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Toxic Torts and Environmental Admiralty and Maritime Law Committee Law Committee
LIMITING THE VESSEL OWNERS LIABILITY TO THE VALUE OF THE VESSEL ANDITS FISHING PERMITS?
Carbon nanotubes (CNTs) hold asbestos fibersdiscussions of First reported in 19913, CNTs promise for many beneficial epitomize the emerging field of parallels between these two applications. However, there have nanotechnology, defined by some substances are natural. Thus, given By: Kirby Aarsheim1 been concerns and calls for a as the ability to measure, see, the legacy of asbestos-related Accordingly, vesselmanipulate, owners should expect claimants There is an absence of and case the lawthousands moratorium raised over mounting and manufacture injury of cases in future Limitation of Liability Actions to attempt to which addresses whether a fishing things usually between 1 and evidence that CNT may be the litigated each year, consideration of 1 permit is an appurtenance for the 4 include the fishing permit with the vessel for the purpose 100 nanometers. CNTs are a type new asbestos, or at least possible implications of the use of of determining the value of Limitation Fund. of including itsin value in and deserving of specialpurpose toxicological of c a rthe bon -based e ngineered CNTs research in consumer the Limitation Fund. The current Continued on page by 18 attention due to prior experiences nanoparticle generally formed products is prudent. 2 types of fishing permits greatly exceed valueasbestos. of certain The shape and size with Continued on page 18 the some value agglomerated of the fishing vessel. Scalloping permits, for of CNTs are example, to areasbestosthe the most highly valued type of fishing similar most 2 In the past two years, the highest permit in the country. Limiting the Vessel Owners Liability to desirable. And because CNTs for sale price of a scallop vessel and permit totaled $5 Carbon Nanotubes: The Next of Asbestos . . . . and . . . . . .Its . . .Fishing ..........1 the Value the Vessel structural utility are long and million, with an average sale price of $4.55 million for Permits? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 thincharacteristics thought to Editors Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 In to early 2013, the value both the increased vessel and permit. impart potency Message From The Chair . . . . . . . . . . . . . . 3 of one scallop permit reached as high Tatera as $4 million. v. FMC4 Corporation: When Is A Product No A Product? . . . 3
1 Miller, G. 2008. Mounting evidence that carbon Mexicos National Wastes Management Program. . . . . . . . . . . . . . . 4 nanotubes may be the new asbestos. Friends of the 1 Kirby Aarsheim is an associate at Clinton & Muzyka, P.C. , a maritime defense firm Earth Australia. Available at http://nano.foe.org.au. Environmental Risk During Restructuring And Bankruptcy . . . . . 5 servicing clients Society in the New England as well of as internationally. Her family is 2 The Royal and Royal area Academy involved in the(RS/RAE). scallop fishing industry, which provides insight on commercial Engineering 2004. Nanoscience and her with Upcoming TTEL Programs And Meetings . . . . . . . . . . . . . . . . . . . . 6 fishing operations.Royal She Society can be and reached atAssociation kaarsheim@clinmuzyka.com or 617-723nanotechnologies. Royal 9165. This article is intended for scholarly and academic purposes only. of Engineers. London: The Royal Society. Available at Limitations Of Toxicogenomic Studies To Assess Toxic Exposures 2 Telephone interviews with A. Nelson Long Jr., a broker at Athearn Marine Agency, http://www.royalsoc.ac.uk/. Inc., (August 22, 2013 and August 29, 2013). Athearn Marine Agency, Inc. has been 3 And Injury From Benzene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Iijima, S. 1991. Helical microtubules of graphitic engaged in the(London) brokerage of commercial fishing vessels and related services since carbon. Nature 354:5658. 1946. Mr. Long has been an owner and commercial fishingBurlington vessel broker for Northern: over 4 The Requisite Intent For Arranger Liability National Science and Technology Council (NSTC). thirty-seven years. 2007. The National Nanotechnology Initiative. Strategic Under Cercla . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3 Id. Washington DC: NSTC, Committee on Plan. 4 Id. Technology, Subcommittee on Nanoscale Science, 2009-2010 TIPS Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Engineering, and Technology. December. Available at http://www.nano.gov/ NNI_Strategic_Plan_2004.pdf.
