Admiralty

JurisdictionUnited States,Federal
CitationVol. 74 No. 4
Publication year2023

Admiralty

John P. Kavanagh Jr.

[Page 1291]

Admiralty
John P. Kavanagh, Jr.*

The cases discussed herein represent decisions from the United States Court of Appeals for the Eleventh Circuit, as well as district courts within the Eleventh Circuit, issued in 2022. While not an all-inclusive list of maritime decisions during that timeframe, the Author identifies and provides summaries of key rulings of interest to the maritime practitioner.1

I. Limitation of Liability

Parties seeking the protections of the Limitation of Liability Act2 must file their complaint or petition for exoneration "within 6 months after a claimant gives the owner written notice of a claim."3 The district court's decision in the instant case turns on the sufficiency of the "written notice" trigger, starting the period within which a limitation action must be filed.4

A vessel owned and operated by a Sea Tow franchisee in south Florida was involved in a collision on June 14, 2020.5 Three days later, attorneys representing the injured parties—the occupants on the second vessel—submitted a letter to the owners and operators of the Sea Tow franchise.

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While the letter did not contain a monetary demand, it was written on behalf of all the potentially injured parties for the "losses sustained" in the June 14, 2020 collision.6 A demand was made for information on insurance coverage, with a closing admonition to preserve all relevant evidence to avoid a spoliation claim.7

The owner and operator of the Sea Tow vessel filed his limitation petition on February 22, 2021.8 Claimants answered and later filed a motion to dismiss because the limitation action was filed out of time; it was filed more than six months after receipt of the June 17, 2020 letter from the claimants' attorneys. The magistrate agreed and issued a report and recommendation, which the United States District Court for the Middle District of Florida ultimately adopted, granting summary judgment and dismissing the limitation petition.9

The district court summed up the controlling issue as follows:

Thus, the only question is whether the Letter constituted written notice. For the Letter to constitute written notice, it simply needed to reveal a "reasonable possibility" of a claim exceeding $42,500.00. That's it. The law does not require the Letter to reveal a "reasonable probability" or a "reasonable likelihood" of a claim exceeding $42,500.00.10

The referenced standard is one announced by the Eleventh Circuit in Orion Marine Construction, Inc. v. Carroll.11 In that case, the Federal Court of Appeals for the Eleventh Circuit held the six-month filing period begins when a claimant provides the ship owner or its agent with written notice, conveying that a "reasonable possibility" exists that the underlying claim exceeds the value of the vessel.12

In its report and recommendation, the magistrate explained that the June 2020 letter provided sufficient notice; it clearly asserted a claim for losses sustained by the claimants, placed blame on the Sea Tow vessel for the collision, requested information about insurance coverage, and made a pointed request for preservation of evidence.13 While the petitioners attempted to distinguish the cases relied on by the

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magistrate, the district court found that the letter sufficiently provided a "reasonable possibility of a claim in excess of the vessel's value," triggering the six-month timeframe to file a limitation petition.14

II. Arbitration of Seafarers' Claims

The Federal Court of Appeals for the Eleventh Circuit has routinely enforced arbitration clauses in seaman's employment contracts.15 Exceptions in recent cases, however, exempted seaman's claims from arbitration when non-signatories attempted to enforce such agreements.16 In the instant case, the United States District Court for the Southern District of Florida looked to a recent Eleventh Circuit decision and held that federal common law—not the law of the arbitration forum—should be applied to the threshold question of arbitrability.17 This threshold inquiry seemingly opens the door for non-signatories to enforce arbitration agreements.

Mr. Prcic was a seaman employed as a waiter aboard vessels operated by the Carnival Corporation.18 He sustained injuries as a result of his working conditions that eventually resulted in low back and hip pain. Mr. Prcic filed a lawsuit based on the Jones Act,19 unseaworthiness, failure to provide maintenance and cure, as well as contractual damages. Mr. Prcic references his employment agreement, which incorporated certain terms and conditions in another document (Terms and Conditions), including an arbitration clause. The only other signatory to the employment agreement—other than Prcic—was Fleet Maritime Services (Bermuda) Ltd. The role of Fleet is not clear, but the import is that the vessel owner and direct employer (Carnival Corp.) was not a signatory to any of the agreements with Mr. Prcic.20

