MARITIME (HAZMAT) – “The Coast Guard is amending its regulations concerning the transfer of hazardous materials to and from bulk packaging on vessels. The Coast Guard is expanding the list of bulk packaging approved for hazardous material transfers to include International Maritime Organization (IMO) Type 1 and Type 2 portable tanks, United Nations (UN) portable tanks, and Intermediate Bulk Containers (IBCs).”

“Bulk Packaging To Allow for Transfer of Hazardous Liquid Cargoes”

 Final Rule. September 6, 2013.

“The Coast Guard is also expanding the list of allowed hazardous materials to provide greater flexibility in the selection and use of packaging in the transportation of hazardous materials. This rule will eliminate the need to obtain special permits or Competent Authority Approvals to use IMO Type 1 or Type 2 portable tanks, UN portable tanks, or IBCs.”

MARITIME (SEAGOING BARGES) / The U.S. Coast Guard is exempting specified seagoing barges from its inspection.

“Seagoing Barges”

Final Rule. August 29, 2013. 

“The Coast Guard is revising several vessel inspection and certification regulations to align them with a statutory definition of ‘seagoing barge’ and with a statutory exemption from inspection and certification requirements for certain seagoing barges. The revisions are intended to eliminate ambiguity in existing regulations, to reduce the potential for confusion among the regulated public, and to help the Coast Guard perform its maritime safety and stewardship missions.” Continue reading

MARITIME (U.S. COAST GUARD GUIDANCE) – “The Coast Guard announces the availability of Navigation and Vessel Inspection Circular (NVIC) 02-13, that sets forth the Coast Guard’s policies and procedures regarding the inspection of U.S. vessels for voluntary compliance with the Maritime Labour Convention, 2006 (MLC or Convention). The Convention enters into force on August 20, 2013.”

“Final Guidance Regarding Voluntary Inspection of Vessels for Compliance With the Maritime Labour Convention, 2006”

August 6, 2013. Notice of Availability.

“…The Convention enters into force on August 20, 2013. The purpose of NVIC 02-13 is to provide guidance to the maritime industry, Coast Guard marine inspectors, and other affected parties on how the Coast Guard intends to implement the new voluntary inspection program. The Coast Guard finalized NVIC 02-13 after considering public comments received in response to our publication of a draft version of NVIC 02-13 in the Federal Register on February 11, 2013.”

MARITIME (REGISTRATION OF FOREIGN-BASED UNLICENSED NVOCC’S) / “The Federal Maritime Commission … revises its rules to impose registration requirements on foreign-based unlicensed non-vessel-operating common carriers and to extend an exemption from certain provisions and requirements of the Shipping Act of 1984 and the Commission regulations to foreign-based unlicensed non-vessel-operating common carriers that agree to negotiated rate arrangements.” Great summary from Thompson Hine LLP.

Great summary from Karyn A. Booth, Esq. and Jason D. Tutrone, Esq. of Thompson Hine LLP issued the day after the final rule published in Federal Register available here.

“Non-Vessel-Operating Common Carrier Negotiated Rate Arrangements; Tariff Publication Exemption”

July 18, 2013. Final Rule.

“Under the Commission’s current rule at 46 CFR part 532, titled NVOCC Negotiated Rate Arrangements, licensed non-vessel-operating common carriers (NVOCCs) that choose to enter into negotiated rate arrangements (NRAs) are exempted from the tariff rate publication requirements of the Shipping Act of 1984 and certain provisions and requirements of the Commission’s regulations. At the time of the promulgation of the rule, the Commission determined to exempt only licensed NVOCCs because of concerns relating to the limited information available to the Commission about foreign-based unlicensed NVOCCs. Continue reading

MARITIME & MOTOR CARRIER (CARRIAGE OF GOODS BY SEA ACT) Vessel operating ocean common carrier (i.e., NOT an NVOCC) that arranged inland freight moves by multiple motor carriers sues those motor carriers for state claims including fraud and conversion for diversion of freight from their intended inland destinations – held (among other holdings): Carriage of Goods by Sea Act (COGSA) did NOT apply because the parties’ did not expressly display an intent “to extend COGSA jurisdiction to Defendants’ [motor carriers’] inland transportation” in a “maritime contract”.

Mitsui O.S.K. Lines, Ltd. v. Evans Delivery Co., Civ. No. 12-7186 (DRD) (U.S. District Court for the District of New Jersey, June 10, 2013). Copy of court-issued opinion available here.

Underscores the “freedom of contract” given to parties in deciding whether or not they wish COGSA and its provisions to apply to an inland freight move connected with an ocean carriage. 

