The latest edition of the UK P&I Club’s US Bodily Injury News highlights the vagaries of US court decisions
News Release
U.K. P&I Club Thomas Miller(Americas)Inc.
January 20, 2011
On behalf of the UK P&I Club, the Thomas Miller (Americas) (TMA) Bodily Injury Team has completed the latest issue of “US Bodily Injury News” and this is now available for download from the Club’s website www.ukpandi.com
More than half of the Club’s personal injury claims over $100,000 are brought in the American courts and the TMA Bodily Injury Team therefore has a major role to play in reducing the cost of such claims to reasonable levels.
The complexities of the US court system are highlighted in several articles such as the refusal of Washington State Court to enforce certain contractual terms of collective bargaining agreements (CBAs), so encouraging plaintiffs’ lawyers to file in the State Court rather than in the Federal Court system. As a result, Vessel Interests are being required to pay maintenance rates higher than the Club feels is fair in view of the rates agreed by the employers and seafarers’ unions.
In another article, Marc Warner, Partner, LeGros Buchanan & Paul, Seattle, Washington, reviews Federal Maritime Law on maintenance rates noting that few legal rights are more revered and protected than a seaman’s right to ‘maintenance’. Determining whether a seafarer is eligible for maintenance and if he is and how much it should be, often leads to litigation through the courts and Mr Warner states that one of the few ways in which a Vessel Interest can establish a fair rate is normally by means of a CBA.
Other articles in this issue of BI News review the rights of both US and foreign seafarers to maintenance and cure and their remedies in US Courts when employment contracts with arbitration and forum selection clauses are involved.
Strange things happening in Texas
According to Christina Schovajsa, Partner, Eastham, Watson, Dale & Forney in Houston, Texas can be an unusual place where strange things happen. This extends to lawsuits in the state’s courts, explains Ms Schovajsa:
“In the normal course of a personal injury lawsuit, a personal injury plaintiff must prove that all medical expenses he/she seeks to recover were necessary and the charges for those services were reasonable. Typically, proof of this must be in the form of expert medical testimony. However, a personal injury plaintiff in a Texas state court action has a unique procedure available to him under Texas state law which allows him to “prove up” his medical expenses by simply submitting an affidavit from the custodian of records for his medical provider. Not only is a plaintiff able to prove up the quantum charged by affidavit but also that the charges were “reasonable and necessary” and “usual and customary.”
“The foregoing is regardless of:
- whether the affiant is a medical doctor or otherwise qualified to render expert testimony on the necessity of a medical service or the reasonableness of the charges for the service; or
- the amount actually accepted in satisfaction of the bills.
“This procedure is available through the Texas Civil Practices and Remedies Code and it effectively and immediately shifts the burden to a defendant to offer evidence that the charges were neither “reasonable and necessary” nor “usual and customary”.
“Significantly, the statute does not require that the plaintiff’s affidavit be completed by a doctor or other medical expert. The affidavits are routinely executed by non-medical support staff. The relevant language only requires that the affidavit:
- be taken before an officer with authority to administer oaths;
- be made by the person who provided the service or the person in charge of records showing the service provided and charge made; and
- includes an itemised statement of the service and charge.”
Once a plaintiff serves an affidavit on a defendant, the defendant must file a counteraffidavit in order to challenge the necessity of the service and the reasonableness of the charge contained in the plaintiff ’s affidavit. Failure to do so can result in the defendant being precluded from presenting controverting evidence at trial.
Unlike the plaintiff ’s affidavit, the defendant’s counteraffidavit must be
completed by an expert witness.
The completion of this process is only the beginning and examples given by Ms Schovajsa show remarkable variations in the way in which Texas appellate courts view these affidavits and counteraffidavits.
She stresses the need to ensure that counteraffidavits are filed correctly and in time, citing by way of an example a recent personal injury case handled by TMA in Harris County, Texas. In this instance, affidavits of costs and necessity attempting to prove up over $110,000 in medical expenses were filed on behalf of a seaman plaintiff. One of the affidavits submitted on behalf of the plaintiff was to prove up charges totalling approximately $30,000 from a day surgery centre.
