Articles by Philip Lorio, IV

Federal Policy Remains that Arbitration Agreements and their Broad Construction are Favored

Plaintiff filed a seaman’s complaint alleging that he incurred injury while working as a crew member on one of the defendant’s vessels because the defendant negligently assigned plaintiff to activities that defendant knew or should have known would result in injury. Defendant filed a motion to stay litigation in favor of arbitration based on the Claims Arbitration Agreement that plaintiff had previously signed. When defendant moved to dismiss plaintiff’s lawsuit, attaching the arbitration agreement to its motion, plaintiff admitted that the arbitration agreement existed and, if applicable, would compel arbitration. Plaintiff’s opposition was that his claim was outside of the scope of the arbitration agreement because it covered only an injury to his right shoulder, while the claim in his lawsuit was brought for injuries to both shoulders and therefore was not a “known claim for a specific injury” at the time plaintiff entered into the arbitration agreement. Although the court acknowledged that investigation may ultimately reveal that plaintiff was bringing a claim for a new, distinct injury, the court found plaintiff’s pleadings insufficient to establish that fact. The court highlighted the federal policy favoring arbitration and the broad construction of the scope of arbitration agreements as it granted the defendant’s motion to compel arbitration and directed the parties to proceed with arbitration in accordance with the parties’ arbitration agreement.

Macrury v. American Steamship Company, 2017 U.S. Dist. LEXIS 106704 (USDC EDMI, July 11, 2017).

U.S. Fifth Circuit reverses district court’s grant of summary judgment, finding that ROV Technician was not a seaman as a matter of law

The United States Court of Appeals for the Fifth Circuit held that a district court erred in finding that a plaintiff, who was a technician who navigated and controlled remotely operated vehicles (“ROVs”) for offshore applications, qualified as a “seaman” as a matter of law. ROVs are unoccupied mechanical devices used to service and repair offshore, underwater drilling rigs. Technicians navigate and control ROVs aboard an ROV Support Vessel, to which the ROVs remain tethered while in use. Technicians work inside a windowless shipping container converted into an ROV command center located on the support vessel. In the context of his claim under the Fair Labor Standards Act (“FLSA”) to recover unpaid wages for overtime worked during his employment, the district court granted summary judgment against the plaintiff, finding that he qualified as a seaman under the FLSA and was exempt from the Act’s overtime provisions.

 

The Fifth Circuit reversed the district court’s ruling, finding that the jurisprudence upon which the district court relied was distinguishable. It focused on the fact that ROV Technicians had a completely separate command structure than that of the tankerman considered in the Coffin case relied upon by the district court. Thus, the Fifth Circuit held that the district court erred in granting the defendant’s motion for summary judgment because it had not been established as a matter of law that the seaman exemption applied. The matter was remanded to the district court for further proceedings.

 

Halle et. Al. v. Galliano Marine Service, LLC

Louisiana law applies over maritime law where accident occurred on continental shelf off coast of Louisiana

On March 10, 2017 the United States District Court for the Western District of Louisiana held that Louisiana substantive law, not maritime law, applied in a dispute governed by the Outer Continental Shelf Lands Act (“OCSLA”).  The plaintiff claimed that he was injured while aboard a fixed SPAR oil and gas production platform known as Devil’s Tower, which is located on the continental shelf off the coast of Louisiana.  Devil’s Tower has no means of propulsion and is connected to the seabed by a mooring system consisting of chains, cables, and piles or caissons embedded into the ocean floor.  Finding that Louisiana was the adjacent state of the location where the incident occurred and the incident took place on a situs covered by OCSLA, Louisiana state substantive law rather than maritime law governed plaintiff’s lawsuit.

 

Spisak v. Apache Corporation, 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