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• Supreme Court to Decide Whether Longshore Coverage Moves Landward for Offshore Workers By Brett P. Fenasci The U.S. Supreme Court granted a writ of certiorari in Pacific Operators Offshore, LLP v. Valladolid, 131 S.Ct. 1472 (2011) to resolve a split among the U.S. Circuit Courts of Appeal regarding the issue of whether an outer continental shelf worker who is injured on land may be afforded coverage under the Longshore and Harbor Workers Compensation Act (“LHWCA”), as made applicable by the Outer Continental Shelf Lands Act (“OCSLA”). Coverage under the LHWCA is limited primarily to two broad categories of workers. First, a worker may be covered “directly” under the provisions of the LHWCA. Such direct coverage is primarily limited to longshore and harbor workers, shipbuilders, and shipbreakers. Second, non-seaman oilfield workers who are engaged in the exploration or development of natural resources on the Outer Continental Shelf (“OCS”) may be entitled to LHWCA benefits by virtue of section 1333(b) of OCSLA. 43 U.S.C. ....
• Outer Continental Shelf Safety and Environmental Management Systems: Imminent Deadlines, New Guidance and Proposed Rules By Lee Vail On October 15, 2010, the former Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) issued new regulations, incorporating in its entirety and making mandatory the implementation of the American Petroleum Institute’s Recommended Practice 75 (API RP 75).  The rule requires development of Safety and Environmental Management Systems (SEMS) plans by “a lessee, the owner or holder of operating rights, a designated operator or agent of the lessee(s), a pipeline right-of-way holder, or a state lessee granted a right-of-use and easement.” 30 C.F.R § 250.105. According to BOEMRE, “the purpose of SEMS is to enhance the safety and cleanliness of operations by reducing the frequency and severity of accidents.” This final rule applies to all Outer Continental Shelf oil and gas and sulphur operations and the facilities under BOEMRE jurisdiction including drilling, production, construction, well workover, ....
• Recent Fifth Circuit Decision Illustrates Importance of Including Demurrage Clause in Contract for Sale and Transport of Goods by Sea By Brittany L. Buckley Maritime attachment is a powerful procedure that allows an aggrieved party to garnish any of the defendant's property located within a particular federal judicial district.  Attachment is especially powerful because the garnished property can be used to ensure satisfaction of a claim, even if the property within the judicial district is not related to the claim that has been filed there.  This right can prove invaluable for securing payment of claims from a foreign defendant who cannot be easily traced down and sued.  This particular species of attachment is unique to admiralty law and is only available to satisfy "admiralty" or "maritime" claims, including contractual obligations that are separable from an non-maritime aspects of a contract. The Fifth Circuit’s recent decision in Alphamate Commodity GMBH v. CHS Europe SA, 627 F.3d 183 (5th Cir. 2010) narrowly defines maritime claims, thereby limiting the ....
• Does the Spoliation of Evidence Doctrine Apply to a Seaman who Elects to Undergo a Post-Accident Surgery Prior to an Independent Medical Examination? By Michael J. O'Brien The spoliation of evidence doctrine concerns the intentional destruction of relevant evidence by a party. In the event that relevant evidence is spoiled (i.e., intentionally destroyed), the court may exercise its discretion to impose sanctions on the responsible party. The seriousness of the sanctions that a court may impose depends on the consideration of: (1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3), whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future. Exclusion of spoiled evidence is a drastic sanction the courts generally try to avoid. However, the court may issue an instruction that will allow the jury to infer that the party spoiled the evidence because the evidence was unfavorable to the party’s ....
• Parties Cannot Avoid Patent Infringement by Conducting Negotiations Outside the United States for Products that will be Delivered and Utilized in the United States By R. Lee Vail In Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc, 617 F.3d 1296 (Fed. Cir. 2010), the Federal Circuit reversed a district court’s summary judgment decision that no patent infringement occurred when a US company made an offer to sell to another US company when the sale negotiations occurred outside of the US. Transocean filed suit for infringement of patents related to an improved apparatus for conducting offshore drilling. In order to drill for oil and other offshore resources, drilling rigs must lower several components to the seabed including the drill bit, casings, BOB’s, and the drill string. A conventional offshore drilling rig utilizes a derrick with a single top drive and drawworks that can only lower one element at a time in a time consuming process. Transocean patented a specialized derrick to improve the efficiency of lowering the above components. The specialized derrick included “two stations – a main ....
