Recent Developments

RECENT DEVELOPMENTS IN MARITIME LAW

FEDERALISM & STATES' RIGHTS EVIDENCE ISSUES ARBITRATION ISSUES CHOICE OF LAWS INDEMNITY & CONTRIBUTION NEGLIGENCE DAMAGES PASSENGER LIABILITY ISSUES WHO ARE JONES ACT SEAMEN'S ACTIONS MAINTENANCE, CURE & UNEARNED WAGES NEGLIGENCE PER SE: VIOLATION OF OSHA REGULATIONS UNSEAWORTHINESS DOCTRINE DEATH CLAIMS LONGSHORE & HARBOR WORKERS' COMPENSATION ACT CARRIAGE OF GOODS PRODUCTS LIABILITIES MARITIME LIENS VESSEL FINANCING & DOCUMENTATION LIMITATION OF LIABILITY PUNITIVE DAMAGES OSHA REPORTING REQUIREMENTS APPLY TO UNINSPECTED VESSELS CRIMINAL LIABILITIES IN MARITIME CONTEXTS EMPLOYMENT LAW - WRONGFUL TERMINATION SALVAGE INSURANCE ISSUES

FEDERALISM & STATES' RIGHTS

Federal Supersession and Preemption. The appeal of International Ass'n of Independent Tanker Owners (Intertanko) v. Locke, 148 F.3^d 1043, 1998 AMC 2113 (9^th Cir. 1998), cert. granted ________(1999),will define the current Supreme Court's interpretation of the doctrines of preemption federal maritime law in the context of regulation of vessel safety and operating regulations in the context of state pollution regulations. Intertanko involved the difficult question of the extension of state pollution regulation (Congress has specifically provided that federal pollution regulation does not preempt state regulation) to impact maritime activities such as commercial vessel design and operation, which impact matters clearly within the "characteristic features" of federal maritime law and carry a strong argument that they require national uniformity of regulation. The Ninth Circuit held that the operating and reporting requirements of state law were not preempted by federal legislation, but that state-imposed design and construction requirements for vessels were preempted under the doctrine of "field preemption". Specifically, navigational equipment requirements were deemed preempted by federal statutes and regulations, but other provisions of the state legislation were held not preempted by federal law, as OPA 90 permits state regulation of pollution prevention efforts. One commentator has criticized the Intertanko decision as giving free reign to states to, in the name of pollution prevention, to regulate all aspects of international/interstate ocean shipping, except vessel design and construction:

Robert H. Nicholas, Jr., Federal and State Preemption Regarding Vessel Construction and Operation, 73 Tul. L. Rev. 2055, 2067 (1999).

Third Party Claimants Are Bound by Arbitration Agreements. American Bureau of Shipping v. Tencara Shipyard S.P.A., 170 F.3d 349, 1999 AMC 1858 (2^nd Cir. 1999), discussed the bases on which a third party to a contract may be bound by an arbitration clause in the contract, in the context of claims of a vessel owner and its insurance underwriters that they were not bound by an arbitration provision in a contract between a classification society and the shipyard which built the vessel. Capitol Vial, Inc. v. Weber Scientific, 966 F.Supp. 1108 (M.D. Ala. 1997), held that a subsidiary of a company that was a party to an arbitration agreement was also bound to arbitration on the grounds that it was either a "third party" beneficiary or an "agent" of its parent. Farrell Lines Inc. v. Columbus Cello-Polly Corp., 1998 AMC 334 (S.D. N.Y. 1997), held that subrogated insurers of a shipper, who derive their rights from those of the shipper, are bound by the provisions of bills of lading including forum selection clauses. Steel Warehouse Co. v. Abalone Shipping Ltd., 141 F.3d 234, 1998 AMC 2054 (5^th Cir. 1998), held an arbitration clause in a charter party which was incorporated into bills of lading by reference applied to a consignee which did not have actual notice of the clauses. Zimmerman v. International Companies & Consulting, Inc., 107 F.3^d 344, 1997 AMC 1812 (5^th Cir. 1997), and In re Talbott Big Foot, Inc., 887 F.2^d 611, 1990 AMC 1781 (5^th Cir. 1989), held that a London arbitration clause in a P & I policy does not bind a direct action claimant: a direct action claimant is not a party to the arbitration agreement. Heikkila v. Sphere Drake Ins. Underwriting Management, Ltd., 1997 AMC 2975 (D. Gu. 1997), reached the opposite result: it held that a third-party direct action claimant is subject to all the terms of the policy, including its arbitration clause.

Where contract provide for application of the law of a designated state, there is a split of authority whether the state law includes otherwise-applicable federal statutory and general maritime law. The traditional view is that federal law is incorporated into state law: "The Constitution laws and treaties of the United States are as much a part of the law of every state as its own local laws and Constitution." Hauenstein v. Lynham, 100 U.S. 483, 490 (1880). But National Enterprises, Inc. v. Smith, 114 F.3^d 561 (6^th Cir. 1997), interpreted a provision in a yacht lease that the lease would be governed by the laws of the state of Ohio to indicate that both parties intended that federal maritime law not apply.

Knight v. Alaska Trawl Fisheries, Inc., 154 F.3^d 1042, 1998 AMC 2710 (9^th Cir. 1998), involved claims by the employing vessel owner against a stevedoring company found 65% at fault for causing injury to a crewmember. The shipowner paid maintenance and cure, and settled claims for damages caused unseaworthiness and Jones Act negligence. The appeal involved the issue whether tort rules for contribution or contract rules of indemnity should be applied. Tort contribution principles would result in reduction of recovery to the employer in proportion to its own contributing negligence. Contract indemnity rules would hold a stevedoring contractor liable for 100% of damages because of its breach of the warranty of workmanlike service though the shipowner also was at fault. The court recognized the continuing vitality of application of contract indemnity by a negligent stevedoring contractor to a shipowner which has strict liability to its seamen for maintenance and cure benefits and damages from unseaworthiness, where the shipowner was not negligent in causing the injuries. It discussed the split between the circuits on the issue whether a negligent shipowner may obtain indemnification where the injury was caused in part by its own negligence. Some circuits apply indemnity rules even when the shipowner is partially at fault. See Cooper v. Loper, 923 F.2^d 1045, 1991 AMC 1032 (3^rd Cir. 1991); Oglebay Norton Co. v. CSX Corp., 788 F.2^d 361, 1987 AMC 71 (6^th Cir. 1986). Other circuits apply contribution rules with apportionment for comparative fault. See Smith & Kelly Co. v. S/S Concordia Tadj, 718 F.2^d 1022, 1984 AMC 409 (11^th Cir. 1983); Loose v. Offshore Navigation, Inc., 670 F.2^d 493, 1984 AMC 1216 (5^th Cir. 1982); Black v. Red Star Towing & Transp. Co., 860 F.2^d 30, 1989 AMC 1 (2^nd Cir. 1988). The Ninth Circuit adopted the latter rule: "a negligent shipowner is not entitled to receive Ryan [Stevedoring Co. v. PanAtlantic S.S. Corp., 350 U.S. 124, 133-34, 1956 AMC 9, 17 (1956)] indemnity from a negligent contract when the shipowner is found liable under both negligence and unseaworthiness theories." Cruz v. Sea-Land Service, Inc., 1998 AMC 2277 (S.D. N.Y. 1998), involved the same issue with the same result. Lubrano v. Weeks Marine, Inc., ____ F.3d. ____ (2nd Cir. 1999), adopted the dictum in Fairmont in holding that Ryan indemnity principles apply only when the exposure of the shipowner to the plaintiff's claims arise only for vicarious liability without fault on its part, such as liability for unseaworthiness, and not when the shipowner would be liable, if at all, for its own negligence. Lubrano expressly held that "Ryan indemnity is virtually dead, at least in this circuit", because of elimination by Congress of a shipowner's third party liability to injured longshore workers for unseaworthiness (33 USC Section 905(b)). Great Lakes Dredge & D. D. Co. v. Tanker Robert Watt Miller, 92 F.3^d 1102, 1997 AMC 902 (11^th Cir. 1996), held there is no right of contribution between settling joint tortfeasors for tort damages awarded the plaintiff, but remanded with instructions to allow contribution for maintenance and cure benefits paid by the shipowner.

