RECENT
DEVELOPMENTS IN THE COURTS - PART VII
(Published October
2002)
The following survey represents some of the more significant recent court rulings around the nation affecting shipping lines generally.
Shipowner May Be Liable for Excess Service of Alcohol
Kludt v. Majestic Star Casino, 200 F. Supp. 2d. 973 (N.D. Ind. 2001)
Defendant operated a casino river boat where alcoholic beverages were served from 9:00 a.m.- 3:30 a.m. Plaintiff and his wife boarded the vessel at approximately 4:00 p.m. and stayed until 4:00 a.m. the next morning. During this period, plaintiff allegedly drank between 14 -16 beers. As they were disembarking the vessel, plaintiff fell on an escalator and was injured. Plaintiff filed suit in the U.S. District Court of Indiana, based on diversity jurisdiction but did not invoke the court's admiralty jurisdiction. However, the court, on its own, invoked its admiralty jurisdiction and ostensibly applied general maritime law.
Defendant moved for summary judgment on plaintiff's negligence claim under general maritime law arguing the court should apply Indiana's Dram Shop Act rather than any substantive federal maritime law. [Most states have enacted "Dram Shop" statutes which relieve persons furnishing alcoholic beverages from civil liability for damage caused by the intoxication of the person who was furnished the alcoholic beverage, unless the person furnishing the alcohol beverage had actual knowledge that the person was intoxicated at the time one furnished the alcohol.] In support of its argument defendant cited Meyer v. Carnival Cruise, 1995 AMC 1652 (N.D. Cal. 1994*) which, following Wilburn Boat Co. v. Fireman's Fund Insurance Co., 348 U.S. 310, held that since no federal maritime Dram Shop rule existed, California's Dram Shop statute governed plaintiff's admiralty claim. Plaintiff argued defendant should be held liable under general maritime law for providing alcohol without adequate supervision, citing Young v. Players Lake Charles 47 F. Supp. 2d 832 (S.D. Tex. 1999), which held there is an existing maritime rule governing the issue of Dram Shop liability.
In rendering its decision, the court relied on Kermarec v. Compagnie General Transatlantique, 358 U.S. 625 (1959), and held that under Kermarec any alleged breach of duty to a passenger on a cruise ship sailing in navigable waters is a maritime tort and requires application of general maritime law. The court found plaintiff presented sufficient evidence from which a reasonable jury could conclude defendant breached the duty of ordinary care, and the breach caused plaintiff's injuries and denied the motion for summary judgment as to plaintiff's negligence claim under general maritime law. However, the court noted that since state law may supplement maritime law, summary judgment would be appropriate on any claim for liability against defendant under Indiana's Dram Shop Act.
[Editor's note: As acknowledged by the court in Kludt, there are two conflicting lines of cases dealing with the issue of shipowner liability for excessive service of alcohol. The first line of cases follow the decision handed down in Meyer v. Carnival Cruise.* Meyer is generally cited for the favorable proposition that where a state Dram Shop statute grants immunity, it will apply in a maritime action brought in that state, whether in federal court or in state court. The second line of cases follow the decision handed down in Young v. Players Lake Charles. These cases hold that general maritime law does include a uniform rule on the issue of a shipowner's liability for excessive service of alcohol, the rule of reasonable care under the circumstances as set forth by the Supreme Court in Kermarec v. Compagnie General Transatlantique. The court in Kludt adds a new dimension to this conflict by allowing a plaintiff to sue under either a state's Dram Shop statute or, alternatively, under general maritime law.]
Federal Forum Non-Conveniens Law Applies to Diversity Suit Brought Against Shipowner in Federal Court
Esfeld v. Costa Crocier, S.P.A., 289 F. 3d. 1300 (11th.Cir. 2002)
Plaintiff passengers while on a shore excursion in Vietnam were injured when the van they were traveling in rolled over. Defendant made all the arrangements for the shore side excursion, including providing the van driver. Upon return to the United States, plaintiffs filed suit in Florida state court for personal injury and negligence. Defendant, an Italian corporation, moved for dismissal on the grounds of forum non-conveniens. The trial court denied defendant's motion. Defendant filed an interlocutory appeal challenging the trial court's denial. The state court of appeal reversed the trial court's denial, concluding that the case should be dismissed on forum non- conveniens grounds. The court of appeal ruled that Italy provided a more proper forum for the litigation since defendant had consented to the jurisdiction of the Italian courts and had agreed to waive reliance on any statute of limitations.
