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					Procrastinators’ Programs       SM




2008 Maritime Updates

  Course Number: 02000812116
        1.0 Hour of CLE


         Clay A. Cosse
       Ryan M. McCabe
       Elizabeth H. Ryan
         December 16, 2008
        4:50 P.M. – 5:50 P.M.
           Pan Am Center
       New Orleans, Louisiana
         2008 FIFTH CIRCUIT
                            ♣
        MARITIME LAW UPDATE
Clay A. Cossé                                          Ryan M. McCabe
Kean, Miller, Hawthorne,                               Montgomery, Barnett, Brown,
D’Armond, McCowan & Jarman, LLP                        Read, Hammond & Mintz, LLP
909 Poydras Street                                     3300 Energy Centre
Suite 1450                                             1100 Poydras Street
New Orleans, Louisiana 70112                           New Orleans, Louisiana 70163
Telephone: (504) 620-3352                              Telephone: (504) 585-7683
Facsimile: (504) 585-3051                              Facsimile: (504) 200-8983
E-mail: clay.cosse@keanmiller.com                      E-mail: rmccabe@monbar.com


                                Elizabeth H. Ryan
                                Lemle & Kelleher, LLP
                                601 Poydras Street
                                21st Floor
                                New Orleans, Louisiana 70130
                                Telephone: (504) 584-9138
                                Facsimile: (504) 584-9142
                                E-mail: eryan@lemle.com




                                           Presented at the
                                    New Orleans Bar Association’s
                                     Procrastinators’ Programs sm


                                     Tuesday, December 16, 2008
                                        4:50 p.m. – 5:50 p.m.


        ♣
                 To the extent that any opinion is expressed in this article, such opinion is solely that
of the authors and does not necessarily represent the opinion of their respective law firms, their
partners, their associates, or their clients.


                                                   2
                                  CLAY A. COSSÉ
                  Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman, LLP
                                        909 Poydras Street
                                             Suite 1450
                                  New Orleans, Louisiana 70112
                                   Telephone: (504) 620-3352
                                    Facsimile: (504) 585-3051
                                E-mail: clay.cosse@keanmiller.com


Clay Cossé is an associate attorney in the New Orleans office of Kean Miller Hawthorne D’Armond
McGowan and Jarman, LLP. He joined the firm in 2006 and practices in the Admiralty and
Maritime practice group.

Clay is admitted to practice before all Louisiana state courts, the United States District Courts for
the Eastern, Middle and Western Districts of Louisiana, and the United States Court of Appeals for
the Fifth Circuit. He has successfully defended clients in federal and state courts through motion
practice and discovery. Clay has gained experience in a wide array of maritime matters, including the
Jones Act, personal injury, oil and gas production and exploration, products and premises liability,
ship and barge collisions and allisions, cargo damage and limitations of liability. In addition to
defending a wide array of maritime clients, Clay has defended clients in toxic torts, construction
defect and insurance arenas.

Clay received his J.D. from the Louisiana State University Law Center in May 2006. He received his
B.A. in Liberal Studies from the University of Notre Dame in 2003.




                                                 3
                               RYAN M. MCCABE
                   Montgomery, Barnett, Brown, Read, Hammond & Mintz, LLP
                                      3300 Energy Centre
                                      1100 Poydras Street
                             New Orleans, Louisiana 70163-3200
                                  Telephone: (504) 585-7683
                                  Facsimile: (504) 200-8983
                                E-mail: rmccabe@monbar.com


Ryan McCabe, an associate in Montgomery Barnett’s New Orleans office, earned his juris doctor
from Tulane University Law School in 2007 and his Bachelor of Science in Business Administration
(Finance concentration) and Bachelor of Arts in Urban Studies and Planning (Urban Economics
concentration), summa cum laude, from the University at Albany in 2004.

Ryan is admitted to practice in the United States Court of Appeals for the Fifth Circuit and the
United States District Court for the Southern District of Texas, as well as all Louisiana state and
federal courts. His practice focuses primarily on commercial litigation, oil and gas litigation,
business and corporate matters, and legal malpractice defense.

During law school, Ryan was a legal intern for the Chief Counsel of the United States Maritime
Administration, served as Editor in Chief of the Tulane Maritime Law Journal, and argued in the John
R. Brown Admiralty Moot Court Competition. Additionally, Ryan won the Journal’s 2005 annual
writing competition and 2007 Tulane Admiralty Law Institute Award of Excellence.

While attending the University at Albany, Ryan was a Presidential Scholar, member of the
Presidential Honor Society, the National Society of Collegiate Scholars, and Beta Gamma Sigma,
and was heavily involved in the University at Albany School of Business Honors Program.

CLE Seminar Taught
  • Co-panelist with Louisiana Insurance Commissioner Jim Donelon; presented a paper
     entitled “Wind versus Flood and Other Trivial and Mundane Matters”, Louisiana State Bar
     Association’s 2008 Sandestin Summer School

Published Works
   • The Third Circuit Declines to Extend Maritime Liens to Replacement Vessels in PNC Bank Delaware
       v. F/V Miss Laura, 30 TUL. MAR. L.J. 427 (2006).
   • A Statutory Frolic of Its Own? A Divided Fourth Circuit Calms the Seas of the Suits in Admiralty Act
       Discretionary Function Exception Circuit Split, 30 TUL. MAR. L.J. 457 (2006).
   • Quantum Survey, 31 TUL. MAR. L.J. 697 (2007) (with Arjya B. Majumdar).
   • Collision Survey, 31 TUL. MAR. L.J. 727 (2007) (with Arjya B. Majumdar).
   • Forum Selection Clause Survey, 31 TUL. MAR. L.J. 745 (2007) (with Arjya B. Majumdar).




