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Maritime Law--Reported Port of Miami Improvements Coming Our Way

There are some recent reports that keep those of us dependent on the Port of Miami's ("POM") success happy. The first report comes courtesy of the Maritime Executive, which confirms that POM has been working hard to bring back transshipment to Miami, in concert with the U.S. Customs and Border Protection ("CBP"). The second report comes from the U.S. Department of Transportation’s Maritime Administration  ("MARAD"), which today released a study on shipping patterns, which identifies POM as a "major U.S. port" targeted for modernization and with that, federal dollars to be allocated for infrastructure projects. 

First Report Prior to 9-11, transshipment made up over 22% of the cargo trade at Port Miami. However due to CBP’s increased inspections of transshipment goods in our post 9-11 world, those transshipment cargoes are going through Panama, Freeport, and Kingston. resulting in cargo delays and added expenses.  A specific example of the resu…

I Am the Captain of My Soul

I have been taking the time to re-acquaint myself with poetry that inspired me as a much younger adult. Upon re-acquainting myself with these poems, I thought readers to this blog might be interested in them as many of them have a salty flavor. I hope you enjoy them as much as I do and will inspire you.

The first that comes to mind is "Invictus" by William Ernest Henley, which you will find in full below:

Out of the night that covers me,
Black as the Pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find, me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul.

William Ernest Henley

Maritime Law-M/T PRESTIGE Captain Innocent of Environmental Crime

As reported late last week in various news sources including the Maritime Executive, a Spanish court found the crew of the M/T PRESTIGE and the Spanish Merchant Navy not guilty of criminal responsibility of the sinking of the oil tanker on November 13, 2002. It was Spain's worst ever environmental disaster. The PRESTIGE sank off Spain’s northwestern coast and polluted thousands of miles of coastline and beaches in Spain, France and Portugal - prompting Spain to close its fishing grounds for about six months. The tanker was transporting about 77,000 metric tons of heavy fuel oil on board.

Picture taken from www.crcco.com

Initially, the ship’s master Apostolos Mangouras requested a place of refuge for the tanker, which had a crack in its hull. But Spanish, French and Portuguese authorities denied the ship sanctuary. The Spanish authorities instructed the captain to take his ship further out to sea. After a storm damaged one of its fuel tanks, the ship drifted for days. The integrity …

Maritime Law-Carnival Corp "Shakes it Up"

Carnival Corp. is shaking up its management team in an effort to rebuild its business after a deadly accident and several other mishaps drove passengers away. Effective December 1, 2013, Howard Frank will be stepping down from his current roles as vice chairman and chief operating officer at Carnival Corp. to take on the role of special advisor to the CEO and chairman, while continuing to represent the industry in his leadership role as chairman of CLIA.Alan Buckelew, president and CEO of Princess Cruises, will take over as chief operations officer of Carnival Corp. & PLC on December 1st.

This follows Carnival's decision in June to name a new CEO. Board member Arnold Donald took over as head of the company, replacing Micky Arison, who had been CEO since 1979 and is the son of one of the company's co-founders.
Today, Carnival's 10 brands annually welcome over 10 million guests on more than 100 ships supported by over 90,000 employees generating more than $15 billion in re…

Maritime Law--MLC Detentions Continue: Are You Ready?

As I have been blogging for the last year, the Maritime Labor Convention ("MLC") came into force internationally on August 20, 2013. Within two weeks, the first vessels were detained for non-compliance. On September 3rd during a port state inspection of the Liberia-flagged offshore supply vessel ATLANTIC CARRIER, the Danish Maritime Authority observed that the crew had employment contracts that were not MLC compliant. The vessel was detained for 24 hours while the issues were corrected and she was then permitted to leave port and continue her operations in the North Sea. ATLANTIC CARRIER: picture provided courtesy of Maritime Executive magazine Around the same time period, LIA M was detained in Canada. The crew complaints included unpaid wages; a collective bargaining agreement that failed to list the vessel's name, a date or a wage scale; crew with no money, no shampoo, toothpaste or other items; a crew member who had twice been refused access to a doctor; and crew members…

Maritime Law-Chasing Whistleblower Bounties

In August, I spoke to the North American Maritime Ministries Association on the topic of Legal Issues Affecting Seafarers and Ship Operators in Whistleblower Scenarios. You can read more about NAMMA here => NAMMA. Since this presentation, I have been asked to opine on other sorts of whistleblower scenarios. I recently noted that the Securities and Exchange Commission has just obtained a record $14 million whistleblower bounty for an in-house counsel whistleblower against his own company, which certainly may have some in-house counsel wondering if they should squeal on their clients. 

