Opposition Brief — Diaz v. J. Ray McDermott, S. A.

é' - / upreme i,

Neal FILED

No. 03-939

FEB 3 - 2004

OFFICE OF TH

In The E CLERK

Supreme Court of the Anited States

+

VICTOR DIAZ, CHARLES ROUNTREE, ROY EDWARD

CLINE, RICHARD WEBB HARRIS, MITCHELL PHEFFER,

PHILLIPE RICHARD, CLAYTON HORSCHELL, SHANE

BRENT RICHINS, ARTHUR BOETTGER, TIMOTHY

NOBLE, ORDWAYNE P. CHAUVIN, AND

GUILLERMO CARRIZALES-CORTES,

Petitioners,

v.

J. RAY McDERMOTT, S.A., MCDERMOTT INTERNATIONAL,

INC., THE AMERICAN BUREAU OF SHIPPING, INC.,

CCC FABRICACIONES Y CONSTRUCCIONES,

CORPORACION DE INDUSTRIAS CONSTRUCCIONES S.A.

de C.V., GEO-TECHNICAL SERVICES, INC., NORTH BANK

TOWING CORP., and SEABULK OFFSHORE, LTD.,

Respondents.

+

On Petition For A Writ Of Certiorari To The

Louisiana Court Of Appeal, Fourth Circuit

>

RESPONDENTS’ BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

a

EDWARD F. LEBRETON, III

Counsel of Record |

FOWLER, RODRIGUEZ, KINGSMILL

FLINT, GRAY & CHALOS, LLP

400 Poydras Street, 30th Floor

New Orleans, LA 70130

(504) 523-2600

JAMES SENTNER, Esq.

GARDERE, WYNNE, SEWELL & RIGGS

1000 Louisiana Street, Suite 3400

Houston, Texas 77002-5000

Counsel for Respondents CCC Fabricaciones

y Construcciones and Corporacion de

Industrias Construcciones S.A. de C.V.

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

When a seaman chooses to file an action under the

Jones Act, 46 U.S.C. §688, in a Louisiana state court and

requests a jury on the main demand, may the District

Judge, pursuant to Louisiana procedure, hear evidence

and decide an exception of res judicata in a separate, judge

trial?

il

STATEMENT REGARDING PARTIES

Petitioners are named in the caption.

Respondents, CCC Fabricaciones y Construcciones

(“CCC”) and Corporacion de Industrias Construcciones

S.A. de C.V. (“CIC”) are represented by undersigned

counsel and hereby submit this Brief in Opposition to

Petition for Writ of Certiorari. Pursuant to U.S.S.C. Rule

29(6), CCC advises that it has no parent corporation. CCC

is the parent of CIC. No publically held company owns

10% or more of the stock of either CCC or CIC.

Respondents, McDermott International, Inc. and

McDermott Underwater Services, Inc., listed as Respon-

dents to Petitioner’s Petition for Writ of Certiorari, are

represented by separate counsel and are filing a separate

Brief in Opposition to Petition for Writ of Certiorari.

ill

TABLE OF CONTENTS

Page

Question Presented ............:cccccceceenneeeeeereeeeeeseneeneeeees i

Statement Regarding Parties..............:::ssseeseeeeeeeeeees ii

tele Oe CAGES oscccvecccccevcccresevessesnvessecveceseosereceosecs ill

Mable of Avthorities.....cccsccccrscovevsesesscsesesseeseessosereveors iv

Brief in Opposition to Petition for Writ of Certiorar .... 1

IEG... cisccncnversevervecescenscneseonenvnsenveceverconcooes 1

Statement of the Case. ......cccccccccrsscccssesccoccsceveseeseesees 2

A. Factual Background ................ccccsseersesereseeeees 2

B. Procedural History .............cccccccccccsceceeseseeeeees 6

Reasons for Denying the Petition. ................ssseeeeeeees 8

I. Louisiana Uses the Exception of Res Judi-

cata as a Screening Mechanism to Determine

Whether the Case Should Proceed to Jury

Trial on the Main Demand .................:cceeeeeees 9

II. Louisiana’s Use of the Exception of Res

Judicata is Consistent with Federal Mari-

UA TMT <.-... csuavegiedeusasesebibanucnnconsesesuuonees 11

III. Rules for Jury Trials Made by Judges in

FELA Cases are Not Incorporated in the

SIN CEE. ccprasenenapeonsetobubensetbepenetocesonsnes 15

IV. The Texas Litigation Arising from the Cap-

size of the DLB-269 is Distinguishable Be-

cause the Causes of Action and State

Procedures Are Different ................ccceeeeeeeeeees 19

V. Petitioners Raise a Narrow Issue Which

Affects Them Onll............ccccccccscscccscrceesereseees 20

INR |... sccnsgaceenentesecenerobsvesennmneveevesaceerenes 20

iv

TABLE OF AUTHORITIES

Page

CASES:

Adams v. Johns-Manville Corp., 876 F.2d 702 (9th

Clee, BI oc ceccnvecenressaceredovesonssacinesseenstonncenecepasnnencnetennennasons 13

American Dredging Co. v. Miller, 510 U.S. 443

(FGI) cecccuciseneconcsesonsevscetosestoeeennistersnentasenssnenianeties passim

Aycock v. Ensco Offshore Co., 833 So.2d 1246 (La.

App. 3rd Cir., 12/18/02) ........scescesesseeesseessneeeeneetnecnnes 15

Babineaux v. Pernie-Bailey Drilling Co., 261 La.

