Seaman: how necessary is the "sea" part?

A couple years ago the Fifth Circuit decided Naquin v. EBI, and it ruled that a dock worker can be both a longshoreman and a Jones Act seaman, which is weird because those two things are mutually exclusive. And a petition for en banc review was filed, and denied, and so the law is that if you work in a shipyard that repairs your company’s own vessels, and you repair those vessels, you are probably a longshoreman and a Jones Act seaman. You gotta do two things to be a Jones Act seaman: (1) spend 30%+ of your time on a boat or fleet under common ownership or control; and, (2) contribute to the mission of the vessel. Contributing is really broad, too. You end up with some weird results.

So when Gilbert Sanchez worked on a shore-side jack-up rig (a vessel) which rig was always jacked up and never moved during his work, and he welded on that vessel (contributing to the mission), he was a Jones Act seaman. Thus spake the Fifth Circuit.

This is a little weird. As the Court explained, Mr. Sanchez “was land-based, lived at home, and traveled to and from work every day. During the 48 days he worked on the ENTERPRISE WFD 350, the barge was jacked up adjacent to and one step away from the dock. While he performed welding repair services on the barge, it was never jacked down into the water or moved away from the dock.” Not exactly what you’d consider “subject to the perils of the sea,” right?

So a weird thing happened. Judge Davis issued a concurrence to his own opinion, and the whole panel joined, saying that the Fifth Circuit should take the case en banc to straighten the nonsense out. We’ll see what comes of it.

Chinese fishing trawlers near the Galapagos

Offered without comment, except that it’s an interesting read if this sort of thing is your bag. :

https://warontherocks.com/2020/08/the-great-fishing-competition/

Recreational Boating Statistics from the US Coast Guard

Wear a life jacket. Don’t drink if you’re going to operate a vessel.

Where the cause of death was known, 79 percent of fatal boating accident victims drowned. Of those drowning victims with reported life jacket usage, 86 percent were not wearing a life jacket.

and

Alcohol continued to be the leading known contributing factor in fatal boating accidents in 2019, accounting for over 100 deaths, or 23 percent of total fatalities.

Available here: https://uscgboating.org/statistics/accident_statistics.php

Gulf of Mexico Aquaculture

The Magnuson Stevens Fishery Conservation and Management Act of 1976 was passed to conserve and manage the fishery resources found off the coasts of the United States.

The Gulf of Mexico Fishery Management Council, a body set up by the law, is responsible for, well, the Gulf of Mexico. And the Gulf of Mexico Council began setting up aquaculture permits in the Gulf. Proper administrative rulemaking policy was followed, and lo, in 2016, it happened.

A bunch of people didn’t like this - principally fishermen - and they filed a lawsuit to stop it. (The merits of aquaculture are probably best left for another post, but anyway it’s reasonably divisive. Note only that for many folks, fish is the only wild-caught thing they’ll ever eat.)

So the question is this: Does the Magnuson Stevens Fishery Conservation and Management Act of 1976 cover aquaculture? Let’s go to the text: It defines a fishery as follows:

(A) one or more stocks of fish which can be treated as a unit for purposes of conservation and management and which are identified on the basis of geographical, scientific, technical, recreational, and economic characteristics; and (B) any fishing for such stocks. Id. § 1802(13).

It defines “fishing” as:

(A) the catching, taking, or harvesting of fish;

(B) the attempted catching, taking, or harvesting of fish;

(C) any other activity which can reasonably be expected to result in the catching, taking, or harvesting of fish; or

(D) operations at sea in support of, or in preparation for any activity described in subparagraphs (A) through (C).

Is aquaculture fishing? The Fifth Circuit says “no,” affirming the district judge (Milazzo). The act applies to fishing, not to aquaculture.

But wait, says the government: it doesn’t apply, but we get to fill in the gap. Tough argument to win, and they lose it.

But wait again, isn’t aquaculture “any other activity which can be reasonably expected to result in the catching, taking, or harvesting of fish?”

No again, says the Fifth Circuit. But here there’s a dissent, arguing that come on, of course aquaculture is “the harvesting of fish.”