The Terms and Conditions required arbitration of any claims arising out of Mr. Prcic's employment.21 It specifically referenced any potential claims between Mr. Prcic and others, "[i]ncluding but not limited to any other Carnival Corporation and plc group brand onboard the ships of

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which [Prcic] may work."22 Further, the Terms and Conditions required the arbitration be governed by the Bermuda Arbitration Act23 and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention).24

Carnival sought to compel arbitration of Mr. Prcic's claims against it.25 Carnival was not a signatory to any document executed by Mr. Prcic. Instead, as a non-signatory, it attempted to enforce the arbitration agreement through the use of equitable estoppel.26 Turning to the 2022 decision in Outokumpu Stainless USA, LLC v. Coverteam SAS,27 the district court found that federal common law—not the substantive law of the forum where arbitration would occur—should be used to determine the arbitrability of federal claims by or against non-signatories to an arbitration agreement.28 Relying on the Outokumpu Stainless decision, the district court found that Carnival, a non-signatory to the arbitration agreement, could equitably compel arbitration in two circumstances: "(1) '[W]here the signatory [here Prcic] to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims' against the nonsignatory' [Carnival], or (2) 'where the signatory [Prcic] raises allegations of collusive misconduct between the nonsignatory and other signatories to the contract.'"29 The court found both prerequisites were met; the entirety of Prcic's claims hinged on his employment as a seaman aboard Carnival vessels.30 This was the sum and substance of the employment agreement which incorporated by reference, the arbitration clause. As for the second set of circumstances, Prcic alleged all defendants were engaged in interdependent acts of misconduct responsible for his injuries.31 The court concluded by saying that Carnival was "explicitly and unambiguously" incorporated into the

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arbitration requirement and granted the company's motion to compel arbitration.32

III. Cruise Line Passenger Claims

Once again, the Federal Court of Appeals for the Eleventh Circuit and its constituent district courts—primarily the United States District Court for the Southern District of Florida—heard and decided multiple cases involving injuries to passengers aboard cruise ships. The following represent a few cases of interest decided during 2022.

There were several cases involving COViD-19 claims against cruise lines decided in 2022. For example, the plaintiffs in Dome v. Celebrity Cruises, Inc.33 , were exposed to the virus while aboard the Eclipse.34 On March 1, 2020, the vessel embarked on a two-week cruise through Argentina and Chile. However, at the Port of San Antonio, Chile (the discharge port), passengers were denied entry because of concerns about COViD-19. The vessel eventually docked in San Diego, California, on or about March 30, 2022. During the thirty-day voyage, multiple passengers—including the plaintiff-decedent—presented with COViD-19 symptoms, though the vessel did not have any testing equipment onboard to verify the infection.35

While underway, the captain of the Eclipse issued a couple of letters to all passengers.36 The letters contained representations which later formed the basis of the negligent misrepresentation claims in the instant case.37 Specifically, the captain told the passengers on both occasions that "[a]ll guests onboard remain[ed] healthy and happy."38 The second misrepresentation was based on the allegation that no person onboard had COViD-19. Based on these statements, the plaintiffs and the other guests aboard the Eclipse continued to participate in regular activities and gatherings aboard the vessel. Upon disembarkation, plaintiff-decedent Robert Dome tested positive for the COViD-19 virus and died within two weeks. The plaintiff's children—who picked up their parents following the cruise—also experienced flu-like symptoms consistent with COVID-19, although it is unclear if the children actually tested positive for the disease.39

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The opinion covers a number of issues, starting with subject matter jurisdiction. Loose language in the complaint's diversity allegations prompted the court to conclude it did not have diversity jurisdiction.40 Specifically, the plaintiffs averred they were "residents" of the State of New Jersey but failed to indicate the "citizenship" required to establish diversity jurisdiction.41 Even absent diversity jurisdiction, the court clearly had admiralty jurisdiction over the wrongful death and personal injury claims arising from an injury aboard a cruise ship.42

The district court then turned its attention to the defendant's argument that the Death on the High Seas Act43 (DOHSA) required that non-pecuniary claims...

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