Supreme Court Rules Punitive Damages Not Available on Unseaworthiness Claims

Discussion in 'Commercial Fishermen's Forum' started by Kailua Kid, Jun 24, 2019.

  1. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
    Today, the Supreme Court resolved a long-standing split in the federal circuits by ruling that punitive damages are not awardable to injured seafarers on claims involving a willful and wanton breach of the duty to provide a seaworthy vessel. The decision is Dutra Group v. Batterton, case number 18-266.

    The case does not change the rule that allows punitive damages in maritime cases involving a willful and wanton failure to pay maintenance, cure and unearned wages (crew shares) to injured crew members, or in other maritime cases involving willful and wanton conduct unrelated to the doctrine of unseaworthiness.

    The decision prompted a strong dissent by Justices Ginsberg, Breyer and Sotomayor based on the Supreme Court's earlier decision and reasoning in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009).

    This case matters, including because it reduces the vessel owner's potential liability (exposure) arising from an injury suffered by a member of the crew. Among other things, that reduction of liability should result in lower premiums for protection and indemnity liability policies (i.e., in cheaper insurance).

    Some federal circuit courts of appeals have not been allowing punitive damages in such cases all along; others were doing so, resulting in some large verdicts. The split of authority on the point resulted in uncertainty, and likely has contributed to higher "P&I" insurance premiums. Now that the split in authority has been resolved -- against allowing punitive damages in unseaworthiness cases -- premiums on P&I policies should be lower (especially in some jurisdictions).

    Your insurance broker might not yet be aware of this decision. Letting your broker know about the Supreme Court's ruling today in Dutra Group v. Batterton might help at renewal time.
     
    NightBite and jim like this.
  2. Diesel Jerry

    Diesel Jerry Captain

    Joined:
    Oct 25, 2015
    Posts:
    4,273
    Likes Received:
    2,194
    Occupation:
    Marine Diesel Mechanic and Systems Technician
    Location:
    South Freeport, ME
    Thanks for the info, but can you put it in simple terms. Maybe in a scenario.
     
    steveinak and Genius like this.
  3. Old Mud

    Old Mud Captain

    Joined:
    Sep 9, 2012
    Posts:
    4,204
    Likes Received:
    3,376
    Occupation:
    Retired Fisherman
    Location:
    mid coast Maine
    Boat Make:
    Ho Made
    Jerry, he's a Maritime Lawyer, those Are his simple terms. :)

    Sorry KK i couldn't let that one go by. :)

    You have to remember, you're talking to Fishermen, Boat builders and Mechanics here.

    Oh but Thank you for the info.
     
    stumpstalker, Kailua Kid and Frigate like this.
  4. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
    Happy to explain.

    Before this Supreme Court ruling, depending on which part of the country the accident happened, a crew member hurt while in the service of the vessel could sue his/her employer, the vessel owner and the vessel itself, and potentially recover an amount of money for damages not only for his/her actual losses (lost income, lost future income, pain and suffering, disfigurement, medical expenses, disability and related forced change of lifestyle, etc.) but also for punitive damages (an additional amount of money to punish the vessel owner and or employer for being so careless, reckless, etc. and to discourage others from being so careless, reckless, etc.).

    Because of this new ruling (yesterday), no matter in which part of the country the accident happened (i.e., no matter in which jurisdiction or federal circuit the suit is filed), persons who are injured on vessels (regardless of the type or size of vessel involved) will only be able to sue for actual (we say compensatory) damages -- not punitive damages on top of actual damages.

