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BP to Pay $4 Billion in Settlement

Last week Oil giant BP Exploration and Production Inc. settled a series of federal charges related to its conduct in the 2010 DEEPWATER HORIZON disaster, which killed 11 people and caused the largest environmental disaster in U.S. history.

In addition to pleading guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty acts, Attorney General Eric Holder announced the company will pay US$4 billion in criminal fines and penalties.

Holder said the settlement has been set up so that more than half of the money paid out will go directly to residents of the Gulf Coast region.

“Our work is far from over,” Holder said at the Thursday press conference. “Our criminal investigation remains ongoing.”

Two top-ranking BP supervisors aboard the Deepwater Horizon on April 20, 2010 – Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. – have been charged with engaging in negligent conduct in a 23-count indictment that includes felony manslaughter charges.

Part of the agreement signed by BP admits that the two supervisors negligently caused the deaths and the resulting oil spill from the explosion.

Former BP executive David I. Rainey, 58, of Houston, has also been charged with obstructing Congress by giving false testimony on the amount of oil being released by the rig after it was destroyed.

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Supreme Court Leaves Punitive Damages Award Intact

Injured seamen are entitled to maintenance, cure and unearned wages, regardless of fault. The shipowner’s duty to pay these benefits is a “sacred obligation.” Willful breach of the obligation gave rise to a claim for punitive damages. In 1990, however, the U.S. Supreme court decided the case of Miles v. Apex Marine Corp., 498 U.S. 19 (1990), prohibiting the award of “non-pecuniary” damages in cases brought under the Jones Act. The decision was interpreted by lower courts to prevent the award of punitive damages for wrongful failure to pay maintenance and cure.

Then in 2009, in the case of Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009), the Supreme Court reinstated the claim for punitive damages in maintenance and cure cases. The Court noted that claims for maintenance and cure, and for punitive damages in admiralty, existed under the General Maritime Law long before the passage of the Jones Act in 1920.

In reliance on Townsend, a claim for punitive damages for willful failure to pay maintenance and cure was upheld by the Washington State Supreme Court in Clausen v. Icicle Seafoods, Inc. 1012 AMC 660 (2012). The case involved a maritime employer that wilfully and callously withheld maintenance and cure from a crewmember injured aboard a fish processing barge. The employer deliberately withheld a medical examiner’s report confirming the plaintiff’s need for spinal surgery. The jury, appalled by the employer’s conduct, awarded $1.3 million in punitive damages. The defendant petitioned the U.S. Supreme Court for certiorari. Icicle Seafoods, Inc. v. Clausen, Cause No. 11-1475.

Yesterday, on the first day of its term, the Supreme Court denied certiorari, refusing to review the Washington State Supreme Court decision in Clausen.

Why did the Court deny certiorari? One interpretation, favored by plaintiffs, is that the Court impliedly ruled that the decision was sound. Another possiblilty, however, is that different justices had different reasons to deny review. So-called liberal justices may have considered the decision sound, while so-called conservative justices may not have wanted to take a case in which the factual context so compellingly cried out for punitive damages. Indeed, the trial court in Clausen stated that the defendant’s conduct reached “the zenith of reprehensibility.” This was hardly the ideal case for the conservative justices to use to abrogate a claim for punitive damages.

Anderson Carey Alexander has been representing injured seamen for over three decades. The firm recovered punitive damages for wrongful failure to pay maintence and cure before the remedy was withdrawn in the wake of the 1990 case of Miles v. Apex Marine. In one case, a federal jury made a six figure punitive damage award against the largest tugboat company in the world. We stand ready to prosecute claims for punitive damages again now that the remedy has been restored by the Atlantic Sounding v. Townsend case. Injured seamen are encouraged to learn their rights. Maritime lawyers at Anderson Carey Alexander are availble for consultation, without obligation, at 1-800-BOATLAW.

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Report: Need for Fishing Vessel Safety Reform

The Center for Public Integrity, an investigative news organization based in Washinton, D.C. has published a report on fishing vessel safety issues. The following is excerpted:

Commercial fishing is the deadliest vocation in the United States. Four years running, from 2007 to 2010, the Bureau of Labor Statistics ranked commercial fishing as the most dangerous occupation in the United States. From 2000 to 2010, the industry’s death rate was 31 times greater than the national workplace average.

