Striding the Quarterdeck
Covering the most recent developments in national maritime jurisprudence and regulatory action, with a focus on issues that affect the inland and offshore industries in and around the Gulf of Mexico.
Subchapter M – Inspecting the Uninspected
On September 10th of this year, the President and CEO of the American Waterways Operators (AWO) appeared before the House Subcommittee on Coast Guard and Maritime Transportation and called for finalization by late 2013 or early 2014 of the long-languishing Subchapter M regulations relating to inspection of uninspected towing vessels (UTVs). http://transportation.house.gov/sites/republicans.transportation.house.gov/files/documents/2013-09-10-Allegretti.pdf. Thus, after more than a decade of regulatory delays and industry uncertainty, it appears that UTV operators can now bank (very literally) on the reality of mandatory Subchapter M compliance in the very near future. read more…
Where’s The Fire?: Coast Guard Issues Litany Of Proposed Regulations Regarding Fire Protection Systems
In a 106-page Notice of Proposed Rulemaking issued Monday, January 13, 2014, the United States Coast Guard (USCG) has undertaken a wide-ranging overhaul of the standards for fire protection, detection and extinguishment equipment aboard inspected and uninspected vessels, mobile offshore drilling units (MODUs), deepwater ports, and Outer Continental Shelf (OCS) facilities. This comprehensive and expansive overhaul is intended to “harmonize [USCG] regulations with appropriate national and international consensus standards; address advances in fire protection technologies and standards; update [USCG] approval processes for fire detection and alarm systems; and revise [USCG] regulations for other types of equipment or components.” 79 Fed. Reg. 2254, 2254 (Jan. 13, 2014). The proposed regulations span several chapters and subparts of two different C.F.R. titles – namely Title 46 (covering the USCG’s more historic shipping purview with respect to vessels) and Title 33 (covering the USCG’s hybrid/share authority over certain units/facilities/vessels engaged in operations on the OCS). read more…
Coast Guard Issues Proposed Regulations and NVIC Regarding Marine Casualty Reporting on the OCS
In the continuing regulatory response – even more than three years after the fact – to the DEEPWATER HORIZON disaster, the United States Coast Guard (USCG) has led off 2014 with proposed regulations that significantly change the reporting requirements for incidents on the Outer Continental Shelf (OCS). Most importantly, these new regulations broaden the types of reportable incidents for foreign-flagged vessels/units/facilities operating on the OCS. read more…
Tolling Agreement Held as Trigger Under Claims Made Policy – Plain Policy Language Provides Safe Harbor for Insurer
For insurers concerned about the effect of tolling agreements between an insured and a third party, the United States District Court for the Eastern District of Louisiana recently confirmed that the proper policy language will ensure that such an agreement tolls only the statute of limitations and does not affect the coverage period or notice obligations. In XL Specialty Insurance Company v. Bollinger Shipyards, Inc., et al, 12CV2071 (E.D. La. Jan. 3, 2014) (Vance, J.), the Court was asked to determine whether a Directors, Officers, and Private Company Liability Insurance Policy (D&O policy) covered claims made by the United States against Bollinger Shipyards, Inc. in related litigation. The United States’ claims against Bollinger arose from Bollinger’s performance of subcontract work to convert 110-feet patrol boats into 123-foot patrol boats. Upon delivery, the “lengthened” vessels suffered structural failures. read more…
Yo-Ho-Ho and No Exclusion: Louisiana Federal Court Gives Insurer “No Quarter” and Refuses to Apply Terrorism Exclusion for Act of Piracy Off Coast of Nigeria
The federal district court for the Eastern District of Louisiana in Johnson v. PPI Technology Services, Inc. (Case No. 11-2773, Rec. Doc. 305 (E.D. La. Dec. 17, 2013)) has scuttled an insurer’s attempt to avoid coverage for an act of piracy off the coast of Nigeria under the “Terrorism Exclusion” in a so-called Foreign Commercial Package Policy. The Johnson decision should be viewed as a jolly roger warning-flag to insureds and insurers alike to review their policies (hull, P&I, and general liability) regarding the applicability (or not) of terrorism/war risk exclusions to acts of piracy – particularly for companies working in the booming but dangerous oil fields off Africa, the haunt of modern day Barbary corsairs. The rash of recent piracy attacks on oilfield interests off the western coast of Africa has been widely publicized, but with a somewhat surprising dearth of litigation defining the potential liabilities for such incidents (at least in the United States). As such the Johnson decision is particularly important given the relatively scarce jurisprudence regarding insurance issues inherent in piracy events. read more…
Remember the (M/V) Alamo!: Mexican Reform Invites Maritime Reinforcements
