Striding the Quarterdeck
Covering the most recent developments in national maritime jurisprudence and regulatory action, with a focus on issues that affect the inland and offshore industries in and around the Gulf of Mexico.
Palinurus Asleep at the Helm: USCG Warns of Need for Cyber-Ready Fleets in Wake of Recent Cybersecurity Breach
The slumberous snare
had scarce unbound [Palinurus’s] limbs, when, leaning o’er,
the god upon the waters flung him forth,
hands clutching still the helm and ship-rail torn,
and calling on his comrades, but in vain.!
…Yet were they drawing nigh
the sirens’ island-steep, where oft are seen
white, bleaching bones, and to the distant ear
the rocks roar harshly in perpetual foam.
Then of his drifting fleet and pilot gone
Aeneas was aware, and, taking helm,
steered through the midnight waves, with many a sigh
and, by his comrade’s pitiable death
sore-smitten, cried, “O, thou didst trust too far
fair skies and seas, and liest without a grave,
my Palinurus, in a land unknown!”
Vergil’s Aeneid, Book V, ll. 852 et seq.
These are Aeneas’s eulogizing words for Palinurus, the trusted helmsman of the lead Trojan vessel after the fall of Troy, who dozed off under the spell of the god of Sleep, let go the rudder of the ship, fell into the sea and drowned. This ancient mythic episode of omnipotent gods and fallible men serves as a poignant metaphor for the ultra-modern automated “smart” systems that, despite their power, remain as fallible as the men and women using them. And the maritime setting of Palinurus’s slumbering at the rudder is an ancient analog for the United States Coast Guard’s July 8, 2019 Marine Safety Alert entitled, “Cyber Incident Exposes Potential Vulnerabilities Onboard Commercial Vessels” (Cyber MSA) regarding a February 2019 “significant cyber incident impacting their shipboard network” aboard an ocean-going commercial vessel inbound to the port of New Jersey.
It bears noting at the outset that these allusions to ancient epics of the sea are not mere purple prose. The etymology of the word “cyber” has direct, deep-seated maritime roots. The word itself derives from the term “cybernetics,” a neologism coined by Norbert Weiner in his 1948 book about the science and architecture of biological and technical control systems. This word in turn was derived from the ancient Greek word (kubernētēs), the ancient Greek word for “helmsman” or “pilot” of a vessel. Thus, in a very real etymological sense, the much-discussed buzz-word “cyber” and related “cybersecurity” have their roots in the age-old operations of maritime trade.
It is fitting, then, that the Cyber MSA focused on the risk that shipboard malware, which had affected the vessel’s network and onboard hardware, might have had the capacity to disable the ship’s control systems – i.e., with the “helmsman”/Palinurus asleep at the digital rudder:
An interagency team of cyber experts, led by the Coast Guard … conducted an analysis of the vessel’s network and essential control systems… and found that the vessel was operating without effective cybersecurity measures in place, exposing critical vessel control systems to significant vulnerabilities.
This incident was reported to the Coast Guard by the vessel, presumably in recognition of the agency’s recent focus and reminder to the maritime industry (as most recently set out in a Marine Safety Information Bulletin, MSIB, in May) that cybersecurity breaches must be reported to the Coast Guard pursuant to the Maritime Transportation Security Act and related MARSEC regulations (as we have previously discussed on this blog):
As a reminder, suspicious activity and breaches of security must be reported to the [Coast Guard National Response Center, NRC] at (800) 424-8802. For cyber attempts/attacks that do not impact the operating condition of the vessel or result in a pollution incident, owners or operators may alternatively report to the 24/7 National Cybersecurity and Communications Integration Center (NCCIC) at (888) 282-0870 in accordance with CG-5P Policy Letter 08-16, “Reporting Suspicious Activity and Breaches of Security.” When reporting to the NCCIC, it is imperative that the reporting party notify the NCCIC that the vessel is a Coast Guard regulated entity in order to satisfy 33 CFR § 101.305 reporting requirements. The NCCIC will in turn forward the report to the NRC that will then notify the cognizant Coast Guard Captain of the Port (COTP).
