Maritime Law: Florida's Governor Signs Expert Witness Testimony Bill

June 05, 2013

Today, Governor Rick Scott of Florida reportedly signed a bill changing the state standard for accepting testimony from expert witnesses. This law is huge as it switches the state's Frye standard to the federal Daubert rule. Florida was only one of 10 states still using the Frye test, a standard established in 1923 that allowed expert testimony as long as it came from qualified experts who adhered to generally accepted scientific principles in their field.

The Daubert standard, named for the 1993 U.S. Supreme Court decision Daubert v. Merrell Down Pharmaceuticals, focuses more on the scientific methodology and its relevance to the facts of the case. Experts under Daubert must have the training to give an opinion on a theory or technique that has been scientifically tested and published in peer-reviewed journals.

The bill, labeled HB 7015, was supported by the business community primarily to do away with what it derided as "junk science" testimony in personal injury and malpractice litigation. However, it was opposed by civil plaintiffs attorneys and criminal prosecutors who maintained the change would bog down cases with needless hearings. The bill requires the more stringent federal standard for expert testimony even though critics claim it will drastically increase the cost of litigation and put new burdens on an already strained state judicial system.

Legal analysts with trial court experience in Daubert hearings say that judges have a tendency to use Daubert to pre-try a case and grant summary judgment in a manner that discourages appeals. This is due in part to a tendency of courts to selectively cite materials submitted in a misleading manner. Commentators representing civil plaintiffs expect that with this change, defendants are going to regularly file motions challenging the validity of expert opinions. I have to agree with this assessment, given my own use of Daubert in federal court. 

Today, the Daily Business Review reported a 2011 PricewaterhouseCoopers' study on the effects of the Daubert standard. It found a 250 percent increase in Daubertchallenges to all types of experts from 2000 to 2010. In 2010, there was a 49 percent success rate in witness testimony being stricken in whole or in part. This could be hugely detrimental since in many cases, expert witnesses do not live in the jurisdiction where the case will be tried. This entails the expert witness travelling, giving testimony and answering the judge's questions in a Daubert hearing. This will certainly increase litigation costs for plaintiffs.

Florida's acceptance of Daubert increases the standard being the law to 41 states.

If you are interested in learning more about Daubert or would like to reach me, you may contact me at mov@chaloslaw.com. 

Maritime Law: Beware of the Boat That Comes to Help in an Emergency (English/Spanish)

June 04, 2013

I received a very frustrating phone call the other day from an individual that owned a small open fisherman that found himself in a predicament and he wanted my help. He was enjoying himself in the South Florida waters, when he found himself in an emergency situation and his vessel capsized; thankfully with no injury to himself or anyone else aboard. He did the right thing and called the U.S. Coast Guard on Channel 16 VHF-FM (156.8 MHz). Almost immediately, a commercial salvor arrived to help.

This individual went on and continued to do the right thing by doing what most maritime lawyers recommend, negotiate the terms before the marine assistance company attempts to assist. This was done and agreed and the salvor tied his line to the vessel. Unfortunately, in the course of his assistance, the salvor grounded the vessel he was attempting to salve in a marine sanctuary. What he did next is astounding--he untied the vessel and took off, leaving this poor man worse off than when he first called the Coast Guard.

A salvor may be liable for additional damage caused by its fault in performing salvage. Where the rub comes in is that there is a split of authority as to whether simple negligence or gross negligence/willful misconduct is the standard of proof. As professional salvors are held to the standard of experts, that standard should more easily fall into the category of gross negligence while other "helpers" that are not salvors will be held to the standards of reasonable seamen.

This sad case is a wake up call for those individuals that insist on operating their watercraft without insurance. If this man would have had insurance, his insurer would certainly paid for the damage and then gone after this errant salvor for negligent salvage. This man also did not have a towing plan, a sort of AAA for boats, that he could call if he gets himself into a "situation". While there is a difference between towing and salvage under the law, these plans assist boat owners in narrowing the distinction by requiring that marine assistance companies distinguish between simple towing and/or soft groundings and the more serious and expensive salvage efforts where distress or danger exist.

Towing assistance provides help for breakdowns and light groundings. The far more expensive salvage claims are covered only by marine insurance policies. If the salvor wants to do the job but does not know what the cost will be but will make claim afterwards, the final amount will be decided one of three ways -- negotiation with your insurance company; binding arbitration or;  through litigation in federal admiralty courts. It pained me to tell this man that because he did not have insurance, litigation was essentially his only option. 

The best protection against a salvage bill or a negligent salvor is adequate insurance. Boaters should make sure the policy provides for salvage up to the full value of the boat, not a percentage of its value and that there is no deductible for salvage costs. 

I am happy to review any insurance policy you may have that you will be relying on in meeting the potential risks of boating. If you are interested in contacting me, you may do so at mov@chaloslaw.com.

