False Distress Call Results in Serious Criminal Penalties

In March 2012, an aircraft pilot falsely reported observing a fishing boat with four passengers in distress in Lake Erie.  In response to the distress call, the U. S. Coast Guard and the Canadian Armed Forces launched a massive search and rescue mission that lasted over 21 hours.  Substantial costs were incurred by both agencies totaling over a half a million dollars.  During a subsequent investigation, the pilot admitted to the Coast Guard that his report of a boat in distress was fabricated.

The pilot was indicted and later pled guilty to making a false distress call, a felony under 14 USC §88.  In addition to a three month prison term and three years supervised release, the pilot was ordered to pay restitution to the U. S. Coast Guard and the Canadian Armed Forces to the full extent of the expenses they incurred in the search and rescue mission.

Following the formal sentencing, the pilot appealed the assessment of “indirect costs,” such as general overhead that would have been incurred by the Coast Guard irrespective of its response to the false distress report.  He argued that such ordinary expenses were not “losses” contemplated by 14 USC §88(c).  He did not contest his liability for the cost directly attributed to his criminal actions, which included the actual expenses attributable solely to search and rescue efforts.

With little guidance from prior case law on this issue, the U. S. Court of Appeals for the 6th Circuit (based in Cincinnati, Ohio) in United States v. Kumar gave a strict interpretation of the statute and found that it was not limited only to “losses” sustained by the Coast Guard, but rather provided for the recovery of all costs incurred because of the criminal defendant’s actions.  For this reason, the Court of Appeals found that the judgment against the pilot which included the full extent of the costs spent by the Coast Guard, including its indirect overhead expenses, was appropriate.  The appellate court further upheld the judgment requiring the defendant to similarly repay the Canadian Armed Forces.  This aspect of the criminal penalty was not specifically provided for by statute, but was permissible within the trial court’s discretionary sentencing authority.

Note: This article first appeared in WorkBoat magazine, and on WorkBoat’s website.

Dock Owners Liability

Boarding and disembarking from vessels. Without a second thought, mariners do it day in and day out – - most of the time without any problem.  Occasionally, however, accidents happen. Depending on where or how a slip, a trip or a fall occurs while transiting to or from a vessel, the potential liabilities can be subject to varying legal standards.

It is well settled under the general maritime law that a vessel owner has a fundamental duty to provide its crew members with a reasonably safe means of getting on to and off of the vessel. Just a slight breach of this duty can result in liability for the vessel owner. The duty owed to non-seamen is less onerous and is that of “reasonable care.”

But the maritime law does not impose any particular duty on a dock owner when it comes to safe ingress and egress to vessels.  That doesn’t mean, however, that a property owner cannot be held liable for accidents that occur on its dock, pier or wharf when someone is hurt while transferring to or from a vessel.  Rather, the property owner’s liability is governed by state law.  While the legal standards for dock owners can vary by state, liability is typically determined under general negligence principals.  State laws typically require that shore side facilities take reasonable precautions to prevent accidents and injuries to those who it knows or should anticipate will be using its dock to get on or off vessels. A recent First Circuit Court of Appeals case out of Massachusetts (Cracchiolo v. Eastern Fisheries, Inc.) recognized that the owner and leaseholder of a pier could be legally responsible for the fatal accident to a fisherman who slipped and fell on an icy area of their dock, which was described as “obviously hazardous.”

The routine nature of boarding and disembarking from vessels does not make that activity less risky to even the most experienced mariners. Because both maritime law and state laws impose legal obligations on vessel operators and property owners, careful attention should be given to the methods vessel personnel may use for ingress and egress to avoid accidents and mitigate liability exposure.

This article first appeared in WorkBoat Magazine.  The article can also be found here, on WorkBoat‘s website.

