Wallace Boudreaux had been working less than five months when he first filed for maintenance and cure from his employer, Transocean Deepwater, Inc. After working on the anchor of a Transocean vessel in May 2005, he claimed that he had injured his back due to the company’s negligence. Transocean thereafter began making maintenance and cure payments to Boudreaux. These awards did not satisfy the seaman, though, and almost three years later, in April 2008, he sued for further damages. The suit led Transocean to a revelation during discovery: in his initial medical interview with the company, Boudreaux never acknowledged that he had had back injuries and pain as early as 1997. Based on this concealment, Transocean filed a motion for summary judgment, leading the district court to dismiss Boudreaux’s maintenance and cure claims in April 2010. By that point, though, Transocean had already paid him $276,263.36 over nearly five years. Wishing to recover the money, the company filed a counterclaim for restitution in June 2010. It then filed a motion for summary judgment on the counterclaim, arguing that because it successfully showed that it was not responsible for further maintenance and cure payments, the court should also grant it restitution for those payments already made in order to avoid unjust enrichment. The district court agreed with this argument and granted Transocean’s motion for summary judgment on the counterclaim for restitution. Boudreaux appealed, leading the United States Court of Appeals for the Fifth Circuit to consider the novel issue of whether a maritime employer should automatically be granted restitution for prior maintenance and cure payments where the employer successfully defends against further payments by showing that an employee intentionally concealed a relevant, preexisting medical condition. The United States Court of Appeals for the Fifth Circuit held that an employer is not entitled to an automatic right of action for restitution of maintenance and cure payments obtained by a seaman after an inaccurate medical interview, although the employer can use these prior payments to offset further Jones Act damages. Boudreaux v. Transocean Deepwater, Inc., 721 F.3d 723, 728, 2013 AMC 2457, 2464 (5th Cir. 2013).
In State v. Louisiana Land & Exploration Co., the Louisiana Supreme Court Retreats from Progress in Oil Field Contamination Litigation
In the ongoing saga of Louisiana “legacy litigation,” the Louisiana legislature and Louisiana Supreme Court have together taken several cautious steps along an uneasy tightrope strung between the competing interests of private landowners and oil and gas exploration and production companies accused of environmental contamination. The most recent opportunity for advancing the resolution of oil field contamination disputes arose in the matter of State v. Louisiana Land & Exploration Co., in which the state of Louisiana and the Vermilion Parish School Board haled into court a dozen exploration and production companies to answer for alleged contamination resulting from oil and gas operations performed on lands owned by the state and managed by the school board. Though it was undisputed that the original 1935 oil, gas, and mineral lease lacked any express provision for environmental remediation, the plaintiffs nevertheless alleged, inter alia, that they were entitled to “excess remediation damages” in spite of the procedural mechanisms for administering remediation awards put in place by Act 312. The defendant companies—admitting responsibility for the contamination, but objecting to the plaintiffs’ contention that they were liable for damages above and beyond the amount required for a statutory cleanup—moved for partial summary judgment. They sought dismissal of the plaintiffs’ claims for excess remediation damages in light of the procedural requirements established under Louisiana Revised Statute (La. R.S.) section 30:29, which, they argued, acted as a substantive cap on remediation damages. The trial court granted the defendants’ motion for partial summary judgment, and the state and school board appealed. The Louisiana Court of Appeal for the Third Circuit agreed with the plaintiffs, reversing the trial court’s granting of partial summary judgment and holding, “La. R.S. 30:29, by its clear language, provides for a landowner to recover damages in excess of those determined in the feasible plan whether they are based on tort or contract law.” The defendant companies sought review of the appellate court’s determination, and the Louisiana Supreme Court held that Act 312 does not prohibit plaintiffs from pleading for and receiving awards for remediation damages in excess of the amount needed to fund the statutorily required cleanup plan. State v. Louisiana Land & Exploration Co., 2012-0884, p. 16 (La. 1/30/13); 110 So. 3d 1038, 1049.
Cell Phones as an Eye of the Government: In re Application of the United States for Historical Cell Site Data
Federal authorities in Texas sought a court order from a federal magistrate to compel a cell phone service provider to disclose records for a particular cell phone number under the Stored Communications Act (SCA). These records included historical cell site data, which service providers collect and store for each of their cell phone subscribers. Historical cell site data provide the locations of antennae towers that receive the signal of a subscriber cell phone and the direction from which that signal emanates. Service providers may record and collect these data at times when the phone is in use and when the phone is idle. Federal authorities sought this order under the SCA on a showing of “specific and articulable facts,” rather than by a warrant on a showing of probable cause. The magistrate refused to grant the order as pertaining to the historical cell site data. The magistrate found that although federal authorities did meet the specific and articulable facts standard of the SCA, this provision allows the government to effect a search under the Fourth Amendment on a lower evidentiary showing than probable cause and is, therefore, unconstitutional. When the government objected to the magistrate’s ruling, the district court affirmed the magistrate’s decision. The government appealed the district court’s decision while the American Civil Liberties Union, the Electronic Frontier Foundation, and others participated as amici. In a split decision, the United States Court of Appeals for the Fifth Circuit held that court orders to compel service providers to provide historical cell site data based on the specific and articulable facts standard under the SCA do not categorically violate the Fourth Amendment and that courts do not have discretion to require a showing of probable cause when the government seeks to compel disclosure of historical cell site data under the SCA. In re Application of the United States for Historical Cell Site Data, 724 F.3d 600, 615 (5th Cir. 2013).
