Louisiana In General

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by Tod J. Everage

On February 12, 2017, a fishing charter boat, the M/V SUPER STRIKE, carrying several paying customers collided with an offshore service boat, the M/V MISS IDA, during a fishing trip. Claims were asserted by the passengers against both vessels and operators in their respective limitation suits. Recently, dispositive motions were filed against the claims asserted by two passengers – whose only alleged damages were for emotional distress resulting from the collision – claiming they were within the “zone of danger.” See In re TK Boat Rentals, (Civ. No. 14-1545) (E.D. La. March 21, 2018).

According to the US 5th Circuit, the “zone of danger” rule permits a plaintiff to recover for emotional injuries that “result from the witnessing of peril or harm to another if the plaintiff is also threatened with physical harm as a consequence of the defendant’s negligence.” Plaisance v. Texaco, Inc., 966 F.2d 166, 168 (5th Cir. 1992). This rule extends to Jones Act seaman for fear of physical injury to themselves as well. Naquin v. Elevating Boats, LLC, 744 F.3d 927, 938 (5th Cir. 2014). Like many similar issues, the Jones Act extension was borne out of a FELA case from the US Supreme Court. See Consol. Rail Corp. v. Gottshall, 51 US 532, 548 (1994). In order to recover though, the plaintiff must show that he suffered actual injuries.

The US 5th Circuit has not yet recognized recovery under the “zone of danger” rule for passengers under the general maritime law. See Barker v. Hercules Offshore, Inc., 713 F.3d 208, 224 (5th Cir. 2013). In TK Boat Rentals, the district court commented that the “zone of danger” rule was merely a threshold requirement for a plaintiff to recover for emotional injuries. Because the plaintiffs could not prove they suffered any objective injuries, the Court dismissed their claims without having to make the determination of whether the “zone of danger” rule even applied to them.

One plaintiff, Nick Siria, admitted that he did not suffer any personal injuries as a result of the collision and that he had not and did not plan to seek any medical or psychological treatment as a result of the collision. He claimed he had a few “tense” moments and reactions when he returned to the water and later dealt with a car pulling out in front of him, but he did not elaborate any further. The Court found these statements to be too vague and conclusory to demonstrate an emotional injury and dismissed his claims. The second plaintiff, Tracy Edwards, argued he should recover damages because he too was in the “zone of danger” of the collision. Edwards similarly offered a vague affidavit wherein he alleged he suffered emotional and physical injuries, but provided no description of either injury. Looking to his deposition, the Court could only find testimony that Edwards jumped into the river at the time of the collision and that he found the water to be cold. He sought no medical or psychological treatment. Edwards testified that he now has a fear of the water and could not participate in a snorkeling trip because of the collision; he had no problems fishing from a boat though. The Court was not persuaded that Edwards could support his claims with such limited evidence and dismissed his emotional injury claims as well.

The idea of a physical or real manifestation of injuries is a common one among the courts. While a physical injury (in the traditional sense of the word) is not necessarily needed, there must be some evidence that the plaintiff suffered an injury sufficient to be compensated for it. For example, emotional distress may “physically” manifest itself as a psychological disorder or condition – so long as it is capable of objective determination. See, e.g., Haught v. Maceluch, 681 F.2d 291, 299 n.9 (5th Cir. 1982). It seems that a threshold point would be to show that the plaintiff sought some sort of treatment for his complained of “injuries.” Self-serving affidavits and vague testimony will not cut it. Given the fact-intensive question, courts will evaluate these claims on a case-by-case basis.

The US 1st Circuit more recently commented on this issue in Sawyer Brothers, Inc. v. Island Transporter, No. 16-2470 (1st Cir. April 3, 2018). Though the US 5th Circuit hasn’t yet extended the “zone of danger” rule to passengers under the general maritime law, the US 1st Circuit officially took that step. “Given its application to seaman, we see no principled basis for imposing the more restrictive physical impact test upon passengers alleging NIED under the general maritime law.” In so doing, the 1st Circuit joined the 11th Circuit (Chaparro v. Carnival Corp., 693 F.3d 1333, 1338 (11th Cir. 2012) (per curiam) and the 9th Circuit (Stacy v. Rederiet Otto Danielsen, A.S., 609 F.3d 1033, 1035 (9th Cir. 2010), affirmatively allowing such claims. This is not to say that the US 5th Circuit would not join these Circuits, they simply have not yet been forced to pick a side.

