Fifth Circuit Re-examines Scindia Duties

In June 2015, an employee of Modern American Recycling Service (MARS) was killed when he stepped through an unmarked open hole on a platform. The hole was created by Manson Gulf, LLC during its decommissioning process of the platform. Manson filed a complaint seeking exoneration or limitation from liability against MARS. The surviving spouse of the employee also brought suit against Manson and MARS, alleging negligence under both maritime and Louisiana law. Manson and MARS then moved for summary judgment and the district court granted both parties’ motions. The District Court found neither Manson nor MARS liable under § 905 of the Longshore and Harbor Workers’ Compensation Act (LHWCA).

The Fifth Circuit ultimately reversed, finding that a fact issue existed with regard to the turnover duty set forth in Scindia. Specifically, in Scindia Steam Navigation Co. v. De Los Santos, 451 US 156 (1981), the Supreme Court held that that vessel-owner liability sounded only in negligence and articulated three “narrow duties” owed by the vessel owner: “(1) a turnover duty, (2) a duty to exercise reasonable care in the areas of the ship under the active control of the vessel, and (3) a duty to intervene.”

The Fifth Circuit dispensed with the claims against Manson under the “active control” duty and the “duty to intervene” as a preliminary matter because it was undisputed that Manson was not in control of the vessel given that all Manson personnel had left the platform prior to the incident. The Firth Circuit noted that under the “active control” duty, the correct test is actual control. Moreover, Manson personnel could not have had “knowledge of any peculiar dangers” related to the operations on the oil platform and thus had no possible “duty to intervene” under the second Scindia duty.

However, with regard to the turnover duty, the Court noted that there are two distinct obligations. First, the vessel owner “owes a duty to exercise ordinary care under the circumstances to turn over the ship and its equipment in such condition that an expert stevedore can carry on stevedoring operations with reasonable safety.” Second, the vessel owner “owes a duty to warn the stevedore of latent or hidden dangers which are known to the vessel owner or should have been known to it.” However, a vessel owner need not warn of “dangers which are either: (1) open and obvious, or (2) dangers a reasonably competent stevedore should anticipate encountering.”

The District Court held that the hole was both open and obvious and anticipated by a competent stevedore. The Fifth Circuit ultimately reversed and remanded, noting that the discrepancies in the testimony on these issues constituted material disputes of fact precluding summary judgment. The Court further explicitly noted that credibility determinations are improper at the summary judgment stage, even if the Court is able to draw its own inferences and conclusions.

The issues of whether the hole was open and obvious or a danger “a reasonably competent stevedore” should have anticipated will be decided after a trial, absent a settlement, and the effect on the application of Scindia duties remains to be seen.

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