The Corporate Counsel magazine on October 14th cites a growing number of in-house counsel and compliance officers filing whistleblower-related claims against their own companies. I find this a disturbing trend, as these cases present a host of issues not present in an ordinary whistleblower claim, such as the plaintiff’s use of privileged communications, attorney work product, and confidential client i…

Maritime Law-What you need to know about the MLC

Given my work on the subject, the Professional Mariner magazine had me guest blog an article on the Maritime Labor Convention ("MLC"). It was incidentally posted on August 20, 2013, the implementation date for the MLC. You can find the complete article here => Professional Mariner Magazine.

I continue to be barraged by questions related to applicability of the MLC in given scenarios. The answer is simple, the MLC will apply to ships of all tonnages, whether publicly or privately owned, which are “ordinarily engaged in commercial activities.” The MLC does not provide a definition for what constitutes this quoted language and there has been some debate in yachting circles as to whether yachts are included. Some flag states have been publishing their narrow interpretation of this language as a way to encourage these vessel owners to change flags. However, this interpretation is not an answer to the “no more favorable treatment” clause which is a principle of the MLC.

So in o…

Maritime Law-Busy Week With New Decisions on Punies, Time Bars and Penalty Wages

This week bring us 3 new decisions which touch on the following issues in this order: punitive damages for unseaworthy vessels, time bars in salvage actions and penalty wages.

The first case is McBride v. Estis Well Service LLC, No. 13-30714 (5th Cir. Oct. 2, 2013). This case arose out of an accident aboard ESTIS RIG 23, a barge supporting a truck-mounted drilling rig. The principal issue was whether seamen could recover punitive damages for their employer's willful and wanton breach of the general maritime law duty to provide a seaworthy vessel. Like the doctrines of maintenance and cure, unseaworthiness was established as a general maritime law right before the passage of the Jones Act. Therefore, the Court reasoned that as punitive damages were available under the general maritime law and the Jones Act did not address unseaworthiness or limit its remedies, the court accordingly reversed and remanded, concluding that punitive damages remained available as a remedy for the genera…

Maritime Law--Boat Captain Sentenced in Fatal Parasailing Accident

The Virgin Islands Daily News reports that a U.S. Virgin Islands boat captain charged with causing the death of a woman killed while parasailing has been sentenced to 6-months of house arrest. The captain was also order to serve 1-year of supervised release, pay $1.4 million in restitution (along with the parasailing company) to the victims and perform 150 community service hours with the U.S. Coast Guard.

Police report that the captain took Bernice Kraftcheck and her daughter on a parasailing tour in 2011 amid heavy winds. The tow line broke, causing the women to fall into the water. The women were still reportedly attached to the parasail, killing Kraftcheck and seriously injuring her daughter. The captain pleaded guilty to operating the boat in a negligent manner and the parasailing company pleaded no contest to misconduct or neglect of a ship owner.

A complete copy of the article can be found here => Virgin Islands Daily News.

The new U.S. Coast Guard Captain of the Port for t…

Maritime Law-Crewmember Brawl Leads to $2.5 Million Verdict Against Celebrity

Recently, a jury delivered a $2.5 million verdict against Celebrity Cruise Lines for the injury to a crewmember resulting from a brawl aboard the CELEBRITY CENTURY while she was on a European cruise and the incident occurred while the ship was off the coast of Spain. According to a Daily Business Review report dated September 16, 2013, the jury took 2½ hours to determine the award of $1.75 million in compensatory damages, $350,625 for medical expenses and $395,400 for lost wages. The plaintiff claimed a fellow crewmember, the linen keeper onboard, got upset and started abusing him verbally and physically when he asked for sheets and towels. News has reported that the plaintiff was a cabin steward and much of his pay came from tips and thus, sheets and towels were necessary for the performance of his job. The injured crewmember claimed that his fellow crewmember threw him onto a trolley, fracturing his right leg. Reportedly, there were never enough towels to go around the vessel, so the…

New FMC Requirements for Foreign NVOCCs

The Federal Maritime Commission ("FMC") has issued a new rule advising that foreign-based NVOCCs may utilize Negotiated Rate Arrangements ("NRAs") in lieu of published rates in their tariffs. In order to take advantage of the NRAs, a foreign-based, registered NVOCC must comply with the new registration requirements by October 17, 2013. Most importantly, regardless of whether a foreign-based NVOCC plans to use NRAs, all foreign-based registered NVOCCs must renew their registration by October 17th.