Navigating the Murky Waters of Admiralty and Bankruptcy Law
When U.S. bankruptcy law converges with federal admiralty law, complex jurisdictional conflicts and constitutional issues arise. This Article explores the history of how courts have treated the intersection of these two complex bodies of federal law, with a particular focus on Article III of the United States Constitution in the wake of the United States Supreme Court’s decision Stern v. Marshall. Because this fundamental issue regarding the power of bankruptcy courts to adjudicate admiralty matters may have a significant practical effect on maritime creditors, it is important that maritime practitioners be cognizant of the principles of bankruptcy jurisdiction. The Article further discusses certain aspects of complex commercial bankruptcy that are relevant to maritime practitioners, providing explanation of the impact of various bankruptcy issues in the maritime context.
Navigating the Rogue Waters of Inland Marine Transportation and the Impact of the Use of Third-Party Logistics Providers on Recovery for Cargo Loss and Damage
More and more, shippers of freight are engaging third-party logistics providers to arrange the movement of cargo instead of speaking with the motor carriers directly. In cases of lost cargo, the claimant must determine among the carriers, brokers, and third-party logistics providers—some of whom may be unknown to the shipper—which party carries the liability. The Carmack Amendment to the Interstate Commerce Commission Termination Act establishes a national application of strict liability to motor carriers and preempts all state law relating to carrier liability. The Carmack Amendment unquestionably applies to motor carriers, thus limiting their liability, but while the Amendment does not apply as to brokers and logistics providers, whether these entities qualify as carriers, despite never having physical control of the cargo, is unclear. This Article first analyzes whether claims about third-party logistics providers are preempted by the Carmack Amendment, then continues to determine what liabilities apply and what remedies are available and whether the Carmack Amendment should apply.
Breach of Warranty and Misrepresentation—USA
Warranties in marine insurance policies can take varying forms, from a common survey warranty to a unique provision inserted at the whim of a particular underwriter. Depending on the type of provision and the law applicable to the interpretation of the clause, the breach of a warranty may void or suspend a policy altogether. Alternatively, in certain jurisdictions or in certain cases, the breach may void the policy only if the breach is causally related to the loss or the breach increases the risk. In other situations, the provision may be unenforceable under state statute or under state law rules of contractual interpretation. This Article provides an overview of the treatment of a breach of warranty by various courts, beginning with an overview of various courts’ treatment of particular clauses and concluding with a discussion of a recent case example regarding a breach of an express seaworthiness warranty in a protection and indemnity policy.
Direct Actions, Declaratory Actions, Abstention, Interpleaders, and Other Practical Considerations
Marine practitioners must be aware of the issues that may arise when dealing with potential claims in the marine insurance context. In some jurisdictions, both in the United States and abroad, plaintiffs may join the insurer in the lawsuit and seek recovery directly, rather than only through the insured. In most jurisdictions, the plaintiff will likely prefer to have the case heard in state court, but the defendant will seek to have it in federal court. To do this, the defendant may seek to remove the case once it is filed or to seek a declaratory action before the claim is made. Additionally, when dealing with multiple potential claimants, the insurer may wish to file and interpleader and deposit the funds with the court. This Article discusses these practical issues, and others, that may arise in a marine insurance claim.
The Central Role of P&I Insurance in Maritime Law
When a ship proceeds to sea, it is beset by danger on all sides. The scope of risks involved is just as vast as the ocean. They range from the most minor to the catastrophic. The focus of this Article is protection and indemnity (P&I) insurance, a form of coverage under which shipowners and charterers are protected against the risk of liability to third parties and which plays a central role in maritime law. This Article considers the extent to which courts in the United States enforce and give effect to P&I insurance, especially in situations where the shipowner is unable to meet its financial obligations or has gone into bankruptcy.
Offshore Energy Construction Insurance: Allocation of Risk Issues
The legal fallout from major offshore events such as the DEEPWATER HORIZON spill, PIPER ALPHA, and the grounding of the EXXON VALDEZ has resulted in extreme stress testing of liabilities allocation in upstream oil and gas project contracts. The risks inherent in the offshore oil and gas industry are very large. This Article examines how liability is shared during offshore construction projects, the standard insurance policy that is commonly used in respect of such risks, and a number of topical issues that parties engaged in such activity might bear in mind when they are negotiating contracts and insurance arrangements to protect their position.
Will the Rigs-to-Reefs Experiment Be Based on the “Best Scientific Information Available”?
Artificial reefs constructed from decommissioned oil rigs have been proposed as a tool to counteract declines in marine fish populations. There is so much uncertainty surrounding this relatively new proposition to deal with an inherently difficult-to-study problem, however, that it is not yet possible to tell whether these rigs-to-reefs will contribute to the recovery of fish populations or exacerbate the problem. The National Fishing Enhancement Act (NFEA), the statute authorizing the rigs-to-reefs program, requires that agencies implementing it base their decisions on the “best scientific information available” (BSIA). Although no court has yet addressed this provision in the NFEA, it has been the frequent subject of litigation in related statutes. This Comment explores how a Court would likely evaluate a challenge to agency action under the NFEA, based on comparisons to treatment of this provision under the Endangered Species Act (ESA), Marine Mammal Protection Act (MMPA), and Magnuson-Stevens Fishery Conservation and Management Act (MSA). Concluding that courts will not likely supply the pressure to advance scientific information about the effects of rigs-to-reefs, this Comment advocates for a targeted approach to closing the information gap.