In Exxon Mobil Corp. v. Minton, the Virginia Supreme Court reversed and remanded a decision of a jury on January 10, 2013, holding that the award of $12.5 million in punitive damages was inappropriately granted because punitive damages are a remedy prohibited by the terms of the Longshore and Harbor Workers' Compensation Act ("LHWCA").
Rubert Minton suffered injuries as a result of developing mesothelioma from exposure to asbestos while working on Exxon Mobile Corporation ("Exxon") ships during his employment at the Newport News Shipbuilding and Dry Dock Company (Shipyard). Minton filed suit against Exxon under the federal LHWCA for failure to warn Minton of, and protect him from, the dangers associated with asbestos. The jury found in favor of Minton and awarded him compensatory damages, medical expenses, and punitive damages. Exxon appealed. The Virginia Supreme Court reversed and remanded the case back to the trial court.First, the Supreme Court upheld the jury in finding that the evidence was sufficient for a reasonable jury to find that both the active control duty and the duty to intervene under the LHWCA had been breached by Exxon. Second, the Supreme Court disagreed with Exxon in arguing that Minton did not prove causation, as the Court found that there was sufficient evidence for a reasonably jury to find that Exxon's actions were a substantial contributing factor in causing Minton's injury.
Amongst other attacks on the trial court's rulings, Exxon finally argued that the ruling on punitive damages was error, as 33 U.S.C. section 905(b) states that suing a vessel owner for negligence is "exclusive of all other remedies against the vessel owner." The Court noted that other courts have held that punitive damages are indeed available under the LHWCA. However, the Court rejected these findings by reading the plain language of the statute which states: "The remedy provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under this chapter." The Court found that because the statute does not specifically provide that punitive damages are available under the statute, the Court cannot read the general maritime law into the statute which provides for punitive damages into the statute.
A copy of this decision can be found here => http://law.justia.com/cases/virginia/supreme-court/2013/111775.html. If you have any questions regarding this decision or wish to reach me, you may do so by writing to me at mov@chaloslaw.com.
A Houseboat is Not a Vessel--USSC Rules in Lozman v. City of Riviera Beach
As I blogged on October 4, 2012 at http://miamishippinglaw.blogspot.com/2012/10/is-houseboat-house-or-vessel.html, Fane Lozman took his eviction by the city of Rivera Beach (the "City") from his houseboat to the U.S. Supreme Court during their fall session. The U.S. Supreme Court has now ruled that Lozman’s houseboat was a "floating home" and has ruled that his floating home is not a vessel.
In reading the decision, it was obvious by reading the first line of the decision that the Court had ruled in Lozman's favor. The houseboat was called a floating home, which was described as a house-like plywood structure with an empty bilge space underneath the main floor to keep it afloat. Don't all houses have empty bilge spaces underneath to keep them afloat? The Court noted that Lozman had the houseboat towed several times before deciding on a marina owned by the City. After various disputes with Lozman and unsuccessful efforts to evict him from the marina, the City brought a federal admiralty lawsuit in rem against the houseboat, seeking a lien for dockage fees and damages for trespass. Lozman moved to dismiss the suit for lack of admiralty jurisdiction. The District Court found the floating home to be a “vessel” under the Rules of Construction Act, which defines a “vessel” as including “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water,” 1 U. S. C. §3, concluded that admiralty jurisdiction was proper, and awarded the City dockage fees and nominal damages.
The Eleventh Circuit Court of Appeals affirmed the trial court, agreeing that the home was a “vessel” since it was “capable” of movement over water despite Lozman’s subjective intent to remain moored indefinitely.
The Court first held that the case was not moot. The District Court ordered the houseboat sold, and the City purchased the home at auction and had it destroyed. However before the sale, the court ordered the City to post a bond to ensure Lozman could obtain monetary relief if he prevailed.
The Court then found that Lozman’s floating home is not a §3 “vessel.” The Court reasoned:
(1) The Eleventh Circuit found the home “capable of being used . . . as a means of transportation on water” because it could float and proceed under tow and its shore connections did not render it incapable of transportation. The Court found this interpretation too broad. The definition of "transportation,” the conveyance of persons or things from one place to another, must be applied in a practical way and cited Stewart v. Dutra Constr. Co., 543 U. S. 481, 496 for this proposition. The Court then stated that a structure does not fall within the scope of the statutory phrase unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.
(b) But for the fact that it floats, nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water, though it actually did. The Court noted that the houseboat had no steering mechanism, had an unraked hull and rectangular bottom 10 inches below the water, and had no capacity to generate or store electricity. It also lacked self propulsion, differing "significantly" from an ordinary houseboat. Sounds like a barge, doesn't it?
(c) This view of the statute is consistent with its text, precedent, and relevant purposes. The statute’s language, read naturally, lends itself to that interpretation: The term “contrivance” refers to something “employed in contriving to effect a purpose”; “craft” explains that purpose as “water carriage and transport”; the addition of “water” to “craft” emphasizes the point; and the words, “used, or capable of being used, as a means of transportation on water,” drive the point home.