Trade Talk: Robin Minturn, Chevron Shipping Co. . . . . . . . . . . . . . . . . . . . . . . . . 5 The Norwegian Continental Shelf Offshore Contracting Risks . . . . . . . . . . . . 8 The Curious Case Of Maritime Law In High Tech Employment: Seasteading Fills The Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Year In Review . . . . . . . . . . . . . . . . . . . . . 10 2013 - 2014 TIPS Calendar . . . . . . . . . . . 30
Uniting Plaintiff, Defense, Insurance, and Corporate Counsel to Uniting Plaintiff, Defense, Insurance, and Corporate Counsel to Advance the Civil Justice System Advance the Civil Justice System
Robins Kaplan Miller & Ciresi 2049 Century Park E, Ste 3400 Los Angeles, CA 90067-3208 (310) 229-5443 Fax: (310) 229-5800 jpkoelzer@rkmc.com
James P Koelzer
Glenanne Bowden
Fisher & Fisher Law Offices LLC 3041 Route 940, Suite 107 Mount Pocono, PA 18344-1324 (570) 839-8690 Fax: (570) 839-7675 joseph.kulesa@pocono-lawyers.com
Joseph Kulesa
Morris Polich & Purdy LLP 1055 W 7th St, Ste 2400 Los Angeles, CA 90017-2550 (213) 891-9100 Fax: (213) 488-1178 ppalmer@mpplaw.com
Chair-Elect
Vice-Chairs
Laurie J Sands
Fowler Rodriguez Valdes-Fauli 400 Poydras St, Fl 30 New Orleans, LA 70130-3245 (504) 523-2600 Fax: (504) 523-2705 pbrickman@frfirm.com Pierce Atwood LLP 10 Weybosset St, Fl 4 Providence, RI 02903-2818 (401) 588-5113 mdaly@pierceatwood.com The Hugener Law Group 1 Sansome St, Ste 3500 San Francisco, CA 94104-4448 (415) 944-9413 Fax: (415) 869-5403 jhugener@hugenerlaw.com Hamilton Miller & Birthisel LLP 100 S Ashley Dr, Ste 1210 Tampa, FL 33602-5313 (813) 223-1900 Fax: (813) 223-1933 chamilton@hamiltonmillerlaw.com Jones Walker et al 201 Saint Charles Avenue, 48th Floor New Orleans, LA 70170-1000 (504) 582-8224 Fax: (504) 589-8224 ghurley@joneswalker.com PO Box 751 Bartonsville, PA 18321 (570) 517-1482 anne.kulesa@gmail.com
Philip C Brickman
Michael J Daly
Hays McConn Rice & Pickering 1233 West Loop S, Ste 1000 Houston, TX 77027-9109 (713) 654-1111 Fax: (713) 650-0027 dwilson@haysmcconn.com
Scope Liaison
3531 Helms Ave Culver City, CA 90232-2414 Giuseppe L Rosa Esq & Associates 4 Piazza G Fracastoro Cavaion Veronese, VR 37010 39 04 5803 0630 Fax: 39 04 5803 1040 glrosa@glrosalaw.com Severson & Werson 1 Embarcadero Ctr, Fl 26 San Francisco, CA 94111-3745 (415) 677-5627 Fax: (415) 956-0439 pls@severson.com 1240 Appling Dr, Unit 301 Mount Pleasant, SC 29464-3696 rftennant@charlestonlaw.edu Phelps Dunbar LLP 365 Canal St, Ste 2000 New Orleans, LA 70130-6534 (504) 679-5509 waidr@phelps.com
Jefferson Poole
Giuseppe Rosa
Janice R Hugener
Council Representative
Carella Byrne et al 5 Becker Farm Rd, Ste 200 Roseland, NJ 07068-1788 (973) 994-1700 Fax: (973) 994-1744 gtroublefield@carellabyrne.com
G Glennon Troublefield
Pamela L Schultz
Christopher Hamilton
Membership Vice-Chair
Holland & Knight LLP 31 W 52nd St, Fl 11 New York, NY 10019-6111 (212) 513-3570 Fax: (212) 385-9010 blythe.daly@hklaw.com
Ryan F Tennant
K. Blythe Daly
Grady S Hurley
Newsletter Vice-Chair
Holland & Knight LLP 31 W 52nd St, Fl 11 New York, NY 10019-6111 (212) 513-3307 Fax: (212) 341-7237 chris.nolan@hklaw.com
Christopher Nolan
Anne L Kulesa
2013 American Bar Association, Tort Trial & Insurance Practice Section, 321 North Clark Street, Chicago, Illinois 60654; (312) 988-5607. All rights reserved. The opinions herein are the authors and do not necessarily represent the views or policies of the ABA, TIPS or the Admiralty and Maritime Law Committee. Articles should not be reproduced without written permission from the Copyrights & Contracts office (copyright@americanbar.org). Editorial Policy: This Newsletter publishes information of interest to members of the Admiralty and Maritime Law Committee of the Tort Trial & Insurance Practice Section of the American Bar Association including reports, personal opinions, practice news, developing law and practice tips by the membership, as well as contributions of interest by nonmembers. Neither the ABA, the Section, the Committee, nor the Editors endorse the content or accuracy of any specific legal, personal, or other opinion, proposal or authority. Copies may be requested by contacting the ABA at the address and telephone number listed above.