To renew registration, foreign based registered NVOCCs must complete new Form FMC-65. FMC-65 requires the NVOCC to provide basic corporate information, designate an agent for service of process and includes a certification that the registrant will use a licensed ocean transportation intermediary ("OTI") for any OTI activities performed on its behalf in the United States. This is a new requirement under the law.

If you are interested in learning more about this …

Maritime Law: Save Florida Keys Fishing!!!

Since I was away for vacation earlier this month, I am now trying to play "blogging catch-up". Apologies to my regular readers if you begin receiving too much content at one time--I cannot control when Blogger disseminates my postings after they are published.

However, there is one very important development that has occurred while I was away and is near and dear to all of us that fish the beautiful waters of the Florida Keys. A reportedly "anti-fishing" group called Ecosystem Protection Working Group ("EPWG") have made recommendations to increase the areas of the Florida Keys that are protected from fishing. The Florida Keys National Marine Sanctuary ("FKNMS") is already one of the largest marine protected areas ("MPAs") in the country. The FKNMS MPA currently measures approximately 496 million square yards of ocean and reef.

EPWG is recommending that authorities expand the MPA by another 310 million square yards of ocean and reef. Th…

Maritime Law: Limited Subject Matter Arbitration Clauses Do Not Avoid Arbitrability Disputes

Lately, I have been seeing contracts containing arbitration clauses that apply to only certain types of disputes. In the latest case I was asked to consult on, this proved to be initially disastrous. Luckily, the parties were willing to work through the dispute (because they were currently negotiating a joint venture) and I helped (in a small way) to guide them through what was initially a potentially disastrous situation. It has been my experience with arbitration clauses that if the parties want arbitration for certain issues, they are well advised to consider arbitration for all of them.

A typical limited subject matter arbitration clause might read as follows: “Any controversy or claim arising out of or relating to this contract or the breach thereof that concerns [regulatory issues, tax obligations, etc.] shall be resolved by binding arbitration.” The thinking behind this type of clause is that it is worth sacrificing the protections of full-blown litigation—including robust disc…

$2.5M Grant for South Florida Transportation Infrastructure

Governor Rick Scott has announced a $2.5 million grant from the Florida Department of Transportation for transportation infrastructure at the South Florida Logistics Center. The center is north of Miami International Airport and along with air cargoes, will also handle cargo from South Florida ports.  The grant will help develop the 400-acre intermodal center with air, rail and trucking links, access roads to FEC's Hialeah rail yard, truck loading ramps and internal traffic circulation. The Governor has announced that the grant will generate more than 1,000 jobs. It is gratifying that the Governor has shown his commitment to ensuring good transportation projects in  South Florida.  The center is being built by Coral Gables-based Florida East Coast Industries Inc., one of the state's largest commercial real estate and railway companies. Chris Scott, president and CEO of FEC subsidiary South Florida Logistics Services, said in commenting on the center that construction of the …

Maritime Law: First Cruise Line to Meet MLC 2006 Requirements (English/Spanish)

NCL is reportedly the first major cruise operator to comply with the International Labor Organization's Maritime Labor Convention of 2006 ("MLC"), otherwise known as the international "bill of rights" for seafarers. The MLC is due to take effect later this month on August 20th. The MLC establishes comprehensive workplace rights and protections for more than 1.2 million seafarers worldwide. That includes more than 17,000 crew members from nearly 100 countries that work aboard NCL's 11 international cruise ships, NCL said Wednesday and reported by the Sun Sentinel. The MLC outlines a wide range of seafarer rights including wages, conditions of employment, accommodation, medical care and shore leave. It is intended to be applied globally, be easily understood and updated, and uniformly enforced. It consolidated and updated more than 68 international maritime labor policies adopted over the last 80 years. I have written on the MLC extensively in this blog and …

