The following cases are recent court decisions that may be of interest to you. Please contact us if you have a question regarding any of the cases mentioned or to request a copy of the complete written court opinion.
SUMMER 2024
Sixth Circuit Sinks Aluminum Company’s Claim for Additional Shipping Expenses Under Maritime Cargo Insurance Policy
Century Aluminum Co. v. Certain Underwriters at Lloyd’s, 97 F.4th 1019 (6th Cir. 2024)
In a recent decision, the Sixth Circuit Court of Appeals upheld a district court’s grant of summary judgment for Lloyd’s of London in a dispute over coverage under a maritime cargo insurance policy. Century Aluminum sought to recover additional shipping expenses incurred when the Army Corps of Engineers closed locks on the Ohio River, forcing the company to find alternative transportation for its alumina ore.
The court analyzed several key provisions of the insurance policy, including the All Risks Clause, Risks Covered Clause, Shipping Expenses Clause, and Sue and Labour Clause. The court determined that Century suffered no physical loss or damage, as required by the All Risks Clause, and that the government’s actions did not constitute an arrest, restraint, or detainment under the Risks Covered Clause.
Furthermore, the court found that the Shipping Expenses Clause did not apply because Century ultimately delivered to its intended destination, although through alternative means. Lastly, the court held that the Sue and Labour Clause did not require Lloyd’s to compensate Century for its efforts to protect its profits, as the policy did not cover the risk of a pot-line freeze due to shipping delays.
Sixth Circuit Affirms Dismissal of Pro Se Plaintiff’s Maritime Salvage and FLSA Claims
Curran v. Wepfer Marine Servs., 2024 U.S. App. LEXIS 12200 (6th Cir. May 20, 2024)
The Sixth Circuit Court of Appeals affirmed the dismissal of a self-represented plaintiff’s maritime salvage claim and Fair Labor Standards Act (FLSA) overtime claim. John F. Curran III had brought these claims against Wepfer Marine Services and Okie Moore Diving and Marine Salvage, LLC after rendering first aid to a fellow crewmember who had sustained a head injury while working aboard a vessel.
Regarding the salvage claim, the court found that Curran failed to meet the prerequisites for a life salvage claim under 46 U.S.C. § 80107(a). Specifically, Curran did not allege that a third party was seeking a property salvage award, which is necessary for a life salvage claim to be valid. Moreover, Curran did not allege that any vessel was in peril when he rendered assistance, which is another essential element of a salvage claim.
As for the FLSA overtime claim, the court determined that Curran was exempt from overtime pay under the seaman exemption, 29 U.S.C. § 213(b)(6). Under Department of Labor regulations, the court found that Curran was a “seaman” because he was subject to the authority of the vessel’s master and his service was primarily rendered to aid in the operation of the vessel. Accordingly, the nature of Curran’s employment satisfied the requirements for the seaman exemption.
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Fifth Circuit Reverses Choice-of-Law Determination in Maritime Malaria Case, Favoring Liberian Law Over U.S. Law
Ganpat v. E. Pac. Shipping PTE, Ltd., 2024 U.S. App. LEXIS 10629 (5th Cir. May 1, 2024)
The Fifth Circuit Court of Appeals recently reversed a district court’s choice-of-law determination in a case involving an Indian seaman who contracted malaria while working aboard a Liberian-flagged ship managed by a Singaporean company. Kholkar Vishveshwar Ganpat had brought claims under the Jones Act and general maritime law against Eastern Pacific Shipping Pte., Limited (EPS) after falling ill during a voyage from Africa to Brazil.
The Fifth Circuit emphasized the significance of the law of the flag in traditional maritime shipping cases and noted that both the shipowner’s base of operations and allegiance pointed to Singapore, not the United States. The court also found that the place of the wrongful act and the defendant’s contacts with the U.S. were not enough to justify the application of U.S. law.
In its analysis, the court applied the Lauritzen-Rhoditis factors, which are used to determine the proper choice of law in maritime cases. These factors include the place of the wrongful act, the law of the flag, the allegiance or domicile of the injured worker, the allegiance of the defendant shipowner, the place of the contract, the inaccessibility of the foreign forum, the law of the forum, and the shipowner’s base of operations.
The court concluded that Liberian law should govern Ganpat’s claims, given the prominence of the law of the flag factor in traditional maritime shipping cases and the lack of sufficient connections to the U.S. to warrant the application of U.S. law.
First Circuit Upholds Dismissal of Claims Against Non-Signatory Based on Equitable Estoppel in Maritime Contract Dispute
P.R. Fast Ferries LLC v. Seatran Marine, LLC, 2024 U.S. App. LEXIS 12181 (1st Cir. May 21, 2024)
In a recent maritime contract dispute, the First Circuit Court of Appeals affirmed the dismissal of Puerto Rico Fast Ferries LLC’s breach of contract and culpa in contrahendo claims against Mr. Cade, LLC and SeaTran Marine, LLC. The court found that the Master Time Charter Agreement between Fast Ferries and Mr. Cade, LLC had an indefinite duration and remained in effect, making the agreement’s mediation and forum-selection clauses binding on the parties.
One of the key issues was whether SeaTran, a non-signatory to the agreement, could enforce the mediation and forum-selection clauses against Fast Ferries. The First Circuit held that SeaTran could invoke these clauses under the doctrine of equitable estoppel because Fast Ferries’ claims against SeaTran were sufficiently intertwined with the Master Time Charter Agreement.
