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)

Benefits Review Board To Enforce Attorney Fee Petition Deadline

The Clerk of the Benefits Review Board has issued a notice to the community that the Board has reviewed its policy concerning handling of untimely attorney fee petitions. Effective March 1, 2017, attorney fee petitions must be filed within the time limits established in 20 C.F.R. §802.203(c) and 802.219(e). The Board will not consider a late filed attorney fee petition absent a valid basis for late filing, which must be specifically requested and will be considered on a case by case basis. This serves notice to claimants’ counsel that late attorney fee petitions will not be permitted as a matter of practice, as has been done in the past.

Pursuant to 20 C.F.R. §802.217, any out of time request must be submitted as a separate motion directed to the Clerk of the Board. Untimely filings are not allowed unless found to be “warranted.”

Court Orders Sale of Seized Vessel Following Default and Unnecessary Delay

Judge Ivan Lemelle recently reinforced the old adage, “if you don’t use it, you lose it,” in a suit based upon the alleged breach of a rental agreement between Essex Crane Rental Corp. and Cross Maritime.  Under the agreement, Cross was to provide a 230 ton Manitowoc lift crane, as well as various services and personnel to the DB CROSSMAR 14, in exchange for a monthly rental fee. In filing its verified complaint against the DB CROSSMAR 14, in rem, the Crane, in rem, and Cross Maritime, in personam, Essex alleged that the parties failed to pay properly presented invoices for several months. As of May 2, 2016, Essex alleged that the amounts outstanding totaled approximately $213,000.00.

 

On June 6, 2016, the Court issued warrants for the arrest of the vessel and the crane.  Essex arranged for Admiral Security Services to be appointed as a substitute custodian and for the vessel to remain at its berth in Houma, Louisiana until such time as the debt could be paid or the vessel could be sold to recoup the debt.  The vessel was subsequently moved to the Port of Terrebonne, to allow the removal of dive equipment belonging to an unrelated party.

 

Over the course of several weeks, various other creditors came forward to assert interests in the vessel; however, Cross failed to take any action, including even making an attempt to post security for the release of the vessel.

 

On September 2, 2016, Essex filed a Motion for Default, seeking to have the sale of the vessel set, following publication of notice. Essex argued that Cross’s failure to take any actions toward release of the vessel constituted an unreasonable delay, and also noted that the vessel was accruing $720.00 in custodial costs per day, which amounted to more than $60,000.00 as of September 2, 2016.

 

In opposing Essex’s motion, Cross asserted that Essex should be made to detail the exact amount of the lien before the vessel was set for sale, and that Cross had been unjustly deprived its ownership interest.  Cross also argued that absent a proper accounting, they could not be expected to determine the amount required to discharge the lien and vacate the vessel’s arrest.

 

In addressing Cross’s claim that Essex owed it an exact accounting of the amounts owed, the Court disagreed.  Quoting Essex’s brief, the Court noted that Cross had failed to “cite a single case in which a court delayed the sale of a vessel due to the purported need for an accounting of a lien claim or the purported issue of standing to bring a claim.”  The Court also stated that if Cross had wanted to challenge the facts surrounding the vessel’s arrest, it could have filed for an evidentiary hearing under the Supplemental Admiralty and Maritime Claims Rule E(4)(f).

 

Ultimately, Judge Lemelle determined that the vessel should be sold and confirmed Essex’s Motion for Default based upon the unreasonable delay caused by Cross’s failure to take any action toward achieving the release of the vessel, the risk of deterioration, decay, and/or injury posed by an idle vessel; and, the expense of keeping the vessel under arrest exceeded $17,000.00 per month.

 

This case highlights a crucial, but often overlooked issue in vessel seizures – what to do with the res after seizure. The instant action shows the necessity of creditors and/or their attorneys, creating a clear plan of action regarding the disposition of a seized vessel, ideally in advance of the seizure, in order to avoid excessive custodial costs. Custodial costs can add up very quickly and can be potentially fatal because those costs could potentially exceed the value of the vessel if unchecked.  This danger may become especially apparent when vessels are seized in ports located significant distances from U.S. Marshall’s offices, or from the base of operations for private custodial services (e.g., Cameron Parish, Louisiana, Port Aransas, Texas). Seizures in distant locations will incur significant charges for custodial travel expenses, for every day the vessel is held.

 

Essex Crane Rental Corp. v. DB Crossmar 14, et al.