April 14, 2015
Historical Context of Maritime Law Is in the Eye of the Beholder
by Michael A. Orlando
This article was originally posted at http://www.irmi.com/expert/articles/2014/orlando10-insurance-maritime-law.aspx
With 5 separate opinions divided between the 15 sitting circuit judges for the en banc Fifth Circuit Court of Appeals, understanding the basis for the holding of McBride v. Estis Well Serv. LLC, 768 F.3d 382 (5th Cir. 2014), is as clear as the brackish waters of Bayou Sorrel, a navigable waterway in Louisiana where the incident occurred.
There, a truck-mounted drilling rig sitting on a barge toppled over, killing one and injuring three other rigs’ hands, all of whom were Jones Act seamen. The Jones Act negligence and unseaworthiness claims against the employer, Estis Well Service, were consolidated, and on motion by Estis to dismiss the claims of punitive damages, the district court did just that, certifying the order for immediate appeal, stating as the basis that the issues were the subject of national debate with no clear consensus.
The holding of the en banc Fifth Circuit Court of Appeals was that punitive damages are not available under the Jones Act or for general maritime law unseaworthiness claims whether the claims are for wrongful death or just personal injuries. In the author’s opinion, the trial court judge was and remains correct—there was and still is no consensus as concerns the reasons that inform the decision on punitive damages for injured seamen, principally because of the debate over historical context. While a number of cases from the 1800s are central to such debate, this court’s disagreement was over two fairly recent US Supreme Court cases.
The representative of the estate of the decedent and the three personal injury crewmen filed separate suits, all alleging claims under general maritime law for unseaworthiness and for Jones Act negligence, seeking compensatory and punitive damages. The suits were consolidated on motion of the plaintiffs, and Estis filed a motion to dismiss the punitive damages claims, which the court treated as a motion for judgment on the pleadings. The court dismissed the punitive damage claims, which went up on an interlocutory appeal. A panel of the Fifth Circuit reversed the trial court, concluding that the decision was controlled by Atlantic Sounding Co., Inc. v. Townsend, 557 U.S. 404 (2009), which held that punitive damages are available in a maritime claim for maintenance and cure.
The Fifth Circuit granted rehearing en banc to determine whether the case was instead governed by Miles v. Apex Marine Corp., 498 U.S. 19 (1990). The explicit holding by the en banc court is clear enough: it reversed the panel and affirmed the district court that punitive damages are not allowed under the Jones Act negligence or the general maritime law unseaworthiness claims for the wrongful death or the personal injury claimants. The reasoning for how the court got there is as clear as mud, leaving no doubt that historical context of this topic under maritime law is in the eye of the beholder.
Five Differing Opinions, Explanations, and Reasonings
Incredibly, only 2 of the 15 judges (J. Davis and J. Southwick) on the en banc court agreed to the sole explanations as stated in the principal opinion of the court. Five circuit judges felt the need to have a separate concurring opinion “to further explain the historical background mandating this result.” Two additional judges concurred in the judgment of the court and in the reasoning in the majority opinion with regard to the death claim but not the reasoning with regard to the injury claims. (Thus, only a plurality of seven judges stood by the reasoning of the court’s judgment with regard to the injury claimants, leaving room for continued debate, at least outside the Fifth Circuit, with regard to injury claimants until there is further decision by the US Supreme Court or an act of Congress.) Six judges would reverse the trial court, two of whom separately dissented to amplify the dissenting opinion’s observation that extending the Miles pecuniary damages limitation to the injury claimants compounded the error in the majority decision.
The majority opinion concluded that Miles limited a seaman’s recovery to pecuniary losses where liability is under the Jones Act or unseaworthiness, and because punitive damages are non-pecuniary losses, such damages are not recoverable as a matter of law. The reasoning is as follows.
Judicial power in admiralty cases is delegated by the Constitution to the federal government in general terms. General maritime law became embedded federal law, but the US Supreme Court determined long ago that Congress has paramount power to fix and determine maritime law. Congress enacted the Jones Act in 1920, extending to seamen the same negligence remedy as afforded railroad workers under the Federal Employers Liability Act (FELA). This provided seamen the right to sue their employers for negligence for personal injury or wrongful death. In essence, Congress imported FELA into the Jones Act so the law as it existed interpreting FELA at the time of the enactment of the Jones Act became the framework for interpreting the Jones Act. Prior to passage of the Jones Act, the US Supreme Court interpreted damages under the FELA (which allows for the unmodified term “damages”) to mean pecuniary damages, but the case so stating was a wrongful death case brought by the relatives of a decedent (Michigan Cent. R.R. Co. v. Vreeland, 227 U.S. 59 (1913), reversing the trial court judgment because it contained loss of society and companionship damages).
