On September 25, 2014, the en banc Fifth Circuit, in McBride v. Estis Well Serv., L.L.C., No. 12-30714 (5th Cir. Sept. 25, 2014), concluded in a brief opinion that the Supreme Court’s decision of Miles v. Apex Marine Corp., 498 U.S. 19 (1990), and its limitation on recovery to pecuniary damages, precluded Jones Act seamen from recovering punitive damages either for Jones Act negligence or general maritime law unseaworthiness. Six judges dissented from the en banc decision, which was supported by nine judges for reversal of the previous panel decision.

This reporter previously commented on the panel decision here, with the observation that punitive damages were not dead yet. The majority en banc opinion has now clarified that punitive damages have “expired and gone to meet their Maker.”

A petition for certiorari to the Supreme Court is an almost certainty. Whether this issue obtains the interest of the requisite four Justices remains to be seen.

The offshore jurisdiction of states in the southeastern U.S. could triple in the relatively near future. Two Louisiana Congressmen, U.S. Sen. David Vitter and U.S. Rep. Bill Cassidy, recently introduced companion bills styled as the Offshore Fairness Act (OFA), which would extend the offshore jurisdictions of Louisiana, Mississippi, Alabama, Florida (partially), Georgia, South Carolina, North Carolina and Virginia to three marine leagues (nine nautical miles) from their respective coastlines. That amounts to an expansion of approximately six nautical miles from their current jurisdictional limits of approximately one marine league or three nautical miles.

At present, two states in the Union – Texas and Florida (in part) – already have offshore jurisdictions extending 3 marine leagues from their coastlines. The Supreme Court of the United States has held that, upon Texas’s admission into the Union in 1845, Congress affirmed Texas’s boundary of three marine leagues, as established by Texas’s First Congress in 1836, through the Annexation Resolution of 1845. U.S. v. States of La., Tex., Miss., Ala. & Fla., 363 U.S. 1, 80 S. Ct. 961, 4 L. Ed. 2d 1025 (1960), supplemented sub nom., U.S. v. Louisiana, 382 U.S. 288, 86 S. Ct. 419, 15 L. Ed. 2d 331 (1965). The Supreme Court similarly has held that Congress’s approval of Florida’s Constitution in 1868, which was done as part of the implementation of the Reconstruction Act of 1867, affirmed the three league boundary along Florida’s Gulf Coast as set forth in that Constitution. Id. However, Florida’s boundary on its Atlantic/eastern boundary was not defined as extending three marine leagues from its coastline in its Constitution, so its offshore jurisdiction extends only three nautical miles off of that coast.

The major hurdle the OFA will face certainly will be its impact on rights to the massive amount of revenue, actual and potential, generated from resources derived from the submerged lands between the existing and potential boundaries. In its current form, the OFA expressly excludes the Outer Continental Shelf Lands Act (43 U.S.C. § 1443, et seq.) and the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. § 1331 note; Public Law 109-432) from its reach, and it would not impact federal oil and gas leases in affected areas on the date of the transfer of jurisdiction from the federal government to the states. However, the proposed bill expressly provides that it “shall not apply to any interest in the expanded submerged land that is granted by the State after the date on which the land is conveyed to the State” by the federal government. It also provides that the states in question may exercise all sovereign powers of taxation over interests in the expanded submerged lands acquired or created after the date the lands are transferred to the states.  Whether the states or the federal government should receive the tax revenues generated by such future interests certainly will be a point of contention.

In its present form, the OFA also would grant the subject states exclusive management over the red snapper fish, the lutjuanus campechanus, within 200 miles from their coastlines consistent with the U.S.’s exclusive economic zone. At present, the National Oceanic and Atmospheric Administration (NOAA) is responsible for conducting scientifically based fishery stock assessments for the red snapper fish. However, NOAA’s assessments have recently come under increased criticism from states and special interest groups.  If passed, the states would remain in charge of red snapper management until each state’s governor certifies to the Secretary of Commerce, in writing, that NOAA’s stock assessments are accurate and based on sound science.

UPDATE: New Orleans CityBusiness has reported that on Monday, April 22, Texas and Louisiana sued to block federal fishery officials from regulating the length of the red snapper recreational fishing season in federal waters off their coasts.

Other resources:
http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Outer-Continental-Shelf/Index.aspx
http://www.gpo.gov/fdsys/pkg/BILLS-113hr1430ih/pdf/BILLS-113hr1430ih.pdf (House bill)
http://www.gpo.gov/fdsys/pkg/BILLS-113s681is/pdf/BILLS-113s681is.pdf (Senate bill)

Supreme Court of the United States
The Supreme Court of the United States may soon be deciding the definition of a vessel.

The very question of what makes a structure a “vessel”  under Section 3 of the Rules of Construction Act, 1 U.S.C. §3 is before the United States Supreme Court in City of Riviera Beach v. That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length, 649 F. 3d 1259 (11th Cir. 2011). In Part 1 of this blog post, we looked at the position of the owner of the alleged vessel, who argued that use and intention should be considered and that a watercraft like his floating house should not be considered a vessel. The Eleventh Circuit, however, ruled otherwise.