The U.S. Coast Guard has been granted only spotty powers to safeguard commercial fishing vessels, and the industry, steeped in a tradition of independence on the high seas, has long resisted government intrusion. Yet some longtime fishermen from Alaska to New England agree the federal safety net has left workers vulnerable.

“This has been an industry where there just hasn’t been a vigorous pursuit of safety at the federal level,” said former congressman James Oberstar, who held fishing safety hearings in 2007 as chairman of the Committee on Transportation and Infrastructure.

For decades, safety advocates and government regulators have pushed for mandatory inspections of the often decades-old boats that take to deep water to bring back scallops, fish, squid and lobster.

And for decades, Congress has stood still. Despite the strikingly high death rate among the men and women who live by the boat, the federal government has never required inspections of commercial fishing boats. The Coast Guard performs voluntary exams of safety equipment, and Congress recently acted to make those dockside reviews mandatory. But the law has yet to mandate detailed inspections of the vessels themselves.

“Fishing vessels are uninspected, so the Coast Guard doesn’t have jurisdiction to go on and look at the condition of the vessel. There’s no standards that a fishing vessel has to be built to or maintained to. That’s much different than a ferry or cargo ship,” said Jennifer Lincoln, a NIOSH epidemiologist based in Alaska who leads the agency’s Commercial Fishing Safety Research and Design Program.

“Every time there’s a vessel loss with high numbers of lives lost and the Coast Guard has done an investigation, one of the recommendations that always comes back is that these vessels should be inspected,” Lincoln said. “There’s industry push back: ‘That would be an expensive thing to do.’”

The National Transportation Safety Board has argued for vessel inspections and, in 2010, held a forum on fishing safety. “Fishermen tolerate long absences from home, inhospitable environments, and workplaces that are teeming with heavy, dangerous equipment while constantly in motion,” board member Robert L. Sumwalt III said at the hearing. “For some, the price paid is even higher: hypothermia, loss of limbs, and even death.”

From 2000 to 2010, 545 commercial fishermen died in the U.S., reported NIOSH, part of the Centers for Disease Control and Prevention. More than half of these deaths occurred after a vessel disaster, with boats sometimes swallowed by the sea. Another 30 percent involved fishermen falling overboard. Other deaths came from accidents on board, or while crew were diving or injured on shore.

The Coast Guard’s website includes a Hiscock report, “The Tragedy of Missed Opportunities,” that details failed reform attempts dating years. In 1999, a Coast Guard task force issued Living to Fish, Dying to Fish, a report citing the industry’s high casualty rate and lack of deep reform.

“Despite long-standing recognition of the serious hazards of commercial fishing, a long succession of proposed laws were not enacted,” the report concludes. “Many fishermen accept that fishing is dangerous, and lives are often lost. Many of those harvesting the bounty of our ocean frontier staunchly defend the independent nature of their profession, and vehemently oppose outside interference.”

In 1988, Congress passed the Commercial Fishing Industry Vessel Safety Act, requiring fishing boats to carry survival craft, personal flotation devices and other safety equipment on board.

The regulations went into effect in 1991. A year later, the Coast Guard sought authority to inspect fishing boats. Approval never came.

“Whether the industry was lobbying enough or Congress didn’t see the need for it, we just weren’t given the authority,” said Jack Kemerer, division chief of the U.S. Coast Guard’s Fishing Vessels Division.

Kemerer said the 1988 law and subsequent tweaks have helped drop death tolls from even higher numbers in the 1980s. “There have been improvements based on the law and safety programs and safety initiatives,” he said.

“But,” he added, “fishing still remains the most hazardous occupation in the country.”

In 2007, the House Subcommittee on Coast Guard and Maritime Transportation held hearings, citing a string of tragedies from Alaska to Maine that had taken 22 lives in recent months.

Still, a question begs: If inspections came, who would pay for them in an industry with approximately 20,000 federally documented fishing boats and some 50,000 state registered vessels?

“We’re talking about hundreds of inspectors that would be needed, but right now with the budget climate the way it is, there’s no way we could get the number of inspectors,” said Kemerer. “It would be great to have it. The challenge would be: How do we accomplish it?”

Hiscock, the former House official, questions just how hard the Coast Guard has pushed for a full vessel inspection program. “They’re not up there lobbying for inspections constantly,” he said.

