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On September 27, 2017, the Fifth Circuit in U.S.A. v. Don Moss, Curtis Dantin, Grand Isle Shipyard, Incorporated, and Christopher Srubar, No. 16-30516 (5th Cir. September 27, 2017), issued a decision affirming the District Court’s dismissal of criminal charges against a number of oil field contractors resulting from a welding accident that occurred on an offshore oil platform located on the Outer Continental Shelf on November 16, 2012. The platform owner and leaseholder, Black Elk Energy Offshore Operations, LLC, in September of 2012, interrupted its oil and gas production on West Delta 32 to begin construction projects on its three-platform production facility. In pursuing these construction projects, it contracted with a number of different companies to provide workers connected with the project. On November 16, 2012, during welding operations, a fatal explosion occurred killing three men and injuring others.

Criminal indictments were issued three years later pursuant to Outer Continental Shelf Lands Act 43 USC §§ 1331, et. seq. (OCSLA) with the government contending that contractors were criminally liable because they failed to obtain proper authorization to weld, failed to conduct appropriate pre-work inspections and failed to ensure the construction area was safe for hot work as required by OCSLA safety regulations. The contractors moved for dismissal of the charges against them. The District Court Judge issued an Order dismissing the charges against the contractors based upon his analysis of each of the regulatory provisions cited in the indictments. He concluded that none of the OCSLA regulations applied to oilfield contractors. Central to this analysis, the Court pointed out that each of the three specific provisions of the OCSLA regulations underlying the charged criminal violations imposed regulations addressed to “You.” Under OCSLA regulations, “You” is a defined term:

You means a lessee, the owner or holder of operating rights, a designated operator or agent of the lessee(s), a pipeline right-of-way holder, or a State lessee granted a right-of-use and easement. 30 CFR § 250.105.

The District Court held this definition did not include contractors, subcontractors or service providers. The government timely appealed.

On appeal, the government relied on four main arguments. First, the government contended that a plain reading of OCSLA subjects any person, including contractors and their employees to criminal penalties for violating the regulations promulgated under the statute. 43 U.S.C. § 1350(c). Second, OCSLA regulations governed the appellees’ conduct because they were the “person[s] actually performing the activit[ies],” and are thus “jointly and severally responsible” under the 30 CFR § 250.146(e). Third, the Courts had upheld both civil and criminal penalties imposed under similar statutory and regulatory schemes. Fourth, OCSLA regulations supported civil and criminal penalties for any person “responsible for a violation” of the regulations. 30 CFR § 250.1402.

Under 43 U.S.C. § 1350(c), the government argued that the contractors were criminally liable as that provision stated that any person who knowingly or willfully violated a regulation that was designed to protect health, safety or the environment may be subject to criminal penalties under OCSLA. The government argued that under OCSLA’s definition of a “person” the contractors clearly fell within its ambit. In response, the contractors asserted that OCSLA precluded the government from criminally prosecuting them as they were not holders of OCSLA leases or permits. In citing 43 USC § 1348(b), the contractors argued that OCSLA identified those people who were required to comply with OCSLA regulations by stating “it shall be the duty of any holder of a lease or permit under this subchapter” to comply with regulations governing workplace safety and health for their own employees and those of any “contractor or subcontractor.” They argued that because Section 1348(b) specifically imposed the duty on lessees and permittees, and equally specifically referenced, but did not impose its regulatory duties on contractors and subcontractors, they were textually excluded from those duties. Ergo, if they were not parties given a duty to comply, criminal penalties should not be imposed.

The panel of the Fifth Circuit thought that the contractors’ arguments were well-stated, even more so given the government’s failure ever before to seek criminal penalties against a contractor in the 60 plus year history of the OCSLA. It was noted that the government’s past inactions spoke volumes about the scope of its regulatory authority. The court, however, stated that to resolve the appeal it did not need to decide whether OCSLA and its criminal liability provision could extend to contractors. Assuming arguendo that the provisions of OCSLA could apply to these contractors, it proceeded to determine whether the specific regulations would support the criminal indictments.