                                                   4
ELIZABETH H. RYAN
     Lemle & Kelleher, LLP
       601 Poydras Street
           21st Floor
  New Orleans, Louisiana 70130
   Telephone: (504) 584-9138
    Facsimile: (504) 584-9142
   E-mail: eryan@lemle.com




               5
2008 FIFTH CIRCUIT
   MARITIME LAW UPDATE
          The following cases were decided by the United States Supreme Court, the United States
Court of Appeals for the Fifth Circuit and the Louisiana state and federal courts over the past year.
The authors do not warrant that the cases discussed herein are a complete complication of all
maritime cases from the foregoing courts. Rather, the following cases are merely meant to be an
illustrative sample of the more noteworthy recent developments in maritime law in the jurisdictions
in which the majority of today’s attendees practice.

I.      PREEMPTION OF STATE LAW BY FEDERAL MARITIME LAW

        A.      Ostrowiecki v. Aggressor Fleet, Ltd., 965 So. 2d 527 (La. App. 4 Cir. 2007).

         In Ostrowiecki v. Aggressor Fleet, Ltd., the Louisiana Fourth Circuit held that the Death on the
High Seas Act, 46 U.S.C. §§ 30301-08 (“DOHSA”), preempted plaintiffs’ state-law claims for
misrepresentation, breach of contract, survival, and wrongful death. Despite the presence of a
Louisiana forum selection clause in an employment contract, Judge Gorbaty recognized that “there
is clear authority that DOHSA preempts the plaintiffs state law claims” for fatal injury remedies.
The court further held that plaintiffs’ claims for intentional or negligent infliction of emotional
distress were not preempted by DOHSA.

II.     ADMIRALTY JURISDICTION

        A.      In re Silver Slipper Casino Venture L.L.C., 264 Fed. App’x 363 (5th Cir. 2008).

         In In re Silver Slipper, the United States Court of Appeals for the Fifth Circuit evaluated the
applicability of admiralty jurisdiction in a limitation of liability action filed by Silver Slipper, the
owner of the President Casino-Broadwater, a casino barge moored in Biloxi, Mississippi. Hurricane
Katrina blew the casino barge several thousand feet across a highway into a hotel. Silver Slipper
subsequently filed suit seeking exoneration from or limitation of liability under the Limitation of
Liability Act, 46 U.S.C. § 186, et seq. The casino barge was permanently moored in a marina,
received electricity and water from land-based sources, and was not practically capable of being
transported over water.

        As the court noted, Silver Slipper could only invoke the Limitation of Liability Act if
admiralty jurisdiction existed under 28 U.S.C. § 1331(1). The controlling inquiry was thus whether
Silver Slipper’s casino constituted a vessel for purposes of admiralty jurisdiction. Applying Stewart v.
Dutra Constr. Co., 543 U.S. 481, 489 (2005), the Fifth Circuit held that the casino barge did not
constitute a “vessel” for purposes of admiralty jurisdiction:




                                                   6
        Notwithstanding Silver Slipper’s attempt to distinguish Pavone [v. Mississippi Riverboat
        Amusement Corp., 52 F.3d 560, 570 (5th Cir. 1995)] and De La Rosa [v. St. Charles
        Gaming Co., Inc., 474 F.3d 185, 188 (5th Cir. 2006)] by arguing that its casino was
        “definitely in navigation” when it struck the hotel, the unfortunate fact that
        Hurricane Katrina blew the casino across a highway and into a hotel did not
        suddenly transform a non-vessel into a practically navigable watercraft.

Silver Slipper, 264 Fed. App’x at 365 (citing 1 U.S.C. § 3; 28 U.S.C. § 1333(1)).

        B.      Abt v. Dickson, 251 Fed. App’x 293 (5th Cir. 2007).

         In Abt v. Dickson, a longshoreman crane operator brought suit to recover for injuries he
suffered when the crane he was operating fell into a ship channel while he moved it along a dock.
The longshoreman filed suit in the United States District Court for the Southern District of Texas
pursuant to admiralty jurisdiction, and so designated pursuant to Federal Rule 9(h). Plaintiffs
asserted claims based on negligence, gross negligence, premises liability, and other torts. The
defendant filed a motion to dismiss for lack of subject matter jurisdiction, arguing that under Sisson v.
Ruby, 497 U.S. 358 (1990), the longshoreman’s claims fell outside the court’s admiralty and maritime
jurisdiction. The district court granted the motion. See 2006 WL 1751897. The longshoreman
appealed.

         On appeal, the Fifth Circuit evaluated the applicability of federal admiralty jurisdiction under
the “maritme situs” test as articulated in Grubart v. Great Lakes Dredge & Dock Co. 513 U.S. 527, 534,
(1995). The maritime situs test involves an evaluation of “whether the tort occurred on navigable
water or whether injury suffered on land was caused by a vessel on navigable water.” Grubart, 513
U.S. at 534 (citing 46 U.S.C. App. § 740). In determining maritime situs, courts make a two-part
inquiry: (1) whether the incident has a potentially disruptive impact on maritime commerce; and (2)
whether “the general character of the activity giving rise to the incident shows a substantial
relationship [to] traditional maritime activity.” Abt, 251 Fed. App’x at 294 (quoting Sisson, 497 U.S.
at 364). In an unpublished opinion, the Fifth Circuit held that federal admiralty jurisdiction did not
extend to the longshoreman’s claims; even though the incident in question potentially could have
disrupted maritime commerce, reasoned the court, there were no vessels on or near the dock at the
time of the incident. Id. at 295. While the longshoreman’s claims satisfied the “locality” test, the
Court reasoned that the plaintiff’s claims were not related to traditional maritime activity. “As the
district court explained, Abt was merely moving the crane from one end of the dock to another; he
was not servicing or even preparing to service a vessel at the time of the incident.” Id. at 294.

