The US Supreme Court seldom takes up shipping cases. But when the country’s highest court heard one such dispute this week, arguments turned on whether shipowners should face the prospect of penalties in crew lawsuits, which to date have been rare.
Punitive damages might be rare, argued the attorney for injured seafarer Christopher Batterton before the court, but that does not mean they do not exist in cases of unseaworthiness.
At Monday's oral arguments in the US Supreme Court case of Dutra Group v Batterton, David Frederick of law firm Kellogg, Hansen, Todd, Figel & Frederick said precedent for awarding punitive damages exists at the state level.
At Monday’s oral arguments in the US Supreme Court case of Dutra Group v Batterton, David Frederick of law firm Kellogg, Hansen, Todd, Figel & Frederick said precedent for awarding punitive damages exists at state level.
Punitive precedent
Frederick’s testimony came after Seth Waxman, representing Dutra, said he could not find a case where punitive damages were even asked for.
“The fact they’re not awarded regularly” does not mean they don’t exist, Frederick told the nine-member high court.
Associate Justice Samuel Alito took a similar line. “How has this general rule escaped everybody’s attention?” he said.
In the case, the court is being asked to settle a dispute between two appeals courts — the US Court of Appeals for the Ninth Circuit on the West Coast and the US Court of Appeals for the Fifth Circuit on the US Gulf Coast.
Both courts ruled it was not settled law that seafarers are barred from recovering punitive damages.
When Congress enacted the Jones Act... Congress made an obvious policy judgment not to go all the way to a workman’s comp [situation], but that is the spirit of what the Jones Act did
Seth Waxman, representing Dutra
But where the Fifth Circuit Court held that punitive damages are only allowed where payments for lost wages and medical costs are not paid, the Ninth Circuit Court appeared to accept that seafarers could seek punitive damages.
As such, the Ninth Circuit held that Batterton, a deckhand onboard a Dutra-owned dredging vessel in 2014, was eligible for punitive damages.
Crushed hand
Batterton was on the vessel off California when, his lawsuit alleges, his left hand was crushed by a hatch that blew open due to pressurised air that had built up in a compartment below.
He sued in a Los Angeles federal court. Dutra appealed the decision to allow him to proceed with a claim for punitive damages before a settlement was reached. Dutra’s appeals were denied twice and have now been taken up by the US Supreme Court.
It is one of only a handful of cases the court decides to hear each year and one of the few admiralty law cases it has taken up.
Industry groups have argued that upholding the Ninth Circuit court’s decision would stifle the shipping industry, making it impossible for shipowners to know whether or not a case would be the one on which they would have to pay out a “multimillion dollar” penalty. The effect, they add, would be more expensive waterborne transportation.
On Monday, Frederick argued that punitive damages would only be available in cases where egregious conduct was on display. Frederick said awarding damages would act as a deterrent against sending unsafe ships to sea. He added Batterton had not been given safety instructions that could have prevented his injury.
Seth Waxman, representing Dutra, said previous cases backed up its appeal, and that the Fifth Circuit Court had held punitive damages could only be awarded when a shipowner failed to pay for lost wages and medical care, known as maintenance and cure payments.
Legal rights
He cited the Jones Act, under which employees injured in certain jobs are paid lost wages and medical expenses in exchange for relinquishing their right to sue.
Waxman said: “When Congress enacted the Jones Act... Congress made an obvious policy judgment not to go all the way to a workman’s comp [situation], but that is the spirit of what the Jones Act did.”
He argued that the court had expanded the contours of remedies available to injured seafarers multiple times, but “there is no evidence whatsoever that punitive damages were even sought”.
