Appeals court allows recovery of punitive damages for unseaworthiness claim

Appeals court allows recovery of punitive damages for unseaworthiness claim
February 14 2018 http://www.internationallawoffice.com/Newsletters/Shipping-Transport/USA...

Introduction

In Batterson v Dutra Group 15-56775 (Ninth Circuit, January 23 2018) the Ninth Circuit held that punitive damages are available to seafarers who sustain injuries from unseaworthy conditions under the general maritime law. In doing so, it rejected the Fifth Circuit's decision in McBride v Estis Well Service (768 F3d 382 (Fifth Circuit 2014 (en banc))), stating that "[t]he Fifth Circuit's leading opinions in McBride are scholarly and carefully reasoned, but so are the dissenting opinions, which to us are more persuasive". Given the clear split between the circuits, the Supreme Court now has the opportunity to resolve the issue.

Facts

The Ninth Circuit noted that it had previously held in Evich v Morris (819 F2d 256, 258 (Ninth Circuit 1987)) that "[p]unitive damages are available under general maritime law for claims of unseaworthiness, and for failure to pay maintenance and cure". Therefore, it was bound by precedent unless Evich was clearly irreconcilable with Miles v Apex Marine Corp (498 US 19, 22 (1990)). However, the court stated that it would reach the same conclusion as the Supreme Court had in Atlantic Sounding v Townsend, even if it were not bound by Evich.

The court recognised that if it had read Miles in isolation, it may have agreed with the Fifth Circuit's decision. However, the Ninth Circuit drew support from Townsend and the dissenting opinions in McBride:

"Six dissenters note that Miles 'addressed the availability of loss of society damages to non-seamen under general maritime law, not punitive damages,' and that 'Townsend announced the default rule that punitive damages are available for actions under the general maritime law (such as unseaworthiness).'"

The Ninth Circuit recognised that in Miles it was held that non-pecuniary damages were not available to those who qualify as 'seafarer' under the Jones Act, and its own precedent suggested that punitive damages were non-pecuniary in nature. In response to this incongruity, it suggested that Miles' juxtaposition of the terms 'pecuniary' and 'non-pecuniary loss' was in reference to loss of society, not punitive damages. Since Miles did not involve a claim for punitive damages and Townsend did, the court relied on the Supreme Court's comments in Townsend to hold that punitive damages were available in unseaworthy claims.

Comment

Allowing punitive damages for unseaworthiness but not negligence seems illogical. Unseaworthiness is a type of strict liability. Liability may be imposed without regard to the vessel owner's knowledge of the unseaworthy condition. However, the difference between strict liability and negligence is knowledge. A situation in which a vessel owner is aware of a danger and fails to correct it constitutes negligence for which no punitive damages can be awarded. However, if the vessel owner has no knowledge of an unseaworthy condition – such as the violent disposition of a crewman who stabbed his co-worker to death, thus rendering the vessel unseaworthy as a matter of law, even after a jury had found to the contrary (eg, Miles) – the Ninth Circuit's decision would support the award of punitive damages. The decisions appear to suggest that if an owner knows but does nothing, it is immune from punitive damages; yet, if an owner knows nothing, it may still be subject to punitive damages if the unseaworthy condition is sufficiently egregious in the opinion of the court. While this seems irreconcilable, the Supreme Court will soon clarify this matter.