What to Do When Your Dock is Damaged By a Ship With a Compulsory Pilot on Board

5223924101_a0488c4e25_zPilotage has existed since ancient times and is as necessary and important now to commercial shipping as it was when Roman law set forth the obligation on the part of the vessel to take a pilot.  A pilot is employed because he is presumed to have knowledge of tides, currents, and their effect upon the ship and all other dangers affecting the safety of the vessel due to local conditions.  In the United States, compulsory pilotage laws pre-date the Revolution.  Early on, Congress recognized that it would be wiser to leave regulation of local pilotage grounds to the individual states.

What happens, however, if a foreign ship carrying a compulsory pilot allides with your dock and causes damage?  Who is responsible—the ship, its master, or the pilot?  What should you, as dock owner, do?

The reason that a vessel employs a pilot, whether compulsory or voluntary, is in large measure because such an individual is expected to have expert local knowledge of the navigable waterways.  He is charged with knowledge and awareness of local conditions, including both published obstacles and dangers not evident on charts or from outward appearances.  The courts have found that pilots may be charged with knowledge of a local condition as a matter of law.  As a result, the courts have consistently come to the conclusion that a pilot may be held individually liable for damage caused by his negligent navigation to the vessel which he is piloting or to third parties which is the result of his failure to exercise due care.

Although a pilot might be regarded as an independent contractor as respects the ship he is aboard and its owners, he is at all times subject to the ultimate control of the ship’s master.  Even though the pilot is deemed to be an expert in navigation of vessels that he guides over his pilotage grounds, the master of the vessel is still in command of the vessel and must, under appropriate circumstances, intervene, interfere, warn or even take over and relieve the pilot.  This duty arises if the master of the vessel observes or discovers incompetency of the pilot or it becomes manifest that the pilot is steering the vessel into danger.  Thus, the courts have required the master to carefully observe and monitor the actions of the pilot.

When damage occurs, the prudent dock owner must move quickly, especially when the offending vessel flies a foreign flag.  While you may be able to procure jurisdiction over the pilot and, if he is found liable, have judgment rendered against him, this remedy may be mere delusion as he will likely not be able to respond to such a judgment.  You may be left with no remedy if the vessel leaves port.

Consequently, the dock owner should look to relief provided by Supplemental Admiralty Rules B and C found in the Federal Rules of Civil Procedure.  These rules provide for attachment and seizure, respectively, of the vessel.

Rule C addresses seizure, which allows anyone with a maritime lien against a vessel to arrest the vessel and proceed against it in a so-called in rem action.  The in rem action is based on the fiction of the personality of the vessel.  When the vessel allided with your dock, the damage it caused immediately gave rise to a maritime lien.  In the in rem action, you proceed against the vessel itself, called the res, to satisfy that lien.  Rule B, on the other hand, addresses attachment, a procedure in which the property of the vessel owner is held in order to compel the owner to submit to the personal jurisdiction of the court, and in order to provide a fund from which any judgment against the owner may be satisfied.  Any property of the owner which can be found in the district, not just the offending vessel, is subject to attachment under Rule B.

By seizing the vessel, the dock owner has security to cover his damages. The vessel owner may post security to cover the dock owner’s claim and the vessel can be released. Mere threat of seizure often results in security being posted, by way of a bond or letter of undertaking from the vessel’s insurer.

At the same time, the dock owner should move the court to require the key members of the vessel’s crew to give their depositions for perpetuation.

In sum, if the vessel owner does not agree to come forward and post security, the dock owner must arrest and/or attach the vessel and proceed both in rem against the vessel and in personam against the owner.  If the owner agrees to post security for the value of the claim, the security can be substituted for the vessel, allowing its release, and providing a fund for the satisfaction of any judgment from the claim.  On motion, the court may require the crew to be deposed or other discovery taken within a given period of time, although if they have already departed, arranging for their transportation may be the plaintiff’s responsibility.

Rules B and C of the Federal Rules of Civil Procedure allow a party aggrieved by a foreign vessel to force the tortfeasor into court by seizing the offending vessel (or, in the case of attachment, another vessel of the same owner), although recovery may well be limited to the value of the vessel.  By acting quickly to arrest and attach the offending vessel, the dock owner can protect himself from damage caused even by a foreign vessel under compulsory p­­ilotage.

Image courtesy of Flickr.

Fifth Circuit Addresses Definition of Seaman Under the Fair Labor Standards Act

3338710223_a1ba090d11_zUnder the Fair Labor Standards Act, for every hour that an employee works beyond 40 hours in a seven day work week, that employee must be paid overtime, that is, one and a half times his normal hourly rate. However, if the employee meets the statutory definition of a “seaman,” then he is not entitled to overtime pay.

