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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In Vessel Owner’s Limitation of Liability Act Case in Federal Court, Injured Claimant Need Not Stipulate to Owner’s Right to Seek Exoneration
In two unrelated Vessel Owner’s Limitation of Liability Act (46 U.S.C. § 30501, et. seq.) cases decided the same day, a Wheeling, West Virginia-based federal judge ruled in Complaint of: Bellaire Harbor Service, LLC, 2013 U.S. Dist. LEXIS 117991 (N.D. W. Va. Aug. 20, 2013) and In re Campbell Transportation Co., 2013 U.S. Dist. LEXIS 117992 (N.D. W. Va. Aug. 20, 2013), that the vessel owners were seeking more than the general maritime law entitled them to in attempting to require the injured claimants–both Jones Act seamen–to stipulate, in order to resume their West Virginia state court lawsuits, that the vessel owners were entitled to litigate the issue of exoneration from liability, in addition to the issue of limitation of liability, in federal court. The Court wrote:
“If courts required an exoneration stipulation prior to lifting the stay on a case, courts would be ‘enlarg[ing] shipowners’ rights under the Limitation Act and abridg[ing] claimants’ rights under the savings to suitor clause’….This Court agrees with the Fifth Circuit’s explanation and analysis of the issue. Thus, again this Court finds that the claimants need not stipulate to the plaintiffs’ right to litigate the exoneration issue in this Court. The claimants’ stipulation to the plaintiffs’ right to litigate all issues related to the limitation of liability, along with the claimants’ other stipulations, is sufficient for this Court to lift the injunction on the state court action and grant the motion to stay this action.”
The Court also held in the cases:
- The husband and wife claimants’ stipulation that the claims of the injured husband will have irrevocable priority over the claims for damages of the wife transformed the case into the functional equivalent of a single claimant case, protecting the vessel owner while allowing the claimants to pursue their state court action;
- The claimants are not required to agree to limit damages to the value of the vessel and its attending freight, nor are they required to stipulate to the precise amount of the limitation fund, or rather the precise amount of the vessel owners’ interest in the vessel and freight; and
- It was improper to determine [at this early stage] whether the claimants’ maintenance and cure claim was subject to the Vessel Owners’ Limitation of Liability Act.
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Employer Blocked in Attempt to Require Injured Seaman to Litigate Maintenance and Cure Claim in Federal Court
In Parker Drilling Offshore USA LLC v. Lee, 2013 U.S. Dist. LEXIS 100271 (W.D. La. June 6, 2013), a federal Magistrate Judge recommended that Parker Drilling’s Declaratory Judgment Act suit against its Jones Act seaman employee, Andrew Lee, be dismissed in deference to Lee’s later-filed Texas state court suit against Parker Drilling. In the federal case, Parker Drilling sought “a judgment declaring (1) that Lee is not entitled to additional maintenance and cure since his back/leg complaints did not manifest in the ‘service of the vessel’ and predate his alleged accident, (2) that Lee is not entitled to maintenance and cure benefits based on the alleged willful concealment of a pre-existing condition and the applicability of McCorpen v. Central Gulf S.S. Corp., 396 F.2d 547 (5th Cir. 1968), and (3) that Parker acted in good faith toward Lee and its actions have not been ‘arbitrary, capricious or callous.'”
Parker Drilling’s Rig 50-B, upon which Jones Act seaman Andrew Lee allegedly sustained a lower back injury
Parker Drilling filed its federal court suit less than three months after Lee’s alleged accident aboard Parker Drilling Rig 50B, which was then operating in Louisiana coastal waters. Lee claimed he injured his lower back in the accident. Lee filed his Texas state court suit, which sought damages for his injuries under the Jones Act (for negligence) and under the general maritime law (for unseaworthiness and maintenance and cure), just a few days after Parker Drilling filed its federal suit.
The federal Magistrate Judge noted that while the federal court had jurisdiction to hear Parker Drilling’s case, it also had discretion under the Declaratory Judgment Act to abstain from exercising jurisdiction over Parker Drilling’s case. Magistrate Judge Hanna found the questions in controversy between the parties could be better settled in the state court action and that the federal court action did not serve a purpose beyond duplicating the claims of the parties. Specifically, the Magistrate Judge found:
- Parker Drilling’s McCorpen defense to Lee’s maintenance and cure claim could be “fully litigated” in Lee’s Texas state court action and that it has long been held that “[w]here a maintenance and cure claim is joined with Jones Act negligence and unseaworthiness claims, the seaman should be allowed to try all of the claims together.”