In Alaska, a safety campaign supported by industry helped lower the death totals. There, NIOSH studied the industry’s high fatality rate and focused on the sectors, such as the crab fishery, with the highest numbers. “NIOSH would look at the fishing data for the entire state, and we identified a hazardous fishery and then we worked with the Coast Guard and crab fishermen,” Lincoln explained. “What can we do to prevent these fatalities from happening?”

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Forum Selection — A Way to Obstruct COSTA CONCORDIA Claims

Although the parent company of the owner of the stricken Costa Concordia is based in Miami, passengers who want to file a lawsuit in U.S. courts over the cruise ship disaster will encounter obstacles in the tickets issued by the cruise line.

That’s because of fine print on the tickets purchased and signed by the 3,000-plus passengers before the ship capsized Jan. 13 off the coast of Italy, killing at least 16 and leaving another 16 missing. The ticket contract includes what’s known as a “choice of forum” clause stating that lawsuits must be filed in Italy.

In a 1991 case of Carnival Cruise Lines v. Shute, the U.S. Supreme Court held that such a provision in a cruise ticket was enforceable. The result has been that many claims by injured cruise ship passengers have been deterred by the expense of filing a lawsuit in a foreign court.

For a Costa cruise that touches any part of the U.S., the clauses say lawsuits should be filed in federal court in South Florida. Same for Carnival Cruises – which owns Costa – and many other major cruise lines. But for cruises such as the Concordia that involve only foreign travel, the Costa ticket says lawsuits must be brought in Genoa, Italy where much of the subsidiary’s operations are based.

The clauses in the cruise industry are not as common in other forms of travel. Lawsuits against airlines, for example, can be brought virtually anyplace they do business for domestic flights; for international flights, lawyers can generally sue in the airline’s home location or where the flight departed, among other venues.

Last August, the 11th U.S. Circuit Court of Appeals ruled in favor of a forum clause in a case involving Regent Seven Seas Cruises Inc. A California woman, Nina Seung, fell and broke her leg aboard a cruise ship sailing from Tahiti, then tried to sue in Fort Lauderdale federal court. Her ticket required foreign cruise lawsuits to be filed in Paris, and the appeals court rejected her challenge.

Seung, who was 74 at the time of her accident, said in court papers that the clause essentially barred the door for her.

“I do not have any savings of note right now, I am going further and further into debt each month and because I cannot work, I don’t see how I can ever afford this,” she said in an affidavit. “So if I am forced to go to Paris, France, I just will not be able to bring my claim.”

When the Shute case was decided by the U.S. Supreme Court, lawyers representing injured passengers were discouraged. It was obvious that passengers do not meaningfully agree to the fine print on the back of tickets issued by the cruise line. This is a classic “contract of adhesion,” in which one party has never had any choice but to accept the terms, no matter how unconscionable.

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Forum Selection — A Thumb on Carnival’s Side of the Scale of Justice

As noted in our last blog post, in the 1991 U.S. Supreme Court case of Carnival Cruise Lines v. Shute, a “choice of forum” clause in a cruise ship ticket was upheld.

In dissent, Mr. Justice John Paul Stevens explained the purpose of choice of forum clauses like the one contained in the COSTA CONCORDIA tickets:

“Clauses limiting a carrier’s liability or weakening the passenger’s right to recover for the negligence of the carrier’s employees come in a variety of forms. Complete exemptions from liability for negligence or limitations on the amount of the potential damage recovery, requirements that notice of claims be filed within an unreasonably short period of time, provisions mandating a choice of law that is favorable to the defendant in negligence cases, and forum-selection clauses are all similarly designed to put a thumb on the carrier’s side of the scale of justice.”

In the Shute case, the plaintiff was a lady from Arlington, Washington. She and her husband purchased tickets through a local travel agent. She was injured aboard the Carnival ship TROPICALE, enroute from Los Angeles to Puerta Vallarta, Mexico. The ticket called for suit in Florida.

The Ninth Circuit Court of Appeals ruled that the forum selection clause was unenforceable. The Supreme Court reversed, relying on it’s previous opinion in Bremen v. Zapata Offshore (1972). That case involved a clause in a contract for towage of an oil rig from Louisiana to a location in the Adriatic Sea, calling for litigation in London. To those of us representing injured passengers, it seemed a stretch to extend the Bremen doctrine to require a lady in Arlington to travel to Florida to seek redress for injury.