        C.      Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 543 F.3d 256 (5th Cir. 2008).

       In Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, a company responsible for repairing and
maintaining offshore platforms and its insurer filed suit against a company responsible for
transporting offshore workers employed by the plaintiff. The plaintiff repair/maintenance company
sought a declaration that it was not obligated to defend and indemnify the defendant transportation
company in a lawsuit arising of an incident in which the plaintiff’s employee was injured in a fall
onboard a vessel owned and operated by the defendant. Judge Engelhardt granted summary
judgment in favor of plaintiff, applying the Outer Continental Shelf Lands Act (“OCSLA”), 43
U.S.C. § 1331, et seq., and the provisions of the Louisiana Oilfield Indemnity Act, LA. REV. STAT. §
9:2780A (“LOIA”) as surrogate federal law under the OCSLA to invalidate the indemnity agreement


                                                    7
upon which the defendant’s defense and indemnity claims were based. 2007 WL 2874808. The
defendant appealed.

        The Fifth Circuit held that the OCSLA—and thus the LOIA—did not apply to a vessel used
to transport a worker from an offshore platform to residential platform. Seacor Marine, 543 F.3d at
259-60. Under Demette v. Falcon Drilling Co., Inc., 280 F.3d 492 (5th Cir. 2002), the vessel in question
did “not qualify as an OCSLA situs within the meaning of § 1333(a)(1). That is, the vessel [did] not
qualify as either ‘the subsoil and seabed of the [OCS],’ an ‘artificial island,’ or an ‘installation ...
permanently or temporarily attached to the seabed.’ Indeed, as to the latter category, § 1333(a)(1)
specifically excludes ‘a ship or vessel’ used for ‘transport [ing] resources from the OCS’ from being a
potential OCSLA situs.” Id. at 259-60.

III.    PUNITIVE DAMAGES.

        A.      Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008).

        In Exxon Shipping Co. v. Baker, the United States Supreme Court held that penalties for water
under the Clean Water Act, 33 U.S.C. §§ 1311(a) and 1319(c)(1) (“CWA”), did not preempt maritime
common law on punitive damages. Exxon, 128 S. Ct. at 2618-19. Having reached that conclusion,
the Court proceeded to analyze the amount of the punitive damages award, holding that a 1:1 ratio
of punitive-to-compensatory damages is a fair upper limit in maritime cases with no earmarks of
exceptional blameworthiness, such as intentional or malicious conduct, or behavior driven primarily
by desire for gain. Id. at 2633. Accordingly, the $2.5 billion dollar punitive damage award against
Exxon, which had been reduced from $4.5 billion dollars by the Ninth Circuit, was further reduced
to equal the amount of compensatory damages, $507.5 million dollars. Id. at 2634.

        Justices Stevens, Ginsburg, and Breyer dissented on the compensatory damages issue in
separate opinions. Justice Alito did not participate in the decision.

IV.     JONES ACT SEAMAN STATUS

        A.      Hebert v. Weeks Marine, Inc., 251 Fed. App’x 305 (5th Cir. 2007).

        In Hebert v. Weeks Marine, Inc., a welder filed suit against a vessel owner under the Jones Act
alleging damages caused by injuries the welder sustained while working in a shipyard when his
shoulder was crushed between two pipes. The United States District Court for the Western District
of Louisiana entered a memorandum ruling and judgment finding that the welder was a Jones Act
seaman. The vessel owner appealed. Id. at 306.

         The Fifth Circuit was not convinced by the vessel owner’s claim that the plaintiff was not a
seaman because he was working on shore in a shipyard at the time of the incident. “It is well
established that a seaman does not lose seaman status merely because his duties take him ashore.”
Id. at 306-07 (citing Chandris, Inc. v. Latsis, 515 U.S. 347, 361). The Court found that the plaintiff had
introduced evidence establishing that approximately 75% of his employment was spent on vessels in
navigable waters; plaintiff therefore met the Chandris 30% test. Id. at 307. The Court also dismissed
the defendant’s argument that the plaintiff had changed jobs prior to the incident. Rather, the
plaintiff had simply transferred from one vessel to another vessel, not from a vessel to a land-based



                                                    8
job. Moreover, plaintiff was a welder on both of the vessels, thus there was no change in his duties
from his old assignment to his new one. Id.

        B.      In re Two-J Ranch, Inc., 534 F. Supp 2d 671 (W.D. La. 2008)

         In In re Two-J Ranch, Inc., a limitation proceeding, an assistant deckhand, James King, boarded
a barge, slipped from its edge, fell into the Mississippi River, and eventually drowned. Id. at 674.
Mr. King was employed aboard the M/V CARLA J; however, he had served in this position for a
short period of time and previously had worked as a welder for a drydock and an attached spud
barge floating in the Mississippi River. Id. at 674. Although M/V CARLA J, a towboat, is clearly a
vessel, the court also ruled that the drydock and attached spud barge was a Jones Act vessel as a
matter of law:

        About once a year, depending on the river level, the drydock and spud barge would
        be moved up and down the river bank as much as several hundred feet along the
        property line of VD & S and Two-J. Far more frequently, the drydock and spud
        barge would be moved a short distance toward and away from the river bank. This
        movement shows that not only were the drydock and spud barge capable of being
        used for maritime transport, they actually were used for that purpose. That in itself
        is sufficient to place the watercraft within the definition of “vessel” in 1 U.S.C. § 3
        for purposes of Jones Act and LHWCA analysis. As Stewart and Holmes reveal, even
        structures that lack many traditional characteristics of vessels are now vessels under 1
        U.S.C. § 3, provided they are not “permanently moored.”

        To drive the point completely home, we emphasize that the drydock in this case is
        unlike the drydock in Cope. In Cope, the drydock “had been put in position by being
        permanently moored by means of large chains” to the river bank, and the drydock’s
        only movement occurred in place, closer or further from the riverbed by means of
        pumps. Cope, 119 U.S. at 627, 7 S.Ct. 336. Clearly, the drydock here does not fit that
        description.

Id. at 680.

