Domingo Guevara v. Maritime Overseas Corporation

GOLDBERG, Before GARWOOD and WIENER, Judges. Circuit PER CURIAM: uphold seaman’s this case we under the Jones Act. compels precedent Fifth also us to Circuit uphold damages for the an award of timely pay shipowner’s failure to mainte- nance and cure. brought negligence Guevara claim under

I. Act, U.S.CApp. § the Jones and an Proceedings Facts and Below unseaworthiness claim under mari- law, against sought time Maritime. He also (Gue- Domingo Plaintiff-appellee Guevara punitive damages for Maritime’s failure to vara) 29, 1990, May injured while was pay timely maintenance and cure on basis. of the crew on the serving as a member jury The returned a verdict in Guevara’s PHILADELPHIA, vessel OVERSEAS favor, finding negligent, Maritime the operated employer, owned and Guevara’s OVERSEAS PHILADELPHIA unseawor- Cor- defendant-appellant Maritime Overseas thy, negligent. jury and Guevara The (Maritime). prepar- poration The crew was $131,000 in compensatory awarded Guevara Texas, Freeport, ing ship to sail from and the May injury, for his and gangway, helping to secure the Guevara was $60,000 for Maritime’s required that it lifted the size of which be arbitrary capricious pay and failure to main- being per- ship’s the crane. The task was appeals. tenance and cure. Maritime now in the midst of considerable wind and formed standing on a catwalk on rain. Guevara was II. pursuant vessel to the orders of the

the bosun, superior, who was vessel’s Guevara’s Discussion gangway As was operating the crane.

lifted, swayed in and Guevara’s direction A. away him from the bosun ordered to move standing. But where he was when Guevara argues Maritime the district move, momentarily caught to he tried denying judg court erred its motions for grating. of his in the catwalk notwithstanding tread boot ment the verdict on Gue himself, Freeing jumped negligence from the Guevara vara’s and unseaworthiness challenges jury’s being hit claims. Maritime also catwalk to the deck below to avoid for Maritime’s gangway. failure to maintenance and cure. We fall. He Guevara his knee first consider whether there is sufficient evi injury promptly reported his to the third jury’s finding dence to that Mari Despite given mate and was assistance. his negligent. regard, time was In this Mari injury, Guevara continued to work on the obliged upstream against a time is to swim (apparently qualify for bene- vessel to union of review fast current because the standard fits) period Upon for a of four months. jury in a Act applied to be to a verdict Jones port, saw a doctor vessel’s return Guevara highly jury’s case deferential. The verdict is diagnosed having him medial who a torn complete stand there is a ab must unless liga- meniscus and a torn anterior cruciate See, probative support it. sence of facts to Although initially reluc- ment. Guevara was e.g., Zapata Wilson Off-Shore undergo surgery, oper- his knee was tant to (5th Cir.1991). 260, 266 n. 9 February ated on 1991. enough evidence in the rec There Guevara, through attorney, his made ord to meet this lenient standard. Guevara’s a number of formal demands on Maritime for theory liability that he had been stand beginning and cure on Febru ing on the catwalk at the direction Maritime, however, ary 1991.1 made no bosun, gangway without who then lifted (Guevara) De payment until at least June making that he was first sure demands, spite subsequent captain did not of the vessel testi position. Guevara The safe performs if payment his and final until the bosun is to blame he receive second fied that ascertaining operation without first such an December (now day) shipown- $8.00 a and medi- cure" refers to a often at the rate of 1. "Maintenance and obligation provide compensation er’s ancient torney’s Garijak, way.2 fees.” Morales men are harm’s that none of his (5th Cir.1987). jury could have concluded from bosun, testimony and hence Mari- that the shipowner hable for dam- A becomes employer, negligent.