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Wednesday, October 9, 2013 Commercial Transportation: Four Hot Topics for the Trucking Lawyer Electronic Data Recorders or the Proverbial Black Box: Questions Concerning Admissibility Preservation and Ownership of the Data After a Motor Vehicle Accident Thursday, October 10, 2013 When Passing the Bar is a Lifelong Challenge More Diligence is Due: What Every Lawyer Must Know About Insurance 2014 Health Insurance Market: New Challenges Dialog with General Counsel Friday, October 11, 2013 Advanced Theories of Recovery and Subrogation 201
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TRADETALK
For our eighth Trade Talk piece, and our fourth in a row featuring woman leaders in U.S. shipping, we are pleased to spotlight Robin Minturn, in-house counsel at Chevron Shipping Co. Chevron Shipping transports crude oil, refined products, liquefied petroleum gas and liquefied natural gas (LNG) for Chevron customers worldwide. During 2012, it managed approximately 2,100 deep-sea tanker voyages using a combination of single-voyage charters, short- and medium-term charters, and company-owned and bareboat-chartered vessels. Headquartered in San Ramon, California, Chevron also maintain regional offices in the major trading centers of Houston, London and Singapore. It offers a full range of marine services: technical and marine operations consulting, commercial arrangements, risk management, and transportation support. Historically, Chevron commissioned its first tanker shipan oil-fired steamer dubbed the George Loomisin 1895. In 1920, it launched the first American tanker equipped with diesel-electric-drive propulsion. The fleet has grown steadily from the days when barrels of oil were rolled onto the decks of sailing ships to the technically advanced tankers of today. Chevron owns a one-sixth interest in each of seven LNG carriers that transport cargos for the North West Shelf Venture in Australia. In 2012, it ordered eight new vessels to modernize the fleet and increase LNG coverage. To protect the environment, all ships in Chevron-owned and bareboat-chartered fleet have double hulls. Below are excerpts from our interview with Robin which address her views on the maritime industry, issues concerning the hiring of outside counsel, and the rise of the Texans of Houston. Q. Robin, tell us what prompted you to get into the maritime legal industry? R. I have always been interested in international business and entered law school with intention of getting my Juris Doctor and a Masters in International Affairs (a 4 year program). After paying for my first year of law school I decided to amend my goals and stick with just a JD (3 years). My interest in international issues and my previous work as divemaster led me to take my first admiralty class. After the first few classes, I knew that I wanted to be part of the maritime industry. Q. Can you describe your experience of working at Chevron Shipping Co.? R. Chevron Shipping is a fast paced and challenging environment. Chevron owned or chartered, ships are trading worldwide twenty-four (24) hours a day - 365 days a year. As an attorney for Chevron Shipping, I support projects and vessels in multiple jurisdictions and 5 time zones. I am always looking at domestic and international issues. Despite this high pressure environment, Chevron Shipping always takes the time to do it right. Q. What are your views on hiring outside counsel? R. I look for outside counsel firms that have not only a good maritime background, but can address a host of other issues that may arise in a transaction including tax issues. Primarily, I utilize outside counsel for transactional work outside of the United States but rely heavily on U.S. counsel for litigation matters. I appreciate working with outside counsel that are sensitive to budget issues and who are willing to offer not only legal advice but creative solutions. Q. What legal issues are coming across your desk with some frequency these days? R. These days I am dealing with a lot of charter negotiations, shipyard repair contracts, Customs/Jones Act issues, and letters of indemnity related to cargo 5
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Additional Information
For more information regarding the benefits that membership in the AMLC can provide to you, check out our webpage at http://ambar.org/tipsadmiralty and join our group on LinkedIn. The Committee is open to all, including non-lawyer maritime professionals, law students and lawyers in every practice area who want to keep abreast of developments in the field.
Pollution liability
Due to the extensive liabilities that may arise, pollution liability is an important part of risk management in offshore contracts.
1 Oddbjrn Slinning is a partner with Wikborg, Rein & Co in Oslo, Norway. Slinnings practice focuses on maritime law and insurance law issues, including issues related to newbuilding and conversion projects for ships and offshore installations, sale/purchase/affreightment of ships and offshore installations, and project finance of ships, rigs and similar assets. Slinning managed Wikborg Reins office in Japan from 2005 to 2008. He has also worked for a period of time at Wikborg Reins London office. Slinning can be reached at osl@wr.no. 2 Act of 29 November 1996 No. 72 relating to petroleum activities, chapter 7 [http://www.npd.no/en/Regulations/Acts/Petroleum-activities-act/]
THE CURIOUS CASE OF MARITIME LAW IN HIGH TECH EMPLOYMENT: SEASTEADING FILLS THE GAP
By: Bill Gutek1 In 2011, when Marty Hu graduated from Stanford Universitys computer science program, he entered the hottest Silicon Valley job market for software engineers since the dot.com crash a decade ago.2 He faced multiple options upon graduation. He had interviews with and was sought after by several topranked, high-tech companies like Google and Microsoft.3 But instead of taking a position with a prestigious Silicon Valley company, he opted to form his own start-up.4 Hu wasnt the only student being pursued by the traditional powerhouses of the Bay Areas technologically progressive employers. In 2011, SimplyHired.com estimated nearly 40 [percent] of the 130,000 open positions in Silicon Valley [were] for software engineers.5 The region, commonly known for its computer and technology prowess, continued to add thousands of jobs in the past two years despite an otherwise crippling economic recession.6 However, high-tech businesses continued to have trouble finding the right individuals to staff the worlds largest and most advanced companies in the world despite the overwhelming efforts to attract new computer science graduates. To those companies, the easy solution would be to hire workers within the U.S., like Hu. However, this remedy is not nearly as simple as it