• "Pipeline Infrastructure and Community Protection Act" Hearings Focus on Recent Pipeline Incidents By R. Lee Vail and Maureen N. Harbourt On July 15, 2011, the House of Representative, Committee on Energy and Power, Subcommittee on Energy and Commerce held hearings on a draft of the “Pipeline Infrastructure and Community Protection Act of 2011.”  Chairman Fred Upton’s initial comments focused on recent pipeline incidents: the 20,000 barrel oil spill into Talmadge Creek, Michigan in the summer of 2010, the September 2010 gas pipeline explosion that killed 8 people in San Bruno, California and the most recent spill of 1,000 barrels of oil near Billings, Montana. (1)  Chairman Upton concluded that these incidents indicate that pipeline laws must be strengthened. Included within the draft legislation are the following provisions: one-hour time limit to report incidents; use of automatic or remote control shutoff-valves; better leak detection technology; substantial increase in civil penalties for releases from pipeline; enhanced inspection techniques; more ....
• Louisiana DNR Extends Offshore Drilling Emergency Order By R. Lee Vail In response to the Gulf of Mexico Deepwater Horizon Incident, the Louisiana Department of Natural Resources (“DNR”), Office of Conservation (“Conservation”) issued a series of emergency rules with effective dates: July 15, 2010(1) , December 9, 2010(2), January 12, 2011(3) and most recently May 12, 2011(4).  . The initial emergency rule created: “a new Chapter within Statewide Order No. 29-B (LAC 43:XIX.Ch. 2) to provide additional rules concerning the drilling and completion of oil and gas wells at water locations, specifically providing for the following: rig movements and reporting requirements, additional requirements for applications to drill, casing-header requirements, mandatory diverter systems and blowout preventer requirements, oil and gas workover operations, diesel engine safety requirements, and drilling fluid regulations.” See, 36 La. Reg. 1427. The initial emergency rule also amended Statewide Order No. ....
• Environmental Groups Attempt to Block Shell Deepwater Gulf of Mexico Drilling By R. Lee Vail Deepwater oil and gas production from the Gulf of Mexico has become a significant portion of the current production within the United States, equal to over 1.6 million barrels per day of oil equivalent; total U.S oil production is around 5.3 million barrels per day. (1)  Worldwide shallow water oil production peaked around the year 2000 whereas worldwide deep water production has risen to around 5 million barrels per day. On May 10, 2011, the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) approved Royal Dutch Shell’s Exploration Plan S-0744 to better define discoveries announced in 2009 and 2010. (2)  Several environmental groups filed suit in an attempt to block the approved plan. Gulf Restoration Network, Inc., Florida Wildlife Federation, and Sierra Club Inc. filed a petition on June 8, 2011, in the United States Court of Appeals, 11th Circuit, in an attempt to set aside BOEMRE’s approval of the plan. ....
• BOEMRE Notice Requires Hurricane and Tropical Storm Effects Reports By R. Lee Vail On June 1, 2011, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) issued a notice to Gulf of Mexico Outer Continental Shelf Region (GOMR) lease and pipeline right-of-way (ROW) holders on reporting hurricane and tropical storm effects. Specifically, the recent notice, designated NTL No. 2011-G01(1), requires four reports, as appropriate: Evacuation and Production curtailment statistic report – partially evacuated platforms are not considered evacuated Facility shut-in reports – including facilities that are partially shut-in Facility damage reports – including platforms, rigs and pipelines Pollution reports - facility discharged or continues to discharge oil during or as a result of the event   The Evacuation and Production curtailment statistic report and the Facility shut-in report overlap in subject matter. They differ in that the first report is general and requires overall company statistics (number of facilities ....
• Office of Conservation Issues Emergency Order Imposing Affirmative Obligations on Oilfield Sites, Facilities, Structures, Injection Wells and Pipelines Throughout the State By R. Lee Vail On April 28, 2011, Governor Bobby Jindal declared a State of Emergency as a result of growing concern over the predicted crest of the Mississippi River well above flood stage in many areas. Consistent with his authority, on May 13, 2011, James Welsh, Commissioner of Conservation, also issued an emergency and administrative order. It is expected that substantial flooding in the state will likely lead to adverse effects on many oilfield sites which could result in serious threats to public safety and the environment. The order specifically applies to following throughout the state: Oilfield sites – including injection wells Other facilities – including commercial E&P waste disposal and transfer stations Structures and Pipelines Ordered actions are both general calls for alert monitoring of the situation and a more specific list of necessary steps (as appropriate). The Order contains a practical, common sense mandate, to keep track of forthcoming ....