In addressing the specific regulations alleged to have been violated by the contractors, the Court indicated that the government ran up against the regulatory definition of “You.” It found that all of the welding regulations that formed the basis of the criminal indictment only referenced “You.” The government sought to circumvent the plain language of the definition of “You” by citing language in 30 CFR § 250.146(e) pertaining to joint and several responsibility for compliance with OCSLA regulations. The Fifth Circuit, however, indicated that “joint and several responsibility” was a term of art reserved for civil, rather than criminal liability, and noted that the government failed to cite any cases that demonstrated support for joint and several criminal liability.

The court further noted that the drafting history of the definition of “You” and the prior public statements of the regulating agencies responsible for OCSLA confirmed that the specific regulations did not apply to contractors. In addressing whether the regulations that were specifically directed at lessees could also extend penalties to contractors, the Court noted that the virtual non-existing past enforcement of OCSLA regulations against contractors confirmed that the regulations were never intended to apply to them, noting also that the government had not issued civil indictments for non-compliance against contractors prior to 2011.

In addressing the government’s more generalized argument that regulations may result in criminal liability for anyone who fails to comply with them, the Court indicated that the argument ignored the rule that a general provision of a comprehensive regulatory scheme must yield to more specific, conflicting provisions. It stated that “the appellees were indicted under three provisions of 30 CRF § 250.113, all of which are directed at “You,” not at just any person, and Section 250.146(c), which was previously addressed, does not impose criminal liability beyond the definition of “You.”  It stated that because the applicable regulatory definitions unambiguously excluded contractors, more general liability provisions did not control.

Finally, the Court addressed the government’s position with regard to its prior non-enforcement of regulations against contractors where the government indicated that subcontractors always had fair notice of their potential exposure to civil penalties and criminal liability as an interpretation of its regulatory directives. The Court chose not to apply the Auer v. Robins deference standard as it appeared that the government’s interpretation conflicted with its earlier and consistently held view. It felt that there had not been fair notice to contractors of this potential liability and because this involved a criminal liability, as opposed to civil exposure, the enforcement of the governmental agency’s interpretation of its regulations in this instance, would be a violation of the contractors’ due process rights.

Whether this last part of the Fifth Circuit’s decision leaves open the possibility of subsequent acceptance of the governmental agencies’ interpretation of these existing regulations as applying to contractors, in light of its previous statements, appears to be speculative.

Jones Act RJSIn a move hailed as a win for international offshore marine contractors and oil companies operating in the Gulf of Mexico and decried as a setback for domestic shipping interests, the U.S. Customs and Border Protection (“CBP”) has withdrawn its proposal to modify and revoke certain previous interpretations of the Jones Act relating to articles and equipment carried on vessels for use in offshore oil and gas operations. The CBP’s May 10, 2017 action halts further consideration of an action that was hotly debated and could have had a significant impact on foreign-flag vessel operations in the Gulf.

The Jones Act restricts the transportation of merchandise between points in the United States to coastwise-qualified U. S.-flag vessels. By application of the Outer Continental Shelf Lands Act, this restriction extends to structures affixed to the seabed on the U. S. Outer Continental Shelf in connection with the specified activities, including exploration for or production of oil and gas. A key exception, widely relied upon by international marine contractors and their oil company customers, relates to the transportation of “vessel equipment,” which includes articles used in “furtherance of the mission” or “fundamental to the operation of” a vessel. Carriage of this “vessel equipment” is not restricted to U.S.-flag vessels and instead may be done by foreign-flag vessels.

The CBP’s original January 18, 2017 proposal would have modified a 1976 ruling concerning the applicability of this exception to a dive support work barge engaged in the construction, maintenance, repair and inspection of offshore petroleum-related facilities. The CBP proposed to rewrite that ruling on the basis that it was inconsistent with the Jones Act. CBP also planned to revoke or modify almost 30 other rulings interpreting the applicability of the Jones Act to numerous operations including pipe and cable laying, well stimulation, lift boats, and sub-sea construction.

