Limitation of Liability Claim Dismissed as Time Barred

The Limitation Act allows a vessel owner to limit liability for damage or injury to the value of the vessel or the owner’s interest in the vessel. To invoke the protections of the Act, the vessel owner must bring an action in district court within six months after a claimant gives the owner written notice of a claim.

At the heart of the dispute in In re The Complaint of RLB, was whether a series of letters exchanged between the vessel owner’s lawyers and the lawyers of the injured party were sufficient. The district court dismissed the vessel owner’s Limitation Action as time barred, and the vessel owner appealed.

The Fifth Circuit addressed the issue of: (1) whether a series of letters, none of which constitutes notice on its own, may be considered together to find notice in the aggregate, (2) whether plaintiff’s letters convey a “reasonable possibility” of a potential claim, and (3) whether those letters establish a “reasonable possibility” that the amount of the claim might exceed the value of the Vessel.

The Court ruled that a written communication may serve as notice under the act in lieu of a filed complaint, and stated that it makes sense to consider a body of correspondence. The Court considered the entire series of letters to analyze the requirements of the Act.

The Court had not previously addressed the issue of what a writing must contain to find a vessel owner had notice of a potential claim, and settled upon the plaintiff’s fact intensive approach. It examined each letter and identified two that explicitly referenced filing a lawsuit dated more than six months prior to the filing of the Limitation Actions.  The two letters conveyed a “reasonable possibility” of a potential claim to the vessel owner.

In determining whether the vessel owner had notice that there was a reasonable possibility of damages in excess of the vessel’s value, the Court relied upon precedent that the vessel owner should have realized the potential for damages in excess of its vessel’s value in light of the severity of the injures.  The vessel owner was aware of the injured party’s potential wrongful death suit.

For these reasons, the Court found that the vessel owner had written notice more than six months prior to filing its Limitation Action, and affirmed the district court’s dismissal.

In re The Complaint of RLB Contracting, Inc., as Owner of the Dredge Jonathan King Boyd its Engine, Tackle, Gear for Exoneration or Limitation of Liab.

Geographical Proximity is Not the Only Factor in Deciding OCSLA Jurisdiction

Robert Lewis, Jr. filed suit under the Outer Continental Shelf Lands Act (OCSLA), alleging injuries to his left elbow, cervical spine, and lumbar spine as the result of an accident that occurred while working on Ram-Powell, a tension-leg fixed platform, located in the Gulf of Mexico in Viosca Knoll Block 956.  The parties agreed that under OCSLA the substantive law for injuries occurring on fixed offshore platforms located on the outer continental shelf is the law of the adjacent state.  However, they disagreed as to which state’s law applied.  Plaintiff argued that Louisiana law should apply as it was the geographically closest to the platform in question.  Defendants, on the other hand, asserted that Alabama was the adjacent state and its law should apply, and filed a motion for summary judgment on the issue.

The court turned to the Fifth Circuit’s opinion in Snyder Oil Corp. v. Samedan Oil Corp. in resolving the issue.  Samedan set forth four factors in determining adjacency: (1) geographical proximity; (2) which coast federal agencies consider the subject platform to be “off of”; (3) prior court determinations; and (4) projected boundaries if the states’ borders were extended to the shelf.   Plaintiff argued that not only was Ram-Powell geographically closer to Louisiana, but that he also travelled to and from the platform via Louisiana and had no connections to Alabama.  Plaintiff further argued that there were no controlling decisions on Block 956, and that any evidence regarding the projected boundary is not as determinative as geographic proximity.

In finding for Defendants, the U.S. District Court for the Eastern District of Louisiana recognized that while Block 956 was geographically closer to Louisiana due to its peculiar boot shape, the other three factors, viewed together, indicated that Alabama was the adjacent state.  First, various federal and state agencies considered the platform to be off the coast of Alabama.  Next, there was indeed a prior decision ruling that the Ram-Powell was adjacent to Alabama; and the platform in question in Samedon was further to the west than Ram-Powell, and it too was considered adjacent to Alabama.  Furthermore, the projected boundaries as set forth by the Minerals Management Service (MMS), U.S. Commerce Department, and U.S. Bureau of Ocean Energy Management (BOEM) all indicate that Block 956 is within the portion of the outer continental shelf of Alabama.  Lastly, the court rejected Plaintiff’s state of transit argument, stating that the geographic proximity factor does not place import on the state of transit.  Thus, partial summary judgment was granted and Alabama law applied.

Lewis v. Helmerich & Payne International Drilling Co., et al.

No Cause of Action Against Coworker’s Lending Employer

The U.S. District Court for the Eastern District of Louisiana recently issued an interesting decision applying the Longshore and Harbor Workers’ Compensation Act’s borrowed servant doctrine.  The plaintiff was injured on a tension leg platform on the outer continental shelf when another worker dropped a piece of equipment on his back.  Plaintiff sued his employer (BP) as well as the other worker’s employer (Danos and Curole).

The parties ultimately agreed that the LHWCA applied by virtue of the Outer Continental Shelf Lands Act and BP was eventually dismissed as plaintiff’s employer.  Danos and Curole filed a motion for summary judgment, arguing plaintiff had no cause of action because its employee was acting as a borrowed servant of BP at the time of the incident.  If plaintiff’s coworker was acting as a borrowed employee of his own employer, BP, the LHWCA prevented him from suing his coworker for negligence and he therefore had no cause of action for vicarious liability against Danos and Curole.

The Court applied the Fifth Circuit’s nine factor test for the borrowed servant doctrine.  After finding that the vast majority of the evidence weighed in favor of plaintiff’s coworker being a borrowed servant of BP, the Court held that plaintiff had no cause of action against Danos and Curole for vicarious liability and dismissed all claims.

Crawford v. BP Corporation North America, Inc.

Fifth Circuit Roles Back Seaman’s Entitlement to Punitive Damages

3367543296_1470ef5247_zThis article originally appeared in WorkBoat Magazine.

The December 2013 Legal Talk column addressed the very significant ruling a three judge panel of the Fifth Circuit Court of Appeals in McBride v. Estis Well Service. That case signaled a major expansion in the law regarding semen’s entitlement to recover punitive damages under the general maritime law.  The availability of punitive damages had been extremely limited since the 1990 Supreme Court case of Miles v. Apex, which held that non-pecuniary damages, which would include punitive damages and similar non-economic type losses, were not recoverable by seamen, whose legal remedies are largely governed by the Jones Act.

Courts have chipped away at the scope of the Miles ruling since then, most notably by the Supreme Court itself in 2009 when the Townsend case recognized that a seaman could get punitive damages for his employer’s willful failure to pay maintenance and cure.  The McBride case took that holding a huge step further by allowing seamen to recover punitive damages for unseaworthiness claims arising under the general maritime law.

The McBride case, however, was recently reconsidered by the entire Fifth Circuit en banc, which reversed the previous ruling by the three judge panel.  Now, the rule in the Fifth Circuit is that Jones Act seamen have no cause of action for punitive damages for either negligence or unseaworthiness. The latest McBride ruling is in keeping with the general pronouncement of the Supreme Court’s Miles v. Apex case regarding the unavailability of non-pecuniary damages in Jones Act cases.

While this significant ruling reflects a trend followed by other federal appeals courts, this issue remains unsettled in some jurisdictions. The Supreme Court may once again have to take up the punitive damages issue to establish uniformity among all courts on this important aspect of maritime law.

Excellent image courtesy of Flickr user Andrew Magill.