Notably, the May MSIB came in the wake of several so-called “phishing” attacks in which “[c]yber adversaries” were attempting to gain sensitive vessel information “using email addresses that pose as an official Port State Control (PSC) authority such as: port @ pscgov.org”; as well as “reports of malicious software designed to disrupt shipboard computer systems.”
And less than a month later, the Cyber MSA addressed another instance of shipboard malware, but noted that this particular security risk had actually been well-known aboard the vessel, to the extent that most crew would not use shipboard systems to check personal email, conduct financial transactions, or check bank accounts. And yet those same systems were routinely used for official business related to vessel operations, such as chart updates, cargo data management, and ship-to-shore communications (including with the Coast Guard). With modern “smart” vessels and shipboard systems, “with engines that are controlled by mouse clicks, and growing reliance on electronic charting and navigation systems, protecting these systems with proper cybersecurity measures is as essential as controlling physical access to the ship or performing routine maintenance on traditional machinery.” The Cyber MSA goes on to provide certain technical recommendations to improve shipboard network security, including (1) segmented network structures; (2) per-user profiles/password access; (3) avoidance of external media; (4) use of basic antivirus software; and (5) ensuring all systems remain up to date with security patches. With respect to item (3), the Cyber MSA noted that it was common practice on this particular vessel for USB drives containing cargo data to be plugged directly into the shipboard systems without sanitizing for potential malware.
The Coast Guard left absolutely no doubt about the importance of cyber hygiene in the modern shipping environment – suggesting, effectively, that it is a requirement:
Maintaining effective cybersecurity is not just an IT issue, but is rather a fundamental operational imperative in the 21st century maritime environment. The Coast Guard therefore strongly encourages all vessel and facility owners and operators to conduct cybersecurity assessments to better understand the extent of their cyber vulnerabilities.
These are strong words, particularly when the word “cyber” does not yet appear, in any of its variations, in any regulation promulgated by the Coast Guard.
And the Coast Guard’s framing of cybersecurity as a “fundamental operational imperative” in the maritime industry is all the more resounding in light of several cyber-related developments affecting multiple facets of maritime operations.
First, Lloyd’s of London, arguably the preeminent global marketplace for insuring (and reinsuring) maritime and offshore risks, issued a July 4, 2019 Market Bulletin mandating that by 2020 all policies issued through the Lloyd’s market must “be clear on whether coverage is provided for losses caused by a cyber event [and such] clarity should be provided by either excluding coverage or by providing affirmative coverage in the (re)insurance policy.” This mandate is intended to avoid the problem of so-called “silent cyber” coverage concerns, which refers to non-affirmative coverage of cyber risks that may not have been contemplated by the coverage wording, but which are not expressly excluded and thus may potentially be covered under otherwise broad general language. This problem was identified in a recent survey that – somewhat shockingly – revealed “a significant divergence in firms’ views of the potential exposure within [inter alia] Marine, Aviation and Transport (MAT)…lines [, with] firms estimate[ing] their exposure to non-affirmative cyber risk on these lines to be anywhere between zero and the full limits.” Thus, cybersecurity will certainly be (to the extent it may not have been already) a front-and-center issue on underwriters’ minds in terms of setting premium on maritime risks going forward. As such, underwriters will expect the maritime industry to be proactive and actively engaged in implementing and maintaining cybersecurity protocols and systems, and will limit coverages and set premiums accordingly.