    There is an important exception to the rule that punitive damages are not available to an injured crew member: Under maritime law, when a crew member falls ill or is injured while in the service of the vessel, that crew member is automatically (unless guilty of certain kinds of bad conduct that directly resulted in the injury or illness) entitled to 1) Maintenance (a daily stipend to cover actual living expenses during the period of recuperation); 2) Cure (medical care until he/she reaches "maximum medical cure," i.e., gets better from the injury or illness); and 3) Unearned Wages through the duration of the voyage or the fishing season or the duration of the crew contract (whether based on crew share, layshare, hourly pay, daily rate, or monthly salary). Again, this tripartite remedy of Maintenance, Cure and Unearned Wages is automatic -- without regard to fault, in the sense that the crew member need not prove the employer was negligent or the vessel was unseaworthy, but only that he/she was employed in the service of the vessel when injured (for example because of equipment failure, defective gear, unsafe method or system, negligence of the owner or operator, etc.) or when the crew member fell ill (heart attack, appendicitis, etc.). This is like "Workers Compensation," sort of, for those who work on boats (except longshoremen, who have a very different set of laws that protect them), but is provided by the vessel owner/employer and or boat insurer rather than by the state. If a crew member falls ill or is injured while in the service of the boat, and the the vessel owner (or his/her insurer) fails to provide Maintenance, Cure and Unearned Wages, the crew member can sue for breach of the duty to provide these three remedies and recover not only the amounts that should have been paid, but also punitive damages plus attorney's fees and costs of suit -- if the vessel owner was willful or wanton about failing to quickly and properly investigate the matter and to pay the three automatic remedies. The availability of punitive damages for wrongful failure to pay Maintenance, Cure and Unearned Wages remains unchanged by yesterday's Supreme Court ruling.

    Obviously, the potential exposure or liability in connection with an injured crew member is enormous, including because the obligation to pay for the medical care and living expenses can continue for a very long time before the injured or ill person reaches maximum medical cure. Nevertheless, by cutting off the possibility of being hit with punitive damages based on a claim of unseaworthiness, the exposure to liability just went way, way down. As noted above, punitive damages still can be awarded based on a willful and wanton failure to pay Maintenance, Cure and Unearned Wages, but that risk is controllable by promptly investigating any claim of injury or illness and then promptly providing any Maintenance, Cure and Unearned Wages that are due.

    In the Dutra Group v. Batterton case, the plaintiff was a deckhand on a scow involved in dredging. He was injured when a hold was being pressurized by other members of the crew. The pressure built up too high and a hatch cover suddenly blew open, crushing Plaintiff's hand between the hatch cover and a bulkhead, causing permanent disability. The trial court ruled that punitive damages would be available based on Plaintiff's claim that the vessel was "unseaworthy" (which in maritime law means that the boat or its equipment, or gear, or operations, or methods, etc. was not squared away) and that the unseaworthy condition caused or contributed to the accident. The vessel owner/employer appealed and the appellate court affirmed the trial court's ruling on that issue. The Supreme Court then took up the case to resolve a split or disagreement among the federal circuit courts of appeals. (Some courts had been allowing punitive damages based on unseaworthiness claims and some had not been allowing such damages in cases involving unseaworthiness). Now, with yesterday's ruling from the Supreme Court, punitive damages based on the doctrine of unseaworthiness will not be allowed anywhere in the country. It is actually a pretty big deal throughout the maritime industry.

    I hope the explanation helps.
     
    Last edited: Jul 10, 2019
    steelguy, Old Mud and Genius like this.
  5. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
    Yup; I know. This stuff is a little hard to put in understandable terms sometimes. You don't really ever want to get me started trying! (Borrrrrrring!!!)
     
    Old Mud likes this.
  6. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
     
    Last edited: Jun 25, 2019
  7. Diesel Jerry

    Diesel Jerry Captain

    Joined:
    Oct 25, 2015
    Posts:
    4,273
    Likes Received:
    2,194
    Occupation:
    Marine Diesel Mechanic and Systems Technician
    Location:
    South Freeport, ME
    Thanks for taking the time to explain all that. It doesn’t involve me directly, but good to know non the less.
     
  8. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
    Happy to help!
     