REMARKS / The 3rd Circuit U.S. Court of Appeals appears to have significantly changed the rules relating to a contractual “warranty of safe berth” in maritime vessel charters. This is maritime-speak for the allocation of the risk of port hazards among parties – specifically in this case: Is the vessel owner an implied beneficiary of the “warranty of safe berth” in the contract between the voyage sub-charterer and the time charterer? This case is important for virtually any maritime oil spill cleanup case – here an undertaking of $180 million. Comment: My educated guess is that this will spark a handful or more of subsequent appellate cases on this point – i.e., that this opinion is not the “last word” on the legal doctrine at issue but instead the “first word” on a newly opened discussion about (1) the warranty being “express assurance” made without regard to the charterer’s diligence, and (2) the legal risk-shifting implications of a ship’s master having opportunity to discover a port’s hazards for himself.

In re: Petition of Frescati Shipping Co. Ltd., as owner of the M/T Athos I and Taskos Shipping Co., Ltd., as manager of the Athos I for exoneration from or limitation of liability, No 11-2577 (U.S. Court of Appeals for the Third Circuit, May 16, 2013. Copy of court-provided opinion available here.

Legal Take-Away:

The old rules are changed:

Hold in suspense any conclusion you had derived from earlier precedents on this subject.

The 3rd Circuit ruled that the U.S. District Court below had erred in failing to comply with Federal Rules of Civil Procedure 52(a)(1), which requires a trial court to make separate findings of fact and conclusions of law following a bench trial such as was the case here.

But here instead of just remanding to the federal district court the 3rd Circuit ventured to address the legal issues appealed.

In so doing the appellate court here upended expectations established earlier in maritime law without definitively replacing them with authoritative new rules.

What exactly about the old rules is changed?

As with maritime bills of lading vis-à-vis the Carriage of Goods by Sea Act before Kirby case and the sequence leading to Sompo and eventually to Regal-Beloit, certain contracts in transport sectors are just that – contracts worked out at arms length between two parties capable of expressing themselves. But they are not truly “one-offs”, isolated from previous deals between other contracting business people. In “safe berth warranties”, as in bills of lading, conventions have grown up around specific uses of words in those contracts.

For “safe berth warranties” this appellate case upsets such conventions. As a practitioner I would consider them no longer applicable until either the U.S. Supreme Court – or more likely – some consensus of the federal circuits, restores the former expectations to legal acceptance.

Practical Take-away:

This calls for an immediate and thorough review by transactional lawyers of “safe berth warranties” and all parts of vessel charters who future interpretation might be modified by the uncertainty created by the 3rd Circuit here.

The old set of legal expectations and assumptions in this area does not hold, and will not hold, until this decision’s upsetting impact is resolved by either the U.S. Supreme Court or a new consensus among the lower federal appellate courts. 

MARITIME (MAINTENANCE & CURE OBLIGATIONS) / Washington Supreme Court issues unanimous en banc ruling “that when a vessel owner stops paying maintenance and cure, upon a seaman’s motion for resumption of payment of maintenance and cure, the summary judgment standard should not apply to the seaman’s motion. Rather, the trial court should order resumption of the payments unless the vessel owner can provide unequivocal evidence that the seaman has reached maximum cure.” Hat tip Jess Webster, Esq. of Graham & Dunn PC.

Dean v. Fishing Company of Alaska, Case No. 87407-7 (Supreme Court of Washington sitting en banc, May 9, 2013. Court-issued version of opinion available here.

Jess Webster’s excellent piece available here.

Note that while the summary judgment standard was ruled not to apply here, the court noted that as an alternative a vessel owner wanting to terminate payment of maintenance and cure had the option of pursuing an expedited trial under Washington Civil Rule 42(b).

For non-maritime types, “maintenance and cure” is a principle of general maritime law concerning the vessel owner’s responsibility for the welfare of the seaman. As Jess Webster puts it: “… [A] vessel owner is obligated to pay maintenance (a living stipend to provide room and board equivalent to that enjoyed on a vessel) and cure (medical expenses) to a seaman who becomes ill or suffers an injury while in the service of the vessel, until such time as the seaman reaches his maximum medical cure from the illness or injury.” 

REMARKS / Lesson for liability management in all transport modes: In an “allision” (maritime speak for NOT a “collision”) between inland river barge and bridge, National Transportation Safety Board’s (NTSB’s) “probable cause: (1) Contract river pilot’s navigation mistakes (primary), (2) absence of needed bridge lighting (contributing), and (3) “failure to exercise effective safety oversight of the [barge’s] operations” by company that employed contract river pilot (contributing). Note well: 3 of the NTSB’s 14 findings related to “safety management system [SMS]” for the barge and safety practices of contract river pilot’s employer. Comment: The old canard of “blame-the-pilot” in this and other transport modes is slowly changing with the coming era of SMS and organizational (not just individual) responsibility for operational safety.