However, according to a medical auditing firm consulted by the shipowner, the usual and customary charges for those services only totalled $9,000 and the provider agreed to accept that amount in settlement of the charge. Failure to file a counteraffidavit could have precluded the shipowner from offering this evidence at the trial of the matter.
Lost in the fog
For non-US shipping companies, the unpredictability of the US courts is less important as, with the notable exception of cruise operators, they rarely employ US citizens. However, the Scandinavian owners Rederiet Otto Danielsen found itself embroiled in an unusual case recently following a near-miss incident in heavy fog involving its 4300dwt multipurpose vessel Eva Danielsen and a US fishing vessel, Marja, owned and operated by a Mr Stacy.
He had picked up Eva Danielsen on his radar about one mile away on a collision course with Marja. He radioed the ship of his findings and Eva Danielsen altered her course but still passed close enough to Marja for Stacy to hear the ship’s engine and feel the ship’s wake but he did not see the ship due to the dense fog.
Eva Danielsen reported a possible collision to the USCG and conducted a search. Hearing the radio conversation, Mr Stacy joined the search along with other nearby fishing boats. During that search Mr Stacy believed Eva Danielsen reported it collided with his boat. He radioed all that he was safe and afloat, an action that resulted in the search being terminated. He returned to fishing.
Over four days later, Mr Stacy heard that another boat fishing in the same area had sunk with the loss of the master, a Mr Wade. Mr Stacy was not acquainted with Mr Wade nor did he know his vessel, Buona Madre, was in the area on the day of the incident.
Mr Stacy decided to claim against the Scandinavian owner, alleging negligent infliction of emotional stress (NIED). Mr Stacy stated that he was “placed in grave and imminent risk of death or great bodily harm” causing him to suffer
physical and mental pain and suffering, stress and anxiety. Stacy also claimed he required medical treatment and sustained economic loss because he couldn’t work.
The owners of Eva Danielsen challenged Mr Stacy’s allegation of NIED and moved to dismiss the case based on a failure to state a cause of action. In granting the motion, the trial court applied the “zone of danger” test expressed in Chan v Society Expeditions, Inc., 39 F.3d 1398 (9th Cir. 1994). That test requires a plaintiff to show two facts:
1) that he or she witnessed the peril or harm to another; and
2) that he or she was threatened with physical harm due to the negligence of the defendant.
Plain and simple…you must see someone suffer an injury or death AND be close enough to the peril that your own safety is at risk. In applying the “zone of danger test” to Mr Stacy’s allegations, the district court dismissed Mr Stacy’s complaint, finding that he failed to show that he witnessed another being serious injured or killed while simultaneously being threatened with physical injury to himself.
Mr Stacy appealed the dismissal of his case to the Ninth Circuit Court of Appeals and in a startling decision, the Ninth Circuit refused to follow binding Circuit precedent and reversed the trial court. The majority view of two of the three Appellate Justices was based on a strained interpretation of Chan and reliance on Consolidated Rail Corp v Gottshall, 512 US 532, (1994).
In Gottshall, the US Supreme Court recognised a federal common law claim for NIED but expressed concern that allowing such claims posed a “very real possibility of nearly infinite and unpredictable liability for defendants”. Accordingly, the Supreme Court allowed only “those plaintiffs who sustain a physical impact as a result of a defendant’s negligent conduct, or who are placed in immediate risk of physical harm by that conduct.”
Although Mr Stacy was never put in “immediate risk of physical harm”; he continued to fish after the ship passed and after the search was terminated. Subsequently, the majority of the Ninth Circuit justice held that the plaintiff was in the zone of danger and could state a claim for NIED.
Even under the more liberal Chan “zone of danger” test, Mr Stacy did not and could not claim he witnessed peril or harm to another and that he himself was threatened with physical harm due to the Eva Danielsen’s negligence.
