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Louisiana Federal Court: Punitive Damages Recoverable Under the General Maritime Law in Longshoreman’s Section 905(b) Case
Since the U.S. Supreme Court’s decision in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009), lower state and federal courts have been grappling with whether punitive damages and other nonpecuniary damage claims (like loss of consortium and loss of society) are available to seamen under the general maritime law, and to longshore and harbor workers in a negligence action against vessel operators under Section 905(b) of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. Section 905(b) (“LHWCA”).
Section 905(b) of the LHWCA states:
“(b) Negligence of vessel. In the event of injury to a person covered under this Act caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 33 of this Act [33 USCS § 933], and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void. If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel. If such person was employed to provide shipbuilding, repairing, or breaking services and such person’s employer was the owner, owner pro hac vice, agent, operator, or charterer of the vessel, no such action shall be permitted, in whole or in part or directly or indirectly, against the injured person’s employer (in any capacity, including as the vessel’s owner, owner pro hac vice, agent, operator, or charterer) or against the employees of the employer. The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under this Act.”
In Callahan v. Gulf Logistics, LLC, 2013 U.S. Dist. LEXIS 133050 (W.D. La. Sept. 16, 2013), U.S. District Judge Patricia Minaldi of the Western District of Louisiana, Lake Charles Division, found, citing the U.S. Supreme Court’s Atlantic Sounding decision, that a longshoreman could recover punitive damages under the general maritime law in a negligence action, and that such damages were not prohibited by Section 905(b) or the Supreme Court’s 1990 decision in Miles v. Apex Marine Corp., 498 U.S. 19 (1990).
Judge Minaldi wrote:
“Further, the Court in Townsend dispensed with the petitioners’ argument that Miles precluded the availability of punitive damages under general maritime law, stating that a reading which interprets Miles as ‘limit[ing] recovery in maritime cases involving death or personal injury to the remedies available under the Jones Act and the Death on the High Seas Act (DOHSA) . . . is far too broad.’ Townsend, 557 U.S. at 418-19 (citing 46 U.S.C. §§ 30301-30306). ‘[B]y providing a remedy for wrongful death suffered on the high seas or in territorial waters, [Miles recognized that] the Jones Act and DOHSA displaced a general maritime rule that denied any recovery for wrongful death.’ Id. at 419 (citing Miles, 498 U.S. at 23-24). Thus, the Court in Miles was tasked only with determining whether statutory maritime law such as the Jones Act and DOHSA expanded the relief previously available under general maritime law. Id. Discussing such relief, the Court notes that punitive damages ‘were well established before the passage of the Jones Act.’ Id. at 420 (internal citations omitted). As such, these were damages previously available as part of general maritime law, and the availability of such damages was not altered by the enactment of § 905(b). Ultimately, the Supreme Court finds that ‘the availability of punitive damages for maintenance and cure actions is entirely faithful to these ‘general principles of maritime tort law,’ and no statute casts doubt on their availability under general maritime law.’ Id. at 421….As a result of the Supreme Court’s recent assertion in Townsend, and its clarification of its holding in Miles, it seems clear that punitive damages are available for actions under general maritime law unless Congress has expressly forbade such availability. This court finds nothing in the language of § 905(b) which could be construed as so limiting the availability of punitive damages in a negligence action under the LHWCA.”
The Court also explained why it was not following a contrary view of at least one other Louisiana federal trial court: “It should be noted that the court is aware that at least one other court in this circuit has reached a contrary conclusion on this issue. See In re: Int’l Marine, L.L.C., 2013 U.S. Dist. LEXIS 91370, 30 (E.D. La. 2013) (holding that under Scarborough v. Clemco Indus., 391 F.3d 660 (5th Cir. 2004), a seaman and his spouse are barred from seeking punitive damages . . . from a non-employer third party.). However, the court therein acknowledged that ‘[t]he reasoning employed in Townsend casts doubt on the continued applicability of Scarborough.’ Id. at 31, n. 10.”
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Vessel Owner Not Entitled to Damages Cap of Limitation of Liability Act When it Fails to Properly Train its Captain and Has Policy of Violating the Rules of the Road
In In Re: BOPCO, L.P., 2013 U.S. Dist. LEXIS 128991 (E.D. La. Sept. 9, 2013), two vessels collided at the intersection of the Back Levee Canal and the Main Canal at Point à La Hache, Louisiana. BOPCO, L.P.’s vessel, the M/V MR. JOE, operated by Captain Tyrell DuPont, collided with crabber Ryk Frickey’s vessel as Frickey was returning from checking his traps. It was a clear day, but the view of the intersection the two vessels was entering was partially obstructed by vegetation and marsh grass. The Court, well-respected U.S. District Judge Helen Ginger Berrigan, found the M/V MR. JOE had an operational radar system, but it was not in use.
