Dispersants are one of the tools available to mitigate detrimental impacts to shorelines and wildlife exposed to oil spills. In response to the Deepwater Horizon incident, the EPA authorized use of surface and subsurface dispersants. In mid-January 2015, the EPA announced that it would soon publish proposed rules in the Federal Register to address future use of dispersants.

Responses to oil spills are subject to the National Oil and Hazardous Substances Pollution Contingency Plan (NEP). The NEP was promulgated in the early 1990’s and is codified at 40 C.F.R. Part 300. Subpart J establishes the procedure and criteria for listing dispersants authorized for use in a spill. These chemicals are listed in the NCP Product Schedule.

The proposed changes affect various parts of the NCP with the majority of the changes affecting dispersant use. These requirements are generally located in 40 C.F.R. §300.900 – 920. As a general matter, the EPA proposal requires a greater availability of data concerning a dispersant, such as its efficacy and toxicity, coupled with instructions for its application in the field. The focus of the proposal is to assure that decision makers, such as the On-Scene Coordinator, Regional Response Team, and Area Committees have sufficient information to develop “preauthorization” plans, make informed decisions, and when needed, monitor the dispersant’s performance where application occurs over a period of time.

In addition, the EPA is proposing to minimize the ability to claim Confidential Business Information (CBI). Under the proposal, the only information that qualifies as CBI is “the concentration and the maximum, minimum, and average weight percent of each chemical compound or microorganism in your product.” (Proposed revision to §300.950(b)). The CBI claim, along with the confidential information, must be submitted at the same time as the information that supports the request to list a chemical in the NCP Product Schedule.

Comments will be accepted on the proposal during a 90-day period following publication in the Federal Register. Publication is anticipated before the end of January 2015. Comments will only be accepted through the official docket: EPA-HA-OPA-2006-0090.

In public bid projects, it is not uncommon to see project specifications that specify particular brands “or their equivalent.” Louisiana law prohibits the use of name-brand specifications, known as “closed specifications,” so the propriety of these specifications is debatable. La. R.S. 38:2212(T). To comply with the statute, these brand particulars are generally interpreted to be illustrative rather than mandatory. Despite this prohibition, some owners have tried to restrict the product brands used in their projects through indirect means.

The Louisiana Second Circuit Court of Appeals addressed an attempt to limit product brands in Akers v. Bernhard Mechanical Contractors, 48,871 (La. App. 2 Cir. 4/16/14), 137 So. 3d 818. In Akers, the City of Shreveport advertised and received public bids for the renovation and remodeling of a fire maintenance facility. The City awarded the general contract to A&R General Contractors (“A&R”), and Bernhard Mechanical Contractors (“Bernhard”) won the mechanical subcontractor for the project. Bernhard then solicited a proposal for a ventilation system, including the vehicle exhaust system, from David Akers.

The City’s project specifications for the vehicle exhaust system stated that all products must be “equal to” those made by Nederman. Akers submitted and Bernhard accepted a bid for a system made by Ventaire. In Akers’ submittal to the City, Akers identified his intent to use Ventaire and his belief that Ventaire was equal to Nederman. Bernhard’s agreed and forwarded the submittal to A&R, who forwarded it without comment to the City’s Architect and Engineer for approval.

Initially, the City’s Architect approved the submittal with only two non-related corrections. Deeming this an approval of the Ventaire system, Bernhard told Akers to order the system. One month later, the City’s Chief of Fire Maintenance noticed that the Ventaire system was being used and told the City Engineer. The City Engineer then told Akers that he had not yet received the submittal, so the submittal was not approved.

The City’s Chief of Fire Maintenance considered the Nederman system to be superior to the Ventaire system. Akers and Bernhard’s manager maintained that the two systems were functionally equivalent and that documents showed that the City Architect had originally approved the Ventaire system. The City Engineer then determined that Ventaire lacked “prior approval,” and this was why he did not approve the submittal. The City Architect then officially rejected Akers submittal for “no prior approval.” Despite Akers having already ordered the Ventaire system, the City chose to install a Nederman system, some of Akers’ equipment, and paid Akers a fraction of his bid.

The Trial Court found that Akers’ proposal was accepted by the City and that the Ventaire system was “substantially the same” as the Nederman system. On appeal, the City argued that “Addendum Number (2)” of the contract required prior approval for Akers’ bid and reads, in pertinent part:

Any changes, which may affect construction or proper installation of materials, equipment or fixtures, not specifically mentioned in this addendum, shall be brought to the attention of the Architect in writing before submission of the bid.

