United States: Recent Developments In Maritime Punitive Damages

Last Updated: June 25 2014
Article by David G. Meyer and Kate B. Belmont

In 2009, in Atlantic Sounding Co., Inc. v. Townsend, the Supreme Court "sea tossed" the law of maritime damages when it held that punitive damages are recoverable for an employer's willful and wanton failure to provide a seaman with maintenance and cure benefits.1 557 U.S. 404, 407-08 (2009). By doing so, Townsend put an end to almost twenty years of near certainty that punitive damages were not available in maintenance and cure claims. To some, Townsend also signaled a shift away from the "uniformity principle" approach to maritime damages as set forth in Miles v. Apex Marine, 498 U.S. 19 (1990).

Generally stated, the Miles uniformity principle holds that if a category of damages is unavailable under a maritime cause of action established by statute, it is similarly unavailable for a parallel claim brought under general maritime law. Because the Jones Act prohibits non-pecuniary damages, and punitive damages are considered non-pecuniary, the Miles uniformity principle was subsequently applied by lower courts to preclude punitive damages claims by seamen for all causes of action, including maintenance and cure claims.

Since Townsend, courts throughout the U.S. have recognized the availability of punitive damages in maintenance and cure claims. However, because the Supreme Court's holding in Townsend only expressly dealt with maintenance and cure, the more difficult question has been whether and to what extent the reasoning in Townsend might authorize punitive damages in other maritime causes of action, despite the Miles uniformity principle. Some courts have recently exhibited a willingness to find that Townsend allows for the recovery of punitive damages for a wider range of general maritime law claims beyond simply maintenance and cure. Unseaworthiness claims in particular have drawn interest, as such claims are routinely alleged in Jones Act and other maritime personal injury lawsuits, and like maintenance and cure claims are based in general maritime law and pre-existed the enactment of the Jones Act.

By way of background, a seaman has a claim under the general maritime law for injuries caused by the unseaworthiness of a vessel, and this claim is independent from a claim under the Jones Act for an employer's negligence. The duty of a vessel owner to provide a seaworthy vessel is an absolute non-delegable duty; the duty imposes liability without fault. A ship is seaworthy if the vessel, including her equipment and crew, is reasonably fit and safe for the purposes for which it was intended to be used. Unseaworthiness is not a fault-based standard; a plaintiff must show, however, that the unseaworthy condition "played a substantial part in bringing about or actually causing the injury and that the injury was either a direct result or a reasonably probable consequence of the unseaworthiness." After Miles and prior to Townsend, it was reasonably settled that punitive damages were not recoverable for unseaworthiness claims. Following Townsend, however, courts have been more willing to recognize the recoverability of punitive damages in unseaworthiness actions.

In one early post-Townsend case, the United States District Court for the Eastern District of Louisiana refused to allow a Jones Act plaintiff to amend his complaint to assert a claim for punitive damages under the Jones Act and general maritime law unseaworthiness based on well-established precedent, and specifically declined to extend Townsend beyond its limited holding. See Rogers v. Resolve Marine, 2009 U.S. Dist. LEXIS 91423 (E.D. La. September 11, 2009). However, shortly thereafter in 2010, the District Court of Hawaii extended the principles established in Townsend and held that Townsend had reaffirmed the Ninth Circuit Court of Appeals' 1987 decision in Evich v. Morris, 819 F.2d 256, which allowed punitive damages under general maritime law claims for unseaworthiness. See Wagner v. Kona Blue Water Farms, LLC., 2010 AMC 2469 (D.Hi. 2010). Similarly, in 2012, the Eastern District of Missouri also followed the analysis in Townsend and held that punitive damages are available under the general maritime law for unseaworthiness claims. See In re Complaint of Osage Marine Services, Inc., 2012 WL 709188 (E.D. Mo. March 5, 2012).

Perhaps the most significant development came in October 2013, when the Fifth Circuit Court of Appeals, which includes almost all of the U.S. Gulf Coast states, issued its decision in McBride v. Estis Well Service, L.L.C., 731 F.3d 505 (5th Cir. 2013). McBride involved wrongful death and multiple personal injury claims arising out of a drilling rig collapse that occurred in Louisiana's coastal waters. The plaintiffs filed suit against Estis, the employer and owner of the vessel at issue, asserting causes of action for unseaworthiness under the general maritime law and negligence under the Jones Act and sought to recover compensatory as well as punitive and/or exemplary damages. Estis successfully moved to dismiss the claims for punitive damages, arguing that punitive damages are not an available remedy for unseaworthiness or Jones Act negligence as a matter of law. Recognizing that the issues presented were "the subject of national debate with no clear consensus," the district court granted the plaintiffs' motion to certify the judgment for immediate (interlocutory) appeal.

The principal question presented on appeal was whether seamen may recover punitive damages for their employer's willful and wanton breach of the general maritime law duty to provide a seaworthy vessel. After a lengthy and detailed discussion of the history of punitive damages in maritime cases through Townsend, the Fifth Circuit concluded that punitive damages were available in such cases. The court summarized its reasoning as follows:

"To give effect to that principle, Townsend established a straightforward rule going forward: if a general maritime law cause of action and remedy were established before the passage of the Jones Act, and the Jones Act did not address that cause of action or remedy, then that remedy remains available under that cause of action unless and until Congress intercedes. Estis does not dispute that the rule's premises are satisfied in this case: the cause of action (unseaworthiness) and the remedy (punitive damages) were both established before the passage of the Jones Act, and the Jones Act did not address that cause of action or remedy, then that remedy remains available under that cause of action unless and until Congress intercedes."

Just four months after issuing the McBride opinion, the Fifth Circuit granted a motion for rehearing en banc, which rarely occurs and which had the effect of withdrawing and vacating the prior opinion. See McBride v. Estis Well Serv., L.L.C., 743 F.3d 458 (5th Cir. 2014). It remains to be seen what the Fifth Circuit will do on rehearing. However, at least two U.S. District Court judges have relied on the initial McBride opinion to hold that punitive damages are available in unseaworthiness actions for "willful and wanton conduct" by the shipowner in the creation or maintenance of the unseaworthy conditions. See Ainsworth v. Caillou Island Towing Co., Inc., 2013 WL 6044376 (E.D. La. Nov. 14, 2013); and, Stowe v. Moran Towing Corp., 2014 WL 247544 (E.D. La. Jan. 22, 2014) ("Of course, punitive damages are available as a remedy to seamen under the general maritime law claim of unseaworthiness.").

There is no question that Townsend has "reinvigorated the debate" as to the availability of punitive damages in maritime cases. As a result, maritime practitioners and their clients will continue to have to deal with the uncertainty surrounding punitive damages in the post-Townsend world of maritime litigation. This uncertainty can become particularly troubling when dealing with, for example, inexperienced plaintiff's attorneys, marginal claims, and/or cases involving high-profile or "sensational" incidents/accident, all of which might generate a tendency to overemphasize the threat of punitive damages as leverage. Accordingly, while the courts continue to struggle with the issue, maritime practitioners must continue to monitor developments in order to be able to guide their clients to safety through the confused seas left in Townsend's wake.

Footnote

1 A claim for maintenance and cure concerns the vessel owner's obligation to provide food, lodging, and medical services to a seaman injured while serving the ship. Subject to certain defenses, this obligation arises without regard to fault, and benefits must be provided until the seaman reaches maximum medical recovery or improvement ("MMI"). Maintenance benefits provide the equivalent of a seaman's food and lodging on the ship, and recent court opinions have approved daily maintenance rates from $30 up to $45 per day.

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