Relatedly, the Coast Guard’s declaration that cybersecurity is a “fundamental operational imperative” raises the possibility (likelihood?) for claims of “cyber unseaworthiness,” an issue that might affect everything from insurance coverage, to general average claims and charter party disputes, to potentially (if property damage or personal injuries result from the incident) the right to limitation of liability and fault/negligence. And the potential basis for claims of “cyber unseaworthiness” are incrementally increasing as a result of the vast and rapid development of industry best standards and practices regarding cybersecurity over the past several years. For example, the American Bureau of Shipping in 2016 formulated a five-volume CyberSafety™ program (previously mentioned on this blog) setting forth detailed, systematic steps for ensuring cybersecurity at sea, and providing for ABS-issued certifications at both the management and individual vessel levels. Det Norske Veritas (DNV) likewise offers cybersecurity training, assessment, and certification to the maritime and offshore industries. And BIMCO, the world’s leading provider of charter party and other maritime contract forms, joined forces with Cruise Line; International Associations of Cargo Shipowners (Intercargo); Vessel Managers (InterManager) and Tanker Owners (Intertanko); the International Union of Marine Insurance (IUMI); Oil Companies International Marine Forum (OCIMF); and the World Shipping Council to issue The Guidelines on Cyber Security Onboard Ships (February 2016). Likewise, and most recently, BIMCO in May 2019 published the first “standard Cyber Security Clause that requires the parties to implement cybersecurity procedures and systems, to help reduce the risk of an incident and mitigate the consequences should a security breach occur.” This clause is intended for broad integration in and application across various maritime/offshore contract types. Thus, the industry has recognized and continues to foster diligence around cybersecurity issues, whether indirectly via certification/best practices or directly through contractual terms like the BIMCO clause. As a practical matter, there will be little if any room to argue ignorance or state-of-the-art in the context of potential “cyber unseaworthiness” claims.
And perhaps more importantly, the International Maritime Organization (IMO) has left no legal/regulatory doubt about the necessity of cybersecurity on the seas:
The [IMO] Maritime Safety Committee, at its 98th session in June 2017, also adopted Resolution MSC.428(98) – Maritime Cyber Risk Management in Safety Management Systems. The resolution encourages administrations to ensure that cyber risks are appropriately addressed in existing safety management systems (as defined in the ISM Code) no later than the first annual verification of the company’s Document of Compliance after 1 January 2021.
Thus, for vessels subject to the ISM Code – which includes some Coast Guard regulated vessels (see, e.g., 33 CFR 96.210(a)) – there will presumptively be a legally enforceable requirement (as of 2021) to address cybersecurity in order to remain ISM Code compliant. Further, as discussed previously on this blog, numerous currently in-force Coast Guard MARSEC regulations, Subchapter M inland towing vessel regulations and the Bureau of Safety and Environmental Enforcement’s SEMS regulations all currently include provisions that (in light of the growing body of cybersecurity industry and regulatory guidance) implicitly require proactive cybersecurity actions in the maritime sector.
But even this may not be enough. As a recent Wall Street Journal article mentioned, cybersecurity industry experts have pointed out that “new” IMO requirements slated for 2021 enforcement and originally developed in 2016 “already need to be updated” because “[t]hey don’t address the modern cybersecurity exposures created by mobility, applications, and the cloud.” James Rundle, Maritime Cyber Rules Coming in 2021 are Outdated, Critics Say (The Wall Street Journal, Pro Cyber News, July 18, 2019). In particular, this article notes that there is already a cargo vessel (the YARA BIRKELAN, owned by Norway-based Yara International ASA, a chemical and fertilizer producer) that is scheduled to be operating on a fully autonomous basis, with no human crew, by 2020. The imminent reality of fully automated vessels at sea brings with it the very real possibility of “cyber pirates at some point taking over an autonomous shipping vessel in the middle of the ocean.” Id. (quoting Michael Murray, general manager of cyber physical systems with BlackRidge Technology International, Inc.).
As ships, structures and systems that operate at sea become further integrated into the expanding digital seas of the “Internet of Things,” with more and more systems (i.e., station-keeping, engine speed controls/monitoring, AIS and electronically aided navigation) being taken over by automation and “smart” technologies, maritime industry actors have a “fundamental operational imperative” to know how their hardware and software interact and where and how the hardware/software interface may be vulnerable to inadvertent breakdown or nefarious attacks. Ignorance – innocent or intentional – of cyber issues will no longer be an excuse (if indeed it ever was) for avoiding the consequences of cyber breaches. Accordingly, the maritime industry must heed the Coast Guard’s mandatory advice, or like Palinurus, risk falling asleep at the automated rudder and drowning in the digital sea.