This court found the facts in Miles to be squarely on point with the wrongful death claim. There were three significant holdings relevant to this case from the Miles case: (1) general maritime law provided no recovery for wrongful death until the decision in Moragne v. States Marine Lines, Inc., in 1970, 398 U.S. 375 (1970), which granted such right to the survivors of a longshoreman killed in state waters; (2) Miles extended the rule to a seaman’s survivors; and, (3) the Miles court limited the damages recoverable to pecuniary loss, thus denying recovery for loss of society. This court then went into an extensive analysis of Miles, concluding, “Thus, the Miles court established ‘a uniform rule applicable to all actions for wrongful death of a seaman, whether under DOSHA, the Jones Act or the general maritime law.’” Id. at *2.
The court then noted that the Jones Act applies to both injury and death claims so long as they are based on the negligence of the employer. Importantly, the court then noted that even though Miles was a wrongful death action, no one has suggested why its holding and reasoning would not apply to an injury case such as those asserted by the crew in this matter. It pointed out that no case under FELA has allowed punitive damages, whether for personal injury or death. It further noted that no cases have awarded punitive damages under the Jones Act. Therefore, reasoned the court, it follows from Miles that the same result flows when a general maritime law personal injury claim is joined with a Jones Act claim: Miles’s conclusion that Congress has struck the balance for us in determining the scope of damage applies to personal injury actions as well as wrongful death cases. The majority opinion thus held that the Miles case controlled and resolved the question presented in this appeal.
The court then distinguished the Townsend case, which allowed punitive damages for the willful failure to pay maintenance and cure. The majority opinion stated that the Townsend court distinguished its facts from Miles and reaffirmed that Miles is still good law. The court then undertook a discussion of what is included within pecuniary losses and concluded that punitive damages do not fit under the caselaw as a subset of pecuniary loss.
Circuit Judge Clement’s concurring opinion joined in the majority opinion but was filed separately to explain the historical background mandating the result. The explanation contained three main points: (1) the US Supreme Court jurisprudence does not require punitive damages in unseaworthiness cases; (2) Merry Shipping and its ilk are poor guidelines; and (3) the historical evidence suggests that punitive damages were not available in unseaworthiness actions. The Clement concurring opinion concluded that the court should be cautious before signing off on an aggressive expansion of punitive damages in the unseaworthiness context. It noted that insurance might not be available and increased costs on shippers would be passed along to consumers. “In light of the potentially sizable impact, this court should not venture too far and too fast in these largely uncharted waters without a clear signal from Congress.” Id. at *12.
Circuit Judge Haynes also wrote a concurring opinion, in which he and Circuit Judge Elrod concurred in the judgment and concurred in the reasoning expressed in the majority opinion with respect to the wrongful death claims but disagreed with the conclusion that the outcome for the death claims dictated the outcome for the personal injury claims. This concurring opinion stated the belief that the wrongful death action remedy has been one that is specifically designed and fashioned by the legislature. “It is therefore entirely logical as matter of legal history (though not as a matter of social policy) that the family of a deceased seaman might not be able to recover punitive damages for his death, while the surviving injured seaman could.” Id. at *13.
This concurring opinion went on to explain the belief that it could not use the court’s “gap-filling” common law to fashion a remedy in the seaman’s personal injury arena because the court did not have the power to do so. The opinion concluded that Congress is the more appropriate body to consider the competing policy concerns on a punitive damages remedy. In essence, this concurring opinion stated that allowing for recovery of punitive damages in the context of this case would be an expansion of a remedy that is a subject best left to Congress. In short, the two judges on this concurring opinion did not believe that Miles answered the question presented in this appeal with regard to the personal injury claimants, but they agreed in the judgment denying the remedy at present until it is squarely decided by the US Supreme Court or Congress speaks on it.