The Court reviewed two cases in depth to support its conclusions. Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co., 271 U. S. 19 involved a wharfboat floated next to a dock, used to transfer cargo, and towed to harbor each winter; Stewart, supra, involved a dredge used to remove silt from the ocean floor, which carried a captain and crew and could be navigated only by manipulating anchors and cables or by being towed. The Court explained that water transportation was not the primary purpose of either structure; neither was in motion at relevant times; and both were sometimes attached to the ocean bottom or to land. However, Stewart’s dredge, which was regularly, but not primarily, used to transport workers and equipment over water, fell within the statutory definition while Evansville’s wharfboat, which was not designed to, and did not, serve a transportation function, did not.
The Court also noted that the purposes of major federal maritime statutes—e.g., admiralty provisions provide special attachment procedures lest a vessel avoid liability by sailing away, recognize that sailors face special perils at sea, and encourage shipowners to engage in port-related commerce—reveal little reason to classify floating homes as “vessels.”
The Court rejected the arguments made by the City and its amici arguing that a purpose-based test may introduce a subjective element into “vessel” determinations. The Court points out that it considered only objective evidence, looking to the views of a reasonable observer and the physical attributes and behavior of the structure. The Court recognized that its approach is "neither perfectly precise nor always determinative", it claimed it to be workable and consistent and should offer guidance in a significant number of borderline cases.
A copy of the decision can be found here: http://www.supremecourt.gov/opinions/12pdf/11-626_p8k0.pdf. Most of the readers to this blog will already know my views on this decision--that it will simply engender even more litigation in the borderline cases. I can recall several cases where in my personal view, the client should have fought the plaintiff's attempt to classify the "contrivance" as a vessel, but chose not to and settled rather than continue to fight and pay my legal fees. This case may give the next client pause. Therefore, while this decision may be good for us lawyers, I expect many with an interest in this industsry to vigorously disagree.
If you are interested in reaching me, you may do so by writing to me at mov@chaloslaw.com.
MLC's Entry Into Force and ISF's New Guidelines
With the launch of International Labour Organization’s Maritime Labour Convention (MLC), I have received numerous queries from various sources in the maritime community. It is clear that many shipowners/operators will have a whole slew of new responsibilities to match up to. As part of its education efforts, the International Shipping Federation employers’ organization has published new guidelines to help operators to ensure compliance with MLC, which will enter into force in August 2013.
With the clock ticking, the guide takes shipping companies through their obligations under the ILO convention and illustrates how to apply ILO standards on board ships in a practical manner. This includes MLC requirements relating to seafarers’ contractual arrangements, oversight of manning agencies, work and rest hours, health and safety, crew accommodation, catering standards and new requirements concerning on board complaints procedures.
Compliance with all relevant standards can also be matched to a detailed checklist that can be printed via an accompanying CD. Also provided is an overview of the MLC certification process. This includes an example of the new Declaration of Maritime Labour Compliance (DMLC) as it might be completed by a shipping company. The DMLC is a key element of the convention and ultimately the policing mechanism, as flag State surveyors will be paying close heed to what shipowners claim to do. The DMLC details the measures adopted to ensure ongoing compliance with the requirements and the measures proposed to ensure there is continuous improvement.
In essence the DMLC is a checklist which sees the owner state quite how they intend to ensure that not only are MLC requirements followed but how. Think SMS for labor issues.
The MLC is truly a game changer…for those that play by the rules.
If you are interested in contact me regarding the MLC, you may do so by contacting me atmov@chaloslaw.com.
Florida Judgment in Favor of NMMA
The Daily Business Review reports that Florida's Third District Court of Appeals in a ruling dated December 19th affirmed a summary final judgment in favor of the National Marine Manufacturers Association.
The recreational boat industry trade group, a participant in the 2008 Miami International Boat Show, parked several tractor trailers on a lot owned by the city of Miami Beach under a temporary license and use agreement signed with the city's housing authority. On February 7, 2008, David Collins entered the lot, climbed under a parked trailer and fell asleep. A truck driver for the association, who didn't know anyone was under the trailer, hitched it to his truck and pulled out, running over and fatally injuring Collins.
Collins' mother, Constance Ryan, sued the trade group and the truck driver, alleging he was negligent in failing to "check around and under the tractor-trailer so as to avoid striking a pedestrian in the vicinity." However, a toxicology report determined Collins' blood alcohol level was 0.21, nearly three times the legal limit for drivers. That finding triggered a winning defense.
Under Florida law, anyone "owning or controlling an interest in real property" cannot be held liable for injuries to a trespasser who was legally under the influence of alcohol. The question was: Did the association have an owning or controlling interest? Ryan contended it did not because the agreement with the city was nominally a license. The association asserted it did because the intent of the agreement made it effectively a lease.
"Our argument was that although it was labeled a license, the essence of the document and what they [the housing authority] purported to do was to grant a short-term lease to National Marine," said Rafael De la Grana, who worked on the appellate brief with James K. Clark of Clark, Robb, Mason, Coulombe & Buschman in Miami. "It therefore was entitled to avail itself of the immunity given by the statute."
Miami-Dade Circuit Judge David C. Miller agreed and ruled for National Marine. On appeal, Emas, who wrote the opinion, Salter and Senior Judge Alan Schwartz affirmed. In a special concurrence, Schwartz wrote: "On the ground that as a matter of law, no one is liable for the accident but the decedent, I join in affirmance."
If you are unable to access the opinion here or wish to reach me for any reason, you may do so by writing to me at mov@chaloslaw.com.