Atlantic Sounding v. Townsend (08

Oral argument: Mar. 2, 2009

Appealed from: United States Court of Appeals, Eleventh Circuit (August 23, 2007)

MARITIME LAW, JONES ACT, PUNITIVE DAMAGES, WORKER'S COMPENSATION

Edgar L. Townsend, a seaman, was injured while working aboard his ship. His employers refused to supply him with maintenance and cure, which covers medical care and wages for injured seamen, in violation of the Jones Act, 46 U.S.C. § 688, and general maritime law.  Townsend sought punitive damages for this refusal. Townsend's employers sought declaratory relief on the punitive damages claim, arguing that Miles v. Apex Marine Corp., 498 U.S. 19 (1990), prohibited all claims of punitive damages under general maritime law, because they are not specified in the Jones Act, and because punitive damages are non-pecuniary. The United States Court of Appeals for the Eleventh Circuit ruled that while Miles's reasoning is meant to provide uniformity in the application of the Jones Act and general maritime law, the holding of Miles addressed only loss of society damages in a wrongful death suit; it did not address punitive damages in a maintenance and cure claim. Therefore, the Eleventh Circuit held that they were still bound by their prior ruling in Hines v. J.A. LaPorte, Inc., 820 F.2d 1187 (11th Cir. 1987), which specifically allows for the recovery of punitive damages. There is currently a circuit split on the issue, as the First, Fifth, and Eleventh Circuit Courts have awarded punitive damages as a remedy for failure to provide maintenance and cure, while the Second, Third, and Ninth Circuit Courts have applied the Miles uniformity principle and awarded only pecuniary damages. The Supreme Court's holding in this case will settle the circuit split and decide whether courts may award punitive damages in maintenance and cure claims.

Question presented

May a seaman recover punitive damages for the willful failure to pay maintenance and cure? The Eleventh Circuit's decision below holds in the affirmative, but conflicts with the Second, Third, Fifth and Ninth Circuits as well as two state courts of last resort, the reasoning of Miles v. Apex Marine Corp., 498 U.S. 19 (1990), and Vaughan v. Atkinson, 369 U.S. 527 (1962).

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Issue

Can a seaman recover punitive damages if he is injured on the job and his employer refuses to pay for his medical treatment and lost wages?

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Facts

Edgar L. Townsend was a seaman and crew member on a ship called the Motor Tug Thomas. See Atl. Sounding Co. v. Townsend, 496 F.3d 1282, 1283 (11th Cir. 2007). Townsend alleges that he slipped and fell on the ship, and injured his shoulder and clavicle when he landed on the steel floor. See id. Townsend claims that Atlantic Sounding Co., Inc., and Weeks Marine, Inc. ("Weeks Marine"), his employers on the ship, refused to provide him with maintenance and cure, "which covers medical care, a living allowance, and wages for seamen who become ill or are injured while serving aboard a vessel." Id. Weeks Marine then filed suit for declaratory relief, asking the court to determine whether or not Weeks Marine was obligated to provide Townsend with maintenance and cure. See id. at 1283-1284. Afterward, Townsend filed suit against Weeks Marine under the Jones Act, 46 U.S.C. § 688, and general maritime law, "alleging negligence, unseaworthiness, arbitrary and willful failure to pay maintenance and cure, and wrongful termination." Id. at 1284. Townsend then filed the same claims as counterclaims in the declaratory judgment action and further sought punitive damages on his maintenance and cure claim. See id.

The United States District Court for the Middle District of Florida consolidated the two suits, and Weeks Marine sought to strike or dismiss Townsend's claim for punitive damages. See Atl. Sounding Co., 496 F.3d at 1284. The district court denied the motion, finding that they were bound by the United States Court of Appeals for the Eleventh Circuit's ruling in Hines v. J.A. LaPorte, Inc. See id.; Hines v. J.A. LaPorte, Inc., 820 F.2d 1187 (11th Cir. 1987). In Hines, the Eleventh Circuit found that "both reasonable attorney's fees and punitive damages may be legally awarded" when a ship owner refuses to pay maintenance and cure. Hines, 820 F.2d at 1189.