Six circuit judges joined in the principal dissenting opinion. The dissent reasoned that the trial court should be reversed and punitive damages allowed because the Supreme Court has said that punitive damages are recoverable and Congress has not said they are not. This opinion goes through its own perspective that punitive damages have historically been allowed even though not designated as such and have been available and awarded in general maritime actions. The dissenting opinion cited cases dating all the way back to The Amiable Nancy from 1818.
In the discussion portion of the principal dissent, the issue was framed as, “[T]he crux of this dispute lies in the parties’ competing theories of statutory displacement of general maritime law.” Id. at *20. The dissent argued that the cause of action of unseaworthiness predated passage of the Jones Act and that punitive damages were an available remedy in that the Jones Act does not address unseaworthiness or limit its remedies. The dissent further argued that Jones Act claims and unseaworthiness claims are not the same, whereas the majority decision believed them to be Siamese twins.
The dissent also argued that the broader point in Townsend was that the laudable quest for uniformity in maritime cases does not require the narrowing of available remedies to the lowest common denominator approved by Congress for distinct causes of action. Most of the dissenting opinion was a discussion of its authors’ belief that punitive damages were available under the general maritime law cause of action for unseaworthiness before the Jones Act was enacted, and therefore the remedy remained available for the personal injury claimants.
The dissenting judges did not believe that interpretation of the Jones Act negligence claim precluded non-pecuniary damages under a general maritime negligence claim for unseaworthiness—that is, that those two types of claims are not Siamese twins. The dissent strongly argued that Townsend allows a general maritime law claim for punitive damages unless Congress enacts legislation departing from such common law understanding. “Congressional silence therefore is oppositely dispositive, and even under the majority opinion’s broadened interpretation of Miles, reversal would be warranted as to the injured seamen, Suire and Touche.” Id. at *26.
The Higginson dissenting opinion concluded, “[L]ike maintenance and cure, unseaworthiness was established as a general maritime claim before the passage of the Jones Act, punitive damages were available under general maritime law and the Jones Act does not address unseaworthiness or limit its remedies. I would conclude that punitive damages remain available to seamen as a remedy for the general maritime law claim of unseaworthiness until Congress says they do not.” Id. at *26.
Circuit Judge Graves, joined by Circuit Judge Dennis, filed a separate dissenting opinion joining in the principal dissent in full but writing to amplify the observation that extending the Miles pecuniary damages limitation to the injured crewmembers in this case compounded the error in the majority opinion. This opinion argued that, at the time of passage of the Jones Act, wrongful death claims were distinguishable from personal injury claims under FELA, and the pecuniary damages limitation applied only to wrongful death claims. This separate dissent concluded, “[T]here is no justification for applying the pecuniary damages limitation, a creature of wrongful death statutes and caselaw, to injured seaman seeking recovery for their own injuries. Even if the pecuniary damage limitation is applicable in this case it must apply only to McBride, a survivor of a decedent seaman asserting wrongful death claims, and not to Touche, Suire, and Bourque who assert unseaworthiness and Jones Act claims based on their own injuries.” Id. at *32.
There is an interesting split within the en banc court. Clearly, 9 of the 15 circuit judges believed that Miles controlled the wrongful death claim in this case, leaving no room for doubt on that decision. However, only seven of the judges believed that the Miles case was also determinative of whether the personal injury claimants are also precluded from asserting punitive damages claims. Two of the judges on the majority side of the judgment, writing in their separate concurring opinion, did not believe that Miles was determinative of that issue and instead believed that such decision must be made by the US Supreme Court or Congress because, based on historical context, seamen generally have not recovered punitive damages for unseaworthiness, and the circuit court should not be the one to extend the law here.
Thus, seven Judges believed Miles did extend the pecuniary damages limitation to the injured crew members; two judges disagreed with such reasoning, but those two disagreed with the dissenting opinion that the Townsend case affirmatively provided that punitive damages are available for a claim brought under general maritime law for unseaworthiness. Had the two in the middle been persuaded that “the historical context” favored the view that punitive damages were available under general maritime law prior to the passage of the Jones Act such that what they were being requested to do was not an extension of such damages to the personal injury claimants, this decision could have easily come out the other way. When a circuit court, sitting en banc, cannot agree on which side of the aisle historical context falls on an issue as important as punitive damages for personal injury claimants who qualify as seamen, it is hoped that the US Supreme Court or Congress will act to provide greater clarity in the interest of uniformity.
****Note, these are my personal views and are not attributable to the firm in general or any of its clients.****