Upon dismissal of their state court action, plaintiffs filed a diversity action against defendant in the United States District Court, Southern District of Florida. Defendant again moved for dismissal on forum non-conveniens grounds. The District Court granted defendant's motion. In so doing, the District Court applied Florida state forum non-conveniens law. Under Florida state law, courts are only permitted to consider the contacts that a lawsuit has with the State of Florida. The District Court found that plaintiffs' suit had no connection to Florida in that plaintiffs were not Florida citizens and the incident giving rise to the suit did not occur in Florida. Plaintiffs appealed.
The United States Court of Appeals for the Eleventh Circuit reversed finding the District Court improperly applied Florida forum non-conveniens law to plaintiffs' diversity suit. The Court of Appeals held that in a diversity suit brought in federal court, the federal court must apply federal forum non- conveniens law. Under federal forum non-conveniens law, a court must consider the strong federal interest in ensuring plaintiffs who are United States citizens generally choose an American forum for bringing suit. The court found another important interest which must be weighed under federal forum non-conveniens law is the federal government's interest in foreign relations. In weighing this interest, a court must consider whether a case should be dismissed because a foreign jurisdiction is more suitable, and analyze the interest the foreign country has, and whether the foreign jurisdiction provides an adequate alternative forum for the plaintiff.
No Cause of Action for Loss of Consortium Under General Maritime Law Against Non- Employers
Williams v. Chemoil Corporation, 2002 U.S. Dist. LEXIS 7958 (E.D. La. 2002)
Plaintiff, a crewmember aboard M/V TRITON, sustained injuries when the floor of the vessel's engine room collapsed. Plaintiff sued his employer for negligence and unseaworthiness under the Jones Act, and a third party, Chemoil Corporation, under general maritime law. Plaintiff's wife also sued defendants for loss of consortium. Defendants moved for summary judgment on the wife's claim.
Defendants argued there is no cause of action under the Jones Act or general maritime law for loss of consortium against either an employer or a non-employer. Plaintiffs conceded that the Fifth Circuit precludes such a cause of action against employers but that the Fifth Circuit rulings do not extend to causes of action against non-employers such as Chemoil. In granting defendants' motion, the court relied on Miles v. Apex Marine Corporation, 498 U.S. 19 (1990), which held there is no recovery or loss of consortium under the Jones Act or under general maritime law. The court disagreed and held that to make a distinction between employer and non-employer would result in the kind of inconsistency the Supreme Court sought to avoid in Miles.
Land-based Employee Permanently Assigned to a Vessel Who Spends 10% of His Working Time Aboard Vessel Not Jones Act Seaman
Nunez v. B & B Dredging, Inc., 288 F. 3d. 271 (5th Cir. 2002)
Plaintiff was employed by defendant dredging company for two years, most recently as a dredge dump foreman. His duties included overseeing the discharge of dredge soil on or near the bank of the waterway in which the dredge operated. Although plaintiff traveled across water to the dredge twice a day to report to his supervisor and occasionally ate meals onboard, it was uncontested he performed 90% of his work on land.