Spanish Translation

Cuidado con el Bote Que Viene a Ayudar en Caso de Emergencia

Recibí una llamada telefónica muy frustrante el otro día de un individuo que poseía un pequeño pescador abierto que se encontró en una situación difícil y quería mi ayuda. Estaba disfrutando de las aguas del sur de la Florida, cuando se encontró en una situación de emergencia y su buque naufragó, afortunadamente sin lesiones a sí mismo o a cualquier otra persona a bordo. Él hizo lo correcto y llamó a la Guardia Costera de los EE.UU. en el canal 16 de VHF-FM (156.8 MHz). Casi de inmediato, un salvador comercial llegó a ayudar.

Este individuo siguió y continuó haciendo lo correcto, haciendo lo que más abogados marítimos recomiendan, negociar las condiciones antes de la empresa de asistencia marítima intenta ayudar. Así se hizo y estuvo de acuerdo y el salvador ató su línea al bote. Por desgracia, en el curso de su asistencia, el salvador encallo el bote que estaba tratando de salvar en un santuario marino. Lo que hizo a continuación es increíble - que desató el bote y se fue, dejando a este pobre hombre peor que la primera vez que llamó a la Guardia Costera.

Un salvador puede ser responsable de los daños adicionales causados or su culpa en el desempeño de salvamento. Cuando el problema se presenta en es que hay una división de la autoridad en cuanto a si la mera negligencia o negligencia / intencional falta grave es el estándar de la prueba. Como salvadores profesionales se mantienen al nivel de expertos, esa norma debería caer más fácilmente en la categoría de negligencia grave, mientras que otros "ayudantes" que no son salvadores se llevará a cabo a las normas de los marineros razonable.

Esta triste caso es una llamada de atención para las personas que insisten en hacer funcionar su bote sin seguro. Si este hombre hubiera tenido seguro, su compañía de seguros sin duda sería pagado por los daños del bote y luego va tras este salvador errante de salvamento negligente. Este hombre tampoco tenía un plan de remolque, una especie de AAA para los barcos, que podía llamar si se pone a sí mismo en una "situación". Si bien existe una diferencia entre el remolque y salvamento conforme a la ley, estos planes ayudan a los propietarios de botes en la reducción de la distinción, al exigir que las empresas de asistencia marinos distinguir entre los esfuerzos de rescate más serios y costosos en los que son mas sencillo y / o encallos en suave arena.

Asistencia de remolque proporciona ayuda para las averías y varadas luz. Las demandas de rescate mucho más caros están cubiertos sólo por las políticas de seguro marítimo. Si el salvador quiere hacer el trabajo, pero no sabe cuál será el costo, sino que hará reclamar después, la cantidad final se decidirá una de tres maneras - negociación con su compañía de seguros, arbitraje o, a través de litigios en el ministerio de marina federal tribunales. Me dolió decirle a este hombre que, debido a que no tenía seguro, el litigio era esencialmente su única opción.

La mejor protección contra un proyecto de ley de rescate o un salvador negligente es un seguro adecuado.

Los navegantes deben asegurarse de que la políza prevé rescatar hasta el valor total del bote, no un porcentaje de su valor, y que no hay deducible para los gastos de salvamento.

Maritime Law: Passengers Get Refunds After Cruise Fire

June 03, 2013

Five days after 25 major cruise companies adopted a passenger bills of rights which promises full refunds for trips that are cancelled due to mechanical failure, a fire broke out aboard a Royal Caribbean ship May 27, 2013. 

Damage on the Royal Caribbean ship Grandeur of the Seas is pictured as the ship is docked in Freeport May 27, 2013. (Vandyke Hepburn, Reuters).

The fire caused so much damage that the rest of the cruise was cancelled and the 2,224 passengers were to be flown from the Bahamas back to Baltimore. Royal Caribbean said on its website that most public areas and staterooms were safe and that power, propulsion and communications systems were not interrupted. The bill of rights for passengers appears that it could not have come at a better time.

The bill of rights includes the following: 

The right to disembark a docked ship if essential provisions such as food, water, restroom facilities and access to medical care cannot adequately be provided onboard, subject only to the Master's concern for passenger safety and security and customs and immigration requirements of the port. The right to a full refund for a trip that is canceled due to mechanical failures, or a partial refund for voyages that are terminated early due to those failures. 

The right to have available on board ships operating beyond rivers or coastal waters full-time, professional emergency medical attention, as needed until shore-side medical care becomes available. 

The right to timely information updates as to any adjustments in the itinerary of the ship in the event of a mechanical failure or emergency, as well as timely updates of the status of efforts to address mechanical failures. 

The right to a ship crew that is properly trained in emergency and evacuation procedures. 

The right to an emergency power source in the case of a main generator failure. 

The right to transportation to the ship's scheduled port of disembarkation or the passenger's home city in the event a cruise is terminated early due to mechanical failures. 

The right to lodging if disembarkation and an overnight stay in an unscheduled port are required when a cruise is terminated early due to mechanical failures. 

The right to have included on each cruise line's website a toll-free phone line that can be used for questions or information concerning any aspect of shipboard operations. 

The right to have this Cruise Line Passenger Bill of Rights published on each line's website. 