The Sawyer Brothers Court dropped a notable footnote in its opinion – the Court would not extend the prohibition of bystander claims set forth in Gottshall to general maritime claims. The Court reasoned that the likelihood of witnessing a death or serious injury of a family member is far greater on the water than on a railroad. In other words, a maritime plaintiff in the 1st Circuit may be allowed to recover if he/she suffered an objective emotional injury as a result of witnessing a death or serious bodily harm to a close family member. Such claims are forbidden under FELA. The 1st Circuit went on to analyze the scope of the “zone of danger” and the provided examples of sufficient physical manifestations of emotional injuries. The plaintiffs in Sawyer Brothers suffered gastrointestinal distress, limb and chest pain, stress-induced shingles, and high fever – all of which were deemed satisfactory to maintain a claim.

While the US 5th and 9th Circuits disagree often on major issues, it remains to be seen if the 5th would disagree with the aforementioned Circuits who have extended “zone of danger” rule to passengers under the general maritime law.

by R. Blake Crohan

The EDLA recently determined that the Insurance Service Office’s (ISO) “Louisiana Changes” endorsement does not expand the scope of Louisiana’s direct action statute. In Menard v. Gibson Applied Technology and Engineering, 2017 WL 6610466 (E.D. La. Dec. 27, 2017), the plaintiff was a senior field technician working offshore in the Gulf of Mexico and was allegedly injured during a personnel basket transfer from a support vessel to a floating, semi-submersible oil-exploration platform. Plaintiff sued several companies along with one of their insurers, ACE American Insurance Company (ACE). ACE filed a motion for summary judgment arguing that the plaintiff could not maintain a direct action against ACE. ACE argued that because its policy was not written or delivered in Louisiana, and neither the accident nor alleged injury occurred in Louisiana, Louisiana’s direct action statute did not apply and the plaintiff could not file a lawsuit directly against ACE.

The parties did not dispute that the policy was not written or delivered in Louisiana – the policy was not issued in Louisiana and the policy was delivered to the insured in Texas. Further, the accident occurred on the Outer Continental Shelf in the Gulf of Mexico. It is well settled in the EDLA that an accident or injury occurring in the Gulf of Mexico or on the Outer Continental Shelf does not occur “within Louisiana” for purposes of Louisiana’s direct action statute. See Signal Oil & Gas Co. v. Barge W-701, 654 F.2d 1164, 1175 (5th Cir. 1981); Joyner v. Ensco Offshore Co., No. 99-3754, 2001 WL 333114, at *2-3 (E.D. La. Apr. 5, 2001).

Nevertheless, the plaintiff argued that the ISO’s “Louisiana Changes” policy endorsement made him a third-party beneficiary and granted him a right to bring a direct action against ACE. The endorsement was entitled “Louisiana Changes – Legal Action Against Us” and was numbered “CG 01 18 12 04.” The court recognized that these ISO endorsements must be attached to all commercial general liability policies covering risk in Louisiana. The endorsement provided: “A person or organization may bring a ‘suit’ against us including, but not limited to a ‘suit’ to recover on an agreed settlement or on a final judgment against an insured. . . .” Plaintiff argued that the endorsement expanded the right of action described in the Louisiana direct action statute; and alternatively, if it is ambiguous, it should be construed against the drafter – ACE. The court held that the endorsement did not make plaintiff a third-party beneficiary because the parties to the contract had no such intent. Rather, the endorsement merely embodied Louisiana’s direct action statute. Therefore, the endorsement did not expand the plaintiff’s right to bring a direct action against ACE, when he could not satisfy the direct action factors themselves. Accordingly, the Court granted ACE’s motion for summary judgment and dismissed the plaintiff’s direct action claims against ACE.

The Eastern District’s decision in Menard reaffirms that all prerequisites to Louisiana’s direct action statute must be satisfied or a plaintiff’s direct action suit will be dismissed. Further, Menard makes clear that insurers including the ISO’s Louisiana Changes – Legal Action Against Us policy endorsement number CG 01 18 12 04 are not contractually expanding their risk to unwanted and unexpected litigation in Louisiana, where the elements of the direct action statute are not met.

by Michael J. O’Brien

In 2016, District Judge Sarah Vance ruled that the heirs of a self-employed commercial fisherman who died while fishing in state territorial waters could recover non-pecuniary damages.  In Re: Marquette Transp., 182 F.Supp. 3d 607 (E.D. La 2016) (citing Yamaha Motor Corp USA v. Calhoun 516 U.S. 1999 (1996)). [Editor’s Note: See blog post on In re Marquette here]. Judge Vance first reiterated that a non-seafarer is someone who is neither a seaman covered by the Jones Act nor a longshore or harbor worker covered by the LHWCA. Based on this reasoning, the In re Marquette decedent was found to be a non-seafarer. Further, his survivors could pursue state law remedies and recover non-pecuniary damages under state law. Two years later, Judge Vance recently revisited Yamaha to address a separate but similar issue:  whether the spouse of an injured non-seafarer can recover damages pursuant to state law claims for loss of society and consortium.