seems. For these employers, there are a diminishing number of potential employees in the U.S. who are prepared to work in the information technology, computer engineering, and programming sectors. This, combined with rising wages for in-demand employees, presents a major problem for companies in northern California who are interested in finding cost-effective solutions to their Human Resource issues. Compounding the issue, a countless number of recent graduates, like Hu, are passing up conventional jobs in established companies to start their own innovative businesses. In response, many companies turn their sights overseas and utilize the United States visa system for highly-skilled engineers and tech employees with training in foreign localities. These high-tech companies are interested in making it easier for highly-skilled engineers and technology experts from India and China to come to the United States to work.7 Unfortunately, obtaining a visa for these potential employees can be difficult. The U.S. sets a yearly quota of around 65,000 visas for highly-skilled immigrants and the competition to get those visas is fierce. In response to the limited slots for employees, high-tech companies often establish foreign branches of their company in counties like India and China. Outsourcing provides Silicon Valley with another solution to an on-going problem and presents glitches of its own. However, in a place where new ideas spur growth and innovation, there is a constant search for new and differing solutions to an ever-present employment issue. One solution that has been presented to companies in northern California has its roots in well-defined maritime law. The proposed answer is a ship that will float twelve miles off the coast of California and is being built by a company called Blueseed. This revolutionary start-up company is looking to bypass the problematic and potentially treacherous visa system that might solve all of these companys problems by refitting a ship turn[ing] it into a floating incubator anchored in international waters and allowing employees to live and work on a high-tech oasis on the Pacific.8 Blueseed
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1 Bill Gutek is a May 2013 graduate of the University of Miami School of Law in Coral Gables, Florida. He can be contacted at William.Gutek@gmail.com, 941-468-3827. 2 Dan Simon, Silicon Valley Experiencing New Hiring Boom, CNN, Apr. 5, 2011, available at http://articles.cnn.com/2011-04-05/tech/silicon.valley.job.market_1_softwareengineers-job-market-simplyhired?_s=PM:TECH (last visited Mar. 18, 2013). 3 Id. 4 Id. 5 Id. 6 Id. In March 2011, Silicon Valley added 1,200 jobs and was on track to produce thousands more in the coming years due to the innovations in social media, mobile and cloud computing. 7 Alan Gomez, Start-up Floats a Solution to Tech Industrys Visa Problem, USA Today, Dec. 5, 2011, available at http://www.usatoday.com/news/washington/story/2011-12-04/ Blueseed-visa-tech-jobs-cruise-ship/51646138/1 (last visited Mar. 18, 2013). 8 Timothy B. Lee, Startup Hopes to Hack the Immigration System with a Floating Incubator, ARS Technica, Jan. 2012, available at http://arstechnica.com/tech-policy/ news/2011/11/startup-hopes-to-hack-the-immigration-system-with-a-floating-incubator.ars (last visited Mar. 18, 2013).
Year In Review
Chair Laurie Sands, Vice Chair Blythe Daly, and Chair Elect Designee Pam Palmer take in some sun before admiralty committee meetings in La Quinta.
An unidentified Californian cat infiltrates the hotel room of Immediate Past Chair Chris Nolan and attemps to do harm to his poor Mets hat.
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Leaders from two of the ABA TIPS sections committees held a program at the SMU Dedman School of Law to tell students about careers in international law and in the practice of admiralty and maritime law. The students who attended learned a lot about those areas and about how (and why) they can become active in the organized bar. Pictured here are the speakers on the SMU Career Panel in Admiralty and International Law: Prof. Mark E. Wojcik, The John Marshall Law School (Chicago), Chair of the ABA TIPS International Committee Laurie J. Sands (New Jersey), Chair of the TIPS Admiralty and Maritime Committee Blythe Daly (New York), Membership Vice Chair of the TIPS Admiralty and Maritime Committee Raymond Ward (New Orleans), Vice Chair of the TIPS Admiralty and Maritime Committee
Christopher Nolan (New York), Immediate Past Chair of the TIPS Admiralty and Maritime Committee and Vice Chair of the TIPS International Committee Christopher Hamilton (Florida), Vice Chair of the TIPS Admiralty and Maritime Committee
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In April, 2013, members of the AMLC traveled to the St. Johns School of Law for a discussion of the practice of insurance law, including the changing legal landscape for lawyers and clients in this area.
Pictured: Christopher R. Nolan, Partner, Holland & Knight; Vice Chair, TIPS Admiralty and Maritime; International Law Committee Ettie Ward, Professor of Law, St. Johns School of Law; Vice Chair, TIPS Alternate Dispute Resolution Committee Thomas M. McNally, Chief Operations Officer, Staff Counsel, Chubb & Son; Chair, TIPS Staff Counsel Committee Laurie J. Sands, Counsel, Riker Danzig Scherer Hyland Perretti, LLP; Chair, TIPS Admiralty & Maritime Committee John B. Cartafalsa, Jr., Managing Attorney, Zurich Staff Legal
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The panel discussion brought together admiralty practitioners and lawyers from the United States Coast Guard, the United States Navy, and the Federal Maritime Commission for a talk pertaining to the practice of admiralty and government law, obtaining government and private practice jobs in this market, and the interaction among lawyers in the federal government and private practice. The panel, moderated by Jessica Link Martyn of Troutman Sanders LLP, included: Christopher Nolan of Holland & Knight LLP, Raymond Waid of Phelps Dunbar LLP, Laurie Sands of Riker Danzig Scherer Hyland & Perretti LLP S, Eric Lee of the Federal Maritime Commission, LT Matt Dursa USN with the General Litigation Division of the Office of the Judge Advocate General, and LCDR Brandy Parker USCG who serves as Legal Counsel at the Coast Guard Intelligence Coordination Center.
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Following the program, The RTI Group, LLC sponsored a sail on the Severn River touring Annapolis and the Naval Academy for all of our guests and welcomed the committee with open arms.
Ray Waid, Laurie Sands, and Canadian guests Rebecca Bush and Tamara Tomomitsu travel to the RTI sailing event in style.
Chair Laurie Sands and Chair Elect Jim Koelzer sail on by.