29 C.F.R. § 783.32 lays out the criteria for being a seaman: An employee will ordinarily be regarded as a seaman, (1) If the employee is a master or subject to the authority of a master (2) aboard a vessel (3) performing service primarily as an aid to the operation of the vessel as a means of transportation, and (4) does not perform a substantial amount of different work.

In Coffin v. Blessey Marine Services, Inc., No. 12-20144 (5th Cir. 11/13/14), the Fifth Circuit addressed whether or not vessel-based tankermen were ‘seamen’ under the statute.

The dispute in Blessey arose when the plaintiffs – vessel-based tankermen – sought to collect overtime pay from their employer under the FLSA. The seamen-non-seamen distinction was crucial because the plaintiffs – working an average 84 hours in a seven day period – would not be entitled to recover if they fell within the seamen exclusion under the FLSA.

Blessey is a company that transports liquid cargo by vessels throughout inland and coastal waterways. The plaintiffs in Blessey worked as tankermen as part of a crew aboard a “tow-unit.” The tow-unit consists of one towboat and two tank barges that are connected through a system of cables. Each member of a tow-unit crew has specific responsibilities. A “wheelman,” (captain), and a deckhand are customarily recognized as seamen. A tankerman’s status as a seaman is less clear.

Tankermen’s duties include many of the same duties that deckhands perform. Some of these duties include: cleaning, handling lines, changing engine filters, tying off to docks, painting, troubleshooting engine problems and handling running lights. As deckhand duties, these tasks are recognized as seamen work. In addition to these traditional seamen tasks, tankermen are responsible for loading and unloading the tank barge’s liquid cargo. Some of these tasks include: oiling grease-fittings on barges, cleaning oil spots on barges, performing barge readiness inspections, and making sure all hatches and dogs are tightly secured.

Plaintiffs argued that the tasks exclusively required for tankermen – loading and unloading – determined their status as non-seamen under the statute. Plaintiffs principally relied on Owens v. SeaRiver Maritime, Inc. 272 F.3d 698 (5th Cir. 2001). In Owens, the court held that loading and unloading duties while part of a “land-based Strike Team,” did not meet the statutory seaman definition. In this case, plaintiffs argued that Owens stood for the principle that loading and unloading a vessel is always non-seaman work.

The court disagreed. First, the plaintiff in Owens only sought overtime for his employment as part of the land-based Strike Team, not as a tankerman. Second, the language in Owens did not foreclose the possibility that any employee who performed loading or unloading operations was categorically a non-seaman. Owens acknowledged that performing these operations was not dispositive of status. Instead, the general character of the work is determinative.

Considering the seamen factors in 29 C.F.R. § 783.32, the parties agreed that the plaintiffs were under the authority of a master and that they were members of a crew of a vessel. The parties disagreed as to whether or not the plaintiff’s performed service in operating the vessel for transportation.

The court acknowledged many situations in which loading and unloading operations were merely incidental to the vessel’s operation, and such employees were not seamen under the statute. For example, employees who only loaded and unloaded the vessel at the beginning and end of a voyage and had little other seamen-related duties would not be seamen.

In this case, the court found that the tankermans’ duties were intertwined with the safe operation of the vessels themselves. Namely, safe loading and unloading affects a tank-barge’s seaworthiness and navigational integrity. Further, the plaintiffs’ conceded that their regular duties such as keeping watch and making sure the barge is level were supposed to ensure a safe operation. Finding that the loading and unloading duties in this case could not be separated from the traditional seamen duties, the court did not have to address the question of ‘substantial different work.’

Thus, the court reversed the district court and held that in this case the vessel-based tankermen were in fact seamen under the FLSA.

Excellent image courtesy of Flickr user greeblie.

“Flotilla Doctrine” Applied and the Court Granted Claimant’s Motion to Increase Security in a Limitation Action

The flotilla doctrine applies where vessels are owned by the same person, engaged in a common enterprise, and under a single command.  The flotilla doctrine requires, for limitation for liability purposes, the owner’s tender of all the vessels in the flotilla, or the value thereof, pending resolution of the underlying claims.

Claimant was allegedly injured when a third party’s vessel collided with the M/V CROSBY MARINER.  Claimant was a crewmember assigned to the M/V CROSBY MARINER.  The M/V CROSBY EXPRESS were transporting a barge together at the time of the accident.  Crosby Marine Transportation, LLC (“Crosby”) owned both the M/V CROSBY EXPRESS and the M/V CROSBY MARINER.  The M/V CROSBY EXPRESS was the lead tug while the M/V CROSBY MARINER was attached to the port side of the barge to stabilize it while under tow.  The decisions pertaining to the speed of the tow and navigation came from the captain of the M/V CROSBY EXPRESS.