  9. Old Mud

    Old Mud Captain

    Joined:
    Sep 9, 2012
    Posts:
    4,204
    Likes Received:
    3,376
    Occupation:
    Retired Fisherman
    Location:
    mid coast Maine
    Boat Make:
    Ho Made
    Yes Thanks for taking the time with that explanation. Even I can understand that. With that said i will have to go back and reread it again. :)
     
    steelguy likes this.
  10. jim

    jim Captain

    Joined:
    Jan 4, 2012
    Posts:
    1,024
    Likes Received:
    1,119
    Occupation:
    Retired FDNY, commercial tuna/sword handgear
    Location:
    Rockaway, NY
    Boat Make:
    48ft Dixon
    I understood this part loud and clear....."should result in lower premiums" What are the chances this actually lowers our premiums? I wouldnt bet on it!
     
    jim,
    Old Mud likes this.
  11. Old Mud

    Old Mud Captain

    Joined:
    Sep 9, 2012
    Posts:
    4,204
    Likes Received:
    3,376
    Occupation:
    Retired Fisherman
    Location:
    mid coast Maine
    Boat Make:
    Ho Made

    .Just a guess Jim but i would say about as much chance you have to being the next man to step on the Moon. Just a guess you know. :)
     
    jim likes this.
  12. novivin

    novivin Senior Member

    Joined:
    Mar 29, 2012
    Posts:
    322
    Likes Received:
    97
    Location:
    southcoast, MA
    I could not agree more with Jim’s and Mud’s observations on the chances of lowered premiums.
    The last sub zero day in the unquenchable fires of hell was the last time insurance premiums ever went down that I can remember. Changes in laws or not, I think they will hold.
     
    Old Mud and jim like this.
  13. Keelboater

    Keelboater Captain

    Joined:
    Oct 3, 2013
    Posts:
    4,962
    Likes Received:
    2,884
    Location:
    Clinton Harbor
    Boat Make:
    35' Bruno & Stillman
    To me it sounds like this: No lower premiums (just like taxes), more "cash cows" floating around in the big commercial fleets not being properly maintained as a result of this, and the poor guys working the decks will still come up short on accidents which clearly involve maintenance/seaworthiness issues. Sure it would be nice for Mom and Pop operations to save on premiums because it really adds up over time, however, if this was the intended result it's a joke. I am not a professional mariner and therefore might not fully understand the logic here, but something smells fishy. All we need is a common sense law. There is vessel seaworthiness and there is stupidity. If my 5 year old grand son can tell the difference, I certainly would hope the legal system can................I know, I know..........so what dictates common sense..................and then it just starts all over again with the $$$$ meter running. :mad:
     
    Kailua Kid likes this.
  14. Kailua Kid

    Kailua Kid Senior Member

    Joined:
    Jan 14, 2019
    Posts:
    160
    Likes Received:
    72
    Occupation:
    Maritime Lawyer; Fisherman; USCG Master 50 Ton
    Location:
    Bainbridge Island
    Home Page:
    Boat Make:
    General Marine 26; Klamath 19; Sparkman & Stephens Yankee 38 sloop
    To my eye, the Dutra Group v. Batterton case was "result oriented," in the sense that the majority decided what outcome they wanted, then plotted a course to get to that result (rather than rigorously applying stari decisis, i.e., following case precedent, applicable statutes and related legislative history, in an intellectually honest analysis to whatever outcome that process might lead), but the result the majority wanted was not lower insurance premiums. Rather, to me it seems the result the majority desired was to protect business interests from what the majority feels are excessive personal injury awards and or excessive restrictions on business owners.

    The dissenting opinion, from my perspective having been on both sides of these cases now for decades, reflects the more intellectually honest and correct view of the law, but it is highly unlikely in our lifetimes the Dutra Group decision will be changed or limited in its application in any significant way. For better or for worse, we are stuck with this decision unless Congress legislates around it, and that is unlikely to happen.

    Meanwhile, while insurance premiums should be lowered as a result of the risk to vessel owners being lowered by this decision, especially in those jurisdictions where punitive damages were being awarded for injuries caused by unseaworthy conditions that arose from a wanton or reckless disregard for safety, whether premiums are actually lowered will depend on a variety of factors, including market considerations, push-back from vessel owners at renewal time, etc. What seems clear is that if this case had resolved the split in the federal circuits in favor of punitive damages in unseaworthiness cases if warranted, premiums certainly would have reflected the increased risk to vessel owners (or policies would have excluded unseaworthiness caused by wanton or reckless disregard for safety).
     
    Keelboater likes this.

Share This Page