“Yet Now, Federated Along One Keel” – United States Supreme Court Resolves Fifth/Ninth Circuit Split, Unequivocally Rejects Punitive Damages For General Maritime Law Unseaworthiness Claims
Yet now, federated along one keel…
MOBY DICK, HERMAN MELVILLE, Chap. XXVII
In the wake of Justice Thomas’s landmark decision in Atlantic Sounding Co. v. Townsend, American maritime jurisprudence was left with its “keeled hulls split at sea” due to a circuit split between the Fifth and Ninth Circuits over a simple but hugely important question: do seamen have a claim for punitive damages under the general maritime law cause of action for unseaworthiness? This question was the fulcrum for leverage in personal injury claims across the country: after Townsend maritime personal injury plaintiffs – pursuing the “white whale” threat of exponentially large exemplary/punitive damage awards – routinely began to include punitive damage claims in their petitions/complaints, usually linked to an unseaworthiness or GML negligence claim, ostensibly as a bargaining chip in settlement/case-valuation negotiations. read more…
ALERT: Supreme Court Rejects Seamen’s Claims for Punitive Damages Under General Maritime Law, Resolving Fifth and Ninth Circuit Split
The Supreme Court of the United States, on writ of certiorari in Dutra Group v. Christopher Batterton, 588 U.S. ___ (2019), has resolved a circuit split between the Fifth and Ninth Circuits regarding whether a seaman can recover punitive damages for unseaworthiness claims under general maritime law (see previous blog post discussing the split here). The Supreme Court held that a seaman cannot recover punitive damages for unseaworthiness claims, as this would provide “novel” remedies inconsistent with congressional policy as iterated in the Jones Act (as explained in Miles v. Apex Marine Corp., 498 U.S. 19 (1990)), would frustrate uniformity under the Jones Act and general maritime law, and would be inconsistent with the Supreme Court’s prior decision in Miles. read more…
Return to the Tidelands – Supreme Court Upholds Application of Federal Law on the Outer Continental Shelf in the Face of Parallel State Law
In a rare decision applying the Outer Continental Shelf Lands Act (43 U.S.C. §1331 et seq.(“OCSLA”), the United States Supreme Court has clarified, re-affirmed and perhaps (given the breadth of its opinion) expanded the exclusive application of federal law on the OCS. This decision comes in the midst of a flurry of maritime/maritime-related writ grants in the current term (Newton, Batterton, Thacker, Devries, and ATHOS I) all of which we will be tracking here on Striding the Quarterdeck. This decision may upend decades of jurisprudence in the Fifth Circuit regarding contractual indemnity. read more…
Despite perennial complaints from lower and appellate courts that the Limitation of Liability Act (“LLA,” 46 U.S.C. §§30501 et seq.) is “now hopelessly anachronistic” (Cont’l Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1376 (5th Cir. 1983) and that “such a law no longer makes sense” Delta Country Ventures, Inc. v. Magana, 986 F.2d 1260, 1266–67 (9th Cir. 1993), the LLA continues to be a powerful procedural and (when successfully invoked) substantive tool for shipowners. This is despite the fact that virtually every high profile maritime casualty (at least as to limitable personal injury/property claims, as opposed to non-limitable pollution issues) raises public controversy and calls for legislative repeal/restrictions of the century-and-a-half old “relic of the clipper ship era in which it was launched” – from the sinking of the TITANIC all the way to the DEEPWATER HORIZON disaster (which prompted an eventually abandoned bill to repeal the LLA), the tragic loss of the EL FARO and the recent catastrophic duckboat incident in Missouri that killed 17. read more…
Dippin’ Dots, Quilt Museums and the Intricacies of Maritime Federal Venue – Southern District of Texas Considers Forum Selection Clauses under FELA and the Jones Act
Many folks across this great country might not be familiar with Paducah, Kentucky. As a public service, the Court provides some basic background information about this relatively small community first settled as Perkin in 1821 and renamed Paducah in 1827 by William Clark (of the famed Lewis & Clark expedition). Paducah is located in the far western part of Kentucky at the confluence of the Tennessee and Ohio rivers, halfway between St. Louis and Nashville. Approximately 25,000 men, women, and children reside in Paducah. Designated by UNESCO as a Creative City of Crafts and Folk Art, the city is home of the National Quilt Museum and, as the local convention and visitor’s bureau likes to boast, “a haven for creative thinkers and doers who find inspiration here.” There is a laundry list of famous people who grew up in Paducah, including Alben W. Barkley (the 35th Vice President of the United States during the presidency of Harry S. Truman), John Scopes (the teacher accused for teaching the theory of evolution in the legendary Scopes trial) and PGA golfer Kenny Perry. Saving the best for last, Paducah is also the corporate headquarters for Dippin’ Dots, a favorite treat of this judge and his family.