Maritime Law: Great Decision on Limits to USCG Authority on Bonds Gets Reversed

In Angelex Ltd. v. United States, Docket No. 13-1610 (4th Cir. Jul. 22, 2013), the government appealed the district court's order which altered the terms of a bond the Coast Guard had fixed for the release of a detained ship that was under investigation and restricted the types of penalties the government could seek for the ship's potential violations of certain ocean pollution prevention statutes. The ship at issue, M/V PAPPADAKIS, an ocean-going bulk cargo carrier carrying a shipment of coal to Brazil, was detained by the Coast Guard because the vessel had allegedly been discharging bilge water overboard. The appellate court reversed and remanded for dismissal under Federal Rule of Civil Procedure 12(b)(1), where the matter was not subject to review in the district court because the Coast Guard's actions were committed to agency discretion by law. Consequently, the district court lacked jurisdiction to consider the petition.

I have the original decision from the District …

Maritime Law: Allianz Joins List Of Too-Big-To-Fail Insurers

Along with AIG, Allianz SE, is now among nine insurers deemed systemically important by global financial rule makers, meaning they may face tougher capital standards and tighter regulation. The list of nine too-big-to-fail insurers, including MetLife and Prudential Financial in the U.S. and France's Axa SA, was published by the Financial Stability Board (the "FSB"), the Basel, Switzerland-based body set up by the Group of 20 nations. It is reported by the Daily Business Review on July 19th that the companies on the FSB list were included based on criteria such as size, global activity and the amount of non-insurance businesses they have.

The FSB, led by Bank of England Governor Mark Carney, is coordinating global regulators' response to the last financial crisis to prevent a repeat of the turmoil that followed the collapse of Lehman Brothers Holdings and the bailout of AIG. Also on the list are Prudential Plc and Aviva Plc of the UK, China's Ping An Insurance Grou…

Maritime Law: South Florida Sets Export Record

As reported in several papers, including the Daily Business Review on July 11, 2013, international trade through South Florida has surged. Merchandise exports in the region hit a record $47.9 billion in 2012. That represents an 11 percent ($4.7 billion) increase from 2011. South Florida has apparently not had to wait for the Panama Canal expansion to enjoy this surge in activity.
Top destinations included Brazil, Colombia, Mexico, Switzerland and Venezuela. I personally am seeing a lot of business from Venezuela right now. South Florida was one of 32 metropolitan areas recording more than $10 billion in exports.

 If you interested in receiving a copy of the Daily Business Review report or are interested in contacting me, you may do so by email at mov@chaloslaw.com.

Maritime Law: FMC Proposes New Rules for OTIs--Have You Made Your Views Known?

On May 31, 2013, the United States Federal Maritime Commission ("FMC") issued proposed rulemaking, significantly affecting the licensing, financial responsibility and duties of Ocean Transportation Intermediaries ("OTI"). The rulemaking started a 60-day notice and comment period, ending July 31, 2013, during which affected or interested parties can provide feedback, objections and other comments to the proposed rule. The proposed new rules impose significant new conditions and alter the regulatory environment and risks for OTIs. Licensing Under current regulations, an OTI license is for an unlimited term. Under the proposed rules, OTI licenses would have to be renewed every two years. Renewal applications would have to be submitted at least 60 days prior to the expiration date, and would include Qualifying Individual (QI) identification and contact information along with changes to the OTI's business or organization, trade names, tariff publication, physical addr…

Maritime Law: Insurers Not Faring Well with Florida Supreme Court

The insurance industry may be feeling like it is taking a beating in the Florida Supreme Court lately.
In three different cases with very different circumstances, the Supreme Court justices ruled against insurance companies and in favor of policyholders and medical providers. The cases divided the court and, ultimately, all had financial implications for insurers and the other parties.
The first case involved a dispute between Geico and medical provider Virtual Imaging Services, Inc. regarding payments for magnetic-resonance imaging tests that were performed after Geico customer Maria Tirado was injured in an auto accident in 2008. Virtual Imaging sent a $3,600 bill to Geico under Tirado's personal injury protection ("PIP") coverage. But Geico, using a formula derived from Medicare fees, paid slightly less than $2,000, prompting a legal fight. The Supreme Court, in a 5-2 opinion, ruled in favor of Virtual Imaging because it said Geico had not disclosed in the policy that …