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.
In Pacific Operators Offshore, LLP v. Valladolid, the United States Supreme Court held that Longshore and Harbor Workers’ Compensation Act (LHWCA) coverage, through the Outer Continental Shelf Lands Act (OCSLA), is available to a worker whose injuries bear a “substantial nexus” to extraction operations on the Outer Continental Shelf (OCS).
i. 1953 was a year of symbolic developments for American maritime law. In August, Congress enacted the Outer Continental Shelf Lands Act (OCSLA), requiring state law to apply to a broad range of legal disputes arising from the new industry of offshore oil drilling in the Gulf of Mexico. Then in December, the Supreme Court of the United States decided Pope & Talbot, Inc. v. Hawn, formally expressing what had long been assumed–that the rejection in Erie Railroad Co. v. Tompkins of the federal courts’ power to define general common law did not apply to their parallel power over admiralty law. On the one hand, OCSLA reflected a view that state law was better suited to deal with a variety of private disputes, even those occurring at sea. On the other, Pope & Talbot traces its lineage through a long line of cases that enshrine admiralty law as a unique species of federal law with special–and often unpredictable–preclusive power.
The Federal Employers’ Liability Act (FELA), 45 U.S.C. §§ 51-60, was enacted in 1908 to provide railway workers with a federal cause of action against their employers for negligently inflicted workplace injuries and illness. In 1920, the Jones Act, 46 U.S.C. § 30104, followed suit, giving seamen a negligence cause of action against their employers by incorporating FELA. The United States Supreme Court has frequently declared that “the Jones Act adopts ‘the entire judicially developed doctrine of liability’ under [FELA].” Although on four occasions the Supreme Court has held that the Jones Act is sometimes more plaintiff-friendly than FELA, there is nevertheless a presumption that FELA jurisprudence governs Jones Act cases, and vice versa.
“Absent express [statutory] language to the contrary, the elements of a FELA claim are determined by reference to the common law [of negligence].” In explicit language, FELA departs from the common law of Negligence in four respects: “It abolished the fellow servant rule, rejected contributory negligence in favor of comparative negligence, prohibited employers from contracting around the Act, and abolished the assumption of risk defense.” All four of these departures involve affirmative defenses to Negligence liability. This Article addresses the legitimacy and meaning of a fifth departure that was recently spotlighted in CSX Transportation, Inc. v. McBride. Unlike the four well-accepted FELA abolitions of affirmative defenses, the McBride departure–one that is destined to remain somewhat controversial–goes to the heart of a FELA plaintiff’s prima facie case in Negligence.
“Surround yourself with the best people you can find, delegate authority, and don’t interfere.”
–President Ronald Reagan
Though not the largest oil spill the United States has ever experienced, nor its worst environmental disaster, the BP/DEEPWATER HORIZON Oil Spill (DEEPWATER HORIZON) was enormous and devastating. Ignited by pressurized methane gas bubbling up from a depth of 18,360 feet below the sea, the DEEPWATER HORIZON oil rig exploded on April 20, 2010, killing eleven men. After the rig sank two days later, breaks in the riser pipe connecting the rig to the ocean floor began spewing hundreds of thousands of gallons of crude oil and gas into the Gulf of Mexico. At first, the spill was nearly impossible to control effectively. Oil flowing from the well washed up on the shores of Louisiana, Alabama, and Mississippi, and polluted thousands of square miles of ocean. Three months later, the well was successfully capped, ending the catastrophic flow of oil. Assessment of the ecological and economic damage continues, as do cleanup efforts.
Although some may believe that no one contemplated that an environmental disaster of such magnitude could occur, for catastrophes like DEEPWATER HORIZON, a coordinated national emergency response plan has existed in some form in the United States since 1968. The National Oil and Hazardous Substances Pollution Contingency Plan (NCP), created to respond to oil spills and hazardous substance releases, was borne out of the 1967 TORREY CANYON disaster off the coast of England. After the supertanker ran aground and spilled over thirty-one million gallons of crude oil into the Celtic Sea, the U.S. Government, recognizing the United States’ own vulnerability, created the NCP, which provided a national response strategy for oil spills. Many acts of Congress required amendment and expansion of the NCP over the years, culminating in the passage of the Oil Pollution Act of 1990 (OPA), which resulted in the most recent major revisions to the NCP.
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.