With this opening paean to Paducah, the U.S. District Court for the Southern District of Texas addressed an intriguing legal question in In the matter of Complaint of Marquette Transportation Company Gulf-Inland LLC: can a limitation of liability action in federal court, filed in response to a Jones Act claim in state court, be transferred to a different venue than the pending state court action under a contractually bargained for forum-selection clause? See 2018 WL 4443141, 3:18-cv-00074 (S.D. Tex. 2018). read more…
Unsmooth “Operator” – Fifth Circuit Holds Tug Owner Liable Under OPA as “Operator” of Non-Owned “Dumb” Oil Barge
In an important decision of first impression construing the Oil Pollution Act of 1990 (“OPA,” 33 U.S.C. §§2701 et seq.), the Fifth Circuit has held the owner and operator (“Nature’s Way”) of a “dominant mind” tugboat liable under OPA as the “responsible party” for a spill emanating from a non-self-propelled “dumb” tank barge in its tow, even though the barge was owned by a third party (Third Coast Towing, “TCT”). Specifically, the Fifth Circuit conducted a res nova interpretation and application of 33 U.S.C. §2702(a), which provides that a designated “responsible party” shall be strictly liable, in the first instance and even without fault, for cleanup/removal costs and damages resulting from an oil spill; and further defines “responsible party” with respect to a “vessel” as “any person owning, operating or demise chartering the vessel.” read more…
Come Well or High-Water – Fifth Circuit Confirms Maritime Contract Law Applies to Decommissioning of Platforms in Navigable Waters
With the eddies still spinning in the wheelwash of its landmark en banc opinion in In Re Larry Doiron, Inc., the Fifth Circuit in In re Crescent Energy Servs., L.L.C., 2018 WL 3420665 (5th Cir. July 13, 2018), — F.3d —, has quickly answered one of the application-specific questions left open by Doiron, as noted previously on Striding the Quarterdeck’s discussion of Doiron: is a contract to decommission an offshore platform a maritime contract or a contract governed by state law? Specifically, under the newly launched Doiron analysis, courts must consider two factors in determining whether a contract is maritime: (1) whether “the contract [is] one to provide services to facilitate the drilling or production of oil and gas on navigable waters”; and if so, (2) whether it “provide[s] or [whether] the parties expect that a vessel will play a substantial role in the completion of the contract.” Under the first factor, the issue of whether deconstructing a well/platform can be deemed “services to facilitate the drilling or production” of the well remained to be decided after Doiron. read more…
The 5th Circuit, in Thomas v. Hercules Offshore Services, L.L.C., concluded per curiam that the Occupational Safety and Health Administration (“OSHA”) safe workplace regulations had been preempted by the United States Coast Guard (“USCG”) regulations for injuries occurring on the Outer Continental Shelf (“OCS”) on a foreign-flagged jack-up drilling rig (or as the opinion described the rig, a “mobile offshore drilling unit” (“MODU”) in the parlance of the USCG’s OCS regulations at 33 CFR Subchapter N and 46 CFR Subchapter I-A). As a result, the owners of the MODU were not negligent for injuries sustained by a galley hand who tripped and fell over a raised doorsill that was constructed in compliance with the USCG’s specific regulations for accommodation space specifications (46 C.F.R. §§108.197, 205). read more…
Keeled Hulls Split At Sea – The Fraught Waters Of General Maritime Law Punitive Damages, Split Among The Circuits
Steady, helmsman! Steady. This is the sort of weather when brave hearts snap ashore, and keeled hulls split at sea. Moby Dick, Herman Melville, Chap. XL
Since the Supreme Court’s (Justice Thomas’s) landmark decision in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009) holding that punitive damages are available in a seaman’s general maritime law (GML) cause of action for willful failure to pay maintenance and cure, several pitched battles have been raging around the country on an issue expressly left unanswered in Townsend (see 557 U.S. at 424, n.11): whether punitive damages are recoverable by a seaman in the separate and independent GML cause of action for unseaworthiness. read more…