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.
FALL 2024
High Seas Tragedy: Lion Air Crash Victims’ Families Face Limited Compensation
In re Lion Air Flight JT 610 Crash, 110 F.4th 1007 (7th Cir. 2024)
The In re Lion Air Flight JT 610 Crash case arises from the tragic crash of Lion Air Flight JT 610, which resulted in the deaths of all passengers and crew. The plaintiffs, representing the estates of the deceased, sought damages for pain and suffering under state and general maritime law. The plaintiffs also sought compensation for property lost during the crash, which occurred over the high seas.
The central legal issue before the appellate court was whether the plaintiffs’ claims for pain, suffering, and property loss could proceed under state and general maritime law or if these claims were preempted by the Death on the High Seas Act (DOHSA). DOHSA, a federal statute, governs wrongful death claims arising from accidents that occur more than three nautical miles from shore and typically limits recovery to pecuniary damages, excluding claims for pain and suffering.
The court held that DOHSA preempted all other wrongful death remedies that would have been available under state law and general maritime law, limiting recovery to pecuniary losses. This meant that the plaintiffs could not recover damages for the decedents’ pain and suffering or for their lost property. The court further ruled that claims brought under DOHSA must proceed in admiralty jurisdiction, and plaintiffs are not entitled to a jury trial in such cases. As a result, the plaintiffs were limited to seeking compensation only for the financial losses caused by the deaths of their relatives.
The court’s decision reaffirmed DOHSA’s broad preemption of state and general maritime remedies in cases involving wrongful death on the high seas and clarified that federal admiralty law, not state law, governs these claims. Additionally, the ruling reinforced the procedural limitation that DOHSA claims must be tried without a jury in federal court.
Court Denies Seaman Status to Offshore Worker in Jones Act Claim
Edwards v. Intermoor, Inc., No. 23-30727, 2024 U.S. App. LEXIS 22010 (5th Cir. Aug. 29, 2024).
In Edwards v. Intermoor, Inc., the appellate court dealt with issue surrounding the Jones Act and the seaman status of a worker. Lawrence Edwards, the plaintiff, brought a suit against Intermoor, Inc. and Tidewater Marine, L.L.C. after being injured while working on a vessel. Edwards sought to recover under the Jones Act, which provides protections for seamen injured in the course of their employment. However, the key legal issue in this case was whether Edwards qualified as a “seaman” under the Chandris test, which defines seaman status.
The Chandris test requires two criteria to be met for an individual to qualify as a seaman: (1) the worker’s duties must contribute to the function of a vessel or the accomplishment of its mission, and (2) the worker must have a connection to a vessel in navigation (or an identifiable group of vessels) that is substantial in both its duration and nature. Edwards argued that his work met these requirements and that he had a substantial connection to the vessel.
The district court, however, ruled that Edwards failed to meet the second prong of the Chandris test. It found that Edwards’ connection to the vessel was not substantial in duration, as he had not spent enough time working aboard the vessel to qualify as a seaman. Edwards then appealed, contending that the district court incorrectly applied the law and overlooked a “change-in-status” exception that he believed should have applied to his case.
Upon review, the Fifth Circuit affirmed the district court’s decision, agreeing that Edwards did not qualify as a seaman. The court held that the district court properly applied federal law in evaluating Edwards’ status under the Chandris test and that there was insufficient evidence to support the application of the change-in-status exception. As a result, Edwards could not recover under the Jones Act.
The court’s decision reinforces the importance of the durational requirement in determining seaman status under the Jones Act. Edwards spent only about 17% of his employment time aboard vessels, far below the 30% rule of thumb established in Chandris. Additionally, the court emphasized that a brief assignment to a vessel, even if it involves maritime work, does not automatically trigger a change in status that would qualify a worker as a seaman. This ruling underscores the need for a substantial connection to a vessel or fleet of vessels both in duration and nature to establish seaman status.