Justice Stevens would have none of it. Joined by Justice Marshall, he said that the clause in question was “the product of disparate bargaining power between the carrier and the passenger” which “undermine[d] the strong public interest in deterring negligent conduct.”

If the courts will not permit suit against Carnival in this country, the Congress should act to rectify the injustice resulting from Carnival v. Shute and its progeny.

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SWANLAND Mirrors Alaska Shipwreck Cases

The facts of the tragic sinking of the SWANLAND resemble those in Alaska fish boat cases.

Although, as noted in our earlier post, the SWANLAND is a Russian vessel, it was British managed. The British Maritime and Coastguard Agency is therefore conducting an investigation, much as the U.S. Coast Guard would conduct a marine casualty investigation.

The cargo ship which sank in the Irish Sea off Gwynedd, Wales with the loss of six crew had been at the center of repeated safety concerns, the BBC reported.

An analysis of safety inspection records for the SWANLAND reveals a high number of failings.

Members of the crew claim the vessel was vulnerable in rough seas because of a history of unsafe loading. This has been a recurrent issue in Alaska shipwreck cases.

The ship’s operator, Torbulk Limited, said it had been regularly inspected and any faults “promptly rectified”. This is the typical response by vessel interests after a loss such as this, but the 34-year-old British-managed ship had a history of defects, according to safety inspections by the Maritime and Coastguard Agency. Over the past five years, 85 faults were highlighted – including cracks in the ship’s decks and defective life-saving equipment identified in May this year. Marine safety management expert Dr Phil Anderson said that, even allowing for the ship’s age, the number of defects seemed surprisingly high.

“You wouldn’t expect to see that number of deficiencies. It’s quite serious. It could indicate a systemic breakdown of safety systems.”

Former crew members have also raised concerns about the techniques used to load the ship.

Alexander Tsybin, a former Russian captain who worked on board the Swanland for 11 years, believes the vessel’s hull had been weakened by the way the cargo was sometimes loaded to save time on each voyage.

Instead of loading evenly from either end, it would be deposited in the middle.

“While the ship was being loaded, it would cave in a little, and while it was being unloaded, it would bulge out,” he said.

“So the middle of the ship would always be subject to pressure which meant that in the end it became weakened.”

Maritime safety experts have also told the BBC that loading heavy, unsecured cargo into a single hull could cause displacement which might cause a ship to roll in bad weather.

They say the combination of the crew’s concerns about loading and the historical defects involving structural safety and cracked decks “give rise for concern”.

The vessel was caught in a gale force 8 storm off the Lleyn Peninsula, north Wales, at the end of November.

According to Vitaliy Karpenko, one of the two survivors from the all-Russian crew, the ship’s hull suddenly cracked.

“It broke in half right across the middle. I saw it with my own eyes,” he said. “We saw through the porthole that it was hopeless trying to save her.”

The ship’s Grimsby-based operator Torbulk Shipping said in a statement that it understood the vessel was loaded in accordance with good practice, adding: “Any working sea-going cargo vessel… will be inspected on a regular basis and may incur minor deficiencies.

“These deficiencies are required to be promptly rectified or the vessel would not be permitted to trade.

“We are unable to comment on specific instances. However, we can state that any deficiencies identified are always rectified within the time-scale specified [by the authorities].”

The vessel, which was British-owned, was flagged to the tiny Cook Islands in the Pacific.

The islands have a higher number of ships with safety problems, and the international shipping authorities regard their flag as inferior to those from European maritime regulators.

As the official British maritime investigation and civil litigation proceed, it seems unlikely that vessel interests will be able to sustain their burden of showing that they exercised due diligence to see that the SWANLAND was seaworthy when she departed Wales enroute to the Isle of Wight. An oceangoing ship should be able to withstand Force 8 winds without breaking in half.

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NTSB Makes Fishing Industry Safety Recommendations

Before the LADY MARY sank off Cape May, N.J., in 2009 with the loss of six lives, it had been structurally modified “without consulting a naval architect,” federal safety officials said.

The scallop trawler’s owners hadn’t assessed its stability. The crew didn’t realize the importance of keeping the vessel watertight during severe weather. And the vessel’s master failed to make an effective Mayday call, officials said.

Those findings were part of a National Transportation Safety Board report this month that made safety recommendations for the nation’s commercial fishing industry, which is waiting to see how they will be implemented and what they’ll cost to implement.

