1. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Subchapter M Towing Vessel Safety Management System (TSMS) Discovery Issues Kent Roberts Schwabe, Williamson & Wyatt, PC

2. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Subchapter M 46 CFR Subchapter M Notice of Proposed Rulemaking, 76 Federal Register, No. 155, August 11, 2011, Docket Number USCG-2006-24412 Final Rule – August 2015 ???

3. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 3

4. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.

5. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.

6. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 1994 – AWO Responsible Carrier Program 1994 – IMO International Safety Management Code – Safety Management Systems for inspected vessels in international trade

7. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 2008: Mel Oliver/Tintomara collision “Caused by human error of the sort that might have been prevented by robust adherence to a safety management system.”

8. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Marine Transportation Act of 2004 46 USC § 3301 “Vessels Subject to Inspection:... (1) Freight vessels... (15) Towing vessels

9. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 46 CFR Subchapter M Part 136 – CERTIFICATION This part sets out the applicability for Subchapter M and describes the requirements for obtaining and renewing a towing vessel Certificate of Inspection (COI). Part 137 – VESSEL COMPLIANCE procedures to demonstrate compliance with Subchapter M - USCG Inspection or TSMS with third party audits 9

10. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 46 CFR Subchapter M Part 138 – TOWING SAFETY MANAGEMENT SYSTEMS (TSMS) Prescribes requirements for owners or managing operators of towing vessels who adopt a Towing Safety Management System (TSMS) to comply with the requirements of this subchapter. Part 139 – THIRD-PARTY ORGANIZATIONS Requirements applicable to approved third-party organizations that conduct audits and surveys for towing vessels and TSMS. 10

11. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. 11

12. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Sample: ISM SMS Non-Conformance Report Provide a factual description of the incident: Immediate corrective action steps taken to remedy the problem: Analyze/identify the key factors/causes of the issues [“Why Tree” or “TapRoot”]: List proposed preventative actions: Evaluation by vessel and management leadership:

13. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. U.S. Coast Guard Report on ISM - SMS Implementation SMS Documents are for promoting safety of life and property at sea, and protection of the environment. But: Records generated through SMS may demonstrate negligent acts and “legal actions could hinge on SMS documentation.”

14. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Discovery and Confidentiality Safety management systems create ordinary business documents subject to discovery ISM code safety management system documentation – generally subject to discovery

15. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Hooke v. Foss Maritime Company 2015 AMC 400 SMS forms sought in discovery: Internal Incident Investigation Report Lessons Learned summary Event Information System (EIS) Report EIS Report Witness Statements

16. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Judge Spero SMS documentation prepared as standing operating procedure: SMS documentation not prepared “because of” litigation, not protected by work-product privilege Standing policy to forward SMS reports to Claims Department does not create work- product privilege

17. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Hooke distinguishes investigations directly conducted by and overseen by counsel Involvement of counsel may not protect documents generated through normal operation of TSMS (incident reports, witness statements, remedial actions on TSMS forms) Contrast KBR 756 F.3d 754 – investigation directed by attorney subject to attorney-client and work product privilege if “one of the significant purposes” is to obtain or provide legal advice

18. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.

19. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. U. S. vs. Tug SUNDIAL and Barges; Tidewater Barge Lines, Inc., Sept. 2012 Government suit to recover the cost of repairs to a lock and gate on allision with a flotilla of barges propelled by the tug SUNDIAL.

20. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.

21. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.

22. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Government’s motion to compel production of all documents regarding any investigation conducted by, or on behalf of, Tidewater into the incident giving rise to this litigation.

23. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. AWO Responsible Carrier Program (“RCP”). Tidewater incident investigation procedure to “identify immediate and underlying causes, so that steps can be taken to prevent reoccurrences.” Tidewater’s safety manual two levels of reports. An Initial Incident Report A more detailed Incident Detail Report

24. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Investigation led by Tidewater’s counsel. Tidewater “more-detailed-than-usual” Initial Incident Report “included all the elements of a typical” Incident Detail Report. Tidewater used TapRoot analytic system “in order to prepare for the claim that Tidewater recognized was sure to come.” The Government claims an Incident Detail Report does exist and is cloaked as the TapRoot analysis on Tidewater’s privilege log.

25. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Court ruling: any document produced in the TapRoot investigation is protected by the work- product privilege doctrine. (1) Tidewater had never used the TapRoot software prior to outside lawyer recommending it. (2) the TapRoot investigation goes beyond what the RCP requires of an AWO member carrier. Government’s motion to compel is DENIED.

26. www.schwabe.com Bend, OR | Eugene, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C. Takeaways: SMS manual - address option of attorney led, privileged casualty investigation Option of alternative level investigations, initial SMS reporting, then detailed risk dept. and counsel investigation Challenge: USCG audit and certification