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ROV Technician Wins Right to Pursue Jones Act Claim in State Court
Santee v. Oceaneering Int’l, Inc. Chevron USA, Inc., 110 F.4th 800 (5th Cir. 2024)
In Santee v. Oceaneering Int’l, Inc., the appellate court addressed a maritime personal injury case involving a remote-operated vehicle (ROV) technician seeking to maintain his Jones Act claim in state court. Shanon Roy Santee sued Oceaneering International, Inc., Transocean Offshore Deepwater Drilling, Inc., and Chevron USA, Inc. for injuries sustained while working aboard the M/V Deepwater Conqueror. The case centered on whether Santee fraudulently pleaded his Jones Act claim to avoid removal to federal court.
Santee had worked in the offshore drilling industry from 1999 to 2021, primarily for Oceaneering. In January 2021, he allegedly suffered a severe shoulder and neck injury while servicing an ROV on the Deepwater Conqueror. Santee filed suit in Texas state court under the Jones Act, general maritime law, and the Saving to Suitors Clause. The defendants removed the case to federal court, asserting various grounds for federal jurisdiction.
The district court denied Santee’s motion to remand and granted summary judgment for the defendants, holding that Santee had fraudulently pleaded his Jones Act claim because he was not a seaman at the time of his injury. The court found that Santee owed allegiance to his land-based employer rather than the vessel and that his assignment was discrete or limited.
Santee appealed, and the Fifth Circuit reversed the district court’s ruling. The appellate court applied the two-pronged test for seaman status and the additional factors from Sanchez v. Smart Fabricators of Texas, L.L.C. The court found that Santee satisfied the first prong of the seaman test and potentially met several factors of the second prong, including exposure to perils of the sea, sea-based work, and possible dual allegiance to both his employer and the vessel.
The Fifth Circuit emphasized that in a fraudulent pleading analysis, all disputed questions of fact must be resolved in favor of the plaintiff. As Santee had at least some possibility of proving he was a Jones Act seaman, the court concluded that he did not fraudulently plead his claim. Consequently, the case was improperly removed from state court.
The appellate court reversed the district court’s denial of Santee’s motion to remand and instructed the lower court to return the case to state court, preserving Santee’s right to pursue his Jones Act claim in his chosen forum.
Yacht Owners’ Liability Limited in Worker Injury Case
In re Live Life Bella Vita LLC, 115 F.4th 1188 (9th Cir. 2024)
In In re Live Life Bella Vita LLC, the appellate court reviewed a maritime case in which a maintenance worker was injured while servicing a 50.5-foot sailboat owned by Live Life Bella Vita LLC. The owners of the boat, Gary and Nava Dordick, along with their LLC, sought to limit their liability under the Limitation of Liability Act. The Act permits vessel owners to limit their liability for any damages arising from accidents involving their vessels to the value of the vessel and its cargo, provided that they can demonstrate the incident occurred without their knowledge or privity.
The injured worker filed a claim in state court seeking compensation for his injuries, which included extensive medical bills and other damages. In response, the boat owners initiated a federal limitation proceeding, attempting to limit their total liability to the value of the sailboat at the time of the accident. They argued that this limitation should prevent the injured worker and any other claimants from pursuing further compensation beyond the value of the vessel.
A significant point of contention in the case was the applicability of the “single claimant exception” under the Limitation of Liability Act. This exception allows a federal court to stay its proceedings and permit a case to proceed in state court if only one claimant is seeking damages. The logic behind this exception is that with only one claimant, there is no need to distribute a limited fund among multiple parties, thus alleviating the necessity of federal court oversight. The Dordicks argued that this exception applied since the injured worker was the sole claimant.
However, the injured worker, as well as third-party defendants in the case, brought counterclaims and sought indemnification and attorney’s fees, leading to the presence of multiple claims against the limitation fund. This, in turn, undermined the application of the single claimant exception. At bottom, the appeals court overturned the district court’s decision to allow the case to proceed in state court, finding that the conditions for lifting the federal court’s injunction had not been met due to the presence of multiple potential claimants. The case was sent back to the district court for further proceedings consistent with this ruling.
Dredging Subcontractor’s Extra Compensation Claim Sinks in Court
In Diamond Services Corp. v. RLB Contracting, Inc., the appellate court dealt with a maritime dispute involving a sub-subcontractor seeking recovery for additional expenses incurred during a dredging project. Diamond Services Corp. was hired as a sub-subcontractor by Harbor Dredging, which had a contract with RLB Contracting, Inc., the prime contractor. The case hinged on whether Diamond could recover under a quantum meruit claim and the Miller Act for costs they claimed exceeded what they had already been paid.
Diamond had initially agreed to perform dredging services and was paid according to the terms of its contract. However, Diamond later sought additional compensation for expenses they claimed were not covered by the initial contract. Diamond argued that despite receiving $950,000 via a joint check for their services, they were entitled to further recovery through a quantum meruit claim—a legal doctrine that allows a party to recover the value of services rendered when no contract exists or when services go beyond the contract’s scope.
The district court granted summary judgment in favor of RLB, dismissing Diamond’s quantum meruit claim. The court found that Diamond had already been fully compensated for all costs and overhead associated with its work and had even profited from the project. The court also ruled that Diamond could not recover under the Miller Act, which protects subcontractors by ensuring payment through bonding requirements. The court found that the damages Diamond sought were outside the scope of the Miller Act’s protections.
Diamond appealed, but the Fifth Circuit upheld the district court’s ruling. The appellate court agreed that Diamond had been fully compensated and that any additional claims were not covered by the Miller Act. The court also affirmed that quantum meruit was inapplicable, as Diamond had been compensated under the contract and could not claim additional payment outside its terms.
Navy Destroyer Collision: Tanker Owner’s Liability Capped at 20%
Energetic Tank, Inc. v. U.S. (In re Energetic Tank, Inc.), 110 F.4th 131 (2d Cir. 2024).
Energetic Tank, Inc. v. U.S. stems from a collision between the M/V ALNIC MC (“ALNIC”), a Liberian-flagged tanker owned by Energetic Tank, Inc., and the U.S. Navy destroyer USS John S. McCain (“MCCAIN”) in the Singapore Strait on August 21, 2017. The collision, which occurred in the pre-dawn hours, resulted in significant damage to both vessels and tragically claimed the lives of ten Navy sailors aboard the MCCAIN, while many others were injured. The ALNIC sustained damages valued at approximately $442,445.
Energetic Tank, Inc. sought to limit its liability under the Limitation of Liability Act. Forty-one Navy sailors and their families, alongside the U.S. government, brought claims against Energetic Tank for their losses. The U.S. government, in turn, sought damages of approximately $185 million to cover the repair costs for the MCCAIN.
The district court applied Singapore law to the determination of liability and damages, given that the collision occurred in international waters governed by Singapore’s maritime jurisdiction. After a Phase 1 trial, the court found that both vessels were at fault for the accident, apportioning 80% of the blame to the U.S. Navy and 20% to Energetic Tank. This meant that Energetic was responsible for paying 20% of the U.S. government’s claimed damages, which totaled $36.6 million. The district court also dismissed Energetic’s claims for contribution or indemnification from the U.S. government, ruling that sovereign immunity protected the U.S. from such claims.
Energetic Tank appealed the district court’s decision, challenging both the allocation of liability and the dismissal of their claims for contribution. Additionally, several sailor claimants filed cross-appeals, arguing that the district court erred by applying Singapore law to the damages calculation rather than U.S. law, which could have provided them greater compensation.
The Second Circuit upheld the district court’s ruling in all respects. It affirmed the decision to apply Singapore law to the case and concluded that the apportionment of 80% fault to the U.S. and 20% to Energetic Tank was correct. The court also upheld the dismissal of Energetic’s claims for contribution against the U.S. government, citing the protection of sovereign immunity. Finally, the court dismissed the sailor claimants’ cross-appeals on the grounds that the district court’s choice-of-law ruling was a non-appealable collateral order.
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