Welcome to Transportation Law Today

Managed by Paul J. Loftus, a partner at Dinsmore & Shohl LLP, Transportation Law Today provides professionals in the rail, transit, inland maritime, and trucking industries with current news and analysis of laws, rulings, and regulatory policies.

Friday, January 27, 2012

BP on the Hook for Some Transocean Spill Costs

A federal judge in New Orleans has ruled that BP is responsible for paying third party damages asserted against oil rig owner Transocean, even if the cause of the damages to the third parties was the negligence, including gross negligence, of Transocean. The Order from District Judge Barbier is attached here. The basis of the Court's ruling is the contractual indemnity provision between BP and Transocean, allocating certain liabilities for injuries, accidents, and pollution from the operation of the rig.

This litigation of course arises from the April 20, 2010 explosion and fire of the Deepwater Horizon rig in the Gulf of Mexico and the subsequent oil spill from the sea floor.

The Court also ruled that BP is not required to compensate Transocean for any punitive damages levied against Transocean, nor is BP required to reimburse Transocean for any potential fines under the Clean Water Act.

The Court deferred ruling on whether BP's indemnity obligation could be voided by Transocean's acts that could be construed to have breached the drilling contract, and thereby prejudiced BP's rights. The Court did not rule on this issue as it involved factual determinations which cannot resolved by Summary Judgement under Fed. R. Civ. P. 56.

Monday, January 23, 2012

New Airline Passenger Regulations Take Effect This Week

Several new airline passenger rules take effect this week, implementing the FAA consumer rule originally issued in April 2011. This Press Release announces the new rules.

Among the rules going into effect:

1. All mandatory taxes/fees, including baggage fees, must be disclosed in published airline fares;

2. Passengers no longer have to pay to hold a reservation, or to cancel it within 24 hours of making a reservation, for travel booked a week in advance;

3. Passengers must be notified promptly of flight delays exceeding 30 minutes;

4. Baggage fees for lost bags must be refunded, and compensation has increased for being bumped from an oversold flight (these took effect in August 2011).

Friday, January 20, 2012

Cruise Ship Disaster Leads to Speculation about Passenger Remedies

It was not long after the news of the Italian cruise ship broke, with details of passengers missing and deaths, that speculation about the potential remedies of the passengers began in earnest.

Since the details of the accident, particularly the course deviation by the captain, and his less-than-heroic response to the accident, a prevalent topic has been whether American passengers could sue in the United States for death or injuries. This speculation, no doubt, has been highlighted by the missing American couple from Minnesota, whose story has been well publicized.

Most commentators agree that legal options for American passengers for a mishap in Italian waters, are limited by the ticket-contract for the voyage, which contains a forum selection clause, reported to be Genoa, Italy, and the lack of a port call in a U.S. port. Federal courts in the U.S. have generally upheld ticket contracts with choice of venue provisions, despite the inconvenience and expense of an American attempting to litigate in a foreign Country. For example, the U.S. Court of Appeals for the 11th Circuit, based in Miami, upheld forum selection clause (in favor of litigating in Paris) for claim made by an American injured during a cruise in French Polynesia. That unpublished Opinion is attached here.

Another issue is the applicability of the "Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea," also known as the "Athens Convention." This international agreement limits recovery for death or personal injuries to approximately $80,000.00 per person. This convention is likely to apply wherever a claim is made, even in the U.S. However, the carrier can lose the right to limit liability "if it is proved that the damage resulted form an act or omission of the carrier done with intent to cause such damage, or recklessly and with with knowledge that such damage would probably result."

Given the reported behavior of the Master and some crew members, reckless behavior seems to be demonstrated by: the course deviation, the reported failure to advise authorities of the true nature of the ship's distress, and the reported failure to assist in the abandonment/evacuation of the ship. If what has been reported in the press is accurate, claimants stand a reasonable chance to pierce the limit of the Athens Convention.

Another avenue is subsidiary liability, since Costa Cruises, is a subsidiary of Miami-based Carnival Corporation & PLC. It is almost certain that the Costa Concordia's Master deviated from company policies in steering close the island and off the planned course. It will be a stretch to claim the parent Corporation in Miami is liable for the Master's apparent negligence, though I think it is likely that someone will try. Somewhat related to the issue of control of subsidiaries, which is an issue in subsidiary-liability cases, is this recent announcement by the parent corporation that it will audit and review Safety and Emergency Response Procedures in its nine different cruise lines. Part of the review is to include officer and crew training and evaluation.

Given the high-profile of this accident, and the growing awareness of the limited remedies available to U.S. passengers, I will not be surprised if there are challenges to both the ticket-contract venue provisions and the limitation of liability, even if potential success is questionable.

Wednesday, January 11, 2012

U.S. Surface Trade with Canada and Mexico up 12%

U.S. Trade with NAFTA signatory countries Canada and Mexico was up 12% from October 2010 to October 2011. The attached release from the USDOT Research and Innovative Technology Administration's Bureau of Transportation Statistics, details the increase in trade over the period.

The overall value of combined import/expert trade with Canada and Mexico was just over $79 billion. Also of interest is the fact that the following rust belt states, Michigan, Ohio, and Pennsylvania, made the top 10 list for among states for trading volume with both Canada and Mexico.

Among the surface modes, "land modes" (i.e. highway, rail, and pipeline)dominated with 86.1% of U.S. trade to Canada and Mexico, with Vessel traffic representing 9.6%and Air 4.3%. Over all modes imports increased by 12.7% and exports by 11.2%. Both truck and rail exports showed strong increases during the period, 10.7 and 21.4% respectively.