While overseeing the discharge of dredge soil, he began to sink into the silt on the bank. To escape, he climbed onto the back of a track hoe and was injured when the machine hit his shoulder and threw him into the air. Plaintiff brought suit against his employer for negligence under the Jones Act, unseaworthiness, and maintenance and cure under the general maritime law. Defendant moved for summary judgment arguing plaintiff was not a seaman under the Jones Act. The trial court denied the motion. Plaintiff then moved for summary judgment on the same issue. The trial court granted the motion and held that plaintiff was a seaman as a matter of law. After trial, the court awarded plaintiff damages and entered final judgment against defendant. Defendant appealed, arguing that the district court erred by finding that plaintiff was a seaman as a matter of law. The Court of Appeals agreed, relying on the two-part test for seaman status under the Jones Act established by the Supreme Court in Chandris, Inc. v. Latsis, 515 U.S. 347 (1995), and Harbor Tug and Barge Co. v. Papai, 520 U.S. 548 (1997), which held a maritime employee is a seaman under the Jones Act if his duties contribute to the function of the vessel, and the worker has a connection to a vessel in navigation that is substantial in terms of both duration and nature. Because plaintiff spent only 10% of his work time aboard BATON ROUGE, the court held he lacked the necessary substantial connection to a vessel in navigation.
Forum Selection Clause in Bill of Lading Upheld
Kiswire Trading, Inc. v. M/V HOEGH MERCHANT, et al., 2002 U.S. DIST. 9475 (N.D. Ca. 2002)**
Plaintiff brought an action for damage to cargo consisting of 102 coils of steel wire shipped aboard M/V HOEGH MERCHANT from Korea to California. The cargo was transported under a bill of lading containing a forum selection clause which provided that any legal proceeding by the shipper arising in connection with the goods carried under the bill of lading shall be brought in the Federal Court of Canada.
Plaintiff filed suit in the United States District Court for the Northern District of California. Defendants moved for dismissal of the action based upon the forum selection clause contained in the bill of lading. Defendants argued that under the mandatory forum selection clause the court lacked jurisdiction. Plaintiff argued that defendants waived the protection offered by the clause by filing an answer, receiving initial disclosures, and participating in assisted dispute resolution prior to filing their motion to dismiss. The court, however, found that defendants conscientiously and reasonably pursued their jurisdictional defense. In the alternative, plaintiff requested the dismissal be conditioned on defendants' agreement to waive any statute of limitations defense they might raise in subsequent Canadian proceedings. The court found that it would be improper to do so, and held that plaintiff, not defendants, should bear the penalty, if any, of ignoring the forum selection clause and granted defendants' motion.
Breach of Trading and Navigational Warranties Voids Coverage
Pacific Fisheries Corp. v. HIH Casualty & General Insurance, Ltd., 239 F.3d 1000 (9th Cir. 2001)
Plaintiff's fishing vessel, ICY POINT, was covered under two policies written by defendant - a hull and machinery policy and protection and indemnity policy. Both policies contained identical trading and navigational warranties. Under the warranties the vessel was confined to the Pacific Ocean and was not to travel beyond certain points within the Pacific.
Notwithstanding the warranties, the vessel traveled to Guam, where a crewmember sustained injuries as a result of alleged dehydration and filed suit against the owner. Plaintiff vessel owner tendered the defense of the crewmember's action to defendant insurer. Defendant insurer advised plaintiff vessel owner that it needed to determine the reasons for the vessel's breach of the trading warranty before agreeing to defend the crewmember's action. Thereafter, the vessel departed Guam and proceeded north, remaining outside the trading warranty. During this voyage, the vessel experienced an engine breakdown. When plaintiff vessel owner notified defendant insurer of the breakdown, defendant insurer refused coverage on the ground the vessel was in breach of the navigation warranty at the time of the breakdown.
Plaintiff filed suit for breach of insurance contract in California superior court. Defendant thereafter removed the case to the District Court for the Northern District of California based on diversity. Following a bench trial, the District Court ruled in favor of defendant holding that the trading and navigational warranties were material to the insurance policies and plaintiff had deliberately breached the warranties in disregard of the terms of the insurance contracts. Plaintiff appealed.
The Ninth Circuit affirmed the District Court's decision in favor of defendant holding that under California law, breach of a warranty will void a policy when the policy expressly so provides, regardless of any lack of causation between the breach and the loss claimed.