In Van Horn, et al. v. Chubb Ins. Co., et al., No. 1711969, (E.D. La 4/03/18). The injured Plaintiff, Muriel Van Horn, was a race official for sailing regattas on Lake Pontchartrain. On the day in question, Mrs. Van Horn boarded a boat for transport to her official’s position. While traveling on Lake Pontchartrain, the boat operator suddenly accelerated his vessel over the swells of the lake. The boat left the water’s surface, assumed a nearly vertical position in the air, and violently slammed down on the water. As a result, Mrs. Van Horn fractured her right tibial plateau. She required major surgery and ongoing medical care. Mrs. Van Horn and her husband sued the boat operator and others for damages under the General Maritime Law as well as Louisiana Law in supplement to General Maritime Law. Specifically, Mr. Van Horn asserted Louisiana state law claims for loss of consortium and society as a result of his wife’s injuries. Defendants took exception to Plaintiffs’ claims and moved to dismiss all claims for loss of consortium and society.

In support of their claims, the Van Horns argued that claims for loss of consortium and society are available to the spouse of a non-seafarer injured in territorial waters when authorized by state law per Yamaha. Note that Yamaha’s “non-seafarer” and “territorial waters” requirements were met as it was undisputed that Mrs. Van Horn was a non-seafarer injured in Louisiana’s territorial waters. Further, Louisiana law permits the spouse of an injured person to recover damages for loss of consortium and society. As such, the Van Horns alleged that they were well within their rights to maintain these non-pecuniary claims.

Alternatively, the Defendants suggested that Yamaha was limited solely to wrongful death actions.  Defendants cited the Eleventh Circuit’s decision in In Re: Amtrak “Sunset Limited” Train Crash, 121 F.3d 1421 (11th Cir. 1997), where that circuit held that Yamaha does not extend to personal injury actions because state wrongful death actions had a historical basis in admiralty. The Eleventh Circuit’s rationale was that no General Maritime cause of action for wrongful death existed prior to 1970; thus, admiralty courts looked to state law to provide a remedy for the deaths of non-seamen in territorial waters.  By contrast, the General Maritime Law has long recognized a personal injury cause of action, such that admiralty courts did not need to rely on state law for remedies in cases of personal injury.  As such, according to Defendants (and the Eleventh Circuit), Mr. Van Horn should be unable to maintain his loss of consortium and society claims.

While Judge Vance admitted that the Eleventh Circuit’s argument had “some force,” she was not persuaded that the Yamaha Court endorsed separate remedies for personal injuries and wrongful deaths of non-seafarers in territorial waters.  Indeed, given the absence of conflict between state remedies and federal law as well as the “clear trend toward consistent treatment of maritime personal injury and wrongful death actions”, Judge Vance found that Yamaha was applicable to personal injuries within territorial waters. As such, Louisiana laws governing loss of consortium damages may supplement General Maritime Law with regard to personal injuries of non-seafarers in territorial waters. Accordingly, Judge Vance held that Mr. Van Horn claims of loss of consortium and society could proceed.

by Michael J. O’Brien

It is now well settled in the United States Fifth Circuit Court of Appeals that a seaman cannot recover punitive damages on an unseaworthiness claim. McBride v. Estis Well Service, 768 F.3d 382 (5th Cir. 2014) (en banc). Specifically, the U.S. Fifth Circuit has held that punitives are non-pecuniary losses and therefore may not be recovered under the Jones Act or General Maritime Law. However, this opinion is not shared by the Ninth Circuit Court of Appeals.  Indeed, in the matter of Batterton v. Dutra Group, 880 F.3d 1089 (9th Cir. 2018), the Ninth Circuit held that the opposite was true and allowed a seaman to pursue punitive damages on his unseaworthiness claims.

In a prior case, Evich v. Morris, 819 F.2d 256 (9th Cir. 1987), the Ninth Circuit held that punitive damages were available under General Maritime Law for claims of unseaworthiness and for failure to pay maintenance and cure.  Dutra relied on the Fifth Circuit’s line of cases as well as the Supreme Court’s decision in Miles v. Apex Marine Corp. that Evich had been overruled.

The sole question before the Ninth Circuit in Dutra was whether punitive damages were an available remedy for unseaworthiness. While noting that the Fifth Circuit’s leading opinions in McBride are “scholarly and carefully reasoned” the Ninth Circuit found that McBride’s dissenting opinions, which argue that punitive damages are available on unseaworthiness actions, were more persuasive.  In forming its opinion, the Ninth Circuit chose to adopt a broad interpretation of the U.S. Supreme Court’s decisions in Atlantic Sounding Co. v. Townsend, 557 US 404, 129 S.Ct. 2561 (2009).

In Townsend, the Supreme Court held that punitive damages were available to Jones Act seamen for the willful failure to pay maintenance and cure. The Townsend Court held that “historically, punitive damages have been available and awarded in general maritime actions” and “nothing in Miles v. Apex Marine or the Jones Act eliminates that availability.” The Fifth Circuit in McBride interpreted Townsend to only apply to maintenance and cure. The Ninth Circuit in Dutra took a far more expansive interpretation. Relying on the Townsend Court’s notation that punitive damages had historically been available and awarded in general maritime actions, the Ninth Circuit found no persuasive reason to distinguish maintenance and cure actions from unseaworthiness actions with respect to the damages awardable. Accordingly, a seaman may bring a claim for punitive damages if he falls within the jurisdiction of the Ninth Circuit.

This decision has yielded a clear split between the Ninth Circuit and Fifth Circuit on the issue of whether punitive damages are available in an unseaworthy action. Splits in circuit courts of appeals are typically addressed by the United States Supreme Court. As such, it will ultimately fall to the highest court in the land to resolve this compelling issue.

By Tod J. Everage

Recently, the US Fifth Circuit addressed three maritime tenets in the same case: McCorpen defense, unseaworthiness, and regulatory governance. While these issues can be rather straightforward in the typical case, the facts in Thomas v. Hercules Offshore Services, LLC (5th Cir. March 2, 2018) provided an interesting review of each. The specific issues addressed in this case were: (1) whether OSHA regulations are preempted by Coast Guard regulations on an “uninspected” MODU; (2) whether a raised doorsill constituted a negligent or unseaworthy condition by creating a tripping hazard; and (3) whether a McCorpen defense can be made when the employee passed a pre-employment physical.

Plaintiff was a galley hand employed by Hercules on the HERCULES 264, a mobile offshore drilling unit (MODU). She tripped on the raised doorsill leading out of the bathroom, measuring two inches high and approximately three inches wide. Plaintiff sued in the Middle District of Louisiana alleging negligence under the Jones Act, unseaworthiness under general maritime law, and a claim for maintenance and cure benefits. Hercules began paying M&C from the date Plaintiff’s injury was reported. Hercules eventually filed two dispositive motions addressing its liability and asserting a McCorpen defense; the district court granted both motions.

The first issue on appeal was whether the MDLA erred in holding that the HERCULES 264 was an inspected vessel, such that OSHA regs were preempted by the Coast Guard CFR’s. Plaintiff insisted that the MODU was an uninspected vessel. In Chao v. Mallard Bay Drilling, 534 US 235 (2002), the US Supreme Court held that inspected vessels were governed by Coast Guard regulations, which preempt OSHA regulations; on uninspected vessels though, OSHA is not preempted. In 46 USC § 3301(1)-(15), Congress clearly set forth a list of 15 types of vessels that are deemed inspected vessels – MODUs are not on that list. Hercules argued that though the HERCULES 264 was not an inspected vessel under the statute, the Coast Guard had issued a Certificate of Compliance and a Report of Inspection for the HERCULES 264, making it an “inspected” vessel.

Hercules also argued that the Coast Guard regs preempt OSHA regs on the Outer Continental Shelf (OCS), where the HERCULES 264 was drilling. Specifically, the Coast Guard had promulgated regulations respecting the design and equipment standards for MODUs, including the construction of accommodation spaces on those units. See 46 CFR § 108.197. The regs also address design requirements of wash spaces, toilet spaces, and shower spaces. See 46 CFR § 108.205. Citing back to Mallard Bay Drilling, the 5th Circuit was persuaded by the Coast Guard’s promulgation of these regulations as an exercise of the Coast Guard’s authority sufficient to preempt OSHA regulations. Thus, the HERCULES 246 would be treated as an inspected vessel and the Coast Guard regulations would apply.

The second issue was whether the HERCULES 264 was unseaworthy for having raised doorsills, creating tripping hazards. After affirming the district court’s ruling that Plaintiff had failed to present any evidence that the raised doorsill created an unsafe condition, the Court concluded that it also did not make the HERCULES 264 unseaworthy. Notably, the design of the doorsill did not violate any applicable Coast Guard regulation. In fact, certain regulations actually called for higher doorsills than the two-inch one Plaintiff had tripped over. This fact alone was sufficient to dismiss Plaintiff’s negligence and unseaworthy claims.

The last issue addressed Hercules’s successful McCorpen defense. McCorpen is the US 5th Circuit’s longstanding shield against fraudulent claims for Maintenance and Cure. It allows a Jones Act employer to terminate its M&C obligation when the employee has willfully concealed a preexisting medical condition. The three prongs of defense are: (1) the seaman intentionally misrepresented or concealed medical facts; (2) the nondisclosed facts were material to the employer’s decision to hire the seaman; and (3) there is a link between the withheld information and the injury that is the subject of the complaint.

In her hiring process, Plaintiff filled out a medical questionnaire and underwent a pre-employment physical – which she passed with no restrictions. On her forms, she signed that she had never sustained any injury or sought medical attention for a physical problem. She also checked the boxes indicating she had never received treatment for any neck, back, or leg pain, among others. In her deposition though, she admitted to two prior car accidents which required medical treatment for neck, back, and leg pain. This satisfied the first prong of McCorpen.

Next, the 5th Circuit rejected Plaintiff’s argument that passing the pre-employment FCE negated the materiality of her concealment. The 5th Circuit has consistently held that the materiality factor is satisfied if the employer asked specific questions about the relevant pre-existing injury on its application forms. Plaintiff’s ability to perform physical tasks at the time of hiring was irrelevant. As to the third factor, the 5th Circuit found a direct link between the concealed pre-existing injuries and the injuries complained about in this case. A Jones Act employer need not prove that that the prior injuries are the sole causes of the current injuries; nor do the present injuries have to be identical. Here, Hercules showed that Plaintiff had received months of medical treatment for neck, back and leg pain after each of her previous car accidents, and reported pain in those same areas after her fall on the HERCULES 264. Therefore, the 5th Circuit affirmed the district court’s ruling on this issue as well.

Despite this finding, Plaintiff was entitled to keep the more than $44,000 she received in Maintenance benefits prior to the district court’s ruling. Though it may be difficult pre-suit, Jones Act employers should immediate begin investigating their employee’s injury claims with an eye towards supporting a McCorpen defense, if available; especially, if the potential cure exposure is significant.

By Blake Crohan

In Griffin v. Hess Corporation, 2017 WL 5125657 (5th Cir. Nov. 3, 2017) (unpublished) the U.S. 5th Circuit reaffirmed the difficult burden of proving that prescription should be excused under the Louisiana jurisprudential exception of contra non valentem non currit preaescriptio. Contra non valentem “means that prescription does not run against a person who could not bring his suit.”

The Plaintiffs in Griffin filed suit seeking unpaid royalties allegedly owed to their father pursuant to an oil, gas, and mineral lease that their great-grandfather and several other members of the Griffin family granted in 1935. The Plaintiffs alleged that production occurred on the property between 1940 and 1969, during which time several members of the Griffin family received royalty payments, except their father. Between 1983 and 1984 the Plaintiffs began researching the history of the oil wells located on the property. Their research discovered documents identifying the Defendants’ corporate predecessors, an abstract of title that was commissioned in connection with potential oil company operations, and documents and pay stubs from previous royalty payments related to the Plaintiffs’ property. Around that same time, the Plaintiffs hired an attorney to represent them with respect to these claims. The Plaintiffs continued their investigation of the allegedly unpaid royalties over the next two decades, and in 2008 reached out to ExxonMobil directly regarding their unpaid royalty claims. Ultimately, ExxonMobil informed the Plaintiffs that it had no sales under the referenced lease after July 1954, found no outstanding royalty payments held in suspense, and that the property listed was not under lease to ExxonMobil. The Plaintiffs disagreed and filed suit on October 14, 2014 in federal court in the Western District of Louisiana against Hess Corporation and ExxonMobil (“Defendants”).

In the district court, the Defendants filed a motion for summary judgment arguing that the Plaintiffs’ claims for unpaid royalties were prescribed and barred under Louisiana Civil Code article 3494(5), which provides that the prescriptive period for unpaid royalties is three years. The Defendants asserted that the Plaintiffs acknowledged that they first became aware of their claims for the unpaid royalties between 1983 and 1984—more than thirty years prior to filing suit.

In order to survive Defendant’s motion, the Plaintiffs had to prove that contra non valentem applied to excuse them for not filing suit earlier. The district court explained that “[s]uit need not be filed when there is a mere apprehension that something might be wrong,” but that prescription commences when “the plaintiff has actual or constructive knowledge of the” wrongful act. The Plaintiffs argued that “many circumstances [justified Plaintiffs’] delay in filing this lawsuit.” Specifically, they argued that between 1983 and 1984 they were merely seeking out who was responsible for the payment of royalties and that many members of their family were uneducated.  The district court was not persuaded. The district court held that “[b]y at least 2008, Plaintiffs had received the assistance of an attorney and had collected information, both documentary and oral, sufficient to excite attention and prompt further inquiry as to the unpaid royalties alleged owed to their father.” Thus, the Plaintiffs claims were dismissed as prescribed.

On appeal to the U.S. 5th Circuit, the Plaintiff-Appellants argued that “it was impossible to bring this lawsuit prior to . . . filing the [2014] complaint in federal court, because in light of the uncertainty of circumstances surrounding their father’s claim, they had no basis to file any claim on behalf of their father.” While the 5th Circuit noted that “their level of education may, by itself, support application of [contra non valentem], the court cannot disregard the substance of their actions which do not indicate any inability to bring this claim.” The Court explained that Appellants were adults when they were informed that they may be entitled to unpaid royalties, they investigated their ownership rights extensively, and knew that Hess Corporation had a past ownership interest in the property. Further, the Court found it compelling that Appellants received advice and meaningful information from three different lawyers on various occasions through their investigation. Nevertheless, Appellants waited until 2008 to contact ExxonMobil and then waited until 2014 to file suit. Finally, the Court noted that the appropriate focus on the commencement of prescription “is not when a plaintiff develops a strong legal case but when he has sufficiently reasonable knowledge of his legal options.” The Court affirmed the district court’s granting of summary judgment in favor of the Defendant-Appellees.

The 5th Circuit’s opinion in Griffin highlights two important aspects of Louisiana law. First, plaintiffs must be diligent in their efforts to initiate a lawsuit in order to preserve their claims. While courts are cognizant of the lay persons’ knowledge of legal claims, plaintiffs cannot wait until they have a “strong legal case” or know all of the facts necessary to prove their claim. Second, prescription is a strong defense mechanism for defendants. While the exception of contra non valentem remains a viable option to defeat prescription, courts applying Louisiana law will strictly construe the doctrine to ensure that its use is not abused.

By Troy Charpentier and Matthew Smith

After contesting the construction of the Dakota Access pipeline, environmental advocacy groups have turned their attention to the proposed Bayou Bridge pipeline in South Louisiana. The Bayou Bridge pipeline is a 162-mile-long, 24-inch-wide proposed pipeline which will cross the Atchafalaya Basin to connect facilities in Lake Charles, Louisiana to crude oil refineries in St. James Parish, Louisiana.

Earthjustice attorneys filed suit on January 11, 2018 on behalf of Atchafalaya Basinkeeper, Louisiana Crawfish Producers Association-West, Gulf Restoration Network, Waterkeeper Alliance, the Sierra Club, and the Delta Chapter of the Sierra Club against the U.S. Army Corps of Engineers challenging permits and authorizations issued by the Corps under § 404 of the Clean Water Act (“CWA”) and under the Rivers and Harbors Act (“RHA”) for construction and operation of the pipeline. The environmental groups contend that the Corps did not conduct a sufficient environmental assessment under the National Environmental Policy Act (“NEPA”) or consider various factors required by the CWA, RHA, and NEPA, including reasonable alternatives to the project, public interest, environmental impact, cumulative effects, and adequacy of mitigation.

Shortly after filing suit, the environmental groups filed Motions seeking a Temporary Restraining Order and Preliminary Injunction to halt construction of the Bayou Bridge pipeline. On January 30, 2018, Judge Shelly Dick of the Middle District of Louisiana denied the environmental groups’ Motion for Temporary Restraining Order, finding that, based on the current record, the groups could not demonstrate a substantial likelihood of success on the merits of their challenge to the issuance of the permits.

In doing so, the court noted the “significant deference” afforded to the Corps’ decision to issue the permits, and that “the existence of opposing views does not render the Corps’ decision arbitrary and capricious.” Despite the contentions of the environmental groups, the court found that it is “undisputed that the Corps held a public hearing and allowed for public comments in accordance with the law.” The court further reviewed a 92 page Environmental Assessment (“EA”) performed by the Corps prior to issuing the relevant permits and found that it “clearly addresses the specific complaints of several Plaintiffs, albeit obviously not to Plaintiffs’ satisfaction.” Specifically, the court found that (i) the EA “reflects that several alternatives were addressed and considered,” (ii) a significant portion of the EA is devoted to consideration of the CWA permit guidelines which the groups contend were not adequately considered, and (iii) the EA included consideration of public interest factors. Accordingly, the court found that “Simply having an opposing opinion, or disagreeing with the mitigation plans imposed, is insufficient to establish a substantial likelihood of success on the merits, especially in light of the high deference that the law requires the Court to afford the Corps.”

The next step in the environmental groups’ attempt to halt construction of the Bayou Bridge pipeline will be the hearing on their Motion for Preliminary Injunction, which is currently set for February 8, 2018.

By Michael O’Brien

In Voces v. Energy Resource Technology, GOM, LLC, et al. the United States Court of Appeals for the Fifth Circuit reviewed the longstanding general rule in Louisiana known as the independent contractor defense, which provides that a principal is not liable for the negligent acts of an independent contractor acting pursuant to the contract.