The court relied on principles of contract interpretation under federal maritime law to determine the duration of the agreement and the applicability of the mediation and forum-selection clauses. The court also drew on its earlier decisions involving the application of equitable estoppel in the context of arbitration agreements between signatories and non-signatories.
The First Circuit emphasized that the purpose of applying equitable estoppel in such cases is to prevent a party from enjoying the benefits of a contract while simultaneously avoiding its burdens and obligations. The court found that Fast Ferries’ claims against SeaTran were closely linked to the Master Time Charter Agreement, as the agreement governed the relationship between the parties and the chartering of the vessel.
Eleventh Circuit Upholds Dismissal of Cruise Ship Passenger's Negligence Claims for Lack of Notice
Patton v. Carnival Corp., 2024 U.S. App. LEXIS 10441 (11th Cir. Apr. 30, 2024)
The Eleventh Circuit Court of Appeals affirmed the dismissal of a cruise ship passenger’s negligence claims against Carnival Corporation, finding that the passenger failed to plausibly allege that Carnival had actual or constructive notice of the dangerous condition that caused her injuries. Marilyn Patton had sued Carnival after tripping and falling on a raised metal threshold while aboard one of the company’s cruise ships.
To prevail on a maritime negligence claim, a plaintiff must establish that the defendant had a duty to protect the plaintiff from a particular injury, which requires showing that the defendant had actual or constructive notice of the hazardous condition. Constructive notice can be shown by alleging either that the dangerous condition existed for a sufficient period of time to invite corrective measures or that substantially similar incidents had occurred due to substantially similar conditions.
Here, the Eleventh Circuit found that Patton’s complaint lacked any allegation regarding how long the dangerous condition had existed and failed to describe the condition in a way that would suggest it had been present for a sufficient time to impute notice to Carnival. The court rejected Patton’s argument that it was reasonable to infer from the photographs attached to her complaint that the hazardous condition had developed over a considerable period due to wear and tear, finding that such an inference was an unwarranted deduction lacking support in the complaint or its attachments.
The court also dismissed Patton’s contention that her complaint should survive because the relevant evidence was exclusively under Carnival’s control, clarifying that her pleading burden required her to allege plausible facts showing constructive notice, rather than having to prove such notice at the outset of the litigation.
First Circuit Dismisses Interlocutory Appeal in Maritime Asbestos Exposure Case for Lack of Admiralty Jurisdiction
Pritt v. John Crane Inc., 2024 U.S. App. LEXIS 11460 (1st Cir. May 10, 2024)
The First Circuit Court of Appeals dismissed an interlocutory appeal in an asbestos exposure case, finding that the plaintiff, Ruth A. Pritt, had not properly invoked admiralty jurisdiction under 28 U.S.C. § 1292(a)(3). The case was originally removed to federal court under the Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1).
To move forward under admiralty jurisdiction and avail oneself of its special procedures and remedies, including the right to an interlocutory appeal, a plaintiff must make an identifying statement under Federal Rule of Civil Procedure 9(h). This statement indicates the plaintiff’s choice to proceed in admiralty. However, Pritt’s amended complaint, filed in federal court, sought a jury trial on all claims and included no reference to Rule 9(h). The court found that a glancing reference to the case implicating “the general maritime jurisdiction of the United States” was not enough to show an election to proceed under admiralty jurisdiction. Moreover, the demand for a jury trial was inconsistent with an intent to proceed in admiralty.
At bottom, Plaintiffs must make a clear identifying statement under Rule 9(h) to move forward in admiralty and avail themselves of its special procedures and remedies. Absent such a statement, parties have no right to invoke admiralty procedures, even if the case implicates general maritime jurisdiction.
Fourth Circuit Affirms Limitation of Liability for Pontoon Boat Rental Company in Accident Case
Under the Bridge Watersports, LLC v. Tressler (In re Complaint of Under the Bridge Watersports, LLC), 2024 U.S. App. LEXIS 4654 (4th Cir. Feb. 28, 2024)
The Fourth Circuit Court of Appeals affirmed a district court’s decision limiting a pontoon boat rental company’s liability in a boating accident case and awarding the company attorneys’ fees. The accident occurred on the Isle of Wight Bay in Maryland when a pontoon boat rented from Under the Bridge Watersports (UTB) collided with a bridge and capsized after its motor failed.
UTB filed an action under the federal Limitation of Liability Act, which allows owners of maritime vessels to limit their liability for accidents. The Act caps a vessel owner’s liability at the vessel’s value after the accident, barring certain exceptions. UTB sought a judgment that it was not liable for any claims arising from the accident or, alternatively, that its liability be limited to $0, the value of the destroyed pontoon.
The central question was whether the claimants could show that the accident resulted from UTB’s negligence, which was necessary to avoid the Act’s limitations on liability and to overcome an exculpatory clause in the rental agreement. The district court rejected the claimants’ two theories of negligence: (1) that the boat was unseaworthy due to engine failure, and (2) that UTB violated its duty of care by allowing too many people and too much weight on the pontoon. The Fourth Circuit noted that the claimants neither challenged nor responded to the district court’s conclusions on these issues, and instead raised new arguments that the Fourth Circuit reviewed only for fundamental error and found none.
This decision underscores the importance of the Limitation of Liability Act in protecting vessel owners from excessive liability in accident cases as well as the enforceability of exculpatory and indemnification clauses in rental agreements. It also highlights the need for claimants to properly raise and preserve arguments in the district court, as the appellate court will review forfeited arguments in civil cases only for fundamental error.
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