1080, 262 So.2d 328 (La. 1977) .........ceeeesseeeeeeeeeereeeeeeees 10

Bailey v. Central Vermont R. Co., 319 U.S. 350

CTIBOT ...... cnnnscarsocendnncersmensnenssecebeinnepsuncctmnneetsneseneuecnians 16

Baltimore S.S. Co. v. Phillips, 274 U.S. 316 (1927).......... 17

Bowden v. State Farm Mut. Auto. Ins., 150 So.2d

655 (La. App. 3rd Cir. 1963) ..........cccsseseeeeeeeeesreeseeeeeeees 11

Brown v. Drillers, Inc., 630 So.2d 741 (La. 1994)............. 10

Callen v. Penn. R. Co., 332 U.S. 625 (1948).......:ceceeeeeeeees 18

Coto v. J. Ray McDermott, S.A., et al., 772 So.2d

828 (La. App. 4th Cir. 2000) ..........ccseeseeeeeeeesesseeeeeeereneeeees 6

Cox v. Roth, 348 U.S. 207 (1955)............cccccccccrccerrerenseeeeees 17

Daigle v. Coastal Marine Inc., 488 So.2d 679 (La.

DIT... iscensoosevntbunseebunseviciciaheemthentnneinecnninnteanieatnaiainine 14

Dice v. Akron, Canton & Y. R. Co., 342 U.S. 359

PSII 5. sciclsiscsccecsenncvipsiccmvasntaceipaconmbennonsondannes 16, 17, 19, 20

Engel v. Davenport, 271 U.S. 33 (1926) ........secceeeeeeeesees 17

Ettelson et al. v. Metropolitian Life Ins. Co., 137

F 2d 62 (3rd Cir. 1943), cert denied, 320 U.S. 777......... 13

TABLE OF AUTHORITIES — Continued

Page

Ex parte: Burlington Northern R. Co., 470 So.2d

BODE (Ale. 1966)..cccccccccccccoscscccvencecevevesesocrscsensosersnneensoeces 17

Gallic v. Baltimore & Ohio R.R., 372 U.S. 108

(BIE occcnexscacciscersenvecstssensieentosnseeneinionsnsaunansenmenaneseaneenens 15

Garrett v. Moore-McCormack Co., 317 U.S. 239

CRIED... ccccvcssserencccnvssnnesessacsemupnioionenesvestataanansd 11, 14, 19

Hopson v. Texaco, Inc., 383 U.S. 262 Ear cadicccidcesmnasenaes 17

Jacob v. New York, 315 U.S. 752 (1941).......ccccccseeeeeeeneeeees 16

Kerman v. American Dredging Co., 355 U.S. 426

CBD onecoverrerrcseiersensesnasetwessessnetastnasneereoncenvssscnesnsonousenstns 17

LeBlanc v. Callais Enterp. Part., Inc., 767 So.2d

823 (La. App. 5th Cir. 2000) ..........ccsesseccessseerereneeeeeeeeees 10

Madruga v. Superior Court of Calif., 346 U.S. 556

CBI. .1..iccccncaedincccccrnsininesssnenibansinmeiecnanmeaemnasaamnnaes 12

Miles v. Apex Marine Corp., 498 U.S. 19 (1990) ..........2++. 17

Milstead v. Diamond M Offshore, Inc., 676 So.2d 89

Cte, TDI ccsccvcosencsnccsnoneccssecsavessasnivesvensenmsemmunannanenenes 14, 15

Missouri ex rel. Southern R. Co. v. Mayfield, 340

CFG 8 CIID) ov seccrcctecccccsecsesoniseccsstuseiesenntnniscssnstenasenpeneten 18

Murphy v. Hoffpauir, 540 So.2d 473 (La. App. 2nd

Che, TODD ceccccertnscvncccccsoscsttncssonsesenntiatemmenmesmncsiemameintaes 10

Red Cross Line v. Atl. Fruit. Co., 264 U.S. 109

(FGA oeccccvcovsseicccscesoscecsncernecsessssinnemammemememnetinnnrnnntees 12

Rivett v. State Farm Fire and Cas. Co., 508 So.2d

TLBEB Ca. 1967) nccccncccccecssseconcsenesercesversosccsnsnsnssenscsseussonens 10

Shell Oil Company v. Kennedy, 344 So.2d 1153 (La.

App. 4th Cir. 1977) .....:ccccsscesscsseeerssseseeeetesersenseens 9, 10, 11

TABLE OF AUTHORITIES -— Continued

Page

Simler v. Conner, 372 U.S. 221, 9 L. Ed. 2d 691, 83

BE Cb, COD (IBGE) occececoveccccesecooeccossscersevseseossscsenesessesosenenes 13

Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917)........ 12

Stier v. Reading & Bates Corp., et al., 992 S. W. 2d

BES (Trac, 1GBB) .cceveevecessscevececesesenersorsnccassvevesecesscoceenoossenss 19

The Osceola, 189 U.S. 158 (1908).........ccccccecceteeeeeseeeeeeeeeees 18

STATUTES AND RULES:

TF .G.G, Beebe 20 oncccesevcccsneccccoresccesecensseevevsenesonsocesnaceserseenons 20

£7,B.B.C. Rule BING). .ccrcevcecsececesvensesevereesenesensonscssosesessseesesvones ii

BE UBC. SIBBT a) ocr ccccoeseceeevrscocsoveveseseconsvecnscovencorsesesessessoes 1