On interlocutory appeal of the district court's denial of Weeks Marine's motion to strike or dismiss Townsend's claim for punitive damages, the Eleventh Circuit considered the question of whether it "may depart from [its] prior ruling in Hines, based on the U.S. Supreme Court's intervening decision in Miles v. Apex Marine Corp." as it relates to whether punitive damages may be recovered in maintenance and cure claims, and concluded that it could not. See Atl. Sounding Co., 496 F.3d at 1284; Miles v. Apex Marine Corp., 498 U.S. 19 (1990). The Supreme Court concluded in Miles "that there is no recovery for loss of society in a general maritime action for the wrongful death of a Jones Act seaman." Miles, 498 U.S. at 33. In reaching its conclusion, the Court reasoned that "[i]t would be inconsistent . . . to sanction more expansive remedies in a judicially created cause of action in which liability is without fault than Congress has allowed in cases of death resulting from negligence." Id. at 32. Consequently, the Court denied the recovery sought and declared "a uniform rule applicable to all actions for the wrongful death of a seaman, whether under . . . the Jones Act, or general maritime law." Id. at 33. Weeks Marine reasoned that Townsend cannot recover punitive damages, because they "are non-pecuniary in nature--under the Jones Act" and thus prohibited by Miles. Atl. Sounding Co., 496 F.3d at 1285. However, the Eleventh Circuit ruled that "this argument can only be based on the reasoning of the Miles opinion, not on the Miles decision [and] its holding" because "Miles says and--more important--decides nothing about maintenance and cure actions or punitive damages." Id. at 1285-86. Therefore, the Eleventh Circuit ruled that the Miles decision did nothing to alter the applicability of Hines or provide a basis for the Eleventh Circuit to depart from its precedent. See id. at 1286.  

Weeks Marine appealed to the U.S. Supreme Court, which granted certiorari to determine whether a seaman may recover punitive damages for the willful failure to pay maintenance and cure.

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Discussion

The Jones Act, 46 U.S.C. § 688, provides a civil right of action for seamen injured or killed while working at sea as a result of an accident caused by the seaman's employer. The United States Court of Appeals for the Eleventh Circuit found that punitive damages may be recovered by an injured seaman for his employer's willful failure to pay maintenance and cure, which covers medical care and wages, citing their prior precedent in Hines v. J.A. LaPorte, Inc. See Atl. Sounding Co. v. Townsend, 496 F.3d 1282, 1286 (11th Cir. 2007); Hines v. J.A. LaPorte, Inc. 820 F.2d 1187 (11th Cir. 1987). However, three years after Hines, the Supreme Court, in Miles v. Apex Marine Corp., declined to extend a remedy not articulated by Congress in the Jones Act, and reasoned that there should be uniformity in maritime law. See Miles v. Apex Marine Corp., 498 U.S. 19, 32-33 (1990).

Petitioners Atlantic Sounding Co., Inc., and Weeks Marine, Inc. ("Weeks Marine") argue that Miles' uniformity principle excludes the possibility of awarding punitive damages for a willful failure to pay maintenance and cure. See Brief for Petitioner Atlantic Sounding Company, Inc. and Weeks Marine, Inc. at 4, 7, 19. Respondent Edgar L. Townsend argues that the holding in Miles applies only in the context of suits involving wrongful death, as it says nothing on the subjects of maintenance and cure and punitive damages. See Brief for Respondent Edgar L. Townsend at 26-28.

Sailors' Union of the Pacific ("SUP"), arguing in favor of Townsend, appeals to maintenance and cure's status as an "ancient duty" of ship owners, recognized by all maritime nations. Brief of Amicus Curiae Sailors' Union of the Pacific ("SUP") in Support of Respondent at 5-6. SUP argues that limiting recovery to attorney's fees would "not constitute a sufficient deterrent" for shipowners inappropriately denying maintenance and cure to an injured sailor, and that such capped awards "are likely to be too small an inducement" for lawyers to want to represent injured seamen", thus discouraging an injured seaman from pursuing litigation in the first place. Id. at 16-17.