Vessel Owner Not Liable for Alleged Medical Malpractice of Shipboard Physician
Jackson v. Carnival Cruise Lines, 203 F. Supp. 2d. 1367 (S.D. Fla. 2002)**
Plaintiff, her husband, and children were passengers aboard a cruise ship when plaintiff's husband became ill. Plaintiff informed the ship's purser of her husband's illness who advised plaintiff he would arrange for the ship's infirmary to provide assistance. Later that evening, plaintiff spoke to a ship's nurse who informed plaintiff she would have to take her husband to the infirmary for treatment. Plaintiff did not take her husband to the infirmary. The next morning plaintiff's husband awoke feeling extremely ill. In response to plaintiff's phone call that morning, two ship employees took plaintiff's husband to the infirmary where he was briefly treated by the ship's physician. Later that morning the vessel docked in Tampa, Florida, and plaintiff's husband was taken by ambulance to a local hospital, where he was later pronounced dead.
Plaintiff sued the cruise line for negligence, negligent hiring, breach of contract, and failure to warn. Defendant moved for summary judgment which the District Court granted. In so doing, the court relied on the fact that both the ship's physician and nurse were hired as independent contractors and the contract of carriage embodied in the passenger ticket provided that if the vessel provided a physician or nurse it did so solely for the convenience of the guest and such persons shall not be considered in any respect whatsoever the employee, servant or agent of the carrier and the carrier will not be liable for any act or omission of such person. The court also held that the cruise line had conducted a proper and thorough investigation into the background and qualifications of both the physician and the nurse prior to hiring them as independent contractors and therefore was not liable for negligent hiring.
Fraudulent Concealment Does Not Bar Jones Act or Unseaworthiness Claims by Seaman
Courtney v. Am. Seafoods Co., 42 Fed. Appx. 984; 2002 U.S. App. LEXIS 17402 (9th Cir. July 8, 2002)
The Ninth Circuit overruled the trial court's ruling in favor of defendant employer and remanded the case to the district court to determine whether defendant was negligent and, if so, whether its negligence, however slight, caused the seaman's alleged injury.
The district court had ruled that because of plaintiff's intentional concealment and fraudulent misrepresentations of his pre-existing condition and his failure to follow his physician's instructions and treatment program, defendant was not liable for negligence under the Jones Act or for unseaworthiness under general maritime law.
The Ninth Circuit acknowledged that while it has ruled that fraud bars maintenance and cure "where a seaman conceals a medical condition that he knows or should know is related to the illness or injury for which maintenance and cure are requested," the district court erred when applying that same rule to Jones Act or unseaworthiness claims. To do so, the appellate court reasoned, was to attempt to re-institute the bar to recovery that the abolished doctrines of contributory negligence and assumption of the risk formerly may have provided. The appellate court remanded the case for determination of whether the shipowner was negligent and whether the fishing vessel was unseaworthy. If either of those issues are decided affirmatively, then the trial court is directed to determine whether liability should be reduced due to the seaman's conduct.
Deviation from Work Sufficient for Dismissal of Jones Act Claim but Not Relevant to Claims for Maintenance and Cure
Callbreath v. United States, 42 Fed. Appx. 969; 2002 U.S. App. LEXIS 16339 (9th Cir. August 8, 2002)
Plaintiff was a crewmember aboard CAPE INTREPID, a government-owned ship docked at a port facility adjacent to railroad tracks. Upon returning from a personal errand and a night out, plaintiff attempted to cross the tracks to gain access to the ship and was severely injured. The district court granted summary judgment to the government on the ground the crewmember was not within the scope of his employment when the incident occurred.
Even construing all evidence in the light most favorable to the crewmember, the Ninth Circuit reasoned that the crewmember could not prove the government had any duty to provide for his safe passage across the railroad tracks, which were not under its direct control. Because there was a triable jury question as to whether the crewmember was acting within the scope of his employment while returning to ship on the night of the accident, however, the district court's determination to the contrary on the maintenance and cure claim was in error. As maintenance and cure is not predicated on proof of fault or negligence of the shipowner, the absence of negligence on the government's part was not sufficient to deny recovery by motion for summary judgment.
