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New Admiralty Case from Eighth Circuit - In re Fitzgerald Marine & Repair

New maritime contract case from the Eighth Circuit Court of Appeals.  The issue is contribution and indemnity provisions relating to the repair of vessels.  The case is In re Fitzgerald Marine & Repair, 2010 U.S. App. LEXIS 17000 and the original opinion can be found here.

Facts:  a marine repair company has a standing service agreement to repair a company's tugboats and barges.  One of its crews is called upon to aid a tugboat that was in danger of sinking.  The tugboat eventually sinks.  During the aid mission, an employee of the repair company was injured.  He brought a claim against his employer and vessel owner for his injuries.  The tug owner cross-claimed against the repair company for contribution and indemnity, citing the contract and common law.  The injured worker's claims were settled. 

Analysis:

The maritime contract provided:

[Repairer] shall provide [Vessel Owner] the following services upon request:

(a) Repair of barges, towboats, and other vessels and any appurtenances, tackle, gear, or appliances of such vessels; and

(b) Such other services as may be agreed upon by the parties.

All of such services shall be performed at the [Vessel Owner's] facility in the vicinity of Columbus, Kentucky, including barge fleets operated in conjunction with the [Vessel Owner's] operation on both sides of the river. [Vessel Owner] shall give [Repairer] at least 24 hours’ advance notice of its
service requirements.

The service agreement indemnity provision provided:

[Repairer] shall indemnify, hold harmless, and defend [Vessel Owner] and its affiliated companies . . . and its and their employees, agents, and vessels, from and against (a) any and all claims, liabilities, penalties, and expenses based upon or arising in connection with injury to or death of the employees or agents of [Repairer] . . . , regardless of any negligence on the part of the party to be indemnified or the unseaworthiness of any vessel owned, chartered, operated, or controlled by such party, and (b) any other claims, liabilities, penalties, and expenses arising in connection with [Repairer]’s operations unless caused by the sole negligence of [Vessel Owner] or its affiliates, or its or their employees, agents, or other contractors or subcontractors.

The court found that this indemnity provision was intended to protect Vessel Owner from the claims of Repairer's employees.  So, if the feckless attempt to save the tugboat was performed pursuant to the service agreement, then Repairer had to indemnify Vessel Owner.  Rejecting claims that it was a good samaritan or that the attempted repair was not a repair that was envisioned by the service agreement, the court found that the attempted rescue of the tugboat was indeed covered by the service agreement, thereby triggering the indemnity obligations of Repairer.

CJ Confirmation Hearing for Justice Mark Recktenwald: Live Blog

Stay tuned here or at www.inversecondemnation.com for live blogging of the Senate confirmation hearing for the nomination of Mark Recktenwald as Chief Justice of the Hawaii Supreme Court.

New Maintenace & Cure Case from Third Circuit - Delaware River & Bay Authority v. Jan D. Kopacz

New Maintenance & Cure case from the Third Circuit Court of Appeals.  The case is Delaware River & Bay Authority v. Jan D. Kopacz, 2009 U.S. App. LEXIS 21260, and the original opinion can be found here.

Facts:  a commuter seaman (ate and slept ashore) was injured at work and brought suit for maintenance and cure payments. 

Issue:  whether commuter seamen, who eat and sleep on land, are entitled to "maintenance and cure"-payment from a shipowner to a seaman to cover medical, food, and lodging expenses during the seaman's recovery from illness or injury; and (2) if so, whether a shipowner is relieved of its maintenance and cure obligation when the injured seaman receives Social Security disability benefits and long-term disability payments provided by the shipowner.

Law:  After reviewing the history of the maintenance and cure claim and the policy reasons behind the claim, the court found that commuter seamen were indeed eligible for maintenance and cure payments.  The court noted that for over 100 years, seamen were considered "wards" of the admiralty courts and their claims must be liberally construed in their favor.  AS to whether Social Security's long-term disability payments somehow made the employer not liable for maintenance and cure, the court found that absent a provision in the seaman's collective bargaining agreement expressing a contrary intent, maintenance and cure payments cannot be offset from any disability payment from Social Security.

New Marine Insurance Case from Fifth Circuit - Great Lakes Reinsurance (UK) PLC v. Durham Auctions Inc.

Found this new-er marine insurance case from the Fifth Circuit Court of Appeals (ok, I'm cleaning out the in-tray).  The case name is Great Lakes Reinsurance (UK) PLC v. Durham Auctions Inc., and the official opinion can be found here.

At issue in this case is a choice of law provision of a marine insurance policy.

Facts:  An insurance company brought suit against its insured following a marine casualty following the loss of a motor yacht.  The insurer was a United Kingdom non-admitted surplus lines insurer that had issued a hull and protection and indemnity policy for the vessel.  The insurer alleged that the policy was void at inception because of misrepresentations in the insurance application and failure to disclose the vessel's loss history and repair status.  The insured was a resident of Mississippi but the insurance contract had a New York choice of law provision.

Issue:  whether New York law or federal law (particularly uberrimae fidei) applied versus the forum law, i.e. Mississippi.

Discussion:  In the marine insurance context, an insurer may rely upon the doctrine of uberrimae fidei which requires the utmost good faith by both parties to the contract.  Basically, it puts an affirmative duty on the insured to disclose "every fact within his knowledge."  Op. at 4 n.2.  If there is a non-disclosure, then the insurance contract is void.  This is unique to the admiralty context as compared to traditional insurance which provides greater protections to insureds.  Under Fifth Circuit precedent, see Albany Ins. Co. v. Kieu, 927 F.2d 882 (5th Cir. 1991), however, uberrimae fidei is not entrenched federal precedent and therefore, state law governs.  There have been recent developments in this doctrine in the Second, Third, Ninth and Eleventh Circuits that hold otherwise. [Watch this issue for Supreme Court review someday].

The inquiry did not end with the position that federal law did not apply.  The contract had an express choice of law provision requiring application of New York state law to the interpretation of the contract.  Absent some overarching public policy reason not to apply the choice of law provision, it governed the dispute.  The court, finding no such reason, found that pursuant to the choice of law provision, New York law governed.

 

Heroism, Medals and Lies: Ninth Circuit Strikes Down the Stolen Valor Act

A divided panel of the Ninth Circuit Court of Appeals has found the Stolen Valor Act unconstitutional.  The decision in the case of United States v. Alvarez can be downloaded here (76 pages so don't just print!)

The Stolen Valor Act, 18 U.S.C. 704(b), provides:

Whoever falsely represents himself or herself, verbally or in writing, to have been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States, any of the service medals or badges awarded to the members of such forces, the ribbon, button, or rosette of any such badge, decoration, or medal, or any colorable imitation of such item shall be fined under this title, imprisoned not more than six months, or both.

The defendant publicly stated that he was awarded the Medal of Honor in 1987.  The court further recounted his statements:

Apparently, Alvarez makes a hobby of lying about himself to make people think he is “a psycho from the mental ward with Rambo stories.” The summer before his election to the water district board, a woman informed the FBI about Alvarez’s propensity for making false claims about his military past. Alvarez told her that he won the Medal of Honor for rescuing the American Ambassador during the Iranian hostage crisis, and that he had been shot in the back as he returned to the embassy to save the American flag. Alvarez reportedly told another woman that he was a Vietnam veteran helicopter pilot who had been shot down but then, with the help of his buddies, was able to get the chopper back into the sky.

Alvarez was convicted of making these statements and challenged the constitutionality of the statute on First Amendment grounds.  

Beginning with a commentary on modern life, the majority stated:

"The sad fact is, most people lie about some aspects of their lives from time to time." 

Sure - but should the Constitution protect such statements?

The majority decision reviewed the false statements made and found that they were not part of the narrow exception of unprotected speech (i.e. defamation, libel), applied strict scrutiny and struck down the statute facially and as applied to Mr. Alvarez.

Judge Bybee wrote a lengthy dissent.

One to watch for sure.  En banc review is likely in an election year and the Supreme Court loves a good First Amendment case.

New Admiralty Case from Eighth Circuit - Boudwin v. Hastings Bay Marina

That first step is a doozy.  At least on the Lovie Dovie it is.

New admiralty (though it reads like a premises liability case) case from the Eighth Circuit Court of Appeals.  The case is Boudwin v. Hastings Bay Marina, 2010 U.S. App LEXIS 16031 and can be found here .

Facts:  during a "tour" of a moored boat, a prospective boat purchaser falls through a hatch that was left open by the "tour-guide" (the guide BROKE into the vessel to conduct the tour).  The purchaser consummated the sale, then lost the boat to a marina operator's lien action.  The purchaser then brought a negligence action against the marina (now boat owner).

Issue:  did the marina operator have a duty to protect the purchaser from the fall?

Law:  Trial court granted summary judgment in favor of the marina and that decision was affirmed by the Eighth Circuit.  As a matter of fact, the court found that the marina did not own, control or possess the boat at the time of the injury.  Further, the tour-guide was not acting in the scope of his employment during the ill-fated tour.  And, any actions were not with actual or apparent authority, so respondeat superior could not save this claim.

New LHWCA Case from Fifth Circuit - Cooper v. Int'l Offshore Servs.

New LHWCA and Jones Act case from the Fifth Circuit Court of Appeals.  The case sets out the impact of a LHWCA settlement on a claimant's other non-LWHCA claims (i.e. Jones Act, Maintenance & Cure).  The case is  Cooper v. International Offshore Services,  2010 U.S. App. LEXIS 16133 and can be found here.

Per the court,

Charles Cooper was seriously injured while loading supplies onto the M/V INTERNATIONAL THUNDER during the course of his employment. He settled his compensation claims with his employer, International Marine, and its parent company, International Offshore Services, (collectively “International”) through the administrative processes in the Longshore and Harbor Workers’ Compensation Act (“LHWCA”). Thereafter, he filed a complaint against International for negligence and sought damages, maintenance, and cure. International’s motion for summary judgment was granted. We AFFIRM.

The court found that the because the claimant did not appeal the order approving the settlement with the employer, he was barred from bringing a separate suit for damages because the settlement agreement settled all claims.

To Rob or Not To Rob - Musings on Pirates

The Wall Street Journal Law Blog today reports on the federal prosecution of Somali pirates and the difficult question of who is a pirate.

The challenge of prosecuting modern day criminal activity with relatively ancient statutes is not for the faint of heart.  That being said, as pointed out last year in my post, there are prosecutorial options.  

The exercise of criminal jurisdiction over extraterritorial crimes is not unprecedented.  As the Maersk Alabama complaint noted, the United States successfully asserted jurisdiction over Ramzi Yousef, Osama Bin Laden (tried in absentia) and Shi Lei.  The Ninth Circuit decision in Shi Lei is the only reported case interpreting the Violence Against Maritime Navigation statute.  [Disclosure: while serving as a Coast Guard JAG, I was a Special Assistant U.S. Attorney and worked on the Shi Lei case].

As my Op-Ed on piracy and U.S. legal systems (here) notes, the U.S. legal system does have the tools it needs to protect American shipping interests. 

On Chief Justices and Experiences

Governor Linda Lingle nominated Associate Justice Mark Recktenwald to be the next Chief Justice of the Hawaii Supreme Court.

As a service to the public, my fellow bloggers and bloggers-to-be, have begun to digest the opinions of Justice Recktenwald.  We are posting them to www.inversecondemnation.com.

We also will be following the confirmation process and will live blog the Senate confirmation hearing.  Details to follow.

On a side note, former Chief Justice Richardson often would recount how his personal experience being excluded from beaches in Hawaii colored his decision in In Re Ashford. 

One wonders what experiences will color Justice Recktenwald's decisionmaking.

Ponderings on Judicial Takings, Beaches and .. Woodchucks?

Once in a while we lift up from the trenches of litigation and ponder the metaphysical questions of law, like how much would could a woodchuck chuck, if a woodchuck could chuck wood?

Robert Thomas, Tred Eyerly and I filed an amicus curiae brief in the case of Stop the Beach Renourishment v. Florida Dep't of Environmental Protection.  We were recently asked to submit an essay to the Vermont Law Review analyzing the property rights impacts of the decision.

More when we publish, but as a hook to grab your interest, a Justice Scalia quote:

Justice Breyer must either (a) grapple with the artificial question of what would constitute a judicial taking if there were such a thing as a judicial taking (reminiscent of the perplexing question how much wood would a woodchuck chuck if a woodchuck could chuck wood?), or (b) answer in the negative what he considers to be the “unnecessary” constitutional question whether there is such a thing as a judicial taking.

Our introduction:

Eighty-four years after the Supreme Court acknowledged that an exercise of governmental authority other than the eminent domain power could be a taking, it appears the search for what might fit the bill has devolved from "the lawyer’s equivalent of the physicist’s hunt for the quark" to the riddle of a nursery rhyme. Having now acknowledged Justice Scalia’s reference to one of the most unlikely phrases ever turned in a Supreme Court opinion, we can move on to the more intriguing questions presented by Stop the Beach Renourishment v. Florida Department of Environmental Protection, the case in which the Court came tantalizingly close to answering the most metaphysical of legal issues: can a state supreme court decision "take" property when it changes state law?

The case held out the promise of providing long sought guidance about whether a state’s exercise of judicial power is constrained by the Takings Clause, but ultimately fell one vote short. Six justices agreed that in certain circumstances, a state supreme court’s recharacterization of property from private to public would violate the Constitution; the four-justice Scalia-led plurality concluded it would be a Takings Clause problem, while Justice Kennedy, joined by Justice Sotomayor, saw it as involving the legitimacy of the state court’s action – in other words, substantive due process. Justice Breyer, joined by Justice Ginsburg agreed there was no judicial taking in the case, but demurred on expressing any opinion of when there would be.

. . . .

No doubt the fractured opinions in the case will be a boon for academics who may continue the search for the takings quark (if not woodchucks) in the pages of law journals. But what about practitioners laboring in the trenches of takings law in the courts, struggling to determine whether a state supreme court’s decision changed the law in a manner such that, from the property owner’s perspective, the state might as well have exercised eminent domain and taken it? In this essay we will attempt to provide a view of how we see the issue, focusing on the Scalia plurality opinion and the PruneYard case, the only other case where the Court has expressly weighed in on the judicial takings question. We conclude with a suggestion of how PruneYard and the plurality opinion in Stop the Beach Renourishment may provide a roadmap for asserting and winning a judicial takings claim.