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Thursday, January 12, 2012

Times Change – or Do They?

By Marilyn Raia

The beginning of a new year often leads to reflection on events of the past year. Instead of a review of legal developments of 2011, a review of legal developments of 1812 and 1912, namely, 200 and 100 years ago, seemed far more interesting.

Admiralty Courts Until 1966
In 1812 and 1912, the federal district courts handled admiralty cases under special admiralty rules. Some of the legal terms were different under those rules. For example, a maritime lawyer was called a “proctor in admiralty.” A complaint in an admiralty case was called a “libel”. The plaintiff was called the “libellant” and the defendant was called the “respondent”. Without a doubt, there were no female proctors in admiralty in 1812. In the 1920’s though, there was a female attorney practicing admiralty law in the San Francisco office of the United States Attorney.

In 1966, the admiralty rules were merged into the general civil procedural rules. A few of the original admiralty rules were retained as supplemental rules. Many years ago, some federal district courts had an informal practice of assigning admiralty cases to judges thought to have greater expertise in admiralty law, but now cases are randomly assigned.

Some Admiralty Cases from 1812
On January 1, 1812, only 17 states were in the union; Louisiana was admitted later that year. In June 1812, the United States declared war on Great Britain, in part because of certain acts by Great Britain impeding America’s maritime commerce with France.

Many of the cases decided in 1812 involved the lack of proper government documentation for vessels or cargo . For example, in The SLOOP ACTIVE v. The United States, 11 U.S. 100 (1812), the sloop Active had a license for the cod fishery and had posted the required bond for that trade. During the night of July 4th 1808, the vessel took on cargo worth more than $600 at New London, CT. The cargo included beef, fish, and butter destined for an unknown port, but apparently within the United States. Some of the cargo belonged to the vessel owners and the rest belonged to a third party. The vessel left the dock without obtaining the proper documentation and clearance from customs, and was seized before getting out of the port. The vessel and all of the cargo on board were deemed forfeited and the forfeiture was upheld on appeal. The United States Supreme Court affirmed in part. It held the vessel and the cargo belonging to the vessel owners were properly forfeited. But, it reversed the forfeiture of the cargo belonging to the third party because the forfeiture statute exempted 1) cargo belonging to parties other than the vessel owner, master and mariners, and 2) cargo for which no duty was owed, in that case because it was to be transported within the United States.

Two hundred years ago, seamen were suing their employers for unpaid wages. In Wesly v. Davis, 29 F.Cas. 709 (Cir. Ct. D. Md. 1812), the vessel on which the seamen were employed was captured and ordered forfeited. The forfeiture was eventually reversed on appeal and the vessel continued her voyage. During the legal proceedings, the master offered to discharge the seamen and arrange their return home. The seamen refused to leave the vessel. The district court held the vessel owner liable for the seamen’s wages incurred during the delay in port during the forfeiture proceedings. The award was affirmed on appeal.

Marine insurance cases were also decided in 1812. Popleston v. Kitchen, 19 F.Cas. 1048 (Cir. Ct. D. Penn 1812), involved a suit on marine insurance policies covering a vessel and her cargo. The insurers defended on the grounds 1) the insured had not told them the vessel’s age and where she was built; and 2) the insured had not proved the vessel was sufficiently found and manned, although the hull of the vessel was seaworthy for the voyage.

Judgment was entered for the insureds. The court held the insured did not have to tell the insurers about the age of the vessel or where she was built, unless asked by them. Also, the court held the insured had to prove the seaworthiness of the vessel only if put in issue by the insurers. It noted seaworthiness includes being sufficiently found and manned. Of course, as readers will know, today an insured is required to disclose all material information about the vessel to be insured even if not asked for.

Some Admiralty Cases From 1912
By January 1, 1912, there were 46 states in the union; New Mexico and Arizona were admitted later that year. The Titanic sank in 1912 en route to New York from Southampton. That tragedy led to many changes in the maritime industry and provided maritime lawyers with a continuing source of legal issues to consider and address including recently litigated disputes over the ownership rights to the Titanic wreckage.

Many of the reported cases from 1912 involved vessel collisions. However, the courts dealt with other interesting issues. For example, In Billings v. Bausbach, 200 F. 523 (9th Cir. 1912), seamen from the Schooner W.H.Talbot sued for compensation for inadequate provisions during an 84-day voyage from Newcastle, Australia to San Francisco. They alleged they were not provided with the statutorily required quantities of certain items such as potatoes, butter, beans, peas, onions, sugar, and similar staples. They also alleged the biscuits served to them were maggot-infested. The vessel owner conceded certain fresh food items were depleted during the voyage but argued canned items were substituted. The vessel owner also argued the seamen accepted what was provided and could not then demand what was due under the statute. Finally, the vessel owner argued the seamen had released their claims when signing off the vessel. The district court rejected all of the vessel owner’s arguments. It found the seamen had released only wage claims and not other types of claims. It found the seamen had little choice but to accept what was given to them or go hungry. It also noted the master knew of the seamen’s dissatisfaction with the food and had to remedy the situation or bear the consequences. The appellate court affirmed.