Fortunately, due to the potential ramifications in future maritime injury cases, the Owners of Eva Danielsen are in the process of submitting a Petition for Writ of Certiorari to the United States Supreme Court. They are seeking other interested parties to file amicus (or Friend of the Court) briefs in the hope that the Supreme Court will take the case and reverse the Ninth Circuit decision.
The saga continues ………. Watch this space!
More than half of the Club’s personal injury claims over $100,000 are brought in the American courts and the TMA Bodily Injury Team therefore has a major role to play in reducing the cost of such claims to reasonable levels.
The complexities of the US court system are highlighted in several articles such as the refusal of Washington State Court to enforce certain contractual terms of collective bargaining agreements (CBAs), so encouraging plaintiffs’ lawyers to file in the State Court rather than in the Federal Court system. As a result, Vessel Interests are being required to pay maintenance rates higher than the Club feels is fair in view of the rates agreed by the employers and seafarers’ unions.
In another article, Marc Warner, Partner, LeGros Buchanan & Paul, Seattle, Washington, reviews Federal Maritime Law on maintenance rates noting that few legal rights are more revered and protected than a seaman’s right to ‘maintenance’. Determining whether a seafarer is eligible for maintenance and if he is and how much it should be, often leads to litigation through the courts and Mr Warner states that one of the few ways in which a Vessel Interest can establish a fair rate is normally by means of a CBA.
Other articles in this issue of BI News review the rights of both US and foreign seafarers to maintenance and cure and their remedies in US Courts when employment contracts with arbitration and forum selection clauses are involved.
Strange things happening in Texas
According to Christina Schovajsa, Partner, Eastham, Watson, Dale & Forney in Houston, Texas can be an unusual place where strange things happen. This extends to lawsuits in the state’s courts, explains Ms Schovajsa:
“In the normal course of a personal injury lawsuit, a personal injury plaintiff must prove that all medical expenses he/she seeks to recover were necessary and the charges for those services were reasonable. Typically, proof of this must be in the form of expert medical testimony. However, a personal injury plaintiff in a Texas state court action has a unique procedure available to him under Texas state law which allows him to “prove up” his medical expenses by simply submitting an affidavit from the custodian of records for his medical provider. Not only is a plaintiff able to prove up the quantum charged by affidavit but also that the charges were “reasonable and necessary” and “usual and customary.”
“The foregoing is regardless of:
- whether the affiant is a medical doctor or otherwise qualified to render expert testimony on the necessity of a medical service or the reasonableness of the charges for the service; or
- the amount actually accepted in satisfaction of the bills.
“This procedure is available through the Texas Civil Practices and Remedies Code and it effectively and immediately shifts the burden to a defendant to offer evidence that the charges were neither “reasonable and necessary” nor “usual and customary”.
“Significantly, the statute does not require that the plaintiff’s affidavit be completed by a doctor or other medical expert. The affidavits are routinely executed by non-medical support staff. The relevant language only requires that the affidavit:
- be taken before an officer with authority to administer oaths;
- be made by the person who provided the service or the person in charge of records showing the service provided and charge made; and
- includes an itemised statement of the service and charge.”
Once a plaintiff serves an affidavit on a defendant, the defendant must file a counteraffidavit in order to challenge the necessity of the service and the reasonableness of the charge contained in the plaintiff ’s affidavit. Failure to do so can result in the defendant being precluded from presenting controverting evidence at trial.
Unlike the plaintiff ’s affidavit, the defendant’s counteraffidavit must be
completed by an expert witness.
The completion of this process is only the beginning and examples given by Ms Schovajsa show remarkable variations in the way in which Texas appellate courts view these affidavits and counteraffidavits.
She stresses the need to ensure that counteraffidavits are filed correctly and in time, citing by way of an example a recent personal injury case handled by TMA in Harris County, Texas. In this instance, affidavits of costs and necessity attempting to prove up over $110,000 in medical expenses were filed on behalf of a seaman plaintiff. One of the affidavits submitted on behalf of the plaintiff was to prove up charges totalling approximately $30,000 from a day surgery centre.
However, according to a medical auditing firm consulted by the shipowner, the usual and customary charges for those services only totalled $9,000 and the provider agreed to accept that amount in settlement of the charge. Failure to file a counteraffidavit could have precluded the shipowner from offering this evidence at the trial of the matter.