The City argued that this clause required Akers to seek prior approval for his bid, which listed a Ventaire system instead of the Nederman, and since Akers did not request prior approval, the City had the right to reject the equipment even if it was equal to Nederman.

The Second Circuit rejected this argument. The fire maintenance facility is a public work subject to the restrictions of public bid law, including the prohibitions on closed specifications. La. R.S. 38:2211 et seq. The purpose of this law is to secure free and unrestricted competition among bidders, to eliminate fraud and favoritism, and to avoid undue or excessive costs. Louisiana Assoc. Gen’l Contractors, Inc. v. Calcasieu Parish School Bd., 586 So. 2d 1354 (La. 1991). The Court stated that the owner cannot reject a bid from a different supplier if the equipment was functionally equivalent to the name-brand product. In reviewing the two products, the Second Circuit agreed with the District Court’s finding that the differences between the Nederman and Ventaire systems were merely superficial. The Court also found it telling that the City’s Architect and Engineer were ready to proceed with the Ventaire system had the Fire Chief not raised the objection. Accordingly, the Second Circuit affirmed the District Court’s finding that the two systems were functionally equivalent, and thus the City had no basis to request prior approval. With the Akers decision, the Louisiana Second Circuit has removed another avenue that a project owner may attempt to improperly limit the products used for publicly funded projects.

Naquin v. Elevating Boats, L.L.C., — F.3d —, 2014 WL 917053, No. 12-31258 (5th Cir. Mar. 10, 2014)

(Davis and Milazzo, J.; Jones, J. dissenting)

In a decision that will undoubtedly have a lasting impact on marine insurers and their shipyard insureds, a divided panel of the U.S. Fifth Circuit held that a vessel repair supervisor at a Houma shipyard qualifies as a Jones Act seaman.

Plaintiff, Larry Naquin, Sr., was employed as a vessel repair supervisor at his employer’s shipyard facility in Houma, Louisiana. Naquin was not assigned to a particular vessel but instead spent seventy percent of his time repairing, cleaning, painting and maintaining lift-boat vessels at the shipyard. Ordinarily, he worked aboard the lift-boats while they were moored, jacked up or docked in the shipyard canal. The remaining thirty percent of his time was spent working in the shipyard’s fabrication shop or operating the shipyard’s land-based crane.

On November 17, 2009, Naquin was operating the shipyard’s land-based crane, when the crane suddenly failed and toppled over onto a nearby building. Naquin himself was able to escape the crane house but not without sustaining a broken left foot, a severely broken right foot, and a lower abdominal hernia.

A jury held that Naquin was a Jones Act seaman and that EBI’s negligence caused his injury, awarding him $1,000,000 for past and future physical pain and suffering, $1,000,000 for past and future mental pain and suffering, and $400,000 for future lost wages. Elevating Boats (“EBI”) appealed, contending that Naquin was not a Jones Act seaman, that the district court provided erroneous seaman status jury instructions, that the evidence was insufficient to establish EBI’s negligence, and that the district court erred in admitting evidence of Naquin’s cousin’s husband’s death.

In a split decision, authored by Judge Eugene Davis and joined by Judge Milazzo, District Judge for the Eastern District of Louisiana (sitting by designation), the U.S. Fifth Circuit affirmed the district court’s judgment on seaman status and liability. It then vacated the damages award, due to the jury’s reliance on emotional anguish resulting from the death of a third party.

Despite EBI’s argument that ship repairmen are expressly included in the jobs listed in the Longshore and Harbor Workers’ Compensation Act, the Fifth Circuit rejected this argument, noting that while the court had previously agreed with EBI’s position in Pizzitolo v. Electro-Coal Transfer Corp., 812 F.2d 977 (5th Cir. 1986), that decision was specifically overruled in this regard by the Supreme Court in Southwest Marine, Inc. v. Gizoni, 502 U.S. 81 (1991). Because Naquin’s work contributed to the function of EBI’s fleet of vessels, and because his connection to that fleet was substantial, the Fifth Circuit upheld the jury’s finding that Naquin was a Jones Act seaman, despite the fact that the vessels were usually docked, Naquin was not often exposed to the dangers of the sea, and he spent nearly every night in his own land-based home.

