Punitive Damages Not Recoverable

In 1990, the U.S. Supreme Court held that a seaman who brings a claim for personal injury against his employer pursuant to the Jones Act for negligence, or under the general maritime law for unseaworthiness of the vessel, is not entitled to recover punitive damages.  (Miles v. Apex Marine Corp., 489 U.S. 19 (1990)).  Employers and insurers embraced the decision, and for close to twenty years the maritime community thought the matter was settled.  However, in the last eight to ten years this prohibition has been increasingly challenged by plaintiffs’ attorneys in courts across the country.  As a consequence there have been some judges who have held that the injured seaman may, in the appropriate circumstances, recover punitive damages for the employer’s willful, wanton and capricious refusal to pay maintenance and cure, and for gross disregard of its obligation to provide the seaman with a seaworthy vessel.  But there has been no consistency between the courts in their rulings, resulting in uncertainty.

On September 25, 2014 the Fifth Circuit Court of Appeals added its voice to the fray in the matter of McBride v. Estis Well Service, L.L.C. (Case:12-30714).  This case’s odyssey to the Court of Appeals began when a truck-mounted drilling rig, part of a barge owned by Estis, toppled over. One crew member was killed, three others injured.  Lawsuits were filed on behalf of each.  Each prayed for recovery of punitive damages.  Estis moved for dismissal of the punitive damage claims as not being recoverable as a matter of law. The federal District Court in Lafayette granted the Motion and held that punitive damages are not available to the injured seaman for unseaworthiness, and that his recovery is limited to pecuniary losses.  The decision was based, in part, on the theory that since Congress had included in the Jones Act (the law that provides the seaman with a remedy against his employer) the prohibition of recovery of punitive damages, the principle of uniformity dictated that the courts should not expand the seaman’s rights of recovery.  The plaintiffs appealed to the Fifth Circuit.

On October 2, 2013 the Court of Appeals reversed the District Court and held that punitive damages may be recovered by the seaman injured due to an unseaworthy condition of the vessel which is the consequence of the employer’s gross breach of its duty to provide a seaworthy vessel. In its lengthy decision, the three-judge panel essentially held that because the seaman’s right to recover punitive damages under the general maritime law was well-established prior to the enactment of the Jones Act, and because the Jones Act does not address unseaworthiness or limit its remedies, the crew of the Estis barge would be entitled to maintain their punitive damage claim.

Estis applied for a re-hearing and on February 24, 2014 the Court of Appeals ordered re-hearing before the entire Court.  This time the Court saw matters in a different light and reversed its earlier ruling.  Judge Davis, writing for the Court, ruled that the historical judicial and legislative record suggested that when the Jones Act limits the seaman’s recovery to pecuniary damages and prohibits recovery of punitive damages the “seaman may not use a general maritime claim to recover damages that would be unavailable under the Jones Act”.  Judge Davis went on to note that “on the subject of recoverable damages in a wrongful death case under the Jones Act and general maritime law, [the Supreme Court] has limited the survivor’s recovery to pecuniary losses” and that these plaintiffs suggested no reason why this analysis would not also apply to their asserting claims for personal injury.  Because punitive damages are designed to punish the wrongdoer and not to compensate the victim, by definition are not pecuniary losses.

But, chances are that this is not the end of this debate.  The plaintiffs will likely appeal to the higher court.  The decision written by Judge Davis was fifteen pages long; the dissent authored by Judge Higginson, and joined by five of his colleagues, measures thirty-seven pages.  Expect this issue to be the center of attention of other appellate courts resulting in contradictory decisions which will again draw the attention of the U.S. Supreme Court.  However, for the time being, at least within the venue of the Fifth Circuit Court of Appeals the seaman cannot recover punitive damages.

Benefits Review Board Denies Claimant’s Request for Benefits at Rate Greater than Maximum

Following a formal hearing, Claimant was awarded benefits associated with his injuries suffered in Iraq while employed with Employer as an armed escort.  The administrative law judge issued her Decision and Order finding Claimant entitled to various periods of differing types of disability benefits.  At the time of the formal hearing, Claimant was earning $480.00 in stateside employment and therefore, the administrative law judge awarded permanent partial disability benefits for that time period going forward.  His average weekly wage was determined to be $2,594.56.   The administrative law judge found that Claimant was therefore, entitled to two-thirds of the difference between his average weekly wage and his wage-earning capacity; she did not expressly apply the Section 6(b)(1), 33 U.S.C. § 906 (b)(1), maximum compensation rate in her Order.

The Order was served by the District Director’s office, which included a compensation and interest calculation prepared by the District Director’s office.  Each payment was calculated at two-thirds of the difference between the average weekly wage and Claimant’s earning capacity.  However, Employer/Carrier paid benefits pursuant to the maximum compensation rate.  Claimant sent the District Director a letter stating he was entitled $1,409.71 per week pursuant to the administrative law judge’s Order and that Employer/Carrier was only paying him $1,047.16 per week (applicable maximum compensation rate in effect).  Thereafter, the District Director’s office issued an amended calculation noting the applicable maximum compensation rate, among other adjustments.  Claimant wrote another letter to the District Director’s office claiming entitlement to $1,409.71 pursuant to Administrative Law Judge’s Order and that Employer’s/Carrier’s challenge to that rate was improper because no party appealed the Order.   Thus, Claimant requested that Employer/Carrier be assessed a Section 14(f) penalty for not making payments in accordance with the Order.   The District Director responded that Employer/Carrier were paying benefits at the proper (maximum) rate and denied Claimant’s requests.