Cruise Lines International Association ("CLIA"), arguing in favor of Weeks Marine, does not deny that it is a ship owner's "ancient duty . . .  to provide maintenance and cure." Brief of Amicus Curiae Cruise Lines International Association ("CLIA") in Support of Petitioner at 28. However, CLIA notes that this duty is not unconditional. Id. For example, a crew member[‘s] failure to disclose prior material medical facts" or failure "to follow physician recommendations" could provide a proper defense for a ship owner who refuses maintenance and cure on such a basis. Id. at 29. CLIA is concerned that "a rule permitting punitive damages . . . [would have] a chilling effect on the assertion of such valid defenses." Id.

SUP characterizes CLIA's argument as "absurd," and claims that CLIA "provides no instances or authorities to support" it. Id. at 34. Furthermore, Port Ministries International ("PMI") warns that "[t]aking away the risk of a punitive damage award[s] . . . will only make the shipowners bolder in their violation of the rights of seafarers", whom they describe as "wards of the sea." Brief for Amicus Curiae Port Ministries International ("PMI") in Support of Respondent at 6, 18. PMI compares a seaman's "life at sea" to "modern slavery," noting that they are subjected to "[p]oor or unsafe living conditions, unpaid wages, long hours of work . . . [and] little or no job security." Id. at 9. In light of these bleak circumstances faced by seamen, PMI claims that "[p]unitive damages are one of the few weapons available to get shipowners to do what they are supposed to do." Id. at 21-22.

American Waterway Operators, et al. ("AWO") believes that the Eleventh Circuit's decision is inconsistent with the concepts of uniformity and predictability in federal admiralty law, and that Congress and the Court have found that "such inconsistency does not serve the interests of seamen, vessel operators, or the courts that must decide their disputes." Brief of Amicus Curiae American Waterway Operators, et al. ("AWO") in Support of Petitioners at 9. AWO also cites separation of powers concerns, claiming that "the courts are not free to expand the remedies provided by Congress in the Jones Act . . .  under general maritime law." Id. at 11.

The Circuit Courts are currently split on whether a court may award punitive damages for an employer ship owner's willful failure to pay maintenance and cure. The First, Fifth, and Eleventh Circuit Courts have awarded punitive damages, while the Second, Third, and Ninth Circuit Courts have applied the Miles uniformity principle and awarded only pecuniary damages. In deciding this case, the Supreme Court may resolve this circuit split by reiterating the uniformity principle espoused by Miles to prohibit the award of punitive damages in maintenance and cure claims, or may allow them on the basis of statutory silence on the issue and uphold the facts in Hines as falling outside the holding of Miles.

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Analysis

The Jones Act, 46 U.S.C. § 688 ("Jones Act") provides a civil right of action for seamen injured or killed while working at sea when the accident occurred as a result of negligence by the employer. See Brief for Petitioner Atlantic Sounding Company, Inc. and Weeks Marine, Inc. at 2. The Death on the High Seas Act, 46 U.S.C. § 762 ("DOHSA") provides that if the seaman dies, his or her personal representative may bring a civil action in admiralty courts against the employer for pecuniary losses sustained by the seaman's loved ones. See id. at 3. Petitioners Atlantic Sounding Co. and Weeks Marine, Inc., ("Weeks Marine") appeal the decision of the Eleventh Circuit Court of Appeals, holding that Respondent Edgar L. Townsend ("Townsend") may recover punitive damages for his employer Weeks Marine's willful failure to pay for a form of worker's compensation existing under general maritime law: maintenance and cure. See id. at 3-6. Maintenance and cure provides medical care, living allowances, and lost wages for injured seamen. See id. The Eleventh Circuit held that it was bound by its holding in Hines v. LaPorte, Inc. that seamen may recover punitive damages if their employers willfully fail to pay maintenance and cure. See id. at 5. However, the Eleventh Circuit decided Hines before the Supreme Court's decision in Miles v. Apex-Marine Corporation. See Miles v. Apex-Marine Corp., 498 U.S. 19 (1990).  Weeks Marine argues that Miles establishes a rule that remedies available for general maritime causes of action must be consistent under the Jones Act and DOHSA, and that non-pecuniary damages, such as punitive damages, are not available under either act. See Brief for Respondent, Edgar L. Townsend at 2-3.