- Be- time as his was pay maintenance can ages when its refusal to jury’s finding that Mari- uphold cause we recalcitrant, as callous and arbi- be described negligent and therefore liable time was willful, callous, trary capricious, or and Act, we need not decide whether the Jones case, jury In this persistent. See id. jury correctly found Maritime’s vessel yes question answered to the whether Mari- general maritime unseaworthy under the “arbitrarily capriciously failed time law.3 plaintiff, Domin- provide maintenance to the timely go on a basis?” and awarded Guevara B. $60,000 damages.4 A reasonable challenge to We now turn to Maritime’s jury have so concluded. could jury’s punitive damages to Gue- first, argues, that Miles v. vara. Maritime parties stipulated that at Guevara’s Apex Corp., Marine torney demands for mainte made formal (1990), 317, 112 L.Ed.2d 275 bars the recov- by February nance letter on six occasions: ery punitive damages pay failure to for 26, 1991; 4, 1991; 1991; February April second, cure, and, that even maintenance and 21, 1991; 7, 1991; January August and June if are available such $448, payment, first for 1992. Maritime’s circumstances, jury a could not reasonable until was not received Guevara sometime in an have concluded that Maritime acted 24,1991.5 pay after Maritime’s second June arbitrary capricious manner. will and We ment, $1,344, for was not received Gue first. discuss the second issue until 1991. Guevara ar vara December that, Circuit, gues nearly passed five months because of this a Under the law initial demand and Maritime’s between his shipowner pay maintenance who refuses to payment, adequate support for subject first there and cure is jury’s correctly ar verdict. Maritime escalating liability: shipown a “an scale of gues that it was entitled to a reasonable er is in fact for maintenance and who liable period investigate of time which to cure, deny but who has been reasonable legitimacy of Guevara’s claim. See McWil ing liability, may only for be held liable Texaco, Inc., liams v. 781 F.2d If amount of maintenance and cure. Cir.1986) (‘Where ... a doubt exists vessel shipowner pay without a has refused may request defense, owner reasonable documenta reasonable he becomes hable in tion from a seaman before it commences compensatory damages. If addition for may payment prove of maintenance that both only the owner not lacks a reasonable de However, lengthy expensive”). and and ex fense but has exhibited callousness plight, shipowner where a indifference to the seaman’s he be cuse is unavailable guilty investigating at- claim comes hable for and of “laxness single finding compensatory damages cal care to an ill or seamen until he has 3. The point recovery.” reached the of "maximum was not allocated or divided as between negligence due to ness, and those due to unseaworthi- any objection nor was there to the form of "Q. 2. And the bosun should make sure his and, charge respect; the deed, or verdict in this in- properly positioned men before he allows suggest any evidence does basis correct, nobody gets up, the crane to lift so such a division. hurt? A. Yes. jury attorneys' to award 4. The was not asked fees way, Q. And if someone is in harm’s the bo- compensatory or on account of Mari- stop operation, sun should correct? time’s failure to maintenance and cure. A. Yes. stop opera- Q. And if the bosun doesn't tion, gets it's the bosun's fault that the man is unclear as to when Guevara The record hurt, actually payment; correct? received this the date on the A. Yes.” check was June 26 L.Ed.2d 339 found to be meritori- U.S. have been that would (1970), question the Miles Court tackled the AWI, Breese v. ous.” availability wrongful of remedies for McWilliams, Cir.1987). shipown- seeking death under maritime law payments until it withheld maintenance er guidance comparable from federal statutes. the sea- documentation of medical received longer no live in an era when seamen “We claim; receiving such documenta- man’s after primarily and their loved ones must look tion, payments commenced shipowner legal as a the courts source substantive Here, at 519. “shortly thereafter.” death; protection injury from Con- compiled by physi- records the medical legislated gress and the have exten- States treating injury were forward- Guevara’s cian era, sively in these areas. In this an admi- along with Febru- to Maritime Guevara’s ed ralty primarily should look these 4, 1991, March demands ary legislative policy guidance. enactments for maintenance, yet payment Maritime made no statutory supplement these reme- We event, any later. until several months doing dies where so would achieve the delay first if the between Guevara’s even policies uniform vindication of such consis- payment first could and Maritime’s demand mandate, tent with our constitutional but investigatory a reasonable explained keep strictly within we must also the limits that jury to conclude period, the was entitled Miles, imposed by Congress.” delay Maritime’s first between the six-month 27, 111 at 323. payment, by received payment and its second observing Then neither the Jones Act that trial, of could practically on the eve Guevara (DOH- High nor Act the Death the Seas here, the facts since Maritime not. Under SA), U.S.C.App. permits § recov- jury could payment, had commenced losses, ery nonpecuniary such as loss of of delay could not properly find that the second society, the Miles Court stated: investigate needed to explained as time place our in “It would be inconsistent with Thus, supports the record claim.6 Guevara’s the constitutional scheme were we to sanc- jury’s punitive damages under judicial- in expansive tion more remedies prevailing law of this Circuit. liability in ly-created cause of action which Congress is without fault than has allowed C. resulting negli- from in cases of death argues that recov- Maritime also Guevara’s 32-33, 111 gence.” Id. at S.Ct. at 326. by ery punitive damages is barred of establishing value of The Court stressed the There, in Supreme Court’s decision Miles. damages applicable to the a uniform rule of killed a fellow parents of a seaman Act, DOHSA, general maritime Jones damages sought to recover for crew member law. id. See society general under maritime law loss of argument abrogates that Miles Maritime’s A of action for unseaworthiness. a cause recovery permitting the this Circuit’s rule that, although the unanimous Court held damages cure in maintenance and wrongful death of a seaman is actionable obviously specific cannot rest cases law, general damages recov- under maritime holding in Miles —that for loss of not loss of erable such actions do include mari society are not recoverable holdings society. The second of these two wrongful time cause of action for death. here, although the principal concern not involve maintenance and cure Miles did analytical methodology course, Court’s was the same punitive damages.7 could be or Of Following holding of Miles logic each. the course first set if not the Lines, Inc., supports argument. the wake Moragne Maritime’s v. States Marine alleging personal inju compellingly general maritime actions was not such as to 6. The evidence long delay any legitimate Murray Anthony reason for the ry. show after Bertucci Constr. J. June 24. Co., (5th Cir.), cert. de 958 F.2d 129-30 nied, -, 121 L.Ed.2d -U.S. 113 S.Ct. wrongful a claim for death 7. That Miles involved seaman; (1992) society); (injured loss injury is not a whereas Guevara's was nonfatal Transp., 957 F.2d Michel v. Total already distinction. We have held relevant seaman; 1992) (injured loss of consor- Cir. recovery nonpecuniaty losses in Miles bars DOHSA,10 Miles, fact, have able under either the Jones Act or appellate four courts puni- run to allow unavail it would counter Miles now are held general maritime law. general maritime law. See Hors able under (1st great argument, there is force to this While ley 15 F.3d 200 Cir. v. Mobil Oil Lines, arguably controlling in 1994); it is not the context v. American President Miller Essentially a form of maintenance and cure. Ltd., Cir.1993); 1454-59 benefit, compensation-like employee workers’ Williams, Drilling Corp. Penrod counterpart maintenance and cure has no (Tex.1993) curiam); Sky (per S.W.2d Act or DOHSA. either Jones Cruises, Andersen, 592 Ltd. v. So.2d curiam), denied, (Fla.App.) (per rev. panel A of this Court overrule — (Fla.), denied, U.S.-, cert. So.2d intervening existing law in the circuit if an (1992).8 466, 121 L.Ed.2d 374 Supreme requires. Court decision The so However, cases, plaintiff’s in each of these Miles, however, implications of are not so claim was not based panel depart direct as to allow this from upon a cause of action for maintenance and previous decisions that the Court’s eases, In another line of several feder cure. damages are in maintenance and available al district courts have held that Miles does cure cases. preclude recovery Conclusion for failure to maintenance and cure.9 contrast, only we have found one court which jury’s adequately supported verdict is has held that Miles bars evidence, judgment and the thereon is damages in and cure cases. See supported by applicable precedent Texaco, Inc., Gray v. 610 So.2d Accordingly, Circuit. the district court’s (La. (La.App.), cert. 616 So.2d 686 judgment 1993). AFFIRMED. The courts which have held that GARWOOD, Judge, concurring: Circuit punitive damages are unavailable cause join fully opinion, append of action for unseaworthiness have reasoned I the Court’s and that, separate writing merely urge because are unavail- that the Inc., tium); Helicopters, Corp., Nichols v. Petroleum 17 Howard v. Atlantic Marine 1992 Pacific 119, 55487, *2, 2474, (5th Cir.1994) (longshoreman F.3d 122 in WL at 1992 U.S.Dist. Lexis at seas; consortium); 28, (E.D.La. 1992); jured high loss of accord *4-5 Feb. Bachu v. Int’l 996, (9th Terminals, 211519, *1, Corp., Smith v. Trinidad 992 F.2d 996 Marine 1991 WL at 1991 Cir.1993) curiam) 14485, 26, (per (agreeing Murray); (E.D.La. with Sept. U.S.Dist. Lexis at *3 Co., (1st Horsley Badeaux, 1991); v. Mobil Oil 15 F.3d 200 Cir. Companies, Rowan Inc. v. 1991 seaman; 1994) (injured society). 