BE UIE.C., BISBAL) .ecceecevecevevevsccecsesesesnsevseenecvenseversconvonsevsever 9

45 U.S.C. 961 Ob 906... ccevcceseevercvecsssccececccrccsssscoves 9, 15, 16, 17

BE TT S.G, BOGB q. ceeveceveessereveseseesecinniuninnnemnennieenenvestes 6, 8,9, 15

4B U.B.C. SEBBLE) .ncsccecvvevccvereserverecseesersescnncsssevevensvesesenenveens 19

La. Const. art. 7, $§10, 29 (1921) ............ccccccccrrescceessceeeeees 15

EA. C.CBP bt. GBT cceevecsesceresenescsscensivsevsnssoreonennsseessnens 7, 9, 10

EB, COB ct. CBD ceeveccresevescessersenevsessevesseersemenneenennns 7,9, 10

Ste ED aah, BBD cecccvecevecessrersssciosscinttainaaas 7,9, 10

MISCELLANEOUS:

Restatement, Conflict of Laws (Rev. 1988) §129 ............... 13

1

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Respondents CCC Fabricaciones y Construcciones,

S.A. de C.V. (“CCC”) and Corporacion de Industrias Con-

strucciones, S.A. de C.V. (“CIC”), respectfully request that

this Court deny the Petition for Writ of Certiorari seeking

review of the opinion of the Louisiana Court of Appeal,

Fourth Circuit, attached to the Petition as Appendix A, at

App. 1.

+

JURISDICTION

On April 22, 2003, the Louisiana Court of Appeal,

Fourth Circuit, entered an Order denying petitioners

application for a writ of certiorari. Attached to the Petition

as Appendix A, at App. 1. On September 26, 2003, the

Louisiana Supreme Court denied an application for

discretionary review. Order denying writ attached to the

Petition as Appendix B, at App. 3.

The Order of the Louisiana Supreme Court merely

says that the application for writ of certiorari to the

Louisiana Court of Appeal, Fourth Circuit, is denied and

makes no comment on the merits. As the Louisiana Su-

preme Court merely denied petitioners application for

writ, the present issue regarding the propriety of a trial to

the district court of an exception of res judicata may be.

raised on appeal, after final judgment. Accordingly, the

Order is not a final judgment or decree of Louisiana's

highest court, and this Court does not have jurisdiction to

grant the petition for writ of certiorari. 28 U.S.C. §1257(a).

2

Respondents understand that McDermott will address

jurisdiction in greater detail.

+

STATEMENT OF THE CASE

A. Factual Background

The incidents giving rise to this lawsuit occurred in

October of 1995, when the DLB-269 sank off the coast of

Mexico during Hurricane Roxanne. Respondent, CCC

Fabricaciones y Construcciones S.A. de C.V. (hereinafter

“CCC”), a Mexican corporation, was the owner and opera-

tor of the DLB-269, and, at the time, was laying an off-

shore pipeline for Pemex, the Mexican national oil

company. Respondent, Corporacion de Industrias Con-

strucciones, S.A. de C.V. (“CIC”), provided labor to CCC

and was the employer of Mr. Carrizales. Respondents,

McDermott International, Inc. and McDermott Underwa-

ter Services, Inc.,’ provided dive crews which assisted the

DLB-269 in laying pipe on the floor of the Bay of Cam-

peche, and the remaining petitioners were members of the

dive crew. After the DLB-269 sank, 248 crew members,

including all of the petitioners, were rescued at sea and

brought to shore.

Shortly thereafter, each of the McDermott plaintiffs

was provided travel expenses and flown back to the United

States. On October 27, McDermott held a meeting with its

employees in New Orleans to discuss possible settlement

‘ It is unclear whether petitioners have named the correct McDer-

mott corporations. This issue will be addressed by counsel for the

McDermott respondents.

Ne ee ee ee ee ge ee ee

3

of their claims and hosted a banquet to celebrate their safe

return. The meeting was called by Don Terry, Manager of

McDermott’s Diving Division, after he had received several

separate inquiries regarding settlement. At the meeting,

Don Terry addressed the dive crew and informed them

that McDermott would arrange for psychological counsel-

ing that any of the crew felt was needed as a result of their

experiences during Hurricane Roxanne. During the

presentation, Terry informed the men that he had been

granted authority by McDermott to discuss the possibility

of settlement with any of the divers who had not been

physically injured. Terry never threatened any of the

divers that a failure to settle would result in their firing.

After his presentation, Terry left the divers to meet pri-

vately among themselves. The divers selected a spokes-

man, who proposed their initial settlement demand to

Terry. Terry rejected the initial figure as too high, and he

suggested that they end talk of settlement and proceed

with the banquet.

In the meantime, however, the divers learned from

another McDermott spokesman that McDermott’s insur-

ance deductible was $1.5 million, and they surmised that

McDermott would pay this amount, or $75,000 to each of

the McDermott diving related personnel. Shortly thereaf-

ter, the crew's spokesman approached J.J. Riddle of

McDermott and asked whether McDermott would be

willing to pay $75,000 to each member of the twenty-man

dive crew. After consulting with Terry, Riddle advised the

men that McDermott would be willing to pay $75,000 to

each man. After arrangements were made to meet with

McDermott’s attorneys the following day, the settlement

discussions ended.

4

Later that evening, McDermott hosted the survival

celebration for the dive crew as scheduled. The following

day, ten members of the dive crew reported to McDermott’s

office for the express purpose of settling their claims

against all of the defendants in this matter. That day,

October 28th, six of the petitioners herein met individually

with an attorney provided by McDermott at which time a

detailed explanation of seaman’s rights was given to each.