The Scope of Remedies Available For Maintenance and Cure Cases Varies According to the Scope Accorded to the Rule in The Osceola and The Iroquois  

The Supreme Court first recognized a right to recover maintenance and cure for seamen injured at sea in two cases in 1903 and 1904, The Osceola and The Iroquois.  See Brief for Petitioner at 7-8.  According to Weeks Marine, neither case mentioned anything beyond awarding compensatory damages for a seaman's right to maintenance and cure. See id. at 8. The scope of the maintenance and cure remedy was subsequently expanded in 1962, when, in Vaughn v. Atkinson, the Supreme Court expanded the remedy of maintenance and cure to include a successful petitioner's costs of attorney's fees. See id. at 9 (citing Vaughn v. Atkinson, 369 U.S. 527 (1962)).

However, Townsend argues that the right to maintenance and cure is an ancient part of maritime common law. See Brief for Respondent at 2. Townsend also places special emphasis on the independent development of punitive damages, indicating that they have long existed as a distinct remedy used by the courts to both punish and deter conduct involving "moral turpitude." See id. at 5; 3-7. Townsend notes that punitive damages are not created by statute, but are well established principles in common law. See id. at 4. Thus, according to Townsend, The Osceola and The Iroquois represented common law enactments of the ancient right to maintenance and cure-not an exhaustive outline of remedies available for it. See id. at 8.

Split in Opinion Develops After the Supreme Court Affirms the Right to Award Attorney's Fees as a part of Maintenance and Cure

Weeks Marine cites "confusing language" in the Vaughn dissent as the reason for subsequent splits of opinion over whether punitive damages can be included as a remedy in a maintenance and cure case. See Brief for Petitioner at 10. In the dissent, Justice Stewart noted that traditional concepts of the law of damages would permit the jury to award "exemplary damages" for "wanton and intentional disregard" of the seaman's right to maintenance and cure. See id. (citing Vaughn v. Atkinson, 369 U.S. 527 (1962)). Weeks Marine notes that although the First and Fifth Circuit Courts have taken the reference to "exemplary damages" in the dissent as cause to believe seamen can recover both attorney's fees and punitive damages for the willful failure to pay maintenance and cure, neither court has explained why "a dissenting opinion authorized a lower court to create a new remedy not contemplated by settled law referenced in prior Supreme Court decisions [such as The Osceola and The Iroquois]." See id. at 12. Weeks Marine argues that Vaughn should be recognized not for its dissenting dicta, but for its majority holding-where the Court declined to expand the scope of damages for willful failure to pay maintenance and cure to cover anything more than attorney's feesSee id. at 12.  

Townsend adopts the reasoning employed by the Second Circuit Court of Appeals, and argues that both the majority and minority opinions in Vaughn believed that punitive damages ought to be an available remedy in maintenance and cure cases, but, since the issue of attorney's fees-not punitive damages-was before the Court in Vaughn, the majority exercised judicial restraint by speaking only to the issue of attorney's fees before them. See Brief for Respondent at 8. Townsend contends that the Eleventh Circuit's decision in Hines, which held that punitive damages could be awarded for willful failure to pay maintenance and cure, was not based on confusion from Vaughn, but rather reflected an emerging consensus among the Circuits that both attorney's fees and punitive damages could be awarded to make a seaman whole, to deter misconduct by shipowners, and to serve as punishment and as a deterrence mechanism when a shipowner acts with willful disregard for the petitioner's rights. See id. at 11.

The Miles Uniformity Principle and Congressional Intent-Were the Jones Act and DOHSA Intended to Assure Consistency or Expand the Rights of Seamen?

