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The Marine & Energy Report: Decision Released Allowing Recovery of Punitive Damages in Some Limited Vessel Unseaworthiness Cases

October 02, 2013

The United States Court of Appeals for the Fifth Circuit issued an important decision today 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. Obviously, vessel/drilling rig operators in the marine, offshore, and energy industries are impacted by this decision and should be aware of its important holding. 

At the District Court, plaintiffs/rig crewmembers filed suits against their employer stating causes of action for general maritime law unseaworthiness and negligence under the Jones Act.  The rig crewmembers sought compensatory as well as “punitive and/or exemplary” damages arising out of an incident that occurred when derrick pipe shifted on a drilling rig causing the rig to topple over. The rig owner/employer moved to dismiss the claims for punitive damages by arguing that punitive damages were not an available remedy for unseaworthiness or Jones Act negligence.  The Magistrate Judge agreed and dismissed all claims for punitive damages.

The rig crewmembers appealed the judgment and contended that prior federal case law mandates that federal courts, in exercising their maritime lawmaking authority, cannot authorize a more expansive remedy for a general maritime cause of action such as unseaworthiness than exists for a parallel statutory maritime cause of action (Jones Act), if, at the time the statutory cause of action or remedy was enacted, the parallel cause of action or remedy did not exist under general maritime law.  In other words, the rig crewmembers contended that punitive damages remain available as a remedy for the general maritime law cause of action for unseaworthiness because, like maintenance and cure, unseaworthiness was established as a cause of action before Congress passed the Jones Act. 

The Fifth Circuit relied on the rule established by the Supreme Court in Atlantic Sounding Co. Inc. v. Townsend, 557 U.S. 404, 424 (2009), (which restored the availability of punitive damages for maintenance and cure claims under general maritime law): if a general maritime law cause of action (unseaworthiness) and remedy (punitive damages) were established before the passage of the Jones Act, and the Jones Act did not address that cause of action or remedy, then that remedy remains available under that cause of action unless and until Congress intercedes.  The Court concluded that punitive damages remain available to seamen as a remedy for the general maritime law claims of unseaworthiness.

The outcome of this matter is significant because it expands the available remedies to seamen, and so, in certain situations, may arguably expand a vessel owner/employers’ exposure where the unseaworthy condition resulted from willful and wanton conduct. 

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