Judge Jones issued a strong dissent, opining that while Naquin’s work contributed to the function of a vessel, that his connection to the vessel(s) was not substantial. As noted by Judge Jones “if a jury could hold Naquin is a seaman, then it could so conclude as to any shore-based worker who maintained EBI’s on-board computers or went aboard the lift-boats to gas them up before they left the repair yard.” Judge Jones argued that the majority opinion did not properly interpret the concept of a “vessel in navigation” where Naquin was a dock worker who performed repairs to vessels at the dock. She points out that the majority’s conclusion is irreconcilable with the “basic point” in Chandris v. Latsis, 515 U.S. 347, 368 (1997), that land-based employees are not seamen.

This opinion has significant implications for shipyard operators and the vessels they service, as the circuit courts continue to expand the definition of Jones Act seaman status.

In its most recent decision regarding Longshore and Harbor Workers’ Compensation Act (LHWCA) coverage, namely New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs, 718 F.3d 384 (5th Cir. 2013) (en banc), the United States Fifth Circuit Court of Appeals defined “adjoining” as used in the LHWCA to mean “bordering on or contiguous with navigable waters.” In doing so, the Court expressly overruled its own precedent found in Texports Stevedore Co. v. Winchester, 632 F.2d 504 (5th Cir. 1980) (en banc), and the Court adopted the interpretation of the statutory language proffered by the Fourth Circuit Court of Appeals in Sidwell v. Express Container Services, Inc., 71 F.3d 1134 (4th Cir. 1995).

In New Orleans Depot Services, the claimant sought benefits for hearing loss resulting from continuous exposure to loud noises. His injuries were suffered while employed to repair, maintain, and store shipping containers at his employer’s facility on Chef Menteur Highway in New Orleans. The employer’s facility was located 300 yards from the Intracoastal Canal in a small industrial park with access to Chef Menteur Highway surrounded by a carwash, a radiator shop, an automobile repair shop, a bottling company, and a box manufacturer. The employer’s facility had no access to the Intracoastal Canal. All of the containers repaired at the facility were delivered to the facility by truck and departed by either truck or rail. No containers were loaded with cargo while in the custody of the claimant’s employer.

The Fifth Circuit began its analysis noting the concerns of Congress in amending the LHWCA in 1972 to prevent longshoremen from walking in and out of coverage as they moved from ship to shore and back again by extending coverage to injuries occurring on “other adjoining areas.” However, the Court also noted that there must be boundaries to coverage under the LHWCA, and thus, “other adjoining areas” must satisfy a geographic component and a functional component for coverage to be afforded. In evaluating its own jurisprudence, and that of other circuits, the Fifth Circuit quoted and cited with approval Fourth Circuit’s opinion in Sidwell.

In contravention to the decisions of other circuits, including the Fifth, the Fourth Circuit, in Sidwell, construed the “other adjoining areas” language strictly. The Sidwell court held that the plain language meaning of “adjoining” required that the situs of the injury actually lie next to, be in contact with, or abut navigable waters. The Sidwell court further concluded that, as a separate inquiry, the situs of the injury must be an area “customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.” In support of these propositions, the Fourth Circuit cited legislative history associated with the LHWCA amendments of 1972 and U.S. Supreme Court precedent interpreting Congress’s intent.

Approving of the interpretation espoused by the Fourth Circuit, the Firth Circuit concluded by adopting the opinion of the Fourth Circuit and overruling Winchester and its progeny. Applying this new standard, the Court denied coverage under the act because the employer’s facility did not border upon and was not contiguous with navigable waters. Therefore, the situs requirement of the LHWCA could not be met.

This latest interpretation of the geographic component of the situs requirement for coverage under the LHWCA marks a departure from prior interpretations of the statute. Prior jurisprudence expanded the geographic scope of the LHWCA to include coverage for injuries far removed from navigable waters. Thus in New Orleans Depot Services, Inc., the Fifth Circuit has made clear departure from the past and created a bright-line test for the geographic component of the LHWCA’s situs requirement.

In Chenevert v. Travelers Indemnity Co., No. 13-60119 (5th Cir. March 7, 2014), the Fifth Circuit formally recognized that an insurer providing and making voluntary payments to an injured employee under the Longshore and Harbor Workers’ Compensation Act 33 U.S.C.A. § 901 et seq (“LHWCA”), specifically 905(b), is entitled to a subrogation lien against the settlement recovery by the employee of Jones Act damages obtained for the same injuries for which the insurer has already compensated the employee.