Arrival in Annapolis
Member Ted Dunlap, TIPS members Chuck Eppolito and Ari Magedoff (or part of him behind the ropes) and Vice Chair Jessica Martyn lead their team.
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Members Daniel Maland, Ray Waid, Chris Nolan, and Tamara Tomomitsu sail to victory in an non-existent competition.
The good folks at RTI and the AMLC join up for food and drinks following the afternoon of sailing. No Jones Act claims made, no Limitation Act petition filed, no Lloyds Open Form necessary.
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AMLC Law Student Writing Competititon winner Kathyn Munson of Tulane Law School, Vice Chairs Phil Brickman and Mike Daly take in the beautiful San Fran day.
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Chair Elect Jim Koelzer accepts the TIPS award for innovation on behalf of the AMLC.
Finally, AMLC recruitment of new members starts early. This year we welcomed Chair Elect Pam Palmers twin girls Addie and Daisy to the long-term planning committee.
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encourage the business of navigation, and, in that respect, put this country on the same footing with other countries.12 Courts applying the statute should not limit the right of the injured party to a recovery beyond what is necessary to effectuate the purposes of Congress.13
5 Martin Mack, Nantucket Waterfront News, http://nantucketwaterfrontnews.blogspot.com (December 8, 2011). 6 Am. Car & Foundry Co. v. Brassert, 61 F.2d 162, 164 (7th Cir. 1932) affd, 289 U.S. 261, 53 S. Ct. 618, 77 L. Ed. 1162 (1933). 7 N.J. Steam Navigation Co. v. Merch.s Bank of Boston (The Lexington), 47 U.S. 344, 12 L. Ed. 465 (1848). In The Lexington, the owners of a steamboat that burned on Long Island sound were held liable for approximately $18,000 in coin, which had been shipped upon the steamer and lost. 8 Id. 9 Act Mar. 3, 1851, ch. 43, 9 Stat. 635 (1851). 10 See Admiralty Rules 51-55, 254 U.S. app. (1920). See also Death of the High Seas Act, 41 Stat. 537 (1920), codified at 46 U.S.C. app. 761 et seq. 11 See N. Healy & D. Sharpe, Cases and Materials on Admiralty (3d ed. 1999). 12 Am. Car & Foundry Co., 61 F.2d at 164. 13 Id. 14 See Hall v. Evans, 165 F. Supp. 2d 114, 123-24 (D.R.I. 2001) (citing Parravano v. Babbitt, 837 F.Supp. 1034, 1040 (N.D.Cal.1993), affd, 70 F.3d 539 (9th Cir.1995), cert. denied, 518 U.S. 1016, 116 S.Ct. 2546, 135 L.Ed.2d 1066 (1996) (citing 16 U.S.C. 1801(a))). 15 Id. (citing Lovgren v. Byrne, 787 F.2d 857, 861 (3d Cir.1986)). 16 Id. A.M.L. Intl, Inc. v. Daley, 107 F.Supp. 2d 90, 93 (D.Mass. 2000) (citing 16 U.S.C. 1852(a)(1)). 17 Id. (citing 16 U.S.C. 1852(h)). 18 Id. 19 Gen. Category Scallop Fishermen v. Secy of U.S. Dept of Commerce, 720 F. Supp. 2d 564, 568 (D.N.J. 2010) affd sub nom. Gen. Category Scallop Fishermen v. Secy, U.S. Dept of Commerce, 635 F.3d 106 (3d Cir. 2011) (citing Amendment 4 to Atlantic Sea Scallop FMP, 59 Fed. Reg. 2757 (Jan. 19, 1994)).
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Fishing Permits are Not Appurtenances to be appurtenances in Limitation of Liability matters in Included in the Limitation Fund two key ways: (1) Fishing permits are not part of what
Courts have carefully scrutinized the value of the vessel for determination of the Limitation Fund. The earliest version of the Limitation Act expressed that the liability of the owner of any vessel shall in no case exceed the value of his interest in the vessel and her freight then pending.22 In Place v. Norwich & N.Y. Transportation Co., the Supreme Court concluded that the proper valuation of the steamer was at the termination of the voyage, which was her value after she sunk and was lying on the bottom of the sea.23 Soon after, the Supreme Court concluded that appurtenances of the vessel were also to be included when assessing the value of the vessel.24 In The Main v. Williams, the Supreme Court stated that [i]n assessing the value of the ship, the custom has been to include all that belongs to the ship, and may be presumed to be the property of the owner,-not merely the hull, together with the boats, tackle, apparel, and furniture, but all the appurtenances, comprising whatever is on board for the object of the voyage, belonging to the owners, whether such object be warfare, the conveyance of passengers, goods, or the fisheries.25 The Supreme Court must have included the term fisheries as a reference to a is risked by the vessel and (2) Fishing permits do not belong to the vessel owner.
