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Towboatlaw – Towboat & Barge Lawyer, Admiralty & Maritime Law on the Rivers

  • Court Invokes Flotilla Doctrine, Orders Vessel Owner to Increase Security in Limitation Act Case to Include Value of 2d Tug Involved in Accident

    The federal case of Crosby Marine Transp., LLC v. Triton Diving Servs., LLC, CIV. 13-2399, 2014 WL 5026070 (W.D. La. Oct. 8, 2014) arises out of accident which occurred in May 2013, in which a tug, the M/V CROSBY MARINER, and another Crosby Marine Transportation-owned tug, the M/V CROSBY EXPRESS, were moving a barge in Bayou Chene near Amelia, Louisiana. The CROSBY EXPRESS was the lead tug that was towing the barge, while the CROSBY MARINER had the barge on its hip to stabilize the barge during transit.  Both tugs were manned by captains, but all passing arrangements and decisions about the speed of the tow and navigation came from the captain of the lead tug, the CROSBY EXPRESS.

    Mark Rottinghaus, a Crosby Tugs, L.L.C. employee and crewman aboard the M/V CROSBY MARINER, was injured when the M/V TRITON ACHIEVER, a vessel owned and operated by another company, collided with the CROSBY MARINER.

    Crosby Marine Transportation, L.L.C., as owner of the M/V CROSBY MARINER, and Crosby Tugs, L.L.C., as owner pro hac vice of the M/V CROSBY MARINER, filed a Verified Complaint for Exoneration from or Limitation of Liability, pursuant to Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims and the Vessel Owners’ Limitation of Liability Act, seeking to be exonerated or alternatively to limit its liability to the value of the tug, with pending freight, upon which Rottinghaus was serving.  Simultaneously with the filing of its complaint, Crosby filed an Ad Interim Stipulation and posted security only in the amount of its interest in the M/V CROSBY MARINER and pending freight together with interest at the rate of 6% per annum from the date of the stipulation and for costs.

    Rottinghaus then filed a motion under Supplemental Rule F(7) asking the federal judge to order Crosby to increase its filed security to include the value of the other Crosby tug, the CROSBY EXPRESS.  Rottinghaus cited the “Flotilla Doctrine.”  Under this Doctrine,  where vessels involved in a casualty are (i) commonly-owned, (ii) engaged in a common enterprise, and (iii) under a single command, the court may order that all vessels in the flotilla, or their value, together with pending freight, be tendered to the court as security for claimants when the vessel owner files for court protection under the federal Vessel Owners’ Limitation of Liability Act.

    Rule F(7), entitled “Insufficiency of Fund or Security,” states:

    “Any claimant may by motion demand that the funds deposited in court or the security given by the plaintiff be increased on the ground that they are less than the value of the plaintiff’s interest in the vessel and pending freight. Thereupon the court shall cause due appraisement to be made of the value of the plaintiff’s interest in the vessel and pending freight; and if the court finds that the deposit or security is either insufficient or excessive it shall order its increase or reduction. In like manner any claimant may demand that the deposit or security be increased on the ground that it is insufficient to carry out the provisions of the statutes relating to claims in respect of loss of life or bodily injury; and, after notice and hearing, the court may similarly order that the deposit or security be increased or reduced.”

    The purpose of Rule F(7), the Court found, “is to ensure that the plaintiff-in-limitation is not permitted to submit an inadequate bond with impunity and that the claimant may not contend that the bond should be higher than the actual value of the vessel.”

    The Court agreed with Rottinghaus and granted his motion under Rule F(7) to increase security.  It ordered that a court-appointed expert appraise the value of both the second tug, the M/V CROSBY EXPRESS, along with the CROSBY MARINER, or, alternatively, that the parties file a stipulation — or written agreement, as to the value of both tugs along with their pending freight, as the Limitation Act and Rule F require.

     

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  • Vessel Owner Not Entitled to Damages Cap of Limitation of Liability Act When it Fails to Properly Train its Captain and Has Policy of Violating the Rules of the Road

    In In Re: BOPCO, L.P., 2013 U.S. Dist. LEXIS 128991 (E.D. La. Sept. 9, 2013), two vessels collided at the intersection of the Back Levee Canal and the Main Canal at Point à La Hache, Louisiana. BOPCO, L.P.’s vessel, the M/V MR. JOE, operated by Captain Tyrell DuPont, collided with crabber Ryk Frickey’s vessel as Frickey was returning from checking his traps.  It was a clear day, but the view of the intersection the two vessels was entering was partially obstructed by vegetation and marsh grass.  The Court, well-respected U.S. District Judge Helen Ginger Berrigan, found the M/V MR. JOE had an operational radar system, but it was not in use.

    A typical marine radar control unit and screen. The vessel owner in this case, incredibly, had a policy that its captains not use radar during the day.