After receiving a full explanation of their rights, including

an explanation that a lawsuit could result in substantial

awards, these six petitioners settled their claims for

$75,000 each.” Each meeting was recorded on videotape.

The videotapes establish that each petitioner was

advised of his right to independent counsel and his right to

bring suit against McDermott, CCC, or any other entity

involved in the sinking of the DLB-269. Each petitioner

verbally acknowledged his understanding of his physical

and emotional condition. Each was advised that he had a

right to recover damages for physical and emotional

injuries. Moreover, each petitioner clearly was advised

that the release encompassed all present or future inju-

ries, whether then known or later discovered. Each peti-

tioner was advised that he was under no obligation to

settle and that he should not do so if he had any hesitation

or doubt. Each petitioner was given ample opportunity to

ask any question about any aspect of his legal rights, the

terms of the settlement, or the actual release document.

? Ordwayne P. Chauvin received $85,000.00 because he also had a

minor physical injury.

5

It is evident from the videotapes that the petitioners

were neither intoxicated nor otherwise mentally impaired.

To the contrary, the behavior of the petitioners on the

videotapes proves that each was coherent, had a complete

understanding of what he was doing, and freely entered

into the settlement agreement presented to him. Each

acknowledged under oath that he, with a full understand-

ing of his legal rights and physical and emotional condi-

tion, was voluntarily settling his claim against

McDermott, CCC, and all other potential parties. Finally,

each received the settlement funds and executed a written

receipt and release and a confirming affidavit.

Five of the other petitioners settled their claims in

much the same manner, albeit at later dates. Like the first

six, each of the five men that settled later was placed

under oath and acknowledged a full understanding of his

legal rights as well as his physical and emotional condi-

tion. Again, each man stated that he had read and under-

stood the settlement agreement and that he was

voluntarily settling his claims against McDermott, CCC,

and any other potential party. Each settlement was

confirmed by a written receipt and release and accompa-

nying affidavit.”

The situation with respect to Mr. Carrizales is similar.

After being rescued, he returned to his home in Mexico.

Later, Mr. Carrizales met with representatives of CCC where

he accepted a settlement of his claims. Mr. Carrizales signed

* Ronald Rozmarynowski was a member of the dive crew and a

plaintiff below, but he did not agree to settle his claim and did not

execute a release. He is not a petitioner in this court.

6

this settlement and release in court in the presence of a

Mexican judge, who approved the settlement in accordance

with Mexican civil procedure. This settlement, approved

by the court, constitutes a judgment of a foreign court and

thus, under the doctrine of comity, must be respected by

American courts. Respondents deny the bald allegation

that Mr. Carrizales was in any way physically threatened

into signing his settlement and release.

In short, all of the petitioners executed valid and

binding releases in which they relinquished all claims that

they may have had against McDermott, CCC, or any other

potential defendants. Consequently, each of the twelve

petitioners is barred from bringing claims against the

respondents in this action.

B. Procedural History

In spite of having signed releases, petitioners filed

suit under the Jones Act, 46 U.S.C. §688, in Civil District

Court in Orleans Parish, Louisiana. Petitioners chose

Louisiana state court and, therefore, chose Louisiana state

procedure. Earlier in this case, respondents filed motions

for summary judgment on the validity of the releases,

which were granted by the trial court. On appeal by the

petitioners to the Louisiana Fourth Circuit Court of

Appeal, the case was remanded to the trial court for

further fact finding on the issue of the validity of the

releases. Opinion attached to the Petition as Appendix D,

at App. 7; Coto v. J. Ray McDermott, S.A., et al., 772 So.2d

828 (La. App. 4th Cir. 2000).

A jury trial of the main demand was set in April 2002

but continued when, on the eve of trial, petitioners’ counsel

held a press conference, which clearly was designed to

7

influence the jury pool. A jury trial of the main demand

was set for a second time on September 9, 2002, and was

scheduled to last six weeks; however, over a month later

only three witnesses had testified. This caused the jury to

-become antagonistic. When there was a dispute over an

alleged comment attributed to an attorney for one of

McDermott’s excess insurers, the Honorable Marvin F.

Gahagan, judge ad hoc, granted McDermott’s and CCC’s

motions for mistrial. The Louisiana Fourth Circuit re-

versed the mistrial, but the Louisiana Supreme Court

reinstated the ruling of the trial court by order dated

October 18, 2002, No. 2002-CC-2585.

Judge Gahagan then recused himself and, thereafter,

the Louisiana Supreme Court appointed the Honorable

Gerald Federoff to sit as judge ad hoc for the duration of

the case. The second trial had been set for six weeks and

was running behind even this extended schedule. Given

the history of this case and the burden it has put on the

trial judges and jurors of the Civil District Court in New

Orleans, Judge Federoff suggested that respondents notice

their previously filed peremptory exceptions of res judi-

cata, for separate evidentiary hearing. This is a procedure

provided by La. C.C.P. arts. 927, 929, and 931 and is heard

by the judge. In Louisiana procedure, the peremptory

exception is a form of gate keeper. A ruling in favor of

respondents would.avoid a trial of the main demand and

save substantial judicial resources and juror time;* on the

‘ Granting respondents’ peremptory exception of res judicata would

end this litigation as it concerns 12 of the 13 plaintiffs from the case

below. The remaining litigation involving the claim of Ronald Roz-

marynowski, who did not sign a release, would take substantially less

time than a jury trial of the claims of all 13 plaintiffs.

other hand, a ruling in favor of petitioners would establish

that the case merits a full jury trial on the main demand.

