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Marine & Energy News Alert: Fifth Circuit will Reconsider En Banc a Decision Allowing Recovery of Punitive Damages for Unseaworthiness

February 26, 2014

The United States Court of Appeals for the Fifth Circuit decided that it will reconsider en banc a panel decision allowing recovery of punitive damages in some limited vessel unseaworthiness cases.

In October 2013, Fifth Circuit Judges Stewart, Barksdale and Higginson issued a decision allowing seamen to recover punitive damages for their vessel owner/employer’s willful and wanton breach of its general maritime law duty to provide a seaworthy vessel.

While cases in United States Courts of Appeals are traditionally decided by a three-judge panel, a majority of the active circuit judges may decide to rehear a case en banc (meaning by the entire Fifth Circuit bench, rather than by a panel selected from the Fifth Circuit) when such proceedings are deemed necessary to maintain uniformity of decisions within the circuit or if the issue is exceptionally important.

This particular issue is extremely significant to vessel/drilling rig operators in the marine, offshore, and energy industries because it expanded the available remedies to seamen, and thus, expanded a vessel owner/employers’ exposure where the unseaworthy condition resulted from willful and wanton conduct.

Following the panel’s decisions, the rig owner/employer petitioned the Fifth Circuit for rehearing en banc, and this petition was joined by an Amici Curiae petition filed on behalf of the Offshore Marine Service Association and the International Association of Drilling Contractors.

The petitioners argued that the panel’s decision should be reconsidered because it thwarts the purpose of unseaworthiness claims, departs from the congressional policy against punitive damages in maritime law, undermines the uniform application of maritime law and allows vessel owners to be exposed to differing levels of liability depending on the jurisdiction that their vessel happens to sail through on a particular voyage.

The Fifth Circuit has now determined that this issue is important enough to warrant rehearing en banc. The petition for rehearing was granted, and thus, the entire Fifth Circuit bench will be reconsidering the panel’s decision on the punitive damages issue in the coming months.

The case is Haleigh Janee McBride, et al v. Estis Well Service, L.L.C., No. 12-30714.

A link to our prior Marine & Energy News Alert discussing the case is attached here.