    A typical marine radar control unit and screen. The vessel owner in this case, incredibly, had a policy that its captains not use radar during the day.

    BOPCO filed this lawsuit under the federal Vessel Owners’ Limitation of Liability Act, 46 U.S.C. Section 30501, et seq., seeking to limit its liability to the value of its vessel, $45,000.  Frickey, however, was seriously injured in the collision.  He was unable to return to work and had to undergo lumbar fusion surgery.

    A jury found BOPCO negligent under the general maritime law and awarded damages to Frickey.  It found BOPCO 75% at fault, Frickey 25%.  Judge Berrigan, in this decision, addressed whether BOPCO was entitled under the Limitation of Liability Act to limit its damages exposure to Frickey to the $45,000, which was the value of its vessel.  The Court described the burden on a vessel owner in these circumstances:

    “The Limitation of Liability Act provides that a vessel owner may limit its liability after an accident to the value of the vessel and pending freight….Despite this, if ‘the vessel’s negligence or unseaworthiness is the proximate cause of the claimant’s loss, the [defendant]-in-limitation must prove it had no privity or knowledge of the unseaworthy conditions or negligent acts.’…Privity or knowledge is understood to be complicity in the fault that caused the accident….Privity or knowledge is imputed to a shipowner if he personally participated in the negligent conduct or brought about the unseaworthy condition….A corporation has knowledge of the negligent act if its managing officers knew or should have known about conditions or accidents likely to cause the loss….The corporation may be found to have knowledge if the negligent condition could have been discovered through reasonable diligence….The corporation must overcome a presumption that its officers and managers had actual knowledge, and that they should have known of the negligent condition that caused the harm….The burden of proving lack of privity or knowledge of the negligence by a preponderance of the evidence is on the owner of the vessel seeking to limit its liability.”

    In this case, BOPCO argued to the Court that the accident occurred soley because of navigational or other errors of its captain—that is, acts of negligence of which it could not have had privity to or knowledge of, and that it had done all it had to do by hiring a competent captain.  Judge Berrigan disagreed.  She found BOPCO’s Captain DuPont “did not make a decision not to operate the radar because he thought it would be a better idea to use binoculars.”  Rather, the Court held, “DuPont followed BOPCO’s policy not to operate the radar system on a clear day in the channel.” (emphasis added)  Thus, Judge Berrigan found BOPCO had privity or knowledge of the accident’s causes and thus could not limit its liability under the Limitation of Liability Act because BOPCO “(1) failed to train DuPont, and (2) not only failed to require the use of radar, but had a policy stipulating that radar should not be used in conditions such as those on the day of this accident.”

    Specifically, the Court wrote: “While DuPont knew that he was required to follow the Rules of the Road, and had a general knowledge of what he thought the rules were, his idea of the Rules of the Road was clearly hazy, and this led him not to follow the Rules, which led to the collision….The Court agrees with Frickey that it was not enough for BOPCO’s safety manual to require a vessel operator to know and obey the Rules of the Road.  BOPCO needed to train DuPont on the Rules. It was required to do due diligence to know that DuPont had not received past training, and BOPCO’s lack of due diligence leads to privity or knowledge of the accident that ensued as a result of DuPont not receiving proper training.”

    On the policy of BOPCO to not require use of radar during the day, the Court was highly critical.  Judge Berrigan wrote:

    “BOPCO was required to use its radar. Fernandez explained that the reason he tells his men not to turn the radar on during the day is that it is ‘almost looking like at a video game while you’re driving.’ Fernandez said that he would prefer for his captains to have their eyes on the waterways. BOPCO made its decision to tell its captains not to use radar during the day in contravention of the Rules of the Road. The Court does not understand how radar could be distracting during the day, but not during the night. Additionally, people drive with GPS devices all the time, and while they may be distracting, they are considered to be more helpful than they are distracting. A device, such as radar, that is not just helpful, but also a tool to ensure greater safety, is surely more of a help than it is a hindrance. Under Judge Learned Hand’s theory, the burden of taking the precaution to use radar is certainly less than the probability of the accident multiplied by the injury. It was negligent for BOPCO not to use the radar, and BOPCO propagated the negligence through a policy. Even Fernandez admitted that there is no harm in using radar on a bright, sunny day.”

    Since BOPCO was not entitled to the cap afforded by a successful invocation of the Limitation of Liability Act, Judge Berrigan held it responsible for Frickey’s damages, as follows: (A) $258,571.78 for medical expenses, past and future; (B) $50,250.00 for loss of earning capacity, past and future; (C) $153,750.00 for physical pain and suffering, past and future; and (D) $367,500.00 for mental anguish and emotional distress, past and future.