CBP’s retreat was perhaps foreshadowed by the agency’s February 8, 2017 extension of the comment period through April 18, 2017.  It also highlights the ongoing battle between domestic and foreign operators in the Gulf of Mexico, with the former contending that the CBP’s stricter interpretation of the coastwise laws would create jobs and stimulate economic activity in the Gulf, and the latter arguing to the contrary on both points and also citing the lack of Jones Act-qualified vessels to do the work that the foreign flagged vessels would be precluded from doing.  The move also was viewed by some as another example of the Trump administration’s reversal of executive action by the outgoing Obama administration.

This regulatory skirmish points up the need for vessel operators and the companies that employ them in the Gulf of Mexico to make sure they are complying with the complicated web of interpretations of the Jones Act when planning new projects and other operations in the Gulf.  As illustrated by Furie Operating Alaska’s recent agreement to pay a $10 million penalty, if operators overlook, or worse, as was alleged in Furie’s case, intentionally violate, the Jones Act, they do so at their peril.

ALI-MLALast week, 425 admiralty and maritime lawyers, law professors, U.S. Coast Guard officers, law students, and maritime industry professionals descended on New Orleans for the Golden Rules: Tulane Admiralty Law Institute and Maritime Law Association’s 50-Year Reunion. The event kicked off Wednesday morning at the New Orleans Board of Trade. The morning CLE program included a 50 year retrospective on marine insurance, followed by programs regarding maritime bodily injury and death. The first was moderated by Patricia Krebs, and featured a discussion of, among other things, strategies for defense counsel to reduce wage bases for claims of future wage loss in maritime employment. It was followed by a presentation on the Federal Arbitration Act, which included an analysis of some interesting recent cases arising in the cruise ship context regarding enforcement of arbitration clauses in U.S. seaman contracts, and the viability of post-injury arbitration agreements. Wednesday afternoon was dedicated to meetings of various committees of the MLA, including the Joint Marine Financing, Marine Bankruptcy, and Practice and Procedure Committees. The evening was capped off with a reception at the Cabildo on Jackson Square.

Thursday morning’s programming included a CLE on professionalism, with Judge Hanks of the Southern District of Texas and Magistrate Judge Knowles of the Eastern District of Louisiana as panelists, followed by presentations on marine finance and liens, collision, limitation of liability and salvage. As was the case Wednesday, Thursday afternoon was dedicated to meetings of committees of the MLA, including the Stevedores, Marine Terminals & Vessel Services Committee, held in the offices of King, Krebs & Jurgens, one of the meeting’s sponsors. Thursday evening provided an opportunity for a variety of social events, including a lively reception at Pat O’Brien’s, jointly hosted by the Young Lawyers Committees of the MLA and ALI.

The events concluded on Friday, with CLE programs in the morning on international law, the past and future of shipping, pollution, and ethics. The general meeting of the MLA was held in the afternoon at McAlister Auditorium, amidst the excitement of homecoming on Tulane’s campus. The week’s programming ended with a well-attended cocktail reception and formal dinner at the Audubon Tea Room.

The CLE programs and committee meetings provided a variety of interesting and useful insights into recent developments in the maritime world. A few examples:

  • Although the Federal Arbitration Act expressly excludes contracts of employment of U.S. seamen, rendering arbitration clauses in such contracts generally unenforceable, several courts have recently enforced arbitration clauses in U.S. seamen contracts when “performance is envisioned abroad.” See, e.g., Alberts v. RCCL, 2016 U.S. App. LEXIS 15502 (11th Cir. Aug. 23, 2016).
  • The impact of the Zika virus on the cruise line industry is ramping up. For example, in early August 2016, the shares of three major cruise lines fell the day after an advisory from the CDC was issued that warned pregnant women of the risk of Zika infection.
  • The Federal Maritime Commission has recently proposed several new rulemakings for further regulation of the marine terminal industry, driven, in great part, by actions taken and developments occurring at West Coast ports. Many parties, both ocean carriers and marine terminal operators, including the National Association of Waterfront Employers, have submitted comments to indicate displeasure with many of the proposed changes as too burdensome on the regulated parties and not providing the FMC with meaningful additional information.