Weeks Marine argues that any ambiguity created by the Vaughn dissent is eviscerated by the clear rule of Miles v. Apex Marine. See Brief for Petitioner at 12-13. In Miles, the Supreme Court held that since the Jones Act and DOHSA allow only for the recovery of pecuniary damages, non-pecuniary damages, such as loss of society, were not recoverable in wrongful death actions based on general maritime law. See id. at 4, 15 (citing Miles v. Apex Marine Corp., 498 U.S. 19 (1990)). Weeks Marine emphasizes Miles' recognition that both the Jones Act and DOHSA were enacted to provide a level of consistency and security by making their rights a matter of public policy, rather than subject to the will of the courts. See id. at 13. The Court reasons in Miles that since the Jones Act and DOHSA were passed to codify seamen's rights into a uniform body of public policy, the acts should both "direct and delimit" the remedies a court awards for seamen's worker's compensation, so that there is a "uniform rule applicable to all actions for the wrongful death of a seaman, whether under DOHSA, the Jones Act, or general maritime law." See id. at 14-15 (citing Miles 498 U.S. at 27, 33). Weeks Marine argues that since a claim for maintenance and cure arises out of the more general right to worker's compensation assured in the Jones Act and DOHSA, and since punitive damages are a form of non-pecuniary damages like the loss of society which was deemed not recoverable in Miles, application of the "uniformity principle" articulated in Miles prohibits the award of punitive damages for a willful failure to pay maintenance and cure. See id. at 4, 7, 19.

Townsend argues that while Miles correctly established a uniform remedy for claims of wrongful death, Weeks Marine inappropriately "jumped the rails" in their reasoning process. See Brief for Respondent at 26. Townsend claims that the Miles reasoning is confined to the context of wrongful death and non-pecuniary damages and does not apply to the concept of maintenance and cure and non-pecuniary damages at issue here. See id. Townsend argues that the Miles uniformity principle applies only in situations directly addressed by Congressional legislation, and neither the Jones Act nor DOHSA spoke directly to the remedies available in suits for willful denial of maintenance and cure. See id. at 29. Townsend argues that under rules of statutory construction, the Court cannot infer from an absence of statutory language governing remedies that Congress meant to decrease a seamen's access to the remedies that a similarly situated individual would have ashore, particularly in an Act designed to enhance seamen's remedies. See id. at 24, 29. According to Townsend, although Weeks Marine assumes punitive and non-pecuniary damages are the same, the courts have always treated them differently. See id. at 3. He points out that punitive damages have always had a separate basis under common law as a way of providing "exemplary" as opposed to compensatory damages.  See id. at 4. As such, Townsend argues that proper consideration of maintenance and cure damages falls under the common law consideration by a federal court, and that if the courts have any problems administering fair results, Congress is free to write legislation that directly addresses the problem. See id. at 3 (citing Exxon Shipping Co. v. Baker, 128 U.S. 2605, 2619 (2008)).

Weeks Marine points out that no body of case law or any Supreme Court decision decided prior to the Jones Act, recognized a right to punitive damages in maintenance and cure cases, and that every other post-Miles circuit court decision confirms that Miles extends beyond its specific holding. See Brief for Petitioner at 21.

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Conclusion

Whether the Supreme Court will decide to allow the recovery of punitive damages for willful failure of a maritime employer to provide maintenance and cure, or whether it will side with Miles v. Apex Marine Corp. in the interest of maintaining consistency of remedies under general maritime law will be determined in this case by how the Court chooses to interpret the scope of its own past decisions. To reach its ultimate conclusion, the Court will have to determine whether The Osceola and The Iroquois merely set forth an ancient right, or whether they defined the boundaries of remedies in maintenance and cure cases. It will clarify whether Vaughn v. Atkinson was just a recognition of the seaman's right to be fully compensated for his losses, decided on the facts of the particular case brought before the Court, or an expansion of the right to compensatory damages for willful failure to provide maintenance and cure. The Court will also have to define the scope of the Miles uniformity rule: whether a uniform body of maritime law is required for all issues related to the Jones Act and the Death on the High Seas Act, or just for those issues specifically addressed by the acts.  The Court's ultimate decision in this case will have substantial ramifications for seamen, who face substantial risk and hardship in their daily lives and rely on the "ancient duty" of shipowners to provide them with maintenance and cure. The Court might consider the possible deterrent effect that punitive damage awards may have on willful violations of this duty by shipowners, but might also balance this consideration with separation of power concerns, and with its stated goal of applying uniformity and consistency in maritime law.

Authors

Prepared by: Michael Selss and Katie Worthington

Edited by: Lauren Buechner

Additional Sources

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