175541, *2, 12355, loss of WL at 1991 U.S.Dist. Lexis at (E.D.La. 28, 1991); Aug. *4 Collinsworth v. Fleet, Inc., 165732, *3, Oceanic 1991 WL at 1991 8. A number of federal district courts have 11759, 19, (E.D.La. Aug. U.S.Dist. Lexis at *9-10 See, e.g., reached the same conclusion. v. Ellison Odeco, Cornish, 1991); 148746, Inc. v. 1991 WL Messerschmitt-Bolkow-Blohm, 39, F.Supp. 807 *2, 10827, (E.D.La. 1991 U.S.Dist. Lexis at *4 (E.D.Tex.1992); 41 La Voie v. Kualoa Ranch & 22, 1991). July Club, Inc., 827, Activity F.Supp. 797 829-31 (D.Hawaii 1992); Steamship In re Waterman 1093, (E.D.La.1992); Corp., F.Supp. 780 1095-96 10.Only pecuniary damages are available under Tankers, Inc., 679, F.Supp. In re Cleveland 791 Miles, the Jones Act and DOHSA. See 498 U.S. (E.D.Mich.1992); Ltd., 682 In re Aleutian Enter. 30-32, (Jones Act); 111 S.Ct. at 325 Mobil Oil 793, (W.D.Wash.1991); F.Supp. 777 796 Haltom 618, 621-23, Corp. Higginbotham, v. 436 U.S. 98 Co., 179, Lykes Steamship F.Supp. v. Bros. 771 (1978) (DOH- 56 L.Ed.2d 581 (E.D.Tex.1991); 181 In re Mardoc Asbestos Case SA). damages nonpecuniary Punitive are and Clusters, 595, (E.D.Mich. F.Supp. 768 599-600 are therefore unavailable either Act. See Builders, 1991); Inc., Rollins v. Peterson 761 Patrick, 1345, Bergen v. St. 816 F.2d 1347 F/V 943, (D.R.I.1991). F.Supp. 949-50 Cir.1987); (9th Kopczynski Jacqueline, The 742 v. (9th Cir.1984), denied, F.2d 560-61 cert. 471 See, e.g., Ridenour v. Holland America 105 S.Ct. 86 L.Ed.2d Line 696 Westours, Inc., (W.D.Wash. Co., (1985). F.Supp. Horsley 806 See also v. Mobil Oil 15 1992); Texaco, Inc., (1st Cir.1994); F.Supp. Anderson v. v. Miller American (E.D.La.1992); Oceantrawl, Lines, Ltd., (6th Ortega v. President 989 F.2d Inc., (D.Alaska 1992); Cir.1993). F.Supp. 623-24 availability to allow in the context of court reexamine banc en maintenance and damages in maintenance contract-like cure punitive cases, if such particularly light claims unavailable and cure Apex context of the tort-like unseaworthiness opinion in Miles v. Supreme Court’s 317, 112 claims.2 Corp., Marine squarely That issue is

L.Ed.2d Furthermore, though even the Jones Act presented this case. may closely analogous and DOHSA not be view, seriously ques points analysis reference in the Miles with my calls into Miles cure, respect Long- to maintenance and availability tion Compensation cure. If the shore and Harbor Workers’ nonpayment of maintenance and (LHWCA), Circuits, §§ Supreme Act 33 U.S.C. the Texas First and Sixth Court, It has been and of the courts that have be. said maintenance and all the rest matter, cure “is to almost what work- are correct that Miles the seaman considered the compensation is to the land worker.” a cause men’s bars Norris, unseaworthiness,1 26:1, § as I believe M. The Law Seamen at 3 action for 1985). LHWCA, meanwhile, are, en banc should ed. they then this Court panel compensation “creates a worker’s scheme for seriously previous its decisions rethink damages in maintenance certain maritime workers which is exclusive allowing punitive Texaco, Inc., provide Gray of other remedies and does not cure eases. See and Miller, 1457; punitive damages.” (La.App.), cert. 989 F.2d 610 So.2d (exclusiveness (La.1993). § see U.S.C. 616 So.2d 686 remedies). Generally LHWCA workers’ Both unseaworthiness schemes, compensation whether state or fed- general maritime cure are doctrines of eral, lubbers, for seamen or land do not law, past have looked to the and in the we permit workers to recover availability damages under the Larson, damages. 2A A. The Law they are avail- deciding when whether one 65.37, § Compensation at 12-36 Workmen’s Merry Ship- the other. In In re able under (1987) (“punitive damages are of course not Cir.1981), 622, 625 ping, 650 F.2d compensation under a workers’ recoverable allowing puni- a First Circuit case we cited act”). Gates, McDonald See also Atkinson ac- damages in maintenance and cure (5th Cir.1988). 