When everything was said and done, attendees earned up to 975 minutes of CLE credit while meeting and reconnecting with colleagues from around the globe. It can truly be said that good times were had by all.

The next meeting of the Maritime Law Association will be held in May of 2017 in New York City.

ALI logo

The 25th Biennial Admiralty Law Institute kicked off with great success on March 11, 2015. Informative presentations continued on March 12-13, building on the theme of this year’s conference, “Symposium on Maritime Personal Injury and Death: Jurisdiction to Judgment.”

Thursday, March 12th: The second day of the Admiralty Law Institute began with a panel discussion of punitive damages. Punitive damages has been a hot topic since McBride v. Estis, where the Fifth Circuit, sitting en banc, reversed its own panel opinion. The panel had concluded that punitive damages could be recovered by a seaman for the alleged unseaworthiness of a vessel. In September 2014, the en banc court reversed that panel and held that the statutory remedies provided by the Jones Act could not be supplemented, and thus a seaman cannot recover punitive damages for death or personal injury based on unseaworthiness. The Supreme Court is considering granting certiorari, so the availability of punitive damages in such cases will likely remain controversial.

Thursday’s program also emphasized themes such as alternative dispute resolution and maritime disaster. A panel discussion moderated by Patricia Krebs addressed a shift in the litigation of maritime disputes from expensive and formal arbitration to more flexible and informal mediation.The following panel, entitled “Effective Settlement Negotiations” similarly addressed practical aspects of dispute resolution.

Two of Thursday’s panels discussed the Deepwater Horizon incident. The first focused on government regulation and class society rules post-incident. The other, which panel included attorneys from both sides of the Deepwater Horizon litigation and Magistrate Judge Sally Shushan, provided an illuminating recount of the effective strategies employed by Judge Barbier in helping to move such a massive case towards resolution.

Friday, March 13th included a panel discussion of the recent Coffin v. Blessey Marine Services, Inc. decision, in which the Fifth Circuit held that tankermen (i.e., individuals responsible for loading and unloading tank barges as part of their duties as crew of a tow) were seaman whilst loading and unloading the vessel, and thus exempt from the overtime requirements of the Fair Labor Standards Act.

The conference was not all work and no play; as was the case Wednesday, both Thursday and Friday featured opportunities for participants to mix and mingle with their colleagues. On Thursday, the Young Lawyers group hosted a networking mixer at the Foundation Room of the House of Blues for registrants in practice fewer than six years. Following the programming on Friday was the Tulane Maritime Law Alumni luncheon at Galvez.

The next Institute, which shall focus on commercial aspects of admiralty and maritime practice, will be held in October of 2016.

New Orleans Maritime Law
The Admiralty Law Institute runs from March 11-13 in New Orleans.

March 11, 2015, marked the first day of the 25th Biennial Admiralty Law Institute. Held at Tulane University in New Orleans, the ALI is the oldest and largest continuing legal education program devoted entirely to maritime law. The theme of this year’s conference is “Symposium on Maritime Personal Injury and Death: Jurisdiction to Judgment,” and Wednesday’s presentations were certainly in keeping with that theme. Some highlights from ALI’s first day:

First up was a panel discussion of recent developments in the ancient law of maintenance and cure. The panel noted that, despite the many modern improvements to the seaman’s lot, such as union contracts, vacation allowances, and disability pensions, the entitlement to maintenance and cure remains diligently guarded by the courts. The panel also discussed developments in the case law, such as the inability of the employer to turn a blind eye to accessible evidence corroborating the maintenance and cure claim, the scope of the seaman’s duty to disclose a pre-existing condition, and latent illnesses of the seaman–a subject that pushes the limits of the course and scope analysis.