Robbins Drydock is Alive and Well. Nautilus Marine, Inc. v. Niemela, 989 F.Supp. 1229, 1997 AMC 1597 (D. Ak. 1996), refused to extend the commercial fisherman exception to the claims for loss of profits from fish processing operations of charterers of fishing tender vessels which were unable to complete their voyages due to collisions with a third vessel: the plaintiffs derived the profits claimed from fish processing and marketing operations, not as commercial fishers. On appeal, the Ninth Circuit affirmed, stated that the Robins Dry Dock rule "has vitality", and held that it applies beyond mere negligence: it applies even to allegations that the tortfeasor intentionally or negligently damaged the property that was chartered by the claimant. Nautilus Marine, Inc. v. Niemela, ____ F.3^d ____, 1999 AMC 1217 (9^th Cir. 1999). The Fifth Circuit rule was restated in the Clearsky litigation in an opinion reported at 1999 U.S. Dist. LEXIS 14379:

Non-Pecuniary Damages in Personal Injuries & Death. Recent cases have held that the general maritime law does not recognize claims for non-pecuniary damages in cases of personal injuries or death subject to admiralty jurisdiction. "Non-pecuniary damages" include claims for loss of society, loss of consortium, and punitive damages. See, e.g., In re Amtrak "Sunset Limited" Crash, 121 F.3^d 1421, 1997 AMC 2962 (11^th Cir. 1997), cert. denied 118 S.Ct. 1041; McDonald v. Carnival Cruise Lines, Inc., 1999 AMC 2081 (S.D. Fl. 1999).

1997 AMC 2313-14. Thus, exposure which results in a "fear of disease" to persons who are "disease and symptom free" are not entitled to recovery for emotional distress under FELA or the Jones Act. Szymanski v. Columbia Transp. Co., 154 F.3^d 591, 1998 AMC 2868 (6^th Cir. 1998), denied recovery for "emotional injury" of a crewman who allegedly suffered a fatal heart attack as a result of stress from working with an incompetent fellow seaman. The majority opinion held that job-related stress is not compensable under the Jones Act or unseaworthiness doctrine.

Damages for Medical Monitoring Expenses. Metro-North Commuter Railroad Co. v. Buckley, 521 U.S. ____, 1997 AMC 2309 (1997), disallowed an award for future annual medical monitoring expenses on the ground that "tens of millions of individuals may have suffered exposure to substances that might justify some form of substance-exposure-related medical monitoring" and the potential flood of such cases does not generally allow a "full-blown, tort law award of lump sum damages." The majority opinion left open the possibility of awards for medical monitoring costs under some circumstances. Bourgeois v. A. P. Green Industries, 716 So. 2^d 355 (La. 1998), involved a request for a judicially supervised fund for expenses of monitoring shipyard employees for asbestos-related illnesses. The court established eight prerequisites for such a claim: (1) there has been a significant exposure to a substance proven hazardous to human health; (2) there is proof that the plaintiff has incurred an increased risk of contacting a serious latent disease; (3) the risk of the plaintiff contracting the possible disease is increased because of the exposure, over that of the public at large; (4) there is a monitoring procedure that makes it possible to detect the disease at an early stage (if there presently is no such procedure but a test is developed later, the court noted a plaintiff may be entitled to bring a claim at a later time); (5) the diagnostic test "is of a type that reasonable physicians in the area of specialty would order for a similarly situated patient"; (6) monitoring would be different than that normally recommended in the absence of the exposure; (7) there might be some medical benefit gained by early detection of the disease; and (8) recovery of damages for medical monitoring can be made only for the reasonable, limited duration of the latency period of the disease. Dragon v. Cooper/T. Smith Stevedoring Co., Inc., 1998 AMC 814 (La. App. 1999), a class action for claims for fear of asbestos-related fatal disease and future medical expenses for the screening and/or monitoring of the plaintiffs, reversed dismissal of the claims for medical monitoring on the grounds that Metro-North Commuter Railroad did not establish a rule of maritime law that such claims could not be recovered, thus there was no conflict with the Bourgeois rule and the Bourgeois rule as the applicable state law should be applied.

Emotional Distress. Szymanski v. Columbia Transp. Co., 154 F.3^d 591, 1998 AMC 2868 (6^th Cir. 1998), held that a fatal heart attack allegedly caused by the stress of being compelled to work with an incompetent fellow seaman was not actionable, as there was no physical impact on the decedent or the decedent was not in the "zone of danger" of physical impact. See Consolidated Rail Corp. v. Gottshall, 512 U.S. 532, 1994 AMC 2113 (1994), for the rule injuries suffered due to overwork are not compensable under FELA unless the employee suffered physical impact or was in the "zone of danger" of physical impact.

Exculpatory Clauses and Limitations of Liability for Injury to Passengers. 46 USC Appx. Section 183c invalidates any provision in any contract for carriage of passengers on a voyage to or from a port of the United States to exculpate the carrier or limit its liability, or limit the claimants right to trial, for death or injury to a passenger resulting from negligence of the carrier. Subsection (b), added in 1996, allows limitations in contracts, agreements, or ticket conditions which relieve a vessel operator and related persons from liability for emotional distress, mental suffering, or psychological injury (so long as the emotional distress, mental suffering or psychological injury was not (a) intentionally inflicted; (b) the result of actual physical injury to the claimant; or (c) the result of the claimant having been in actual risk of physical injury, caused by negligence or fault of the person released). Cummins v. Holland America Line Westours, Inc., 1999 AMC 2282 (W.D. Wa. 1999), enforced a provision in a passenger ticket that "in all situations ... whether or not involving negligence or willful fault, neither the owner nor [the carrier] will have any liability to you for infliction of emotional distress, mental suffering or psychological injury; this specific limitation of liability does not apply, however, to those situations in which a limitation of liability of this nature is not allowed under 46 United States Code app. Section 183c(b)." Section 183c has been applied in the context of recreational diving excursions, invalidating a release of liability of executed by scuba divers before a recreational dive trip. Courtney v. Pacific Adventures, Inc., 5 Supp.2d 874, 1998 AMC 2857 (D. Hi. 1988). See J. Woodruff, note, Please Release Me -- The Erroneous Application of 46 U.S.C. app. ' 183c to Scuba Diving Releases in Courtney v. Pacific Adventures, Inc., 23 T. Mar. L.J. 473 (1999).

Loss of Consortium. Warman v. Commodore Cruise Line, Ltd., 100 F.3^d 943 (2^nd Cir. 1996), allowed recovery for loss of consortium in a passenger injury case, without discussion of Miles. Douville v. Casco Bay Island Transit, 1998 AMC 2775 (D. N.H. 1998), expressly held that a relative of a passenger can recover for loss of consortium under maritime law, if the death or injury occurred in the territorial waters of a state, not under jurisdiction of the Death on the High Seas Act. In re Amtrak "Sunset Limited" Crash, 121 F.3^d 1421, 1997 AMC 2962 (11^th Cir. 1997), cert. denied 118 S.Ct. 1041, rejected claims for loss of society and loss or consortium with respect to the deaths and injuries of train passengers killed and injured as a result of a barge striking a railroad bridge over navigable waters, on the grounds that maritime law applies and maritime law does not authorize recovery for loss of society or consortium in personal injury cases. Friedman v. Cunard Lines Limited, 996 F.Supp. 303, 1998 AMC 1417 (S.D. N.Y. 1998), involved a claim for loss of society/loss of consortium arising from injury to a passenger, and denied either a maritime claim or a state law claim for loss of society and consortium. Friedman was followed in McDonough v. Celebrity Cruises, Inc., 1999 U.S. Dist. LEXIS 13280 (S.D. N.Y. 1999).