     

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  • Seaman’s Employer Which Willfully Denied Maintenance & Cure Ordered to Pay Attorney’s Fees at $400/hour, $150/hour for Paralegal Work

    A seaman is entitled to maintenance and cure for any injury or illness that occurs, manifests, or becomes aggravated while he or she is in service of his or her ship.  “Maintenance” refers to reasonable and necessary food and lodging expenses.  “Cure” is the seaman’s right to reasonable and necessary medical care until the seaman has reached “maximum medical improvement,” defined as the point at which the condition is permanent or cannot be improved with further medical treatment.

    As the U.S. Second Circuit Court of Appeals observed last July in Messier v. Bouchard Transportation, “[i]t does not matter whether he is injured because of his own negligence….It does not matter whether the injury or illness was related to the seaman’s employment…It does not even matter, absent active concealment, if the illness or injury is merely an aggravation or recurrence of a preexisting condition…This well-established rule does not permit an exception for asymptomatic diseases—so long as the illness was present during the seaman’s service, he is entitled to maintenance and cure.”

    Recently, in Hicks v. Vane Line Bunkering, Inc., 2013 U.S. Dist. LEXIS 55043 (S.D.N.Y. Apr. 15, 2013), the jury found against Ciro “Charles” Hicks, a mate on Vane Line’s tugboat, on his Jones Act negligence and general maritime law unseaworthiness claims.  But, it found Vane Line liable as to his maintenance and cure claims, and that this employer had acted willfully in underpaying and failing to pay him maintenance and cure.  So, the jury assessed damages as follows: underpaid maintenance – $77,000, future maintenance – $16,000, future cure – $97,000, past pain and suffering – $132,000, and $123,000 in punitive damages.

    Given the willfulness finding, the Court also ordered Vane Line to pay Hicks’ attorney’s fees and expenses, including paralegal time.  It valued Hick’s highly-experienced admiralty attorney’s services at $400/hour and the paralegal’s time at $150/hour, together with case expenses (depositions, copies, filing fees, etc.) totaling $112,083.77.

    Thus, if you are a seaman and may not ultimately have a winning Jones Act negligence or general maritime law unseaworthiness case, you may still have a valuable general maritime law maintenance and cure claim, particularly where your employer has acted callously or willfully in failing to pay or underpaying you maintenance and/or cure.

     

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  • Employer Not Automatically Entitled to Restitution for Maintenance and Cure Paid to Seaman Who Intentionally Misrepresents or Conceals Pre-existing Medical Condition

    In Boudreaux v. Transocean Deepwater, Inc., 2013 U.S. App. LEXIS 5288 (5th Cir. Mar. 14, 2013), the U.S. Fifth Circuit Court of Appeals, perhaps the country’s most experienced and prolific appellate court in admiralty and maritime cases, in an opinion authored by Judge Patrick E. Higginbotham, reaffirmed the judiciary’s historical deference to seamen.

    Before Wallace Boudreaux began work as a Jones Act seaman for Transocean, he answered “no” on the employer’s pre-employment medical questionnaire which asked if he had a history of back troubles.  After five months of working for Transocean, Boudreaux said he’d injured his back while servicing equipment.  Transocean then paid him maintenance and cure for nearly five years.  Boudreaux later sued Transocean alleging it had failed to properly fulfill its general maritime law maintenance and cure obligation to him.

    In the discovery phase of Boudreaux’s lawsuit, Transocean found out Boudreaux had had a history of back problems before he began work for Transocean.  It then filed an unopposed motion for partial summary judgment on Boudreaux’s claim for further benefits, invoking McCorpen v. Central Gulf Steamship Corp., a 1968 Fifth Circuit Court of Appeals decision.  McCorpen holds that a maritime employer does not owe its seaman employee maintenance and cure if it can show the seaman intentionally misrepresented or concealed a pre-existing medical condition that, had it known about at the time of hiring, it would not have hired the person.  But Transocean went a step further.  It filed a counterclaim against Boudreaux seeking to recoup the money it had paid Boudreaux and his medical providers.  It claimed that since it successfully established its McCorpen defense, it should automatically be entitled to these funds.  The Fifth Circuit disagreed.

    The New Orleans-based appellate court wrote that a “maritime employer’s obligation to pay an injured seaman maintenance and cure is an essential part of the employment relationship, whether characterized as contractual or otherwise.”   The court noted that in cases where the seaman does not have a Jones Act negligence or general maritime law unseaworthiness-based damages verdict against the employer which such a restitution claim might merely offset, “the employer would gain an affirmative judgment against the seaman.  Although most likely uncollectible, the judgment would stand as a serious impediment to the seaman’s economic recovery, and its threat would have a powerful in terrorem effect in settlement negotiations.”

    The Fifth Circuit was also reluctant to adopt Transocean’s argument because it is easier for the employer to escape maintenance and cure liability under the McCorpen rule than it would be to prove the seaman committed fraud.  Under McCorpen, the employer need only show the seaman had an objective intent to conceal, that he or she “failed to disclose medical information in an interview or questionnaire that is obviously designed to elicit such information.”