Another topic up for discussion was cruise ships. The discussion was divided into two parts. First, regulation and compliance, followed by passenger and crew claims. A major topic of discussion was recent developments in the 11th Circuit regarding ship’s physicians. In the 5th Circuit the law remains that a ship’s physician, like a concessionaire, is not an employee or agent of the ship and thus no right of action exists against the shipowner for the medical malpractice or negligence of the on-board physician. As has been stated more often than once, ships are not floating hospitals. However, obtaining personal jurisdiction over the ship’s doctor in such cases is nearly impossible, so aggrieved parties are often left with no avenue of recovery. It seems the law is changing in the 11th Circuit, with a recent case holding the shipowner liable on an apparent agency theory.

Wednesday’s other presentations addressed attorney-client privilege and the admiralty practitioner, vessel status and jurisdiction (which included a very interesting discussion of the Lozman case) and removal of maritime cases. All presentations were followed by lively, and occasionally heated, questions and comments from the attendees. The day was capped off with a very well-attended cocktail reception at the lovely New Orleans Board of Trade.

Thursday’s topics include punitive damages, arbitration and mediation of maritime disputes, and litigating maritime disasters.

Pre-Judgment Interest RateThe current post-judgment interest rate in federal court is the infinitesimally meager rate of 0.22% (that is 22 hundredths of a percent, not 22 percent) as per statute, 28 U.S.C. § 1961(a). In contrast, the rate of pre-judgment interest is within the discretion of the district court (and therefore rarely disturbed on appeal), and furthermore the award of pre-judgment interest is “well–nigh automatic”. See Gator Marine Serv. Towing, Inc. v. J. Ray McDermott & Co., 651 F.2d 1096, 1101 (5th Cir. Unit A 1981) and Reeled Tubing, Inc. v. M/V CHAD G, 794 F.2d 1026, 1028 (5th Cir. 1986).

In Offshore Marine Contractors, Inc. v. Palm Energy Offshore, L.L.C., No. 14-30059 (5th Cir. Mar. 2, 2015), the Fifth Circuit affirmed the district court’s setting the pre-judgment interest rate at 1.5% per month, based on the invoices of the party claiming payment. The Fifth Circuit confirmed that the rate of pre-judgment interest can be based on the creditor’s actual cost of borrowing money, state law, or “other reasonable guideposts indicating a fair level of compensation”, including interest rates set forth on invoices. The purpose supporting an award of pre-judgment interest was to compensate the creditor for the use of funds to which it was entitled from the debtor which had use of those funds prior to the judgment, and accordingly, the Court rejected as irrelevant the argument that the judgment debtor never agreed to the invoice rate. By affirming the award of 1.5% per month, the spread between pre-judgment and post-judgment interest rates was 18%.

In the near future, it is expected judgment debtors will cite to the applicable state law governing usurious interest rates. Nevertheless, the Offshore Marine decision provides creditors with jurisprudential support for a pre-judgment interest rate of 1.5% per month, which translates to 18% per year – not a bad rate of return in this economy.

Horton v Maersk Line DecisionIn John Horton v. Maersk Line, Limited, Case No. 14-14450 (11 Cir., 02/27/2015) the 11th Circuit issued an unpublished decision finding that the International Safety Management Code (the “Code”) did not create vessel duties to a longshoreman over and above that established in Scindia.

The plaintiff, John Horton, a longshoreman, was working aboard the M/V SEALAND CHAMPION when a twist lock dislodged from a container due to crane operator mishandling of the container, causing it to fall and strike the plaintiff on the head. Mr. Horton sued the crane operator’s employer and obtained a significant settlement, and then brought this suit against the vessel owner and other parties. Some of the issues addressed in the opinion by the 11th Circuit, including spoliation of evidence and exclusion of experts, lack noteworthiness.