• A Recent U.S. Fifth Circuit Decision Shows the Importance of Including a Release of "Any and All Claims" in a Settlement Agreement By Sean T. McLaughlin When drafting a settlement agreement, the parties almost always have competing interests. The Plaintiff will push for a vaguely-worded settlement in an attempt to take another “bite-at-the-apple” down the road; the Defendant will push for a broad, all-encompassing release of liability (i.e., “any and all claims”) in an attempt to “close-the-books” on the Plaintiff’s claims. Sometimes, the parties will compromise by executing a settlement agreement which falls somewhere in the middle. However, both parties should be aware that compromises made during the settlement negotiations can lead to unintended consequences down the road. In Cooper v. Intern. Offshore Services, LLC, 2009 WL 5175216 (E.D. La. Dec. 17, 2009), aff’d, 2010 WL 3034497 (5th Cir. Aug. 3, 2010), the Plaintiff sustained injuries while working on a ramp connected to a vessel owned by his employer, International Marine. International Marine thereafter paid ....
• Is the Limitation of Liability Act Going to Sink with the Deepwater Horizon? By Karen Waters Shipman The recent tragedy involving the Mobile Offshore Drilling Unit Deepwater Horizon has shed a very bright and very public light on a much and often litigated 159-year old law previously known to very few outside of the maritime industry—the Shipowner’s Limitation of Liability Act, (“the Limitation Act”), 46 U.S.C. § 30505 (formerly 46 U.S.C. § 183). What the Limitation Act does is entitle a vessel owner to limit its liability after a maritime incident or casualty to the post casualty value of the vessel and its pending freight, which may be zero if the vessel is a total loss, except when the loss occurred due to the vessel owner’s "privity or knowledge." Privity or knowledge is found to exist where the acts of negligence or unseaworthiness that caused the casualty were known or should have been known to the vessel owner. In addition to limiting a vessel owner’s liability, the Limitation Act also has several ....
• District Courts Continue To Agree That Production SPARs Are Not Vessels By R. Lee Vail A spar is a nautical structure designed to float with the bulk of the hull below the waves-something akin to a giant buoy. Fields v. Pool Offshore, Inc., 182 F.3d 353(5th Cir. 1999). Spars are essential to the expansion of oil production in deep water and their use has led to the legal question of their status. Are they vessels? Consistent with the Fifth Circuit Court of Appeals’s three part test, several recent decisions in Texas District Courts have found that a SPAR is a work platform and not a vessel. The finding is important since jurisdiction of a Jones Act action requires the existence of a vessel. In Fields, the Fifth Circuit laid out the three part test to distinguish “stationary” work platforms from vessels. These factors include the function of the structure, whether it is moored or secured at the time of the accident, and that it has greater than theoretical mobility. Fields distinguished spars from drilling rigs, as rig move from site to ....
• Recent Developments in E-Discovery in Louisiana By Katie D. Bell Electronic Discovery, or “E-Discovery”, is not considered the “novel issue” it once was. However, E-Discovery still presents problems that litigants and courts struggle with. Below is a summary of recent Louisiana Federal Court opinions dealing with the issues surrounding E-Discovery. In Frees, Inc. v. McMillian, 2007 WL 184889 (W.D. La. Jan. 22, 2007), the Western District of Louisiana granted the plaintiff’s motion to compel. In an unfair competition and trade secret theft action, the plaintiff claimed that the defendant, a former employee, had stolen various data files. Plaintiff had unsuccessfully requested production of defendant’s laptop and desktop. The Court granted the motion to compel the defendant to produce these two items because they were the most likely places that the data files would be located. The Court did institute protective measures so as to prevent the disclosure of any irrelevant or personal information. ....
• Immigration Status is Irrelevent Under the Longshore and Harbor Workers' Compensation Act By Amanda L. Howard In Bollinger Shipyards, Inc. v. Director, Office of Worker’s Compensation Programs, U.S. Dept. of Labor, (5th Cir. 2010) the United States Fifth Circuit upheld the award of workers compensation benefits to an undocumented immigrant worker who was injured on the job as a pipefitter. The Bollinger plaintiff, Jorge Rodriguez, fell and allegedly injured himself while welding for his employer, Bollinger Shipyards, Inc.  At the time of his alleged injury, Rodriguez had been working for Bollinger for approximately eight months, having initially obtained employment by falsely holding himself out as a United States citizen.  Rodriguez presented Bollinger with a false Social Security Card.  Bollinger initially paid Rodriguez temporary disability benefits and reimbursed him for a portion of his medical bills.  Two years later, however, Bollinger terminated all payments after discovering that Rodriguez was an undocumented immigrant.  Rodriguez ....