Liability of Carriers for Negligence of Excursion Contractors. Rawlins v. Clipper Cruise Line, 1998 AMC 1260 (E.D. Mo. 1996), examined the issue of liability of cruise operators for injuries to passengers while on optional excursions conducted by independent contractors. It granted summary judgment where the carrier offered the optional excursions without negligence on its part in choosing its contractors, and the contracts of carriage disclaimed liability for negligence of such contractors. See also Dubret v. Holland America Line Westours, Inc., 25 F.Supp.2^d 1151, 1999 AMC 859 (W.D. Wa. 1998). O'Keefe v. Inca Floats, Inc., 979 F.Supp. 254, 1998 AMC 645 (N.D. Ca. 1997), held that a carrier owed to heightened duty of protecting a passenger from attempted rape by a crewman of a reputable excursion contractor, where the carrier in the contract of carriage disclaimed liability for the acts of independent contractors.

Foulk v. Donjon Marine Co., 144 F.3^d 252, 1998 AMC 2926 (3^rd Cir. 1998), reversed the summary judgment of a trial court that a commercial diver who was injured on the first day of his employment did not have a sufficient connection with a vessel because he was assigned to the vessel for only ten days: the Third Circuit held that the number of days of an assignment is only one factor to be considered in determining whether there was a "substantial connection" to a vessel in navigation, and the issue of fact should have been submitted to the jury. Wisner v. Professional Divers of New Orleans, 1999 AMC 1189 (La. 1999), held that a commercial diver whose employment placed him on vessels for 90% of his employment time is a Jones Act seaman, irrespective that the vessels on which he worked were not under common ownership or control. Little v. Amoco Production Company, 1999 La. App. LEXIS 1630 (La. App. 1999), substantial connection issue in the context of a member of a "casing crew" assigned to a spud barge at the time of injury. The plaintiff had been hired by the employer for three weeks, during which he had worked with two crews on five work assignments, four of the five involving vessels, but none of the vessels was owned or operated by his employer. His combined work time in the three weeks was 43 hours, 10 hours on a land-based job, 3 hours on one vessel, 10 hours on another, 6 hours on another, and 4 hours on the spud barge. The trial court granted summary judgment dismissing claims against the employer on the ground that the plaintiff was not a seaman as he had no substantial connection with either a single vessel or with an identifiable fleet of vessels having common ownership or control: though the percentage of his employment time on vessels was 77% in the three weeks preceding his injury, his assignment to each vessel was transitory, he was not a member of the crew of any of the vessels, and there had been no "new assignment" which changed his essential duties. The court distinguished Wisner as being based on the fact that Wisner was engaged in "inherently maritime" employment, doing "classical seamen's work" (a diver). Witte v. Matson Navigation Co., Inc., 1998 AMC 2968 (W.D. Wa. 1998), held that a Port Relief Engineer hired to perform the duties of the regular engineering duty officers while a ship was in port for three days but was not hired to take the vessel to sea did not meet the test of a sufficient "substantial connection" to the vessel.

Continuous Employment by Same Employer. Shade v. Great Lakes Dredge, 154 F.3^d 143, 1999 AMC 147 (3^rd Cir. 1998), involved injury to a dredge worker who received his work assignments through a union hiring hall, had been employed by various companies, but the majority of his work had been with Great Lakes Dredging. He had worked as a deckhand and other duties since 1974. He had worked for another employer for approximately 10 months immediately before he was hired for a specific dredging operation 21 days before he was injured. The jury found that he was a "seaman", based on his employment history. On appeal of the issue of "substantial connection" to a vessel in navigation and application of the "fleet seaman" doctrine, the Court of Appeals reversed and remanded for new trial because the trial court had refused to exclude evidence of the plaintiff's prior work history. The Court of Appeals held the "fleet seaman" doctrine required that the plaintiff be employed on vessels under common ownership on a continual, uninterrupted basis:

See also Gipson v. Kajima Engineering & Const. Inc., 1997 AMC 2606 (C.D. Ca. 1997). In Delange v. Dutra Construction Co., Inc., 153 F.3^d 1055, 1998 AMC 2764 (9^th Cir. 1998), the Ninth Circuit adopted the rule of Ellender that a pile driving barge, which moved only incidental to its service as a work platform and it's function did not involve transportation of persons or goods across water, was not a Jones Act "vessel". That opinion was revised, 1999 AMC 1864 (9^th Cir. 1999), the court reversing its decision on that issue and remanding for a finding of fact whether the plaintiff met the tests of a "seaman":

Moore v. The Sally J., 27 F.Supp.2^d 1255, 1998 AMC 1707 (W.D. Wa. 1998), held the fact that medical records were "contradictory" did not justify withholding of payment of maintenance and cure:

Liability of Shipowner for Negligent Treatment of Physician Providing Cure. Aholm v. American Steamship Company, 144 F.3^d 1172, 1998 AMC 2352 (8^th Cir. 1998), held a shipowner liable for the negligence of medical care providers where the initial injury was caused by fault of the shipowner: "where a negligent tortfeasor is responsible for an injury requiring subsequent medical care, that party normally is liable for an injury during treatment of the victim." Olsen v. American Steamship Co., ____ F.3d _____ (6^th Cir. 1999), recognized that if a ship employs an on-board physician, or selects and arranges for treatment by an on-shore physician, the shipowner is vicariously liable for the physician's negligent treatment of a crewmember, but affirmed a defense judgment based on failure of the plaintiff to have argued vicarious liability of the shipowner for negligence of a treating physician. See also Overseas Corp. v. United States, 433 F.Supp. 419, 421 (N.D. Ca. 1977) ("Doctors who are hired by the shipowner to provide care for seamen are ... agents of the shipowner, and the shipowner is liable for the malpractice of the doctor.").

Pratico v. Portland Term. Co., 783 F.2^d 255 (1^st Cir. 1985), determined that Kernan requires that the violation of "any" safety statute triggers ' 53 of FELA, expressly holding that violation of OSHA regulations creates ' 53 liability. The validity of the Pratico rule was questioned in Elliott v. S. D. Warren Co., 134 F.3^d 1 (1^st Cir. 1998), which, in a non-FELA case, recognized that the majority of circuits had rejected Pratico and its rule that violation of an OSHA regulation constitutes negligence per se. Jones v. Spentonbush-Red Star Co., 155 F.3^d 587, 1999 AMC 324 (2^nd Cir. 1998), held that violation of an OSHA regulation is admissible as evidence of negligence, but does not constitute negligence per se or bar the defense of contributory negligence in a Jones Act suit. Jones based its ruling on the grounds that OSHA, at 29 USC Section 653(b)(4) limits its application to enlarging or diminishing the liabilities of an employer or employee:

Incompetent Crew as Unseaworthiness. A condition of an inadequate crew, such as incompetence or lack of training, can constitute unseaworthiness. Miller v. Arctic Alaska Fisheries Corp., 133 Wn.2d 250 (1997). Miller also held that misuse of otherwise safe equipment by an incompetent crew constitutes unseaworthiness. Szymanski v. Columbia Transp. Co., 154 F.3^d 591, 1998 AMC 2868 (6^th Cir. 1998), held that a fatal heart attack allegedly caused by the stress of being compelled to work with an incompetent fellow seaman was not actionable, as there was no physical impact on the decedent or the decedent was not in the "zone of danger" of physical impact.

