The U.S. Fifth Circuit Court of Appeals recently released an opinion concerning a maritime employer’s obligation to pay maintenance and cure benefits. In Boudreaux v. Transocean Deepwater, Inc., 711 F.3d 501 (5th Cir. 2013), the Court tackled what it called a “novel” issue: whether a successful McCorpen defense automatically entitles an employer to restitution of maintenance and cure benefits already paid to a seaman.
Maintenance and Cure
“Maintenance” is a seaman’s right to food and lodging if he falls ill or becomes injured in the service of a ship, while “cure” is his right to necessary medical expenses. Both obligations are owed by the seaman’s employer regardless of any fault or negligence on its part.
However, in McCorpen v. Central Gulf S. S. Corp., 396 F.2d 547 (5th Cir. 1968), the Fifth Circuit provided employers a defense to this maintenance and cure obligation. Under McCorpen, a maritime employer does not owe maintenance and cure if it can establish that a seaman “intentionally misrepresented or concealed a pre-existing medical condition that is material to the employment and is causally connected to the injury allegedly sustained.”
In Boudreaux v. Transocean, seaman–plaintiff Boudreaux failed to disclose serious back problems in his pre-employment medical questionnaire provided by his employer, Transocean. Five months after being hired, Boudreaux claimed to have injured his back while servicing equipment. As a result of this claim, Transocean paid him maintenance and cure for almost five years. A lawsuit was eventually filed, and Transocean successfully proved its McCorpen defense. It thereafter moved for restitution of those benefits already paid.
Court Weighs Conflicting Values
This issue of restitution required the Fifth Circuit to weigh conflicting values “of protecting seamen from the dangers of the sea, and employers from dishonesty.” The Court ultimately refused to allow restitution, noting that such a holding would “mark a significant retreat from our hoary charge to safeguard the well-being of seamen.” However, the Court left open the question of whether restitution is available when the seaman concealed or misrepresented his medical history “with subjective intent to defraud.”
In the opinion’s dissent, Judge Clement argued that a valid McCorpen defense should entitle an employer to restitution “under the fundamental equitable principle that a person who has received something to which he is not entitled . . . must restore it to the person from whom he received it.”
Although the Boudreaux holding precludes a maritime employer from recovering maintenance and cure benefits already paid, the employer can still use these payments as an offset to any Jones Act damages adjudicated against it. Moreover, if a McCorpen defense is successfully asserted, a maritime employer may be entitled to restitution if it can show that the seaman acted fraudulently in his misrepresentations.
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.