Following the District Director’s letter, Claimant appealed to the Board.  The Board ruled that Claimant’s appeal was proper as the Board viewed the District Director’s letter as an Order denying a Section 14(f) assessment and thus, the Board has jurisdiction.

The Board ruled there was no legal basis to support Claimant’s position and agreed with Employer/Carrier that the benefits are subject to the statutory maximum rate under Section 6(b)(1).  The Board further struck down Claimant’s argument that Section 6(b)(1) did not apply to benefits awarded under Section 8(c )(21).

Ari Navalo v. Cochise Consultancy, Inc., BRB No. 14-0095 (Aug., 27, 2014).

Maintenance and Cure Not Owed in Case Defended By MBLB

Recently, Will Bland, Beth Bernstein, and paralegal Meredith Foster of Mouledoux, Bland, Legrand & Brackett, LLC, successfully invoked the McCorpen defense for their client, St. June, LLC, resulting in Judge Barbier granting St. June’s motion for summary judgment and dismissing plaintiff’s claims for maintenance and cure with prejudice.  See Eldon P. Foret, Jr. v. St. June, LLC, No. 13-5111 (E.D. LA. 2014).

On January 11, 2011, Eldon Foret sustained injuries to his neck and back while employed as the captain of the M/V ST. JUNE.  Foret filed suit against St. June, LLC on July 18, 2013, asserting claims under the Jones Act, maintenance and cure, as well as punitive damages.  St. June filed a counterclaim on May 14, 2014, seeking reimbursement for all money paid to Foret regarding maintenance and cure and associated legal fees.

St. June’s counterclaim relied on the McCorpen defense.  Specifically, it alleged that Foret had failed to disclose the existence and extent of injuries to his neck and lower back, and that the failure to disclose these facts was material to St. June’s decision to hire Foret.

St. June filed its motion for Summary Judgment before Judge Carl Barbier of the Eastern District on August 26, 2014.

To succeed on the McCorpen defense, an employer must show: (1) The seaman intentionally misrepresented or concealed medical facts; (2) The non-disclosed facts were material to the employer’s decision to hire the seaman; and (3) A causal link exists between the pre-existing injury and the injury incurred during employment.

Whether or not the seaman intentionally misrepresented facts depends on whether or not the employer requests a pre-employment examination.  If the employer requests an examination, the seaman must disclose those medical facts that are plainly desired.  On the other hand, if the employer does not request an examination, the seaman must disclose medical facts that, in the seaman’s own opinion, would be considered important by the ship-owner.

In determining what facts a seaman should consider important to his employer, courts consider the seaman’s employment history.  For instance, an extensive work history over a long period of time familiarizes seamen with what employers expect to uncover regarding their employees’ medical history.  In this case, Foret had worked on shrimp boats for 42 years and acknowledged that several boating companies as well as every oilfield company he had ever worked for had inquired into medical problems with his neck and back.  Further, Foret failed to disclose an injury he sustained to his neck and back on July 2012, or that he was taking pain medication during his employment with St. June.

Regarding materiality, the Fifth Circuit has routinely held that back injuries are precisely the type of information employers consider material in deciding to hire a seaman.  See Brown v. Parker Drilling Offshore, Corp., 410 F.3d 166 (5th Cir. 2005)see also Jauch v. Nautical Servs., Inc., 470 F.3d 207 (5th Cir. 2006).

Finally, courts have regularly found causal links between pre-existing and post-employment injuries where these injuries arise in the same area of the body.  Brown v. Parker Drilling Offshore, Corp., 410 F.3d 166 (5th Cir. 2005).  Here, the record showed that multiple doctors had treated Foret’s lumbar-spine region years before his employment with St. June.  Thus, the court found a causal link between the pre and post-employment injuries based on their extreme similarities.

Longshore Conferences and the Louisiana Comp Blog

First, there’s a new workers’ compensation blog in town.  Louisiana Comp Blog (http://compblog.com/), which is published by LCI Workers’ Comp, looks great.  I’m a fan of the design and the content, and I look forward to many insightful discussions in the future.  I have already subscribed and I suggest you do the same.  The following snippet explains Louisiana Comp Blog’s mission:

Louisiana Comp Blog’s fresh and original content ranges from features and profiles of industry leaders to commentary/opinion articles and event coverage.  We also publish a daily Comp News Bulletin every morning, which allows our readers to get a head start on their day with the top three to five stories affecting Louisiana’s workers’ comp industry on both the local and national scale.  All of this makes us your one-stop source for the best workers’ comp reporting from across Louisiana.

Second, we are one month away from the annual DOL West Coast Symposium.  Loyola University New Orleans College of Law, in cooperation with the United States Department of Labor, have scheduled an outstanding conference.  Feel free to register through Loyola’s enrollment webpage or via the standard mail-in registration form.  Although a more in-depth schedule is available on Loyola’s website, topics for the Symposium include:

Updates from the Department of Labor, the Joint Bar Association, and WILG
Adequacy of Section 8(i) Settlement Agreements
Self-Executing Compensation Orders in light of the Benefits Review Board’s Mitri Decision
MSA Guidelines
Emerging Social Issues Affecting the Longshore Act
A Round Table Discussion with the San Francisco Administrative Law Judges
Attorneys Fees on the West Coast

Third, we have three additional Longshore-related conferences to look forward to.  Save the dates for:

November 18, 2014: A Day with the Department of Labor in Houston, TX
December 9, 2014: A Day with the Department of Labor in New Orleans, LA
March 19-20, 2015: Loyola’s Annual Longshore Conference in New Orleans, LA