    Whereas, to win a fraud claim, one must show the alleged fraudster had a subjective intent to defraud, that is, the plaintiff in such a claim must show the person actually, in their mind, intended to defraud, or as the court described it here, “fraud hinges on the subjective state of mind of the alleged wrongdoer.”  The court also noted issues of fraud are usually left to a jury to decide and should not be decided on summary judgment by a judge.

    Taking the above into account and also the history of solicitude courts have shown to seamen, the court wrote, “a restitution-via-McCorpen counterclaim would, in practice, threaten injured seamen with the specter of crushing liability for misstatements found material.  With respect, such a result is inimical to the existing fabric of maritime law.”  It concluded:

    “We are offered no reason to depart from precedent.  There is only the change of advocates and judges, by definition irrelevant to the settling force of past jurisprudence — always prized but a treasure in matters maritime.  All this against the cold reality that the sea has become no less dangerous, and the seaman no less essential to maritime commerce.”

     

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  • Materials Vessel Operator Provides to U.S. Coast Guard to Further Agency’s Marine Casualty Investigation Not Exempt From Discovery by Injured Claimant

    Patricia Guest, one of about 4,500 passengers and crew aboard the CARNIVAL SPLENDOR cruise liner in November 2010, allegedly slipped and fell, injuring her shoulder. She claimed in a personal injury lawsuit against Carnival Corporation her accident occurred while the vessel, including its stabilizers, was disabled and adrift following an engine room fire and that the ship “violently lurched,” causing her fall.

    Cruise liner CARNIVAL SPLENDOR

    Cruise liner CARNIVAL SPLENDOR

    The U.S. Coast Guard conducted an investigation into the engine room fire and the failure of the ship’s automatic CO2 fire suppression system to deploy. Guest’s lawyers, as part of her lawsuit’s discovery process, asked Carnival for photographs it had taken, communications between it and the Coast Guard with respect to this investigation, and reports, memoranda, and documents Carnival had submitted to the Coast Guard. In response, Carnival claimed a federal law protected it from having to turn over the materials it had given to the Coast Guard.

    The federal statute in question, codified at 46 U.S. Code Section 6308, is entitled “Information barred in legal proceedings.” It states, in pertinent part:

    “…no part of a [U.S. Coast Guard] report of a marine casualty investigation…including findings of fact, opinions, recommendations, deliberations, or conclusions, shall be admissible as evidence or subject to discovery in any civil or administrative proceedings, other than an administrative proceeding initiated by the United States” and “[a]ny member or employee of the Coast Guard investigating a marine casualty…shall not be subject to deposition or other discovery, or otherwise testify in such proceedings relevant to a marine casualty investigation, without the permission of the Secretary [of the Department of Homeland Security].”

    A Coast Guard regulation, appearing at 46 C.F.R. § 4.07-1(b), states the “investigations of marine casualties and accidents and the determinations made [by this agency] are for the purpose of taking appropriate measures for promoting safety of life and property at sea, and are not intended to fix civil or criminal responsibility.”

    In Guest v. Carnival Corp., 2012 U.S. Dist. LEXIS 184936 (S.D. Fla. Nov. 7, 2012), a U.S. Magistrate Judge found that when reading Section 6308 together with Section 4.07-1(b), “it is clear that the scope of the statutory protection [of Section 6308] is limited to the Coast Guard’s investigative report, and anything included within that report, in order to avoid having the Coast Guard’s investigative report and its conclusions influence the litigation process.” But, the Court found, Section 6308 did not protect vessel owners like Carnival from having to hand-over to parties like Guest the materials Carnival had provided to the Coast Guard in furtherance of the Coast Guard’s investigation. The Court wrote:

    “Ultimately, the issue before this Court is whether or not the material that Defendant produced to the Coast Guard is precluded from discovery pursuant to 46 U.S.C. § 6308(a). Defendant has failed to provide the Court with any compelling support for that proposition, and this Court has been unable to find the same independently. In addition, a review of the applicable case law unequivocally demonstrates that 46 U.S.C. § 6308(a) extends to the specific Coast Guard investigative report and, arguably, any other Coast Guard document produced in the course of its investigation that contains any findings of fact, opinion or conclusions – not, however, a litigant’s own documents. Accordingly, Defendant’s objections are overruled…..Defendant shall produce copies of all documents, photographs and any other materials provided to any governmental agency, classification society or flag state, including but not limited to the U.S. Coast Guard, in connection with the fire; the failure of the fire suppression systems; and the loss of propulsion aboard the vessel. Defendant shall produce the above-described documents within seven (7) days of this Order.”

    About two months later, the parties announced to the Court the case had settled.

     

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