My Team and I Obtain a Defense Verdict in Jones Act Case

I, my husband and the rest of our Miami team successfully defended a yacht owner against a former employee’s Jones Act negligence claim in a 7-day Zoom trial in the U.S. District Court for the Southern District of Florida. The case arose after the yacht’s chief stewardess was allegedly injured after hitting a wake while aboard the yacht’s tender during a purported sea trial of the tender. The plaintiff alleged she was in the course and scope of her employment with the yacht at the time of her accident aboard the tender and sought over $2 million in damages.

I first won the case on summary judgment, as the district court found the crewmember failed to present a genuine issue of fact as to whether she was acting within the course and scope of her employment when she was injured. The crewmember appealed that decision to the Eleventh Circuit Court of Appeals, which remanded the case back to the trial court, stating that in evaluating whether the crewmember was within the course and scope of her job with the yacht, the trial court needed to evaluate the case under the guidance provided in Fowler v. Seaboard Coastline R.R. Co., 638 F.2d 17, 20 (5th Cir. Unit B Feb. 1981). The Eleventh Circuit found that Fowler stands for the proposition that acts that are incidental to an employee’s work can fall within the course of her employment, even is the employee is not performing her customary job duties. Fowler, 638 F.2d at 20 (discussing the meaning of “within the scope of employment” to determine liability under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51). However, a reading of Fowler makes clear that Jones Act protections do not cover personal activity engaged in by the employee for a private purpose and having no causal relationship to her employment. Id. at 18-19.  

The Eleventh Circuit also relied on Beech v. Hercules Drilling Co., L.L.C., 691 F.3d 566, 572 (5th Cir. 2012), which states that “to hold an employer vicariously liable under the Jones Act for one employee’s injury caused by the negligence of a co-employee, a plaintiff must show that the injured employee and the employee who caused the harm were both acting in the course of their employment at the time of the accident”. Again, the court focused on the course and scope of employment as it pertained to the captain and his piloting of the alleged tender during the purported sea trial at the time the plaintiff was injured.

After carefully reviewing all the evidence in the case after it was remanded for trial, the trial court found that the plaintiff had not met her burden to show that she was acting within the course and scope of her employment on the day of her accident. The court concluded that she was engaged in a family outing with the captain who was her then boyfriend, her daughter and a married couple that were personal friends of the couple. The court determined that the activity was not advancing a business interest of the yacht owner and it was not foreseeable to the yacht owner that the activity was to be engaged in by either the plaintiff or the captain. The court noted that the Jones Act does not apply to private acts by a crewmember and emphasized that the Jones Act is not a strict liability scheme.

If you are interested in receiving a copy of the Eleventh Circuit decision or wish to contact me to discuss the case further, please feel free to send me an email at blog@miamimaritimelaw.co or you can call 305.377.3700.

Cruise Pax, Crew and Shareholders Suing Over COVID-19

The last cruise ship carrying passengers reportedly docked on Tuesday, April 21, 2020. The COSTA DELIZIOSA disembarked passengers in Genoa, Italy, allowing more than 1,500 people to return home after a 113-day round the world voyage. Under orders from the Centers for Disease Control and Prevention, it will be some time until cruise ships will once again be able to sail from U.S. ports. In the meantime, cruise lines are dealing with a host of lawsuits filed by passengers, crew and their own shareholders who accuse the companies of negligence in exposing them to the Coronavirus or otherwise downplaying the risk.

One of the first cases filed was for 40 passengers on board the GRAND PRINCESS, who claimed emotional distress due to an outbreak of COVID-19 onboard. Princess has defended the suits, stating that allowing cruise ship passengers to sue over emotional distress because they could have been exposed to the COVID-19 pandemic would “open the door to open-ended liability.” Princess cited the U.S. Supreme Court case of Metro-North Commuter R. Co. v. Buckley, 521 U.S. 424 (1997), which generally holds that Plaintiffs are prohibited from suing for fear of exposure, in this case, to the Coronavirus. Such an “unprecedented theory of liability for emotional distress” could unleash lawsuits against all types of businesses, reasons Princess. Princess further notes that “[i]f accepted, plaintiffs’ theory would open the door to open-ended liability for every business, school, church, and municipality across America, stalling economic recovery in the wake of the COVID-19 pandemic and complicating the ability of businesses to reopen…If individuals in plaintiffs’ situation can recover, businesses, school, churches and other venues across America will be forced to keep their doors closed long after state stay-at-home orders are lifted, lest they risk crushing liability to each and every one of their invitees for emotional distress, based on the mere possibility of infection, because some employee or other current or past customer of the business was later discovered to have the virus.”