After both parties submitted briefs, on January 22,

2003, Judge Federoff entered Reasons and Order setting

the exceptions for trial. Reasons and Order attached to the

Petition as Appendix C, at App. 5. In the Reasons and

Order, Judge Federoff stated unequivocally that the

federal substantive maritime law applies to the validity of

the seamen’s releases, and correctly decided that the state

procedural law is applicable when it does not interfere

with the substantive maritime law. Finding no substantive

interference, he ordered that the respondents’ exception of

res judicata be heard by the court without a jury.

Immediately thereafter, petitioners sought writs from

the Louisiana Fourth Circuit, and, on April 22, 2003, the

Louisiana Fourth Circuit upheld Judge Federoff’s order

setting the exceptions for trial. Opinion attached to the

Petition as Appendix C, at App. 1. Petitioners then sought

writs from the Louisiana Supreme Court, which were

denied on September 26, 2003. Order attached to the

Petition as Appendix B, at App. 3. Subsequently, petition-

ers have filed their petition for writ of certiorari to the

Louisiana Fourth Circuit Court of Appeals with this Court.

+

REASONS FOR DENYING THE PETITION

The trial court, affirmed by the Louisiana Fourth

Circuit Court of Appeals, correctly held that, when a

seaman elects to bring his action under the Jones Act, 46

U.S.C. §688, in state court, the determination as to the

validity of a seaman’s release is subject to state rules of

procedure.

|

Under the Louisiana Code of Civil Procedure, when a

plaintiff has executed a valid release, his cause of action

may be dismissed on an peremptory exception of res

judicata. La. C.C.P. art. 927. This exception is tried to the

court, without a jury, and before the main demand. La.

C.C.P. arts. 929, 931. The exception is a gate keeping

device and is consistent with the seaman’s right to jury

trial on the main demand. Shell Oil Company v. Kennedy,

344 So.2d 1153 (La. App. 4th Cir. 1977).

Trial of the exceptions also is consistent with the

Savings to Suitors Clause, 28 U.S.C. §1333(1), and the

Jones Act, 28 U.S.C. §688, because this Court traditionally

has granted the states wide latitude in applying their

procedural rules to maritime cases in state court and

because the trial of the exceptions does not prejudice the

characteristic features of the general maritime law or

interfere with the proper harmony and uniformity of that

law. American Dredging Co. v. Miller, 510 U.S. 443 (1994).

Further, the FELA, 45 U.S.C. $51, et seq., cases cited

by petitioners are distinguishable because the Jones Act

only incorporates the statutory provisions of FELA, and

FELA has no statutory provision for jury trial. Moreover,

the Texas litigation cited by petitioners is based on en-

tirely different causes of action and the procedural rules of

another state, and therefore, is distinguishable.

I. Louisiana Uses the Exception of Res Judicata as

a Screening Mechanism to Determine Whether

the Case Should Proceed to Jury Trial on the

Main Demand

Peremptory exceptions are procedural devices which

allow the district court to adjudicate certain, discrete

10

issues before trial, including prescription, non-joinder of

parties, no cause of action, no right of action, and res

judicata. La. C.C.P. art. 927. Peremptory exceptions may

be tried prior to trial, by the court, sitting without a jury,

and the court may hear evidence and make factual deter-

minations. La. C.C.P. art. 929, 931. Each peremptory

exception is a complete bar to recovery. Therefore, when

the court grants a peremptory exception, the court saves

the judicial resources used in a full trial on the main

demand.

It is well settled under Louisiana law that the proper

procedural mechanism for asserting the defense of com-

promise or release is the peremptory exception of res

judicata. Brown v. Drillers, Inc., 630 So.2d 741, 747 (La.

1994); Rivett v. State Farm Fire and Cas. Co., 508 So.2d

1356 (La. 1987); Murphy v. Hoffpauir, 540 So.2d 473 (La.

App. 2d Cir. 1989). The peremptory exception of res judi-

cata has been used to determine the validity of seamen’s

releases. See, e.g., LeBlanc v. Callais Enterp. Part., Inc.,

767 So.2d 823 (La. App. 5th Cir. 2000). A trial judge may

determine, in advance of a jury trial on the merits, a

peremptory exception of res judicata, even when factual

evidence must be evaluated to make the determination.

Shell Oil Company v. Kennedy, 344 So.2d 1153, 1154 (La.

App. 4th Cir. 1977), citing Babineaux v. Pernie-Bailey

Drilling Co., 261 La. 1080, 262 So.2d 328 (La. 1977).

Petitioners argue that the trial court’s hearing of the

exceptions of res judicata would deny them the right to trial

by jury afforded by the Jones Act. Notably, Louisiana has

held that a judge trial of an exception of compromise does not

deny plaintiff of his right to trial by jury on the main de-

mand. Shell Oil Company v. Kennedy, 344 So.2d 1153 (La.

App. 4th Cir. 1977); citing Babineaux v. Pernie-Bailey

11

Drilling Co., 262 So.2d 328 (La. 1978); Bowden v. State

Farm Mut. Auto. Ins. Co., 150 So.2d 655 (La. App. 3rd Cir.