        C.      Phelps v. Bulk III, Inc., Nos. 06-0833, 05-2148, 2007 WL 3244723 (E.D. La.
                Nov. 1, 2007).

         In Phelps v. Bulk III, Inc., the plaintiff injured his spine when he was struck in the back by a
spreader bar attached to the defendant’s crane barge. Id. at *1. At the time of the accident, the
plaintiff was working as a flag man and a lead man in the hold of a vessel on the Mississippi River.
Id. The employer moved for summary judgment, claimed that the plaintiff was not a Jones Act
seaman, and presented evidence that the plaintiff primarily performed a traditional function of a
longshoreman (loading and unloading cargo) on the employer’s fleet of barges. Id. at *2. The
employer, however, did “not dispute that its barges are an identifiable fleet under common
ownership or control.” Id. at *3. In rejecting the defendant’s arguments due to the existence of
genuine issues of material fact, Judge Feldman noted that the defendant failed to meet the thirty
percent benchmark set forth in Roberts v. Cardinal Servs., Inc., 266 F.3d 368, 377 (5th Cir. 2001)
(“[W]hen a group of vessels is at issue, a worker who aspires to seaman status must show that at



                                                   9
least 30 percent of his time was spent on vessels, every one of which was under his defendant-
employer’s common ownership or control.”). Phelps, 2007 WL 3244723, at *3-4.

        D.      Willis v. Fugro Chance, Inc., 278 Fed. App’x 443 (5th Cir. 2008).

         In Willis v. Fugro Chance, Inc., the Fifth Circuit rejected the applicability of the so-called
“classicial seaman’s work exception” purportedly set forth by Bertrand v. Int’l Mooring & Marine, Inc.,
700 F.2d 240, 245 (5th Cir. 1983). Since the Fifth Circuit decided Bertrand, parties have argued that
the Bertrand case stands for the proposition that a party may establish seaman status just by proving
that he is regularly exposed to the perils of the sea, without satisfying the Jones Act’s vessel or fleet
requirement. Citing Roberts v. Cardinal Servs., Inc., 266 F.3d 368 (5th Cir. 2001), and Buras v.
Commercial Testing & Eng’g Co., 763 F.2d 307 (5th Cir. 1984), the Willis court stated that “we have
limited our holding in Bertrand to the facts of that case.” Id. at 447.

V.      LIABILITY UNDER THE JONES ACT

        A.      Stiward v. United States, 551 F. Supp. 2d 478 (E.D. La. 2008).

       In Stiward v. United States, a diabetic seaman who suffered a significant diabetic attack while
working on a merchant marine vessel owned by the United States subsequently brought suit against
the United States under the Suits in Admiralty Act for Jones Act negligence and unseaworthiness
due to (1) the vessel’s officers’ failure to stock insulin and (2) the vessel’s officers’ failure to
promptly seek medical assistance on the seaman’s behalf when the attack occurred. Id. at 499.
Following a bench trial, Judge Duval found for the seaman, explaining that:

        The lack of medical supplies aboard the M/V Cape Horn in this case made it
        unseaworthy…Considering Fifth Circuit precedent holding that a coastal oyster
        dredger should stock sedatives in order to be deemed seaworthy, see Stevens [v.
        Seacoast Co., 414 F.2d 1032, 1038-39 (5th Cir.1969)], supra, it is not a great leap to
        require a vessel that traverses thousands of miles of open ocean and performs
        potentially dangerous missions in foreign countries to stock insulin.

Id.

        B.      O’Neill v. Seariver Maritime, Inc., 246 Fed. App’x 278 (5th Cir. 2007).

       In O’Neill v. Seariver Maritime, Inc., the Fifth Circuit stated, in a per curiam opinion, that “[t]he
standard for causation in Jones Act cases is very light.” Id. at 280. The court went on to hold:

        We cannot say that under the Jones Act’s lenient standards for causation and the
        highly deferential clear error standard, the district court clearly erred in concluding
        that a greater than 200 ppm existed when O’Neill was exposed to the hydrogen
        sulfide and that it was the cause of his injuries. The same analysis would apply to the
        seaworthiness claim.

Id.




                                                    10
         Accordingly, the Fifth Circuit affirmed the trial court’s entry of judgment in favor of the
plaintiff seaman, holding that the evidence supported the court’s finding that heightened levels of
hydrogen sulfide caused the seaman’s medical problems. Id. at 279-80.

VI.     MAINTENANCE AND CURE

        A.      Lejeune v. Transocean Offshore Deepwater Drilling, Inc., 247 Fed. App’x 572
                (5th Cir. 2007).

        In Lejeune v. Transocean Offshore Deepwater Drilling, Inc., a seaman was injured when a valve fell
on his foot, crushing his first metatarsal bone and peroneal nerve. The seaman filed suit under the
Jones Act and general maritime law. The United States District Court for the Western District of
Louisiana entered judgment for the seaman and awarded $1.8 million in damages. The seaman’s
employer appealed. The Fifth Circuit held, inter alia, that the district court was entitled to award
maintenance and cure for future medical expenses despite that the seaman was not yet at maximum
medical improvement. The Court also found that the trial court did not err in awarding the seaman
future cure expenses for recommended future physical therapy and psychological treatments, even
though the amount of these expenses was uncertain. Id.

        B.      Parker v. Jackup Boat Serv., LLC, 542 F. Supp. 2d 481 (E.D. La. 2008).

       Under McCorpen v. Cent. Gulf S.S. Corp., 396 F.2d 547 (5th Cir. 1968), a seaman may be
denied maintenance and cure if he lies about his medical history. More specifically, the employer
must prove the following to establish the McCorpen defense:

        (1)     the claimant intentionally misrepresented or concealed medical facts;

        (2)     the non-disclosed facts were material to the employer’s decision to hire the
                claimant; and

        (3)     a connection exists between the withheld information and the injury
                complained of in the lawsuit.

Parker v. Jackup Boat Serv., LLC, 542 F. Supp. 2d 481, 493 (E.D. La. 2008) (citing McCorpen, 396 at
548-49).