In determining that the floating house was a vessel, the Eleventh Circuit distinguished and disagreed with jurisprudence from the Fifth and Seventh Circuits. According to the Eleventh Circuit, the Fifth and Seventh Circuits “focus on the intent of the ship owner rather than whether the boat has been ‘rendered practically incapable of transportation or movement.’” Compare Board of Commissioners of the Orleans Levee District v. M/V Belle of Orleans, 535 F.3d 1299 (11th Cir. 2008) with Pavone v. Mississippi Riverboat Amusement Corp., 52 F.3d 560 (5th Cir. 1995); Tagliere v. Harrah’s Ill. Corp., 445 F.3d 1012 (7th Cir. 2006). The Eleventh Circuit submitted that by injecting the owner’s intention into determining whether a floating structure was a vessel, the Fifth and Seventh Circuits have deviated from the United States Supreme Court’s decision in Stewart v. Dutra Construction Company, 543 U.S. 481 (2005).

In the amicus briefs filed by the National Marine Bankers Association and numerous maritime plaintiff attorneys, it was argued that the Eleventh Circuit’s decision should be upheld, and they too criticized the jurisprudence of the Fifth and Seventh Circuits. As argued by National Marine Bankers Association, under the Fifth and Seventh Circuits’ jurisprudence, “a once-valid marine security could at a later date be adversely affected because the craft is no longer deemed a vessel” by its owner, which would create uncertainty for lenders and banks. The plaintiff’s attorneys also supported the Eleventh Circuit’s decision as it potentially could expand admiralty jurisdiction to include, among other things, floating casinos, and other floating offshore installations.

The outcome of this case may have far reaching implications likely broader than those briefed, including whether the courts would revisit whether certain floating offshore installations used in the petroleum industry are vessels. That is, if the matter is decided at all. The U.S. Solicitor General has argued that the case is moot as the floating houseboat at issue has already been destroyed, and the Supreme Court has requested the parties further brief that issue. Stay tuned.

A feisty dachsund and its owner, Fane Lozman, have stirred up troubled waters regarding the definition of a “vessel” in City of Riviera Beach v. That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length, 649 F. 3d 1259 (11th Cir. 2011). That case, which is now before the 2012–2013 session of the United States Supreme Court, started out with the City of Riviera Beach, Florida, attempting to evict Mr. Lozman and his floating home from the city’s marina because, among other things, he refused to keep his dog—a small Dachshund—muzzled.

The case may have far reaching implications. It has attracted interest and amicus briefs from the federal government, numerous floating home owners and their associations, lawyers, law professors, the Marine Bankers Association, carpenters, and owners and operators of riverboat casinos, all of whom claim they will be affected by the Supreme Court’s decision. In a two-part blog post, Offshore Winds will look at both sides of this argument over the definition of “vessel.”

The City of Riviera Beach claims Mr. Lozman’s structure is a vessel and brought an in rem proceeding against it. Mr. Lozman disputed that claim. The position of Mr. Lozman, along with the American Gaming Association, the carpenters, certain lawyers, and the floating homeowners, was that in determining whether a structure was a “vessel” under Section 3 of the Rules of Construction Act, 1 U.S.C. §3, the Court must take into account practical considerations such as historical use, its current use, and its reasonable intended use for the future. The matter is being watched closely within the Fifth and Eleventh Circuits, where employees of semi-permanently moored riverboat casinos are subject to workmen’s compensation laws, not federal maritime law. Additionally, floating homeowners argue that expanding the definition of vessel to include their floating homes would subject them to new federal laws, including maritime liens, which would frustrate certain local regulations. They argue that practically their homes are a mere extension of the land, and should be treated as such in the courts.

The United States Court of Appeals for the Eleventh Circuit agreed with the City of Riviera, disagreeing with jurisprudence from the Fifth and Seventh Circuits defining what is a vessel. In Part 2, we will look at why that Court held Mr. Lozman’s floating home was a vessel.

The United States Supreme Court, in Pacific Operators Offshore, LLP v. Valladolid, concluded that the widow of an employee who suffered fatal injuries on shore may still recover LHWCA benefits pursuant to OCSLA if her husband’s death had a “substantial nexus” to his employer’s oil and gas operations on the OCS.  This is an unexpected decision based upon loose Congressional language in 43 U.S.C. § 1333(b), which adopts the LHWCA as the workers’ compensation scheme for the “disability or death of an employee resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf” for the purpose of extracting its natural resources.

The Court disagreed with the Third Circuit’s test which was based on a “but for” standard.  The Court also rejected the Solicitor General’s proposal to adopt a Chandris-esque test that the employee have a substantial relation in duration and nature to OCS operations in order to qualify for LHWCA benefits under OCSLA.

Moreover, the Court discarded the en banc Fifth Circuit’s test for coverage that had focused solely on whether the incident occurred on an OCS situs.  The Court consigned to dicta inferences or statements to the contrary in its earlier decisions of Herb’s Welding, Inc. v. Gray and Offshore Logistics, Inc. v. Tallentire that had been interpreted to focus on the situs of the underlying accident as determining whether the employee was entitled to LWHCA benefits pursuant to OCSLA.

Rather, the Court agreed with the Ninth Circuit’s “substantial nexus” test in determining LHWCA coverage for OCSLA purposes.  Although the accident giving rise to this claim occurred on shore, 98% of Valladolid’s work activities were based on platforms and other oil and gas production structures affixed to the OCS.  Accordingly, Valladolid’s widow could recover LHWCA death benefits, pursuant to OCSLA.

Unlike the 30% test set forth in by the Court in Chandris, Inc. v. Latsis, the Supreme Court in Vallalodid left it to the lower courts to develop the boundaries of the “substantial nexus” criteria.  As Justice Scalia pointed out in his concurrence that agreed a “causation-like” standard was appropriate, but disagreed with the “substantial nexus” standard adopted by the Court – “What a tangled web we weave.”