Convention on Foreign Arbitration Trumps Jones Act in POEA Forum Selection Disputes
Francisco v. STOLT ACHIEVEMENT M/T, 293 F. 3d 270 (5th Cir. 2002)
Plaintiff, a Philippine national, was injured aboard M/T STOLT ACHIEVEMENT, a chemical tanker located on the Mississippi River. He was employed aboard the vessel allegedly operated by Stolt-Nielsen Transportation Group, Inc., a Liberian corporation. Stolt's "Crewing Manager" submitted an affidavit attesting that when Stolt hires Filipino seamen, it must comply with employment contract requirements of the Philippine Overseas Employment Administration ("POEA"). Plaintiff signed such a contract containing lengthy provisions addressing employee compensation and benefits in the event of work-related injury, illness, or death. The contract provided that in the event of "claims and disputes arising from this employment," the parties agree to arbitrate their disputes in the Philippines. The contract was found subject to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention Act"), 9 U.S.C.S. § 201.
Even though plaintiff had pled theories of liability under the Jones Act, general maritime law for unseaworthiness and maintenance and cure in his Louisiana state court action, the federal court permitted removal jurisdiction as the claims fell under the Convention Act, and as such, removable under the laws and treaties of the United States.
In regard to arbitration itself, the appellate court held that arbitration was proper as plaintiff had signed a written employment contract stating that claims and disputes arising from his employment, were subject to arbitration in the Philippines. Further, his employment contract stated it was governed by the law of the Philippines and such conventions and treaties to which the Philippines was a signatory. As the United States was a signatory to the Convention Act, the exclusion of seamen employment contracts in the Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., conflicted with the Convention Act itself and as ratified by the United States, and was found by the Fifth Circuit not applicable to the Convention Act.
Forum Selection Clause in Maritime Employment Contract Must Be Reasonably Communicated
Angeles v. Norwegian Cruise Lines, Inc., 2002 U.S. Dist. LEXIS 16134 (S.D.N.Y. August 29, 2002)
The district court denied without prejudice defendant's summary judgment motion based on the existence of a forum selection clause in a case involving a maritime action brought by a former employee against a cruise line for sexual harassment and gender discrimination.
Plaintiff worked as a bar waitress on one of defendant's ships. Plaintiff alleged her supervisor sexually harassed her aboard ship by touching and rubbing her, kissing her hair and the nape of her neck, and making sexually explicit remarks. Plaintiff's employment was subject to an employment contract, which she signed in the Philippines and provided the Philippine Overseas Employment Administration ("POEA") or the National Labor Relations Commission ("NLRC") shall have original and exclusive jurisdiction over "any and all disputes or controversies arising out of or by virtue of this Contract." In opposition to the summary judgment motion, plaintiff filed a sworn affidavit stating she was never given a copy of the contract sections containing the forum selection clause.
Based on the little evidence provided by the parties, the Court ruled it had no basis on which to conclude that the contents of the forum selection clause were reasonably communicated to plaintiff and therefore, that it can be enforced as to her. The Court noted, however, that the parties have not engaged in any discovery yet; and that if upon investigation the parties find sufficient evidence regarding the issue of notice to meet their burdens for purposes of summary judgment, the Court will consider it at that time.
Admiralty Jurisdiction Found in Wrongful Death Claim from Shoreside Murder of Grandmother by Her Insane Grandson-Seaman
Crear v. Omega Protein, Inc., 2002 U.S. Dist. LEXIS 15759, (E.D. La. August 22, 2002)
On May 14, 1998, Obedean Crear was working as a member of the crew aboard defendant's vessel, M/V WILLARD P. LEBOUGH when a stern pipe came loose and struck him on the head. Crear originally filed suit under the Jones Act and general maritime law, alleging severe head, neck and back injuries, mental illness, and substantial claims for lost future earning capacity. The relatively routine Jones Act case became complicated when, on June 24, 1999 Crear killed his grandmother by striking her multiple times with a hatchet. A Mississippi jury found Crear "not guilty due to insanity." In December 2001, the eight children of Crear's deceased grandmother filed suit, alleging the actions of the defendant shipowner in causing Crear's head injury and in failing to supply him with prompt and proper treatment caused his insanity which resulted in his grandmother's death.