        In Parker, Judge Zainey held that the employer was not shielded by McCorpen from its
obligation to pay maintenance and cure to the seaman because the third element was not satisfied:

        In establishing the requisite causal relation, there is no requirement that a present
        injury be identical to a previous injury. All that is required is a causal link between the
        pre-existing disability that was concealed and the disability incurred during the
        voyage.

        Defendants assert that there is a clear connection between the illness that Plaintiff
        failed to disclose and the present disability for which he seeks maintenance and cure.
        Specifically, Defendants argue that Trinity has established the causal link between the
        concealed information and the accident which forms the basis of this suit because


                                                    11
        Plaintiff’s prior injury was an injury to the neck and in the instant matter, he is
        claiming neck injuries as well.

        The Court does not consider this sufficient to establish a causal connection.
        Defendants offer no medical testimony to augment their argument of causality… No
        evidence exists in the record that Plaintiff’s neck was re-injured due to the accident
        or that the previous injury contributed to his accident.

Id. at 494-95 (internal quotation marks, citations, and footnote omitted).

VII.    BURDEN OF PROOF — THE PENNSYLVANIA RULE

        A.      Florida Marine Transporters, Inc. v. Sanford, 255 Fed. App’x 885 (5th Cir.
                2007)

        In Florida Marine Transporters, Inc. v. Sanford, a seaman brought unseaworthiness, Jones Act
negligence, and maintenance and cure claims against a vessel owner to recover damages for an injury
he sustained aboard a vessel. At trial, the jury awarded the seaman maintenance and cure, but ruled
for the vessel owner on the seaman’s other claims. Id. at 887. Following the jury verdict, Judge
Feldman of the Eastern District denied the seaman’s motion for entry of judgment as a matter of
law on the issue of unseaworthiness with a new trial for damages, or, alternatively, for a new trial on
negligence and unseaworthiness. 2006 WL 2524162.

        On appeal, the Fifth Circuit evaluated the applicability of negligence per se and the
Pennsylvania rule. The Court held that the district court did not err in refusing to instruct the jury on
negligence per se and the Pennsylvania rule. “In In re Mid-South Towing Co., this court declined to apply
the Pennsylvania rule where establishing a causal connection between the statutory violation and the
resulting injury was implausible…. Rather, this court held that the statutory violation must be a
contributory and proximate cause of the accident.” Sanford, 255 Fed. App’x at 889 (citing In re Mid-
South Towing Co., 418 F.3d 526 (5th Cir. 2005); Stine v. Marathon Oil Co., 976 F.2d 254, 259 (5th
Cir.1992)). The Court noted, however, that the district court commit error—albeit harmless—by
ruling that the Pennsylvania rule applied only in collision cases. Id. at 889.

VIII. ENFORCEMENT OF JONES ACT SETTLEMENTS

        A.      Durley v. Offshore Drilling Co., 288 Fed. App’x 188 (5th Cir. 2008).

        In Durley v. Offshore Drilling Co., the Fifth Circuit evaluated the district court’s order
invalidating a release agreement between a seaman and his employer. The seaman was injured in an
incident aboard an inland drilling barge owned by TODCO. The seaman underwent medical
treatment and ultimately settled, without representation, his claims against TODCO. The seaman
released TODCO via a release agreement that was explained to and executed by the seaman on the
record before a court reporter “of and from any and all past, present and/or future claims, demands,
causes of action and rights of action whatsoever, which he may or might have and/or which may
hereafter accrue to him, whether known or unknown, foreseen or unforeseen.” Id. at 189.

       The seaman was subsequently diagnosed with more serious medical conditions than those
with which he was initially diagnosed; this was attributed in part to the fact that the seaman withheld


                                                   12
that he was experiencing pain in certain areas because he desired to return to work. The seaman
thereafter filed suit against TODCO under the Jones Act, 46 U.S.C. App. § 688(a), and general
maritime law, claiming that he had concealed the nature and extent of his injuries in the course of
his post-accident medical treatment. TODCO pled the release agreement as a bar to plaintiff’s
claims and filed a compulsory counterclaim for indemnity, based on the terms of the release. The
district court invalidated the release on the grounds that the seaman and TODCO shared a mutual
mistake as to the nature and severity of the seaman’s injuries. Durley, 288 Fed. App’x at 189.

         Relying on Simpson v. Lykes Bros. Inc., 22 F.3d 601, 602 (5th Cir. 1994), the Court vacated the
district court’s order invalidating the release, holding that the doctrine of mutual mistake was
unavailable to the seaman to avoid the release. In evaluating the validity of a seaman’s release,
courts consider several factors, including “whether the parties have negotiated at arms-length and in
apparent good faith, whether the competency of counsel or the adequacy of medical or legal advice
is questioned, and whether there is any appearance of ‘taint or fraud, deception, coercion or
overreaching…in the negotiations eventuating in the settlement.’” Durley, 288 Fed. App’x at 190
(quoting Strange v. Gulf & S. Am. Steamship Co., 495 F.2d 1235, 1236 (5th Cir.1974)). Courts also
consider the adequacy of the settlement consideration, though “[t]he ultimate concern...is not
whether the seaman has received what the court believes to be adequate consideration, but rather
whether the seaman relinquished his rights with an informed understanding of his rights and a full
appreciation of the consequences when he executed a release.” Id. at 190 (quoting Simpson, 22 F.3d
at 602); see also Stipelcovich v. Sand Dollar Marine, Inc., 805 F.2d 599, 606 (5th Cir.1986).

       The Court evaluated the seaman’s argument that the release should be invalidated for mutual
mistake:

        A seaman’s release should be set aside for mutual mistake if neither party understood
        the nature of the injury, as opposed to its extent. Rogers v. Trico Marine Operators, Inc.,
        No. 98-30094, 1998 WL 870688, at *3 (5th Cir. Dec.2, 1998) (citing Robertson, 510
        F.2d at 836). “A longshoreman who signs a release may have to take his chances that
        [with] a properly diagnosed condition ... his injuries may be more serious and
        extensive than originally thought.” Id. (quoting Robertson, 510 F.2d at 836)…. Where
        both parties completely misunderstood the nature of the injury, then, we have set
        aside a release for mutual mistake. Id.