The facts in Voces are similar to what occur in the oil field on a daily basis. Defendant Energy Resource Technology GOM, LLC, (“ERT”) hired independent contractor Offshore Specialty Fabricators, LLC (“OSF”) to remove an oil and gas platform. The contract between ERT and OSF provided that OSF would perform all work as an independent contractor and that OSF was responsible for providing all necessary services, equipment, materials, personnel, and engineering to safely remove the platform. The contract also spelled out OSF’s duties and responsibilities, which included written operating procedures, the performance of all work in accordance with the written operating procedures, the review of operating procedures, and the performance of work with personnel trained to do so in a safe manner. During the removal process, ERT maintained a Company Man aboard the platform to monitor OSF’s work for compliance with the contract.

The decommissioning of the platform proceeded without incident until a tragic accident claimed the life of Peter Voces, a welder employed by OSF. Following Mr. Voces’ death and a Bureau of Safety and Environmental Enforcement (BSEE) panel investigation, the decedent’s wife filed suit.  Mrs. Voces claimed that ERT was vicariously liable for the negligence of its contractor OSF and independently liable for its own negligence.  Her claims against ERT were based on the presence of the ERT Company Man aboard the platform.

As stated above, the independent contractor defense is a general Louisiana rule that a principal is not liable for the negligent acts of an independent contractor; there are exceptions to this rule. Specifically, the “operational control” exception applies when the principal retains or exercises operational control over the independent contractor’s acts or expressly or impliedly authorizes an unsafe practice. This exception is routinely satisfied in situations where a Company Man is present.

ERT moved to dismiss Ms. Voces’s claims based on the independent contractor defense. The District Court agreed and determined that Mrs. Voces could not prevail on her vicarious liability claim because she could not prove that ERT maintained the requisite operational control over OSF’s acts or that ERT expressly or impliedly authorized OSF’s unsafe practices. On review, the U.S. Fifth Circuit reiterated that determining operational control depends in great measure upon whether and to what degree the right to control the work has been contractually reserved by the principal.  Operational control exists only if the principal has direct supervision of the step-by-step process of accomplishing the work such that the contractor is not entirely free to do the work in his own way.  The Fifth Circuit also held that a principal may demand in its contract that an independent contractor develop safe work practices without triggering the operational control exception.

Further, it is critical to note that a principal may monitor (via a Company Man) its independent contractor’s work for compliance with contractual demands without triggering the operational control exception. As such, the mere fact that a principal takes an interest in the safety of the employees of its independent contractors and stations a Company Man on the platform does not, in and of itself, constitute operational control. Here, the Fifth Circuit found that ERT’s Company Man never dictated the work methods or operative details of the platform removal procedure. Instead, the ERT Company Man merely inspected OSF’s procedures and work to ensure OSF’s contractual compliance. Accordingly, the 5th Circuit included that ERT did not exercise operational control.

Last, the Court considered whether ERT could be held liability for its own negligent acts. Again, Mrs. Voces placed great emphasis on the presence of ERT’s Company Man aboard the platform.  However, the Court was not persuaded. Indeed, the Court advised that it has not located any Louisiana authority holding that a principal assumes a duty to ensure the safety of an independent contractor’s employees by merely stationing a Company Man on an oil platform for the purpose of overseeing a contractor’s compliance with his contractual obligations. A Company Man does not affirmatively assume any duty to provide an independent contractor’s employees with a safe workplace simply by observing their unsafe work habits. Accordingly, the Judgment of the District Court dismissing the claims of the Voces Plaintiffs against ERT was affirmed.

By Alex Rossi

The 5th U.S. Circuit Court of Appeals “adopt[ed] a bright-line rule [on January 11, 2018]: Section 1446(b)(3)’s removal clock begins ticking upon receipt of the deposition transcript” as opposed to running from the date of the deposition testimony. The decision in Morgan v. Huntington Ingalls, Inc., et al, No. 17-30523, __ F.3d __ (5th Cir. 1/11/18) was one of first impression for the court.

Plaintiff, Curtis Morgan filed the original lawsuit alleging he contracted mesothelioma as a result of asbestos exposure at various industrial facilities in Louisiana. Morgan specifically alleged that he was exposed to asbestos through his employment at Avondale Shipyard in New Orleans as a sheet metal tacker in the 1960s. Seventy-eight (78) defendants were originally named in the lawsuit.

Morgan was deposed over eight days from March 9 to April 13, 2017. On the second day of testimony, Morgan testified that he worked on unspecified vessels at Avondale Shipyard. On March 20, Morgan agreed with medical records presented by counsel for Avondale Shipyard that one of the vessels on which he worked was the USS Huntsville, a vessel Avondale refurbished on behalf of officers of the U.S. government.