808, 813-14 & holding that support tions in of our genesis examining the of this damages in unseaworthiness Before are recoverable Thus, highly jurisprudence, it will be it would anomalous Court’s relevant actions. herein, normally rights per and cure differs from clas note 8 and accom- nance 1. See our curiam contractual,” 532, also, panying id. note 7 id. at 82 S.Ct. citations in text. See sified 1000, accompanying quoted “Con 10 and text. and then Justice Cardozo: and note has its source in tractual it is in the sense it but, origin, a relation is contractual in which damages generally unavailable for 2. Punitive are relation, competent given agreement to no is breach of contract. See Restatement (Second) abrogate the incident.” Cortesv. Baltimore Insu (1979); § 355 11 Williston on Con- Contracts 371, Line, 367, 77 53 S.Ct. lar 287 U.S. 1968); 1340, (W. Jaeger § at 209-11 3d ed. tracts (1932). shipown just 368 Yet because a L.Ed. 1077, (1964). § at 438-39 5 Corbin on Contracts obligation pay cure can er’s to maintenance and duty pay de- maintenance and cure That by provision,” abrogated a contractual not "be from contract was first stated Justice rives Inc., 259, Express, 809 F.2d Dawdle v. Gordon, 480, Story Fed.Cas. 482 in Harden v. 11 Offshore (5th 1987), does not mean that none 262 Cir. (No. 6,047). (C.C.D.Me.1823) v. Accord Brister pertain contract law to maintenance Inc., 350, the rules of AWI, (5th Cir.1991) 360 946 F.2d held, example, for that the and cure. It has been (Maintenance implied and cure "is in the em- and cure be set rate of maintenance ship- ployment contract between seaman and bargaining agreement. v. Norris, See Gardiner owner.”); collective 2 M. The Law Seamen 943, (9th Serv., Inc., 26:2, ("Maintenance 786 F.2d 948 (4th 1985) Sea-Land § at 3 ed. 331, Cir.), 107 S.Ct. cert. 479 U.S. compensation given cure is a contractual form of sum, sure, law.”). to the extent that L.Ed.2d 303 In general maritime To be pay obligation and cure is Vaughan analogy v. has its limits. In contract nature, Atkinson, allowing punitive contractual in 8 L.Ed.2d (1962), Douglas thereof is anomalous. for a breach "[m]ainte- Justice stated in for such refusal provide an overview of the law helpful to among general circuits. In addi under the maritime law. this area the other available Inc., First, Second, Fifth, Merry Shipping, Complaint tion to the Miles) (5th Cir.1981) (prior (collecting have held Eleventh Circuits 650 F.2d Pocahontas, cases); punitive damages are recoverable for see also Robinson v. Cir.1973).” (1st Inc., and cure. See nonpayment of maintenance 477 F.2d 1048 Inc., Pocahontas, Holmes, F.2d 1048 v. 734 F.2d at 1118. Robinson (1st Cir.1973); Enterpris Kraljic v. Berman Thus, exclusively upon three Holmes relied (2d es, Cir.1978); v. F.2d 412 Hines Supreme Vaughan, this cases: Court’s LaPorte, Inc., 820 F.2d 1187 Cir. J.A. Merry Shipping, and the First Cir- Court’s curiam). 1987) Circuit, (per In the Second eases, of these cuit’s Pocahontas. None however, recovery is limited to the amount of however, significant support for the provides attorneys’ Kraljic. in the fees. The law in rule announced Holmes. unclear. The and Ninth4 Circuits is Sixth3 Vaughan, Supreme upheld Court circuits have no law. other attorneys’ shipowner fees where right Although the to maintenance and deliberately maintenance and had withheld cure “stems from the ancient sea codes of the underlying Vaughan’s cure. The rationale Norris, 26:2, supra § Ages,” Middle subject holding to considerable debate and upheld this Court had never an award of greater length it at later on. we will discuss nonpayment of mainte- now, Vaughan enough For it is to know this: until v. J. nance and cure 1984. See Holmes fees, upheld attorneys’ puni an award of Ray McDermott & 734 F.2d 1110 directly damages, and therefore does not Cir.1984). Texaco, v. See also McWilliams holding of Holmes. See Rein (5th Cir.1986). 781 F.2d & n. 11 schreiber, Damages Admiralty Punitive only Holmes deals with the issue an abbre- Bad Faith to Provide Mainte Refusal fashion, analysis viated the extent of Holmes’ Cure, Diego nance and 15 San L.Rev. being as follows: (“the (1978) Vaughan decision affords no Atkinson, Vaughan “In punitive damages”). new basis for (1962), 8 L.Ed.2d fact; dispute Nor did Holmes said Supreme employer’s that an Court held that, Vaughan, subsequent after decisions arbitrary willful and refusal to mainte- made available. gives nance and cure rise to a claim for Holmes, attorneys’ the form of fees The second case cited and the heavily, damages. rely