1963). Indeed, in Shell, the Fourth Circuit rejected the

plaintiff’s argument that factual issues as to the validity

of a compromise were jury questions, concluding that “a

plaintiff is not denied the right of trial by jury because

{Louisiana’s] procedural system requires or permits

certain issues to be decided by the judge alone in advance

of the trial.” Shell Oil, 344 So.2d 1153 at 1154. Rather, the

Court noted that Louisiana procedure “[utilizes] such

devices as the peremptory exception to avoid the full-scale

trial of actions which may be finally determined by the

trial in advance of a conveniently separable issue.” Jd. If

the exception is denied, the main demand is tried to the

jury.

II. Louisiana’s Use of the Exception of Res Judi-

cata is Consistent with Federal Maritime Law

Although the original petition was filed in Louisiana

state court, there is no dispute that the substantive

federal maritime law applies to the validity of these

releases. Reasons and Order of the District Court, at-

tached to the Petition, Appendix C, App. at 5; Garrett v.

Moore-McCormack Co., 317 U.S. 239 (1942). However, the

exception of res judicata is a procedural device, and

procedure is determined by state law.

As this Court has stated, a matter is procedural when

it “does not bear upon the substantive right to recover, and

is not a rule upon which maritime actors rely in making

decisions about primary conduct — how to manage their

business and what precautions to take.” American Dredg-

ing Co. v. Miller, 510 U.S. 443, 454 (1994). A seaman

12

would have the same right to recover under the Jones Act

regardless of whether a judge or jury determines the

validity of his release; likewise, a defendant maritime

employer would manage its business in the same fashion

regardless of whether a judge or jury decided the validity

of a release. Therefore, a trial court’s decision to hear an

exception of res judicata on a seaman’s release is a proce-

dural and not a substantive matter.

Extensive case law of this Court holds that, when it

does not conflict with substantive maritime law, state

courts may apply state procedures in adjudicating mari-

time actions under the “Saving to Suitors” clause. See

American Dredging Co. v. Miller, 510 U.S. 443 (1994),

Madruga v. Superior Court of Calif., 346 U.S. 556 (1954),

Red Cross Line v. Atl. Fruit Co., 264 U.S. 109 (1924). This

Court held that, while a state may not provide for an in

rem action in state court, “the State, having concurrent

jurisdiction [under the “Saving to Suitors” clause], is free

to adopt such remedies, and to attach to them such inci-

dents, as it sees fit.” Red Cross Line, 264 U.S., at 124

(holding that New York’s Arbitration Law may be used to

compel parties in an admiralty action). State procedure is

to be applied in state courts unless it “works material

prejudice to the characteristic features of the general

maritime law or interferes with the proper harmony and

uniformity of that law in its international and interstate

relations.” Miller, 510 U.S., at 447 (quoting Southern

Pacific Co. v. Jensen, 244 U.S. 205, 216 (1917) (upholding

Louisiana’s rejection of the doctrine of forum non conven-

iens).

States are given relatively wide scope in terms of what

is permissible state action in admiralty jurisdiction:

—_

Wherever the boundaries of permissible state

regulation may lie, they do not invalidate state

rejection of forum non conveniens, which is in

two respects quite dissimilar from any other

matter that our opinions have held to be gov-

erned by federal admiralty law: it is procedural

rather than substantive, and it is most unlikely

to produce uniform results.

Miller, 510 U.S., at 453. Thus, where a matter is proce-

dural or does not necessarily require uniformity in appli-

cation, state laws will apply.’

The exception of res judicata is exactly the type of

proceeding that this Court has approved of in Miller.

Petitioners have chosen to bring their case in state court;

while substantive maritime law applies, this case is

subject to state procedure, including the exceptions cre-

ated under the Louisiana Code of Civil Procedure. Further,

the use of the peremptory exception will not “work mate-

rial prejudice to the characteristic features of the general

maritime law” because the trial court will be bound by the

* This is consistent with the general rule of conflicts that whether

an issue is decided by the judge or a jury is determined by the law of

the forum. Restatement, Conflict of Laws (Rev. 1988) §129; Ettelson et

al. v. Metropolitan Life Ins. Co., 137 F.2d 62, 64 (3rd Cir. 1943), cert.

denied, 320 U.S. 777.

For example, in a diversity case in federal court, substantive

questions are governed by state law, but which issues go to the jury is

determined by federal law. Simler v. Conner, 372 U.S. 221, 222, 9

L. Ed. 2d 691, 83 S. Ct. 609 (1963) (whether the propriety of a lawyer's

fee was an equitable issue for the judge or a legal issue for the jury was

determined by federal standards); Adams uv. Johns-Manville Corp., 876

F.2d 702, 709 (9th Cir. 1989) (whether an issue of prior settlement goes

to the jury or the judge decided based on federal standards of what is

equity and what is law).

14

same legal standards under the Jones Act as a jury would

be. The court will follow the federal substantive rules

regarding the burden of proof and standard for determin-

ing whether a seaman’s release is valid. See Reasons and

Order of the District Court attached to the Petition as

Appendix C, at App. 5; Garrett v. Moore-McCormack Co.

supra. The applicants will have the opportunity to present

all of their evidence regarding alleged fraud or coercion to

the court, and the trial judge will apply federal maritime

law to the issue of the plaintiffs’ releases. Such a trial of

the exception of res judicata would affect the plaintiffs’

claims no more than a dismissal for forum non conveniens

and, by the standards established by American Dredging

Co., trial of the exception preserves the characteristic

features of maritime law and maintains its harmony and

uniformity.”

® Several decisions of Louisiana state courts also support this

conclusion.

In Milstead v. Diamond M Offshore, Inc., 676 So.2d 89 (La. 1996),

the Louisiana Supreme Court noted that, even prior to Miller, it had

held that the application of state procedural remedies in both general

maritime cases and Jones Act cases. See id. at 94-95 (citing Daigle v.

Coastal Marine, Inc., 488 So.2d 679 (La. 1986)). Milstead involved a

question of whether a Louisiana appellate court should use a Louisiana

or federal standard in reviewing a Jones Act judge trial. The Louisiana

Supreme Court held that the standard of appellate review is procedural

and that use of the state standard did not prejudice the harmony or

uniformity of maritime law. Moreover, in Milstead, the Louisiana

Supreme Court extended the holding of Daigle, supra, and suggested

that Louisiana courts of appeal should apply the state, rather than

federal, standard of review in both general maritime and Jones Act jury

trials. Milstead, 676 So.2d at 95. In so deciding, the Louisiana Supreme

Court focused on two primary factors: first, that standards of review are

procedural in nature; and, second, that standards of review are not

characteristic features of general maritime law such that application of

(Continued on following page)

Se

15

III. Rules for Jury Trials Made by Judges in FELA

Cases Are Not Incorporated in the Jones Act

Petitioners have based their argument that a jury

must decide the exception of res judicata squarely on

decisions interpreting the Federal Employer’s Liability Act

(“FELA”), 45 U.S.C. §51, et seq. Petition at 8. Petitioners

argue that the Jones Act, 46 U.S.C. §688, incorporates all

provisions of FELA, including its judicial gloss. However,

the Jones Act incorporates “all statutes of the United

States modifying or extending the common-law right or

remedy in cases of personal injury to railway employees[.]”

46 U.S.C. §688. (emphasis added) Accordingly, the incorpo-

ration of FELA into the Jones Act is limited to the statu-

tory provisions of FELA such as the abolition of

contributory negligence and assumption of risk, and the

gloss on those express statutory provisions. In contrast,

Louisiana’s standards of appellate review would interfere with the

proper harmony and uniformity of general maritime law. Id.

More recently, the Louisiana Third Circuit Court of Appeal relied

upon Milstead for the proposition that, while federal law is applicable

to substantive issues in unseaworthiness and Jones Act cases, Louisi-

ana appellate courts are correct to conduct their reviews under the

applicable state law standard of review, manifest error. Aycock v. Ensco

Offshore Co., 833 So.2d 1246 (La. App. 3d Cir. 12/18/02).

Indeed, the application by Louisiana courts of the state standard of

review in Jones Act cases was formerly even more significant, as

Louisiana law provided for appellate review of fact as well as law. La.

Const. art. 7, §§10, 29 (1921). To the contrary, under federal law

appellate courts may not disturb the finding of a jury on the merits

unless there appears to be no reasonable basis for the jury’s finding.

Gallic v. Baltimore & Ohio R.R., 372 U.S. 108 (1963). Thus, the

Louisiana standard controlled in spite of the fact that it differed

considerably from the federal standard.

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ee

ee a ee tear tone cet ae Lae

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the right to jury trial in FELA cases in state cour*. is judge

made and, therefore, not incorporated into the Jones Act.

FELA contains no provision granting a right to a trial

by jury. 45 U.S.C. §51, et seq. Instead, the right to a trial

by jury in FELA cases in state court is entirely a judicial

creation. In Bailey v. Central Vermont R. Co., 319 U.S. 350

(1942), a FELA case, the issue was whether plaintiff had

presented sufficient proof of negligence for the jury to find

in his favor. The Supreme Court of Vermont held that the

defendant/respondent was entitled to a directed verdict.

Id., at 350. This Court reversed that holding, finding that

there was sufficient evidence to support the verdict, and

stated that “To withdraw such a question from the jury is

to usurp its functions.” Id., at 354. In explaining the

decision, the Court quoted an earlier holding that “The

right to trial by jury is a basic and fundamental feature of

our system of federal jurisprudence which is protected by

the Seventh Amendment.” Jacob v. New York, 315 U.S.

752, 752 (1941) (reversing Federal District Court’s dis-

missal of Jones Act complaint).

Later, in Dice v. Akron, Canton & Y. R. Co., 342 US.

359 (1952), a FELA case from the Supreme Court of Ohio,

the issue was not just whether a directed verdict was

proper in the particular circumstances of the case, but to

whom a question of settlement would be submitted in the

first instance: the judge or the jury. This Court quoted

Bailey that trial by jury was “part and parcel of the rem-

edy afforded railroad worker under the Employer’s Liabil-

ity Act.” Id., at 363 (quoting Bailey, 319 U.S., at 354).

Thus, Dice extended Bailey to create a new rule for jury

17

trials in FELA cases in state court.’ The basis of Dice can

only be a judicially created right peculiar to the circum-

stances of railroad workers and FELA. It clearly is not

based on any statutory provision of FELA or an interpre-

tation of any such statutory provision of FELA, and,

accordingly, the rule of Dice is not incorporated into the

Jones Act.

