While operating 9.5 nautical miles off the coast of California, a United States Navy helicopter plunged into the Pacific Ocean. Three Navy crewmen died in the 2007 crash. Blaming the accident on the helicopter and its component parts, the personal representatives and successors in interest of the crewmen (collectively Appellants) brought wrongful death and general maritime claims in California state court. The manufacturers, Sikorsky Aircraft Corporation and Sikorsky Support Services, Inc. (collectively Sikorsky) removed the case to the United States District Court for the Central District of California.
In recent years, arbitration has become an increasingly favored means of dispute resolution, particularly in the field of maritime insurance. In the United States, maritime arbitration is governed by two primary sources: the Federal Arbitration Act and the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Louisiana, along with several other jurisdictions that regularly handle maritime disputes, provides an injured party the right to name the alleged tortfeasor’s insurer as a direct defendant based on the insured’s tortious conduct. These direct action statutes often include language or specific provisions that, in many instances, courts have interpreted to void arbitration clauses in insuring agreements, reasoning that the enforcement of such clauses would impair or impede the right of direct action created by the statute. Because direct action statutes regulate the business of insurance–a field of legislation largely reserved to the states by the McCarran-Ferguson Act–they are generally exempt from preemption by federal law.
The purpose of this Comment is to identify and discuss the often perplexing nuances of a maritime employee’s “course and scope of employment” as it pertains to Jones Act negligence claims against a maritime employer under vicarious liability. The law is fairly well developed, though not settled, with respect to whether purely intentional and purely negligent acts fall within the employee’s course and scope. However, few courts have undertaken a meaningful analysis of course and scope in cases involving “hybrid torts,” where a seaman negligently inflicts injury upon a fellow employee but knowingly violates a workplace safety rule. Such conduct lies somewhere between mere negligence and intentional tort. Vicarious liability for these hybrid torts is the main focus of this Comment.
States have expansive power to tax the people and property within their jurisdiction. This taxing power is limited by the United States Constitution; however, taxes that affect the supremacy of the federal government, interfere with a sphere exclusively occupied by Congress, or inhibit interstate commerce are constitutionally beyond a State’s power to tax. The Tonnage Clause of the United States Constitution makes clear that Congress has the exclusive authority to tax and regulate interstate commerce and prohibits states from “lay[ing] any Duty of Tonnage.” This seemingly direct prohibition, interpreted and modified by a century of jurisprudence, now encompasses additional implied prohibitions and exceptions.
The Tonnage Clause, especially when considered in conjunction with the Import-Export Clause, is one method of ensuring that the individual states do not tax maritime trade discriminatorily, to the detriment of the union as a whole, or in contravention of federal schemes. However, this solution is not the only form available; there is also a patchwork option that was developed in the Articles of Confederation and quickly abandoned. Additionally, the European Union has addressed the problem and developed a solution not entirely dissimilar to the U.S. approach, which includes methods designed to provide E.U. Member States with advisory guidance on the acceptability of any taxation scheme.
Admiralty jurisdiction has long posed a formidable opponent to those seeking to understand its subtleties. Fortunately, perhaps, for the maritime bar, substantial issues yet remain around its murky edges that require further discourse. The determination whether a products liability claim falls within admiralty jurisdiction can, at times, lead one into uncharted waters. This Comment will attempt to shed some light into the murky corners of admiralty jurisdiction’s reach so that those far wiser may choose an enlightened path toward the smooth sailing of logical, established precedent.
To accomplish this goal, this Comment will first briefly discuss the adoption of products liability into admiralty jurisdiction. This discussion will be followed by an in-depth analysis of the Supreme Court of the United States’ formulation of admiralty jurisdiction in the tort context, which is intended to give the reader a historical lens through which to view the current approaches. Next, this Comment will highlight the three approaches used by courts today in resolving whether a products liability claim satisfies the “substantial relationship to traditional maritime activity” component of the admiralty jurisdiction test.
