11th Circuit Addresses Maritime Salvage Case Arising out of Marina Fire

Under the law of salvage in general maritime law, a person who recovers another person’s ship or cargo after peril or loss at sea is entitled to a reward commensurate with the value of the property saved.  The essential elements of a salvage claim are: (1) A maritime peril from which the ship or other property could not have been rescued without the salvor’s assistance, (2) A voluntary act by the salvor ­– that is, he must be under no official or legal duty to render assistance, and (3) Success in saving, or helping to save at least part of the property at risk. Klein v. Unidentified Wrecked, etc., Vessel.  Regarding the first element, a maritime peril does not exist where the “vessel has the situation under control,” however, all that is necessary is that there be a “reasonable apprehension of peril.” Fine v. Rockwood.

In Biscayne Towing & Salvage, Inc. v. M/Y Backstage, a yacht at a marina caught fire and spread to other vessels. A towboat on the scene pulled one vessel out of its slip at the request of the fire department to create a firebreak.  The owner of next yacht in line, the M/Y BACKSTAGE, wanted to move his vessel but was prevented from doing so by the fire department. The vessel sustained extensive heat damage as a result.

The towing company filed a maritime salvage claim against the M/Y BACKSTAGE and its owner. The trial court granted summary judgment in favor of the M/Y BACKSTAGE, dismissing the complaint because “[the claimant] rendered indirect benefit to a vessel not in need of assistance.”  The towing company appealed.  On appeal, the U.S. 11th Circuit reversed, finding that there were genuine issues of material fact regarding whether or not the M/Y BACKSTAGE “could not have been rescued without the salvor’s assistance.” The court reserved resolution of “the purely legal question whether the existence of a maritime peril has a ‘needs-assistance’ component” as the defendant asserted.

Biscayne Towing & Salvage, Inc. v. M/Y Backstage

Is Sarbanes-Oxley Really This Fishy?

Next week the Supreme Court will hear arguments in Yates v. United States, a Sarbanes-Oxley anti-shredding case.  The Sarbanes-Oxley Act was enacted after the Enron scandal.  One of the provisions of the Act is commonly known as the “anti-shredding provision,” which criminalizes knowingly altering, destroying, mutilating, concealing, covering up, falsifying, or making a false entry in “any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration” of any federal matter.

Why am I mentioning Sarbanes-Oxley on a maritime blog?  Because Yates v. United States involves the federal government’s application of the “anti-shredding provision” to a commercial fisherman who directed his crewmen to throw undersized fish back into the sea, after receiving a civil citation and being told to bring the fish to dock to be destroyed.  That’s right…throwing fish back into the sea landed one fisherman in the Sarbanes-Oxley anti-shredding net.  Since then, the fisherman has lost his license, his boat, and his livelihood.

Take a look at this video from the National Association of Criminal Defense Lawyers (NACDL).  Really, take a look.  It’ll only take two minutes, and the video is really good:

Oral argument will be held on November 5, 2014.  So far, the fisherman has lost at the district court and the Eleventh Circuit.  Will the Supreme Court overturn?

For those who are interested in more reading, here are some links:

Brief of Petitioner, John L. Yates

Brief of Respondent, United States

Reply of Petitioner, John Yates

Mark Walsh, Fisherman convicted of violating Sarbanes-Oxley will be heard by the Supreme Court (published by the American Bar Association)

Tip of the hat to the NACDL, SCOTUSblog, and the ABA Journal.

“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)

Maintenance and Cure Not Owed in Case Defended By MBLB

Recently, Will Bland, Beth Bernstein, and paralegal Meredith Foster of Mouledoux, Bland, Legrand & Brackett, LLC, successfully invoked the McCorpen defense for their client, St. June, LLC, resulting in Judge Barbier granting St. June’s motion for summary judgment and dismissing plaintiff’s claims for maintenance and cure with prejudice.  See Eldon P. Foret, Jr. v. St. June, LLC, No. 13-5111 (E.D. LA. 2014).

On January 11, 2011, Eldon Foret sustained injuries to his neck and back while employed as the captain of the M/V ST. JUNE.  Foret filed suit against St. June, LLC on July 18, 2013, asserting claims under the Jones Act, maintenance and cure, as well as punitive damages.  St. June filed a counterclaim on May 14, 2014, seeking reimbursement for all money paid to Foret regarding maintenance and cure and associated legal fees.

St. June’s counterclaim relied on the McCorpen defense.  Specifically, it alleged that Foret had failed to disclose the existence and extent of injuries to his neck and lower back, and that the failure to disclose these facts was material to St. June’s decision to hire Foret.

St. June filed its motion for Summary Judgment before Judge Carl Barbier of the Eastern District on August 26, 2014.

To succeed on the McCorpen defense, an employer must show: (1) The seaman intentionally misrepresented or concealed medical facts; (2) The non-disclosed facts were material to the employer’s decision to hire the seaman; and (3) A causal link exists between the pre-existing injury and the injury incurred during employment.

Whether or not the seaman intentionally misrepresented facts depends on whether or not the employer requests a pre-employment examination.  If the employer requests an examination, the seaman must disclose those medical facts that are plainly desired.  On the other hand, if the employer does not request an examination, the seaman must disclose medical facts that, in the seaman’s own opinion, would be considered important by the ship-owner.

In determining what facts a seaman should consider important to his employer, courts consider the seaman’s employment history.  For instance, an extensive work history over a long period of time familiarizes seamen with what employers expect to uncover regarding their employees’ medical history.  In this case, Foret had worked on shrimp boats for 42 years and acknowledged that several boating companies as well as every oilfield company he had ever worked for had inquired into medical problems with his neck and back.  Further, Foret failed to disclose an injury he sustained to his neck and back on July 2012, or that he was taking pain medication during his employment with St. June.

Regarding materiality, the Fifth Circuit has routinely held that back injuries are precisely the type of information employers consider material in deciding to hire a seaman.  See Brown v. Parker Drilling Offshore, Corp., 410 F.3d 166 (5th Cir. 2005)see also Jauch v. Nautical Servs., Inc., 470 F.3d 207 (5th Cir. 2006).

Finally, courts have regularly found causal links between pre-existing and post-employment injuries where these injuries arise in the same area of the body.  Brown v. Parker Drilling Offshore, Corp., 410 F.3d 166 (5th Cir. 2005).  Here, the record showed that multiple doctors had treated Foret’s lumbar-spine region years before his employment with St. June.  Thus, the court found a causal link between the pre and post-employment injuries based on their extreme similarities.