In contrast, the cases cited by petitioners holding that

FELA jurisprudence is incorporated into the Jones Act

deal exclusively with issues of liability explicitly addressed

in statutory provisions of FELA. Kernan v. American

Dredging Co., 355 U.S. 426, 432-33 (1958) (Jones Act

incorporates case law on FELA provision, 45 U.S.C. §54,

holding employer negligent due to statutory violation); Cox

v. Roth, 348 U.S. 207, 209 (1955) (interpreting FELA

provision, 45 U.S.C. §57, allowing for suits against receiv-

ers as allowing a Jones Act suit against the survivor of a

tortfeasor); Miles v. Apex Marine Corp., 498 U.S. 19, 33

(1990) (seaman’s cause of action under Jones Act survives

to his personal representative by incorporating FELA

provision 45 U.S.C. §59); Engel v. Davenport, 271 US. 33,

38-39 (1926) (incorporating FELA’s two year statute of

limitations into Jones Act, from former §6 of FELA);

Hopson v. Texaco, Inc., 383 U.S. 262, 263-64 (1966) (Jones

Act incorporates FELA case law on definition of “agent” as

used in 45 U.S.C. 851); Baltimore S.S. Co. v. Phillips, 274 .

U.S. 316, 324 (1927) (§1 of FELA was incorporated into the

’ The Dice decision has been criticized by several state courts

hearing FELA cases. See, e.g., Ex parte: Burlington Northern R. Co.,

470 So.2d 1094, 1097 (Ala. 1985).

————

18

Jones Act and supplanted the rule from The Osceola, 189

U.S. 158 (1903)).*

Indeed, FELA and the Jones Act differ substantially

on other non-statutory issues. The issue of releases under

the Jones Act and FELA is particularly pertinent here. A

FELA railroad worker attacking the validity of his release

bears the burden of proving the release to be invalid.

Callen v. Penn. R. Co., 332 U.S. 625 (1948). In Callen, this

Court held that “until the Congress changes the statutory

plan, the releases of railroad employees stand on the same

basis as the releases of others. One who attacks a settle-

ment must bear the burden of showing that the contract

he has made is tainted with invalidity, either by fraud

practiced upon him or by a mutual mistake under which

both parties acted.” Id., at 630. In this specific area where

there are no statutory provisions of FELA, Jones Act

jurisprudence from this Court has established a substan-

tially different legal standard. Under the Jones Act, the

party seeking to enforce a seaman’s release bears the

* The only case cited by petitioners addressing an issue not

specifically included in the statutory language of FELA is Miller,

although the reference to FELA is dicta. This Court, having already

determined that Louisiana's rejection of forum non conveniens was not

in conflict with general maritime law, also noted that the same result

had been reached under FELA. Miller, 510 U.S., at 456. This Court

cited Missouri ex rel. Southern R. Co. v. Mayfield, 340 U.S. 1,5 (1950),

which itself simply held that there was nothing in FELA that would

compel a state to reject its own doctrine of forum non conveniens. Thus,

both Mayfield and Miller simply found that there were no provisions in

either FELA or the Jones Act that would affect a state’s doctrine of

forum non conveniens; this is hardly an importation of a judicial gloss

regarding a non-statutory issue.

7

19

burden of proof in asserting the validity of a release.

Garrett v. Moore-McCormack, 317 U.S. 239, 248 (1942).

It is clear from the jurisprudence of this Ceurt that,

when FELA is silent on a particular point, there may be

variation between the legal standards applied to FELA

and Jones Act cases. Therefore, the Jones Act only incor-

porates statutory provisions of FELA and FELA jurispru-

dence on non-statutory issues is not controlling in Jones

Act cases. Accordingly, Dice is not controlling in this case.

IV. The Texas Litigation Arising from the Capsize

of the DLB-269 is Distinguishable Because the

Causes of Action and State Procedures Are Dif-

ferent

The decisions of the Texas courts to which petitioners

refer, Petition at 12, are distinguishable. 46 U.S.C. §688(b)

bars foreign oil field workers on the outer-continental shelf

of foreign countries from bringing claims under the Jones

Act, the General Maritime Law, or state law. Section

688(b) applies to the plaintiffs in the Texas proceedings,

and, accordingly, they have brought their claims under

Mexican law. Stier v. Reading & Bates Corp., et al., 992

S.W.2d 423 (Tex. 1999). Therefore, the Jones Act is not

involved, and the two cases are distinguishable.

Further, the trials conducted in Texas were on the

plaintiffs’ main demands, not an exception of res judicata.

In addition, there is the obvious difference that the Texas

cases are brought in Texas state court and are subject to

Texas procedural rules. If Texas chooses to grant a jury

trial to the plaintiffs there, it can have no effect on peti-

tioners who chose to bring their cases in Louisiana state

court.

20

V. Petitioners Raise a Narrow Issue Which

Affects Them Only

Petitioners base their request for a writ of certiorari

on an alleged conflict between a state procedure for de-

termining the validity of a release and this Court’s 1952

decision in Dice. Yet, petitioners cite no case in which such

a conflict has arisen in the 52 years since Dice was de-

cided. It, therefore, is obvious that the issue raised by

petitioners is important to them only and that it lacks any

of the factors necessary to be worthy of a writ of certiorari

from this court. U.S.S.C. Rule 10.

2

CONCLUSION

The petition for writ of certiorari should be denied.

Respectfully submitted,

EDWARD F. LEBRETON, III

FOWLER, RODRIGUEZ, KINGSMILL

FLINT, GRAY & CHALOS, LLP

400 Poydras Street, 30th Floor

New Orleans, Louisiana 70130

(504) 523-2600

JAMES SENTNER, ESQ.

GARDERE, WYNNE, SEWELL & RIGGS

1000 Louisiana Street, Suite 3400

Houston, Texas 77002-5000

Counsel for Respondents CCC

Fabricaciones y Construcciones

and Corporacion de Industrias

Construcciones S.A. de C.V.

February 3, 2004

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