Claimant sued Crosby and the owners of the third party vessel.  Crosby filed a limitation action pursuant to the Limitation of Liability Act and supplied security in accordance with the value of the M/V CROSBY MARINER and its pending freight.  Claimant filed a Motion to Increase Security arguing the applicability of the flotilla doctrine.

The Magistrate agreed with the Claimant.

Here, the CROSBY MARINER and the CROSBY EXPRESS were both owned by the same owner, Crosby.  Additionally, both were engaged in a common enterprise, that is, towing the same barge.  Further, both vessels were under Captain Naccio’s command.  Accordingly, the Court finds that the flotilla doctrine applies in this case.

Accordingly, the Court ordered an appraisal of the M/V CROSBY EXPRESS and M/V CROSBY MARINER by a Court-appointed appraiser or for the parties to stipulate and agree to the valuation of both vessels and the freight involved.

Crosby Marine Transp., LLC v. Triton Diving Servs., LLC, CIV. 13-2399, 2014 WL 5026070 (W.D. La. Oct. 8, 2014)

Historical Background Anchors Judge Clement’s McBride Concurrence

On September 25, 2014, the Fifth Circuit Court of Appeals, sitting en banc, rendered its decision in the high-profile case McBride v. Estis Well Service, L.L.C.,12-30714, 2014 WL 4783683 (5th Cir. Sept. 25, 2014)McBride garnered national attention after the Fifth Circuit panel reversed the district court and held that punitive damages were available to seamen as a remedy for the general maritime law claim of unseaworthiness.  731 F.3d 505.  On rehearing, a majority of the Fifth Circuit judges determined that punitive damages were not available.  The majority opinion was about fifteen pages long and was followed by nearly sixty pages of concurring and dissenting opinions.

The first concurrence, penned by Circuit Judge Edith Brown Clement and joined by Circuit Judges Jolly, Smith, and Owen, took a closer look at the historical background that, in Judge Clement’s opinion, mandated the result reached by the majority.  Judge Clement dissected what she viewed as the three main points that McBride relied on and determined that, “[w]hen examined closely, none of these arguments establish McBride’s ultimate contention.”  Id. at *7.

Judge Clement first analyzed and concluded that United States Supreme Court jurisprudence does not require punitive damages in unseaworthiness cases.  The Judge noted that Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), only addressed the narrow issue of whether punitive damages were preempted by the Clean Water Act and that this narrowness accounted for the Court’s need in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009), to even address the issue of punitive damages in maintenance and cure cases.  According to Judge Clement, this left McBride with “only the thin strand of Townsend.”  McBride at *7.  However, Townsend, a maintenance and cure case, was of little help in light of the “significant differences” between actions for maintenance and cure and unseaworthiness.  Judge Clement cleverly cited to the academic writings of McBride’s own counsel to underscore the well-recognized distinction between the two causes of action. The Judge concluded that “[t]he difference between maintenance and cure and unseaworthiness actions make maintenance and cure cases a poor guide for determining unseaworthiness remedies.”  McBride at *8.

Judge Clement went on to examine the Fifth Circuit’s pre-Miles case law approving punitive damages in unseaworthiness cases, starting with In re Merry Shipping, Inc., 650 F.2d 622 (5th Cir. Unit B 1981).  She concluded that, notwithstanding Merry Shipping and a handful of other cases, there is an absence of actual authority establishing that pre-Jones Act plaintiffs claiming unseaworthiness were entitled to punitive damages.  The Judge characterized the support for such entitlement to punitive damages the result of a “collective judicial ‘oh, hell, why not’ principle” equating the availability of punitive damages in other types of actions to the availability of punitive damages for unseaworthiness.  McBride at *9.

Finally, Judge Clement waded through pre-Jones Act unseaworthiness cases cited by McBride in support of the availability of punitive damages and found only one unseaworthiness case that arguably awarded punitive damages.  The Judge concluded that, even assuming that this case did award punitive damages, one “dust-covered” case should not provide the basis for the general availability of punitive damages in unseaworthiness cases.  This was particularly true when considering the Supreme Court decisions in The Osceola, 189 U.S. 158 (1903) and Pacific Steamship Co. v. Peterson, 278 U.S. 130 (1928) that recognized the remedy for unseaworthiness was an indemnity by way of compensatory damages.

Judge Clement concluded her concurrence by explaining the need for caution “before signing off on an aggressive expansion of punitive damages in the unseaworthiness context.”  McBride at *12.  This is a product of the varying availability of insurance for punitive damages and the direct and indirect impacts such an expansion would have on commercial shipping.  “In light of the potentially sizable impact, this court should not venture too far and too fast in these largely uncharted waters without a clear signal from Congress.”  McBride at *12.

McBride v. Estis Well Serv., L.L.C., 12-30714 (5th Cir. Sept. 25, 2014) (en banc).