According to plaintiffs, the sole and proximate cause of Crear's act was the negligence of the defendant and in failing to live up to its obligations under general maritime law, thus exacerbating his mental impairment. Defendant vessel owner argued the crewmember's intentional murder of his grandmother was an unforeseeable, superseding cause of harm for which the vessel owner was not liable.
Under the Extension of Admiralty Jurisdiction Act 46 U.S.C. § 740, the court found the matter fell within its admiralty jurisdiction because the alleged damages were "consummated on land" but were allegedly caused by a vessel on navigable waters." The claims alleged maritime negligence and / or unseaworthiness, and failure to provide maintenance and cure. According to the court, the claims also had the potential to disrupt maritime commerce and the general character of the activity showed a substantial relationship to traditional maritime activity. Because the children's claims stemmed from the death of a non-seafarer, for which Congress had not prescribed a comprehensive remedy, state law permitting punitive damages could also be brought to supplement any recovery under general maritime law.
ADA Does Not Displace Venereal Disease Defense in Maintenance and Cure Cases Involving HIV
Thomas v. New Commodore Cruise Lines Ltd., 202 F. Supp. 2d 1356; (S.D. Fla. 2002)
Plaintiff entered into a crew employment contract with defendant to work aboard its vessel. The crew employment contract provided plaintiff's hiring was contingent upon on a pre-employment physical which included testing for HIV. On September 19, 1999, plaintiff boarded ship. Upon realizing plaintiff had not undergone the required testing, defendant referred plaintiff to the Marine Medical Unit for his pre-employment physical and required HIV screening. The results from a blood test revealed plaintiff was HIV positive.
Plaintiff brought this action, in part, to recover maintenance and cure based on his testing positive for HIV. In response, defendant argued plaintiff was not entitled to maintenance and cure because that remedy was not available for illness resulting from venereal disease.
The court found no basis for distinguishing HIV from other venereal diseases. The seaman argued that he might not have contracted HIV through sexual conduct, but he failed to proffer evidence to raise more than a mere possibility of some other source. There was a lack of evidence that defendant was aware of or tolerated promiscuity or other dangerous sexual activities; the fact that condoms were provided by the ship's medical facility did not suggest defendant knew of or encouraged promiscuity. Accordingly, the Court granted summary judgment.
Seaman's Complaints about Physical Contact by Supervisor Sufficient to Deny Employer's Motion for Summary Judgment
Macke v. Miss. Belle II, Inc., 212 F. Supp. 2d. 1069 (S.D. Ia. 2002)
Defendant operates a river gaming casino in Clinton, Iowa and employed plaintiff as a customer service representative in the casino's Players' Club. During plaintiff's employment, a female co-worker was assigned to supervise Players' Club employees when the regular supervisor was not on duty. Plaintiff claimed she was knocked into a bookcase by the substitute supervisor. A few days later plaintiff claimed she was deliberately struck again by the same individual. Plaintiff alleged her employer was negligent under the Jones Act, because it continued to employ the substitute supervisor even after the casino knew or should have known that she had a propensity toward violence. Defendant sought summary judgment on plaintiff's Jones Act and unseaworthiness claims.
Viewing the evidence in the light most favorable to plaintiff the court held she had produced sufficient evidence to raise a material question of fact concerning whether the shipowner knew or should have known that the seaman was in danger of assault from her supervisor. The record indicated that plaintiff repeatedly told other supervisors about specific, deliberate assaults by the substitute supervisor. The shipowner's motion for partial summary judgment was denied with regard to the seaman's Jones Act negligence claim, however granted with regard to the unseaworthiness claim under general maritime law because the supervisor's attacks did not rise to the level of savagery necessary to render the vessel unseaworthy.