Which is right? Well, on the one hand, two votes are right, and for practical purposes, barring en banc or Supreme Court review, this is the law. But from an analytic perspective, this brings us to Title VII, and whether a 1964 law banning discrimination on the basis of sex applies to sexual orientation, because the question is basically the same. Do you look at the words up-close to figure out what they mean, or do you take a little step back and ask yourself what the drafters were trying to accomplish? And here, it is pretty obvious the fisheries act was not meant to establish an aquaculture regime, so that’s the answer. If you instead look at it up close, you can see how hard the panel works to say that aquaculture is not “harvesting fish.”

Snap Removal

Diversity jurisdiction is based on the idea that we can’t trust state courts to be fair to out-of-state defendants, because they’re going to home-town it. It’s right there in the Constitution, but as early as 1789, congress was already limiting it, requiring not just a chance for home-towning it against a party, but also a minimum dollar requirement.

If, say, you are a Louisiana company and you sue a Texas defendant in Louisiana, the Texas defendant, fearful the judge/jury will support the local guy, can remove it to federal court. But you have to have complete diversity - what if you sue a Texas defendant and a Louisiana defendant? No diversity jurisdiction.

But what if you serve the Texas defendant first, and then the Texas defendant removes it before the Louisiana defendant gets served? Seems to go against the thrust of the idea, right?

But here’s what the statute says:

[a] civil action otherwise removable solely on the basis of the jurisdiction under [28 U.S.C. § 1332(a)] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

And the Fifth Circuit stuck to the wording in Texas Brine Company. If you serve the Texas company before the Louisiana company, then the Texas company can remove the case and the removal will stick.

At the intersection of boats and the Clean Air Act

The Clean Air Act is a little bit of an odd one. See, for instance, the Fifth Circuit’s fascinating and excellent panel opinion in Environment Texas Citizens’ Lobby v. ExxonMobil, where the Fifth Circuit - judge Costa writing, who is just always outstanding at elucidating complex stuff - explained how people can sue even though they can’t get damages, subject to limitations.

Judge Costa’s opinion is wonderful. Judge Oldham’s dissent is also wonderful. One quote, to tell you what’s up:

I write separately to emphasize that our precedents in this area are a mess. The majority admirably attempts to make sense of them. But I’m afraid that task is too big for any panel. Eventually, our en banc court should clean up this confusion.

And then there’s Shrimpers and Fishermen of the RGV v. Texas Commission on Environmental Quality.

The Texas Commission on Environmental Quality, which is responsible for making these types of decisions, approved a liquid natural gas facility in Texas. The shrimpers and fishermen of the Rio Grande Valley didn’t like that, so they fought it, first with the TCEQ, then with the Fifth Circuit. The shot to the Fifth Circuit was a long shot, but interestingly, the Fifth Circuit didn’t dispose with it on that basis. It reached standing, and held that the fishermen hadn’t shown that they may be adequately harmed by the LNG facility that they could bring a claim in the first instance:

Even if we charitably construe this argument as claiming that individuals living, working, and driving within a roughly fourteen-mile radius of the proposed facility (i.e., Petitioners’ members) will suffer an increased risk of harm that those living further away will not suffer, these claims are too generalized and Petitioners have not produced enough evidence to show an actual or imminent harm.

It's here! The argument in Batterton!

https://www.supremecourt.gov/oral_arguments/argument_transcripts/2018/18-266_3d9g.pdf

Credit to Justice Sotomayor for her perceptive questioning.

It is probably a fool’s game to predict the outcome based on the transcript, at least in this case. It seems likely that it won’t be unanimous, though it might be a little bit of an odd decision: Justice Kagan refers to the Jones Act as a “flashing yellow light,” warning the Supreme Court not to expand remedies for unseaworthiness, which tends to suggest she’s against a more expansive remedy, a little surprisingly. Then again, Miles was unanimous.

We should know the answer before long - June-ish or before.

Edit: It remains a fool’s game to predict the outcome, but fools rush in where angels fear to tread, so here goes: 6-3 ruling that punitive damages are unavailable. Roberts, Kavanaugh, Kagan, Gorsuch, Thomas, Alito for the majority; Sotomayor, Breyer, Ginsburg for the dissent. (Note that this is wild, wild speculation.)

