Supreme Court To Determine Availability Of Punitive Damages In Unseaworthiness Actions

Sara Kuebel
Sara Kuebel
Jeff Tillery
Jeff Tillery

By Jefferson R. Tillery and Sara B. Kuebel, Jones Walker LLC

Due to a circuit split between the U.S. Court of Appeals for the Fifth Circuit and the U.S. Court of Appeals for the Ninth Circuit, the U.S. Supreme Court must determine the availability of punitive damages for unseaworthiness actions—a decision poised to impact the entire maritime industry.

In Batterton v. Dutra Group, the Ninth Circuit held that a seaman could pursue punitive damages against his employer. The case stems from an incident in which Christopher Batterton, a seaman, was working on a vessel owned by Dutra Group. The vessel lacked an exhaust mechanism to relieve pressure in a compartment. This buildup of pressure caused a hatch cover to suddenly open and crush Batterton’s left hand. When the plaintiff sought punitive damages for his injury, the lower court found that the lack of an exhaust mechanism rendered the vessel unseaworthy. The vessel owner moved to strike the recovery of such damages, but the court denied this motion.

On appeal, the vessel owner relied on the 2014 en banc decision of the Fifth Circuit in McBride v. Estis Well Service LLC. In that case, the Fifth Circuit held that a Jones Act seaman could not recover punitive damages under the Jones Act or for unseaworthiness based upon the Supreme Court’s 1990 decision in Miles v. Apex Marine Corporation. Moreover, the vessel owner argued that Miles implicitly overruled the earlier Ninth Circuit decision Evich v. Morris, in which the court held that a seaman’s survivors could recover punitive damages for unseaworthiness.

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The Ninth Circuit disagreed with the vessel owner, citing the Supreme Court’s 2009 decision in Atlantic Sounding Co. v. Townsend. In Townsend, the court determined that a seaman could recover punitive damages for an employer’s arbitrary and capricious withholding of maintenance and cure payments. Thus, because “there is no persuasive reason to distinguish maintenance and cure actions from unseaworthiness actions with respect to damages awardable,” the Ninth Circuit held a seaman could pursue punitive damages for unseaworthiness. Dutra Group appealed the Ninth Circuit’s decision and the Supreme Court granted writs on December 7, 2018.

In the face of this circuit split, a decision by the Supreme Court will resolve a number of discrepancies in the overlapping application of the Jones Act and general maritime law as it relates to punitive damages. But a decision that affirms the Ninth Circuit’s ruling will result in irreversible and lasting consequences for the maritime industry and upset a century of precedent.

If a seaman suffers injury due to a condition aboard the ship, the seaman may pursue a Jones Act negligence claim against his employer or an unseaworthiness claim against the vessel owner. Unseaworthiness is a strict liability claim that imposes liability even if the vessel owner had no knowledge of the condition. In today’s industry, the Jones Act employer typically owns the vessel, thus the two claims overlap. In fact, it is rare that the circumstances of an injury constitute unseaworthiness, but not negligence. It is well-settled that a seaman may not recover punitive damages from his employer under the act.

The imposition of punitive damages requires a showing of willful, or reckless conduct. Accordingly, to levy punitive damages against the vessel owner, would require the vessel owner’s knowledge of an unseaworthy condition and conscious choice to ignore it. This standard also implicates the Jones Act employer’s duty to exercise reasonable care in providing a safe place to work. Thus, because the two claims are theoretically impossible to separate, and the Jones Act disallows punitive damages—they should remain unavailable for unseaworthiness.

Moreover, the imposition of punitive damages will disrupt maritime commerce. Like all businesses, maritime industry participants are willing to engage in commerce provided they have the ability to purchase and enforce risk protection. Punitive damages are generally uninsured risks—as risks increase, maritime actors could attempt to shift the risk amongst each other, ultimately, increasing costs downstream. This downstream effect could negatively impact maritime commerce, and possibly even other industries. With the U.S. domestic maritime industry accounting for more than 648,000 jobs and $154.8 billion in economic output, the financial implications of the court’s decision are substantial.

Although the arguments for overturning the Ninth Circuit’s decision in Batterton remain viable, it is impossible to predict how the Supreme Court will rule. No matter the outcome, the decision will have major implications for vessel owners and seamen alike.

Jeff Tillery is a partner with Jones Walker’s Maritime Practice Group. He helps maritime and marine industry clients prevent and resolve a broad range of disputes. For more than 30 years, Jeff has advised and represented clients in maritime personal injury and collision matters, commercial litigation, longshore matters, and marine insurance coverage disputes.

Sara B. Kuebel is an associate with Jones Walker LLP in the firm’s Maritime Practice Group. Sara advises clients in a broad range of disputes with a concentration in maritime litigation, including allisions and collisions, claims under General Maritime Law, the Jones Act, the Longshore and Harbor Workers’ Compensation Act, and the Outer Continental Shelf Lands Act.