Fifth Circuit Holds Punitive Damages Available In General Maritime Law Unseaworthiness Claims

The United States Fifth Circuit Court of Appeals recently joined the national discussion on the availability of punitive damages for an employer’s willful and wanton breach of the general maritime law duty to provide a seaworthy vessel.  The case arose out of an accident aboard a drilling rig where one crew member was killed and three others injured.  The administratrix of the deceased crew member and the other injured crew sued the employer and owner of the rig, Estis Well Service, L.L.C. (“Estis”).  She alleged unseaworthiness under the general maritime law and negligence under the Jones Act.  She also sought “punitive and/or exemplary” damages.  Estis moved to dismiss the claim for punitive damages as being unavailable as a matter of law.  The motion was granted but the judge below, recognizing that the issues presented were “the subject of national debate with no clear consensus,” certified the judgment for interlocutory appeal.

In its opinion, the Fifth Circuit went through a thorough history of the sources of maritime law, the available causes of action, and the attendant remedies.  It observed that punitive damages have historically been available under the general maritime law.  However, in a 1989 Fifth Circuit decision, Miles v. Melrose, 882 F.2d 976 (5th Cir. 1989), the court held for the first time that loss of society damages were unavailable to nondependent parents, reasoning that it would be anomalous for a wrongful death claimant to recover damages for loss of society under the general maritime law even though that claimant could not recover those damages under statutory maritime law.  The following year, the Supreme Court announced a “new age of maritime law” in Miles v. Apex Marine Corp., 498 U.S. 19 (1990) where it recognized that statutory law had become primary, that Congress retained superior authority in admiralty matters, and admiralty courts should look to the relevant statutes for policy guidance.  In Miles, the Supreme Court held that because the Death on the High Seas Act (“DOHSA”) and the Jones Act limited recovery to pecuniary loss, non-pecuniary damages such as loss of society should not be recoverable under a parallel wrongful death action under the general maritime law.

The court explained that Miles did not address punitive damages but did appear to spawn a general principle: “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 the general maritime law.”  This principle was, in turn, extended by lower courts to cover punitive damages claims.  In 1995, the Fifth Circuit held in Guevara v. Maritime Overseas Corp., 59 F.3d 1496 (5th Cir. 1995) that punitive damages were not available in cases of willful nonpayment of maintenance and cure under the general maritime law.  The availability of punitive damages in unseaworthiness claims was not addressed in Guevara.

The extension of the Miles “uniformity principle” was halted in 2009 by the Supreme Court’s decision in Atlantic Sounding Co. Inc. v. Townsend, 557 U.S. 404 (2009)Atlantic Sounding abrogated Guevara and held that the Jones Act was intended to enlarge the protection afforded seaman, not narrow it, and that the Jones Act did not alter the understanding that punitive damages had long been an accepted remedy under the general maritime law.  Reliance on Miles to bar punitive damages was too broad of a reading of a case that only addressed loss of society in maritime wrongful death, not punitive damages in the context of failure to pay maintenance and cure.

In the case presently before the Fifth Circuit, the crew members argued that punitive damages remained available under the general maritime law for unseaworthiness because the cause of action predated the Jones Act, punitive damages were historically available under the general maritime law, and the Jones Act did not address or limit unseaworthiness.  Estis argued along the lines of Guevara that where claimants pursue claims for harm compensable under both general and statutory maritime law, their recovery is limited to the class of damages afforded by the Jones Act and DOHSA.  Because the crew members sought redress for wrongful death and personal injury, types of harm compensable under both general and statutory maritime law, then punitive damages were unavailable.  And although Guevara’s holding that punitive damages were unavailable in the maintenance and cure setting was overruled, its guidance on how to apply the “uniformity principle” from Miles remained intact.

The Fifth Circuit disagreed with Estis, holding that “Townsend abrogated Guevara’s holding because of Guevara’s interpretation of Miles, not in spite of it.”  The court held that the premises of Townsend’s rule—if a general maritime law cause of action and remedy predated 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—were satisfied.  Estis advanced several arguments to distinguish Townsend, including that Townsend dealt with maintenance and cure rather than unseaworthiness.  The court was not persuaded by the arguments advanced by Estis and held that punitive damages remain available to seamen as a remedy for the general maritime law claim of unseaworthiness.  The ruling below was reversed and the case remanded for further proceedings.

Importantly, this decision did not address whether plaintiffs were actually entitled to punitive damages but, rather, whether punitive damages were available as a matter of law.  The case was remanded for further proceedings wherein plaintiffs will have to prove their employer’s willful and wanton breach of the general maritime law duty to provide a seaworthy vessel.

McBride v. Estis Well Serv., L.L.C.,— F.3d —-, 12-30714, 2013 WL 5474616 (5th Cir. Oct. 2, 2013).