Id. at 190.

        The Durley release was analogous to the Simpson release in that both releases expressly
covered any worsening of the respective plaintiffs’ conditions subsequent to the execution of the
Releases, both known and unknown at the time. The express language of the Durley release coupled
with the plaintiff’s exchange on the record with counsel for TODCO made it “clear that Durley
understood he was relinquishing his rights for all injuries even if they were unknown. Per Simpson,
then, the doctrine of mutual mistake is unavailable to him to avoid the agreement.” Id. at 191.

        B.      Steverson v. GlobalSantaFe Corp., 508 F.3d 300 (5th Cir. 2007).

        In Steverson v. GlobalSantaFe Corp., a seaman was injured and hired an attorney in Biloxi to
represent him. Id. at 302. The seaman’s chosen attorney subsequently passed away, and the
attorney’s associate then became the seaman’s sole attorney. Id. The associate filed a Jones Act


                                                    13
action and eventually settled the seaman’s case for $350,000.00 following a settlement conference
over which a Magistrate Judge presided. Id. at 304. Eight days later, however, the seaman informed
the associate that he did not agree to the settlement and that he was under the impression that he
had thirty days to consider whether he wanted to go forward with the settlement. Id. at 305. The
seaman terminated the associate’s services and retained new counsel. Id. The defendant filed a
motion to compel the settlement, which was granted by the district court.

        On appeal, the Fifth Circuit reversed the district court, noting that “[s]eamen, of course, are
wards of admiralty whose rights federal courts are duty-bound to jealously protect….Any release or
settlement involving a seaman’s rights is subject to careful scrutiny.” Id. at 304 (internal quotation
marks, citations, and brackets omitted). Citing Stipelcovich v. Sand Dollar Marine, Inc., 805 F.2d 599
(5th Cir. 1986), Fifth Circuit implied that the likelihood that a settlement will be upheld increases
when: (1) the lower court’s dismissal order is not confusing and ambiguous; (2) there is evidence
that the settlement is negotiated by the seaman’s counsel in apparent good faith at arms length; (3)
the lower court holds a hearing to resolve conflicting stories or otherwise assess the legal advice
given to the seaman by his counsel; (4) the seaman has access to adequate access to legal advice at
the time the settlement agreement is executed. Id. at 305-06. Several of the foregoing factors were
not present when the Steverson settlement agreement was executed.

IX.    A SEAMAN’S WILLFUL CONCEALMENT OF A PREEXISTING CONDITION
       AS A DEFENSE TO JONES ACT AND UNSEAWORTHINESS CLAIMS

       A.      Johnson v. Cenac Towing, Inc., 544 F.3d 296 (5th Cir. 2008).

        While a Jones Act seaman’s willful concealment of a pre-existing medical condition has long
been held to preclude a seaman’s recovery for maintenance and cure benefits, willful concealment
has never acted as a bar to recovery under the Jones Act. McCorpen v. Cent. Gulf S.S. Corp., 396 F.2d
547 (5th Cir. 1968); Still v. Norfolk & Western Railway Co., 368 U.S. 35 (1961). The Fifth Circuit’s
recent ruling in Johnson v. Cenac Towing, Inc. provides both comfort and caveat to the Jones Act
employer. 544 F.3d 296 (5th Cir. 2008). The comfort: the seaman who willfully conceals a pre-
existing medical condition from his employer does so at his own peril—if his concealment causes
the seaman to suffer a re-injury, the seaman will be precluded from recovering maintenance and
cure, and will see his Jones Act claim reduced in proportion to the percentage of fault attributable to
his concealment. The caveat: insurance benefits received by a Jones Act seaman under an employer
financed health insurance plans that provide coverage only for non-work-related injuries are
“collateral source” payments and will not reduce the seaman’s recovery from his employer for Jones
Act negligence. Id. Still, the Fifth Circuit noted:

       If Cenac had established a health insurance plan that covered both work-related and
       non-work-related injuries and contained specific language requiring that benefits
       received under the plan be set-off against a judgment adverse to the tortfeasor [Jones
       Act employer], then a court might find that the plan was intended to indemnify the
       tortfeasor from liability.

Id. at 306 (citing Allen v. Exxon Shipping Co., 639 F.Supp. 1545, 1549 (D. Me. 1986)).

      Leroy Johnson, a Jones Act Seaman employed as a tankerman by Cenac Towing, injured his
back while carrying a 175-pound cross-over hose aboard a Cenac vessel. Johnson had applied for


                                                  14
employment with Cenac on two occasions. Both times, Johnson indicated that he had never
suffered any on-the-job injuries and that he did not have any physical conditions that might interfere
with or hinder his job performance. In connection with his pre-employment physical examinations,
Johnson completed medical history questionnaires. Both times, Johnson indicated that he had never
hurt his back and that he had never received disability compensation. Yet Johnson had suffered
work-related injuries on two occasions prior to his employment with Cenac. In 1994, Johnson
sustained neck and back injures that left him disabled for ten months; Johnson underwent neck
surgery for these injuries. In 2001, Johnson re-injured his back and was disabled for thirteen
months; Johnson received steroid injections for the re-injury. Id. at 299-301.

        Johnson then injured his back in 2005 while working for Cenac. Johnson applied for and
received insurance benefits for his back injury under an insurance plan financed by Cenac; the
insurance plan provided coverage only for non-work-related injuries. Id. at 300.