How to pay M&C and not get it back

You’re a boat owner. You employ crewmembers. You’re minding your business - say you’re sitting at the dock - when some other boat comes by and runs into you, or its wheel wash swamps you, say, or anyway somehow or another, your crewmember gets hurt, or says he gets hurt.

You start paying maintenance and cure, because of course you do - it’s the right thing to do, and if you don’t you face a punitive damages claim.

A year, and $150k in M&C later, your crewmember files suit against the malefactor, and you join in to get your money back. “But wait” says the tortfeasor, a year into litigation: "this whole thing is rotten, and this crewmember had an undisclosed, untreated back for a decade and now he’s trying to pawn it off on me.” And wouldn’t you know it - it’s right. The judge even says so. No recovery. You’re out $150k - or maybe more now - even though you didn’t do anything wrong. Who should pay that? You or the third-party tortfeasor?

You, says the Fifth Circuit just recently. Which . . . mostly makes sense. If you’re a tortfeasor, you only owe the damages you cause. If somebody else is perpetrating an elaborate fraud, it doesn’t follow that you should have to pay it. After all, if it were health insurance with a subrogation claim instead of an M&C reimbursement claim, the health insurer couldn’t get money back if there wasn’t an accident or an injury. M&C should be no different.

when lawyers are like journalists

From Robert Caro:

Finally, he raised his head. “I didn’t know someone from Princeton could do digging like this,” he said. “From now on, you do investigative work.”

I responded with my usual savoir faire: “But I don’t know anything about investigative reporting.”

Alan looked at me for what I remember as a very long time. “Just remember,” he said. “Turn every page. Never assume anything. Turn every goddam page.” He turned to some other papers on his desk, and after a while I got up and left.

From the New Yorker

Supreme Court!

The US Supreme Court granted certiorari in its first maritime case in some time: The Dutra Group v. Batterton. At issue: whether there’s a cause of action under general maritime law for punitive damages in the event of, for lack of a better term, wanton / gross unseaworthiness. The Fifth Circuit says “no.” The Ninth Circuit says “yes.” The Supreme Court will decide.

But if you’re reading this, you want to know the answer. What’s the Supreme Court going to do? The safe money is on “side with the Fifth.” First, +/- 65% of Supreme Court cases reverse the appellate court - otherwise, why take the case in the first place? Second, you have a pretty conservative Court here, and “no punitive damages” is the more conservative position, along with “defer to Congress.” It gets spotty, though, because limits on punitive damages are couched in due process, and it is not often considered a conservative position to have an expansive definition of due process.

More analysis: it used to be that there were two and a half pillars of federal maritime common law. First: uniformity. Second: Congress is presumed to legislate knowing what the law is. The half: deference to Congress.

That gives you Miles v. Apex, where the Court said "Congress did not allow punitive damages in the Jones Act, and we sail in occupied waters (lol). We won’t go beyond what Congress allowed for Jones Act negligence, or for general maritime law unseaworthiness.” All two-and-a-half objectives accomplished.

Then Exxon v. Baker: in a pure general maritime law claim, there is a claim for punitive damages because Congress hasn’t said “no.” One point away from uniformity, because it’s weird to give everybody with a general maritime law claim a shot at punitive damages except for Jones Act seamen (and others, like Longshoremen, whose remedies are creatures of statute.)

Then Atlantic Sounding v. Townsend: Jones Act seamen do have a claim for punitive damages: not for negligence or unseaworthiness, but for arbitrary and capricious denial of maintenance and cure. The rationale for the 5-4 decision: there were punitive damages before the Jones Act for arbitrary and capricious denial of M&C, so that survives after. Another point away from uniformity.

Now Batterton. If gross unseaworthiness isn’t materially different from gross negligence under the Jones Act, then the nearly-discredited uniformity idea comes roaring back and there’s no cause of action for gross unseaworthiness. This makes sense: maintenance and cure are real different from Jones Act negligence or GML unseaworthiness, but unseaworthiness and negligence are real close. It makes sense to treat them as overlapping in remedies. But if unseaworthiness is materially different from negligence, then there’s every reason to have different remedies, and a gross unseaworthiness remedy survives. This also makes sense, because they have, among other things, different causation standards. What about hoary history? That cuts both ways, as described in elaborate detail in the Fifth Circuit’s McBride decision.