Lost in the fog
For non-US shipping companies, the unpredictability of the US courts is less important as, with the notable exception of cruise operators, they rarely employ US citizens. However, the Scandinavian owners Rederiet Otto Danielsen found itself embroiled in an unusual case recently following a near-miss incident in heavy fog involving its 4300dwt multipurpose vessel Eva Danielsen and a US fishing vessel, Marja, owned and operated by a Mr Stacy.
He had picked up Eva Danielsen on his radar about one mile away on a collision course with Marja. He radioed the ship of his findings and Eva Danielsen altered her course but still passed close enough to Marja for Stacy to hear the ship’s engine and feel the ship’s wake but he did not see the ship due to the dense fog.
Eva Danielsen reported a possible collision to the USCG and conducted a search. Hearing the radio conversation, Mr Stacy joined the search along with other nearby fishing boats. During that search Mr Stacy believed Eva Danielsen reported it collided with his boat. He radioed all that he was safe and afloat, an action that resulted in the search being terminated. He returned to fishing.
Over four days later, Mr Stacy heard that another boat fishing in the same area had sunk with the loss of the master, a Mr Wade. Mr Stacy was not acquainted with Mr Wade nor did he know his vessel, Buona Madre, was in the area on the day of the incident.
Mr Stacy decided to claim against the Scandinavian owner, alleging negligent infliction of emotional stress (NIED). Mr Stacy stated that he was “placed in grave and imminent risk of death or great bodily harm” causing him to suffer
physical and mental pain and suffering, stress and anxiety. Stacy also claimed he required medical treatment and sustained economic loss because he couldn’t work.
The owners of Eva Danielsen challenged Mr Stacy’s allegation of NIED and moved to dismiss the case based on a failure to state a cause of action. In granting the motion, the trial court applied the “zone of danger” test expressed in Chan v Society Expeditions, Inc., 39 F.3d 1398 (9th Cir. 1994). That test requires a plaintiff to show two facts:
1) that he or she witnessed the peril or harm to another; and
2) that he or she was threatened with physical harm due to the negligence of the defendant.
Plain and simple…you must see someone suffer an injury or death AND be close enough to the peril that your own safety is at risk. In applying the “zone of danger test” to Mr Stacy’s allegations, the district court dismissed Mr Stacy’s complaint, finding that he failed to show that he witnessed another being serious injured or killed while simultaneously being threatened with physical injury to himself.
Mr Stacy appealed the dismissal of his case to the Ninth Circuit Court of Appeals and in a startling decision, the Ninth Circuit refused to follow binding Circuit precedent and reversed the trial court. The majority view of two of the three Appellate Justices was based on a strained interpretation of Chan and reliance on Consolidated Rail Corp v Gottshall, 512 US 532, (1994).
In Gottshall, the US Supreme Court recognised a federal common law claim for NIED but expressed concern that allowing such claims posed a “very real possibility of nearly infinite and unpredictable liability for defendants”. Accordingly, the Supreme Court allowed only “those plaintiffs who sustain a physical impact as a result of a defendant’s negligent conduct, or who are placed in immediate risk of physical harm by that conduct.”
Although Mr Stacy was never put in “immediate risk of physical harm”; he continued to fish after the ship passed and after the search was terminated. Subsequently, the majority of the Ninth Circuit justice held that the plaintiff was in the zone of danger and could state a claim for NIED.
Even under the more liberal Chan “zone of danger” test, Mr Stacy did not and could not claim he witnessed peril or harm to another and that he himself was threatened with physical harm due to the Eva Danielsen’s negligence.
Fortunately, due to the potential ramifications in future maritime injury cases, the Owners of Eva Danielsen are in the process of submitting a Petition for Writ of Certiorari to the United States Supreme Court. They are seeking other interested parties to file amicus (or Friend of the Court) briefs in the hope that the Supreme Court will take the case and reverse the Ninth Circuit decision.
The saga continues ………. Watch this space!