Storm-And-Blue-Lightining-At-Sea

By Tod Everage

Since the U.S. Supreme Court’s ruling on the availability of maritime punitive damages claims in Atlantic Sounding v. Townsend, 557 U.S. 404 (2009), maritime plaintiffs have fought tirelessly to see where else they can carve out from under the Jones Act’s prohibition from punitive damages. Recall that in Townsend, the Supreme Court recognized that a claim for failure to pay maintenance and cure was one based in general maritime law that pre-existed the Jones Act. To that end, Townsend clarified that Miles v. Apex Marine, 498 U.S. 19 (1990) does not actually provide for a complete bar to all punitive damages claims in a maritime setting, as it had been expanded to represent. Though the Supreme Court was clear that Miles is still good law, other related precedents have been under attack.

Most notably, in 2014, the U.S. Fifth Circuit, in McBride v. Estis Well Service, issued an en banc decision seeking to clarify some of the post-Townsend uncertainty in a case where a plaintiff sought to challenge whether Townsend had eroded Miles in an unseaworthiness case. Therein, the Fifth Circuit re-affirmed Miles’ holding that the Jones Act only provides for pecuniary damages against a Jones Act employer for negligence or unseaworthiness. As in Townsend, the Fifth Circuit distinguished between a seamen’s remedies for compensatory damages based on negligence and unseaworthiness and a general maritime claim for maintenance and cure. To the satisfaction of maritime employers everywhere, the U.S. Supreme Court denied writs in McBride. The availability of punitive damages in the wake of McBride was more fully addressed in a previous post.

Though recent decisions from the Eastern District of Louisiana have generally maintained the holding of Townsend and Miles, limiting the availability of punitive damages to cases involving bad faith failure to pay maintenance and cure benefits, the attacks continue. This article focuses on the future of U.S. Fifth Circuit’s Scarborough v. Clemenco Indus., 391 F.3d 660 (5th Cir. 2004) decision in the wake of Townsend.

Scarborough was a post-Miles declaration by the U.S. Fifth Circuit extending the prohibition of punitive damages to a Jones Act seaman against a non-employer third party. Simply put, if the seaman is not allowed to claim punitive damages against his employer, why should he be able to claim them from a third party? Scarborough heavily relied upon the U.S. Fifth Circuit’s 1995 decision in Guevera v. Maritime Overseas Corp., 59 F.3d 1496 (5th Cir. 1995), which had expanded Miles to recognize a prohibition of punitive damages even for a failure to pay maintenance and cure claim. Guevera was expressly abrogated by Townsend. Since Townsend eroded the Scarborough’s foundation, the ongoing validity of Scarborough has been scrutinized.

In In re: International Marine, LLC, 2013 WL 3293677 (E.D. La. 6/28/13), the district court dismissed the claimants claims for punitive damages against the third party oil company defendant. The claimants appealed the issue to the U.S. Fifth Circuit, arguing that in the wake of Townsend’s abrogation of Guevera, and the fact that punitive damages were available to a seaman against a third party under general maritime law prior to the Jones Act, Scarborough is no longer valid law. The case ultimately settled days before oral argument. Thereafter, the claimants in In re: Settoon Towing, No. 2014 WL 3778827 (E.D. La. July 29, 2014) filed punitive damages claims against the non-employer third party pipeline owner resulting from a fatal allision between the vessel and the pipeline. The pipeline owner filed a dispositive motion on the issue, but a decision was held in abeyance until the McBride en banc decision was reached. That case too was settled before a formal decision was reached on Scarborough.

More recently, Collins v. A.B.C. Marine Towing, LLC, 2015 WL 5254710 (E.D. La. 9/9/2015) involves a fatal allision between a crane barge and the Florida Avenue lift bridge in New Orleans. Decedent’s widow sued ABC Marine as decedent’s Jones Act employer, alleging negligence under the Jones Act and vessel unseaworthiness, and sued the owner of the crane barge and Board of Commissioners for the Port of New Orleans as the alleged owner/operator of the bridge. Following discovery, Plaintiff amended her Complaint to assert claims of gross negligence against the Board seeking punitive damages. The Board challenged the availability of Plaintiff’s demand for punitive damages under Scarborough.

Judge Fallon issued an opinion denying the Board’s motion, holding that Scarborough was “effectively overruled” by Townsend because Scarborough was founded upon Guevera, and because it is “inconsistent with current Supreme Court precedent.” Following the guidance of Townsend, the Court held that a seaman can recover punitive damages under general maritime law if the Jones Act is not implicated. Further, the Court stated that “if the Jones Act is not implicated, the seaman is treated no differently in his ability to bring a cause of action than a non-seaman.” Going farther, the Court more directly held that in light of Townsend, “it can no longer be stated that Miles applies to a non-pecuniary claim against a non-employer third party.” Thus, as it stands in at least one court in the Eastern District, third party tortfeasors in a maritime case are fair game to defend punitive damages claims for negligence filed by Jones Act seamen. Plaintiff’s punitive damages claims against the Board were later dismissed on the merits, eliminating the possibility that issue would be brought to the U.S. Fifth Circuit.

However, that is not currently a uniform opinion amongst the sections within that same court. In Howard v. Offshore Liftboats, LLC, 2015 WL 7428581 (E.D. La. 11/20/15), Judge Morgan reviewed Judge Fallon’s ruling in Collins, but held that Townsend was clear in that the only available claims for punitive damages for a Jones Act seaman are for failure to pay maintenance and cure, and that the law has not changed with respect to their claims for negligence and unseaworthiness. Further, in Judge Morgan’s opinion, Scarborough remains precedent in the Fifth Circuit. Thus, she dismissed the plaintiffs’ claims for punitive damages against the non-employer third party. Judge Morgan reaffirmed her position four days later in an identical opinion in Lee v. Offshore Logistical and Transports, LLC, 2015 WL 7459734 (E.D. La. 11/24/15).

It is only a matter of time before the U.S. Fifth Circuit will be commenting on the viability of Scarborough. Stay tuned.