Based on the testimony regarding Morgan’s work on the USS Huntsville for the U.S. Government, Avondale removed the case to the U.S. District Court for the Eastern District of Louisiana on April 28, 2017 under the federal officer removal statute and claimed that removal was timely filed 30 days after receipt of Morgan’s deposition transcript. Morgan opposed the removal as untimely, claiming that the removal clock began from Morgan’s testimony regarding the USS Huntsville, which took place 38 days prior to removal. Morgan further argued that the district court lacked subject matter jurisdiction under 28 U.S.C. § 1442.

In finding the removal untimely, the district court determined that the removal clock for “other paper” under § 1446 began running on the date of the oral deposition testimony, and not the later date of receipt of the deposition transcript. The district court did not address whether the substantive requirements of § 1442 had been met for federal officer jurisdiction.

Citing the plain meaning and purpose of § 1446(b), as well as policy considerations, the 5th Circuit found that oral testimony at a deposition does not constitute an “other paper.” Instead, the court found the removal clock begins upon receipt of the deposition transcript as the “other paper” providing the basis for the removal. In adopting this bright light rule, the 5th Circuit balanced the competing goals of removal: encouraging prompt and proper removal and preventing, hasty, improper removals. The court declined to follow the “notice” standard adopted by the 10th Circuit, finding it counterintuitive to start the clock for removal before the objective evidence is received by the defendant.

The 5th Circuit remanded the case to the district court to address whether the substantive requirements of federal officer removal have been met.

 

 

By Lou Grossman

On January 9, 2018, a split panel of the United States Fifth Circuit Court of Appeals affirmed an order from the district court, denying a motion to remand a matter removed under the Class Action Fairness Act (“CAFA”). The 2-1 decision In Warren Lester, et. al. v. Exxon Mobil Corp., et. al., No. 14-31383, __F3d___ (5th Cir. 1/9/2018) addressed two issues of first impression for the Fifth Circuit: (1) whether a motion to transfer and consolidate can effectively create a “mass action” removable under CAFA; and (2) if so, whether CAFA may be invoked as a basis for removal when one of the underlying suits comprising the new “mass action” commenced well before the 2005 effective date of CAFA. In affirming the action of the district court below, the Fifth Circuit answered both questions in the affirmative. A full copy of the opinion can be found here.  

The removed actions included two separate matters filed in the Civil District Court for the Parish of Orleans, State of Louisiana – Warren Lester, et. al. v. Exxon Mobil Corporation, et. al. and Shirely Bottley, et. al. v. Exxon Mobil Corporation, et. al. The Lester matter was filed by over 600 plaintiffs for personal injuries and property damages allegedly resulting from Naturally Occurring Radioactive Materials (“NORM”) in 2002. The Bottley matter, on the other hand, was filed in 2013 as a wrongful death and survival suit filed on behalf of Cornelius Bottley, a decedent-plaintiff in Lester, by his three remaining heirs. Following the selection of a trial flight in the Lester matter, which was to include the claims of Mr. Cornelius Bottley, the Bottley Plaintiffs moved to transfer and consolidate their suit with Lester. The matter was promptly removed by a defendant named only in the Bottley matter.

The Fifth Circuit rejected Plaintiffs’ argument that the consolidation was meant to attach the Bottley matter only to the pending trial flight such that it did not, as CAFA requires, propose a single trial with more than 100 individual plaintiffs. Rather, the Fifth Circuit held that the focus under CAFA is on the consolidation proposed, which in the case of the Bottley plaintiffs, was a consolidation of cases involving “overlapping liabilities, damages and questions of law and fact…the determination [of which] in either case will have great bearing on the other….” Plaintiffs’ Motion did not and, as a matter of law could not, limit consolidation to only the claims set for trial. As such, the Fifth Circuit found that it proposed a “mass action,” i.e. a joint trial of 100 or more plaintiffs’ claims, under CAFA.

More importantly, the Fifth Circuit examined the date of the proposed consolidation as determining the applicability of CAFA. Though Lester had been filed before CAFA’s enactment, the proposed consolidation was proposed years later. The Fifth Circuit found that the proposed consolidation created a new “mass action.” The Fifth Circuit reasoned that a civil action may commence before it becomes a “mass action,” and that the Bottley suit became a “mass action” when Plaintiffs proposed that the claims be tried jointly with those in the Lester matter. Bottley was a “civil action” commenced after CAFA’s effective date that subsequently became a mass action subject to CAFA’s removal provisions.

In affirming the denial of Plaintiffs’ Motion to Remand below, the Fifth Circuit established two compelling rules: (1) that a consolidation is effective to create a “mass action” under CAFA; and (2) that CAFA’s Section 9 requirements are met if one of the two consolidated actions was commenced after CAFA’s effective date.  In addition to providing guidance and interpretation regarding the commencement of a mass action, this opinion demonstrates a broad approach to CAFA.