This incident follows the various incidents plaguing Carnival ships earlier this year that I have blogged about. The Miami Herald has also reported on this latest incident. If you are interested in receiving a copy of the Miami Herald article, you may seek a copy by writing to me at mov@chaloslaw.com.

Marine Terminal Liable for Submerged Abandoned Anchor

May 16, 2013

Today the 3rd Circuit in the ATHOS I matter issued a critical maritime ruling that held that a marine terminal may be liable for a major casualty that occurred when a vessel, on approach, struck a submerged abandoned anchor. 

Picture of ATHOS I after casualty taken from www.ceoe.udel.edu

The facts of the case are simple: as the oil tanker M/T ATHOS I neared Paulsboro, New Jersey, after a journey from Venezuela, an abandoned ship anchor lay hidden on the bottom of the Delaware River squarely within the ATHOS I’s path and only 900 feet away from its berth. Although dozens of ships had docked since the anchor was deposited in the River, none had reported encountering it. The ATHOS I struck the anchor, which punctured the ship’s hull and caused approximately 263,000 gallons of crude oil to spill into the River. The cleanup following the casualty was successful, but expensive.

The appeal was the result of three interested parties attempting to apportion the monetary liability. The first party (actually two entities consolidated as one for our purposes) includes the ATHOS I’s owner, Frescati Shipping Company, Ltd., and its manager, Tsakos Shipping & Trading, S.A. (jointly and severally, “Frescati”). Although Frescati states that the spill caused it to pay out $180 million in cleanup costs and ship damages, it was reimbursed for nearly $88 million of that amount by the United States (the “Government”)—the second interested party—pursuant to the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. In order to recoup the unreimbursed losses, Frescati made claims in contract and tort against the third interested party—a set of affiliates known as CITGO Asphalt Refining Company, CITGO Petroleum Corporation, and CITGO East Coast Oil Corporation (jointly and severally, “CARCO”)—which requested the oil shipped on the ATHOS I and owned the marine terminal where it was to dock to unload its oil. Specifically, Frescati brought a contract claim for CARCO’s alleged breach of the safe port/safe berth warranty (jointly and severally, “safe berth warranty”) it made to an intermediary—Star Tankers, Inc.--responsible for chartering the ATHOS I to CARCO’s port, and alleged negligence and negligent misrepresentation against CARCO as the owner of the wharf the ATHOSs I was nearing when it was holed. The Government, as a statutory subrogee that stepped into Frescati’s position for the $88 million it reimbursed to Frescati under the Oil Pollution Act, has limited its claim for reimbursement from CARCO to Frescati’s contractual claim pursuant to a limited settlement agreement.
 
Following a 41-day bench trial, the District Court for the Eastern District of Pennsylvania held that CARCO was not liable for the accident under any of these theories. In regard to the contractual safe berth warranty, the Court determined that Frescati (and the Government as a subrogee) could not recover on their contractual claims. First, Frescati was not a party to the agreement that contained the warranty between CARCO and Star Tankers, and was not an intended beneficiary of that agreement. Furthermore, even if Frescati could claim the protection of the warranty, it was only a promise by CARCO to exercise due diligence and not an unconditional guarantee; moreover, sufficient diligence existed here. In any event, the warranty was excused because CARCO specified the port ahead of the ATHOS I’s arrival, placing the burden on the ATHOS I’s captain to accept it as safe or reject it under what is called the “named port exception.”

The Third Circuit Court of Appeals disagreed with all three of these rulings. First, the appellate court held that the ATHOS I—and by extension, its owner, Frescati—was an implied beneficiary of CARCO’s safe berth warranty. The Court concluded that the safe berth warranty is an express assurance of safety, and that the named port exception to that warranty does not apply to hazards that are unknown to the parties and not reasonably foreseeable. The Court added that it could not be sure that this warranty was actually breached, as the District Court made no finding as to the ATHOS I’s actual draft nor the amount of clearance actually provided.

Second, the appellate court found that if on remand the District Court rules in favor of Frescati on its contractual warranty claim, its negligence claim becomes unnecessary. It reasoned that if this issue is reached, they do not agree with the District Court’s conclusion that CARCO cannot be liable in negligence because the anchor lay outside the approach to CARCO’s terminal—the area in which CARCO had a duty to exercise reasonable care in proving a safe approach. As such, the District Court would need to resolve the appropriate standard of care required, whether CARCO breached that standard, and if so, whether any such breach caused the accident. 

Conversely, the appellate court found no error with the Court’s holding that CARCO’s alleged misrepresentation as to the depth of its berth was geographically (and hence factually) irrelevant to the ultimate accident. In addition, the appellate court concluded that the Government had waived reliance on a partial settlement agreement with CARCO that, the Government contended, precluded CARCO from making certain equitable defenses to the Government’s subrogation claims. In this context, the Court affirmed in part, and vacate and remand in part for additional fact finding on the contractual (and possibly negligence) claims.

A copy of this decision can be found here => http://www.americanmaritimecases.com/assets/Third-Circuit/ATHOS.pdf. If you are unable to open this link and wish a copy of this decision or if you wish to reach me, you may do so by email atmov@chaloslaw.com.