This Comment will review the basics of Protection and Indemnity clubs (P&I clubs) and the Medicare Secondary Payer Act (MSP). More specifically, this Comment will address the question whether P&I clubs are required to report a Medicare set-aside (MSA) to the Centers for Medicare and Medicaid Services (CMS) under the reporting requirements of section 111 of the Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 (MMSEA) in cases of liability settlements. MMSEA created a duty for specific parties to notify the CMS of a settlement that concerns the interests of Medicare. Failure to comply with this statute results in a fine of $1000 per day. Many P&I clubs alerted their members to the new obligations and disclaimed any reporting responsibility of their own. At first glance, the P&I clubs’ approach would seem to be at odds with the statute, the plain language of which clearly requires all insurers to be responsible reporting entities (RREs).
However, in reviewing the history and policies of P&I clubs, one quickly realizes there are significant differences between traditional insurers and P&I clubs. These differences range from the structure of the entities to the types of coverage each entity guarantees. Arguably the most significant difference between the two institutions is the policy of “pay to be paid,” which establishes the indemnity aspect of P&I clubs. The pay-to-be-paid rule, along with a few other characteristics of P&I clubs, collectively represent a compelling argument for affirming the clubs’ stance with regard to the MMSEA’s reporting requirement. The indemnity practice of P&I clubs similarly plays a determinative role in the analogous situation of direct action statutes. With direct action statutes, courts have generally recognized a difference between maritime indemnity coverage (operating under the pay-to-be-paid rule) and a traditional liability insurance policy. This difference represents the strongest argument for why the liability and the duty to report settlements rest firmly on the club members’ shoulders.
In 2009, in Ondimar Transportes Maritimos v. Beatty Street Properties, Inc., the United States Court of Appeals for the Fifth Circuit rejected assignment of plaintiff’s claims to a settling defendant. The court adopted into the general maritime law the rule that an injured party cannot assign tort claims to a settling defendant for the purpose of proceeding against any other joint, nonsettling defendants. To reach this decision, the court looked to a Texas Supreme Court decision, Beech Aircraft Corp. v. Jinkins, which reasoned that assignment was not available to a settling defendant even when he “obtain[ed] a complete release for all other parties allegedly responsible.” The Ondimar court seemed to announce that there was no way for a settling tortfeasor to seek contribution from any nonsettling tortfeasors. This was troublesome because it could discourage settlement and increase litigation over the common practice of one tortfeasor settling with the plaintiff and then allowing the joint tortfeasors to battle amongst themselves to determine their respective shares of liability.
On April 28, 1988, President Reagan signed the Abandoned Shipwreck Act (ASA or Act) of 1987 into law. The ASA was passed in response to congressional concern about how historic shipwrecks were managed and preserved and with a desire to streamline and clarify the law that governed those wrecks. Congress created a two-step solution: first, granting the United States title to all abandoned shipwrecks embedded in state lands or submerged under state waters and eligible for inclusion in the National Register of Historic Places; second, immediately transferring those titles to the states where the wrecks are located. By excluding vessels under its purview from admiralty claims for salvage and finds, the Act also relegated legal disputes regarding historic vessels to state courts. The ASA’s scheme significantly realigned traditional maritime law regarding historic shipwrecks, supposedly to the benefit of historic preservation.
Ninety percent of world trade moves on ships. These vessels are often owned by one party, managed by another party, then chartered and subchartered to additional actors. The shipowners and their home ports are spread across the world, creating the serious need for a predictable, uniform, and simple set of admiralty law rules that resolve disputes and make trade flow smoothly. In addition to appropriate substantive maritime law rules, it is important that the vessels’ owners be subject to process in national courts to allow for fair and convenient adjudication of disputes for all maritime players.
On April 20, 2010, the Deepwater Horizon mobile offshore drilling unit exploded and sank approximately forty miles off the southern coast of Louisiana while working on the Macondo/MC252 oil well. According to federal government estimates, over the next eighty-seven days the well discharged over 200 million gallons of crude oil into the ecologically rich waters of the Gulf of Mexico. BP disputed this estimate as between twenty percent and fifty percent too high in comments submitted to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, which was responsible for investigating the incident. As of this writing, the dispute between the federal government and BP persists over the amount of oil actually discharged into the Gulf of Mexico.