Associated Terminals of St. Bernard, LLC v. Potential Shipping HK Co.

• Decision Date: 28 March 2018
• Docket Number: CIVIL ACTION No. 17-5109
• Citation: 324 F.Supp.3d 808
• Parties: ASSOCIATED TERMINALS OF ST. BERNARD, LLC v. POTENTIAL SHIPPING HK CO. LTD. et al.
• Court: U.S. District Court — Eastern District of Louisiana

324 F.Supp.3d 808

ASSOCIATED TERMINALS OF ST. BERNARD, LLC

v.POTENTIAL SHIPPING HK CO. LTD. et al.

CIVIL ACTION No. 17-5109

United States District Court, E.D. Louisiana.

Signed March 28, 2018

Patrick J. McShane, Danica Benbow Denny, Kathleen Pontier Rice, Lauren A. Guichard, T. Patrick O'Leary, Frilot L.L.C., New Orleans, LA, for Associated Terminals of St. Bernard, LLC.

Peter Brooks Sloss, Charles Lewis Whited, Jr., Timothy David DePaula, Murphy, Rogers, Sloss & Gambel, New Orleans, LA, for Potential Shipping HK Co. Ltd. et al.

SECTION I

ORDER AND REASONS

LANCE M. AFRICK, UNITED STATES DISTRICT JUDGE

On May 19, 2017, longshoremen employed by Associated Terminals of St. Bernard, LLC ("Associated Terminals") boarded the M/V UNISON POWER ("ship") and proceeded to use the ship's no. 2 crane to offload wire coil from the ship to a barge anchored alongside the ship. In the process of moving these coils, the no. 2 crane's wire rope snapped, causing a load of wire coils weighing tens of tons to fall onto the barge. Jamaal Ford ("Ford")—who was employed as a forklift operator for Associated Terminals at the time and was working on the barge that day—alleges that the load's impact with the barge propelled him forward into the forklift that he was mounting at the time, thereby injuring him.

Ford intervened in this case and asserted a negligence claim under the Longshore and Harbor Worker's Compensation Act ("LHWCA") against Potential Shipping HK Co. Ltd., in personam and as owner of the M/V UNISON POWER, in rem ("Potential Shipping"). Potential Shipping denies liability and contests the extent of Ford's injuries.

Over the course of just over two days, the Court held a bench trial in this case. This opinion is the result.

I.

A.

The LHWCA "establishes a comprehensive federal workers' compensation program that provides longshoremen and their families with medical, disability, and survivor benefits for work-related injuries and death." Howlett v. Birkdale Shipping Co., S.A. , 512 U.S. 92, 96, 114 S.Ct. 2057, 129 L.Ed.2d 78 (1994).

Under [the] LHWCA, which is similar to other worker compensation schemes, an employer's liability to an employee who is injured on the job is essentially limited to payment of compensation. The LHWCA also allows the employee to recover for injuries resulting from the fault of third parties. The employee need not choose whether to receive compensation or to recover damages against a third person; he can do both.

Fontenot v. Dual Drilling Co. , 179 F.3d 969, 972 (5th Cir. 1999) (internal citations omitted).

Thus, the LHWCA provides a longshoreman such as Ford¹ with an avenue through which to "seek damages in a third-party negligence action against the owner of the vessel on which he was injured." Howlett , 512 U.S. at 96, 114 S.Ct. 2057. "The right of ship repairers, longshoremen, and other persons covered by the [LHWCA] to sue a vessel owner for negligence arises exclusively under 33 U.S.C. § 905(b)," which Congress added to the LHWCA in 1972. Garry v. Exxon Mobil Corp. , No. 03-0791, 2004 WL 2367706, at *2 (E.D. La. Oct. 19, 2004) (Africk J.), aff'd , 150 Fed. App'x 363 (5th Cir. 2005) (per curiam); see Scindia Steam Nav. Co. v. De Los Santos , 451 U.S. 156, 165, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981) (observing that, with the 1972 amendments to the LHWCA, "the longshoreman's right to recover for unseaworthiness was abolished" and "his right to recover from the shipowner for negligence was preserved in § 905(b), which provided a statutory negligence action against the ship").

Section 905(b) provides, in relevant part:

In the event of injury to a person covered under [the LHWCA] caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 933 of [Title 33 of the United States Code ], and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void. If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel.... The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under [the LHWCA].

In Scindia Steam Navigation Co. v. De Los Santos , 451 U.S. 156, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981), the Supreme Court "limited the duties vessel owners owe under § 905(b)." Kirksey v. Tonghai Maritime , 535 F.3d 388, 391 (5th Cir. 2008). Specifically, the Scindia Court "outlined three duties [that] shipowners owe to longshoremen: 1) the ‘turnover duty,’ relating to the condition of the ship upon the commencement of stevedoring operations; 2) the duty to prevent injuries to longshoremen in areas remaining under the ‘active control’ of the vessel;² and 3) the ‘duty to intervene.’ "³ Moore v. M/V ANGELA , 353 F.3d 376, 380 (5th Cir. 2003) (quoting Howlett , 512 U.S. at 98, 114 S.Ct. 2057 ). This case implicates the turnover duty.