Mr. Chenevert filed a personal injury lawsuit against his former employer, GC Constructors (“GC”), after he allegedly sustained injuries while working as a crane operator on the deck of a barge owned by GC in May of 2007. At the time of his injury, Travelers Indemnity Co. (“Travelers”) provided coverage to GC for Mr. Chenevert’s injuries under the LHWCA. The Travelers policy specifically excluded coverage for bodily injuries to a master or a member of the crew of any vessel. Between May 2007 and May 2010, Travelers paid benefits under the LHWCA in excess of $275,000, but discontinued those benefits in May of 2010, when Mr. Chenevert sued GC in federal court alleging negligence under the Jones Act and “seaman” status. Travelers then put Mr. Chenevert and GC on notice that it would seek reimbursement of the amounts paid under the LHWCA from any recovery Chenevert received in his Jones Act lawsuit.

After Chenevert and GC reached a settlement in the Jones Act case, Travelers sought and was granted leave to file a motion to intervene for the first time. Travelers filed its motion to intervene wherein it asserted its right to subrogation as a result of its payments of LHWCA indemnity and medical benefits made to Chenevert prior to the filing of his Jones Act lawsuit. As part of their final resolution, the parties agreed to interplead $277,728.72 into the court’s registry pending resolution of the dispute between Chenevert and Travelers. The Magistrate to whom this issue was assigned ultimately denied Travelers right to recoup its payments basing his decision on the legal tenant that no right of subrogation can arise in favor of an insurer against its own insured. The Magistrate also found that Travelers had not demonstrated an interest relating to the subject property or transaction and that Travelers had untimely moved to intervene in the case. Travelers appealed the decision to the United States Fifth Circuit.

On appeal to the U.S. Fifth Circuit, the court felt that the rule of law relied upon by the Magistrate would not apply in this factual setting as Travelers did not insure GC against Jones Act liability. Moreover, the court noted that the LHWCA itself grants subrogation liens to the employer’s insurers when compensation benefits are paid. The panel cited its previous holdings in Peters v. North River Ins. Co., 764 F.2d 306 (5th Cir. 1985) (recognizing the employer/insurer’s compensation lien in a third party suit), Taylor v. Bunge Corp., 845 F.2d 1323 (5th Cir. 1988) (recognizing insurer’s right to recovery in 905(b) claim against the employer as a vessel owner) and Massey v. William-McWilliams, Inc.. 414 F.2d 675 (5th Cir. 1969), which recognized a ship owner-employer’s right to a credit for amounts paid under the LHWCA that bear reasonable relation to the items of loss compensated under a Jones Act claim. The court felt the right to assert a subrogation lien by Travelers as a logical extension of this line of cases and it saw no difference between the insurer in the Massey case and Travelers in the instant case asserting a lien against a 905(b) recovery as opposed to a lien against a Jones Act recovery.

In answering this question, the U.S. Fifth Circuit specifically stated, “we perceive no sound reason why an insurer’s right of reimbursement against a Jones Act recovery should be different from its right of reimbursement against a 905(b) recovery. Arguably, an insurer has an even stronger equitable claim to repayment from a Jones Act recovery.” The court further acknowledged that “a worker who succeeds in a Jones Act claim is necessarily a seaman, and therefore not entitled to LHWCA benefits. It would be particularly unfair to deny the insurer the right to recover the benefits it has paid in such a situation.” The court reasoned that “by paying LHWCA benefits on behalf of GC, Travelers acquired a repayment lien that is independent of, and cannot be nullified by, GC. If this were not so, an employer and employee could easily settle around the insurer’s lien and prevent any possibility of recovery by the insurer.” The U.S. Fifth Circuit thus reversed the district court and remanded.

In a recent decision, the Eleventh Circuit in Skye v. Maersk Line Limited, Corp., 751 F.3d 1262 (11th Cir. 2014), reversed a district court ruling awarding damages to a Jones Act seaman for injuries stemming from “excessive work hours and an erratic sleep schedule.” The Court’s decision in Skye reaffirms a now decades old prohibition on recovery under the Jones Act for injuries resulting from work-related stress.