DOHSA is Sole Death Action for Deaths on Non-Seafarers on High Seas. Dooley v. Korean Air Lines Co., 523 U.S. ___, 1998 AMC 1940 (1998), determined that DOHSA preempts general maritime law survival actions for deaths of non-seamen on the high seas: the only remedy for death of non-seamen on the high seas is the provision of DOHSA which allows certain relatives of a decedent to recover for their own pecuniary losses. Thus, there is no survival remedy with respect to deaths on the high seas of non-seafarers. Gray v. Lockheed Aeronautical Systems Co., 155 F.3^d 1343, 1999 AMC 725 (5^th Cir. 1998), in light of Dooley, reversed itself on the issue whether general maritime law recognized a survival action where DOHSA applies. Gray held that survival claims for predeath pain and suffering may not be recovered where DOHSA applies. See also Jacobs v. Northern King Shipping Co., Ltd., ____ F.3d ____, 1999 AMC 2341 (5^th Cir. 1999). Palanker v. Holland America Lines Westours Inc., 1999 AMC 855 (W.D. Wa. 1998), held that a death of a passenger in Mexico territorial waters was a death on the "high seas", and DOHSA was the exclusive remedy, subject to its limitation to pecuniary damages only.

Deaths on Land from Injuries from Land-based Negligent Acts. Motts v. M/V Green Wave, 25 F.Supp.2^d 771 (S.D. Tx. 1998), appeal filed, involved an injury to a vessel's engineer on the high seas that was not properly treated for two weeks, and his death after corrective surgery ashore once the vessel reached port. The court held that DOHSA applied to the shipowner's liability for the initial accident, but that DOHSA did not apply to the death on shore which resulted from shore-based acts of negligence of the vessel's manager, and therefore state law, including causes of action for punitive damages and other non-pecuniary losses, applied to the potential liability of the vessel's manager for not arranging for proper medical treatment. This decision appears to conflict with the generally-recognized rule that land-based actions that cause injury on navigable waters are within admiralty jurisdiction, subject to principles of maritime law rather that to state law: the claims against the vessel manager, arising from a maritime duty, should be subject to maritime law. Though the death occurred on shore, the aggravation of the initial injury which resulted in the death occurred at least in large part while the vessel was at sea. Brown v. Eurocopter, S.A., 38 F.Supp.2d 515, 1999 AMC 1949 (S.D. Tx. 1999), involved a Death on the High Seas case where a helicopter used to ferry workers from land to offshore oil platforms crashed on the high seas, the negligence which caused the crash had occurred earlier on land, and the pilot of the helicopter died on land. The court held there was admiralty jurisdiction in the case and DOHSA applied, as the placed where the wrongful act in issue was consummated was on or above the high seas: the "point of crisis" is the point of consummation of the wrong.

LHWCA Coverage: Structures Adjacent to Navigable Waters Not Existing for Vessel Activities. Brooker v. Durocher, 133 F.3^d 1390, 1998 AMC 1314 (11^th Cir. 1998), cert. granted ____ U.S. ____ (1998), appeal dismissed after settlement, determined that a seawall on which a worker employed in reconstructing it fell and was injured, was not a pier or wharf or "other adjoining area customarily used by an employer in loading, unloading repairing or building a vessel", irrespective that two barges were moored to buoys near to the seawall, on the basis that the seawall existed to protect an electric plant and not for any vessel-related activity. McGray Construction Co. v. Director, OWCP, _____ (9^th Cir. 1999), determined that a work site which "looked like a pier" but "was not used to dock ships" and which did not reach water except at high tide was an "adjoining pier" subject to LHWCA coverage. The "pier" housed machinery utilized to separate oil from water and gas transmitted from a pipeline from an off-shore well to the pier. The oil then was stored in tanks on the "pier" and periodically was pumped into another pipeline which transported the oil to offshore barges.

Third Party Actions. Quevedo v. Trans-Pacific Shipping, Inc., 143 F.3^d 1255, 1998 AMC 1895 (9^th Cir. 1998), interpreted the interplay between the "turnover duty", the "active involvement duty" and the "duty to intervene". Rodriguez v. Barge Foss 343, 1999 AMC 1593 (W.D. Wa. 1998), applied the "borrowed employee" doctrine as a defense to third party liability of a vessel operator which was found to have "borrowed" the injured employee. The injured employee was a temporary worker directly employed by a contract services provider which charged the operator a hourly rate for the employee's services. The operator provided instruction and supervision on how the employee performed his duties.

Per Package Limitation. Akiyama Corporation of America v. M.V. Hanjin Marseilles, 162 F.3^d 571, 1999 AMC 650 (9^th Cir. 1999), applied the COGSA $500 per package limitation to a claim for damage to a printing press packed in four separate cases. All four cases were damaged while still aboard the ship during unloading by a contract stevedore. The total claim exceeded $1 million. The district court applied the COGSA limitation to each of the four cases (a total of $2000), and determined that the stevedoring company and terminal operator were entitled to the limitation under the Himalaya clause in the bill of lading. The Ninth Circuit affirmed, on the ground that the Himalaya clause in issue extended the protection to "every servant, agent and sub-contractor ... and the agents of each" of the carrier, and that such extended the benefits and protections of the bill of lading to terminal operators and stevedores engaged in unloading the cargo. The Ninth Circuit rejected the argument that there must be privity of contract between the shipper and the subcontractors claiming benefits.

Intentional Damage to Cargo as Deviation. Vision Air Flight Service, Inc. v. M/V National Pride, 155 F.3d 1165, 1999 AMC 1168 (9^th Cir. 1998), held that intentional damage to goods by the carrier could constitute "unreasonable deviation". It held that evidence of unloading a shipment of two trucks by a means which the carrier knew would cause damage (the stevedore used the same system to unload a second truck that had destroyed the first truck, with the same predictable results) could constitute unreasonable deviation with respect to carriage of the second truck.

Burden of Proving Valuation of "Package". Servicios-Expoarma, C.A. v. Industrial Maritime Carriers, Inc., 135 F.2^d 984, 1998 AMC 1453 (5^th Cir. 1998), placed the burden of proof of the value of damage to each individual package on the cargo plaintiff, reversing a trial court which had placed the burden of allocation on the carrier. Servicios-Expoarma was decided in the context of a number of COGSA "packages", the context of which were not kept separate but which were co-mingled after delivery, and after co-mingling of the contents, aggregate damage was assessed. There was no evidence of the damage done to each package, or whether the damage to the contents of some package exceeded the $500 limitation. The Fifth Circuit reversed the trial court determining that the carrier could limit only to $500 times the number of packages damaged, applied the $500 limitation to each package, and placed the burden on the claimant to prove the actual amount of damage to each individual package.

