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.

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By Zoe Vermeulen

In the recent case of Halle v. Galliano Marine Service, L.L.C., No. 16-30558, 2017 WL 1399697 (5th Cir. Apr. 19, 2017) the U.S. Fifth Circuit addressed for the first time whether ROV technicians, who are traditionally Jones Act seamen, qualify as seamen under the Fair Labor Standards Act (“FLSA”). The Court found that the plaintiff, an ROV technician assigned to an ROV support vessel, was not an FLSA seaman. In reaching its decision, the Court reiterated the important difference between a Jones Act seaman and a seaman for purposes of the FLSA.

Under the Jones Act, the term “seaman” is construed broadly to provide protection for a larger group of individuals. Seamen are exempt from the FLSA, so the term is construed narrowly, to ensure that more workers enjoy the benefits granted by the FLSA. The Court was clear that “the definition of ‘seaman’ in the Jones Act is not equivalent to that in the FLSA.”

The FLSA requires employers to provide overtime pay to any employee who works more than forty (40) hours in a workweek, unless the employee is subject to an exemption. Again, “seamen” are exempt from the FLSA’s overtime requirements. Under the FLSA, an employee is a “seaman” if: (1) the employee is subject to the authority, direction, and control of the master; and (2) the employee’s service is primarily offered to aid the vessel as a means of transportation, provided that the employee does not perform a substantial amount of different work. These criteria are very fact specific.

In Halle, there was a dispute as to whether the plaintiff was subject to the authority, direction, and control of the master of the ROV support vessel. Thus, the first factor was not dispositive. In analyzing the second factor, the Court found that the ROV technician plaintiff lived on the ROV support vessel and operated the ROV, which was attached to the support vessel, to perform industrial tasks in the water. He occasionally communicated GPS coordinates to the captain of the support vessel, but did not otherwise help ensure that the support vessel navigated safely or in any particular manner from point A to point B. The plaintiff did not control the vessel’s path to its intended target, steer, anchor, make any navigational decisions, or take any navigational actions. The plaintiff, and other ROV technicians, could not even see if there were navigational issues affecting the support vessel. Under these facts, the Court found that the plaintiff’s service was not “primarily offered to aid the vessel as a means of transportation.” As the plaintiff – a Jones Act seaman – could not meet the second prong of the test, he could not be a seaman for FLSA purposes.

This case provides valuable guidance to maritime employers in classifying employees for FLSA purposes. Employers should never assume that because a worker qualifies as a Jones Act seaman, he or she will automatically be exempt from the overtime requirements of the FLSA. While both the Jones Act and the FLSA employ the term “seaman,” Halle underscores the different tests for seaman status under these Acts. Litigants are cautioned not to borrow an analysis of this term under one Act for use in the other.

Misclassifying an employee as “exempt” can expose employers to back pay, liquidated damages, and attorneys’ fees. And with a recent increase in FLSA claims, correct employee classification is as critical now as ever.

Close-up close-up shots of the tracks

By Michael J. O’Brien

In the recent case of BNSF Railway Co. v. Tyrrell, the U.S. Supreme Court rejected a blatant forum shopping attempt by two railway employees and limited future lawsuits against out-of-state railroads. In BNSF Railway Co., Robert Nelson of North Dakota and Kelli Tyrrell of South Dakota filed separate suits against BNSF Railroad in a Montana State Court pursuant to the Federal Employer’s Liability Act (“FELA”) 45 U.S.C. §51 et sec. which makes railroads liable for on-the-job injuries to their employees. Nelson allegedly injured his knee while working for BNSF in the State of Washington. Tyrrell claimed that her husband died of cancer he contracted after being exposed to chemicals while working for BNSF in South Dakota, Minnesota, and Iowa. Despite the fact that neither Plaintiff resided in Montana, nor sustained any injuries in Montana, they filed their lawsuit against BNSF in that state based upon BNSF’s alleged contacts in Montana.

BNSF was incorporated in Delaware and it maintained its principle place of business in Texas. It operates railroad lines in 28 states, however, it maintained less than 5% of its workforce and approximately 6% of its total track mileage in Montana. Nelson and Tyrell claimed that these contacts with Montana were sufficient for them to sue the railroad in Montana. BNSF disagreed.