addition to the claim for one which it most seems . however, Subsequent Merry Shipping Vaughan, decisions have established Like that, fees, Merry Shipping squarely support addition to such does not Johnson, Relying Sample on dicta in Al-Zawkari v. American 1347 n. Cir.1985), Steamship F.2d 8 871 590 n. Cir. 12 rt. ce 1989), one district court in the Sixth Circuit has (1986), 89 319 the Ninth L.Ed.2d punitive damages held that "a claim for under "[p]unitive damages Circuit stated in dicta that recog the doctrine of maintenance and cure is awardable, are in some circumstances to a sea Hoeffling nizable in this circuit." v. United payment man where for maintenance and cure is Steel, (E.D.Mich. F.Supp. States 792 1030 wrongfully part Sample, Relying- denied." in on 1991). Another district court in that Circuit has two district courts in the Ninth Circuit have held said that a recover "an award seaman of punitive damages that our, Riden are available. See punitive damages attorney's limited to Ow fees." 911-13; supra, F.Supp. at Nelsen v. Terminals, Inc., ens v. Conticarriers & (D.Hawaii Corp., F.Supp. Research (W.D.Tenn.1984) F.Supp. (original em however, 1992) (dicta). court, Another district phasis). suggested they Still another has that Voie, opposite reached the conclusion. See La not at all. See recoverable Mardoc Asbestos Case Clusters, supra, F.Supp. supra, F.Supp. at 600 n. 1. As at 831-32. Ridenour and La noted, recently gener Voie, conclusions, the Sixth Circuit held that reaching while different puni al maritime law does not allow of agreed dispos- that there is no Ninth Circuit case damages in a cause of action for unseawor itive of the issue. Miller, Miller, however, supra. thiness. See did specifically not discuss maintenance and cure claims. Pocahontas, however, upheld Merry Shipping. suf- Merry Shipping rule. the Holmes wrongful upon it damages for the fers from the fact that relied punitive Pocahontas, Vaughan. in cause of action for dissent in a seaman a death of holding, pointed of its As F.2d at 1051. the Second Circuit unseaworthiness. approvingly cited the First Merry Shipping Kraljic opinion: out in its decision, which, in the Pocahontas Circuit’s justified pu “The [Pocahontas ] Merry Shipping, “upheld an award words of damage primarily by relying nitive damages shipowner’s willful punitive for a of dissenting opinion Mr. on Justice Stewart’s withholding main- of a seaman’s and callous which, [Vaughan in v.] Atkinson as we F.2d at 625. Yet and cure.” 650 tenance indicated, have have would awarded exem holding in Pocahon- this endorsement damages concepts plary under traditional Merry clearly Shipping since tas is dictum necessarily not limited to the amount of and cure. As not involve maintenance did difficulty counsel fees. The obvious with noted, “The Holmes commentator has one approach is that the court followed the authority allowing an award of Court’s of in views the dissenters Atkinson and not readily damages apparent, not majority.” Kraljic, at was not at maintenance and cure because Kraljic, no of Holmes made mention even Davis, Merry Shipping.” Punitive issue though years it was decided six earlier. Cure, Damages Maintenance Kraljic, held that the Second Circuit willful 103, 108 Mar.Law. nonpayment of maintenance and cure entitles Furthermore, when one looks back seaman recover limit- Miles, of Merry Shipping with the benefit ed to the amount fees. Shipping Merry is doubt- becomes clear Kraljic court stated: holding Merry authority at best. The ful court, believe, “The we cor- [Pocahontas ] Shipping are avail- —that majority rectly perceived that both general maritime law—rested able under minority opinions in Atkinson essence upon assumptions, both of which were two found that were awarda- First, Merry Shipping capsized by Miles. ble maintenance and cure eases. The nonpecuniary losses are recovera- stated is, however, inescapable fact that the ma- general maritime law. See 650 ble under jority opinion in limited that re- Atkinson course, was proposition, at 626. That covery despite explicit to counsel fees rejected at squarely Miles. See 498 U.S. view of the that no such curb be dissenters Second, Merry at 325. S.Ct. imposed.” Id. at 415-16. argued unavailability of Shipping Finally, in order about the a brief word is Act under the Jones does case, Circuit’s Hines which was Eleventh unavailability general compel their under years Recog- three after Holmes. decided at 626. That maritime law. See 650 F.2d availability question nizing that on the however, reasoning, flatly inconsistent with dispos- damages, “Vaughan is not uniformity in insistence Miles’ only a claim for itive because that ease availability mari- asserted,” Hines, attorney’s fees was such as the Jones Act. time law and statutes court choose to F.2d at the Hines 27-29, 30-32, 111 See 498 U.S. ”, Merry Shipping guidance “[f]ollow[] Miles, Thus, it would because id., punitive damages in mainte- and allow longer Merry Shipping is no appear that however, Again, Mer- nance and cure cases. good law. authority at ry Shipping questionable by case cited Holmes is the First The last best.5 sure, To Pocahontas