First, fishing permits survive the vessel no matter the loss and are therefore not part of what the vessel owner risks on the vessel during its voyage.27 The value of the fishing permit, which is not impaired due to the sinking, cannot be included in the vessels fair market value for the purpose of determining whether the vessel was a constructive total loss.28 When a vessel sinks, its fishing permit does not go down with the ship; it may be applied to a replacement vessel.29 Second, a fishing permit is not the property of the vessel owner. The issue of fishing permit ownership has been litigated in cases involving governmental takings of fishing permits. Courts analyzing the ownership of fishing permits have consistently concluded that holders of fishing permits issued pursuant to the Magnuson Stevens Act do not possess a valid property interest in such permits.30 A fishing permit holder typically cannot assign, sell, or transfer his permit.31 Scalloping permits, for example, cannot be transferred or assigned absent attachment to the vessel.32
20 PNC Bank Delaware v. F/V MISS LAURA, 381 F.3d 183, 185 (3d Cir. 2004) (citing 16 U.S.C. 1801 (2000) and Gowen, Inc. v. F/V QUALITY ONE, 244 F.3d 64, 68 (1st Cir. 2001) (some fishing vessels are valuable significantly, and sometimes almost entirely, because of their permits). 21 See id. (citing 50 C.F.R. 648.4(a)(1)(i)). 22 Place v. Norwich & N.Y. Transp. Co., 118 U.S. 468, 490-93, 6 S. Ct. 1150, 1155-56, 30 L. Ed. 134 (1886). 23 Id. 24 The Main v. Williams, 152 U.S. 122, 131, 14 S. Ct. 486, 488, 38 L. Ed. 381 (1894) (citing the English Court cases The Dundee, 1 Hagg. Adm. 109 and Gale v. Laurie, 5 Barn. & C. 156, 164 (The real object of the act in question was to limit the liability of vessel owners to their interest in the adventure.)). 25 Id. (Emphasis added). 26 See In re Pac. Far E. Line, Inc., 314 F. Supp. 1339, 1350 (N.D. Cal. 1970), affd, 472 F.2d 1382 (9th Cir. 1973), (citing The Main, 152 U.S. at 131; The Walter A. Luckenbach, 14 F.2d 100 (9th Cir. 1926); The Buffalo, 154 F. 815 (2d Cir. 1907)). 27 Id. 28 F/V Sailor, Inc. v. City of Rockland, 324 F. Supp. 2d 197 (D. Me. 2004), affd, 428 F.3d 348 (1st Cir. 2005). 29 PNC Bank Delaware, 381 F.3d at 185. 30 Gen. Category Scallop Fishermen, 720 F. Supp. 2d at 576 (citing Am. Pelagic Fishing Co., v. United States, 379 F.3d 1363, 1373-75 (Fed. Cir. 2004)). 31 Am. Pelagic Fishing Co., 379 F.3d at 1374 (citing Conti v. United States, 291 F.3d 1334, 1341 (Fed. Cir. 2002) (The court concluded that the vessel owners swordfishing permit fell short of conferring a cognizable property interest because the Department of Commerce required the owner to obtain a permit to harvest swordfish in the Atlantic Swordfish Fishery in the exercise of its authority under the MSA.)); see also 50 C.F.R. 648.4(k) (Transfer. A permit issued under this part is not transferable or assignable. A permit will be valid only for the fishing vessel, owner and/or person for which it is issued.). 32 50 C.F.R. 648.4(k).
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Conclusion
Because a fishing permit does not belong to the vessel owner and is not risked during the voyage, a fishing permit cannot meet the requirements of appurtenances as defined in Limitation of Liability cases. Furthermore, Congresss intention in passing the Limitation of Liability Act was to protect the maritime industry in the United States, so it seems unlikely that Congress would approve of tripling the value of the vessel by including the vessel owners revocable license to fish.
33 Am. Pelagic Fishing Co., 379 F.3d at 1374. 34 Id. 35 Gowen, 244 F.3d at 67-70. 36 Gowen, Inc. v. F/V Quality One, CIV. 99-371-P-C, 2000 WL 893402 (D. Me. June 14, 2000), affd, 244 F.3d 64 (1st Cir. 2001) (citing SS Tropic Breeze v. Tropical Commerce Corp., 456 F.2d 137, 141 (1st Cir. 1972)) (Emphasis added). 37 Gowen, 244 F.3d at 69.
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THE NORWEGIAN...
The knock for knock principle has been broadly adopted in the international offshore industry, and has been applied in both the Norwegian Fabrication Contract 2007 (NF 07) and the Norwegian Total Contract 2007 (NTK 07). The standard indemnity clause within these offshore contracts also states that the knock for knock principle shall apply regardless of the form of liability, whether strict or by negligence. The reciprocal indemnities between the company and contractor extend only to the parties included in the definition of the company and contractor groups. It is therefore important to apply wide definitions of the company and contractor groups to ensure that all potential claimants are included.
will only benefit from these to the extent that the loss or damage is not caused by willful misconduct or gross negligence. Again, an example is the mandatory allocation of pollution liability in the Norwegian Petroleum Activities Act, and similar carve outs often found in the contracts of offshore parties. Further, a general principle of Norwegian contract law holds that a party may not rely on a limitation of liability clause, if loss or damage is caused by the willful misconduct or gross negligence of the leading personnel or top management of the party seeking to rely on the exclusion. This principle has to some extent been codified as a general rule in the Norwegian Contracts Act4 section 36, which provides that a contract may be set aside in part or full, or modified if that contract is unreasonable or in conflict with good business practice. Similar provisions can be found in the Swedish and Danish contract acts, which generally coincide with the Norwegian provision. However, if a limitation clause clearly states that it shall apply regardless of the form of liability, whether strict or by negligence, then it is significantly less likely that it will be set aside. When contemplating their total exposure, contracting parties should be aware that English civil law has no defined concept of gross negligence. The English system distinguishes only between those actions that are negligent, and those that are not.5 However, the distinction between ordinary negligence and gross negligence is clearly recognized in Norwegian law. While ordinary negligence will be held by Norwegian courts to exist in situations where a contractual party has failed to act in a prudent and reasonable manner, the Norwegian Supreme Court has described gross negligence as a qualified blameworthy behavior giving rise to strong reproach for a lack of attentiveness.
