Fifth Circuit Affirms OSHA Citations Against Mobile Services Rig Operator

In September 2013, a five-man crew was operating a mobile well-servicing rig in Hawkins, Texas.  An inspector for the Occupational Safety & Health Administration (“OSHA”) observed the crew pulling pipe out of a well and photographed the activity.  The photographs demonstrated that the crew had placed guardrails only around the upper part of the rig’s platform.  Further, the investigator observed a set of stairs leading from the ground to the lower platform, but no stairs from the lower to the upper platform.

 

Based on these observations, OSHA cited the rig operator for the missing stairs and missing guardrail.  The matter was tried before an administrative law judge, who affirmed both citations.  In affirming the citations, the ALJ rejected the rig operator’s defenses that compliance with the guard rail regulation was “infeasible” and would have presented a greater hazard.  Further, the ALJ also found that the fixed stairs violation was serious and that the guardrail violation was a repeat violation.  The rig operator was fined penalties of $5,500.00 for the fixed stairs violation and $38,500.00 guardrail infraction.  The rig operator appealed for discretionary review to the Occupational Safety & Health Review Commission as to the fixed stairs violation (which upheld the ALJ’s findings and conclusions), but not as to the guardrail citation.

 

On appeal to the Fifth Circuit, the rig operator argued that the “fixed stairs” requirement did not apply to a mobile rig because the rig itself was not “fixed.”  Further, the rig fell into the “articulated stairs” exception that would apply to structures such as floating roof tanks, dock facilities, or other rigs containing several sections that independently articulated.  In interpreting the word “fixed,” the Fifth Circuit rejected the rig operator’s definition of “fixed” as “permanently attached.”  Citing prior application of the fixed stairs requirement to mobile rigs, the Fifth Circuit held that OSHA’s definition of “fixed” as being “attached in some way to prevent movement” was much more reasonable.  As to the “articulated stairs” exception, the Fifth Circuit held that that exception applied only to stairs that rest on water.  Thus, the citation as to the fixed stairs was affirmed.

 

With respect to the guardrail citation, the Fifth Circuit found that the rig operator had waived its argument that attachment of the guardrail was infeasible because the rig operator had not raised that argument with the OSHRC.

 

Basic Energy Services v. Occupational Safety and Health Administration

Fifth Circuit Affirms “Take Nothing” Jury Verdict in Jones Act Suit

Plaintiff filed suit against his Jones Act employer, Cheramie Marine, L.L.C., alleging negligence and seeking maintenance and cure after an alleged injury on one of its utility vessels. Plaintiff alleged that on July 18, 2014, he was injured as a result of the captain’s decision to travel through high seas. Cheramie put on contrary evidence that the waves were not violent and that plaintiff had made contradictory statements that he, in fact, did not fall and that his alleged back pain was the result of being seasick. The captain testified at trial that plaintiff never reported having any kind of accident. Cheramie’s medical expert also offered testimony at trial about two different MRI films taken of plaintiff’s back, one taken prior to his alleged injury and the other taken after the injury. Cheramie’s expert offered his opinion that the pre-injury MRI actually looked worse than the one taken after the alleged accident. After a jury entered a “take nothing” verdict on plaintiff’s claims, plaintiff appealed to the United States Court of Appeals for the Fifth Circuit.

 

Prior to appealing, plaintiff did not file a motion for a judgment as a matter of law or a motion for new trial. Accordingly, on appeal, the Fifth Circuit was limited in what it could review. Review for sufficiency of the evidence was not an option because of plaintiff’s failure to move for judgment as a matter of law or new trial. The only review available was a challenge to the jury instructions. One of the questions on the jury verdict form asked the jury: “(1) Do you find from a preponderance of the evidence that plaintiff had an accident on July 18, 2014?” In response to this question, the jury answered “no.” On appeal, plaintiff argued that the word “accident” was confusing to the jury because, among other reasons, it may have given them the impression that it was something that happened without fault. Applying an abuse of discretion standard in reviewing the challenge to the jury verdict form, the Fifth Circuit found no reversible error in the inquiry as to whether plaintiff had an accident because it fairly presented the issue of liability to the jury.

 

Plaintiff also challenged the trial court’s decision to allow Cheramie’s medical expert to offer an opinion about the pre-incident MRI because the actual film of the MRI was not produced prior to trial. However, the pre-incident MRI was discussed in the expert’s Rule 26 expert report that was disclosed seven months prior to trial and the opinions offered in that report mirrored the testimony offered at trial. The Fifth Circuit concluded that the district court did not err in allowing the expert to testify consistent with his report while not admitting the actual MRI films into evidence.

 
Bosarge v. Cheramie Marine, L.L.C., 2017 WL 105891 (5th Cir. 2017)

Eastern District of Louisiana Excludes Pre-Trial Surveillance for Failure to Disclose

Plaintiff filed a Jones Act claim against several defendants, including barge drilling contractor, Baywater Drilling, LLC (“Baywater”) and oil services company Frank’s International, LLC (“Frank’s”).  The matter was initially set for trial in April 2015, but was continued several times.  The final continuance, granted in August 2016, set the trial for October 31, 2016 with an order that “no further discovery shall be conducted and no motions shall be filed without leave of Court.”

