PUNITIVE DAMAGES IN MARITIME BEFORE AND IN THE WAKE OF BATTERTON: THE FUTURE.

• Author: Crais, Arthur A., Jr.

1. Introduction A. Rise of Punitive Damages Under General Maritime Law in the Twentieth Century B. The Fall of Punitive Damages Under General Maritime Law in the Twentieth Century II. What controls Statutory or Decisional Law? A. Moragne v. States Marine Lines, Inc. and Sealand Services, Inc. v. Gaudet B. Mobil Oil Corp. v. Higginbotham and Miles v. Apex Marine Corporation III. The Resurrection of Punitive Damages A. Exxon Shipping Co. v. Baker and Atlantic Sounding v. Townsend IV. The Nail in the Coffin? 1 A. Dutra Group v. Batterton 1 V. Punitive Damages in Maritime Law--Pending Issues Left Unresolved 3 A. What is the Standard for Gross Negligence in Maritime Law? 4 B. What is the Standard to Impute Gross Negligence to the Employer or Principle? 6 C. Punitive Damages for Personal Injury and Death--Status and Location 9 1. Seamen v. Third Parties--Personal Injury and Death Claims 9 2. Application of State Law to Punitive Damage Claims in Territorial Waters 12 3. Personal Injury and Death Claims on the High Seas 16 D. Is there a standard for excessive punitive damages? 17 E. Punitive Damages for Other Claims 19 1. Marine Pollution 19 2. Punitive Damages for Damage to Property other than Pollution 24 3. Breach of Contract Claims 25 VI. Conclusion--The Future of Punitive Damages--A Quixotic Quest for a Legal Unicorn? 31 IV. The Nail in the Coffin? A. Dutra Grp. v. Batterton Though federal district courts in the Hawaii, (1) Washington, (2) Missouri, (3) California, (4) and Minnesota (5) as well as state courts in Washington (6) and Virginia (7) addressed the applicability of the reasoning of Miles and Townsend to claims for punitive damages for breach of the warranty of seaworthiness, three years would pass before another U.S. Court of Appeals would confront the issue. (8) Christopher Batterton was a seaman on a vessel owned by The Dutra Group and injured his hand when a hatch cover blew open (9) because the vessel lacked a mechanism to relieve pressure as it was being pumped into a compartment. (10) This rendered the vessel unseaworthy. (11) On an interlocutory appeal to the Ninth Circuit, the panel noted that the issue in Miles was not whether punitive damages were recoverable for breach of the warranty of seaworthiness and that Miles clearly stated that general maritime law claims of seamen for unseaworthiness are not limited by the Jones Act. (12) Furthermore, any doubt of the applicability of that decision were put to rest with the Townsend opinion. (13) The damages sought in Miles were compensatory. Punitive damages punish and deter reckless and callous acts of a tortfeasor. (14) The opinion of the Supreme Court in Miles does not overrule the prior precedent of the Ninth Circuit established in Evich v. Morris. (15) Hence, the seaman had a valid claim for punitive damages under General Maritime Law for unseaworthiness. With a clear split in two major maritime circuits, the U.S. Supreme Court granted writs. (16)

   The majority opinion was written by Justice Alito who authored a critical dissent of the majority opinion in Townsend. (17) He was joined by Chief Justice Roberts and Justices Kagan, Gorsuch, Kavanaugh and curiously by Justice Thomas, the author of the opinion in Townsend. Justice Ginsburg dissented with whom Justices Breyer and Sotomayor joined. (18)

   In summary, Justice Alito examined the history of the claim for breach of the warranty of seaworthiness which initially was a basis for a seaman to collect wages if after signing a contract for a voyage the vessel was unseaworthy as well as a defense to criminal charges for disobedience to follow orders. (19) It became a basis for a claim for personal injury in The Osceola; the doctrine was further expanded by the Court in Mahnich v. Southern S. S. Co. (20) and became a basis for strict liability of the vessel owner in Mitchell v. Trawler Racer, Inc. (21) The Batterton majority resolved the matter relying on the Miles decision and relegated Townsend as "gloss" on that opinion. (22) Justice Alito's opinion in Batterton follows in line with the basis for his dissent in Townsend in which he questioned whether the two cases cited in the majority opinion in Townsend clearly established awards for punitive damages for failure to pay maintenance and cure. (23) Though the majority opinion does not appear to question prior statements of the Court that punitive damages historically have been available under General Maritime Law, Justice Alito dissects the case law cited to support the claim at issue in Batterton and states: "For claims of unseaworthiness, the overwhelming historical evidence suggests that punitive damages are not available." (24) Absent a compelling need to promote uniformity with Acts of Congress the Court should not allow a new remedy with no historical basis. (25) The Jones Act and a claim for unseaworthiness are duplicative. (26) In addition, allowing punitive damages for breach of this warranty would create anomalies which should be avoided. (27) Injured seaman could recover punitive damages but if killed beneficiaries would be barred. (28) The displaced owner would be held liable for punitive damages while the operator would not be. (29) In addition, as civil law tradition does not allow punitive damages, American shippers would be placed at a disadvantage. (30) The Ninth Circuit was, thus, reversed; and the case was remanded. (31)