After Tyrrell and Nelson filed suit, BNSF moved to dismiss both of their lawsuits for lack of personal jurisdiction. The Montana Supreme Court ultimately denied the motion allowed these cases to move forward holding that Montana Courts could exercise general personal jurisdiction over BNSF because §56 of FELA authorizes State Courts to exercise personal jurisdiction over railroads “doing business” in the state. The Montana Supreme Court further observed that Montana law provides for the exercise of general jurisdiction over “all persons found within the state.” Thus, because of BNSF’s many employees and miles of track in Montana, the Montana Supreme Court concluded that BNSF was both “doing business” and “found within” the state such that both FELA and Montana law authorized the exercise of personal jurisdiction.

The U.S. Supreme Court granted certiorari to resolve whether §56 of FELA authorizes State courts to exercise personal jurisdiction over railroads that do business in states but are neither incorporated, nor headquartered in that state. The Supreme Court also examined whether the Montana Court’s exercise of personal jurisdiction in these cases comported with constitutional due process.

A solid majority of the Court rejected the two theories upon which Nelson and Tyrrell had relied on to justify jurisdiction over BNSF in Montana. First, the Court held that FELA does not itself create a special rule authorizing jurisdiction over railroads simply because they happen to be doing business in a particular place. Next, the Court ordered that an exercise of jurisdiction over BNSF must still be consistent with due process. Thus, the Montana rule that allowed Courts in the state to exercise jurisdiction over “persons found” in Montana did not help the Plaintiffs as it violated due process.

The Supreme Court repeatedly mentioned that BNSF was not incorporated in Montana, and it did not maintain its principle place of business in that state. Further, BNSF was not so heavily engaged in activity in Montana “as to render it essentially at home” in that state. The Supreme Court noted that a corporation that operates in many places can “scarcely be deemed at home in all of them.” Thus, the business that BNSF did in Montana may be sufficient to subject the railroad to specific personal jurisdiction in maritime for claims related to the business activity in Montana. However, simply having in state business did not suffice to permit the assertion of general jurisdiction over claims like Nelson’s and Tyrrell’s that were completely unrelated to any activity occurring in Montana.

Last, it is important to note that this holding is also relevant in maritime cases. Indeed, since FELA case law is applicable to Jones Act cases, BNSF Railway Co.’s holding will, by extension, also limit forum shopping by Jones Act seaman under the same reasoning.

Tugboat sailing in a stormy day off the Portuguese coast during its activity of oil tankers and other ships support

By Michael J. O’Brien

The doctrine of maintenance and cure mandates that an employer pay an injured seaman a per diem living allowance for food and lodging comparable to what the seaman was entitled to while at sea. The injured seaman is also entitled to payment of medical expenses incurred in treating an injury or illness. The duty to pay maintenance and cure extends until the seaman has reached maximum medical improvement (MMI). However, the point at which a seaman reaches MMI can be a thorny issue, particularly since punitive damages are available to a seaman whose employer has arbitrarily and capriciously terminated maintenance and cure benefits. Many employers will request an independent medical examination (IME) to assist in the investigation of whether the seaman has reached MMI. Quite often, an employer will terminate maintenance and cure based on the opinions of the IME physician, expecting that its reliance on the medical opinion of the expert medical professional would not be arbitrary or capricious. Unfortunately, a recent decision by Judge Carl Barbier of the Eastern District of Louisiana demonstrates that an employer that terminates maintenance and cure benefits simply because an IME physician opines that a seaman has reached MMI does so at its own peril.

In Weeks Marine, Inc. v. Rodney Watson, 2016 WL 3027430 (E.D. La. May 27, 2016), Watson claimed to have been injured on September 24, 2014, when he was struck by a large steam table that toppled over in the galley in rough seas. On September 27, 2014, Watson was taken to a North Carolina physician with complaints of left hip and knee pain. Next, Watson was evaluated by an orthopedist on October 2, 2014. An MRI was recommended to investigate possible knee ligament or meniscus damage. His employer refused to authorize or pay for this diagnostic test. Thereafter, on October 16, 2014, Watson returned home to Louisiana and began treating with a local orthopedic surgeon. An IME was performed on January 15, 2015 by a physician chosen by Watson’s employer. The IME physician opined that there were no objective findings or a need for additional medical treatment. The IME physician also found Watson to be at MMI. Based on the opinions of the IME physician, Weeks terminated Watson’s maintenance and cure benefits on January 15, 2015.