On May 14, 2013 the NTSB issued its report in a public meeting relating to the allision between an inland river barge Cargo Vessel M/V Delta Mariner and Eggner’s Ferry Bridge Tennessee River near Aurora, Kentucky on January 26, 2012.

See brief website announcement here.

See abstract of NTSB report here.

Note these three findings:

“9. The Delta Mariner’s safety management system was not effectively implemented on board the vessel at the time of the accident.

“10. Foss Maritime Company provided ineffective oversight of the safety of Delta Mariner operations.

“11. The expertise, duties, and responsibilities of the Delta Mariner contract pilots were inadequately defined.”

Legal Take-Away:

Strictly speaking, an NTSB report of this sort might be said to have no “legal effect” at all due to statutory proscriptions against use of the report for specified purposes in evidence. 

Specifically relating to maritime situations, Alan Weigel, Esq. of Blank Rome LLP last year wrote an excellent summary of the sense in which this is true of NTSB reports (and U.S. Coast Guard reports) – and more importantly, showing that this is not fully correct as a generalization. Available here (law firm publication “Mainbrace” at page 6).

And similar generalizations and exceptions apply to NTSB reports in aviation as well. See law firm write-ups here and here, for instance.

My point #1:

NTSB and other government reports about transport accidents in various modes may or may not be admissible in court as evidence. Or, stated differently, they might be admissible for one purpose (such as impeaching the credibility of a witness) – but not for a different purpose (such as to prove a factual point on the basis of which liability will be imposed – or excused).

There is more nuance on this point than a single simple generalization can accurately express.

My point #2:

What this instance of an NTSB report demonstrates:

If the NTSB is answering the “how-did-this-happen?” question by reference to the “safety management system” connected to the vessel (or aircraft, or perhaps the truck, etc.) or to the “safety oversight” by the employer of the contract river pilot over that pilot (read: “established company procedures for operations”), then one must ask if, how and when the courts might follow the NTSB’s lead in connecting such conclusions about causation to their determination of legal liability.

As to the “safety management system” under which the vessel involved here (or an aircraft or truck in another situation) must operate, the NTSB report essentially states that adherence to SMS is causative of good outcomes, and that non-compliance is causative of negative outcomes. To the (large) extent that liability in tort is a function of causation, the NTSB through conclusions like those it renders here declares that SMS or lack of it is part and parcel of such causation analysis. Put another way, the SMS failure here was a contributing probable cause factor to the accident itself.

Similarly, the “safety oversight” failure reference to the company that employed the erring contract pilot here means that the NTSB ascribes causative significance to what the company’s supervisory function over what its contract pilot did at the helm the night of the allision. Through what the law calls respondeat superior, the law ascribes responsibility not just to the contract pilot who made the mistake but to the company that vetted, perhaps trained, and certainly had supervision responsibility for that contract pilot.

Practical Take-Away:

In the coming years it will increasingly be harder for an operating company like an airline or ship carrier to simply “blame-the-pilot” – the NTSB and increasingly the courts will understand that safe operation is not solely a function of the individual who is physically at the controls.

SMS in particular, and safety procedures in general, should be the focus of any organization that operates transportation equipment.

Why? Because the legal significance of respondeat superior leads to the practical significance of ascribing individual conduct to what the organization did or failed to do by way of selection of that individual, training, or supervision: The company that complies or does not with SMS, or that adequately supervises or does not supervise its pilots and other key personnel – is more likely than the individual contract pilot or other functionary to have a balance sheet with which to pay money judgments in court.

MARITIME (U.S. COAST GUARD) / U.S. Coast Guard announces Compliance With MARPOL Annex VI International Energy Efficiency (IEE) Requirements for U.S. flag vessels. English translation: “These requirements apply to all U.S. flag ships 400 gross tonnage and above that engage in voyages to ports or offshore terminals under the jurisdiction of other Parties to MARPOL [treaty].”

“U.S. Flag Compliance With MARPOL Annex VI International Energy Efficiency (IEE) Requirements.” 

May 13, 2013. Notice of international Standards.

MARITIME (U.S. COAST GUARD CRANE REGULATION OFFSHORE SUPPLY VESSELS) / Revision of Crane Regulation Standards for Mobile Offshore Drilling Units (MODUs), Offshore Supply Vessels (OSVs), and Floating Outer Continental Shelf (OCS) Facilities.

“Revision of Crane Regulation Standards for Mobile Offshore Drilling Units (MODUs), Offshore Supply Vessels (OSVs), and Floating Outer Continental Shelf (OCS) Facilities.” 

May 13, 2013. Notice of Proposed Rule Making.