In Red Star Towing & Transportation Co. v. Snare & Trieste Co. 194 F. 672 (2d Cir. 1912), the steam tug C.F. Roe was damaged when it collided with piles being stored in the water where a bridge was being built. The piles were submerged at high tide and not marked. Ruling in Red Star’s favor, the court held the authority to obstruct a navigable waterway when building bridge abutments was not authority to leave the piles in the area without properly marking them. The court also noted the absence of any evidence the tug operator knew the submerged piles were there because he had only transited the area on a high tide.

Marine insurance disputes also found themselves on the courts’ dockets in 1912. Listers Agricultural Chemical Work v. Home Ins. Co. 202 F. 1011 (S.D.N.Y. 1912) involved a hull policy covering a steam lighter against “perils of the harbor” but excluding coverage for bursting or explosion of boilers. The policy also contained a warranty that the insured would not carry gunpowder or other explosives on the lighter.

While the lighter was navigating in the harbor, dynamite exploded while being transferred from a rail car on a pier to a barge, causing significant loss of life and property damage. The lighter suffered damage by shock or concussion and not by waves or swell or debris from the explosion. Coverage was denied because of the lack of a covered peril.

The district court found the coverage issue to be “novel”. The insured admitted the damage was not caused by a peril of the sea, but argued the policy covered all perils of/in the harbor, not just those caused by the action of the waves. The court disagreed and held there was no coverage. It reasoned if a boiler on the lighter had exploded or if the lighter had been carrying explosives, there would be no coverage because of the policy exclusion and warranty. It also reasoned if the lighter had been damaged by a projectile from a cannon on shore one mile away, or by the explosion of a steam boiler on shore, there would be no coverage either. It found the facts of the case to be analogous to those situations and held he insurer made clear its intent not to insure against damage to the lighter caused by an explosion, regardless of its origin.

The maritime industries of 1812 and 1912 could never have imagined the technology available to the maritime industry in 2012. Nonetheless, the issues being litigated in 2012 have not changed much since 1812 and 1912. Among others, documentation problems, seamen’s wages and benefits, collisions, and marine insurance disputes have kept, and still keep, maritime lawyers busy.


Marilyn Raia is Of Counsel in the San Francisco office of Bullivant Houser Bailey. She specializes in maritime and transportation matters and can be reached at marilyn.raia@bullivant.com.

Charges Against 9 Longview ILWU Protestors Dropped

Prosecutors in Cowlitz County, Washington have dropped trespassing charges against nine dockworkers and supporters who were arrested during protests at the Port of Longview’s EGT terminal last summer.

Second-degree criminal trespass accusations were dismissed against six people who were arrested during a Sept. 7 protest where hundreds of International Longshore and Warehouse Union members and supporters blocked an incoming grain train.

Criminal trespassing and disorderly conduct charges were also dropped against three people who were arrested at an EGT protest on July 25.

Prosecutors first made the motion to dismiss the charges in a Dec. 30 filing. The charges against eight of the nine individuals were dismissed without prejudice, meaning they can be filed again at a later time. Prosecutors have not indicated, however, whether any refiling of charges is a possibility.

For those keeping score, the tally so far is Defendants: 11, Prosecutors 0. The first two protestors to be brought to trial were both declared not guilty during jury trials in December.

The protests were part of a prolonged labor action against EGT, which is a joint venture between Bunge Ltd, ITOCHU International and STX Pan Ocean.

Members and supporters of ILWU Local 21 picketed the facility throughout last summer over labor issues, with the local saying its contract with the Port of Longview requires that the 25 to 35 jobs inside the terminal go to unionized labor.

The company, however, says its lease agreement with the port does not specify ILWU labor. It employs members of a different union, which represents operating engineers. A federal trial on the dispute is expected to begin in March.

During last summer’s pickets, protesters stormed the facility, cut brake lines on rail cars and dumped grain from the cars, among other things, which led to dozens of people being arrested on trespassing and disorderly conduct charges.

In September, the union was ordered by a US district judge in Tacoma to pay $250,000 in compensation to EGT and local authorities for the damage caused.
The union is appealing the ruling.

The six Sept. 7 protestors who’ve had the charges against them dismissed are Cary Justin Brister, Matthew Paul Hellem and Lowell W. Lovgren of Kelso, and Jeffrey Bryant Lenora Michelle Bryant and Gregory D. Carse of Vancouver.

The three July 25 picketers who had charges against them dropped were Shelly Ann Porter of Longview, George R. Johnson of Kelso and William Roberts of Clatskanie. Roberts is the sole protestor whose charges were dismissed with prejudice, meaning the charges against him cannot be refiled.

Port of Anchorage Director Stepping Down

After 10 years on the job and mounting criticism over the cost of an expansion project, Bill Sheffield has announced that he’s retiring as director of the Port of Anchorage, effective Jan. 15.

“When I arrived at the port in 2001, we recognized the necessity of modernization and continually worked to develop that objective,” he said in a letter delivered to Anchorage Mayor Dan Sullivan at the end of December.

“I am confident that I leave the port a more profitable, vibrant, and thriving facility,” Sheffield, 83, wrote. “It is the lifeline for nearly all of Alaska. It is our lifeline for today and the key to economic growth for tomorrow.”

In his own written statement, Sullivan praised Sheffield for his role in developing the port’s Intermodal Expansion Project, an infrastructure improvement program.

“His passion for the Port of Anchorage is unmatched and his recognition and vision that we must plan for the decades ahead by improving this critical facility is solid,” Sullivan said.

However, despite the resignation, the mayor says Sheffield could be retained by the port via a $60,000 a year consulting contract. The agreement, which would only be for one year, would enable Sheffield to continue assisting the expansion project, according to Sullivan.

The project, which was originally estimated to cost $360 million during its origins in 2005, has jumped to about $1 billion and counting, and last year led to Anchorage Assemblyman and mayoral candidate Paul Honeman saying that Sheffield should be fired.

Before joining the port, Sheffield was Alaska’s governor from 1982 to 1986. After one term as the state’s highest elected official, he served as chair of the board for Alaska Railroad from 1986 to 1997 and was then promoted to become the state-owned railroad’s president and CEO.

He served in that role from 1997 until joining the port in 2001, but to date remains on the railroad’s seven-member board as vice chair.

Deputy port director Steve Ribuffo will serve as interim director while the search for a permanent replacement is ongoing, according to Mayor Sullivan.

Oxnard Harbor District President Announces Congressional Run

Jess Herrera, a five-term member of the Oxnard Harbor District, the entity that runs the Port of Hueneme, has announced that he’s running for a newly created Congressional District seat in Ventura County.

Herrera, 63, is a longshoreman by trade and works as a marine clerk at the Port of Hueneme, where he helps coordinate the flow of ships and cargo. He says he’s running for the newly drawn 26th District seat in the California House of Representatives because he wants to bring jobs to the area. The new seat includes most of Ventura County, with the exception of Simi Valley.

Herrera says he has no plans to step down from the five-member commission, to which he was first elected in 1994, where he currently serves as president.

He’s the fifth person so far to enter the race. Under new California election primary rules, the top two vote getters in a June ballot go on to face off on a November ballot, regardless of party affiliation. Herrera and the other announced candidates are all Democrats.

Port of LA Reality Show in the Works

Actor Mark Wahlberg says he’s developing a reality show about the world of contraband cargo that moves through America’s busiest port.

“We’re trying to put together a show right now about the Port of LA and all the different things that happen in this port. It’s a reality show, like a docudrama,” he told World Entertainment News Network in a recent interview.

The show’s working title is “Port of LA,” Wahlberg said.

“We’ve been spending a lot of time down there and knowing all the real dangers that are down there, like smuggling, human trafficking, I mean everything, across the board,” he explained. “It’s pretty scary stuff, but a fascinating world.”

Wahlberg told WENN he became fascinated with the topic while researching and filming the movie “Contraband,” in which he plays a retired criminal who’s forced back into a life of illegally smuggling goods. The film opened in US theatres Jan. 13.

If Wahlberg’s series is eventually produced, it wouldn’t be the first reality show about the port to appear on TV. That honor would go to “America’s Port,” an eight-episode show that ran on the National Geographic channel in the spring of 2008.

The program, which lasted just one season, explored multiple issues at the port, including longshore safety and pollution control.

Tuesday, January 10, 2012

FMC Releases Seaport Competition Investigation Documents

The US Federal Maritime Commission has made public the first batch of documents in its two-month-old inquiry into whether American policies are causing an erosion of container traffic at ports on the US West Coast.

The documents include responses from various business and trade groups that, depending which side of the border they’re on, say that a claim that Canadian and Mexican ports have an unfair competitive advantage over those in the US is either accurate or erroneous.

For example, the Seattle Metropolitan Chamber of Commerce and Washington Ports Association, among others, say US policies have resulted in a diversion of cargo to Canadian and Mexican ports and that the situation could deteriorate even more in coming years.

“This diversion compounds the competitive pressures that our ports will face when the Panama Canal completes its expansion in 2014, enabling larger vessels to bypass the West Coast entirely,” the Chamber of Commerce wrote in its response to the inquiry.

The Canadian government among others, however, rejects the diversion theory, saying the growth at non-US ports is due to other factors.

“The unprecedented expansion and diversification of the Asian marketplace continues to significantly alter global trade patterns and supply chains,” the government wrote in its official comments to the FMC inquiry. “This phenomenon presents considerable business opportunities for North American firms and has yielded steady growth in sea-borne trade, specifically containerized trade, between North America and Asia.”

The Canadian government says that it and the Mexican government have responded to this increase in container traffic volume by beefing up port, rail and road infrastructure improvements throughout the transportation system, the Canadian government said in its response to the inquiry.

The FMC’s investigation, which was launched last November, is studying the impacts and the extent to which US policies, particularly the US Harbor Maintenance Tax, incentivizes container cargo to shift from US West Coast ports to those in Canada and Mexico.

The maintenance tax is a US-only per-container federal fee, collected by American ports on behalf of the federal government, based on a percentage of the cargo’s value. The money collected is distributed to ports for dredging work and other improvements.

The fee is not charged in Canada or Mexico, which has given rise to the belief by some officials that the fee could be causing diversion of cargo to non-US ports. In recent years, there’s been a steady increase in the amount of US-destined cargo moving through Canadian port Prince Rupert and the Port of Lázaro Cárdenas in Mexico.
The FMC launched its investigation after receiving requests from elected officials in Washington and California regarding the issue, with some suggesting that the Canadian and Mexican governments should explore a tax similar to the US’s HMT, in order to level the playing field.

The officials requesting the investigation were US senators Maria Cantwell and Patty Murray, both of Washington state, and Congress members Jaime Herrera Beutler, Norm Dicks, Jay Inslee, Rick Larsen, Jim McDermott, Dave Reichert and Adam Smith, all of Washington, as well as Congresswoman Laura Richardson of California.

Groups Plan EGT Grain Ship Protest

The Occupy movement and International Longshore and Warehouse Union both say they’re planning to protest at the Port of Longview’s EGT terminal to coincide with the arrival of the facility’s first grain ship, but the two groups differ drastically on their planned approaches.

In a letter to union locals last week regarding the planned protest, ILWU President Bob McEllrath said that the ship, which is due in later this month though the exact date is still undetermined, is expected to be escorted in from the mouth of the Columbia River by the US Coast Guard, and then protected by multiple law enforcement agencies.

He urged that caution be taken so that events don’t spiral out of control.

“Any showing of support for Local 21 at the time that a vessel calls at the EGT facility must be measured to ensure that the West Coast ports have sufficient manpower so as not to impact cargo movement for PMA member companies,” he wrote in the Jan. 3-dated letter.

“A call for a protest of EGT is not a call for a shutdown of West Coast ports and must not result in one,” he wrote, referencing the Dec. 12 protests by the Occupy movement that impeded cargo traffic at some ports along the North American West Coast.

Occupy Longview spokesman Paul Nipper, however, has said his group’s members would actively try to prevent the ship from being loaded and has called on Occupy members from across the country to participate.

The protests would be the latest in a series in a continued labor action against EGT, which is a joint venture between Bunge Ltd, ITOCHU International and STX Pan Ocean.

Members and supporters of ILWU Local 21 picketed the facility throughout last summer over labor issues, with the local saying its contract with the Port of Longview requires that the 25 to 35 jobs inside the terminal go to unionized labor.

The company, however, says its lease agreement with the port does not specify ILWU labor. It employs members of a different union, which represents operating engineers. A federal trial on the dispute is expected to begin in March.

During the previous pickets, some protesters stormed the facility, cut brake lines on rail cars and dumped grain from the cars, among other things, which led to dozens of people being arrested on trespassing and disorderly conduct charges.

In September, the union was ordered by a U.S. district judge in Tacoma to pay $250,000 in damages.

Hearing Scheduled on Proposed Long Beach Grain Facility

A public hearing has been scheduled for Wed., Jan. 11 by the Port of Long Beach to receive comments on a draft environmental impact report regarding a proposed grain export facility at Pier T on Terminal Island.

Total Terminals International is proposing to build a facility that would transfer grain from railcars into ocean shipping containers. The proposed facility, which would export an estimated 750,000 to 1.5 million tons of grain annually utilizing existing rail and container shipping facilities, would be built on about 10 vacant acres adjacent to the current TTI container shipping terminal.

The draft environmental impact report for the project is available at polb.com/ceqa.

The public hearing’s scheduled for 7 p.m. Wed., Jan. 11 at Long Beach City Hall Council Chambers, 333 W. Ocean Blvd., Long Beach, 90802. Parking is available in a structure accessible off Broadway between Chestnut and Cedar avenues.

The port is also accepting written comments until 4:30 p.m. on Jan. 23, 2012 at Cameron@polb.com or by mail to Richard D. Cameron, Director of Environmental Planning, Port of Long Beach, 925 Harbor Plaza, Long Beach, CA 90802.