Sky Reefer Arbitration & Choice of Forum Issues. Kukje Hwajae Ins. Co., Ltd. v. The M/V Hyundai Liberty, 1999 AMC 2199 (C.D. Ca. 1999); Majestic Electronics, Inc. v. M/V Jin He, 1999 AMC 1700 (C.D. Ca. 1999); Union Steel America Co. v. M/V Sanko Spruce, 1999 AMC 366 (D. N.J. 1998); Rationis Enterprises, Inc. v. Panama Limitation Process, 1999 AMC 889 (S.D. N.Y. 1999); Gibbs Int'l Inc. v. Federal Ins. Co., 1997 AMC 2954 (D. S.C. 1996); and International Marine Underwriters v. M/V Kasif Kalkavan, 989 F.Supp. 498, 1998 AMC 765 (S.D. N.Y. 1998), are the only reported cases of which this author is aware that refused to enforce choice of forum clauses. Kukje Hwajae, refused to enforce a choice of forum clause in the actual carrier's bill of lading in a claim by the cargo owner against a NVOCC which issued a separate bill of lading. The court acknowledged that the actual carrier's forum selection clause probably would require dismissal of an in rem claim if the plaintiff relies on the bill of lading to establish its case. Majestic Electronics refused to enforce a Peoples' Republic of China clause because of conflicting evidence that a Chinese court might literally enforce a clause that delivery of a shipper-sealed container with seal intact be full performance by the carrier free of delivery (the seal was intact but the container door was bent so as to remove its contents), which would lessen the carrier's liability under COGSA. Rationis refused to enforce a Korean jurisdiction clause claimed by one of many "slot sharing" carriers who had issued bills of lading for goods on the ship because it conflicted with the limitation proceeding commenced by the owner and bareboat charter in the Southern District of New York. The court stated that to enforce the forum selection clause of each carrier involved would be disruptive and would lead to a duplication of efforts and possibly inconsistent results: "Unjustifiably giving effect to all of the various forum clause in a cargo situation of this complexity and global magnitude would fragment this case beyond recognition." Kasif Kalkavan enforced a choice of forum clause as to in personam claims, but not as to in rem claims. Union Steel enforced a choice of forum clause in favor of a time charterer which issued a bill of lading. The M/V Sanko Spruce enforced a choice of forum clause as to the carrier which issued the bill of lading, but in a separate opinion refused to enforce the clause in favor of the vessel owner on the grounds that COGSA recognized liability of shipowner as a "carrier", Korea law possibly did not, and to enforce a Korea forum clause might lessen the owner's liability as a carrier in controversion of COGSA. Gibbs held a Korean forum and choice of law clause invalid in that Korean law might not recognize the rights of indemnification and subrogation, thus lessening the carrier's liability in contravention of COGSA. The limited application of Gibbs is restricted by Fireman's Fund Ins. Co. v. Cho Yang Shipping Co. Ltd., 1998 AMC 583 (9^th Cir. 1997), opinion amended 131 F.3^d 1336 (9^th Cir. 1998). In Fireman's Fund, the district court invalidated a Korea forum selection clause on the grounds that the chosen forum might lessen the carrier's liabilities in that Korea law does not recognize the right of the plaintiff to obtain in rem security. The Ninth Circuit reversed, stating that contractual choices of forum should be enforced unless the party seeking rejection of enforcement bears a "heavy burden of proof" that enforcement is "unreasonable", e.g., enforcement contravenes a strong public policy in the forum where the suit is brought. The Ninth Circuit held that mere unavailability in rem proceedings in the chosen forum goes to the issue of the means of enforcement of a remedy, but does not impermissibly lessen the specific liability imposed by COGSA. See also Union Steel America Co. v. M/V Sanko Spruce, 1999 AMC 372 (D. Or. 1998). Gibbs was discussed but it was found that Gibbs "plainly spoke incorrectly" on the issue whether Korean law recognized the right of subrogation in Union Steel America Co. v. M/V Sanko Spruce, 14 F.Supp.2^d 682, 1999 AMC 344 (D. N.J. 1998). Hyundai Corporation U.S.A., Inc. v. M/V An Long Jiang, 1998 AMC 854 (S.D. N.Y. 1998), adopted the same rule: inability to proceed in rem is not grounds to avoid a choice of forum clause in the bill of lading. See also Chiyoda Fire & Marine Ins. Co. of America v. M/V Hyundai Freedom, 1999 AMC 1603 (S.D. N.Y. 1999). Reed v. Barton Corp v. M.V. Tokio Express, 1999 AMC 1088 (S.D. N.Y. 1999), enforced a choice of law clause mandating application of German law and choice of forum clause requiring jurisdiction in Germany, though German law might not provide an in rem remedy for cargo damage. Street, Sound Around Electronics, Inc. v. M/V Royal Container, 30 F.Supp. 2d 661, 1999 AMC 1805 (S.D. N.Y. 1999), enforced a German forum-selection and choice-of-law clause to claims arising from a shipment to which COGSA did not apply. Jewel Seafoods Ltd. v. M/V Peace River, 39 F.Supp.2d 628, 1999 AMC 2053 (D. S.C. 1999), enforced a China choice of forum clause. In Tokio Express, the carrier provided a letter of undertaking to satisfy any judgment of the German court, thus there was no actual lessening of the liability of the "ship". International Marine Underwriters v. M/V Kasif Kalkavan, decided six days before An Long Jiang, reached the opposite conclusion and rejected the Ninth Circuit rule: a forum selection clause for Korea, where an in rem action is not available, is effective only as to the in personam action against the carrier. Kasif Kalkavan focused on the prohibition of ' 1303(8) rendering any clause in a contact of carriage "relieving the carrier or the ship from liability ... or lessening such liability". Other recent cases have enforced foreign forum selection clauses: Fireman's Fund Ins. Co. v. M/V DSR Atlantic, 131 F.3^d 1336, 1998 AMC 583 (9^th Cir. 1998)[that bill of lading may be a contract of adhesion does not render choice of forum clause unenforceable]; Duferco Steel Inc. v. M/V Kalisti, 121 F.3^d 321, 1998 AMC 171 (7^th Cir. 1997 [London]; Mitsui & Co. (USA), Inc. v. M/V Mira, 111 F.3^d 33, 1997 AMC 2126 (5^th Cir. 1997) [London forum selection clause]; Silgan Plastics Corp. v. M/V Nedlloyd Holland, 1998 AMC 2163 (S.D. N.Y. 1998)[Rotterdam][left plaintiff the right to reopen the case if the foreign decision reduces carrier's obligations in violation of COGSA]; Tradearbed, Inc. v. M/V Agia Sophia, 1997 AMC 2838 (D. N.J. 1997)[Korea arbitration/forum clause]; Seven Seas Ins. Co. v. Danzas, S.A., 1997 AMC 961 (S.D. Fl. 1996) [Paris, France]; Talatala v. Nippon Yusen Kaisha Corp., 974 F.Supp. 1321, 1997 AMC 1398 (D. Hi. 1997), [Tokyo]. Kelso Enterprises, Ltd. v. M/V Wisida Frost, 8 F.Supp.2^d 1197, 1998 AMC 1351 (C.D. Ca. 1998), held that allegations of unreasonable deviation by the carrier does not avoid an otherwise-valid choice of forum clause, as it is for the designated forum to determine whether there was any unreasonable deviation. Kelso Enterprises also made clear that the choice of forum clause applies to tort causes of action as well as to claims stated in contract. Robalen, Inc. v. Generale de Banque, S.A., Brussels, 1998 AMC 1879 (S.D. N.Y. 1998), applied a choice of foreign forum clause in a bill of lading to require litigation in Italy to claims between a U.S. shipper and a U.S. freight services company for failure to properly prepare a bill of lading. Though the claim was for breach of a separate contract from the bill of lading, the bill of lading required litigation in Italy as to any dispute "in connection with" the bill of lading. Maritime Ins. Co. Ltd. v. M/V Sea Harmony, 1998 AMC 1961 (S.D. N.Y. 1998), refused to extend a choice of forum clause to a terminal operator at the port of destination otherwise entitled to the benefits of a bill of lading under a Himalaya Clause. An unreported opinion in Commercial Union Ins. Co. v. M/V Bremen Express, 16 F.Supp.2d 402, 1999 AMC 2002 (S.D. N.Y. 1998), held that a forum selection clause in an ocean bill of lading did not apply where the loss occurred during inland transportation.