   The fate of punitive damages for seamen at least for the present seems sealed. Seamen can only seek punitive damages in claims of refusal or arbitrary and capricious failure to pay maintenance and cure. Punitive damages may not be recovered under the Jones Act or for breach of the warranty of seaworthiness. Thus, it would appear that when a right and remedy is created by statute or when a remedy created by jurisprudence overlaps with a statutory right and remedy, the statutory right and remedy prevails.

5. Punitive Damages in Maritime Law--Pending Issues Left Unresolved

   The Batterton opinion finally puts to rest the question of whether a seaman injured or killed regardless of the location of the incident may recover punitive damages for unseaworthiness. But, considering some of the broad language in Batterton, do punitive damages have a future in General Maritime Law? Justice Alito qualifies the restriction on recovery of punitive damages to seaman's claims for unseaworthiness. (32) The majority opinion also does not abrogate the Court's previous statements that punitive damages have been recognized in maritime law since the early days of the Republic. It is now quite well established that punitive damages can be recovered in maritime law except in those cases in which the statutory right and the right established under General Maritime Law overlap, then the remedy or damages may not exceed what is allowed by statute. It must be remembered that claims for punitive damages are in personam claims. An action in rem only arises with a maritime lien. (33) Punitive damages do not give rise to a maritime lien. (34) Accordingly, there is no in rem claim against the vessel.

   Nonetheless, many pending issues require resolution in maritime law for claims for punitive damages. What is the standard for gross negligence under General Maritime Law? What is the standard of review to determine if an award is excessive? What is the standard to impute acts of employees to the employer? In the area of personal injury and death may seamen still claim punitive damages for personal injury or death when caused in whole or in part by a third party? May non-seamen (35) seek punitive damages for personal injury or death in territorial waters? In cases of marine pollution, may parties seek punitive damages? May a party seek punitive damages for tortious breach of contract or for tortious interference with a contract? May claimants for damage to property in a collision or allision or for damaged cargo claim punitive damages for gross negligence?

   1. What is the Standard for Gross Negligence in Maritime Law?

      The Supreme Court in an 1854 maritime personal injury case expressed difficulty in defining the term "gross negligence. (36) In EXXON VALDEZ, Justice Souter, expounds on the varied degrees of culpability which have supported claims to punish actors. Reckless conduct includes recognition of a high degree of risk and action or inaction despite that knowledge as well as knowledge of the facts but a failure to appreciate the high degree of risk or harm. (37) Acting or failing to act to increase profit also represented a greater degree of culpability including willful or malicious acts. (38) The Court in Townsend stated that punitive damages may be awarded "for wanton, willful, or outrageous conduct." (39) Prior to Townsend, the Eleventh Circuit Court of Appeals (40) stated in dictum that the standard for punitive damages in a maritime tort requires "'intentional or wanton and reckless conduct'" with "'a conscious disregard of the rights of others.'" (41) Subsequent district court decisions of the Eleventh Circuit cast doubt on this standard in light of the Townsend decision. (42) Challenges to the Sunset Limited standard were in light Townsend at least with respect to non-pecuniary damages were rebuffed by the Eleventh Circuit in Petersen v. NCL (Bahamas) Ltd. (43) Nonetheless, two district judges in the Southern District of Florida stated that Townsend casts doubt on that standard and held that punitive damages may be recovered for willful, wanton, or outrageous conduct. (44) Other federal district judges in Florida maintain that Sunset Limited is still the standard for general maritime law claims in the Eleventh Circuit and that the standard is intentional misconduct. (45) Thus, in the Eleventh Circuit at the present time, sufficient facts must be alleged to constitute intentional misconduct even to survive a Motion to Dismiss.

      The Ninth Circuit in Protectus Alpha Navigation Co., Ltd. v. North Pacific Grain Growers, Inc., (46)...