Supreme Court to revisit punitive damage ‘ping-pong’ in maritime claims

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Punitive damages are an extraordinary remedy intended to punish an individual or corporation for gross negligence or willful misconduct. Insurance often does not indemnify for a claim of punitive damages. Thus, an allegation of punitive damages creates a concern, whether real or not. Punitive damages are often limited by state and federal statutes. In the maritime world, the Jones Act — a statute providing remedies for seamen injured in the course of their employment — does not allow a punitive damages award. However, the general maritime law, a form of common law, does not prohibit punitive damages. Then what happens when a Jones Act seaman also alleges a general maritime law claim arising from the same accident and injury?

The Supreme Court recently accepted writs to hear arguments in Batterton v. Dutra Group concerning the availability of punitive damages for a Jones Act seaman alleging a general maritime law cause of action for vessel “unseaworthiness.” Under the general maritime law, a vessel owner owes a strict duty to provide a vessel that is “reasonably fit and safe for its intended use.” This is expected to be one of the major maritime decisions in 2019 and should clarify the scope of personal injury remedies available to Jones Act seamen under the general maritime law.

Batterton was a seaman injured when a hatch cover malfunctioned and crushed his left hand. Batterton’s employer, Dutra, moved to strike Batterton’s prayer for punitive damages under the general maritime law as non-pecuniary, meaning damages that are not a quantifiable money loss. The district court denied Dutra’s motion. Following Evich v. Morris, the 9th Circuit affirmed the district court. In Evich, the court distinguished Jones Act personal injury claims — where punitive damages are not available — and held that “punitive damages are available under general maritime law for claims of unseaworthiness and for failure to pay maintenance and cure.” The 9th Circuit’s Batterton decision is at odds with the 5th Circuit’s holding in McBride v. Estis Well Service, which held that punitive damages are not concurrently available to seamen where Jones Act and unseaworthiness claims are jointly pled arising out of the same facts. In legal terms, the unseaworthiness claim was “derivative” or “related to” the Jones Act claim. Currently, there are ping-pong punitive damage arguments in the 9th and 5th circuit courts involving Jones Act claims joined with general maritime law claims for personal injuries.

Historical context
The Supreme Court in the Exxon Valdez litigation — a case involving an inebriated captain who ran his vessel aground, causing a major oil spill — recognized that punitive damages have been awarded under maritime law since 1763 where gross negligence is found in personal injury and property damage claims. The unresolved issue is the availability of damages that are not related to a loss of profits or income — pecuniary damages — when a Jones Act seaman is injured and alleges related claims under the general maritime law. The Jones Act does not statutorily provide for non-monetary damages, nor does the Death on the High Seas Act (DOHSA). Punitive damages are not monetary losses — non-pecuniary — and serve to punish and deter gross behavior.

In Miles v. Apex Marine, the Supreme Court noted in a wrongful death action that the Jones Act and DOHSA prohibit recovery for non-pecuniary damages in alleged and related general maritime law claims. “It would be inconsistent with this court’s place in the constitutional scheme to sanction more expansive remedies for the judicially created unseaworthiness cause of action,” the court wrote. In Guevara v. Maritime Overseas Corp., the 5th Circuit applied the Miles “uniformity doctrine” to prohibit a Jones Act seaman from recovering punitive damages arising out of an employer’s failure to pay “maintenance and cure.” Maintenance and cure is the amount paid to a seaman who becomes ill or is injured for daily room and board (maintenance) and medical expenses (cure).

However, the Supreme Court overruled Guevara in Atlantic Sounding Co. v. Townsend and allowed a punitive damages award for a Jones Act employer’s failure to pay maintenance and cure. The court reasoned that maintenance and cure was a general maritime law remedy preceding the Jones Act that is independent of the Jones Act, and thus does not affect uniformity of maritime law. In McBride v. Estis Well Service, after reviewing the Jones Act legislative history, an en banc 5th Circuit held that a seaman could not recover punitive damages from an employer for combined and related claims of Jones Act negligence and vessel unseaworthiness.

While the 5th Circuit has broadly interpreted Jones Act legislation and the Miles decision, the 9th Circuit has narrowly construed Miles and held that punitive damages could be awarded in any general maritime law cause of action, whether related to a Jones Act claim or not. Often the Jones Act employer is also the vessel owner who owes the duty of providing a seaworthy vessel. The circuit courts are thus split on how to reconcile Miles and Townsend with respect to the availability of punitive damages to Jones Act seamen with related unseaworthiness claims.

Upcoming deliberations
In 2019, the Supreme Court will be asked whether the Jones Act should be strictly construed to prohibit non-pecuniary damages, such as punitive damages, or to distinguish Jones Act remedies in order to recognize unseaworthiness as a distinct general maritime law cause of action favoring punitive damages. A gray area also should be considered, where an employer’s “operational negligence” creates an unsafe vessel condition and where a Jones Act employer also breaches its duty to provide a “reasonably safe place to work” under the general maritime law. Seaworthiness is the vessel owner’s strict obligation under maritime law — to provide a vessel that is “reasonably fit for its intended use” — compared to the Jones Act employer’s obligation to provide a reasonably safe place to work on a vessel.

There is a fine distinction between a Jones Act employer’s duty to provide a safe place to work and a vessel owner’s duty to provide a vessel that is reasonably fit. The Supreme Court has agreed to review these issues and the need for uniformity under the law when faced with a claim by a seaman alleging both a Jones Act negligence claim and a general maritime law claim for the vessel owner’s failure to provide a seaworthy vessel.

Grady Hurley is a partner at Jones Walker LLP in New Orleans. He is the leader of the law firm’s maritime litigation and arbitration team, and co-chairman of the energy, environmental and natural resources industry sector. Since 1979, he has focused on maritime, oil field and energy litigation.

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