Court Denies Summary Judgment to Plaintiff in COGSA Case Involving Land Shipment
Pt Indon. Epson Indus. v. Orient Overseas Container Line, Inc., 208 F. Supp. 2d 1334 (S.D. Fla. 2002)**
Plaintiff delivered containers of cargo to defendant container line company for delivery to a third party. Defendant issued a through bill of lading for six containers to the consignee in Miami, Florida. Upon arrival in the United States by ship, one container containing 1248 computer printers was shipped overland from Long Beach, California, by rail to the Florida East Coast Railroad terminal in Miami. From there, the container was to be delivered by Interstate Maritime Trucking ("IMT") by truck to a forwarding company.
The container arrived at the railroad terminal in Miami, where after three days in storage, IMT picked up the container for transport to the forwarder. While en route, IMT's driver stopped briefly at a cafeteria. The driver claimed that upon returning to his truck and container, he was approached by two armed robbers who assaulted him at gunpoint, and hijacked the container and its cargo. The container of printers never arrived at the forwarder. Plaintiff filed suit against the container line company and IMT and move for summary judgment.
In its motion for summary judgment on the issue of liability, plaintiff claimed the Carmack Amendment of the Interstate Commerce Act, 49 U.S.C. § 11707, and the Harter Act, 46 U.S.C. §§ 190, 1311, applied to the through bill of lading between the plaintiff and defendant container line company.
The court held that disputed issues of fact existed as to whether the trucking company was negligent in causing the loss and thus it denied plaintiff's motion for summary judgment. It held the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.S. § 1300 et seq., governed the case, and as such, plaintiff had established a prima facie case under COGSA because: (1) the "through" bill of lading listing the weight of the cargo demonstrated that the cargo was delivered to the shipper in good condition; and (2) the parties did not dispute that the printers never arrived at their destination. However, bill of lading clauses 4, 23, and 26 allowed the shipper to subcontract all or part of its duties to a servant, agent, or subcontractor without increasing any of its responsibilities or liabilities under COGSA. Given COGSA's strong policy against lessening a carrier's liability and toward off-setting the superior bargaining power of carriers, clause 4 of the bill of lading was void, and did not relieve the shipper of liability for the trucking company's negligence.
First Federal Appeals Court To Recognize Validity of Athens Convention Limit in U.S. Suits Against U.S.-Based Carrier, Even Though U.S. Not A Signatory
Bobbie Jo Wallis v. Princess Cruises, Inc. et al., 2002 U.S. App. LEXIS 20097 (9th Cir. September 24, 2002) (Certified for publication)**
This case involved a widow's claims related to her husband's fall overboard from his cabin balcony in the middle of the night when the ship was cruising at full speed. Plaintiff did not report her husband missing until several hours later, after the ship was docked in Piraeus, Greece. She filed suit in federal court in California, alleging wrongful death, intentional infliction of emotional distress, and various fraud and breach of contract claims based on the cruise line's marketing materials. The cruise line filed motions for summary judgment or alternatively summary adjudication in the lower court, which were granted almost in their entirety. The lower court dismissed all of plaintiff's causes of action, except for her wrongful death claim, which the court ruled involved triable issues of fact. Regardless, the court enforced the Athens Convention damage limitation of approximately $60,000.
Plaintiff appealed the dismissal of her intentional infliction of emotional distress claim, as well as the Athens Convention damage limitation on the grounds it was void for public policy and the ticket contract had not reasonably communicated the damage limitation to her. The Ninth Circuit rejected plaintiff's argument that the Athens Convention limit was void for public policy under Section 183(c), noting Section 183 applied only to voyages traveling to and from U.S. ports. However, the appellate court accepted plaintiff's argument that the ticket contract did not reasonably communicate the damage limitation. The Court held the particular passage contract, which referenced the "'Convention Relating to the Carriage of Passengers and the Luggage by Sea' of 1976 ('Athens Convention')," but did not specify the monetary limitation, did not meaningfully inform a passenger of the limitation and was thus unenforceable on the facts of the case. The Ninth Circuit affirmed the dismissal of plaintiff's intentional infliction of emotional distress claim, focusing on the stringent legal standards set forth in the Restatement of Torts and noting the ship's conduct of which plaintiff complained was not sufficiently outrageous behavior to meet the pertinent legal standard.