With the highest fatality rate among all U.S. occupations, the industry has generally welcomed the input.

The Lady Mary’s failings are frequently referred to in the NTSB report, which calls on the Coast Guard to establish new standards for commercial fishing industry vessels of 79 feet or less, including measures to improve stability, watertight integrity, and training. Vessels under 79 feet are lost at a higher rate, the Coast Guard has reported.

An NTSB investigation into the sinking of the 71-foot Lady Mary said it was caused by flooding through an access hatch left open during 10- to 12-foot seas, “contrary to safe shipboard practice.”

The report this month also recommended that ship owners install recovery devices to rescue anyone who has fallen overboard, and that crew members wear flotation aids at all times while on board and be trained in the use of all emergency equipment.

“While numerous laws have been passed to protect fishing grounds and fish populations, regulations to improve the safety of commercial fishermen are long overdue,” NTSB Chair Deborah Hersman said.

In the United States, on average, there were 158 deaths annually from 1992 to 2008 for every 100,000 commercial fishermen, compared with an average of four fatalities per 100,000 workers in all occupations.

The Coast Guard is responsible for offering any new regulations.

Some regulations may mean “more expense,” a Coast Guard spokesman stated.

Keith Laudeman, whose Cold Spring Fish & Supply Co. in Cape May owns boats and harvests scallops, said he’s in favor of “anything that promotes safety and can save a life.”

“The cost is minor compared to saving a life,” he said. “We are in a dangerous line of business.”

The sinking of the LADY MARY is just one more instance of a fishing vessel being modified without sufficient precaution taken to preserve vessel stability. Indeed, for the past 30 or more years, it has been the custom in the Alaska fishing industry to take hulls designed for service in the Gulf of Mexico and modify them for operation in the North Pacific. Often, these vessels were marginally stable before modification and became death traps after addition of weight aloft or changes in the hull configuration. The problems have been aggravated by loading of heavy deck cargo such as crabpots. A egregious example was a crabber northbound from Seattle which capsized in calm water immediately after passing through the locks connecting Lake Washington with Puget Sound.

A tragic case was the capsizing of the seine fishing vessel MISS LINDSAY in Bellingham Bay, Washington State. All hands were lost. In that case, as in many others, the lawfirm of Anderson, Connell & Carey retained an expert to assess the vessel’s stability characteristics at the time of the loss. The boat had been lengthened and a net drum added without benefit of stability analysis. The effect of the modifications rendered the boat with a load of salmon so unstable as to capsize in protected waters just a few miles from her home port in Bellingham.

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Obama and Biden Will Protect Your Rights!

Vessel crewmembers are working people. They don’t benefit from tax cuts for the wealthiest Americans. They need the benefits and protection sought by labor unions and the party of labor, the Democrats. They need affordable health care and Social Security. They need good public schools for their children. They need an intelligent energy policy and environmental protection. They need the right to organize and the right to fair compensation when they are injured.

The Republican party has been in control of the federal government for eight years, during which time no progress has been made to meet the needs of vessel crewmembers.

The cost of health insurance has sky-rocketed. Social Security is in jeopardy. Public schools have languished. There has been no concerted effort to deal with problems of energy and the environment. The Republicans continue to mount their attack upon labor, often under the guise of tort reform which would erode the injured seaman’s right to compensation.

Anderson, Connell & Carey  has been fighting for the rights of injured seamen for more than 30 years, in the courtroom and in the public square. In 1986, Dave Anderson actively opposed so-called “tort reform” and urged seamen to do likewise.

This year, our law firm is supporting the Obama–Biden ticket and we urge seamen to do the same. If McCain and Palin are elected, they will nominate Supreme Court justices likely to diminish the rights of labor, including vessel crewmembers. Past Republican nominees have been instrumental in depriving the families of deceased seamen of full compensation for their loss. They have also opposed punitive damages for the failure of shipowners to provide maintenance and cure to injured seamen.

Anderson, Connell & Carey maximizes compensation to its clients under the law. The state of the law, however, is a result of the political process. In myriad ways, the Democratic party seeks to influence that process in favor of working people.

To vessel crewmembers voting on November 4, 2008, we say: If you are compelled by opposition to abortion or gay marriage to vote Republican, so be it. But if you want to protect your legal rights, you should vote Obama-Biden .

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