A unique feature of maritime law in the United States is the Limitation of Shipowners’ Liability Act (“Limitation Act”), which provides vessel owners with a federal right to limit their liability for damage or injury following a maritime accident. 46 U.S.C. 30505. The Limitation Act is a powerful tool for maritime defense attorneys. It provides a procedure to enjoin all pending suits and to compel them to be filed in a limitation proceeding so that liability may be determined and limited to the post loss value of the shipowner’s vessel and the amount related to services performed by the vessel (i.e. carriage of cargo). This is especially powerful when the vessel has suffered significant damage due to a casualty; thus significantly reducing its post loss value and creating a substantial financial limitation against potential claims. However, timing is everything and turns on the notice provided to the shipowner.

To be afforded protection under the Limitation Act, the shipowner must bring a limitation action in federal court within six months of receiving notice of a claim. Once the shipowner meets the six-month statutory deadline, all related lawsuits pending against the shipowner shall cease and a limitation fund is created. Thereafter, all claimants are required to pursue their claims in the limitation proceeding.

Earlier this year, the Eleventh Circuit in Orion Marine Construction, Inc. v. Dawson, No. 17-11961 (11th Cir. 2019) issued a much-anticipated ruling addressing the scope of the notice provisions under the Limitation Act. The case involves a limitation action filed by Orion after a number of local residents filed complaints alleging damage to their properties. Orion used barges to drive concrete piles into the bay floor to rebuild a bridge pursuant to a contract with the Florida Department of Transportation (FDOT) and the local residents claimed that their homes were damaged by the vibrations caused by such activities. Originally, between 2012 and 2014 only nine local residents brought complaints against either Orion, FDOT or Orion’s third-party administrator, FARA Insurance. There were eventually 247 claims made against Orion, however, for purposes of analysis and the timing requirement, the court focused on the original nine claims. Those nine claims were made before November 11, 2014, and more importantly for purposes of the court’s analysis, unlike the other claims, these were made more than six months before Orion filed suit on May 11, 2015. Of those nine, two of the original complainants, the Dawsons, moved to dismiss Orion’s limitation action for untimeliness arguing that because Orion had received “written notice of a claim” but had not brought a limitation action “within 6 months after a claimant gives the owner written notice of a claim,” the action was time barred as per §30511(a). Orion responded that it did not receive proper notice under the Act because the complaints were (1) not in writing and, (2) they failed to reveal a “reasonable possibility” that the claims would exceed the aggregate value of the barges used during the project. The District Court subsequently dismissed the motion without prejudice.
Continue Reading

On June 24, 2019, the United States Supreme Court issued a much-anticipated decision in Dutra Group v. Batterton, No. 18-266 (June 24, 2019). The decision settles and resolves a longstanding circuit split on whether a seaman has the right to recover punitive damages under a claim of unseaworthiness. In a 6-3 ruling, the Court held that a plaintiff may not recover punitive damages on a claim of unseaworthiness. See Id at 2.

In Dutra, the Plaintiff, Christopher Batterton (“Batterton”) filed a personal injury action alleging that, while working on a scow near Newport Beach, California which was owned by Dutra Group, he was injured when his hand was caught between a bulkhead and a hatch that blew open as a result of unventilated air accumulating and pressurizing within the component. Id at 9. Batterton sued Dutra and asserted a variety of claims, including negligence, unseaworthiness, maintenance and cure, and unearned wages. Id. He sought to recover general and punitive damages. Dutra moved to strike Batterton’s claim for punitive damages, arguing that they are not available on claims for unseaworthiness. Id. The District Court denied Dutra’s motion, 2014 WL 12538172 (CD Cal., Dec. 15, 2014), but agreed to certify an interlocutory appeal on the question, 2015 WL 13752889 (CD Cal., Feb. 6, 2015). Id. The United States Court of Appeals for the Ninth Circuit affirmed and held that punitive damages are available for seaworthiness. Dutra Group v. Batterton, 880 F. 3d 1089, 1096 (CA9 2018). The United States Supreme Court granted certiorari to resolve the division between the circuits.
Continue Reading

In a 6-3 ruling on March 19, 2019, the United States Supreme Court held that, under maritime law, a product manufacturer has a duty to warn when its “bare metal” product requires incorporation of a part the manufacturer knows or has reason to know is likely to be dangerous, such as asbestos-containing components.