[Editor's note: This case is the first Circuit Court opinion in the nation holding the Athens Convention damage limitation can be enforced in a U.S. lawsuit brought by an American passenger against a U.S.-based cruise line, even though the U.S. is not a signatory to the Convention. However, the limitation amount must be adequately communicated in the ticket and can only be applied to cruises which do not touch a U.S. port. Although a new protocol to the Athens Convention is now under consideration by the IMO, ratification by the required number of nations, if any, is still several years away. Until that time the Wallis opinion is an important precedent for limiting passenger claims for injury or death to approximately $60,000.]
ADA Barrier Removal Provisions Inapplicable to Passenger Ships, Even in U.S. Waters, Until Federal Agencies Promulgate Applicable Regulations
Spector et al. v. Norwegian Cruise Line Limited d/b/a Norwegian Cruise Line U.S.D.C.Case No. H-00-2649 (S.D. Tx.2002)
The Court sustained in part and denied in part defendant shipowner's motion to dismiss equal access claims brought under Title III of the Americans With Disabilities Act ( "ADA"), 42 U.S.C. §§ 12181, et seq. A group of mobility-disabled passengers and their non-disabled companions sought to bring a class action suit alleging barrier-imposed restrictions denied them equal access to recreational and safety facilities in violation of Title III. The companion plaintiffs claimed the barriers prevented them from participating in activities because they had to choose between missing activities and leaving their mobility-impaired companions alone.
Defendant sought to dismiss the complaint under FRCP 12(b)(6) for failure to state a claim upon which relief may be granted. Preliminarily, the Court decided cruise ships do fall within Title III's definition of "public accommodations" and that foreign-registered vessels are governed by the ADA while in U.S. waters, without violating the usual presumption against extraterritorial application of U.S. law. The Court then addressed the effect of the federal agencies' failure to date to promulgate any specific guidelines or regulations regarding the design, construction or alteration of cruise ships, and the effect of such failure on the barrier removal provisions of the ADA. Title III directs the DOT to issue regulations to carry out the various transportation provisions of the statute, including § 12184. In 1991, the DOJ issued regulations governing new construction and alteration of places of public accommodation (see 28 C.F.R. §§ 36.401, et seq.), and shortly after issued ADA Accessability Guidelines ("ADAAG") in an appendix to the regulations. See 28 C.F.R. Pt. 36, App. A. Nowhere do the DOJ or DOT guidelines address cruise ships or other passenger vessels and pronouncements from both agencies indicate the existing regulations do not apply to ships.
Defendant argued the agencies' failure to create such regulations excused it from compliance with the barrier removal requirements of Title III. The Court examined conflicting opinions on this issue in other federal courts, including Access Now v. Holland America Line-Westours, Inc., 147 F.Supp.2d 1311, 1312-13 (S.D. Fla. 2001) [rejecting the argument] and Resnick v. Magical Cruise Company, 148 F.Supp.2d 1298, 1305 (S.D. Fla. 2001) [accepting DOJ's and DOT's own statements that the ADAAG did not apply to cruise ships and dismissing plaintiff's claims that the shipowner violated the ADA's construction, alteration and barrier removal requirements in the absence of regulations]. The Court also relied upon Deck v. American Hawaii Cruises, Inc., 51 F.Supp.2d 1057, 1061 (D. Haw. 1999) [holding that new construction and alterations provisions of Title III do not apply to cruse ships]. The Court dismissed plaintiffs' claims against defendant to the extent they sought removal of physical barriers on the ships, as legally impermissible in the absence of specific regulations on the subject. The Court allowed the case to proceed only as to other alleged discrimination not based on the physical characteristics of the vessel.