decision. Circuit’s that Holmes relied up, sum the cases squarely punitive hold that To that case did the result upon cannot now available in maintenance and fees, attorneys’ eases, Vaughan awarded favorably cited in Holmes. and it was cure ping, one of them. Hines judges panel which was authored the Hines were on 5. Two of the per pre-split panel Merry Ship- was a curiam. Fifth Circuit the id., damages; Merry Shipping suggest did that the fees were meant to be a compensatory out-of-pocket for ex- award maintenance and cure and has not involve put it: penses. As one commentator Miles; and Po- probably been overruled clearly if Vaughan “Yet did not articulate upon Vaughan the dis- cahontas was based puni- compensatory such an award was or cite, that Holmes did not sent. Of the cases Initially, tive. the Court cited Cortes Kraljic to the limits employer’s an proposition that failure attorneys’ of fees and Hines relied amount timely payments to make of maintenance Merry Shipping. the now-dubious and cure entitle the seaman to the Holmes, arguable support of there is one necessary intimating expenses, remaining possibility that should be consid- compensatory. award was The ered, namely, Vaughan, only up- while stress, however, that the Court went on to fees, attorneys’ holding an award of an- payments defendant’s failure to make the principle than its result. nounced a broader callous, language was willful and that lends unquestionably Vaughan is the root of this puni- itself to the view that the award was hence, law; attempt area of we now entire Maslanka, Damages tive.” Punitive in the Vaughan determine how broad is. (1980); Admiralty, 5 Mar.Law. Davis, supra, at accord Vaughan, opinion by Doug- a brief Justice as to commentators are divided whether las, “ambiguous”6 has been described as and Vaughan award was intended to be com- “cryptic”7 rightly so. What is clear is —and pensatory8 punitive9 or in nature. Douglas upheld an that Justice Fortunately, deciphering Vaughan, we attorneys’ to a where his fees seaman em- enigmatic are not confined the text ployer deliberately payment had withheld opinion unexpressed or the intent of its au- maintenance and cure. The confusion sur- Vaughan thor. Since was decided in theory Doug- rounds the under which Justice Supreme Court has cited it seven attorneys’ fees. las awarded On the one cases. Each of these cases concerns the hand, adjectives Douglas that Justice fees; shifting attorneys’ none of them employer’s used to behavior— describe cases, concerns maritime law. In all seven “callous,” “recalcitran[t],” persis- “willful and Vaughan support- the Court has treated tent,” Vaughan, 369 ing exception to the so-called “American imply that the award was meant to litigants generally 999— Rule” that must bear their hand, be a sanction. On the other case, own costs. the first such Chief his statements that a seaman is entitled to Vaughan Justice Warren read as establish- “necessary expenses” recover and that ing compensatory fee-shifting: basis for lawyer go seaman “was forced to hire a exceptions “Limited to the American rule him,” get plainly to court to what was owed ... have been sanctioned this Court Raduazzo, Black, Flynn, Cooper 6. 1 BE. D. & G. Bene 9. See G. Gilmore & C. The Law of Admi Admiralty § (2d dict on at 4-80 rev. ed. 1975) ralty (Vaughan ed. “awarded what 1991). essentially punitive damages were under the Mallor, fees.”); name of counsel Punitive Attor Robertson, Judge Rubin’s Maritime Tort Deci- ney's System, Fees Abuse Judicial sions, 52 La.L.Rev. (1983) (“Although N.CX.Rev. the Su Moore, ¶ 8. See 6 J. Moore’s preme Federal Practice 54.- Court awarded the seaman fees 78[3], (2d 1986) ("The at 54-503 n. 29 ed. compensatory damages, under the rubric of [Vaughan expenses ] court found that ... emphasized the role that bad defendant's faith rightly part the suit could compensatory damage."); Norris, be treated as played causing damages.”). had those That 30; id. at 54-504 n. the award was was also the view of 26:41, (“The supra § at 111 allowance of Rowe, Judge Rubin. See Sanchez justified by counsel fees was virtue of the inclu- (5th Cir.1989) (“Fees were awarded [in 'necessary expenses' damage sion arising as items of Vaughan shipowners’ ] on basis of the bad- suffering physical out of the handi- response underlying to the faith seaman's cap give the failure which follows mainte- claim.”). Judge Rubin has been described as cure."); Reinschreiber, supra, nance and at 312 (“the acknowledged “an [Vaughan] master of the maritime field.” majority attorney’s award[ed] Robertson, compensatory damages"). supra, fees as an item of at 1527.