Time Bars & Improper Forum. Duferco Steel Inc. v. M/V Kalisti, 121 F.3^d 321, 1998 AMC 171 (7^th Cir. 1997); New York Marine & General Ins. Co. v. M/V Admiralengracht, 1999 AMC 1647 (S.D. N.Y. 1999); Chiyoda Fire & Marine Ins. Co. of America v. M/V Hyundai Freedom, 1999 AMC 1603 (S.D. N.Y. 1999); Union Steel America Co. v. M/V Sanko Spruce, 14 F.Supp.2^d 682, 1999 AMC 344 (D. N.J. 1998); Talatala v. Nippon Yusen Kaisha Corp., 974 F.Supp. 1321, 1997 AMC 1398 (D. Hi. 1997); Seven Seas Ins. Co. v. Danzas S.A., 1997 AMC 961 (S.D. Fl. 1996); Street, Sound Around Electronics, Inc. v. M/V Royal Container, 30 F.Supp. 2d 661 (S.D. N.Y. 1999); and Great American Ins. Co. v. Kapitan Byankin, 1996 AMC 2754 (N.D. Ca. 1996), point out the risk of a plaintiff choosing an improper forum, in that suits filed in an improper forum were dismissed though refiling them in the designated forum was time barred. Duferco Steel and Kapitan Byankin held that where a bill of lading has an enforceable choice of forum clause and the plaintiff chose an improper forum to initiate its action, the chosen court has no authority to require as a condition of dismissing the action that the carrier waive time bar limitations that it might, at the time of dismissal, have in the contractual forum. Seven Seas dismissed the case in the absence of allegation of fraud, undue influence or overweening bargaining power.

Which "Carrier" May Select Forum? Union Steel America Co. v. M/V Sanko Spruce, 14 F.Supp.2^d 682, 1999 AMC 344 (D. N.J. 1998), held that the carrier which issued the bill of lading to the shipper and collected freight is the carrier which may designate the forum. In that case, the bill of lading provided for mandatory jurisdiction where the carrier had its principal place of business. The bill of lading had been issued by a time charterer, which had its principal place of business in Korea. The shipowner had its principal place of business in Japan. The shipowner moved to dismiss the suit against it on the grounds that the bill of lading defined the owner as the carrier, and stated that the contract was between the owner and the merchant.

Choice of Law Clauses. Talatala v. Nippon Yusen Kaisha Corp., 974 F.Supp. 1321, 1997 AMC 1398 (D. Hi. 1997), enforced a clause specifying application of Japanese law "except as may be otherwise provided herein", as the law of Japan can conform to COGSA to the extent that there is any conflict. Itel Container Corp. v. M/V Titan Scan, 139 F.3^d 1450, 1998 AMC 1965 (11^th Cir. 1998), involved a claim against a NVOCC, and a claim for indemnity by the NVOCC against the actual carrier. Both bills of lading included a typewritten clause stating "English law to apply". The Eleventh Circuit enforced the choice of law clause against both carriers, holding that the clause effectively provided for application of the higher liability limits of the Hague Rules.

Other Property. The rules of East River S.S. Co. v. Transamerica DeLeval, Inc., 476 U.S. 858, 1986 AMC 2027 (1986), are that tort claims do not exist in maritime law for damage to the product itself: the parties are left to their contractual remedies, if any (including the concepts of privity of contract, and contractual disclaimers and limitations), for damage to the product, but tort claims exist under Restatement of Torts 2nd Section 402A for personal injury and resulting damage to "other property". Saratoga Fishing Co. v. J. M. Martinac & Co., ____ U.S. ____, 1997 AMC 2113 (1997), reversed a holding that "other property" did not include parts and equipment added to a large commercial fishing vessel after initial delivery by the builder. The Court held that there is a ' 402A tort cause of action for damage to "user-added equipment" against the building shipyards which resulted from the ship catching fire. The Court's majority did not find significant that the vessel was not complete and ready to fish when delivered by the builder: it was anticipated that the owner would add additional equipment (skiff, nets, navigational electronics, spare parts and other equipment). Equipment added to a product after the manufacturer has sold the product to an initial "user" is not part of the product itself. Saratoga did not address the issue of the definition of a "user": in that case, the initial purchaser who added most of the equipment did not utilize and did not intend to utilize the vessel in commercial fisheries, but, instead, as an entrepreneur in the business of designing, assembling and distributing completed tuna fishing vessels, completed its outfitting and sold it to the third party who was using it at the time of the fire.

Red Letter Clauses. La Esperanza de P.R., Inc. v. Perez Y Cia. de Puerto Rico, Inc., 124 F.3^d 10, 1998 AMC 21 ( 1^st Cir. 1997), affirmed enforcement of a red letter disclaimer of consequential damages in a shipyard repair contract and the finding that the shipyard's negligence did not amount to gross negligence:

Choice of Law. Galehead v. M/V Anglia, 15 F.Supp.2^d 1304, 1999 AMC 292 (S.D. Fl. 1998), affirmed 1999 U.S. App. LEXIS 18404 (11^th Cir. 1999), applied choice of law factors to determine whether U.S. maritime lien law should be applied where goods are provided in a foreign port:

OPA 90 Claims. The Commonwealth of Puerto Rico v. The M/V Emily S, 13 F.Supp.2^d 147, 1998 AMC 2726, found a maritime lien exists for OPA 90 pollution claims.

Effect of Settlement on Limitation Fund. In the Matter of Kristie Leigh Enterprises, Inc., 168 F.3d 697, 1999 AMC 1366 (5^th Cir. 1999), held that there is no dollar for dollar reduction of the limitation fund for settlement with some of the claimants. Because the issue was not raised at the trial court, the court did not decide whether there could have been a pro rata credit for settlement with some of the claimants against the limitation fund available to non-settling claimants. The Kristie Leigh litigation arose from a collision between a tug and its barges and two recreational boats, which resulted in two deaths and three injuries to the occupants of the recreational boats. Initially, a fund of $685,000 was established based on the value of the tug and barges, as a "flotilla", and settlement of $650,000 was reached with one group of claimants. Subsequently, it was determined that the fund was not to include the value of the barge, and the fund was reduced to $190,000. The petitioner claimed dollar for dollar credit for the earlier settlement, which would have reduced the fund remaining to satisfy the claims of the non-settling claimants to $0.

Claims of States. Claims of states must be joined in a federal limitation proceeding, a state's Eleventh Amendment immunities notwithstanding. Bouchard Transp. Co., Inc. Limitation Proceedings, 147 F.3^d 1344, 1998 AMC 2409 (11^th Cir. 1998), stated in dictum that the Eleventh Amendment does not apply to a state's claims in a Supplementary Admiralty Rule F limitation proceeding, as such proceedings involve a bond or security for the value of the limitation fund and are sufficiently analogous to an in rem proceeding. The holding is dictum as the court went on to hold that the state's claims for oil pollution damages under OPA 90 are not subject to a limitation action brought by a vessel owner.

"Owner on Board" Doctrine. Keller v. Jennette, 9440 F.Supp. 35, 1997 AMC 955 (D. Ma. 1996), held that as there must be some personal fault or negligence on the part of the owner, or concurrence with the fault of another, to deny the right to limit: the fact that the owner was aboard the boat and at the helm of the vessel doesn't in itself establish his privity and knowledge to the fault of another person on the vessel. See also Suzuki of Orange Park, Inc. v. Schubert, 86 F.3^d 1060, 1997 AMC 457 (11^th Cir. 1996); In re M/V Sunshine II, 808 F.2^d 762 (11^th Cir. 1987); In the Matter of South Coast Boat Rentals, Inc., _____ 1999 U.S. Dist. LEXIS 12748 (E.D. La. 1999).