In Air & Liquid Systems Corp., et al. v. DeVries, No. 17-1104, 586 U.S. ___ (2019), the Supreme Court examined the scope of a manufacturer’s duty to warn of the dangers of asbestos when its own bare metal products are later combined with asbestos-containing parts that the manufacturer did not make or sell. Plaintiffs Kenneth McAfee and John DeVries (“Plaintiffs”) filed suit in state court against a number of product manufacturers alleging that they developed cancer as a result of exposure to asbestos-containing equipment, including pumps, blowers, and turbines manufactured by the defendants, while serving on U.S. Navy vessels.[1] Plaintiffs asserted, inter alia, that defendants were negligent in failing to adequately warn of the dangers associated with the use of their equipment, even though the defendant-manufacturers of the equipment at issue did not always incorporate asbestos into their products and instead delivered much of the equipment to the Navy without asbestos, in a condition known as “bare metal.” Defendants removed to federal district court under maritime jurisdiction and subsequently moved for summary judgment based on the “bare-metal defense.” The District Court granted the motions for summary judgment, and Plaintiffs appealed. The United States Court of Appeals for the Third Circuit vacated and remanded, holding that “a manufacturer of a bare-metal product may be held liable for a plaintiff’s injuries suffered from later-added asbestos-containing materials” if the manufacturer could foresee that its product would be used with later-added asbestos-containing parts. In re Asbestos. Prods. Litig., 873 F.3d 232, 240 (3d Cir. 2017). The United States Supreme Court granted certiorari to resolve inconsistency among the Courts of Appeals regarding the validity and application of the bare-metal defense under maritime law.
Continue Reading

Imagine this scenario:  Company X manufactures a “bare-metal” product. After the product is sold, the buyer adds defective asbestos-containing insulation manufactured by Company Y to the product, which is sold for its proper function. Unfortunately, an end-user is then injured by the insulation manufactured by Company Y.  The “bare-metal defense” suggests that the bare-metal manufacturer, Company X, would not be liable for this injury.  In practice, the intuitive logic of the bare-metal defense is not always followed.  Thus, the short answer to the question of the bare-metal manufacturer’s liability is, “it depends.”

Some courts apply a bright-line rule, holding that a bare-metal product manufacturer is never liable for asbestos-related injuries, while other courts assess the foreseeability that hazardous asbestos materials would be added to the manufacturer’s bare-metal product. The Supreme Court has not yet addressed this issue, and neither had the United States Court of Appeals for the Third Circuit, until October 3, 2017, in In re:  Asbestos Products Liability Litigation (No. VI).

What is the “Bare-metal Defense”?

In simplest terms, the “bare-metal defense” contends that equipment manufacturers are not liable for the potential hazards of asbestos-related injuries, when the source of the asbestos exposure comes from aftermarket replacement component parts or insulation that the equipment manufacturer neither manufactured nor placed into the stream of commerce. Some courts have applied the defense when considering causation, concluding that the bare-metal manufacturer was not the proximate cause of an asbestos-related injury.  Others courts have analyzed similar issues when evaluating whether a bare-metal manufacturer had a duty to act with reasonable care with respect to reasonably foreseeable asbestos-related risks. Although slightly different, both analyses hinge upon foreseeability.

The Third Circuit addressed the application of the “bare-metal defense,” and in particular, whether to use a bright-line rule or a fact-specific standard, in a maritime negligence claim.

The Third Circuit’s Decision in In re: Asbestos Products Liability Litigation (No. VI)

            Two widows of former Navy servicemen alleged that their husbands were exposed to asbestos from insulation and other components that were added onto engines, pumps, boilers, and other equipment manufactured by defendants. Many of the defendants made their products “bare-metal” and without any asbestos-containing insulation, which was later added. These same defendants asserted the “bare-metal defense” and were granted summary judgment by the Eastern District of Pennsylvania, because they shipped their products without asbestos-containing insulation and therefore could not be liable for asbestos-related injuries.

Both widows appealed the summary judgment to the Third Circuit. In tackling this issue, the Court reviewed the four main tenets of maritime law:

  • Maritime law is deeply concerned with the protection of sailors;
  • Maritime law is built on “traditions of simplicity and practicality;”
  • Maritime law has a “fundamental interest” in “the protection of maritime commerce;” and
  • Maritime law seeks out “uniform rules to govern conduct and liability.”

The Third Circuit found only the first tenet to be dispositive of the “bare-metal defense,” and stated that none of the other tenets weigh heavily in either direction. Maritime law
Continue Reading