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Longshore Insider
Will There Ever be Uniformity for Punitive Damages Under Maritime Law?
Jul 22, 2019 - Jack Martone, The American Equity Underwriters, Inc.

The U.S. Supreme Court recently took a step forward in improving uniformity in the country’s maritime jurisprudence by resolving a conflict between the federal courts of appeal for the Ninth and Fifth circuits.

The issue was whether punitive damages may be available under the general maritime law in an action for vessel unseaworthiness.

In 2018, in Batterton v. Dutra Group, the Ninth Circuit held that punitive damages were available. This holding was most prominently in conflict with the Fifth Circuit’s decision in McBride v. Estis Well Services, LLC, 768 F.3d 382 (2014).

The U.S. Supreme Court accepted an appeal in the Batterton case in order to resolve the conflict. In a decision dated June 24, 2019, in Dutra Group v. Batterton the Court reversed the Ninth Circuit and held that a plaintiff may not recover punitive damages on a claim of unseaworthiness.

This is a welcome decision. The scorecard with regard to punitive damages is, for now, settled.

  • Maintenance and cure – yes for punitive damages
  • Unseaworthiness – no for punitive damages
  • Jones Act – no for punitive damages
  • Death on the High Seas Act – no for punitive damages

Rather than spend time analyzing the reasoning of the majority opinion in Batterton (three Justices joined in a dissent), I thought that I would presume to congratulate the Court on recent contributions to maritime uniformity and to suggest some areas where further improvement may be achieved.


OCSLA Considerations: Pacific Operators Offshore LLC v. Valladolid


In Pacific Operators Offshore LLC v. Valladolid, 565 U.S. 207 (2012), the Supreme Court resolved another conflict between the Ninth and Fifth Circuits with regard to an issue under the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. section 1333 et seq.) The issue had been whether an injury had to occur on the outer continental shelf of the United States (OCS) in order to be covered under the OCSLA. In that decision, the Supreme Court affirmed the Ninth Circuit’s holding and gave us the test for OCSLA coverage for injuries that occur in areas other than on the OCS. The Court held that the OCSLA covers an injury regardless of where it occurs as long as it has a “substantial nexus” to operations on the OCS. A claimant is required to “establish a significant causal link between the injury that he suffered and his employer’s on-OCS operations conducted for the purpose of extracting natural resources from the OCS”.

 

It’s obviously a case-by-case test, but still the case resolved a serious conflict and contributed to uniformity.

Another relatively recent decision that contributed to maritime uniformity is Chandris, Inc. v. Latsis, 515 U.S. 347 (1995) which gave us the current test for crewmember status, namely that in order to qualify for seaman status and have access to the seaman’s remedies, an employee must:

  1. Contribute to the mission or function of the vessel, and
  2. Have a substantial employment relationship to a vessel or fleet of vessel under common ownership in terms of both nature and duration.

Once again, it’s a case-by-case approach, but at least we have a uniform formulation.


The Current Test for Vessel Status:

Lozman v. City of Riviera Beach, Florida


In Lozman v. City of Riviera Beach, Florida, a January 15, 2013 decision, the Supreme Court gave us the current test for vessel status. Based on the characteristics and activity, viewed through the eyes of a reasonable observer, is the “vessel” practically capable of transporting people or things over water.

In an acknowledgment similar to language in its Valladolid decision, the Court stated that its “reasonable observer” standard, “…is neither perfectly precise nor always determinative … Nevertheless we believe the criterion we have used, together with our example of its applicability here, should offer guidance in a significant number of borderline cases.” It’s another case-by-case, fact-specific inquiry, but again, at least it’s an approach with a uniform formulation.


How can maritime uniformity be achieved?


Here are my suggestions for additional progress toward achieving maritime uniformity.

The Longshore Act jurisprudence has a serious problem with regard to the issue of maritime “situs”. In the federal Fourth and Fifth Circuits Courts of Appeal, the term “adjoining” as used in section 903(a) means contiguous with or touching the water (Sidwell v. Express Container Services, Inc., 71 F.3d 1134 (4th Cir. 1995) and New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor (Zepeda), 718 F.3d 384 (5th Cir. 2013)). In all other circuits, there are functional and geographic nexus tests used along the lines spelled out in Brady-Hamilton Stevedore Co. v. Herron, 568 F.2d 87 (9th Cir. 1978), which do not require that the employer’s premises actually touch the navigable waters at some point. This is a glaring circuit conflict. It should be resolved.

There is another circuit conflict that can be resolved if the issue could somehow find its way up to the Supreme Court. In some federal circuits, appeals from U.S. Department of Labor determinations in Defense Base Act cases go to federal district court, while in other circuits, appeals go to the circuit court of appeals. Briefly, this disagreement is based on whether the 1972 Amendments to Section 921 of the Longshore Act, which eliminated district court review, was incorporated into the Defense Base Act.

By my count, the current scorecard, where the issue has been adjudicated, is:

  • Appeals go to federal district court – 6th, 4th, 5th, and 11th federal circuits.
  • Appeals go to the circuit court of appeals – 1st, 2nd, 7th, and 9th federal circuits.

This can be fixed.


Parting Shot


It would be helpful if we could have a conclusive statement from the Supreme Court on the issue of whether or not the Longshore Act ever may apply on the territorial waters of foreign nations and surrounding land areas as well as what conditions may apply to the application of the Longshore Act on the high seas.

There are additional conflicts that can wait for resolution until after the above problems are addressed, such as simple or compound interest on past due payments of compensation and whether attorney fees may be awarded pre-controversion.



ABOUT THE AUTHOR

John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of AEU's Longshore Insider.

The opinions and comments expressed in this article are those of the authors and do not reflect the opinion of ALMA, AEU or AmWINS. None of ALMA, AEU, AmWINS or the authors are responsible for any inaccuracy of content or for any loss or damages incurred by any party as a result of reliance on information contained in this article. Content may not be published or reproduced without the written consent of the authors. Prior articles may not be updated for accuracy as pertinent information changes over time. The Longshore Insider is intended to provide general information about the industry and should not be construed as legal advice under any circumstances. For legal advice, please consult a licensed attorney.
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