Gaffney, Michael P. v. Riverboat Serv IN

451 F.3d 424, 2006 WL 1653349
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 16, 2006
Docket04-3829, 04-3900
StatusPublished
Cited by10 cases

This text of 451 F.3d 424 (Gaffney, Michael P. v. Riverboat Serv IN) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gaffney, Michael P. v. Riverboat Serv IN, 451 F.3d 424, 2006 WL 1653349 (7th Cir. 2006).

Opinion

RIPPLE, Circuit Judge.

The plaintiffs, who are licensed merchant marine officers, 1 brought this whis-tleblower action under 46 U.S.C. § 2114 against Showboat Marina Casino Partnership, Showboat, Inc., Showboat Indiana, Inc., Showboat Mardi Gras Casino and M/V Showboat (collectively “Showboat”), Riverboat Services, Inc. and Riverboat Services of Indiana, Inc. (collectively “Riverboat”), and Robert Heitmeier and Thomas Gourgueehon in their individual capacities. See Pub.L. No. 98-557, § 13(a), 98 Stat. 2863 (1984) (current version at 46 U.S.C. § 2114 (2002)). 2 The plaintiffs claim that they were discharged in retaliation for engaging in statutorily protected correspondence with the United States Coast Guard (“Coast Guard”) about a change in hiring guidelines on the vessel on which they were employed, the M/V Showboat. After a bench trial on the plaintiffs’ claims against Riverboat and the individual defendants, the United States District Court for the Northern District of Indiana entered judgment in favor of all but two plaintiffs and awarded back pay, expenses and punitive damages. Those defendants now appeal, contending that the district court erred in holding that the plaintiffs established the requisite causation between their correspondence with the Coast Guard and their subsequent terminations. These defendants also submit that the plaintiffs did not prove that they are entitled to whistleblower protection *431 under § 2114: according to the defendants, the plaintiffs did not act in “good faith,” did not make a “report[]” to the Coast Guard, and did not have a reasonable belief that a violation of safety laws and regulations had occurred at the time of the correspondence. Id. Further, the individual defendants contend that they are not subject to § 2114 liability because they do not qualify as “individuaos] in charge of a vessel.” Id. The two plaintiffs who did not obtain relief 3 cross-appeal the district court’s ruling denying them relief. All ten plaintiffs appeal the denial of attorneys’ fees. Finally, Riverboat appeals the district court’s judgment granting partial summary judgment to Showboat. Riverboat contends that Showboat was required to obtain insurance for the plaintiffs’ claims and, thus, it is entitled to indemnification from Showboat. For the reasons set forth in the following opinion, we affirm in part and reverse in part the judgment of the district court.

I

BACKGROUND

A. Facts

This appeal involves the claims of ten 4 licensed merchant marine officers, formerly employed as captains, chief engineers, assistant engineers or deck officers on the M/V Shoioboat, a large gaming vessel that carried passengers on excursions on Lake Michigan. 5 They allege that they were terminated in retaliation for reporting the violation of safety regulations to the United States Coast Guard and that their terminations violate 46 U.S.C. § 2114(a). 6 See § 13(a), 98 Stat. at 2863. The plaintiffs filed suit in 1998 against Showboat, the registered owner of the M/V Showboat, and Riverboat, the operator and manager of the vessel. The plaintiffs also named two individual defendants: Robert Heit-meier, the President, member of the Board of Directors and sole shareholder of both Riverboat Services, Inc. and Riverboat Services of Indiana, Inc.; and Thomas Gourguechon, who during the events in this case was both the Director of Marine Operations for Riverboat and the Director of Project Management for Showboat.

1. The M/V Showboat

The M/V Showboat, the ship on which the plaintiffs were employed, is one of the largest casino vessels currently operating in the United States; it weighs 2,803 gross *432 tons, is 332-feet long and can carry up to 4,250 passengers and crew at a time. During the period at issue in this litigation, the M/V Showboat operated on a daily basis gambling excursions on Lake Michigan that departed from, and returned to, East Chicago, Indiana.

The vessel’s operation is governed by a Marine Management Services Agreement (the “Agreement”) between Riverboat and Showboat. See R.37, Ex.A. This Agreement gives Riverboat the “exclusive right and obligation to manage and operate the marine aspects of the [M/V Showboat ].” Id. § 3.01. Specifically, Riverboat is responsible for ensuring that the vessel’s operation complies with applicable state and federal laws, including United States Coast Guard regulations, see id.; employing and training the vessel’s crew in a manner consistent with generally accepted standards of the riverboat gaming industry, see id. §§ 3.01, 3.02(1); monitoring the qualifications of the vessel’s staff, as well as assuring that the maritime staff is properly licensed, see id. § 3.02(iv); and the hiring, firing, promotion and supervision of all executive and service employees, see id. § 3.04.1. In turn, the Agreement obligates Showboat to obtain insurance and to name Riverboat as the insured party. Section 5.01.1 specifies that Showboat should obtain insurance covering all “acts, omissions and injuries to persons or property” caused by Riverboat or its agents, in the amount of not less than five million dollars. See id. § 5.01.1. Section 5.01.01.1 then lists five types of insurance coverage required: worker’s compensation insurance; comprehensive general liability insurance for accidents and property damage; full form protection and liability insurance on all vessels and floating equipment; hull and machinery insurance; and collision liability insurance for damage to vessels and floating objects. In addition, the Agreement mandates that Showboat obtain coverage for liabilities arising under the Jones Act. See id.

The operation of the M/V Showboat also is required to abide by federal statutes and regulations. In pertinent part, applicable Coast Guard regulations provide that a limited engineer license permits a chief or assistant engineer to “serve within any horsepower limitations on vessels of any gross tons on inland waters,” but not on vessels of “more than 1600 gross tons in ... Great Lakes service.” 46 C.F.R. § 10.501(b); see also id. § 15.915(b)-(d). At 2,803 gross tons, the M/V Showboat falls into the latter category. Fearing that the Coast Guard under these regulations would require the M/V Showboat

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451 F.3d 424, 2006 WL 1653349, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gaffney-michael-p-v-riverboat-serv-in-ca7-2006.