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home countries. In response to demand to change the restrictions of the H1 visa, Congress established the H-1B visa which allowed for those with bachelors degrees who wished to stay in the U.S. permanently to apply.12 The change liberalized the restrictions on the total number of applications by allowing only applicants who wanted to stay permanently. Additionally, the visa is now tailored to those who wish to apply to a specialty occupation which requires the worker possess a theoretical or practical application of a body of highly specialized knowledge in that specialty.13 As such, the program governs most admissions of temporary immigrants into the U.S. for employment in science and engineering.14 The H-1B has time limitations, however. It allows employers who seek skilled foreign workers to sponsor a foreign worker for up to six years.15 Throughout the six years, the worker may apply to obtain permanent residency through green card status.16 Additionally, several steps of bureaucratic red-tape were put in place to issue the visa more because of the potential for its abuse by employers using it as a cheap alternative to local hiring. For example, a potential employer must prove to the Department of Labor the wage it is offering is higher than either the actual wage the same employer pays to other similarly situated employees in the geographical area or the prevailing wage for that position.17 Once the Department of Labor has approved the request, the employer must then petition the Immigration and Naturalization Service for the visa itself in the hopes the visa cap has not been reached.18 The cost of the visa application alone can be upwards of $5000.19 B. Outsourcing and Offshoring While many other programs exist for foreign employees to come into the U.S. through a visa program, perhaps the most highly utilized alternative is to outsource or offshore the work to a foreign locality. Outsourcing occurs when a company turns over responsibility, in whole or in part, for an internal
is attempting to provide an alternative to outsourcing work to other countries with more favorable benefits to the companies who might use their service. This article will address the importance of foreign employees who seek work in the U.S. with specific focus on employment in Silicon Valley. First, it will discuss the employment solutionsincluding visas and outsourcingutilized by both employers and employees in Silicon Valley to build a rapidly growing industry. Further, it will discuss the legal problems employers face in getting these visas for their employees and the economic impact such issues have presented. Finally, it will also address the impact companies like Blueseed will have on employment decisions in comparison to the visas or alternative employment solutions currently available to tech companies.
9 David C. Yang, Globalization and the Transnational Asian Knowledge Class, 12 Asian L.J. 137, 141 (2005). The H1 visa was established by Congress in the 1950s. 10 Id. 11 Id. 12 Id. at 142. 13 8 U.S.C. 1184(i)(1) (2006). 14 Craig S. Morford, H to B or Not to Be: What Gives foreigners the Right to Come Here and Create American Jobs?, 6 Ohio St. Entrepreneurial Bus. L.J. 299, 310 (2011). 15 Yang, supra note 9, at 145. 16 Norman Matloff, On the Need for Reform of the H-1B Non-Immigrant Work Visa in Computer-Related Occupations, 36 U. Mich. J.L. Reform 815 (2003). 17 Hyacinth Leus, Practice Tips: Using the H-1B Visa to Fill Staffing Needs with Foreign Professionals, L.A. Law. at 24 (Oct. 2000) (The goal of this investigation is to prevent wage depression among similarly situated employees in the U.S.). 18 Id. at 25. 19 Morford, supra note 14, at 321.
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20 Brad Peterson, When and Why Companies Outsource and Offshore, 912 PLI/Pat 11, 15 (Sept.-Oct 2007). 21 Id. at 15, 19-20. Common business functions to outsource in the IT field are infrastructure and operations, network management, business continuity/disaster recovery, application development and maintenance, desktop management, voice/data telecommunications, hosting, help desk, and end-user support. 22 Leus, supra note 17, at 25. 23 Id. 24 Peterson, supra note 20, at 15, 19-20. Additionally, the outsource provider might have better technology, skills and assets to enhance the companys service to its customers. 25 Id. Some estimates indicate that customers receive a 30 percent to 50 percent savings of their onshore costs. Additionally, the number of available personnel in India, for example, is much greater because more people graduate from Indias colleges each year. 26 Id. at 20. 27 See generally id. at 20. 28 Id. at 20-23. 29 Claire Cain Miller and Jenna Worthham, Silicon Valley Hiring Perks: Meals, iPads and a Cublicle for Spot, The New York Times, Mar. 25, 2012, available at http://www. nytimes.com/2011/03/26/technology/26recruit.html (last visited Mar. 18, 2013). 30 Id. 31 Gomez, supra note 7. 32 Roger Waldinger and Christopher L. Erickson, Temporarily Foreign? The Labor Market for Migrant Professionals in High Tech at the Peak of the Boom, 24 Comp. Lab. L. & Poly 463, 466-67 (2003) (explaining that even though students can both attend school on F-visas and can also work and gain valuable experience with American employers).
