by the
United States in connection with a flood control project. The court held there existed a question of fact as to whether the MRGO related to
a flood control project, or if, as the plaintiffs alleged, the MRGO was
merely a navigable waterway. In addition, the court was unable to determine
(based solely on the pleadings) whether the United States would be able to
avail itself of the “due care” or the “discretionary function” exceptions to
the Federal Tort Claims Act. Accordingly, the court denied
the government’s motion to
dismiss and ordered discovery to commence.
Illinois Federal District Court: State Whistleblower Act
Claims Preempted
In Robinson v. Alter Barge Line, Inc.,
2007 WL 809647 (S.D.Ill. Mar. 15, 2007, seaman Dave Robinson was terminated shortly
after he reported alleged instances of drug and alcohol abuse by other crew members
aboard a vessel to his employer’s human resources department.
Robinson brought claims of (1) retaliatory discharge and (2) violation of the
Illinois Whistleblower Act against his employer, Alter. The
court held the Illinois Whistleblower Act was
preempted by 46 U.S.C. § 2114 to the extent the former created a cause
of action for circumstances not actionable under the latter (§ 2114 permits
a claim only where the employee reports a safety violation to the Coast
Guard or other federal agency—in Robinson, the seaman had only
reported his concerns to his employer prior to being discharged). Likewise,
claims of retaliatory discharge under Illinois common law are far broader
than the retaliatory discharge claim available under general maritime law.
General maritime law permits a claim for retaliatory discharge only when an
employee is terminated upon filing a personal injury action against his
employer. Thus, the court held the general maritime law preempts the
Illinois retaliatory discharge claim. Accordingly, the Court dismissed both counts of
Robinson's complaint.
Lagniappe
$142 Billion?!: "Admiralty Lien Notice" Legalese and
Gobbledygook Continues
We
reported in the last issue of AdmiraltyUpdate on hokey notices
"entrepreneurs" are sending to some
companies. The notices include a spattering of maritime legal
terms and purport to unilaterally impose huge judgments against
the companies.
So far, it appears the federal courts have seen through these ruses,
although we haven't seen sanctions in the form of attorney's fees, or
perhaps more properly, criminal prosecutions, yet.
The
most recent federal court decision on this type of apparent scheme comes from
U.S. District Judge Arthur J. Tarnow of the Eastern District of
Michigan, Southern Division, involving attempts by one Hakeem Abdul
Rasheed against not a company, but Wayne County, Michigan, and others.
The ruse began when Rasheed filed in federal court there as his
complaint an "Affidavit in the Nature of a Petition for Enforcement of
Maritime Liens in Libel Review for Summary/Default Judgment."
Rasheed followed his "Affidavit" with "An Affidavit in the Nature of
Petition by Plaintiff to Amend the Complaint, First Amendment
Complaint," "Memorandum of Law," "Request for Clerk's Entry of Default,"
a "Partial Chain of Evidence," and a "Notice of Exemption from 'Service
of Process.'"
The
defendants filed a Motion to Dismiss, citing failure to state a claim,
and the frivolity of Rasheed's filings. In his May 18, 2007, Order
Granting Defendants' Motion to Dismiss and Dismissing Case with
Prejudice in Rasheed v. County of Wayne, 2007 WL 1467300
(E.D.Mich. 2007)(emphasis supplied), Judge Tarnow agreed:
"From what can be gathered from the pleadings, Plaintiff appears to
bring this suit under admiralty law. He raises both tort and contract
claims against Defendants. Yet, Plaintiff's complaint and accompanying
documents fail to allege specific requirements of admiralty
jurisdiction, such as a location that involves and a connection with
maritime activity. Plaintiff also fails to allege elements of both tort
and contract claims. For instance, Plaintiff invokes admiralty
jurisdiction for his tort claim but fails to allege any specific
tortious conduct by Defendants or a relationship of that conduct to the
navigable waterways or traditional maritime activities. In terms of his
contract claim, Plaintiff fails to allege that a contract even existed. Consequently, Plaintiffs complaint and subsequent pleadings appear
beyond a doubt that he can prove no set of facts in support of his
claims that would entitle him to the requested relief of between $30 and
$142 billion dollars. Thus, Plaintiff has failed to state a
cognizable claim upon which relief can be granted under either
Admiralty/Maritime Law or general tort and contract law against
Defendants and pursuant to FRCP 12(b)(6), this Court finds that the
case should be summarily dismissed.
Mr. Rasheed's case should also be dismissed as frivolous since it lacks
an arguable basis in both law and fact. As a result, his complaint is
also summarily dismissed pursuant to 28 U.S.C. §§ 1915(e)(2)(B) and
1915A(b).
IT IS HEREBY ORDERED that the case is DISMISSED WITH PREJUDICE."
Ed. Note: Excerpts from Wayne County's Brief in Support of its
Motion to Dismiss Rasheed's Complaint:
"In the instant case, plaintiff has completely failed to allege
any specific tortious conduct by defendants, or the relationship of
that conduct to the navigable waterways or traditional maritime
activities. To the extent that he has sued Wayne County, some
of its elected officials, and several Wayne County assistant
prosecutors, the Court can take judicial notice that their offices
are located approximately 1/4 mile from the nearest navigable
waterway -- the Detroit River.
* * *
In support of his claim, plaintiff has produced a “Treaty”
declaring himself a 'sovereign nation' with 'sovereign immunity'
(Exhibit C), and an affidavit alleging that the United States, the
State of Michigan, the County of Wayne, and the Detroit Police
Department (amongst others) do not exist (Exhibit D)."
Reader Feedback
"Very
impressive. Very informative."
Richard Nielsen, Esq.
Nielsen Shields, PLLC
Seattle, WA
"This is great stuff, Fred.
Thanks for keeping me on the list. My only question is what is
that red creature in the Lagniappe section of your newsletter.
If it is a crawfish, it is a pitiful rendering and not anatomically
correct. :-) Attached is an anatomically correct
mudbug."
Elena Gonzales
Director of Risk Management
CGB Enterprises, Inc.
Mandeville, LA
Ed. Reply: Thank you,
Elena, for setting us straight. Obviously, that Goldsmith
character has been away from his second home of New Orleans for way too
long and has lost sight (and taste) of all he formerly knew of crawfish
anatomy. Please forgive him, but feed us, and consider
placing a couple of sacks
of live mudbugs on the plane with a mess of Zatarain's for
the boil. We'll send you an Admiralty Lien Notice in full
payment, eh? :-)
* * *
We truly appreciate and welcome your
(even Elena's!) feedback – positive, negative, or in-between. Just e-mail Fred Goldsmith at fbg@golawllc.com.
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