 

On October 2, 2016, Baywater and Frank’s conducted targeted surveillance that revealed Plaintiff working on his truck, using a handheld jack to jack up his truck, and physically lying under his truck.  This video was produced to Plaintiff on October 19, 2016, which prompted Plaintiff to file a Motion to Exclude.  At no time was the court provided with the surveillance video prior to Plaintiff’s motion.  Further, at no time did the defendants move to amend the pretrial order to include the videographer as a witness or the video itself as an exhibit.  The court granted Plaintiff’s motion to exclude.

 

In granting Plaintiff’s motion, the court cited Chaisson v. Zapata Gulf Marine Co., 988 F.2d 513 (5th Cir. 1993), which held that surveillance evidence is considered substantive evidence that is subject to discovery and that failure to timely disclose it can lead to its exclusion.  The court held that inclusion of the surveillance footage would be highly prejudicial to Plaintiff constituting the type of surprise that Chaisson was intended to prevent.

 

Smith v. Baywater Drilling, LLC, et al

Fighting Liability and Presenting Poor Experts Lead to Unanticipated Expenses

On June 10, 2011, the M/V Salvation, a steel-hulled tug owned and operated by the defendant struck the Ekwata, a vessel that was privately owned by the plaintiff, on the Atchafalaya River.  At the time of the allision, the Ekwata was moored at the fleeting facility.  Prior to the allision, the Salvation’s captain knew that the Atchafalaya River was experiencing historic water levels, which created the potential for extreme cross-currents and required him to exercise extreme caution.  Nonetheless, he proceeded down the river without assistance from another tug, and upon arriving at a holding position in the river, left the controls for a cup of coffee while the on-duty deckhand, who was supposed to be on watch, was below deck.  Before the captain returned to the controls, the river’s current had taken control of the Salvation. After unsuccessfully attempting to regain control, the captain decided to allide with the Ekwata to avoid damaging the two barges in the Salvation’s tow.

 

Plaintiff filed suit for the resulting damages to the Ekwata in the United States District Court for the Western District of Louisiana invoking the court’s admiralty jurisdiction.  Up to and through trial, the defendant contested liability despite the captain’s admission to his actions and the facts described above. This fight would later prove costly for the defendant.

 

After bench trial, the district court found the defendant to be at fault and concluded that the Ekwata was a constructive total loss.  The district court awarded the plaintiff $322,890, representing the pre-casualty value of the Ekwata, less the value of the materials and equipment the plaintiff could have preserved following the accident.  The district court also awarded $295,436.09 in attorney’s fees and costs to the plaintiff, finding that the defendant’s handling of the case was “an abuse of the process and bad faith”.

 

Defendant appealed the matter to the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”).  Among several assignments of error, the defendant asserted that the district court was erroneous in imposing attorney’s fees as a sanction for its handling of the case.  Defendant urged that it had a good faith basis for questioning the plaintiff’s pre-casualty valuation and thus the district court was not justified in awarding attorney’s fees as a sanction for its handling of the case.  Defendant further argued that the award was excessive.

 

The Fifth Circuit upheld the district court’s award of attorney’s fees.  It noted the district court’s finding that the defendant contested liability up to and through trial even though it “clearly knew the extent of its liability based on the circumstances of the case and the actions of its captain… [and] was fully aware of the fact that [plaintiff] had no liability whatsoever for this allusion.”  It further noted the district court’s finding that the defendant “presented two experts who were so lacking they could not even properly name the vessel [at issue].”

 

Defendant urged that the fee award was unwarranted because defendant had a good faith basis to challenge the quantum of damages and proceed with same through trial.  The Fifth Circuit held that even if defendant’s contention was true, it did not justify defendant’s intransigence on liability or the means by which defendant presented its defense on damages.  The Fifth Circuit highlighted defendant’s use of one expert who, according to the district court’s findings, opined on value “without including any comparables, without considering the equipment on the vessel, and without reliable underlying information” and a second expert who, according to the district court, “not only failed to correct the glaringly incorrect information set forth in [the first expert’s] report, but incorporated it into his own.”  The Fifth Circuit affirmed these decisions as well as the award of $295,436.09 in attorney’s fees.

 

This case illustrates the value the courts place on candidly presenting facts and evaluations of those facts at trial.  While the defendant in this case may have had its reasons to dispute liability, counsel and clients should always work together to analyze their trial strategy and ensure that the fight being fought is not undue.  This can be a hard balance to strike when stepping up to the attorney’s duty of fervently defending his or her client.  The case also illustrates the need for counsel to ensure the competency of the experts they retain.  Here, the defendant’s insistence on fighting liability where the court saw no grounds to do so and the presentation of experts who demonstrated brazen unpreparedness led to costs no one wants to incur.

 

Moench v. Marquette Transportation