New Version of Nautical Rules of the Road Published

The United States Coast Guard has published a new amalgamated version of the nautical Rules of the Road to improve the readability and understanding of the navigation rules (commonly called “Rules of the Road”). The version combines the Rules of the Road and associated regulations. This edition shows the rules in a one-page format—as opposed to the previous two page, side-by-side. Rule differences are shown in either a two-column table or in bracketed text. Italics text is used to differentiate the Inland Rules from the International Rules. This new edition is available online.

Same Sex Spouse Can Recover Under DOHSA

In what appears to be a case of first impression, the U.S. District Court for the Southern District of Florida has held a same sex spouse can recover damages under the Death on the High Seas Act (DOHSA) arising from the death of his husband while on a cruise on the high seas.

The facts recited by the Court are compelling: Plaintiff and his husband were subjected to ‘repetitive anti-gay insults’ while passengers onboard the cruise. On their first day onboard, they were repeatedly called a ‘lipstick’ by a bartender. The couple immediately complained to the cruise operator’s management about the incidents. The next evening, the husband was extremely distraught when employees called him ‘a pedophile and other anti-gay slurs.’ He returned to his stateroom and told his husband about the insults. Afterward, security officers reported to the couple’s stateroom and ‘engaged in an argument’ with them. ‘A series of events’ ensued and the decedent fell over the couple’s seventh deck stateroom balcony onto a life boat on deck six. He held on to the life boat for several minutes as crewmembers attempted to rescue him. The crewmembers grabbed his hand but failed to rescue him, and he fell into the ocean. The ship did not stop for some time and did not timely deploy rescue boats. After receiving a distress call from the cruise, the United States Coast Guard searched for the decedent but did not find him.

The Plaintiff sued for wrongful death of his husband, as well as for the intentional infliction of emotional distress for witnessing his husband’s death. On a Rule 6 Motion to Dismiss, the Court allowed the DOHSA claim to continue, but dismissed the claim for intentional infliction of emotional distress because, although Plaintiff was mere feet away from his husband and witnessed his fall and disappearance, he was not himself in the ‘zone of danger’ where he was at risk of physical harm.

Elbaz v. Royal Caribbean Cruises, No. 16-24568, U.S.D.C., S.D.FL.

Tides Are Turning: The Arrival of Subchapter M

*This article was prepared by our summer law clerk, Ridge Miguez.

 

On June 20, 2016 the U.S. Coast Guard posted a preview of the final version of the long-awaited Subchapter M regulation, which will extend inspection requirements to the majority of tugs and towboats for the first time. In 2004, Congress reclassified towing vessels as vessels subject to inspection, and consistent with 46 U.S.C. 3305, this rule sets out the scope and standards of inspection. Now with the implementation of Subchapter M the U.S. Coast Guard has created a comprehensive safety system that includes company compliance, vessel compliance, vessel standards, and oversight in a new Code of Federal Regulations (CFR) subchapter dedicated to towing vessels. This rule, which generally applies to all U.S. flag towing vessels 26 feet or greater, and those less than 26 feet moving a barge carrying oil or hazardous material in bulk, lays out both inspection mechanisms as well as new equipment, construction, and operational requirements for towing vessels.

 

To provide flexibility, vessel operators will have the choice of two inspection regimes. Under the Towing Safety Management System (TSMS) option, routine inspections of towing vessels will primarily be performed by third-party organizations (TPOs), including certain classification societies, and this rule creates a framework for oversight and audits of such TPOs by the Coast Guard. The TSMS will provide operators with the flexibility to tailor their safety management system to their own needs, while still ensuring an overall level of safety acceptable to the Coast Guard. Alternatively, under the Coast Guard inspection option, routine inspections would be conducted by the Coast Guard, providing an option for those operators who choose not to develop and implement their own TSMS.

 

Subchapter M also creates many new requirements for design, construction, equipment, and operation of towing vessels. Those requirements are typically based on industry consensus standards or existing Coast Guard requirements for similar vessels.

 

The most important change to the final revision of Subchapter M has been the changes made to the Coast Guard’s proposal in the NPRM. They have clarified the system for Coast Guard oversight and inspection of towing vessels that complements the TPO system. To address concerns about the cost impact of the rule, they have added “grandfathering” provisions to several requirements, so the requirements will not apply to existing vessels or vessels whose construction began before the effective date of the rule. Also, they have reorganized several parts for greater clarity or to better align with the existing text of other parts of the CFR. As noted in the NPRM (7 FR 49985), the Coast Guard still plans to promulgate a separate rulemaking for an annual inspection fee for towing vessels that will reflect the specific program costs associated with the TSMS and Coast Guard inspection options. As of now the Coast Guard is establishing the existing fee of $1,030 in 46 CFR 2.10-101 for any inspected vessel not listed in Table 2.10-101, as the annual inspection fee for towing vessels subject to Subchapter M. Furthermore, this fee will not be charged for a vessel being inspected for the initial issuance of a certificate of inspection (COI), however the fee will be charged annually starting the following year.

 

The Coast Guard released a statement that Subchapter M will affect approximately 5,509 U.S. flag towing vessels engaged in pushing, pulling, or hauling alongside, and the 1,096 companies that own or operate them. Towing vessels exempt from this rule include towing vessels inspected under Subchapter I, work boats, and recreational vessel towing vessels.

 

The estimate for total industry and net government costs is $41.5 million annualized at a 7 percent discount rate over a 10 –year period of analysis. The estimate for monetized benefits is $46.4 million annualized at a 7 percent discount rate, based on the mitigation of risks from towing vessel accidents in terms of lives lost, injuries, oil spilled, and property damage. Thus, a net benefit of $4.9 million is estimated from implementing Subchapter M.

 

The new rule became effective July 20, 2016. However, certain existing towing vessels subject to this rule will have an additional 2 years before having to comply with most of its requirements. It will be interesting to see how small operators are affected by the changes Subchapter M brings their way. Only time will tell, but it seems the rule change is in the greater interest of the industry as a whole.

 

Coast Guard to Increase the Limits of Liability under Oil Pollution Act of 1990

The Coast Guard is issuing a final rule which increases the statutory limits of liability for vessels, deepwater ports, and onshore facilities, under the Oil Pollution Act of 1990 (OPA 90). The increase is standard procedure for the Coast Guard, as it is required by the OPA 90 to adjust the statutory limits every three years to reflect the increases in the Consumer Price Index. Under Title I of the OPA 90, the responsible party for any vessel or any facility from which oil is discharged, or which poses a substantial threat of discharge of oil, into navigable waters or adjoining shorelines…are strictly liable, jointly and severally, under 33 U.S.C. §2702 for removal costs and damages resulting from the incident. Yet, a responsible party’s liability is limited to a specified dollar amount, pursuant to 33 U.S.C. §2702.

 

To prevent the real value of the statutory limits from depreciating over time, and preserve the “polluter pays” principle embodied in the OPA 90, 33 U.S.C. §2704(d)(4) requires that the limits of liability be adjusted “not less than every three years…to reflect significant increases in the Consumer Price Index.” The timing of the three-year adjustment is rather unfortunate for oil and gas companies, given that the industry is currently facing bleak economic conditions with record low oil prices.