- Parker Drilling could have reasonably anticipated Lee’s state court suit given his accident and Parker’s suspension of maintenance and cure payments to him.
- Even though Lee had not filed his Texas state court suit by the time Parker Drilling filed its federal action, Parker’s federal court suit came early — less than three months after Lee’s accident (“While the plaintiff is not required to wait indefinitely for the defendant employee to act, the Fifth Circuit has cautioned that using a declaratory judgment action to race to res judicata or to change forums is inconsistent with the purposes of the Declaratory Judgment Act.”).The fact Lee had not yet filed his state court suit by the time Parker Drilling filed its federal court suit was not dispositive (“It is a well-settled principle that the real or traditional plaintiff Lee (the party who was allegedly injured) is entitled to choose his forum, and that choice is ‘highly esteemed’…. Lee’s Texas suit was filed two days before he filed the Motion to Dismiss in this court. He chose the Texas state court forum, although he is a resident of Mississippi and worked for Parker in Louisiana. The [Texas state court] forum is nevertheless appropriate, since the record demonstrates that Parker is a Texas-based corporation and venue would be proper in Harris County. To allow this [federal] case to go forward would effectively deny Lee his choice of forum on the general maritime law claim for maintenance and cure.”).
- While Parker Drilling argued the federal court in the Western District of Louisiana was more convenient for both parties and witnesses, the court found: “The Louisiana federal court forum may be a more convenient venue which would favor maintaining the action in this court. However, in considering and deferring to Lee’s choice of forum and the judicial economy of having all matters in controversy heard by one court, which can occur in the Texas forum, the undersigned finds that [this] factor weighs in favor of dismissal.”
Magistrate Judge Hanna concluded:
“…the interests of fairness and judicial efficiency are better served if the declaratory judgment action is dismissed. This finding is consistent and in accord with other cases addressing similar issues in dismissing an employer’s preemptive declaratory judgment action regarding maintenance and cure benefits in a maritime personal injury case ….. The interests of comity, judicial economy and deference to the traditional plaintiff’s choice of forum weigh in favor of allowing the Texas court to adjudicate the entirety of this dispute.”
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Lead Mate Aboard Towboat Secures $621K Judgment for Shoulder Injury in Ratchet Accident
Deckhands working with a ratchet on the line deck of a jumbo hopper barge
Quincy Allen was employed by American River Transportation Co. (“ARTCO”) as lead mate aboard the ARTCO towboat, the M/V SCARLETT GEM, a fleet boat on the lower Mississippi River. While assisting in the removal of a barge from the tow of an AEP River Operations, LLC towboat near ARTCO’s Kenner Bend Fleet, Allen sustained a serious shoulder injury. The AEP deckhand assisting Allen kicked loose the coupling on the barge by releasing the pelican hook on a ratchet while the line was under strain. Unbeknownst to the two workers, the wire was kinked and, when it was released, it recoiled and caught Allen’s arm, injuring his shoulder. Allen testified he had specifically instructed the AEP deckhand to warn him before kicking loose the pelican hook, should that become necessary, but, the Court found, the AEP deckhand failed to do so.
Allen’s orthopedic surgeon performed a right shoulder bursectomy, subacromial decompression, distal clavicle resection, and labral debridement. After an attempt to return to work, Allen was required to undergo another surgery to repair a degenerative tear of the proximal biceps with an intact superior labral complex and some fraying of the biceps tendon. The treating surgeon opined that Allen continued to suffer from residual stiffness and pain in his right shoulder and that Allen would be unable to return to heavy-duty work aboard a towboat, that he was permanently restricted to light duty work. Allen settled his claims against his employer, ARTCO, and tried to resume work for fear if he did not he would lose his job, but was physically unable to do so. He then brought suit against AEP.
Following a nonjury trial, the New Orleans-based federal judge found AEP liable in negligence under the general maritime law due to the actions of its deckhand, Allen not liable to any extent, and that Allen was entitled to pain and suffering damages of $150,000, medical damages of $45,048, and past and future lost earnings damages of $426,866. The case is reported at Allen v. AEP River Operations, LLC, 2013 U.S. Dist. LEXIS 89797 (E.D. La. June 25, 2013).
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