On September 25, 2014, the Fifth Circuit Court of Appeals, sitting en banc, rendered its decision in the high-profile case McBride v. Estis Well Service, L.L.C.,12-30714, 2014 WL 4783683 (5th Cir. Sept. 25, 2014). McBride garnered national attention after the Fifth Circuit panel reversed the district court and held that punitive damages were available to seamen as a remedy for the general maritime law claim of unseaworthiness. 731 F.3d 505. On rehearing, a majority of the Fifth Circuit judges determined that punitive damages were not available. The majority opinion was about fifteen pages long and was followed by nearly sixty pages of concurring and dissenting opinions.
The first concurrence, penned by Circuit Judge Edith Brown Clement and joined by Circuit Judges Jolly, Smith, and Owen, took a closer look at the historical background that, in Judge Clement’s opinion, mandated the result reached by the majority. Judge Clement dissected what she viewed as the three main points that McBride relied on and determined that, “[w]hen examined closely, none of these arguments establish McBride’s ultimate contention.” Id. at *7.
Judge Clement first analyzed and concluded that United States Supreme Court jurisprudence does not require punitive damages in unseaworthiness cases. The Judge noted that Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), only addressed the narrow issue of whether punitive damages were preempted by the Clean Water Act and that this narrowness accounted for the Court’s need in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009), to even address the issue of punitive damages in maintenance and cure cases. According to Judge Clement, this left McBride with “only the thin strand of Townsend.” McBride at *7. However, Townsend, a maintenance and cure case, was of little help in light of the “significant differences” between actions for maintenance and cure and unseaworthiness. Judge Clement cleverly cited to the academic writings of McBride’s own counsel to underscore the well-recognized distinction between the two causes of action. The Judge concluded that “[t]he difference between maintenance and cure and unseaworthiness actions make maintenance and cure cases a poor guide for determining unseaworthiness remedies.” McBride at *8.
Judge Clement went on to examine the Fifth Circuit’s pre-Miles case law approving punitive damages in unseaworthiness cases, starting with In re Merry Shipping, Inc., 650 F.2d 622 (5th Cir. Unit B 1981). She concluded that, notwithstanding Merry Shipping and a handful of other cases, there is an absence of actual authority establishing that pre-Jones Act plaintiffs claiming unseaworthiness were entitled to punitive damages. The Judge characterized the support for such entitlement to punitive damages the result of a “collective judicial ‘oh, hell, why not’ principle” equating the availability of punitive damages in other types of actions to the availability of punitive damages for unseaworthiness. McBride at *9.
Finally, Judge Clement waded through pre-Jones Act unseaworthiness cases cited by McBride in support of the availability of punitive damages and found only one unseaworthiness case that arguably awarded punitive damages. The Judge concluded that, even assuming that this case did award punitive damages, one “dust-covered” case should not provide the basis for the general availability of punitive damages in unseaworthiness cases. This was particularly true when considering the Supreme Court decisions in The Osceola, 189 U.S. 158 (1903) and Pacific Steamship Co. v. Peterson, 278 U.S. 130 (1928) that recognized the remedy for unseaworthiness was an indemnity by way of compensatory damages.
Judge Clement concluded her concurrence by explaining the need for caution “before signing off on an aggressive expansion of punitive damages in the unseaworthiness context.” McBride at *12. This is a product of the varying availability of insurance for punitive damages and the direct and indirect impacts such an expansion would have on commercial shipping. “In light of the potentially sizable impact, this court should not venture too far and too fast in these largely uncharted waters without a clear signal from Congress.” McBride at *12.
McBride v. Estis Well Serv., L.L.C., 12-30714 (5th Cir. Sept. 25, 2014) (en banc).