"The turnover duty applies to the shipowner's obligation before or at the commencement of the stevedore's activities." Kirksey , 535 F.3d at 392. Worded differently, "[t]he ‘turnover duty’ relates to the condition of the ship upon the commencement of stevedoring operations." Moore , 353 F.3d at 380 (citing Scindia , 451 U.S. at 167, 101 S.Ct. 1614 ); see also Howlett , 512 U.S. at 99, 114 S.Ct. 2057 (pointing out that "[m]ost turnover cases brought under § 5(b) concern the condition of the ship itself or of equipment on the ship used in stevedoring operations").

"This duty places two responsibilities on the vessel owner." Kirksey , 535 F.3d at 392. First, the owner

must "exercise ordinary care under the circumstances" to turn over the ship and its equipment and appliances "in such condition that an expert and experienced stevedoring contractor, mindful of the dangers he should reasonably expect to encounter, arising from the hazards of the ship's service or otherwise, will be able by the exercise of ordinary care" to carry on cargo operations "with reasonable safety to persons and property."

Howlett , 512 U.S. at 98, 114 S.Ct. 2057 (quoting Federal Marine Terminals, Inc. v. Burnside Shipping Co. , 394 U.S. 404, 416-17 n.18, 89 S.Ct. 1144, 22 L.Ed.2d 371 (1969) ).

Second, the vessel owner's turnover duty "extends to warning the stevedore of hazards with respect to [ ] equipment known to the vessel that would likely be encountered by the stevedore and would not be obvious to him." Moore , 353 F.3d at 381. This duty to warn is a "narrow one": it "attaches only to latent hazards, defined as hazards that are not known to the stevedore and that would be neither obvious to nor anticipated by a skilled stevedore in the competent performance of its work," and it "encompasses only those hazards that are known to the vessel or should be known to it in the exercise of reasonable care."

Howlett , 512 U.S. at 105, 114 S.Ct. 2057 (internal quotation marks omitted). It "does not include dangers which are either: (1) open and obvious or (2) dangers a reasonably competent stevedore should anticipate encountering." Kirksey , 535 F.3d at 392.

"[I]f the shipowner had actual knowledge of a condition which presented an unreasonable danger to a longshoreman and actual knowledge that he could not rely on the stevedore to correct [or avoid] the condition, then the shipowner, not the stevedore, is liable to the longshoreman." Hernandez v. M/V Rajaan , 841 F.2d 582, 586 (5th Cir.) (citing Scindia , 451 U.S. at 175, 101 S.Ct. 1614 ), opinion corrected on denial of reh'g , 848 F.2d 498 (5th Cir. 1988). "If the condition existed from the outset [of cargo operations], the shipowner is charged with actual knowledge of the dangerous condition and has a duty to warn the stevedore and the longshoremen if the defect is hidden." Id.

Ford bears the burden of proving by a preponderance of the evidence that Potential Shipping violated its turnover duty. Cf. Ponce ex rel. Estate of Ponce v. M/V ALTAIR , 493 F.Supp.2d 880, 893 (S.D. Tex. 2007) ; Crochet v. ABC Ins. Co. , 777 F.Supp. 498, 504 (W.D. La. 1991). "[M]erely proving that an unsafe condition existed at the time of the accident is insufficient to establish liability." Hudson v. Schlumberger Tech. Corp. , 452 Fed. App'x 528, 534 (5th Cir. 2011) (quoting Treadaway v. Societe Anonyme Louis–Dreyfus , 894 F.2d 161, 166 (5th Cir. 1990). "[T]he defendant has not breached its duty to turn over a safe vessel if the defect causing the injury is open and obvious and one that the longshoreman should have seen." Greenwood v. Societe Francaise De , 111 F.3d 1239, 1246 (5th Cir. 1997) (quoting Pimental v. LTD Canadian Pacific Bul , 965 F.2d 13, 16 (5th Cir. 1992) ) (alteration in original). Further, "[i]f the longshoreman knew of the defect, then it is considered open and obvious." Id. "That being said, even if a hazard is ‘open and obvious,’ a vessel owner may still be liable where the employee has no alternative but to work in the unsafe condition or leave the job." Hudson , 452 Fed. App'x at 534.

B.

After reviewing the evidence admitted at trial, the Court finds that Potential Shipping breached its turnover duty and that this breach was a proximate cause of the injuries to Ford resulting from the incident. Cf. Moore , 353 F.3d at 380-83.

i.

Kevin Fos ("Fos"), an Associated Terminals superintendent who oversaw Associated Terminals' cargo operations on the ship on the day of the incident, testified that he reviews a vessel's certification and inspection records prior to the use of a vessel's equipment by the longshoremen. He stated that he relies on the accuracy of such records to...