         District Judge Sarah Vance denied plaintiff maintenance and cure benefits on the grounds
that plaintiff had willfully concealed his pre-existing medical conditions. Judge Vance awarded
plaintiff damages under the Jones Act. Id. at 301. While Judge Vance found the plaintiff’s injuries
to be aggravations of his pre-existing conditions, the Fifth Circuit found that Judge Vance’s ruling
was unclear as to whether the plaintiff had been contributorily negligent by willfully concealing his
prior injuries from Cenac. The Fifth Circuit remanded the case to the District Court to determine
whether plaintiff had been contributorily negligent in “exposing himself to heavy labor with a
weakened back.” The Fifth Circuit’s decision did not make a determination on Johnson’s
contributory negligence/comparative fault. Id. at 302-303.

       With respect to the admissibility of benefits paid to the plaintiff under the employer-
financed health insurance plan, the Fifth Circuit held that the insurance benefits were a collateral
source payment and could not reduce Johnson’s damage award.

       [W]hen an employer-tortfeasor funds a benefit plan, like the group health insurance
       plan at issue here, “the justifications for denying a setoff become less compelling.”
       [Phillips v. Western Co. of N. Am., 953 F.2d 923, 931 (5th Cir. 1992)]

       Generally, however, when an employee has bargained for a fringe benefit like health
       or life insurance as additional consideration for employment, “compensation
       received by the employee under that fringe benefit should not be deducted from
       damages awarded to the employee as a result of the employer’s negligence.” [Davis v.
       Odeco, Inc., 18 F.3d 1237, 1244]

Id. at 304. Applying Davis, the Fifth Circuit reasoned that the Johnson plan’s exclusive coverage of
non-work related injuries was the dispositive factor in determining that the plan was a collateral
source that could not be set off against Johnson’s damage award. Id.

X.     VESSEL STATUS

       A.      Cain v. Transocean Offshore, USA, Inc., 518 F.3d 295 (5th Cir. 2008).

      In Cain v. Transocean Offshore, USA, Inc., the Fifth Circuit addressed whether the United States
Supreme Court’s decision in Stewart v. Dutra Constr. Co., 543 U.S. 481 (2005), overruled the


                                                 15
longstanding Fifth Circuit precedent that a watercraft under construction is not a “vessel in
navigation” for purposes of the Jones Act.

        On March 1, 2000, Transocean assigned plaintiff Rocky Cain to work as a toolpusher in a
Singapore shipyard on the construction of the M/V CAJUN EXPRESS, a fifth-generation semi-
submersible mobile offshore drilling rig designed to drill for oil and gas. Cain was expected to
continue working on the CAJUN EXPRESS or a sister rig after the M/V CAJUN EXPRESS was
completed. In the first half of 2000, the CAJUN EXPRESS underwent sea trials with respect to the
operational readiness of its power generation and navigation systems, and with respect to test its
watertightness. With tugboat assistance, the CAJUN EXPRESS was then towed with men and
equipment aboard to Grand Isle, Louisiana. Construction continued—and plaintiff continued to
work—during the voyage to Louisiana. Upon arrival to the Gulf of Mexico, the CAJUN EXPRESS
was moored in a “floating shipyard” for completion of construction. Cain, 518 F.3d at 296-97.

        The rig was capable of self-propulsion, but was not capable of operating as a semi-
submersible drilling rig. The necessary construction still included installation of vital pipe-handling
equipment and materials needed for increased buoyancy. Transocean’s engineer testified that at that
time, “no drilling contractor would have found the CAJUN EXPRESS fit for the purpose of drilling
a deepwater well in the Gulf of Mexico.” On September 10, 2000, Cain was injured while working
on board the CAJUN EXPRESS. At the time of Cain’s incident, drilling systems had not been
commissioned, nor had the necessary buoyancy systems been installed. Subsequent to his incident,
Cain was evaluated by a neurosurgeon, who recommended that Cain undergo physical therapy. Cain
received physical therapy and continued to work aboard the CAJUN EXPRESS. In April or May
2001, the CAJUN EXPRESS was finally completed and began drilling operations in the Gulf of
Mexico. Id. at 297.

        Cain continued to work as a toolpusher on the CAJUN EXPRESS but was subsequently
diagnosed with a herniated disc. In September 2001, he discontinued work to undergo a cervical
discectomy and fusion. Cain returned to work in December 2001, but was assigned to land-based
employment. Id. at 297-298.

        Cain filed suit against Transocean for Jones Act negligence and the alleged unseaworthiness
of the CAJUN EXPRESS. Transocean moved for summary judgment on the grounds that the
CAJUN EXPRESS was not a “vessel in navigation” at the time of Cain’s incident, and thus that
Cain was not a Jones Act seaman. The district court denied Transocean’s motion, concluding that
the Supreme Court’s decision in Stewart had overruled Fifth Circuit precedent concerning the non-
vessel status of watercraft under construction. The district court held that the CAJUN EXPRESS
was a vessel at the time of Cain’s injury because under Stewart it was capable of transporting
workers and equipment over water. Id. at 298.

        Transocean appealed the district court’s order denying summary judgment. On appeal, the
Fifth Circuit addressed the “continued viability of our longstanding precedent holding that a
watercraft under construction is not a ‘vessel in navigation’ for purposes of the Jones Act.” Cain,
518 F.3d at 296. In reversing the trial court’s ruling denying summary judgment, the Fifth Circuit
held that the Supreme Court’s decision in Stewart, supra, has not overruled longstanding Fifth Circuit
precedent that a watercraft under construction is not a “vessel in navigation;” in essence, Stewart did
not concern or address the point at which a vessel-to-be actually becomes a vessel.



                                                  16
        We therefore hold that Stewart does not require us to modify our precedent
        regarding the vessel status of incomplete watercraft. As such, the CAJUN EXPRESS
        was not a “vessel in navigation,” and Cain was not a Jones Act seaman. Cain was
        thus not entitled to relief under the Jones Act for his September 10, 2000, injury.

Cain, 518 F.3d at 303. Indeed, the Fifth Circuit seemed to suggest that Stewart, supra, is not
controlling in cases involving vessels under construction.