In a moment as pivotal as the Battle of San Jacinto, groundbreaking reform in Mexico may bring a Lone Star-sized opportunity to the American maritime industry. On December 20, 2013, Mexican President Enrique Pena Nieto signed into law constitutional reforms that will open the country’s energy sector to private investment. www.fuelfix.com/blog/2013/12/29/qa The reform will end the long-held monopoly by state-owned Petróleos Mexicanos (“Pemex”), allowing private companies to explore for and produce oil and gas under a variety of contracts, including services, production, profit-sharing and licenses. The reform was driven by a number of factors, including Pena’s broad political agenda, aging refineries, lack of deep-water drilling capability and dwindling oil production. The “easy” oil is drying up, and Pemex lacks the funds and technology to get at the difficult stuff. http://www.nytimes.com/2013/08/14/business/global/in-mexico-a-proposal-to-revamp-oil-policy.html?_r=0. read more…
Second Circuit Firmly Aligns (for now) with the Robins Dry Dock Rule on Non-Recoverability of Pure Economic Damages Absent Physical Damage Under Maritime Law
The United States Court of Appeals for the Second Circuit in American Petroleum & Transport, Inc. v. New York, 2013 WL 6332548 (2d Cir. Dec. 6, 2013) recently – albeit reluctantly – joined the fleet of other federal circuit courts that have applied the United States Supreme Court’s decision in Robins Dry Dock as a per se bar against purely economic damages resulting from a maritime tort (i.e. economic damages in the absence of any physical property damage). Nonetheless, the court voiced its doubts regarding the validity of the majority rule derived from Robins Dry Dock: “Although we conclude that Robins Dry Dock has been overread to establish a rule barring damages for economic loss in the absence of an owner’s property damage, we believe the rule has been so consistently applied in admiralty that it should continue to be applied unless and until altered by Congress or the Supreme Court.” read more…
“And so the Universal Thump Is Passed Round”* – The Bureau of Safety and Environmental Enforcement (BSEE) Issues Report and Enforcement Actions Concerning November 16, 2012 West Delta Block 32 Fire
*Herman Melville, Moby Dick; Or, the Whale
Just under a year after the November 16, 2012 rig fire that left three workers dead, a joint investigative panel of BSEE and the United States Coast Guard has issued a report regarding the causes of the incident and recommending various enforcement actions/regulatory responses in the wake of the incident (“the Report”). http://www.bsee.gov/uploadedFiles/BSEE/Enforcement/ Accidents_and_Incidents/Panel_Investigation_Reports/Final%20BSEE%20Black%20Elk%20report.pdf. This Report and the ensuing Incidents of Non-Compliance (INCs) issued by BSEE are yet another reinforcement of BSEE’s controversial, unprecedented, and arguably ultra vires extension of its regulatory enforcement jurisdiction to offshore contractors in addition to its historic and statutorily supported jurisdiction over OCS operators and lessees. read more…
The Removal of the Ancient Mariner – The Developing Jurisprudence Allowing Removal of General Maritime Law Claims under the Recent Amendments to 28 U.S.C. §1441(b)
Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
Samuel Coleridge, The Rime of the Ancient Mariner
After nearly half a century of being “stuck” in state courts under the saving-to-suitors clause and the Supreme Court’s decision in Romero v. Int’l Terminal Operating Co., 358 U.S. 354 (1959), the non-removal albatross may have fallen from the neck of maritime defendants under a developing line of cases from the Southern District of Texas in the wake of the recent 2011 amendments (effective January, 2012) to the removal statute (28 U.S.C. §1441). read more…
That Ship Has Sailed – The Fifth Circuit Re-Affirms the “Useless Judgment” Doctrine
The United States Fifth Circuit Court of Appeal of Community Bank of Lafourche v. M/V MARY ANN VIZIER, 2013 WL 5615738 (5th Cir. Oct. 15, 2013) recently re-affirmed the historic but infrequently applied “useless judgment” doctrine, which precludes subject matter jurisdiction in the federal appellate courts when the losing litigant in an in rem proceeding before the district court fails to protect the federal courts’ in rem jurisdiction by either seeking a stay and/or substitution of security (cash, supersedeas bond) for the res to perpetuate in rem jurisdiction. See Republic Nat’l Bank of Miami v. United States, 506 U.S. 80 (1992); Newpark Shipbuilding & Repair, Inc. v. M/V TRINTON BRUTE, 2 F.3d 572 (5th Cir. 1993); Eurasia Int’l, Ltd. v. Holman Shipping, 411 F.3d 578 (5th Cir. 2005). This doctrine is particularly relevant in cases of maritime in rem practice, given that the interlocutory sale of a vessel not only liquidates the res but also erases any prior liens or encumbrances against the Vessel. The result in Community Bank is of particular note for vessel mortgagees, maritime lienors, and vessel owners engaged in in rem litigation, because failing to take the necessary steps to protect jurisdiction can result in preclusion of an appeal from an adverse ruling in the district court. read more…
