Punitive Damages Are Recoverable Under The General Maritime Law For Willful And Wanton Failure To Pay Maintenance And Cure
June, 2009
by Kimbley A. Kearney and Daniel R. Bryer
In Atlantic Sounding Co., Inc. v. Townsend, 557 U.S. ___ (2009), the United States Supreme Court held that punitive damages are a remedy for the willful and wanton failure to pay maintenance and cure.
Facts
Maintenance and cure concerns a vessel owner's obligation to provide food, lodging, and medical services to a seaman injured while serving the ship. Edgar L. Townsend claimed Atlantic Sounding, Inc., the owner of the tugboat on which he worked, wrongfully denied him maintenance and cure after he fell on deck, injuring his arm and shoulder. Atlantic Sounding thereafter filed an action for declaratory relief regarding its obligations with respect to maintenance and cure. Townsend filed his own suit under the Jones Act and general maritime law, alleging negligence, unseaworthiness, arbitrary and willful failure to pay maintenance and cure, and wrongful termination.
The District Court consolidated the cases, and Atlantic Sounding moved to dismiss Townsend's punitive damages claim. The District Court denied the motion, holding that, under Eleventh Circuit precedent, punitive damages are available in an action for maintenance and cure. On interlocutory appeal, the United States Court of Appeals for the Eleventh Circuit upheld the District Court's opinion. This placed the Eleventh Circuit in conflict with decisions of the Fifth and Ninth Circuits, see, e.g., Guevara v. Maritime Overseas Corp., 59 F. 3d 1496 (5th Cir. 1995) (en banc); Glynn v. Roy Al Boat Management Corp., 57 F. 3d 1495 (9th Cir. 1995), and the Supreme Court granted certiorari.
Analysis
As an initial matter, the Supreme Court recognized three points central to resolution of the case: (1) punitive damages have long been available at common law; (2) the common-law tradition of punitive damages extends to maritime claims; and (3) nothing in maritime law precludes punitive damages in maintenance and cure cases. Accordingly, the Court concluded that punitive damages were historically available for the willful disregard of maintenance and cure, and Townsend's right to pursue such a cause of action depended on whether Congress had enacted legislation departing from this common-law tradition.
The Court found that the plain language of the Jones Act does not provide a basis for overturning the common-law availability of punitive damages. The Act created a statutory negligence action, but did not eliminate preexisting common law remedies such as maintenance and cure. The Court also concluded that the Act bestows the right to "elect" to bring a Jones Act claim, thereby indicating a choice of actions for seamen-not an exclusive remedy.
Atlantic Sounding argued that the Supreme Court's decision in Miles v. Apex Marine Corp., 498 U.S. 19 (1990), forecloses a seaman's recovery for punitive damages. In Miles, the Court held that non-pecuniary damages are not available in an action for the wrongful death of a seaman under the Jones Act or Death on the High Seas Act ("DOHSA") because neither statute authorizes non-pecuniary relief in a wrongful death action. Atlantic Sounding contended that Miles should be read to preclude recovery of punitive damages in any action brought by a seaman against an employer or vessel owner because punitive damages are non-pecuniary damages. The Townsend court declined to read Miles so broadly.
The Jones Act and DOHSA created a maritime law remedy for wrongful death when none existed under the general maritime law. Miles limited the remedies available for maritime wrongful death to what Congress specifically authorized in the Jones Act and DOHSA.
While noting that Miles remains good law, the Townsend court found the reasoning there to be inapplicable to the issue of whether punitive damages are available for the willful disregard of maintenance and cure obligations. In contrast to Miles, both the general maritime right Townsend sought to assert (maintenance and cure) and the remedy he sought (punitive damages) were well established before the Jones Act's passage. Unlike the situation in Miles, Townsend's relief was not dependent on statute. As such, an action for maintenance and cure is not a subject on which Congress has spoken directly or sought to place limitations. For these reasons, the Court concluded that there has not been a departure from the general common-law understanding that punitive damages are an available remedy for the willful and wonton failure to pay maintenance and cure.
Learning Point: Prior to Townsend, a significant number of admiralty courts declined to award punitive damages for failure to pay maintenance and cure based on Miles. It is now imperative that marine employers and vessel owners vigilantly comply with maintenance and cure obligations to avoid exposure for punitive damages. Examples of willfulness meriting sanctions include (1) laxness in investigation of the claim; (2) termination of benefits in response to the seaman's retention of counsel or refusal to settle; (3) failure to reinstate benefits after a change in medical circumstance or new diagnosis; and (4) refusing or terminating benefits without compelling medical support from a qualified physician.
For more information contact Kimbley A. Kearney at kkearney@clausen.com and Daniel R. Bryer dbryer@clausen.com
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