Marlin Oilfield Divers, Inc. v. Allied Shipyard, Inc.

Filing 111

ORDER AND REASONS denying 96 Motion for Sanctions. Signed by Judge Jane Triche Milazzo on 5/9/22. (Reference: All Cases)(mmm)

Case 2:20-cv-02431-JTM-DMD Document 111 Filed 05/09/22 Page 1 of 4

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARLIN OILFIELD DIVERS, INC.

CIVIL ACTION

VERSUS

NO: 20-2431 C/W 21-575

ALLIED SHIPYARD, INC.

SECTION: “H”

ORDER AND REASONS
Before the Court is Plaintiffs Blue Marlin, LLC and Marlin Oilfield
Divers, Inc.’s Motion for Sanctions (Doc. 96). For the following reasons, the
Motion is DENIED.
BACKGROUND
Plaintiffs Blue Marlin, LLC and Marlin Oilfield Divers, Inc. are the
owner and bareboat charterer, respectively, of the M/V IRON MAIDEN. Marlin
Oilfield Divers, Inc. entered into an agreement with Defendant Allied
Shipyard, Inc. (“Allied”) for repair work to be performed on the IRON MAIDEN
in Allied’s yard. On April 16, 2020, a fire broke out aboard the IRON MAIDEN
in the Allied yard, and the vessel was damaged. The parties dispute the cause
of the fire. Plaintiffs bring a breach of contract claim and negligence claim
against Allied for causing the fire.
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In the instant Motion, Plaintiffs seek a number of sanctions against
Defendant Allied for its delay in production or intentional withholding of
discovery. This Court will consider their arguments in turn.
LAW AND ANALYSIS
Pursuant to the scheduling order, discovery in this matter was set to be
completed on November 15, 2021. Plaintiffs argue that Allied delayed in
producing certain damaging documents relating to citations by the Coast
Guard until well after this deadline. Specifically, Defendant did not produce
documents related to the Coast Guard’s audit of its competent person program
or an August 2019 letter from the Coast Guard citing it for “irregularities” in
its competent person logs until March 2022. A bench trial in this matter is set
to begin on May 16, 2022. Plaintiffs argue that they are prejudiced by Allied’s
delay in producing the Coast Guard documents and seek sanctions against
Allied pursuant to Federal Rule of Civil Procedure 37. Specifically, Plaintiffs
ask this Court for an order (1) finding that Allied deliberately withheld
relevant evidence from Plaintiffs; (2) striking Allied’s liability defenses, leaving
for trial only the issues of causation and damages; (3) ordering an adverse
presumption of gross negligence on the part of Allied in its performance of work
on the IRON MAIDEN; and/or (4) ordering Allied to pay Plaintiffs’ reasonable
expenses, including attorney’s fees, related to all increased expenses and fees
caused by Allied’s deliberate, willful withholding of documents.
In its defense, Allied contends that some of the records at issue were
discovered in a file in the office of its director in March of 2022 and promptly
turned over to Plaintiffs. That discovery prompted Allied’s management to
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remember the August 2019 letter, which was thereafter turned over as well.
Allied states that during discovery its focus was on OSHA records and that
there was never any intent to conceal the Coast Guard records at issue. 1 It also
points out that the August 2019 letter addresses an unrelated incident that
occurred ten months before the fire at issue here. Further, Allied has agreed to
produce any witness that Plaintiffs want to depose relating to the Coast Guard
documents.
Under Rule 37, a court may sanction a party for failure to timely produce
information or supplement an incomplete discovery response unless that
failure was “substantially justified or harmless.” In determining whether a
party’s failure to sufficiently respond is harmless or substantially justified, “a
court generally considers: ‘(1) the importance of the evidence; (2) the prejudice
to the opposing party of including the evidence; (3) the possibility of curing
such prejudice by granting a continuance; and (4) the explanation for the
party’s failure to disclose.’” 2 “The sanctions available under Rule 37(b) for such
conduct are predicated upon the presence of such factors as willful

Indeed, Plaintiffs’ request for production specifically referred to OSHA records. It
stated, “Please provide each and every audit performed by OSHA or any other governmental
entities of Allied within two (2) years of the incident, or any document reflecting the final
results of the following: OSHA audits, inspections, investigations or reviews of Allied
Shipyards generally or incidents occurring at an Allied Shipyard facility.”
2 Canon U.S.A., Inc. v. S.A.M., Inc., No. CIV. A. 07-01201, 2008 WL 2522087, at *3
(E.D. La. June 20, 2008) (quoting Tex. A & M Rsch. Found. v. Magna Transp. Inc., 338 F.3d
394, 402 (5th Cir. 2003).
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disobedience, gross indifference to the right of the adverse party, deliberate
callousness, or gross negligence.” 3
Here, the Court finds that Allied’s failure to timely produce the Coast
Guard documents was substantially justified and harmless. Allied has
provided evidence that the delay in production was the result of an honest
mistake, and it produced the documents as soon as it discovered them. Allied
also took efforts to cure any potential prejudice to Plaintiffs by producing
witnesses for depositions regarding the late-disclosed documents, and those
depositions have been taken. To further cure any prejudice to Plaintiffs, the
Court will allow them wide latitude to cross-examine witnesses regarding the
Coast Guard documents at the bench trial in this matter.
CONCLUSION
For the foregoing reasons, the Motion is DENIED.

New Orleans, Louisiana this 9th day of May, 2022.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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Dorsey v. Acad. Moving & Storage, Inc., 423 F.2d 858, 860 (5th Cir. 1970).
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