        In short, although Stewart instructs that the “in navigation” requirement “is relevant
        to whether the craft is ‘used, or capable of being used’ for maritime transportation,”
        543 U.S. at 496, 125 S.Ct. 1118, that instruction does not consider in the first
        instance when a vessel-to-be becomes a vessel. We view that issue as a separate
        question from whether an unconventional watercraft is a vessel.

Cain, 518 F.3d at 303.

       On the issue of whether the M/V CAJUN EXPRESS was in fact a vessel in navigation the
Fifth Circuit held to the contrary. The Court held that the CAJUN EXPRESS was a watercraft
under construction; thus, under established Fifth Circuit precedent, the CAJUN EXPRESS was not
a vessel in navigation and Cain was not a Jones Act seaman. Notwithstanding that the M/V
CAJUN EXPRESS was capable of self-propulsion, the rig was still under construction in a floating
shipyard, lacked vital equipment to make it fully operational as a gas and oil drilling rig, and had not
been certified as operational by the Coast Guard. The Court seemed to lend particular weight to the
testimony of Transocean’s engineer, who testified that no drilling contractor would have found the
CAJUN EXPRESS fit to drill a deepwater well in the Gulf of Mexico. Rather, the CAJUN
EXPRESS was not finally completed and placed into service until after Cain was injured. Id. at 299.

        That the CAJUN EXPRESS lacked Coast Guard certification was not dispositive, however;
the Court cautioned that “[w]e do not hold that a watercraft that has not been certified by the Coast
Guard can never be considered a vessel…We note only that the absence of certification when legally
required should inform the evaluation of a structure’s capability for transportation.” Id. at 303.

XI.     LONGSHORE AND HARBOR WORKERS’ COMPENSATION ACT

        A.      McLaurin v. Noble Drilling (U.S.), Inc., 529 F.3d 285 (5th Cir. 2008).

        In McLaurin v. Noble Drilling (U.S.), Inc., a decision that has been subject to criticism, a
shipyard worker brought a personal injury claim against a vessel owner alleging negligence under
state law, general maritime law, and the Longshore and Harbor Workers’ Compensation Act
(“LHWCA”). The United States District Court for the Southern District of Mississippi granted
summary judgment in favor of the owner, finding that in order to state a cause of action under
Section 5(b) of the LHWCA, the plaintiff “must show that the tort occurred on or in navigable
waters, bringing it within the Court’s admiralty jurisdiction. An injury which occurs on land rather
than on or in navigable waters does not constitute a cognizable negligence claim under § 905(b).”
No. 1:05CV463, 2007 WL 1062946, at *1 (S.D. Miss. 2007) (citing May v. Transworld Drilling Co., 786
F.2d 1261, 1265 (5th Cir.), cert. denied, 479 U.S. 854 (1986); Richendollar v. Diamond M Drilling Co., 819
F.2d 124, 125-26 (5th Cir.), cert. denied, 484 U.S. 944 (1987)). The district court further held that the



                                                   17
state-law negligence action was preempted by Section 5(b).             The plaintiff was not injured on
navigable waters; therefore, the case was dismissed. Id. at *2.

        On appeal, the Fifth Circuit reversed. Writing for the court, Judge Edith Brown Clement
held that Section 5(b) does not preempt a claim under state law when the injury occurs outside of
admiralty jurisdiction:

        [T]he McLaurins did not allege a claim against Noble Drilling specifically under § 933, but
        they did allege negligence claims under state law in their Complaint. If a maritime worker
        recovers against a vessel under § 905(b), then he may not also sue the vessel in tort. The
        McLaurins cannot recover from Noble Drilling as a vessel owner because they cannot state a
        cognizable claim for vessel negligence under § 905(b), so the language of § 905(b) does not
        preempt their state-law claim against Noble Drilling as a third-party tortfeasor. The plain
        language of [28 U.S.C.] § 933 clearly contemplates and preserves a maritime worker’s ability
        to pursue separate claims against third parties, including vessel owners allegedly responsible
        for the injury.

Id. at 292-93 (footnote omitted).

XII.    UBBERIMAE FIDEI

         Although not from the Fifth Circuit, two cases from the Ninth Circuit have furthered the
distance from the Fifth Circuit’s statement in Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d 882, (5th Cir.
1992), that the doctrine of utmost good faith, uberrimae fidei, is “entrenched no more[.]” In New
Hampshire Ins. Co. v. C’Est Moi, Inc., 519 F.3d 937, 938 (9th Cir. 2008), the court noted that uberrimae
fidei, “the doctrine that’s on everyone’s lips,” “is a well-entrenched doctrine that protects not merely
the insurer but also the integrity of the risk pool.” The C’Est Moi court held that the insurer could
rescind an insurance policy covering a yacht because the insured’s application for insurance (1)
misrepresented the yacht’s purchase price and (2) misrepresented the yacht’s present insurer. Id. at
939.

         In Certain Underwriters at Lloyd’s v. Inlet Fisheries, Inc., 518 F.3d 645 (9th Cir. 2008), the Ninth
Circuit held that vessel pollution policies are marine insurance policies to which uberrimae fidei
applies. Id. at 654-55. In Inlet Fisheries, the defendant’s vessel pollution policy was cancelled, and
the defendant sought coverage from the plaintiff without disclosing the condition of defendant’s
vessels, the defendant’s financial history, or the reason for cancellation of the previous policy. Id. at
648. Moreover, in response to the insurer’s request for “pollution loss history,” the defendant wrote
that there had been “none,” although a vessel which had been owned by the defendant, the
MAREN I, had hit a sandbar and sunk with three thousand gallons of diesel on board. Id. at 647.
On these facts, the Ninth Circuit held that the plaintiff insurer was justified in voiding the pollution
policy due to the defendant’s failure to disclose material facts about its loss history. Id. at 655-56.




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