The 11th Circuit’s decision, however, is of some note as it refused to apply the International Safety Management Code as a basis for vessel negligence. The Code was implemented by Congress as part of the International Convention for the Safety of Life at Sea in 46 U.S.C. Sections 3201-3205 and CFR regulations 33 CFR Sections 96.200-96.390. The Court determined that the plaintiff could not rely on the Code, indicating that the plaintiff cited no authority that recognized the Code as modifying the duties set out in the Longshore Act and recognized in Scindia Steam Navigation Co. v. De Los Santos, 451 US 156 (1981). In the implementing statute accepting the Code, Congress directed that compliance with the Code was to be achieved through regulations that are “consistent” with it and provided penalties for non-compliance. The 11th Circuit agreed with a lower court decision indicating that, “Congress merely desired to participate with other maritime nations in achieving safety goals [though the Code], but did not intend to change long-established rules of law which govern liability and its allocation in general maritime law.” citing Calderon v. Offen, 2009 WL 3429771, at *4 (SD Fla. 10/20/2009)

The 11th Circuit felt that attributing to the ship owner a duty to supervise cargo loading and unloading as provided for in the Code would run directly contrary to the Supreme Court’s interpretation of the Act; namely, that a duty to supervise a stevedore would “saddle the ship owner with precisely the sort of non-delegable duty that Congress sought to eliminate”. Scindia 451 U.S. at p. 169.

The U. S. Fifth Circuit recently held that an injured seaman was precluded from recovering maintenance and cure where he intentionally provided false information during a pre-employment physical conducted by a previous employer that was later acquired by his current employer. Although the current employer did not conduct its own pre-employment physical, the Fifth Circuit found that under the particular circumstances presented (i.e. when a company purchases another entity and keeps the predecessor’s seaman in its employ) a re-examination of the seaman was not required. The holding, Meche v. Douret, et al., No. 14-30032 (5th Cir. Jan. 22, 2015) does not change prior case law holding that misrepresentations made to unrelated previous employers will not impact the seaman’s right to recover. However, the case is a conservative extension of the McCorpen rule, as articulated in McCorpen v. Central Gulf Steamship Corp., 396 F.2d 547 (5th Cir. 1968), which is one of the few vehicles a maritime employer or ship owner can use to defeat a maintenance and cure claim. In order to establish a McCorpen defense, the employer/ship owner must show:

  1. An intentional misrepresentation regarding medical history;
  2. The misrepresentation was material to the decision to hire; and
  3. A connection between the misrepresentation and the injury complained of. (See also Brown v. Parker Drilling Offshore Corp., 410 F.3d 166, 171 (5th Cir. 2005).)

In Meche, as in many other cases, the seaman had filed several prior lawsuits related to the same condition (low back injury). However, the seaman falsely stated in his pre-employment medical history questionnaire that he had no such problems with his back or any illness, injury or claim arising out of his previous employment.

Meche argued that he did not intentionally conceal his prior medical history because his daughter actually filled out the form and he did not “read and write very well.” The Court acknowledged that, where a seaman “lacks the requisite literacy skills to understand and complete the questionnaire,” his failure to disclose may not be intentional. However, in Meche it was found that the seaman did understand what was written in the form which he acknowledged through his signature.

To avoid “illiteracy” arguments in subsequent litigation, employers and owners should be mindful of the seaman’s English literacy skills when having them fill out such forms and take steps to ensure they understand the forms they are completing.

In cases where the employer does not conduct a pre-employment physical, the employee is required to disclose past illnesses or injuries only when, in the seaman’s own opinion, the employer would “consider it a matter of importance.” On the other hand, where a physical is performed, the “subjective” element is removed, and a mariner may be barred from recovery whenever he conceals material medical facts during a pre-employment physical designed to elicit such information. The McCorpen rule, and its recent extension, emphasize the importance of pre-employment physicals and detailed medical questionnaires as a means of mitigating exposure to subsequent maintenance and cure claims by seamen with sometimes lengthy histories of injury and litigation.

Attorney Mike Vincenzo
Guest blogger Mike Vincenzo is a Member in King, Krebs & Jurgens’ New Orleans office who has been defending clients in complex litigation scenarios for two decades, with a particular focus on casualty and personal injury cases in the maritime, aviation, and air medical industries. He is admitted to practice law in Louisiana.

File the Limitation ComplaintOn December 3, 2014, the Fifth Circuit, in In re:  RLB Contracting, Inc., No. 14–40326 (5th Cir. Dec. 3, 2014), concluded that an ongoing exchange of correspondence between counsel for a dredge involved in a maritime casualty and counsel for the wrongful death and personal injury claimants satisfied both prongs of the “reasonable possibility” test for written notice of a claim and thereby began the six month statutory period for the dredge owner to have filed its complaint for exoneration and/or limitation of liability. These issues have been previously explored in this Blog in 2012 and in 2013.

To satisfy the “reasonable possibility” test sufficiently to start the six month period, the correspondence to the vessel owner (or its counsel) must convey a “reasonable possibility” that a potential claim exists and a “reasonable possibility” that the amount of the claim might exceed the value of the vessel. The court observed that no magical language is necessary and that the vessel owner, not the dead or injured claimants, bears the risk in the event of a wrong guess or a tactical error.

It should be noted that from a procedural perspective, the Fifth Circuit affirmed the district court’s judgment of dismissal under the de novo standard. The failure to timely file the Limitation Complaint is a jurisdictional defect, subject to de novo review, even though the “reasonable possibility” inquiries are fact–intensive and based on the circumstances of the case. Because the district court considered matters outside of the pleadings, it had applied a summary judgment procedure in its analysis of the correspondence exchanged between counsel. Summary judgments likewise are subject to a de novo standard. For good measure, the Fifth Circuit concluded that its review of the record did not reveal any dispute of material fact and thus summary judgment was procedurally proper.

Vessel owners should take note: the correspondence from claimants’ counsel is sufficient to start the six month period to file a limitation complaint, regardless of when the claimants ultimately decide to file suit. Once more, we stress what by now should be obvious – when in doubt, file the complaint for limitation.

Coffin v BlesseyOn November 13, 2014, the U.S. Fifth Circuit Court of Appeals held in Coffin v. Blessey Marine Services, Incorporated, Case No. 13-20144, that individuals who loaded and unloaded tank barges as part of their duties as crew of a unit tow were seamen exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”). The case is important insofar as it distinguished the Fifth Circuit’s previous ruling in Owens v. SeaRiver Maritime, Inc., 217 F.3d 698 (5th Cir. 2001), in which the Court held that a tankerman who was not a crewmember and not tied to a particular vessel was entitled to overtime under the FLSA. The plaintiffs in Coffin argued that the Owens decision foreclosed any factual inquiry into the nature and character of loading and unloading duties and compelled the conclusion that loading and unloading a vessel was in and of itself, without regard to attachment to a specific vessel as seamen for other purposes, non-seaman work as a matter of law.

Finding this reading of Owens to be erroneous, the Fifth Circuit found instead that Owens left open the question of loading and unloading duties for vessel-based employees, and expressly rejected a categorical rule such as that argued by the plaintiffs. Instead, the Court found its decision in Gale v. Union Bag & Paper Corp., 116 F.3d 27 (5th Cir. 1940), in which the Court recognized that vessel-based barge tenders who maintain and service a barge are exempt seamen under the FLSA, also controlled the situation in Coffin. The Court found to be of particular significance the undisputed facts that the plaintiffs ate, slept, lived and worked on the Blessey towboat that comprised a part of the unit tow; that they were members of the crew and worked at the direction of the captain; and that improper loading and unloading could compromise the seaworthiness of the barge. The Court stated: “Critically, the context in which work is done can affect whether it is seaman or non-seaman work.” The Court stated further:

Naturally, when an individual lives aboard the vessel that he or she loads or unloads, this living situation will affect the character of his or her duties. In Owens, the tankerman duties were divorced from the subsequent navigation of the barge. See 272 F.3rd at 704 (noting that the plaintiff did not move or moor the barge and only prepared it for navigation. By contrast, the Plaintiffs here recognized that their loading and unloading duties were integrated with their many other duties. Indeed, the plaintiff in Owens chose not to sue for the time he was a tankerman in navigation. Id. at 700.

In summation, the Court concluded that Blessey’s tankermen were seamen while loading and unloading the vessel because these duties were integrated within their many other duties. Accordingly, the Court saw no basis for distinguishing the tankermen’s loading and unloading duties from the many other duties the vessel-based barge tender performed in Gale.