Watson continued to treat with his choice of his physician who never found him to be at MMI. Eventually, Weeks contacted Watson and ordered him to return to the vessel and resume his duties. Watson refused due to his ongoing physical symptoms and he was terminated. Watson then retained an attorney and began treating with a Houston, Texas orthopedic surgeon. MRI studies revealed possible injuries to the left knee as well as to the cervical and lumbar spine. At his employer’s request, Watson returned to the IME physician on June 15, 2015, for his own MRI. The MRI was reported as normal, and Weeks declined to reinstate either Watson’s maintenance or cure.

As of Watson’s last medical appointment with his Houston orthopedist, it was recommended that he undergo a two-level cervical disc fusion, left knee arthroscopy, a radio frequency neurotomy procedure, and continued observation. The Houston physician further related the need for this treatment and surgery to the September 24, 2014 vessel incident. As of the date of trial, Weeks had not paid any medical bills since January 15, 2015 (the date of the first MMI opinion by the IME physician). Unpaid medical expenses were $56,582.00. The parties stipulated that accrued maintenance was payable at $20 per day and totaled $9,340 as of May 17, 2016.

Procedurally, Weeks filed a Complaint for Declaratory Judgment declaring that it was not obligated to make maintenance and cure payments beyond January 15, 2015. Watson responded by filing a Complaint for Damages alleging negligence under the Jones Act, unseaworthiness of the vessel, and compensatory and punitive damages for Weeks’ willful failure to pay maintenance and cure. The two Complaints were consolidated for a bench trial.

Following the bench trial, Judge Barbier held that Weeks was negligent and the vessel unseaworthy. There was no comparative negligence on the part of Watson. Judge Barbier further found that there was credible medical evidence that Watson required a two-level cervical fusion at the cost of $125,000, as well as a left knee arthroscopy and lumbar radiofrequency neurotomy.

In deciding the issue of punitive damages, Judge Barbier reiterated that the maintenance and cure duty must be liberally interpreted for the benefit and protection of the seaman. Any ambiguity or doubt related to maintenance and cure must also be resolved in favor of the seaman. He highlighted that the ship owner bears the obligation to investigate a seaman’s maintenance and cure claim and examine all medical evidence in determining whether maintenance and cure is owed. Further, if a ship owner unilaterally decides to stop paying maintenance and cure and the seaman reasserts his rights by bringing action against the ship owner, the ship owner meets his burden of proof only by providing “unequivocal evidence” that the seaman has reached MMI. See Johnson v. Moreland Drilling Co., 893 F.2d 77, 79 (5th Cir. 1990). Critically, Judge Barbier held that a second opinion contrary to the treating doctor’s opinions regarding diagnosis or prognosis of an injured seaman does not provide the unequivocal evidence required for termination of maintenance and cure benefits. This is in contrast to the existing case law out of the EDLA that has found a Jones Act employer was not arbitrary or capricious when it terminated maintenance in cure based upon its IME doctor’s MMI opinion that conflicted with the treating physician’s opinion. See Great Lakes Dredge and Dock Co. v. Martin, 2012 WL 3158870 (E.D. La. 2012) (Lemelle); Lodrigue v. Delta Towing, LLC, 2003 WL 22999425 (E.D. La. 2003) (Vance). That being said, each case must be evaluated on its own facts.

Based on this rationale, Judge Barbier found that the employer arbitrarily terminated Watson’s maintenance and cure benefits on January 15, 2015. Indeed, Judge Barbier put no faith in the opinion of the IME physician and rejected the physician’s “incredible and biased testimony at trial.” Thus, in addition to his other damages, Watson received $100,000 in punitive damages for willful failure to pay maintenance and cure as well as $50,000 in attorney’s fees incurred for his maintenance and cure claim.

This decision will be well known in the maritime plaintiff’s bar and used to threaten similar claims for punitive damages when a Jones Act employer relies heavily on its IME physician’s opinion in terminating maintenance and cure benefits. While specific circumstances in this case certainly affected the analysis, Jones Act employers should proceed with caution before terminating benefits on the basis of their own IME in light of this decision.

Venice, Italy - May 20, 2016: Construction site for the realization of the movable bulkheads system called MOSE to save Venice from tides.

By R. Chauvin Kean

On October 19, 2016, the Louisiana Third Circuit Court of Appeal in Guidry v. ABC Ins. Co., 2016-61 (La. App. 3 Cir. 10/19/16); — So. 3d — affirmed that a welder injured while assisting in the construction of a bulkhead in Grand Isle, LA was a seaman and that the floating mat on which he was injured was an appurtenance of the barge.

Plaintiff, Ernest Guidry, was hired as a welder for Tanner Services, LLC, which was awarded a contract to construct a bulkhead made of king and sheet piles. The contract involved a land division and a marine division. Plaintiff was assigned to the marine division in order to assist in the welding of the various metal sheet piles as they were lowered via a crane barge stationed adjacent to the construction site. The marine division consisted of two tugs and three barges from which operations were centered.

The vast majority of Plaintiff’s work was spent on a “floating mat,” which was described as a raft or floating scaffolding that was affixed to the various piles via ropes, that were used to relocate and move the mat along the bulkhead as construction progressed. At various times, when necessary, the mat was lifted by the barge’s crane and stored on its deck. Plaintiff spent approximate 50-60% of his time on the floating mat, 30-40% of his time on the barge, and 10% on land.

During construction operations, a steel pile vibrating hammer, being lifted by the crane on the barge, fell onto Plaintiff as he worked on the floating mat below. Plaintiff suffered numerous injuries and filed suit for seaman benefits under the Jones Act and was awarded general and special damages. Plaintiff’s employer, Tanner Services, LLC, appealed.

Examining the trial court’s determination that Plaintiff was a seaman under Chandris, Inc. v. Latsis, 515 U.S. 347, 368 (1995), the Third Circuit affirmed the holding based upon his duration of work on the barge and the floating mat. The Third Circuit also found that Plaintiff’s “duties contributed to the barges’ mission and function, the building of the bulkheads, and thus making them inherently vessel-related and fulfilling of the substantial nature requirement of the Chandris test.”

The most interesting portion of this opinion was the court’s determination that the floating mat was an appurtenance of the barge/vessel. Generally, “an appurtenance is any identifiable item that is destined for use aboard a specifically identifiable vessel and is essential to the vessel’s navigation, operation, or mission.” Clay v. ENSCO Offshore Co., 146 F. Supp. 3d 808, 813 (E.D. La Nov. 19, 2015). In Drachenberg v. Canal Barge Co., Inc., the seminal case from which the Fifth Circuit relied on two prior U.S. Supreme Court cases to base its opinion, the court announced various factors that could be used to determine if a piece of equipment was in fact an appurtenance to a vessel. 571 F. 2d 912, 918-21 (5th Cir. 1978). The guiding principle is predicated on the principle that one extending credit to a vessel has the right to assume that the entire vessel, including all her equipment essential to her function and mission, stands as security for the debt. Thus, the appurtenance must be essential to the vessel’s mission and purpose for which it was hired and must be used in conjunction with the vessel’s primary function at the time of the accident.

One essential element that was lacking in this case that is typically found in other appurtenance designations is physical connection to the vessel at the time of the accident. Although not essential to such determination, the U.S. Fifth Circuit has relied on the connection factor to determine that a piece of equipment that is temporarily attached to a vessel was so integral to the operations that it was in fact an appurtenance of the vessel. See, Drachenberg, 571 F. 2d at 920-921. Here, there are no facts in the opinion discussing whether the floating wooden mat was affixed to the barge at the time of the accident. In fact, the case facts state that the mat was primarily “tethered” to the bulkhead and moved by the rope system, without the mention of the barge’s interaction. The only mention of the mat’s physical connection to the barge is when, for certain reasons, the crane atop the barge would, on occasion, lift the mat out of the water for storage. Thus, this finding by the Louisiana Third Circuit greatly extends the classification of vessel appurtenances; mere wooden boards placed together to act as a platform adjacent to the bulkhead, without physically connection to the vessel at the time of the accident, was deemed an appurtenance of the vessel.

Ship owners and operators should take notice that the Louisiana Third Circuit has found that physical connection to a vessel does not necessarily determine if a piece of equipment is an appurtenance of a vessel. Here, the court held that but for the use of the floating mat, the bulkhead construction operations could not have been completed as tasked. This determination was amplified by a company representative’s testimony that declared that the mat was essential to the operations.

The consequence of ruling that the mat was an appurtenance to the vessel allowed the court to determine that all time spent on the floating mat could be contributed to the employee’s status as a seaman: his time and substantial connection to the vessel and its mission. Thus, because of the time Plaintiff worked “on the vessel” and its “appurtenance,” the employee was deemed a seaman. If appealed, the Louisiana Supreme Court may still find that Plaintiff was a seaman based upon Mr. Guidry’s percentage of time spent on the barge; thus, further appeal may not occur. This opinion is yet another example of the Louisiana Third Circuit developing new and more liberal views on maritime related issues in recent years.

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By Daniel B. Stanton

The U.S. 5th Circuit recently re-addressed the standing law on seaman status in the Circuit in Alexander v. Express Energy Services Operating, L.P., No. 14-30488. In that case, Alexander was injured while working on Express’ P&A crew on an Apache platform. As a member of the P&A crew, his job was to ensure that “everything was set up and running properly on the deck of the platform,” assist his team in plugging the well, and then cut and remove pipe from the well. To assist Express’s P&A work, Apache contracted a liftboat with crane, which was positioned next to the platform and connected by a catwalk. At the time of his injury, Alexander was performing his P&A duties on the platform, when a wireline from the crane snapped, dropping a bridge plug on his foot. Alexander sued Express, claiming to be a Jones Act seaman. Judge Barbier of the Eastern District of Louisiana granted summary judgment in favor of Express, holding that Alexander did not meet the test for a Jones Act seaman. Alexander appealed.

In considering the plaintiff’s seaman status, the Fifth Circuit relied on long-standing and well-established precedent from the Supreme Court and its own decisions. The Supreme Court in Chandris, Inc. v. Latsis, 515 U.S. 347 (1995) set forth a two-prong test for seaman status: (1) the plaintiff’s duties must “contribut[e] to the function of the vessel or to the accomplishment of its mission;” and (2) the plaintiff must have a substantial connection to a vessel in terms of both duration and nature. Courts have subsequently found that the second prong of Chandris’s test may generally be satisfied if the plaintiff was permanently assigned to a vessel or spent 30% of his work time aboard a vessel or fleet of vessels.

The 5th Circuit’s analysis focused on the second prong, while the district court focused on the first. With respect to the second prong, Alexander argued that under Roberts v. Cardinal Services, Inc., 266 F.3d 368 (5th Cir. 2001) and Johnson v. TETRA Applied Technologies, L.L.C., No. CIV.A. 11-1992, 2012 WL 3253184 (E.D. La. Aug. 7, 2012) he could count all of his work time on all of his jobs for Express that involved the use of a liftboat (vessel) – which amounted to 35% – regardless of the amount of work time he actually spent on the adjacent vessel. The 5th Circuit found plaintiff’s interpretation of Roberts and Johnson to be in clear contradiction to the Supreme Court’s holding in Chandris, which requires that a seaman actually work on a vessel at least 30% of the time.  Working adjacent to or with the assistance of a vessel was simply not sufficient to satisfy the fundamental purpose of the substantial connection requirement. And, Alexander presented no evidence that he spent 30% of his work time on a vessel. For this reason, regardless of whether his duties contributed to the function of the liftboat, he was not a seaman.

On the eve of its twentieth anniversary, Chandris remains the guiding light for determining issues of the seaman status of an employee. But because of the often intermingled relationships, tasks, and job duties of oil field employees and their employers – and the use of a variety of vessels to support their operations – seaman status remains an area of active litigation in the 5th Circuit. Plaintiffs continue to seek new and creative ways to establish connections to the vessels that transport, house, and support them in an effort to reap the benefits of seaman status under the Jones Act.  Fortunately for employers, the 5th Circuit has been and continues to be a stalwart supporter of Chandris and the consistent and relatively predictable application of its test for seaman status.