1289 may now be otherwise. preme view justice Court’s overriding considerations when 1943, Cole, 1, 93 36 v. 412 U.S. S.Ct. In Hall appro a result. In such compel seemed (1973), Brennan stated: 702 Justice L.Ed.2d held, circumstances, an ad we have priate “Thus, unquestioned that a federal it is counsel may be awarded miralty plaintiff to a success- may counsel award fees compensatory an fees as item of opponent has acted in his party ful when taxed).” (not cost to be separate as a faith, wantonly, op- vexatiously, or for bad Corp. v. Maier Distilling Fleischmann cases, this class of pressive reasons. 718, 714, Co., 87 S.Ct. Brewing U.S. 386 is, shifting’ underlying rationale the of‘fee (1967) (empha 1404, 1407, 475 18 L.Ed.2d course, essential ele- punitive, the added). sis triggering the award of fees ment in of ‘bad faith’ on the the existence therefore however, Vaughan has Brewing, Maier Since 5, litigant.” Id. at part of unsuccessful proposition for the to stand now come added; (emphasis internal at 1946 93 S.Ct. may be awarded attorneys’ sometimes fees omitted). marks quotation has opponent his party when prevailing a in the re- reasoning was reaffirmed Hall’s litiga- in the conduct in acted bad faith NASCO, Inc., v. 501 of Chambers cent case said, commentator has As one 32, 2123, tion.10 L.Ed.2d 27 111 S.Ct. 115 U.S. Hall, (1991). uniformly cited as a foun- Court the Chambers Vaughan Quoting now “is exception “in of the bad-faith said: the case ex- ‘bad faith’ so-called case dational Rule, underlying ratio- ‘the to the American rule.” Reinschreib- ception to the American ” is, course, punitive.’ “fee-shifting” nale of compensato- purely er, supra, at 312.11 53, Even three 111 at 2137. at S.Ct. Id. not aired Vaughan has been ry description of Hall for the in cited dissenters Chambers Brewing.12, Maier majority opinion since in a for the bad that “the rationale proposition short, view is current the Court’s 75, at punishment.” Id. exception faith is. be understood Vaughan should fee J., dissenting). (Kennedy, at 2148 111 S.Ct. litiga- conduct in for bad-faith as a sanction rejected specifically Court The Chambers tion. petitioner that fee- argument made This compensatory character. shifting is Vaughan in- However, knowledge that our said, utterly,” id. “fails argument, the Court does immedi- a bad-faith fee-shift volved 15, 54, because even at 2137 n. 111 S.Ct. at type of that are awards ately tell us whether compensatory may fees have though the Although some punitive. compensatory or purpose punitive. primary effect, their attorneys’ an award of have asserted con- analogized to for civil fines The Court to the exception compensatory conse- the bad-faith tempt, fees under which design. quence but compensatory,13 the Su- rule is American have, 112, retrospect, Indus., characterized tators Valley Inc. v. Local 10. See Summit 2112, 2114, involving faith' 719-721, the ‘bad 717, Vaughan 72 decision 102 S.Ct. 456 U.S. rule.”). Professor (1982); exception the American Express, Roadway Inc. v. L.Ed.2d 511 2455, interpretation 765-67, 752, the bad-faith Moore calls 100 S.Ct. Piper, U.S. 447 Moore, supra, at (1980); view.” 2464, Runyon Vaughan "a revisionist v. 65 488 L.Ed.2d 2586, Supreme 183-85, may, