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Edmund Fitzgerald: Investigating Marine Casualties

Today marks the 40th anniversary of the sinking of the M/V Edmund Fitzgerald on Lake Superior in 1975.  It sank in rough weather, taking with it the lives of 29 officers and crew. Commemorative events are outlined here.  

With this anniversary and with the sinking of the M/V El Faro last month, it seemed timely to outline the marine casualty investigation roles of the U.S. Coast Guard and the National Transportation Safety Board.  The agencies have overlapping authorities to investigate marine casualties and they have entered a Memorandum of Understanding regarding their independent roles in a marine casualty.  

Typically, the U.S. Coast Guard investigates all marine casualties but some investigations trigger NTSB involvement.  Under 49 U.S.C. 1131, the NTSB has authority to investigate:

a major marine casualty (except a casualty involving only public vessels) occurring on or under the navigable waters, internal waters, or the territorial sea of the United States as described in Presidential Proclamation No. 5928 of December 27, 1988, or involving a vessel of the United States (as defined in section 2101 (46)  [1] of title 46), under regulations prescribed jointly by the Board and the head of the department in which the Coast Guard is operating.

"Major marine casualties" are defined by regulation (49 C.F.R. 850.5) and the current regulation states:

(e) Major marine casualty means a casualty involving a vessel, other than a public vessel, that results in—(1) The loss of six or more lives;(2) The loss of a mechanically propelled vessel of 100 or more gross tons;(3) Property damage initially estimated as $500,000 or more; or(4) Serious threat, as determined by the Commandant and concurred in by the Chairman, to life, property, or the environment by hazardous materials.

The NTSB has appellate review over decisions of the U.S. Coast Guard with regard to merchant marine licensing which can lead to unusual court decisions like, Collins v. National Transportation Safety Board.  Collins is Admiral Thomas Collins, then Commandant of the U.S. Coast Guard.

In Collins, the D.C. Circuit Court of Appeals reviewed an administrative appeal from a proceeding before a Coast Guard Administrative Law Judge.  The ALJ below found that a licensed mariner committed misconduct leading to a collision in Miami Harbor.  The ALJ suspended the mariner's license for five months.  The mariner appealed to the Commandant of the U.S. Coast Guard who affirmed the decision.  The mariner then appealed to the NTSB under 49 U.S.C. 1133 which reversed the Commandant's decision.  The Coast Guard appealed to the D.C. Circuit Court of Appeals.

As is common with judicial review of administrative decisions, the court wanted to provide the executive branch with "deference" on matters that the agencies were better suited to judge (like mariner misconduct).  This case was unusual because the court had to decide which agency was entitled to deference:  the U.S. Coast Guard or the NTSB.

The court held that the U.S. Coast Guard's interpretation of the regulations at issue were entitled to deference both by the court and the NTSB.

Back to the Edmund Fitzgerald, the National Transportation Safety Board report published its findings in a report and the abstract of the report stated:

About 1915 EST on November 10, 1975, the Great Lakes bulk cargo vessel SS EDMUND FITZGERALD, fully loaded with a cargo of taconite pellets, sank in eastern Lake Superior in position 46 59.91 N, 85 06.61 W, approximately 17 miles from the entrance to Whitefish Bay, MI. The ship was en route from Superior, WI, to Detroit, MI, and had been proceeding at a reduced 3 speed in a severe storm. All the vessel’s 29 officers and crewmembers are missing and presumed dead. No distress call was heard by vessels or shore stations. The Safety Board considered many factors during the investigation including stability, hull strength, operating practices, adequacy of weathertight closures, hatch cover strength, possible grounding, vessel design, loading practices, and weather forecasting. The National Transportation Safety Board determines that the probable cause of this accident was the sudden massive flooding of the cargo hold due to the collapse of one or more hatch covers. Before the hatch covers collapsed, flooding into the ballast tanks and tunnel through topside damage and flooding into the cargo hold through nonweathertight hatch covers caused a reduction of freeboard and a list. The hydrostatic and hydrodynamic forces imposed on the hatch covers by heavy boarding seas at this reduced freeboard and with the list caused the hatch covers to collapse. Contributing to the accident was the lack of transverse watertight bulkheads in the cargo hold and the reduction of freeboard authorized by the 1969, 1971, and 1973 amendments to the Great Lakes Load Line Regulations.

The tale was memorialized in a song by Gordon Lightfoot which, in full disclosure, has been hummed or sang on every ship I have ever sailed on.  As the song reminds us, the sea is, and always has been, an ever present danger to sailors worldwide. 

Lawyer Hits the Road

Guam in November.

When Contracts and Constitution Collide - Third Circuit Looks at the Tonnage Clause

And, in the Third Circuit, the contract wins.

Among the arcane provisions of the U.S. Constitution is the tonnage clause which prohibits the states from laying "any Duty of Tonnage" without the consent of Congress.  Roughly translated, states and local governments cannot tax cargo. 

So, if a municipal landowner leases land to a private company, can it charge rent based on the amount of cargo that passes through that land?

The Court of Appeals for the Third Circuit says YES.

In the case of Maher Terminals, LLC v. Port Authority of New York and New Jersey, the court held that a lease provision that charged rent on "container throughput" was not an unconstitutional duty of tonnage.

The court summarized its decision:

Although Maher Terminals, LLC (“Maher”) challenges the rent it must pay under its lease agreement (“the Lease”) with the Port Authority of New York and New Jersey (“the Port Authority”), this case is not a typical landlordtenant dispute. Maher, a landside marine terminal operator, asserts that the rent due under the Lease violates the U.S. Constitution’s Tonnage Clause, U.S. Const. art. I, § 10, cl. 3, as well as two related federal statutes, all of which historically have concerned taxes and fees imposed on vessels, their owners, and their passengers and crews. The District Court dismissed Maher’s complaint in its entirety, reasoning that Maher’s rent obligations did not violate the Tonnage Clause or its related statutes, and that Maher failed to establish admiralty jurisdiction for its remaining tort claim. We agree and hold that landside service providers like Maher are not within the class of plaintiffs that the Tonnage Clause or its related federal statutes were intended to protect, that is, they are outside each law’s zone of interests. Accordingly, we will affirm.

The decision is peppered with reference to the fact that the terminal operator did not object to the lease provisions when the terminal was exempted from container throughput fee and only brought suit when the fee started escalating per the terms of the lease. The court traced the history of the tonnage clause and the cases interpreting it.  The court noted the tonnage clause's protection of ships, their masters and cargo:

[T]he Tonnage Clause protects the rights of vessels to navigate free of local hindrances by prohibiting charges that the vessels do not choose to incur. Just as a tax on a vessel impedes the vessel’s ability to freely move in commerce, taxes on the people on board the vessel have the same effect. Taxes on certain people (the owner, captain, supercargo, and crew) directly impact where a vessel decides to make port by taxing those responsible for the vessel’s navigation, and taxes on passengers will likely indirectly impact a vessel’s decisions by reducing demand for passage on the vessel. The interests of these people are the same as the interests of the vessels they occupy, so the Tonnage Clause prohibits taxes on them just as it prohibits taxes on the vessels themselves.

The court found that the tonnage clause protects vessels and their owners/masters and not landside operators.  

There was a concurrence/dissenting opinion which would have rejected the district court's decision on the tonnage claim.

Stay tuned, we don't think we've heard the last of this one.

Territorial Status Case Headed for Supreme Court

October 1st and the Supreme Court just granted hearing in several cases.  Of note, to this humble island attorney, is the case of Puerto Rico v. Valle. Those pesky Insular Cases....(my posts here and here).

This case arises from a criminal prosecution in Puerto Rico.  A criminal defendant was convicted of federal crimes in federal court, but then subsequently tried and convicted of violations of Puerto Rico law.  He challenged the second conviction on Double Jeopardy grounds.  The Double Jeopardy clause of the U.S. Constitution provides:  Nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb.  Amend. V.  This provision does not protect criminal offenders who are charged for the same conduct by different sovereigns.  Consider a bank robber:  bank robbery is a federal crime (18 U.S.C. 2113) and armed robbery is a state crime.  Because a State and the Federal Government are separate sovereigns, no double jeopardy violation.

So, from a Constitutional perspective, is Puerto Rico the same sovereign as the federal government OR, as the Question Presented asks:  Whether the Commonwealth of Puerto Rico and the Federal Government are separate sovereigns for purposes of the Double Jeopardy Clause of the United States Constitution.

Puerto Rico says: No.  It has a Congressionally approved organic act and constitution which gave the people's sovereign power to the Puerto Rico government, which in turn, passed the criminal code.

Mr. Valle says:  Yes.  Under the Constitution, there are only two sovereigns:  states and the federal government and Puerto Rico is not a state.

SCOTUSBLOG has the cert briefs here.  When the merits briefs are available, we will post them here.

This blogger's answer?  Stay tuned.

Ninth Circuit - Jones Act is Constitutional

The Ninth Circuit struck down a challenge to the constitutionality of the Jones Act or Merchant Marine Act of 1920.  The case was Novak v. United States and the opinion can be found here.

The litigated component of the Jones Act (rest easy merchant mariners, you didn't lose your worker compensation causes of action) was the requirement that any ship carrying cargo between two points in the United States - say Long Beach and Honolulu - be "built in the United States."  

Per the Court:

Plaintiffs’ theory is that, by excluding foreign competition, the cabotage provisions have created “an essentially monopolistic Hawaiian ocean shipping market” that has resulted in “high prices” and “a de facto duopoly” of two established firms in the Hawaii-mainland shipping market. Plaintiffs contend that all Hawaii residents and businesses, including themselves, have been harmed not only by the increased shipping costs, but also by the resultant inflated cost of doing business in Hawaii because higher shipping costs lead to higher prices for imported goods. Plaintiffs assert that interstate trade between Hawaii and the rest of the United States has been significantly stifled to such an extent that the effect of the Jones Act’s restrictions amounts to “an unlawful restraint of trade and interstate commerce, thereby violating the Commerce Clause of the United States Constitution.” Plaintiffs filed this action against the United States, asserting a single cause of action under the Commerce Clause.

The basic issue on appeal is the Standing doctrine which requires you to be the right plaintiff with an injury caused by some conduct and that injury can be redressed by a favorable decision.

The Ninth Circuit rejected this challenge to the Jones Act because the harm alleged by plaintiffs - increased prices for goods purchased in Hawaii - was not caused by the Jones Act itself, but was rather based on the prices set by the shipping companies carrying the cargo.  As such, absent showing that BUT FOR the Jones Act, the prices would have assuredly been less, the Plaintiffs did not have standing to bring the challenge.

Classically, amendment of a complaint could cure a standing problem, so the Ninth Circuit analyzed whether amendment could cure the problem.  Under the federal rules, amendment of complaints should be allowed, unless it would be futile.  Or, if the amended complaint would fail for any reason, the court won't allow you to amend it.

In this case, the Ninth Circuit found the Jones Act to be a valid exercise of Congress' commerce clause powers.

9th Circuit - California Shark Fin Law Not Preempted by Fed Fisheries Law

The Ninth Circuit rejected a challenge to California's Shark Fin Law, Cal. Fish & Game Code § 2021(b) which makes it "unlawful for any person to possess, sell, offer for sale, trade, or distribute a shark fin" in the state.  The case is Chinatown Neighborhood Ass'n v. Harris and the opinion can be found here.

Shark finning is a practice of harvesting shark fins to make shark fin soup.  The rest of the living shark is discarded.

The practice was prohibited by Congress in 2000.  California outlawed possession of fins without the shark carcass in 1995, then in 2011 criminalized the possession of detached shark fins in the California Shark Fin Law.

Several trade associations filed a federal challenge to the Shark Fin Law asserting that California's law was preempted by federal fisheries law.

The Ninth Circuit found that the federal fisheries law, the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C.§§ 1801-1884 did not preempt California's Shark Fin Law.  The Court similarly rejected a dormant commerce clause challenge to the law.

Fisheries laws are a complex web of federal and state laws and regulations.  For sure, the States have the power to regulate fisheries within their waters, typically seaward of the 3 nautical mile line from the baseline.  Similarly, States can regulate fish LANDED in their ports.  

Federal law can and does preempt state law under the Supremacy Clause of the Constitution.  Federal fisheries laws does not preempt California's Shark Fin Law.  So says the Ninth Circuit.

 

ABA Litigation Section - FREE Roundtable on Cotenancy Clauses in Retail Leases

The ABA Section of Litigation announced a free roundtable to discuss Cotenancy clauses after a recent decision by a California appeals court, Grand Prospect Partners, LP v. Ross Dress for Less.  You can find the link for registration here.

Cotenancy clauses in retail leases are common provisions that allow a tenant to abate rent and/or terminate the lease if the landlord fails to meet a cotenancy requirement under the lease.  In a case of first  impression, in Grand Prospect Partners, LP v. Ross Dress for Less,  although the California  Court  of Appeal upheld the termination right, it struck down the rent abatement remedy as an unenforceable penalty.  Does the case have a sweeping impact for negotiated retail leases in shopping centers across the country?  Panelists will explore the implications of the case for retail landlords and tenants and its impact on the drafting of cotenancy clauses and the enforceability of the remedies negotiated by the landlords and tenants.

The program will be moderated by Howard K. Jeruchimowitz of Greenberg Traurig and will include speakers addressing what this decision means to commercial landlords and tenants.  The panelists will be Rosie Rees of Pircher, Nichols & Meeks who will discuss the the landlord's perspective and Ellen Sinreich of the Sinreich Group who will discuss the tenant's perspective.

Sign up and join us.  No CLE credit but this is a burning issue in retail leases and is causing some disruption in the industry.

On Citizenship and Nationality - DC Circuit Revisits Insular Cases

Geography matters, but so do governments.  If you live in a place that flies the American flag, should you be entitled to all of the privileges that are shared by all the residents of lands where that flag is flown?

No, says the Court of Appeals for the District of Columbia.  Citizenship belongs to those persons whose populace and locally elected government opt to incorporate as a territory or be accepted as a state.  

The American Samoa people and government have not opted for that aspect of governance and therefore its residents, though "nationals" of the United States are not "citizens" of the United States.  

The case is Tuaua v. United States of America and the opinion can be found here.

In Tuaua, a resident of American Samoa challenged his status as a national of the United States under the Citizenship Clause of the Fourteenth Amendment.  That clause provides:

“[a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

So, if the resident of American Samoa is "in" the United States, it follows that he should be a citizen of the United States.

Not so, says the court.  Hearkening back to, and ultimately being bound by, the Insular Cases, citizenship is reserved to those persons whose neighbors and governments have opted to incorporate their territory into the national franchise.  Short of that, the courts are not going to force the benefits, and obligations, of citizenship on a people.

I posted on Hawaii's history of statehood following the Insular Cases here.

DC Showdown Over Fisheries Law Amendments

Ah, the bloggers's dream:  juxtaposing DC Showdown with Fisheries Law in the title of your post.

On a more serious note, domestic fisheries are a $5B component of our national economy with certainly more impact locally in those ports where fish are landed.

The governing statute which sets out federal regulation of fisheries is the Magnuson-Stevens Fisheries Conservation and Management Act, codified at 16 U.S.C. 1801 et seq.

Congressman Young (AK) introduced a bill updating the Magnuson-Stevens Act in ways that trouble the White House.  The bill, H.R. 1335, contains some interesting provisions: 1) exempting fishery management actions from the National Environmental Policy Act and replacing it with a different type of study; 2) changing the types of fish counted towards the sustainable stock figures (red snapper killed during oil drill platform removal are not counted, nor fish seized from foreign fishers violating U.S. EEZ); and 3) extending State jurisdiction over recreational red snapper fishery in the Gulf Coast.

The White House says that President Obama will veto the bill if it gets passed by the Congress. Per Congressman Young's website, the House is set to vote on the bill today.

Stay tuned.

Hawaii Campaign Finance Law Survives Constitutional Challenge

As a random quirk of our law practice, we have done some work with the Hawaii Campaign Spending Commission.  Not surprisingly, the Commission's laws and regulations were challenged after the Citizen's United case and today, we have the Ninth Circuit's take on Hawaii's election laws in light of Citizen's United.  It upheld Hawaii's election laws and noncandidate committee requirements.  The case is A-1 A-Lectricians v. Snipes.  The opinion is here.

This case was a challenge to the constitutionality of Hawaii's campaign finance laws following the Supreme Court's decision in Citizen's United v. Federal Election Comm'n, 558 U.S. 310 (2010).  Hawaii election laws, available at the Campaign Spending Commission's website, here, require the creation of noncandidate committees for those entities who expend more than $1,000, requires those committees to have certain disclaimers, requires identifying information in electioneering communication and the ban on contributions from governmental contractors.

The court's summary, a reading aid, states:

The panel affirmed in part and reversed in part the district court’s summary judgment in an action brought by two individuals and a Hawaii for-profit corporation, A-1 A-Lectrician, Inc., challenging the constitutionality of Hawaii’s campaign finance laws. During the 2010 election, plaintiff A-1 contributed over $50,000 to candidates, candidate committees and party committees. It also purchased three newspaper advertisements. As a result of these expenditures and contributions, A-1 was required to register as a “noncandidate committee,” and was subjected to reporting and disclosure requirements (HRS § 11-302) and advertising disclaimer requirements (HRS § 11-391). A1, which plans to run similar advertisements and make similar contributions to candidates in the future, objects to both the disclaimer requirement and the noncandidate committee registration and reporting requirements.

Addressing A-1's Fourteenth Amendment due process vagueness challenge to Hawaii’s reporting and disclosure requirements, the panel held that HRS § 11-302’s definitions of “expenditure,” and “noncandidate committee” were not vague given the narrowing construction of the term “influence” proffered by Hawaii’s Campaign Spending Commission. The panel also held that § 11-302’s definition of “advertisement” was not unconstitutionally vague because read as a whole and in context it was sufficiently clear to give a person of ordinary intelligence a reasonable opportunity to know what was prohibited. Addressing the First Amendment challenges, the panel held that the registration, reporting and disclosure requirements that Hawaii places on “noncandidate committees” survived exacting scrutiny as applied to A-1. The panel held that the requirements were substantially related to Hawaii’s important interests in informing the electorate, preventing corruption or its appearance, and avoiding the circumvention of valid campaign finance laws. The panel also held that Hawaii’s requirement that political advertising include a disclaimer as to the affiliation of the advertiser with a candidate or candidate committee did not violate the First Amendment as applied to A-1’s political advertisements.

The panel declined to consider A1’s challenge to Hawaii’s electioneering communication reporting requirements (HRS § 341) because it determined that A-1 was not subject to those requirements as of the date the complaint was filed. The panel rejected A-1’s First Amendment challenge to Hawaii’s ban on campaign contributions by government contractors to candidates or candidate committees, (HRS § 11-355). The panel held that Hawaii’s government contractor contribution ban survived closely drawn scrutiny even as applied to A-1’s proposed contributions to candidates who neither decide whether A-1 receives contracts nor oversee A-1’s contracts. The panel held that the individual plaintiffs were entitled to attorney’s fees arising from their prior interlocutory appeal challenging HRS § 11-358, which prohibited any person from making contributions to a noncandidate committee in an aggregate amount greater than $1,000 in an election.

The panel held that because plaintiffs prevailed in the interlocutory appeal, and subsequently became prevailing parties after the district court entered judgment in their favor, the district court erred by failing to consider whether to award them reasonable appellate attorney’s fees. The panel referred the matter to the Ninth Circuit Appellate Commissioner to determine the amount of fees to be awarded.

Seems likely that Supreme Court review will be coming...stay tuned.