Maritime law generally allows recovery for emotional distress if there is physical injury to the claimant. However generally, maritime law does not permit recovery for mental anguish or wholly emotional injuries absent some physical impact and unless the emotional injury is associated with some actual physical injury to the claimant.

In addition to the lawsuits for emotional distress, Princess faces wrongful death claims on behalf of passengers who died from COVID-19 and at least one class action on behalf of more than 2,000 passengers on the GRAND PRINCESS. The suit claims Carnival and Princess failed to protect passengers and contain the spread of the virus. At least 100 of the passengers contracted COVID-19, and two died after disembarking, according to the complaint.

A shareholder also filed a class action against Carnival Corp., the parent company of Princess. The same occurred to Norwegian Cruise Lines, where a shareholder filed a stock drop securities class action in the Southern District of Florida. The shareholder’s suit challenged statements made by NCL on and after February 20, 2020, in which the company allegedly minimized the likely impact of the Coronavirus outbreak on NCL’s operations and omitted information about allegedly deceptive sales practices undertaken in response to the virus.

Rpyal Caribbean faces a wrongful death lawsuit after a 27-year-old crew member on the CELEBRITY INFINITY died from the virus and two others were airlifted off of the OASIS OF THE SEAS.

Congress has launched an investigation into Carnival’s response to the Coronavirus pandemic. Bloomberg reported that the U.S. House Committee on Transportation and Infrastructure is investigating the company's handling of the outbreak as more than 1,500 cases have been confirmed from aboard the company's ships and dozens of passengers and crew members have died.

The rapid developments in the spread and economic impact of COVID-19 present particular challenges for officers and directors of public companies trying to manage their businesses while providing timely and truthful information to shareholders. Shareholders have filed suits alleging that public companies materially misrepresented the impact of COVID-19 on their operations. If history is any guide, derivative litigation alleging director and officer mismanagement is likely to follow. Directors and officers of public companies should exercise great care in any public statements regarding the impact of COVID-19 on their businesses, and carefully consider and document the steps they are taking to oversee and respond to COVID-19 developments.

Cruise lines have been particularly hard hit as large numbers of COVID-19 cases were identified among cruise passengers, certain cruises faced lengthy quarantines at sea, and cruise ship operations were suspended from all U.S. ports of call. Add to the expenditures of cruise lines having to keep ships afloat, requires huge expense, while not generating revenue. There have been articles suggesting that with so many lawsuits already filed, and more likely to come, the hope is that some rulings will help write new case law and make it easier to bring future cases against cruise lines. The idea being that cruise lines have insurance to cover any possible awards or settlements. However such statements ignore the plain truth that cruise lines have high self-insured retentions. They would have to pay out a considerable amount of money for each individual claim before their insurance policies kick in. These same people suggest that high volume litigation against cruise lines are unlikely to have much of a financial impact on the companies. This is to not understand how cruise ships and their owners are insured. Add the fact that the no-sail orders in effect in the U.S. are crippling the cruise industry, there is the adage that you should not kill the goose that lays the golden egg.

This law firm does not represent cruise lines and has no “skin in this game.” Nevertheless, these are issues that will affect not just cruise lines but ordinary working ships. If the cruise lines all go down with some of these novel theories, smaller carriers, with less power, will likely be next. Please feel free to reach out to us at blog@miamimaritimelaw.co, if you would like to discuss these issues further.

Navigational Limits Upheld in Eleventh Circuit

In Geico Marine Ins. Co. v. Shackleford, Case No. 18-12105, 2019 U.S. App. LEXIS 37228 (11th Cir. Dec. 17, 2019), the U.S. Court of Appeals for the Eleventh Circuit held that a marine insurance policy did not cover the loss because the policy unambiguously contained a navigational limit when the loss occurred, nothing in the record supported the conclusion that the insurer voluntarily and intentionally relinquished its right to enforce the navigational limit, the parties did not contract out of federal maritime law, which required absolute enforcement of express navigational limits and the vessel was outside of the covered navigational area when the loss occurred.

The facts in this case are a little convoluted, but ultimately, the insured had informed Geico Marine that he needed an updated policy to sail his vessel to Fort Lauderdale for repairs. However, when Geico Marine updated the policy to allow for navigation, it reinstated a previous navigational limit requiring the vessel to be “north of Capt Hatteras, NC from June 1 until November 1 annually.” When the insured had a casualty in Lake Sylvia in Fort Lauderdale in June and made a claim under the policy, Geico Marine denied coverage and filed a declaratory judgment action claiming, among other things, that coverage was barred by the policy’s navigational limit and that Florida law does not strictly enforce warranties in marine insurance contracts.

The insured alleged, among other things, that Geico Marine “waived” its right to enforce the navigation limit when it agreed that he could sail the vessel to Fort Lauderdale in late May. The Eleventh Circuit painstakingly reviewed the policy and found that the policy unambiguously contained a navigational limit when the loss occurred. The Court then found that under Florida law, Geico Marine did NOT waive its navigational limit requirement as “[n]othing in this record supports the conclusion that Geico Marine voluntarily and intentionally relinquished its right to enforce the navigational limit.”

More importantly, the Court address the insured’s argument that the parties contracted out of the federal maritime rule requiring absolute enforcement of express navigational warranties. The Court found that the federal rule of absolute enforcement of warranties, as opposed to the Florida rule which allows a marine insurer to avoid coverage based on an insured’s breach of warranty only if the breach “increased the hazard by any means within the control of the insured”, was controlling as the the federal maritime law is the default rule and displaces contrary state law when construing a marine insurance contract. Thus, “[b]ecause the parties did not contract out of maritime law, we must apply the federal rule requiring absolute enforcement of express navigational limits.”

This is a very important ruling post AIG Centennial, as prior to this, the courts had adopted a “entrenched federal precedent” standard. In other words, the court would have to find that the general maritime law was “entrenched federal precedent” before it would allow federal maritime law to displace state law.

If you are interested in receiving a copy of this decision or wish to discuss this decision further, please feel free to write to me at blog@miamimaritimelaw.co or you may call me at 305-377-3700.

DOHSA Does Not Preempt State Wrongful Death Statute in Fla State Waters

In Kipp v. Amy Slate’s Amoray Dive Ctr., Inc., 2018 Fla. App. LEXIS 7847 (3d DCA June 6, 2018), Florida's Third District Court of Appeals held that DOHSA does not preempt Florida's wrongful death statute and DOHSA does not apply to the territorial waters of the state.

Steven Kipp, was a crew member onboard a scuba dive charter boat which was owned and operated by Amy Slate’s Amoray Dive Center, Inc. On November 12, 2015, the captain took a number of customers out for a night dive with Kipp onboard. The adverse currents pushed some of the divers as far as a half mile away. In response, Kipp snorkeled out to bring the customers back in. However, while doing so,  Kipp suffered a heart attack and died.  Kipp’s widow filed a lawsuit alleging: (1) Jones Act negligence against the dive center; (2) general maritime unseaworthiness against the dive center as owner of the vessel; (3) state tort negligence against the dive center; (4) DOHSA claim against the dive center; (5) state tort negligence against the captain; and (6) DOHSA claim against the captain. The Defendants filed motions to dismiss arguing that the cause of action was controlled solely by DOHSA because the death occurred more than three nautical miles from the shore. Kipp’s widow argued that DOHSA is inapplicable because the death occurred within Florida’s territorial waters. The trial court dismissed the complaint holding that DOHSA applied and therefore the trial court did not have jurisdiction to consider the merits of the remaining issues. Kipp’s widow appealed.

The appellate court first noted that this case involves an issue of statutory interpretation. Reading DOHSA, the court found on the one hand, "DOHSA expressly applies to death on the high seas more than three nautical miles from the shore of the United States", but on the other hand, noted that “by its plain terms, [DOHSA] ‘does not affect the law of a State regulating the right to recover for death’ and ‘it does not apply to waters within the territorial limits of a state’”. The Court noted that unlike Florida, for most states, the two provisions do not conflict because their territorial waters do not extend beyond three nautical miles. However Florida's Constitution specifically extends Florida's Atlantic boundary to three miles from the coast or to the shoreward edge of the Gulf Stream, whichever is greater.

The Court distinguished the Submerged Lands Act from DOHSA, because unlike DOHSA, the SLA includes limiting language which states that “in no event shall the term boundaries . . . be interpreted as extending from the coast line more than three geographical miles into the Atlantic Ocean or the Pacific Ocean.” Id. at 7. The Court found that it is up to Congress to curtail the reach of Florida law or limit rights granted by Federal law and found that Congress did not do this with DOHSA.

Thus, the case has been reversed and remanded for further proceedings. If you are interested in receiving a copy of this opinion or wish to reach me to discuss the case further, please feel free to write to me at blog@miamimaritimelaw.co.