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33 Yang, supra note 9, at 137. 34 Id. at 138. 35 Morford, supra note 14, at 307. The increase was from 65,000 yearly to 115,000 in 1999; to 107,500 in 2001; to 195,000 in 2002; and reverted back in 2003 to 65,000. 36 Id. at 319. 37 Matloff, supra note 16, at 829. 38 Id. 816. 39 Id. at 845. 40 American Competitiveness in the Twenty-First Century Act, Pub. L. No. 106-313, 114 Stat. 1251 (2000). Congress limited the number available visas to 65,000 after the tech bubble crash in the late 1990s and early 2000s. 41 Yang, supra note 9, at 144. Noting that H-1B visa applicants are fighting over a limited number of spots and in some instances high-tech employees might be losing to other professions like dancers or entertainers who have bachelors degrees. 42 Morford, supra note 14, at 306. 43 Id. at 321. 44 Id. Google spends upwards of $20 million per year on H-1B visa applications and has a full-time immigration team comprising of twenty lawyers and support staff. 45 Leus, supra note 17, at 24. 46 Matloff, supra note 16, at 830. 47 Id. at 830.
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48 Keith Naughton, Outsourcing: Silicon Valley East, Newsweek (Mar. 6, 2006) (The average annual income in India is $737 when compared to $42,027 in the United States). 49 Stuart D. Levi, Outsourcing: A Practical Guide to Law and Business, PLIREF-OAPG s, 9:2 India (2012). 50 Keri Toomey, Fewer Tech Companies Are Sending Jobs Overseas, BDO USA Survey Finds, available at http://www.bdo.com/news/pr/1952 (last visited Mar. 18, 2013). 51 Id. The survey took place between December 2011 to January 2012. 52 Levi, supra note 49. 53 Id. (citing a forecast from the National Association of Software and Service Companies or NASSCOM). 54 Id. In 2007, the total IT outsourcing market in china was $1.073 billion and is expected to grow to $2.904 billion in 2012. 55 Sourcingline, XMG Global Issues 2009 Outsourcing Year-End Revenue Forecast, Sept. 23, 2009, available at www.xmg-global.com/press_releases/pr090923.html (last visited Apr. 8, 2012). Prediction based on estimates made in 2009. According to the survey, India accounts for $48 billion or 44.8 percent and China accounts for $28 billion or 25.9 percent. 56 Levi, supra note 49, at 9.3. 57 Sam Williford, Is Silicon Valley the next Detroit?, Economy in Crisis, Nov. 8, 2010, available at http://economyincrisis.org/content/silicon-valley-next-detroit (last visited Mar. 18, 2013). However, it is unclear from the article if these jobs are call center based or more engineering/programming focused positions. 58 Id. (citing P.V. Kannan, the founder of 24/7 Customer, an IT firm based in India and California). 59 News Release, Bureau of Labor Statistics, U.S. Dept of Labor (Apr. 10, 2012). Addressing the unemployment rate in the San Jose-Sunnyvale-Santa Clara region in February 2012.
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60 Patri Friedman & Brad Taylor, Seasteading and Institutional Evolution (Apr. 12, 2011) (Unpublished Paper Presented at the Association of Private Enterprise Education Conference), available at http://www.seasteading.org/files/research/governance/Friedman&Taylor_2011_Seasteading_APEE.pdf?214c59. 61 Id. 62 Shannon Renton Wolf, Making Waves: Circumventing Domestic Law on the High Seas, 14 Hastings Womens L.J. 109, 116 (2003). 63 Id. 64 Friedman and Taylor, supra note 60. 65 Id. 66 Id.; see also Pirate Radio or The Boat That Rocked (Universal Pictures 2009). 67 Friedman and Taylor, supra note 60. 68 Id. 69 See generally www.womenonwaves.org (last visited Mar. 18, 2013). 70 See generally Steven R. Swanson, Google Sets Sail: Ocean-Based Server Farms and International Law, 43 Conn. L. Rev. 709 (2011). The patent is held by Google. 71 Id. at 714. 72 Id. at 716. 73 Id. at 715, 741-750. 74 Blueseed LLC, http://www.blueseed.co/faq.html#offer (last visited Mar. 18, 2013) [hereinafter BlueseedFAQ]. 75 Id.
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76 Id. 77 Gomez, supra note 7. 78 U.S. Citizen and Immigration Services H-1B Cap, March 15, 2013, available at http://www.uscis.gov/portal/site/uscis/ menuitem. (last visited March 18, 2013). The program does provide for an extra 20,000 visas if the applicant has a masters degree or higher.
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V. Conclusion
Blueseed might initially appear as though it provides a viable solution to Silicon Valleys issue of hiring welltrained, high-tech employees from across the world without having to either outsource or apply for difficultto-get visas. In some circumstances, Blueseed can provide companies an answer to these problems. However, it is not a silver bullet to the high-tech industrys employment issues. Blueseed remains an interesting solution utilizing admiralty and maritime law solutions to an ever-present employment problem and it will undoubtedly be used, albeit in limited circumstances. However, perhaps the most exciting feature of Blueseeds work is its ingenuity and use of international admiralty and maritime law, which might very well carry over into other areas of law where companies or individuals are looking to avoid undesirable decrees.
79 H-1B employees must be hired at the market rateon average computer programming jobs in the U.S. pays somewhere between $60,000 to $80,000. However, employees are paid $8,952 in China, $5,880 in India or $5000 in the Russian Federation. Essentially, Blueseed provides companies have an arbitrage situation where they can pay employees anywhere between average market rate in the U.S. and similar outsourcing costs and be in a better position than hiring an H-1B employee. See Naughton, supra note 48. 80 BlueseedFAQ, supra note 74.
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