Cases Holding Maritime Law Does Not Permit Non-pecuniary Damages. Frazer v. The City of New York, 1997 AMC 2484 (N.Y. App. 1997), dismissed passenger claims for punitive damages based on personal injury ruling that Miles v. Apex Marine Corp., 498 U.S. 19, 1991 AMC 1 (1991), limits damages in maritime causes of action for personal injuries to seamen or passengers or other invitees to pecuniary losses, holding that Yamaha is based on the provision in DOHSA specifically preserving application of state statutes to deaths in territorial waters. Frazer flatly held that but for cases of deaths to non-seafarers in territorial waters (where, under Yamaha, state punitive damage law may be applied) and to claims for property damage not affected by the Miles rule, punitive damages are not available under general maritime law. See also O'Hara v. Celebrity Cruises, Inc., 979 F.Supp. 254, 1998 AMC 522 (S.D. N.Y. 1997), which held that punitive damages are not available under the general maritime law for a passenger's claims for personal injury: the court broadly stated that punitive damages are "quasi-criminal" and they are not allowed under the general maritime law. Hunter v. Seabulk Offshore, Ltd., 993 F.Supp. 973, 1998 AMC 2323 (E.D. La. 1998), held that, under maritime law, nonpecuniary damages cannot be recovered by a passenger against the operator of a crew boat that ran aground in territorial waters. Brodtmann v. Duke, 1998 AMC 1486 (La. App. 1998), overruled decisions holding that punitive damages could be awarded under maritime law other than in the circumstances of a seaman's action against the employer and held that the Miles rule applies irrespective whether the injured party was a seaman or, as in Brodtmann, a passenger on a pleasure vessel. Brodtmann broadly held that punitive damages are not available under the general maritime law. By rejecting CEH, Inc. v. F/V Seafarer, 70 F.3^d 694, 1996 AMC 467 (1^st Cir. 1995), as persuasive precedent, the Brodtmann court inferred that the new rule that punitive damages are not available in federal maritime law applies not only in cases of maritime death or personal injury, but to claims for property loss and damage.

Cases Holding Proscription Against Punitive Damages Applies Only to Seaman Claims Against Employers. In Matter of Denet Towing Service, Inc., 1999 U.S. Dist. LEXIS 8058 (E.D. La. 1999), "studied the issue and found no basis to extend Miles beyond the seaman-employer relationship." Edwards v. Jones, 1999 AMC 1078 (D. Md. 1999), held that Miles does not apply to injury or deaths of recreational boaters, and non-pecuniary damages including punitive damages can be awarded under the general maritime law (even when punitive damages cannot be awarded under state law), stating a broad rule that "punitive damages are recoverable under maritime law in personal injury negligence actions", not involving the Jones Act or DOHSA. Gravatt v. City of New York, 1999 U.S. Dist. LEXIS 7741 (S.D. N.Y. 1999), rejected a broad rule that punitive damages are not available in cases brought under general maritime law and awarded punitive damages in a LHWCA ' 905(b) third party action for injury to a harbor worker, and provided a cogent basis for distinction:

Owner on Board Doctrine. Herman v. Tidewater Pacific, Inc., 160 F.3^d 1239, 1999 AMC 236 (9^th Cir. 1998), held that Coast Guard regulations relative to reporting injuries and death do not supersede OSHA regulations applicable to working conditions and to record keeping of illness and injury applicable to workers within a state apply to seamen on uninspected vessels. In Herman, OSHA issued two citations after inspecting an ocean-going tug in state territorial waters: one for substantive safety violations regarding confined space entry procedures, machine guarding and blood-borne pathogen exposure control plans; and a citation for failure to keep a log of injuries and illnesses as required by OSHA regulations. The Ninth Circuit rejected the rule of Clary v. Ocean Drilling & Exploration Co., 609 F.2^d 1120 (5^th Cir. 1980), which held that OSHA regulations do not apply to the working conditions of seamen on vessels which operate on the high seas as Coast Guard regulations preempt application of OSHA regulations with respect to working conditions of seamen. It followed a "hazard based" approach exemplified by Donovan v. Red Star Marine Services, 739 F.2^d 774 (2^nd Cir. 1984); and In re Inspection of Norfolk Dredging Co., 783 F.2^d 1526 (11^th Cir. 1986), which held that OSHA regulations applied to less regulated "uninspected vessels" where Coast Guard regulations do not specifically address the hazard that is the subject of OSHA regulation and citation. It held that OSHA regulations applicable to working conditions and to record keeping of illness and injury applicable to workers within a state apply to seamen on uninspected vessels. Thus, under 29 USC Sections 657(c)(2), 673(a) and 1904.4, an employer must maintain a detailed log supplementary to any reports of injury required by the Coast Guard of any injury or illness involving medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job of any employee in state territorial waters.

Sending a Ship to Sea in an Unseaworthy Condition. United States v. Rivera, 131 F.3d 222, 1998 AMC 609 (1^st Cir. 1997), reversed the conviction of a manager of a tugboat's managing company under 46 USC Section 10908 for knowingly sending a U.S. vessel to sea in an unseaworthy state likely to endanger the life of an individual, on the ground that there was no evidentiary support that knowledge of the defective condition of a towing wire was likely to endanger life. The case arose from the grounding of the tug's oil-carrying barge after the towing wire parted. The court noted that ' 10908 is part of a statutory chapter establishing complaint procedures for seamen reporting unseaworthy vessels, and the statute originally was designed to enhance those procedures by criminalizing a knowing attempt to take a dangerous vessel to sea after it was determined it was unseaworthy on a complaint as to its seaworthiness was lodged. The court, in dictum that rejected the position urged in the amicus briefs of the MLA and other industry interests, held that the statute's plain language, as amended in 1983, creates a stand-alone criminal basis for criminal prosecution, without a prior finding or prior complaint of unseaworthiness of the vessel. A vigorous dissent would apply the rule of construction that a statute should be construed in its textual context, and its application should be limited to cases where procedures for correcting unseaworthiness under Chapter 109 have been initiated. As the unseaworthiness procedures do not apply to foreign vessels, fishing vessels, harbor vessels, yachts, and vessels on inland waterways, the Rivera holding extends the criminal offense to vessels beyond those covered by the procedural provisions.

Investigation and Vessel Searches for Possible Criminal Activity. Two recent decisions have greatly broadened the authority of Coast Guard officials to board and inspect vessels without warrants and to make warrantless searches for evidence of criminal activity on the vessels. United States v. Varlack Ventures, Inc., 149 F.3^d 212, 1999 AMC 255 (3^rd Cir. 1998), upheld the constitutionality of 14 USC Section 89(a), which permits warrantless boarding and searches of vessels in U.S. waters and upon the high seas if the Coast Guard or other officials have reasonable suspicion of criminal activity. In United States v. Boynes, 149 F.3^d 208, 1999 AMC 249 (3^rd Cir. 1998), Coast Guard officers made three separate warrantless inspections of a vessel. The first was from alongside the vessel which was observed to discharge a dark brown liquid. The Coast Guard notified the owner/master that they were investigating the incident and instructed him to bring the vessel to a Coast Guard dock for inspection. Before the appointed hour, they boarded the vessel with the consent of the owner and noted oil in the engine room bilge and oil leaking from a fuel line in the engine room. The owner master was arrested when he appeared at the Coast Guard dock, but without the vessel, which then was in drydock in the British Virgin Islands for repairs. The Coast Guard boarded the vessel in the British Virgin Islands the next day without a warrant and videotaped and photographed the interior and exterior of the vessel. In the resulting criminal prosecution of the owner/master, he moved to suppress evidence obtained during the third warrantless search of the vessel. The district court granted the motion. The Third Circuit reversed, holding that a Coast Guard search of a vessel without warrant while the vessel was in foreign territory did not violate the Fourth Amendment, because no warrant was required under exigent circumstances. United States v. One Big Six Wheel, 166 F.3d 498, 1999 AMC 951 (2^nd Cir. 1999) (a Gambling Ship Act prosecution, not an environmental case), involved interpretation of expansion of the territorial sea for purposes of criminal jurisdiction. The court held that the definition of "territorial waters" is the Gambling Ship Act was tied to the definition of territorial waters in other existing regulations, which then was three miles, and subsequent extension of criminal jurisdiction to twelve miles does not change the three mile limitation.