Maritime Law Sees Expansion of Punitive Damages

For the last two decades, our industry has seen growing restrictions on the type of monetary damages that can be awarded in maritime cases, particularly for claims involving accidents and illness to seamen.  The 1990 landmark Supreme Court case of Miles v. Apex Marine Corp. paved the way for a general prohibition against “non-pecuniary” damages in seamen’s claims.  That case concluded in particular that the non-dependent mother of a seaman who was killed on the job had no legal entitlement to compensation for her personal losses resulting from the death of her son.  From there, courts relied on the Miles holding to reduce recoverable damages in a variety of other fact-specific situations.  That lead to a nearly across-the-board prohibition against punitive damages in seamen’s cases.

That trend changed drastically in 2009 when the U. S. Supreme Court issued its opinion in Townsend v. Atlantic Sounding Company.  There, the Court found that the general maritime law allows for the recovery of punitive damages when a seaman’s employer willfully or arbitrarily fails to meet its maintenance and cure obligations.  In October of this year, the U. S. Fifth Circuit Court of Appeals went a step further and issued an important ruling that provides that a maritime employer can also be held liable for punitive damages when a seaman is injured or killed as a result of an unseaworthy condition of its vessel.  The McBride v. Estis Well Service case noted that punitive damages for unseaworthiness were historically available pre-Miles when the employer’s breach of its duty to provide a seaworthy vessel was “willful and wanton.”  Whatever may constitute a “willful and wanton” breach of the duty of seaworthiness is, by necessity, determined on a case by case basis; and there is no predetermined standard to assess when that level of breach has been met.

The McBride case is being closely watched by industry and legal analysts due to its marked departure from the previously more conservative trend against allowing punitive and other non-pecuniary type damages in maritime cases.  Importantly, the McBride case is up for possible reconsideration by the Fifth Circuit en banc, so its holding is not yet set in jurisprudential stone. And regardless of the outcome the requested rehearing, the case may well be on its way to the U. S. Supreme Court for a final ruling.

Note: This article originally appeared in WorkBoat magazine.  The electronic version of the article is available on WorkBoat‘s website.

Employers Can’t Sue Seamen to Recover Back Maintenance and Cure Wrongfully Paid

Maintenance and Cure: It’s the nearly inalienable benefit that seamen receive when they are injured or become ill while in the service of the ship.  A seaman is entitled to this daily living allowance and payment of medical treatment irrespective of fault; and a shipowner/employer’s defenses to a maintenance and cure demand are quite limited. Generally, these benefits are not owed if the injury or illness results from intentional misconduct or intoxication by the seaman.  The legal obligation to provide maintenance and cure can also be excused if it is shown that the seaman had willfully misrepresented a pre-existing physical or medical condition when he applied for his job and that his subsequent injury or illness is causally related to that pre-existing condition.

Until recently, Jones Act employers sometimes took legal action against seamen to recover back maintenance and cure payments made before discovering that the seamen had misrepresented his medical history or preexisting physical condition.  In July, however, the U.S. Fifth Circuit Court of Appeals issued an important ruling striking down the employer’s right to recover back maintenance and cure payments.

In the case of Boudreaux v. Transocean Deepwater, Inc., the Fifth Circuit reversed a district court’s ruling that allowed Transocean to sue its employee to recover back maintenance and cure benefits which Transocean did not believe were owed because the employee concealed a pre-existing back condition – which was found to be related to his claimed on-the-job injury – when he initially applied for his job.  In denying the Jones Act employer the right to pursue recovery of maintenance and cure benefits that were thus wrongfully paid, the Fifth Circuit was heavily influenced by the near-absolute remedies afforded to seamen by virtue of their employment relationship with the employer which include entitlement to a daily living allowance and medical treatment for work related injuries.  The court was unwilling to grant the employer the heavy handed remedy of exposing the seaman to repay benefits that he received but to which he might not have been entitled.  Consequently, Transocean was found not to have a “right of action” to recoup maintenance and cure paid to the dishonest seaman.

Jones Act employers can still deny maintenance and cure to a seaman who has willfully concealed his medical history, when that misrepresentation is related to the decision to hire the seaman and his subsequent claimed injury.  But in the event of an inadvertent payment of benefits later determined not to have been owed, the employer’s rights to recover those benefits back are extremely limited.