A Great Resource for Longshore Agency Deference…That Needs To Be Updated

When reviewing issues affecting the Longshore and Harbor Workers’ Compensation Act, courts will give the Director of Labor deference.  What this means is that courts “accord ‘considerable weight’ to the construction of the statute urged by the Director of the Office of Workers’ Compensation Programs, as he is charged with administering it.”  Force v. Dir. OWCP,  938 F.2d 981, 983 (9th Cir. 1991).  Further, courts “will defer to the Director’s view unless it constitutes an unreasonable reading of the statute or is contrary to legislative intent.”  Matson Terminals, Inc. v. Berg, 279 F.3d 684,696 (9th Cir. 2002) (citing Chevron U.S.A., Inc. v. Nat’l Res. Def. Council, 467 U.S. 837, 842-45 (1984)).  There are different levels of deference.  When the Director takes a position in litigation, she is afforded Skidmore deference.   Under Skidmore, the measure of deference depends upon “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”  Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).

To peruse some of the Director’s prior litigation positions, to which at least Skidmore deference was afforded, take a look at this Department of Labor webpage.  There you will find copies of Longshore Legal Briefs, which were filed on behalf of the Director to state her position on issues that were addressed by courts of appeals.  Although the list of Briefs is relatively small, and the webpage does not look like it has been updated since 2004, it is nonetheless interesting to review the Director’s position.  Our suggestion is that all of the Director’s briefs should be uploaded to the DOL’s website just like how the Benefits Review Board uploads cases on a monthly basis.   Uploading the Briefs is a great idea that should be continued.

Supreme Court Grants Another “Vessel” Case. Casino Boats Beware.

On February 21, 2012, the Supreme Court of the United States granted certiorari for Lozman v. City of Riviera Beach, Florida.  The issue is “[w]hether a floating structure that is indefinitely moored, receives power and other utilities from shore, and is not intended to be used in maritime transportation or commerce constitutes a “vessel” under 1 U.S.C. Sec. 3, thus triggering federal maritime jurisdiction.”  SCOTUSBlog’s case page provides a wealth of case information, including the Eleventh Circuit’s opinion from which certiorari was granted.

In the Eleventh Circuit, the City of Riviera Beach (“City”) filed an in rem proceeding against Defendant Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length (“Defendant”) for trespass and to foreclose on the City’s maritime lien for unpaid dockage.  Defendant argued that his was a “floating residential structure” and not a “vessel,” but the Eleventh Circuit disagreed.  Pursuant to 1 U.S.C. Sec. 3, a “vessel” includes “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.”  In Stewart v. Dutra Constr. Co., 543 U.S. 481, 496 (2005), the Supreme Court pronounced that whether a watercraft is a vessel requires focusing on “whether the watercraft’s use ‘as a means of transportation on water’ is a practical possibility or merely a theoretical one.”  Its a matter of capability, not a matter of “present use or station.”

Ultimately, the Eleventh Circuit determined that the “floating residential structure” was a “vessel” for purposes of federal admiralty jurisdiction.  It did not matter that the Defendant’s vessel was “moored to a dock by cables, received power from land, and had no motive power or steering of its own.”  The vessel could still be towed.  It had a “practical capacity for transportation over water.”

