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Marine & Energy News Alert: The Supreme Court Resolves Circuit Split Regarding Punitive Damages

June 25, 2019

In a much anticipated opinion within the marine and energy industry, the United States Supreme Court held in a 6-3 opinion that an injured Jones Act seaman may not recover punitive damages on a claim for unseaworthiness.

As previously reported, the case made its way to the Court when a split in authority arose between the United States Fifth Circuit and Ninth Circuit Courts of Appeals. Specifically, the Ninth Circuit expressly disagreed with the Fifth Circuit and found that punitive damages were recoverable for Jones Act seamen for a claim of unseaworthiness. The Court granted certiorari to resolve the conflict between the two Circuits and addressed whether a mariner may recover punitive damages on a claim that he was injured as a result of the unseaworthy condition of the vessel.

Justice Alito, who delivered the Court’s opinion, examined the Court’s prior decisions in Miles v. Apex Marine Corp. and Atlantic Sounding Co. v. Townsend to resolve the issue at hand. In Miles, a wrongful death claim under general maritime law, the Court held that recovery was limited to pecuniary damages, which did not include loss of society. In Townsend, after examining centuries of relevant case law, the Court held that punitive damages are not categorically barred as part of the recovery on a maintenance and cure claim.

In concluding that punitive damages are not recoverable in an unseaworthiness claim, the Court based its reasoning on three grounds. First, the Court found that, unlike maintenance and cure, the overwhelming historical evidence suggests that punitive damages are not available for claims of unseaworthiness. Second, the promotion of a uniform rule applicable to all sanctions for the same injury, whether under the Jones Act or the general maritime law, commands conformity with the statutory scheme established by the Jones Act. As such the Court cannot sanction a novel remedy. Lastly, the Court was not persuaded that, in the absence of everything else, punitive damages are warranted as a matter of policy. In this regard, the Court noted allowing punitive damages would place American shippers at a significant competitive disadvantage to their foreign counterparts and would discourage foreign-owned vessels from employing American seamen.

Justice Ginsburg, joined by Justice Breyer and Justice Sotomayor, dissented on the basis that Townsend controls and punitive damages are not categorically barred in unseaworthiness actions.

The Court’s rejection of punitive damages has significant implications in the marine and energy industry as it limits the vessel owner’s/operator’s exposure when facing an unseaworthiness claim and avoids the necessity of defending false punitive damages claims for vessel unseaworthiness in Jones Act seamen cases.

The case is The Dutra Group v. Christopher Batterton, 588 U.S. ____ (2019). See a copy of the Court’s decision here.