A typical marine radar control unit and screen. The vessel owner in this case, incredibly, had a policy that its captains not use radar during the day.
BOPCO filed this lawsuit under the federal Vessel Owners’ Limitation of Liability Act, 46 U.S.C. Section 30501, et seq., seeking to limit its liability to the value of its vessel, $45,000. Frickey, however, was seriously injured in the collision. He was unable to return to work and had to undergo lumbar fusion surgery.
A jury found BOPCO negligent under the general maritime law and awarded damages to Frickey. It found BOPCO 75% at fault, Frickey 25%. Judge Berrigan, in this decision, addressed whether BOPCO was entitled under the Limitation of Liability Act to limit its damages exposure to Frickey to the $45,000, which was the value of its vessel. The Court described the burden on a vessel owner in these circumstances:
“The Limitation of Liability Act provides that a vessel owner may limit its liability after an accident to the value of the vessel and pending freight….Despite this, if ‘the vessel’s negligence or unseaworthiness is the proximate cause of the claimant’s loss, the [defendant]-in-limitation must prove it had no privity or knowledge of the unseaworthy conditions or negligent acts.’…Privity or knowledge is understood to be complicity in the fault that caused the accident….Privity or knowledge is imputed to a shipowner if he personally participated in the negligent conduct or brought about the unseaworthy condition….A corporation has knowledge of the negligent act if its managing officers knew or should have known about conditions or accidents likely to cause the loss….The corporation may be found to have knowledge if the negligent condition could have been discovered through reasonable diligence….The corporation must overcome a presumption that its officers and managers had actual knowledge, and that they should have known of the negligent condition that caused the harm….The burden of proving lack of privity or knowledge of the negligence by a preponderance of the evidence is on the owner of the vessel seeking to limit its liability.”
In this case, BOPCO argued to the Court that the accident occurred soley because of navigational or other errors of its captain—that is, acts of negligence of which it could not have had privity to or knowledge of, and that it had done all it had to do by hiring a competent captain. Judge Berrigan disagreed. She found BOPCO’s Captain DuPont “did not make a decision not to operate the radar because he thought it would be a better idea to use binoculars.” Rather, the Court held, “DuPont followed BOPCO’s policy not to operate the radar system on a clear day in the channel.” (emphasis added) Thus, Judge Berrigan found BOPCO had privity or knowledge of the accident’s causes and thus could not limit its liability under the Limitation of Liability Act because BOPCO “(1) failed to train DuPont, and (2) not only failed to require the use of radar, but had a policy stipulating that radar should not be used in conditions such as those on the day of this accident.”
Specifically, the Court wrote: “While DuPont knew that he was required to follow the Rules of the Road, and had a general knowledge of what he thought the rules were, his idea of the Rules of the Road was clearly hazy, and this led him not to follow the Rules, which led to the collision….The Court agrees with Frickey that it was not enough for BOPCO’s safety manual to require a vessel operator to know and obey the Rules of the Road. BOPCO needed to train DuPont on the Rules. It was required to do due diligence to know that DuPont had not received past training, and BOPCO’s lack of due diligence leads to privity or knowledge of the accident that ensued as a result of DuPont not receiving proper training.”
On the policy of BOPCO to not require use of radar during the day, the Court was highly critical. Judge Berrigan wrote:
“BOPCO was required to use its radar. Fernandez explained that the reason he tells his men not to turn the radar on during the day is that it is ‘almost looking like at a video game while you’re driving.’ Fernandez said that he would prefer for his captains to have their eyes on the waterways. BOPCO made its decision to tell its captains not to use radar during the day in contravention of the Rules of the Road. The Court does not understand how radar could be distracting during the day, but not during the night. Additionally, people drive with GPS devices all the time, and while they may be distracting, they are considered to be more helpful than they are distracting. A device, such as radar, that is not just helpful, but also a tool to ensure greater safety, is surely more of a help than it is a hindrance. Under Judge Learned Hand’s theory, the burden of taking the precaution to use radar is certainly less than the probability of the accident multiplied by the injury. It was negligent for BOPCO not to use the radar, and BOPCO propagated the negligence through a policy. Even Fernandez admitted that there is no harm in using radar on a bright, sunny day.”
Since BOPCO was not entitled to the cap afforded by a successful invocation of the Limitation of Liability Act, Judge Berrigan held it responsible for Frickey’s damages, as follows: (A) $258,571.78 for medical expenses, past and future; (B) $50,250.00 for loss of earning capacity, past and future; (C) $153,750.00 for physical pain and suffering, past and future; and (D) $367,500.00 for mental anguish and emotional distress, past and future.
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