Why should casino boats beware?  A line of cases has developed which tests the Eleventh Circuit’s broad reading of a “vessel.”  In De La Rosa v. St. Charles Gaming Co., 474 F.3d 185 (5th Cir. 2006), the M/V CROWN CASINO, a floating casino permanently moored to a dock, the Fifth Circuit considered the casino owner’s intent of usage in addition to the objective evidence that the craft was indefinitely moored.  Then, in Tagliere v. Harrahs Ill. Corp., 445 F.3d 1012, 1014-16 (7th Cir. 2006), the Seventh Circuit likewise considered owner intent, distinguishing “permanently moored” and “indefinitely moored” based upon whether the owner intends to sail the craft again.  State courts–especially in Louisiana–have latched onto De La Rosa to consider owner intent in addition to objective evidence.  Lemelle v. St. Charles Gaming Co., Inc., 11-255 (La. App. 3 Cir. 1/04/12), — So. 3d —-, 2012 WL 130351; Breaux v. St. Charles Gaming Co., Inc., 10-1349 (La. App. 3 Cir. 6/21/11), 68 So. 3d 684.  The Fifth and Seventh Circuits’ intent-based consideration was rejected by the Eleventh Circuit.  Bd. of Comm’rs of Orleans Levee Dist. v. M/V BELLE OF ORLEANS, 535 F.3d 1299 (11th Cir. 2008) (“The owner’s intentions with regard to a boat are analogous to the boat’s ‘purpose,’ and Stewart clearly rejected any definition of ‘vessel’ that relies on such a purpose.”).  The Supreme Court now gets to resolve this interesting offshoot of Stewart.

Note: Special thanks to Professor Michael Sevel, University of Miami School of Law , for the quick info about the Lozman cert. grant.  Of particular note to the maritime legal community, Professor Sevel is coaching two teams at the National Admiralty Moot Court Competition, which is scheduled to take place in New Orleans between March 22-24, 2012.  Considering Loyola’s Annual Longshore Conference and now the National Admiralty Moot Court Competition, New Orleans is the place to be this March for the maritime and longshore communities.

 

Deepwater Horizon: Contractual Indemnity for Gross Negligence or Punitive Damages?

U.S. District Judge Carl Barbier recently rendered a very important ruling in the Deepwater Horizon/BP Oil Spill suit that relates to the enforceability of contractual indemnity in the context of GROSS NEGLIGENCE and/or PUNITIVE DAMAGES. 

Judge Barbier addressed whether BP was contractually obligated to defend and indemnify Transocean, owner of the Deepwater Horizon, for pollution claims asserted by third parties.  The drilling contract between BP and Transocean, in pertinent part, required BP to defend and indemnify Transocean for damages and liability from spills “without regard to negligence of any party or parties and specifically without regard for whether the pollution or contamination is caused in whole or in part by the negligence or fault of” Transocean. 

BP argued to Judge Barbier that its duty to defend and indemnify did not extend to damages caused by Transocean’s gross negligence or to punitive damages that may be awarded against Transocean.  BP asserted that the words “negligence and fault” (as used in the contract) meant “ordinary fault” but not gross negligence or strict liability.  BP also contended that public policy prohibits indemnity for gross negligence and punitive damages. 

In a rather detailed opinion, Judge Barbier accepted BP’s arguments relating to punitive damages but disagreed with respect to gross negligence.  Judge Barbier ruled that public policy bars indemnity for punitive damages.  However, he held that public policy does not prohibit indemnity for gross negligence.  The Court found that the foregoing indemnity wording was intended to emphasize that BP assumed the risk even if caused by Transocean’s negligent conduct but was not intended to limit such conduct to ordinary negligence.  

Interestingly, Judge Barbier noted that, in some instances, gross negligence may indeed render certain contractual language unenforceable where one party agrees in advance to release the other contracting party from liability for damages suffered by the former, as a matter of public policy.  Such provisions are more rightly defined as “releases” rather than indemnity, according to the court.  

Judge Barbier explained that, in general, a “release” surrenders legal rights or obligations between parties to an agreement.  In comparison, a true indemnity agreement determines which party to a contract will ultimately bear the risk of injury to a third party.  In the first instance, the injured party has no recourse.  In the latter instance, the injured party is not restrained from seeking compensation.  Thus, the court ruled that gross negligence will render release language unenforceable, but will not prohibit indemnity. 

This ruling will certainly be appealed to the Fifth Circuit.

In re Oil Spill by the Oil Rig “Deepwater Horizon, MDL No. 2179 (E.D. La. Jan. 26, 2012).

Schedule Released for Longshore Conference

Loyola University New Orleans College of Law released the schedule for the 2012 Annual Longshore Conference.  Without a doubt, Loyola’s Continuing Legal Education department has set up another excellent conference for all who attend.  Here is the schedule, and you can register by clicking here:

Annual Longshore Conference

March 15 – 16, 2012

Sheraton Hotel

New Orleans, Louisiana

Thursday, March 15, 2012:

7:30 a.m. – 8:15 a.m. Registration

8:15 a.m. – 8:30 a.m. Introduction and Announcements: María Pabón López, Dean Loyola University New Orleans College of Law; Lana A. Corll, Director, Continuing Legal Education, Loyola University New Orleans College of Law; Alan G. Brackett, Esq., Advisory Board Chair, Mouledoux, Bland, Legrand & Brackett, LLC, New Orleans, LA.

8:30 a.m. – 9:30 a.m. Significant Judicial Decisions Impacting Claims Under the Act: Thomas C. Fitzhugh, III, Fitzhugh & Elliott, P.C., Houston, TX.

9:30 a.m. – 10:30 a.m. Section 22 Modification: Keith L. Flicker, Flicker, Garelick & Associates, LLP, New York, NY; Joshua T. Gillelan, II, Longshore Claimants’ National Law Center, Washington, D.C.; David T. Kormis, Senior Attorney, Benefits Review Board, Washington, DC.

10:30 a.m. – 10:45 a.m. Break

10:45 a.m. – 12:00 p.m. The Basics of Understanding Orthopedic Injuries: Dr. Kenneth N. Adatto, Orleans Orthopedic Association, New Orleans, LA; Herbert J. Chestnut, Chestnut Beller and Walter, Marietta, GA; Frank J. Towers, Blue Williams, LLP, Metairie, LA.

12:00 p.m. – 1:15 p.m. Lunch

1:15 p.m. – 2:15 p.m. Claims Arising on the Outer Continental Shelf: Kenneth G. Engerrand, Brown Sims, PC, Houston, TX.

2:15 p.m. – 3:45 p.m. Proposed Amendments to the Act: David A. Duhon, District Director, U.S. Department of Labor, OWCP, New Orleans, LA; Anthony R. Filiato, Signal Administration, Inc., Wilton, CT; Jon B. Robinson, Mouledoux, Bland, Legrand & Brackett, LLC, New Orleans, LA; Jeffrey M. Winter, Law Offices of Jeffrey Winter, San Diego, CA.

3:45 p.m. – 4:00 p.m. Break

4:00 p.m. – 4:45 p.m. Seeking Relief from the Special Fund: Mark Reinhalter, Counsel for Longshore, U.S. Department of Labor, Office of the Solicitor, Washington, DC; Raymond H. Warns, Jr., Holmes, Weddle & Barcott, Seattle, WA

4:45 p.m. – 5:30 p.m. Longshore Jeopardy!: Hon. Patrick Rosenow, Office of Administrative Law Judges, Covington, LA.

5:30 p.m. – 7:00 p.m. Cocktail Reception

Friday, March 16, 2012:

8:30 a.m. – 9:30 a.m. Understanding Ethics and Why it’s Important to the Legal Process: Professor Dane S. Ciolino, Alvin R. Christovich Distinguished Professor of Law, Loyola University New Orleans College of Law, New Orleans, LA.

9:30 a.m. – 10:30 a.m. Handling Death Claims Under Section 9: Paul M. Doolittle, Paul M. Doolittle, P.A., Jacksonville, FL.

10:30 a.m. – 10:45 a.m. Break

10:45 a.m. – 11:45 a.m. Psychological Claims Arising Under the Act: Kathleen K. Charvet, Lewis Brisbois Bisgaard & Smith LLP, New Orleans LA; David C. Barnett, Barnett & Lerner, P.A., Fort Lauderdale, FL.

11:45 a.m. – 1:00 p.m. Handling Claims Outside CONUS: Hon. Larry Price, Office of Administrative Law Judges, Covington, LA; Nina C. Hogan, Freedman and Lorry, P.C., Philadelphia, PA; Mick Thomas, Thomas, Quinn & Krieger, San Francisco, CA.