Fairport International Exploration, Inc. v. Shipwrecked Vessel known as the Captain Lawrence, ____ F.3^d ____ (6^th Cir. 1999), addressed the issue whether a ship had been abandoned where the owner had filed a "Record of Casualties to a Vessel" which stated that the vessel was a total loss and he had made no attempt to salvage the vessel though it was in relatively shallow water, but had told a family member that he intended to raise money to repair it. The Sixth Circuit examined whether abandonment must be proven by proof that the owner performed some "clear and unmistakable affirmative act" of abandonment, or it can be proven by inference from circumstantial evidence, and adopted the "inferential abandonment" test:

The case was remanded for a threshold inquiry to determine whether its owner abandoned the vessel, and the state claiming abandonment has the burden of proving abandonment by clear and convincing evidence. If so, then the ASA would apply. Deep Sea Research was applied in Sea Services of the Keys, Inc. v. State of Florida, 156 F.3^d 1151, 1999 AMC 320 (11^th Cir. 1998). Sea-Services involved a salvage claim against a vessel towed to a port of safety by the claimant. The state discovered that the boat did not have a required hull identification number and seized it under a state forfeiture statute. The salvor brought a suit in rem for a salvage award and the federal district court issued a warrant for the boat's arrest. State officers refused to allow the U.S. marshal to serve the arrest warrant, and moved for dismissal of the suit on grounds of the Eleventh Amendment immunity. The Florida forfeiture state provides that seizure by the state, alone, does not vest the state with legal possession of the boat: a forfeiture action in state court is required. As there had been no forfeiture action at the time of the attempt to execute the in rem arrest warrant, it was determined that the state did not have possession of the boat and the rule of Deep Sea Research allows the federal district court jurisdiction in the in rem action against the vessel. The district court determined that the vessel had been abandoned and awarded title to the vessel to the salvor under the doctrine of finds. Sea Services of the Keys, Inc. v. Abandoned 29' Midnight Express Vessel, 1999 AMC 1198 (S.D. Fl. 1998).

Margate Shipping Co. v. M/V Ja Orgeron, 143 F.3^d 976, 1998 AMC 2383 (5^th Cir. 1998), involved the largest maritime salvage award in U.S. jurisprudence. The Fifth Circuit reduced an award of $6.4 million to , based on its determination that the district court erred in evaluating a NASA space shuttle fuel tank which was cargo on a barge which was salved. A 688-foot fully-laden tanker rescued a tug and barge in very rough waters near shoals. The tank was valued at its prototype production cost of $51,387,000, but replacement tanks could have been obtained at $19,014,000 each. The barge was valued at $2 million. The trial court awarded $12.5% of the value. H.R.M., Inc. v. S/V Eagle Light, 1997 AMC 1972 (D. Ct. 1997), awarded $9,000 for a professional salvor who utilized its $100,000 vessel to pull a $42,000 vessel off a strand and tow it into a nearby harbor. H.R.M., Inc. v. S/V Venture VII, 972 F.Supp. 92, 1998 AMC 1 (D. R.I. 1997), awarded the same salvor, who risked equipment valued at $175,000, $25,000 for pulling a $250,000 yacht off a rocky shore. Tyner v. Bristol Enterprise, 1997 AMC 1714 (Arb. 1997), awarded in addition to quantum meruit a "bounty" of 2% of the salved value for towing a disabled vessel from imminent peril on a lee shore to safety.

Evanow v. M/V Neptune, 1999 AMC 516 (9^th Cir. 1998), involved a contract to aid a tug and its barge when the tug was disabled and grounded and encountering storm winds of over 90 knots, causing the barge to pound heavily against the tug. The Coast Guard became involved, in part because of its concern about the risk of pollution if either the tug or barge should break up or be holed. A contact was entered into an individual and two fishing boats to tow the barge into deeper waters, and, when that was not successful, for one of the fishing vessels to assist in steadying the barge alongside the tug. The Ninth Circuit affirmed the determination that the parties had entered into a salvage contract (as opposed to a towage agreement) and that the contract was not subsequently modified:

Uberrimae Fidei. Several cases have determined that coverage is vitiated due to failure of the insurer to make full disclosure of all potentially-material facts in the negotiation of insurance. Atkin v. Smith, 137 F.3^d 1169, 1998 AMC 1239 (9^th Cir. 1998), applied California statutory law to the issue whether an innocent failure to disclose the criminal record of a hired master, where there was no causal relationship between the non-disclosure and the loss of the insured yacht, permitted the insurers to void the policy. Atkin did not address the issue whether federal maritime law should apply, or whether the federal rule was different that state law. CIGNA Property & Cas. Ins. Co. v. Polaris Pictures Corp., 159 F.3^d 412, 1999 AMC 1 (9^th Cir. 1998), which states that the principle of uberrimae fidei "exists under both California insurance law ... and federal admiralty law." Royal Insurance Co. of American v. Harbor Shuttle, Inc., 1999 AMC 929 (E.D. N.Y. 1999), stated that "[marine insurance policies are governed by the doctrine of uberrima fides".

Fire Due to "Malicious Acts or "Vandalism" isn't Covered by Standard Perils Clause. In Ferrara & DiMercurio, Inc. v. St. Paul Mercury Ins. Co., ____ F.3^d ____, Docket 98-1094, 3/4/99 (1^st Cir. 1999), the insurer denied coverage, contending that there was no coverage for an arson fire, whether the fire was set by the insured or resulted from the malicious acts of a third party, and that only fires that are fortuitous and "of the sea" are covered under the Perils clause. The court of appeals held that the policy excluded coverage for a "malicious act" which results in a fire.

Pay-to-be-paid Indemnity. The requisites for pay-to-be paid in the context of P & I club rules were examined again in In re Prudential Lines Inc., 158 F.3^d 65, 1999 AMC 609 (2^nd Cir. 1998). The bankruptcy court approved an plan where the shipowner's Trustee transferred funds to each claimant in satisfaction of his claim, and that claimant immediately transferred these funds back to the Trustee in the form of a non-recourse loans so the funds could be used again to pay the next claimant, until all claimants were paid. "Seed money" of $300,000 was thus leveraged to pay $13,000,000 of claims, and the bankruptcy court judge ordered the P & I club at risk to pay the $13,000,000. This "recycling agreement" was reversed by the district court, affirmed by the Second Circuit, as a "sham" that resulted in no monetary loss to the insured. The parties stipulated that New York law applied. The Second Circuit applied the New York test of "whether the assured has actually in good faith sustained the loss for which reimbursement is sought", and determined that a non-recourse debt which, financially, amounts to "nothing" is not a "loss", adopting the rationale of Conoco, Inc. v. Republic Insurance Co., 819 F.2^d 120, 122, 1987 AMC 2975 (5^th Cir. 1987), that payment of a claim with a non-recourse note does not amount to payment under an indemnity policy.

In re Prudential Lines Inc., Dicola v. American Steamship Owners Mutual P & I Assoc., 158 F.3^d 65, 1999 AMC 609 (2^nd Cir. 1998).