• United States Fifth Circuit Reiterates Rule That Crew Members Are Not Entitled to a Salvage Award for Assistance Rendered to Their Own Vessel By Michael J. O'Brien In Solana v. GSF Development Driller I, et al., 587 F.3d 266 (5th Cir. 2009), the United States Fifth Circuit reiterated the longstanding rule that generally, a seaman belonging to a vessel in peril cannot claim a salvage compensation for saving his vessel. The facts in Solana are quite interesting.  As Hurricane Katrina approached the Gulf Coast, Global Santa Fe (GSF) evacuated its jack-up and anchored rigs in the Gulf of Mexico, which included the Development Driller I (DDI), a $350 million dollar semi-submersible drilling rig. The DDI’s power was shut off and its crew was evacuated.  Solana, a 20 year GSF employee and Offshore Installation Manager (OIM) of the DDI, and Lally, a ballast control operator and senior dynamic positioning operator, were among those employees who were evacuated from the rig.  The DDI was seriously damaged as Katrina steamrolled through the Gulf.  After the storm had passed, a representative of GSF sought ....
• Structuring the Purchase of a Vessel Through a Corporate Entity for Tax Purposes Can Have Unintended Consequences By Sean T. McLaughlin It is a fairly common practice for individuals purchasing pleasure yachts to take calculated steps to minimize sales taxes on their purchases. In fact, a simple “Google” search on the subject reveals many websites offering free advice on this issue. One of the tactics suggested by several websites seems fairly simple: instead of the individual purchasing the yacht, the individual forms a corporation, and the corporation purchases the yacht.First and foremost, the author strongly recommends that any individuals considering purchasing a yacht seek the advice of legal counsel. The author specifically recommends seeking the advice of both a tax attorney and a litigation attorney. Why? A tax attorney can offer qualified legal advice concerning the sales tax issues surrounding the purchase. A litigation attorney can advise that structuring a purchase through a corporate entity can have significant non tax-related implications, including a complete bar ....
• Limitation of Liability - Effect of Notice to a Single Co-Owner By William M. Burst The Limitation of Liability Act provides, inter alia, that a vessel owner may petition a district court of competent jurisdiction for limitation of liability within six months of receiving written notice of a claim.  See generally 46 U.S.C.A §§ 30501-30512 (West 2010).  If the vessel owner fails to petition the court and the six month period lapses, it is thereafter precluded from seeking the Act’s protection.  The Act, however, does not address the effect that one co-owner’s failure to file a petition for limitation has on another co-owner’s right to subsequently seek limitation of liability. In other words, if co-owner “X” of a vessel receives notice of a claim against it and fails to file for limitation of liability within the requisite six-month period, is co-owner “Y,” who did not receive notice, precluded from filing for limitation of liability?The Middle District of Florida is the ....
• A Jones Act Seaman Does Not Have Greater Remedies Against A Non-Employer Than He Does Against His Employer By Sean T. McLaughlin It is well known that a seaman who is injured on the job can file suit against his employer in negligence due to the statutory provisions of the Jones Act. 45 U.S.C.A §§ 30104.  However, in a Jones Act suit, the injured seaman is prohibited from recovering “non-pecuniary” damages from his employer, a category which includes punitive damages and loss of consortium. (1).  This limitation on recoverable damages is due to the language of Jones Act itself. Miles v. Apex, 498 U.S. 19 (1990). In addition to bringing claims against his employer pursuant to the Jones Act, a seaman injured on the job often also files claims against non-employers. These claims are not dependant on the Jones Act, but rather general maritime law. In this situation, plaintiffs often attempt to recover non-pecuniary damages from the non-employer. Plaintiffs suggest that since there is no specific prohibition against the recovery of non-pecuniary damages in general ....
• Medical Bills Are Not Admissible to Prove Pain and Suffering By Michael J. O'Brien Due to the non-pecuniary nature of pain and suffering, Jones Act seamen will often use various methods to provide the trier of fact with a concrete basis for a damage award for pain and suffering.  One method that Plaintiffs may utilize is to introduce their medical bills for the sole purpose of highlighting the cost of their medical care.  Once the bills have been admitted, Plaintiffs will argue to the trier of fact that the high dollar amount of their medical bills corroborate their pain and suffering.  Alternatively, Defendants may introduce medical bills and point to the low cost of a Plaintiff’s medical care to prove the Plaintiff’s lack of pain and suffering.It is interesting that the United States Fifth Circuit has not commented on this issue. However, several cases outside the Fifth Circuit hold that there is no correlation between the amount charged by a healthcare provider and a Plaintiff’s pain and suffering.  In ....