From 2000-2008, the Plaintiff, William Skye, was employed as chief mate aboard a vessel operated by defendant, Maersk. During this time, Skye worked between 90 and 105 hours per week for periods of 70 to 84 days at a time. In 2003 Skye was diagnosed with a benign arrhythmia, and his cardiologist suggested that he get more rest. By 2008, Skye was experiencing headaches, back aches, and was diagnosed with a left ventricular hypertrophy, or thickening of the heart wall. In 2011, Skye brought a Jones Act negligence suit against his employer, Maersk, alleging that Maersk negligently failed to provide sufficient crew, reasonable working hours, and adequate rest hours. At trial, a jury awarded Skye $2,362,299.00, which the district court reduced to $590,574.75 as a result of Skye’s comparative fault. Maersk moved for a judgment as a matter of law, alleging that Skye’s injuries were not cognizable under the Jones Act based on Consolidated Rail Corp. v. Gottshall, 512 U.S. 532 (1994). The district court denied Maersk’s motion and rendered judgment in favor of Skye.

On appeal, the Eleventh Circuit noted that the Jones Act does not recognize all work-related injuries. The “central focus” of the Jones act is protection from “physical perils.” The Court found that Skye’s case failed for the same reasons as the case of the plaintiff in Gottshall. In Gottshall, the plaintiff’s complaint was similar to that of Skye’s. Both complained of injuries stemming from long hours and job-related stress. The Gottshall court, denied recovery to the plaintiff because work-related stress is “not caused by any physical impact.” Consistent with the precedent set by Gottshall, the Eleventh Circuit refused to expand the definition of “physical perils” to include an “arduous work schedule and an irregular sleep schedule.” The Court noted that it was not the development of a physical injury that brought a claim within the ambit of the Jones Act, but rather the cause of the injury. For an employer to become liable for an employee’s injury, it must be the result of a physical impact. Accordingly, the Court vacated the judgment of the district court and rendered judgment as a matter of law in favor of Maersk.

The Eleventh Circuit’s ruling in Skye reaffirms the common-sense understanding that work-related stress comes standard with all jobs. Similarly, individuals have varying levels of tolerance for stress. An employer should not become responsible for employee injuries resulting from an employee’s inability to manage work-related stress in an at-will employment relationship.

Going back to 1943, the Supreme Court in De Zon v. Am. President Lines, Ltd., 318 U.S. 660, 669 (1943), ruled that a shipowner could be liable to a Jones Act seaman for harm suffered as the result of any negligence on the part of the ship’s doctor while treating the seaman. The U.S. Supreme Court has never commented on whether De Zon extended those claims to a passenger. In 1988, the 5th Circuit did just that in Barbetta v. S/S Bermuda Star, 848 F.2d 1364 (5th Cir. 1988), limiting the liability of shipowners to only seaman and not passengers.

The “Barbetta Rule” immunizes a shipowner from respondeat superior liability whenever a ship’s employees render negligent medical care to its passengers. As applied, the rule confers this broad immunity no matter how clear the shipowner’s control over its medical staff or the level of claimed negligence by the medical staff. As is expected, the majority of the recent case law on this issue stems from cruise ship industry, as other types of medically-staffed passenger ships are increasingly rare. And, starting in the late 1980’s cruise ships began forcing passenger to sue in the Southern District of Florida, nearly eliminating passenger suits in the 5th Circuit. Thus, Barbetta has not been challenged in the Fifth Circuit, and for the first time recently became the subject of focus within the 11th Circuit.

On November 10, 2014, the 11th Circuit issued a lengthy, and well-reasoned opinion specifically rejecting the Barbetta Rule, and adopted a fact-based agency determination that would allow a shipowner to be held liable for its medical staff’s negligence in their care of a passenger.

In this case, Pasquale Vaglio fell and hit his head on the Royal Caribbean “Explorer of the Seas.” He went to the infirmary for medical treatment. Plaintiffs allege that the treatment from the on-board staff was so negligent that his life could not be saved. In particular, the ship’s nurse purportedly failed to assess his cranial trauma, neglected to conduct any diagnostic scans, and released him without any treatment. The on-board doctor failed to meet with Vaglio for over four hours. Vagio died from his injuries a week later. Vaglio’s heirs filed suit against Royal Caribbean under two theories: actual agency (respondeat superior) or apparent agency. The Southern District of Florida dismissed the complaint under the Barbetta Rule.

As stated, the 11th Circuit rejected Barbetta’s blanket immunity to shipowners. Recognizing its authority to affect general maritime law, the 11th Circuit sought out to establish new precedent on this issue. “We have repeatedly emphasized that vicarious liability raises fact-bound questions, and we can discern no sound reason in law to carve out a special exemption for all acts of on-board medical negligence. Much has changed in the quarter-century since Barbetta. As we see it, the evolution of legal norms, the rise of a complex cruise industry, and the progression of modern technology have erased whatever utility the rule once may have had.”

The 11th Circuit started with the century-old maritime principle of making principals answer for the negligence of their onboard agents. See, e.g. The Kensington, 183 U.S. 263 (1902); The J.P. Donaldson, 167 U.S. 599, 603 (1897). In other factual contexts, the Supreme Court and all federal circuits have generally applied agency rules “across a rich array of maritime cases.” See, e.g. Suzuki of Orange Park, Inc. v. Shubert, 86 F.3d 1060 (11th Cir. 1996); Gibboney v. Wright, 517 F.2d 1054 (5th Cir. 1975); Matheny v. Tenn. Valley Auth., 557 F.3d 311, 315 (6th Cir. 2009); CEH, Inc. v. F/V Seafarer, 70 F.3d 694 (1st Cir. 1995); McDonough v. Royal Caribbean Cruises, Ltd., 48 F.3d 256 (7th Cir. 1995); Jackson Marine Corp. v. Blue Fox, 845 F.2d 1307 (5th Cir. 1988); De Los Santos v. Scindia Steam Navigation Co. Ltd., 598 F.2d 480 (9th Cir. 1979); Pritchett v. Kimberling Cove, Inc., 568 F.2d 570 (8th Cir. 1977); Ira S. Bushey & Sons, Inc. v. U.S., 398 F.2d 167 (2d Cir. 1968). With this backdrop, the Court acknowledged that there are no bright line rules immunizing cruise ship medical employees for their negligent treatment of passengers. And, the Court saw “nothing inherent in onboard medical negligence, when committed by full-time employees acting within the course and scope of their employment, that justifies suspending the accepted principles of agency.”

Next, the Court acknowledged that several federal circuits have “long barred vicarious liability” in this exact context, starting with Barbetta. In Barbetta, a passenger on a cruise ship sued the ship because the ship’s doctor failed to discover that the passenger had diabetes during treatment. By 1988, neither the Supreme Court, the Fifth Circuit, or any district court under the Fifth Circuit had answered the question of whether De Zon extended to passengers. The Barbetta declined to do so, finding a lack of control by the shipowner over the relationship between the passenger and the ship’s doctor. Next, the Court commented that “ships are not floating hospitals,” that shipowners are not in the business of providing medical care to passengers, and shipowners specifically lack the expertise in properly supervising the medical staff. Bottom line, because the shipowner lacked control over the medical staff’s actions, general maritime law did not impose liability under the doctrine of respondeat superior upon a carrier or ship owner for the negligence of a ship’s doctor who treats the ship’s passengers. The Barbetta Rule has been adopted by some courts, see Cummiskey v. Chandris, S.A., 895 F.2d 107 (2d Cir. 1990); Mumford v. Carnival Corp., 7 F.Supp.3d 1243 (S.D. Fla. 2014); Hilliard v. Kloster Cruise, Ltd., 1990 WL 269897 (E.D. Va. 1990); and rejected by others. See Huntley v. Carnival Corp., 307 F.Supp.2d 1372 (S.D. Fla. 2004); Nietes v. Am. President. Lines, Ltd., 188 F. Supp. 219 (N.D. Cal. 1959); Mack v. Royal Caribbean Cruises, Ltd., 838 N.E. 2d 80 (Ill. App. Ct. 2005).

In analyzing Barbetta in the modern day, the 11th Circuit found it more accurate to say that, “absent any statutory mandate to the contrary, the existence of an agency relationship is a question of fact under the general maritime law.” The Court strongly announced its rejection of Barbetta, “because we can no longer discern a sound basis in law for ignoring the facts alleged in individual medical malpractice complaints and wholly discarding the same rules of agency that we have applied so often in other maritime tort cases.” It found that the Barbetta Rule “now seems to prevail more by the strength of inertia than by the strength of its reasoning.” In exercising its broad admiralty jurisdiction, the 11th Circuit was guided by its “experience and new conditions [to] give rise to new conceptions of maritime concerns.” Now, instead of 19th Century steam ships (focus of Barbetta), the courts (and passengers) are confronted with state-of-the-art cruise ships, complete with well-stocked modern infirmaries and urgent care centers. Today, cruise ships actually exert more control over their medical employees. Though it will be unpopular among passenger vessel owners, it is hard to disagree with the 11th Circuit’s reasoning.

The Court went further to find that the case law is overwhelming in its recognition that principles of vicarious liability in the medical industry. And, the court could find no principle from maritime tort law that justifies treating shipowners so differently from ordinary employers. Importantly, the 11th Circuit found control and an agency relationship between the on-board medical providers and Royal Caribbean, their employer. The Court simply refused to adopt a bright line immunity rule for shipowners, repeatedly asserting that the agency relationship is bogged in the specific facts of the case.

This case is presented here for its erosion of a long-standing Fifth Circuit rule. Beyond that, this particular issue seems germane mainly to cruise ships and thus, the 11th Circuit. And, while it may present well-reasoned ammunition to a plaintiff-passenger who might find a way to sue in the 5th Circuit to attack Barbetta, it has no controlling legal effect here yet. Given the significant liability implications to the cruise ship industry in the 11th Circuit, and the now-existing circuit split on the issue, it would seem likely that Royal Caribbean would want to take writs to the Supreme Court. They would likely argue, as they unsuccessfully did to the 11th Circuit that there needs to be uniformity in maritime law – which also happens to be a relevant issue in the maritime punitive damages arena that may make its way to the Supreme Court soon as well. That being said, it seems unlikely that the Supreme Court would accept the invitation to weigh in on this issue, given the 11th Circuit’s well-reasoned and current explanation.

In recent months, the EEOC has made clear that protections for LGBT workers remains a priority for the EEOC. Before Thanksgiving, the EEOC published a document entitled “What you Should Know about EEOC and the Enforcement Protections for LGBT Workers,” in which the EEOC touted its enforcement efforts in this area and reaffirmed its commitment to fighting discrimination against LGBT individuals in the workplace.

In what commentators have dubbed the EEOC’s “guidebook” on this issue, the EEOC reasserted its position that workplace discrimination based on sexual orientation or gender identity violates Title VII of the Civil Rights Act of 1964. The EEOC’s Strategic Enforcement Plan (adopted in December 2012) listed “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions, as they may apply” as a top enforcement priority. Consistent with that priority, the EEOC recently filed two lawsuits on behalf of transgender employees challenging alleged sex discrimination, and an amicus brief in the Seventh Circuit related these issues.

Significantly, the EEOC explained that it has instructed its investigators and attorneys that “discrimination against an individual because that person is transgender is a violation of Title VII’s prohibition of sex discrimination in employment.” In addition, investigators and attorneys were “instructed that lesbian, gay, and bisexual individuals also may bring valid Title VII sex discrimination claims, and that the EEOC should accept charges alleging sexual-orientation-related discrimination.” These allegations may include claims of sexual harassment or sex discrimination because of an individual’s failure to conform to sex-stereotypes.

As part of its outreach efforts, the EEOC has also developed a brochure on Gender Stereotyping, Preventing Employment Discrimination of Lesbian, Gay, Bisexual or Transgender Workers.

A copy of the EEOC’s “guidebook” can be found here.

Is a defendant entitled to rummage through the desk drawers and closets in a plaintiff’s home as part of discovery in a civil case? Most would agree this is beyond the scope of standard discovery.

A United States District Court Judge used this logic to limit the discovery of plaintiff’s social media accounts when the defendant sought complete access to plaintiff’s entire social media records. In Ogden v. All-State Career School, –F.R.D.–, 2014 WL 1646934 (W.D. Pa. 2014), an employee sued his employer for subjecting him to a hostile work environment as well as retaliation, in violation of Title VII. Plaintiff’s employer moved to compel production of the employee’s entire social media records, demanding access to or production of complete copies of all social media accounts. Although courts have permitted discovery of social media, such as Facebook records, when it is reasonably calculated to lead to the discovery of admissible evidence, the court noted that “it is the nature of the claims and defenses and not merely the form of medium that define the bounds of relevancy and courts have declined to permit far-roving discovery into social media accounts where the inquest does not meet the basic tenants of Rule 26.” The court concluded that ordering plaintiff to permit access to or produce complete copies of his social media accounts “would permit defendant to cast too wide a net and sanction an inquiry into scores of quasi-personal information that would be irrelevant and non-discoverable. Defendant is no more entitled to such unfettered access to plaintiff’s personal email and social networking communications than it is to rummage through the desk drawers and closets in plaintiff’s home.” As such, parties are not entitled to “unfettered access” to social media accounts. Rather, the proper method for obtaining relevant information is to serve limited requests for production for information related to the claims or defenses involved in the case.

Rule 37(e) of the Federal Rules of Civil Procedure, also known as the “Safe Harbor Rule” of electronic discovery, governs the consequences of a party’s failure to preserve discoverable Electronically Stored Information (ESI). Currently, Rule 37(e) provides:

Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

While intended to protect parties who implement timely litigation holds, but who nevertheless may have deleted discoverable ESI in the regular course of business, the rule in its current form has provided little guidance to the courts applying it. This has resulted in inconsistent application across the circuits and varying standards for when sanctions are appropriate under the rule. As a result, in September 2014 the Judicial Conference Committee on Rules of Practice and Procedure unanimously approved an entirely rewritten version of Rule 37(e) several years in the making that will, if approved by the Supreme Court and Congress, unify the approach courts take to sanctioning the loss of ESI. The proposed rule now reads:

Rule 37(e) Failure to Preserve Electronically Stored Information.

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court may:

 (1) upon finding prejudice to another party from loss of the information, order measures no greater than necessary to cure the prejudice; or

 (2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation:

 (A) presume that the lost information was unfavorable to the party;

 (B) instruct the jury that it may or must presume the information was unfavorable to the party; or

 (C) dismiss the action or enter a default judgment.

Rather than providing specific details regarding the preservation obligation itself, the proposed rule empowers courts to take remedial measures when a party loses ESI because the party “failed to take reasonable steps to preserve the information, and the information cannot be restored or replaced through additional discovery.” According to the September 2014 Report of the Judicial Conference Committee on Rules of Practice and Procedure, this language is intended to retain the duty to preserve “that has been uniformly established by case law: the duty arises when litigation is reasonably anticipated.” As a result, the proposed rule does not impose strict liability for failure to produce ESI—the rule only applies when a party fails to take “reasonable steps” to preserve the ESI once litigation is reasonably anticipated. Even if the opposing party is prejudiced, as long as “reasonable steps” are taken the rule does not permit sanctions. The remedial measures available to a court are split into two sections.

Rule 37(e)(1) provides that the court, “upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice.” This permits a court to take measures regardless of whether the loss of ESI is the party’s fault, and while it preserves broad trial court discretion to take steps to cure prejudice, it strictly limits the scope of the court’s action to measures that will cure the prejudice.

Rule 37(e)(2) resolves the circuit split on when a court may deliver an adverse inference jury instruction for loss of ESI. Under the current rule, some circuits have held that an adverse jury instruction for loss of ESI is justifiable only upon a showing of bad faith by the losing party, whereas the Second Circuit in particular required only a showing of negligence. See Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2002). The consequence under the Second Circuit’s rule was essentially that if a party was found to have lost ESI not through routine, good-faith operation of an ESI system—essentially a finding of negligence—they could almost automatically be subject to an adverse inference instruction. If the safe harbor was not available, a party was immediately at risk of receiving the full weight of sanctions. The danger of severe sanctions upon a finding of mere negligence resulted in a tendency to over-preserve ESI at significant cost to parties to civil litigation. The proposed rule, however, permits adverse inference instructions, dismissal, or default judgment “only upon a finding that the party acted with the intent to deprive another party of the information’s use in the litigation.” Notably, this section of the proposed rule does not require actual prejudice to the opposing party—intent alone is sanctionable by adverse instruction.

The proposed changes to Rule 37(e) have the potential to make a real change in the frequency and severity of sanctions for loss of ESI. Whereas current Rule 37(e) was intended as a safe harbor but has rarely been used as such, the new rule authorizes limited court action only when reasonable steps were not taken to preserve ESI and the loss of ESI cannot be cured by additional discovery. As a result, a party that has lost discoverable ESI can always defend itself by arguing: 1) that it took “reasonable steps” to preserve the ESI; and 2) that the loss may still be cured through additional discovery. In addition to these defenses, under Rule 37(e)(1) a party may also argue: 3) that the opposing party has not been prejudiced; and 4) that the requested remedy will not cure the asserted prejudice.

Only one of these possible defenses relates to the conduct of a party before it loses ESI: taking “reasonable steps” to preserve discoverable ESI. While the proposed rule does not define “reasonable steps,” jurisprudence on the duty to preserve generally refuses to apply a per se test to what is reasonable. See Automated Solutions v. Paragon Data Systems, 756 F.3d 506, 516-17 (6th Cir. 2014); Chin v. Port Authority, 685 F.3d 135, 162 (2nd Cir. 2012). The Rules Committee has also suggested that a factor in evaluating the reasonableness of preservation efforts is the proportionality of those efforts—in other words, whether the steps taken to preserve ESI are proportional to the needs of the individual case.