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).

Fifth Circuit Vacates Summary Judgment and Allows Consideration of Plaintiff’s Expert

The plaintiff allegedly sustained injuries when he fell on a vessel owned by his employer.  He filed a lawsuit in the U.S. District Court for the Eastern District of Louisiana, alleging negligence under the Jones Act and unseaworthiness of the vessel.  The employer eventually filed a Motion for Summary Judgment and argued for dismissal of the case based on the plaintiff’s inability to meet his burden of proof with respect to causation of his injuries.  The plaintiff then filed an opposition memorandum and submitted a report by his maritime expert.  The District Court refused to consider the expert report because while it was signed, it was unsworn.  Summary judgment was granted and the case was dismissed.  The plaintiff appealed to the Fifth Circuit.

 

The Fifth Circuit noted that in granting the motion, the District Court had incorrectly relied on a prior version of Rule 56 of the Federal Rules of Civil Procedure, which governs summary judgment.  Rule 56 was amended in 2010, including a subsection outlining the means of providing documentary support or opposition to a motion for summary judgment.  In rejecting the report, the District Court had looked to the prior rule regarding sworn affidavits.  The Fifth Circuit noted that the new Rule 56 clearly allows for the consideration of “documents . . . declarations, [and] other materials” in addition to sworn affidavits.  For purposes of summary judgment, the document may be presented in a form that would not be admissible at trial.  The plaintiff could later present the same evidence at trial in an admissible form.  In other words, the fact that the expert report was not a sworn affidavit was of no consequence for purposes of the Motion for Summary Judgment.  The Fifth Circuit vacated the granting of summary judgment and remanded the case to the District Court for consideration of the expert report.

 

Lee v. Offshore Logistical and Transport, LLC

White House Budget Proposal Could Result in Huge Financial Loss for Gulf Coast Region

On May 23, 2017, at a time when oil prices have started to rise and energy companies have regained optimism about the prospect of Deepwater drilling, the White House proposed ending a program that allows increased revenue-sharing from offshore oil and gas drilling royalties with the Gulf Coast states of Louisiana, Alabama, Mississippi, and Texas. That program is called the Gulf of Mexico Energy Security Act, or GOMESA, which Congress passed in 2006. GOMESA was created to boost offshore drilling efforts by giving these Gulf Coast states a portion of the revenue when federal water was leased to oil and gas companies for exploration.

 

President Trump’s proposal to end GOMESA is part of his blueprint to limit the growth of the U.S. federal deficit; however, the Gulf Coast region stands lose billions in revenue as a result. Rather than revenue-sharing with the Gulf Coast states, the profits from any Deepwater drilling in federal water would be sent directly to the federal treasury.

 

Congressmen and residents from the Gulf Coast states, along with Louisiana Governor John Bel Edwards, have openly voiced their opposition to President Trump’s proposal. Indeed, Governor Edwards proclaimed that President Trump’s proposed budget for the 2018 fiscal year “robs Louisiana of financial resources promised to us for coastal restoration.” Congressman Bradley Byrne (R-AL), further exclaimed, “The GOMESA program is critical to coastal states, who assume the environmental and economic risks and provide a majority of the infrastructure and workforce for the offshore oil and gas industry.” Indeed, the people of the Gulf Coast know these risks all too well. Considering that the GOMESA revenue is to be used for coastal conservation, restoration, and hurricane protection, if President Trump’s budget proposal is approved and another BP Deepwater Horizon oil spill or Hurricane Katrina subsequently materializes, these Gulf Coast states could suffer enormous consequences.

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