So at last, the prediction: I don’t think it’s accidental that the most conservative judges on the Fifth Circuit found no punitive damages for wanton unseaworthiness. I don’t think it’s accidental that the less conservative judges dissented. I also don’t think it’s accidental that the Ninth Circuit panel that found wanton unseaworthiness was mostly liberal (a Clinton appointee from Montana, a George HW Bush appointee from Alaska, and an Obama appointee from California). Furthermore, the Batterton decision is narrow. It doesn’t say that “we like punitive damages.” It just says “Miles isn’t completely on point, so our precedent survives Miles.” TheSupreme Court is conservative, with a libertarian bent. My money, if I were a betting man, would be on the conservative side winning out. There are three easy votes for “no punitives:” Roberts, Alito, and Kavanaugh. Everybody else is a maybe, and two maybes out of six isn’t a lot.

How far does arbitration extend?

You enter into a contract that contemplates future performance. Say it’s an installment contract. You buy my land - a grapefruit orchard, let’s say, but you don’t know a lot about farming it. I do. I agree to sell you all my grapefruit, and you agree to pay me the market rate for my grapefruit. But I’m worried the floor is going to fall out from the market and you won’t pay me enough to cover my costs; you’re worried I’m not going to grow enough grapefruit anyway. We agree to arbitrate that part of the contract. But only that part of the contract.

We disagree and we arbitrate. The arbitrator decides who should pay what to whom, but she does more on top of that. She decides that there was mutual mistake in part of the contract and reforms that part of the contract, say to my benefit. You’re not happy, but arbitration is generally not appealable.

What do you do? The Fifth Circuit says you file a federal lawsuit. Though courts, broadly, favor arbitration, the Fifth Circuit says that’s only a rule to apply in the case of ambiguity, which, like all the other rules, falls to the wayside in the face of clear language.

SCF Waxler v. ARIS T - 1292(a)(3) jurisdiction

Maritime law is mostly like the rest of common law, but there are some fun quirks here and there. One of those is 28 U.S.C. § 1292(a)(3), which provides: 

Interlocutory decrees of such district courts or the judges thereof determining the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are allowed.

Ordinarily, with some important exceptions, a case has to be over before you can appeal in federal court. 1292(a)(3) provides an exception for admiralty causes of action too. But how broad is it? To answer that, you have to answer another question: how do we interpret statutes? Going by the plain language, you'd think it's any judgment that determines the rights and liabilities of the parties - i.e. all of them. But if you look at purpose, it's much narrower than that - the original idea is that often a special master will determine liability and damages are determined by separate process, and the goal is to allow appeal of the former before the latter is determined. 

So we find the dilemma in SCF Waxler Marine LLC v. ARIS T (5th Cir. 2018). Judge Zainey had ruled that an insurance carrier was allowed to limit its liability along with its insured if its insured won limitation.* However you want to call it, this is something that determines some of the rights and liabilities of the parties, but it isn't a final adjudication of much of anything except that narrow issue. The other side appealed. The Fifth Circuit said "no right of appeal." 1292(a)(3) appeals are only for final adjudication of an entire part of a claim. "We have clarified that appellate jurisdiction is generally appropriate whenever an order in an admiralty case dismisses a claim for relief on the merits," says the Court. If one plaintiff is dismissed, there's a final adjudication, for instance. If the insurer had been dismissed (say, on the argument it didn't provide coverage at all), same thing. No need to wait for the entire case to be over. But finding that the insurer is entitled to make an argument to limit its liability? Not so much. 

There is pretty significant case law on this, so the decision is not really a surprise and the appeal was a long shot. 

*Louisiana allows the insurer to be named directly. The limitation of liability act allows the vessel owner to limit its liability to the value of the vessel + freight at the end of the voyage if the accident did not involve its privity or knowledge. The vessel's insurer can only avail itself of limitation if it has a Crown-Zellerbach clause. Whether this policy's language met the Crown Zellerbach question was the underlying question. The district court said "yes." 

Copyright and cheating

Is cheating in a video game a copyright violation? I dunno. But we might find out. 

https://www.theverge.com/2018/5/9/17333292/fortnite-cheater-lawsuit

From the same author who brought our attention to Uber's misdeeds. It's an interesting read. And if anybody reading on the west coast with an expertise in IP / copyright / DMCA and a giant bent for pro bono work wants to help . . . they don't have lawyers. 

