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.

Coast Guard Inspection of Towing Vessels RuleThe U.S. Coast Guard Inspection of Towing Vessels Final Rule under 46 CFR Subchapter M takes effect on July 20, 2016. The Rule, published this week, has its roots in the Coast Guard and Maritime Transportation Act of 2004, and creates many new requirements for the equipment, operations, construction and design of towing vessels, and establishes a comprehensive inspection regime. The Rule provides that towing vessel owners/operators must select for their fleet one of two inspection compliance options: (1) the Coast Guard inspection option or (2) the Towing Safety Management System (TSMS) option.

The Coast Guard inspection option is fairly straightforward; under it, the Coast Guard conducts annual routine inspections of towing vessels or fleets. To meet record keeping requirements, vessel owners may use a safety management system (SMS), towing vessel record, vessel operations manual or logbook. The second option, TSMS, requires owners/operators to implement a survey program for vessel compliance, which may be internal or external. Under an external survey program, Third Party Organizations (TPOs), such as certain classification societies, perform routine inspections of the vessels. An internal survey program is conducted using internal resources or contracted surveyors, with the oversight of a TPO. Whatever option is selected, a new towing vessel must obtain a Certificate of Inspection from the Coast Guard before it enters into service. Owners/operators of only one towing vessel must have a valid Certificate of Inspection by July 20, 2020, while owners/operators of a fleet of towing vessels must obtain a Certificate of Inspection for each vessel according to a set schedule (July 2019 for at least 25% of the fleet; July 2020 for at least 50%; July 2021 for at least 75% and July 19, 2022 for 100% of the fleet). Owners/operators that select the TSMS option must obtain a TSMS certificate from a TPO at least six months before their vessels may obtain a Certificate of Inspection.

The Coast Guard estimates that the Inspection of Towing Vessels Final Rule will affect 5,509 U.S.-flag towing vessels and 1,096 owners or operators of towing vessels. The financial impact on the industry is estimated to amount to an annual cost of about $33 million, with some cost savings stemming from certain exemptions in the Rule for existing vessels. Vessel owners/operators are well-advised to fully review the Final Rule to ensure compliance, as failure to timely implement the Rule’s requirements could result in substantial penalties, delay in vessel operations, and other liabilities.

Punitive Damages - US Eastern District Court HouseFollowing the Fifth Circuit’s opinion in McBride v. Estis Well Service, 768 F.3d 382, 391 (5th Cir. 2014), we reported that punitive damages had “expired and gone to meet their maker” when it comes to Jones Act seamen. As it turns out, they were only mostly dead. In Corey Hume et al. v. Consolidated Grain & Barge, Inc. et al., No. CA 15-0935, 2016 WL 1089349, at *1 (E.D. La. Mar. 21, 2016), Judge Zainey of the Eastern District ruled that punitive damages are still recoverable by Jones Act seamen against non-employer third parties.

The Plaintiffs, who were employees of defendant Consolidated Grain, were working aboard a vessel owned by defendant Quality Marine Services when a running wire of the vessel struck each of them in the face and head, resulting in brain injuries and facial disfigurement. The Plaintiffs sued Quality Marine for punitive damages under general maritime law. Quality Marine moved to dismiss, arguing that, pursuant to McBride v. Estis Well Service, 768 F.3d 382, 391 (5th Cir. 2014) (en banc), cert. denied, 135 S.Ct. 2310 (2015) (which held that an injured seaman cannot recover punitive damages against his employer), and Scarborough v. Clemco Industries, 391 F.3d 660, 668 (5th Cir. 2004) (which held that a seaman who invokes Jones Act status cannot recover punitive damages against a non-employer third party), Plaintiffs were not able under general maritime law to recover punitive damages from Quality Marine.

The court disagreed. Relying on another recent decision from the Eastern District, Collins v. A.B.C. Marine Towing, L.L.C., 14-1900, 2015 WL 5254710 (E.D. La. Sept. 9, 2015), the court declined to follow the Fifth Circuit’s holding in Scarborough, finding Scarborough had been “effectively overruled” by the Supreme Court in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009). The court held instead that the Jones Act forecloses a seaman’s recovery for non-pecuniary loss in maritime cases only with respect to his employer. With respect to a non-employer tortfeasor such as Quality Marine, to whom the Jones Act does not apply, no statutory regime exists that conflicts with general maritime law remedies, and thus punitive damages may be recoverable. In the end, the court held that the “takeaway from Townsend” was that a seaman may recover punitive damages under general maritime law if the Jones Act is not implicated, and denied Quality Marine’s motion to dismiss the punitive damages claim.

Helix
This ship may or may not have been a vessel in navigation while in dry dock for 20 months, according to a Texas court of appeals in the Jones Act case Gold v. Helix Energy Solutions Group.

A Texas court of appeals recently held that a drill ship undergoing a renovation for nearly two years in dry dock might still be a “vessel in navigation.” Gold v. Helix Energy Solutions Group, Inc., No. 14-15-00123-CV, (Tex. App. Dec. 15, 2015). The plaintiff, who had been hired to work as a seaman aboard the Helix, was working on the ship in dry dock when he began to experience neck pain and was diagnosed with a bulging disk. He sued the ship owner under the Jones Act for his injuries. The owner successfully moved for summary judgment on the basis that the worker was not a Jones Act seaman because the Helix, which was under conversion in the Jurong Shipyard in Singapore for a total of 20 months, was not a vessel in navigation. The Texas court of appeals reversed the grant of summary judgment, holding that fact issues existed as to vessel status despite the lengthy withdrawal from navigation.

The Supreme Court has held that a vessel does not cease to be a vessel simply because she is berthed for minor repairs. See, e.g., Chandris, Inc. v. Latsis, 515 U.S. 347, 374, 115 S. Ct. 2172, 2192, 132 L. Ed. 2d 314 (1995). However, there is a point the repairs become so significant, or the time out of the water so vast, that the vessel can no longer be considered “in navigation” for Jones Act purposes. For example, the Ninth Circuit held that a ship undergoing reconstruction over 17 months (three months less than the Helix) was not a vessel in navigation. McKinley v. All Alaskan Seafoods, Inc., 980 F.2d 567, 568 (9th Cir. 1992). The Fifth Circuit held that an extensive overhaul lasting only 77 days was enough to render a ship no longer in navigation. Hodges v. S. S. Tillie Lykes, 512 F.2d 1279, 1280 (5th Cir. 1975). And yet the Helix, laid up for repairs far longer than the ships in either of those cases and with no means of self propulsion, might nevertheless be “in navigation.”

Although there is no settled expiration date for “in navigation” status for vessels under repairs, the weight of authority in the Fifth Circuit and admiralty courts elsewhere suggests that a ship undergoing a major conversion over the course of nearly two years is definitely not a vessel in navigation for Jones Act purposes. Thus, the Texas court of appeals’ decision in the Helix case is a bit of an outlier. Still, the decision is worth noting as a demonstration of how far some courts are willing to go to find Jones Act seaman status.

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.