Fifth Circuit Reverses Itself on Punitive Damages

The U.S. Fifth Circuit Court of Appeals recently released a 73-page opinion in the en banc rehearing of McBride v. Estis Well Service, L.L.C., No. 12-30714 (5th Cir. Sept. 25, 2014).  As reported previously, the court originally ruled that seamen may be able to recover punitive damages for their employers’ willful and wanton breach of the general maritime law duty to provide a seaworthy vessel.  In this opinion, the Court affirmed the district court’s ruling that punitive damages are not available under general maritime law for a seaman’s unseaworthiness claim.

In so ruling, the majority opinion reiterated the “uniform rule” of Miles v. Apex Marine Corp., 498 U.S. 19 (1990) that a seaman’s recovery for personal injury or wrongful death under the general maritime law is limited to pecuniary damages.  The McBride opinion makes clear that this limitation on damages applies to both Jones Act negligence and unseaworthiness claims.  The Court reasoned that this decision was made by Congress when it expressly prohibited non-pecuniary damages in the Death on the High Seas Act, and when it incorporated the damages limitations of the Federal Employers’ Liability Act into the Jones Act.

In Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009), the U.S. Supreme Court ruled that punitive damages are available to a seaman when his employer arbitrarily and capriciously fails to pay maintenance and cure.  The McBride opinion distinguishes Townsend by noting that a seaman’s action for maintenance and cure is “independent and cumulative” from his claims for Jones Act negligence and unseaworthiness:  “the seaman may have maintenance and cure and also one of the other two.”

Concurring Opinion Highlights Risks Created by Punitive Damages

In a lengthy concurrence written by Judge Clement, the Court attacked the notion that punitive damages had traditionally been available for a breach of the warranty of seaworthiness.  (By comparison, it is the opinion of the dissenting judges that punitive damages are a traditional maritime remedy.)  The concurring opinion further cautions that “aggressive expansion of punitive damages in the unseaworthiness context” may cause “increased costs on shippers [that] will be eventually passed along to consumers.”

Until the U.S. Supreme Court joins the discussion, McBride makes clear that punitive damages are not available for unseaworthiness within the Fifth Circuit.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.