UBER Redux

The last time Uber was in the news here at Barge and in Charge, it was about their abuse of the discovery process. Since then, they killed somebody. Since then, California ruled their drivers are employees, not independent contractors. 

Is this right or wrong? 

I suggest it depends on what you think the answer should be, because it's a close one. 

Reasoning: 

Defendants (i.e. Uber) hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that Defendants are involved in every aspect of the operation

What does Uber do? It vets drivers; it requires background checks and DMV checks; it controls the tools (cars must be newer than ten years old), and the driver doesn't negotiate the fee. It doesn't tell them when they can work. It does and doesn't tell them how to work. 

This is a policy question. Were I Uber, I would think the proper fight is in the legislature more than the courts. But I'm thankful I'm not Uber. 

 

At the intersection of bankruptcy and mineral liens

ATP (disclosure: represented them once forever ago in an unrelated matter) filed for bankruptcy. Before it did, it sold "term overriding royalty interests" in its oil and gas leaseholds to OHA Investment. But even before that, ATP hired service providers to, well, provide services. Under the Louisiana Oil Well Lien Act, those service providers had secured interests against ATP's leaseholds. 

ATP files for bankruptcy. The service providers want to collect on their secured debts, only to find out those are - maybe - owed by OHA, not ATP, because they've been transferred. So this amounts to the service providers going after OHA under the LOWLA. 

OHA argues it doesn't actually have an interest in the oil and gas; it only has an interest in the proceeds from their sale. Therefore, OHA further agues, the service providers don't actually have a secured interest - the security goes to the holdings, not the stream of profits from the holdings. Nuh-uh, says the Court - that's slicing the bologna a little too thin. 

So OHA is in bad shape. But the LOWLA has a safe-harbor: a bona fide purchaser without notice of the security interest is A-OK. OHA never had notice of the service providers' interests, or at least not before purchase. Result? OHA wins. 

Author of the opinion? Judge Reavley, who is now ninety-six years old. 

At the intersection of patents and offshore wells

Here I sit, patiently waiting for the phone call to argue this one in the Supreme Court. Kannon Shanmugam? Paul Clement? Nah, call me. 

You have a patent in the U.S. over let's say a drill bit. You license it to me. I negligently give it to a third party, overseas, who uses a part of it to build a drilling rig in oh, I don't know, the South China Sea. You sue me for patent infringement. How much am I liable for, and how much is the real infringer liable for? What's the extraterritorial effect of patent remedies? Does it matter if the use in the South China Sea by the real infringer wasn't infringing the patent law of that country? 

These are reasonably complicated issues, with an uncertain outcome. I won't hazard a prediction. The argument is available here:

An article too good to pass up

William Langewiesche writing about the El Faro. Just excellent stuff. 

One little bit though:

Add to that mystery this simple fact: the sinking of El Faro was the worst U.S. maritime disaster in three decades.

[thinks back to the Deepwater Horizon]

[Counts back to April 2010]

Second worst maritime disaster in three decades. 

9th Cir: does your sewage get into navigable waters? Then you're under CWA

What do you do with four million pounds of poo? If you're Hawaii, you dig really deep holes and flush it. What if it leaks into the Pacific Ocean? Then, my friend, you have a clean water act problem. 

Hawaii concedes it digs holes and flushes effluent down those holes. It concedes the effluent reaches the Pacific Ocean. It admits the wells are a 'point source' under the CWA. But it argues the source doesn't directly convey the, uh, effluent into the water; it's only conveyed indirectly. And that's not without merit! The 9th Circuit held previously:

point source pollution occurs when "the pollution reaches the water through a confined, discrete conveyance," regardless of "the kind of pollution" at issue or "the activity causing it." (cleaned up)

Hawaii comes back. The CWA doesn't cover disposal into wells, by its own language. Not so, says the 9th Circuit; that's only if the wells are, in effect, self-contained. 

The result seems . . . mostly reasonable, no? If your process for getting sewage gone includes dumping it into the ocean, that seems like a CWA problem. That you have some intermediary steps doesn't make the problem go away. 

Now what's interesting is how closely this will be applied to fracking, and what the effects will be. It appears to be largely same/same.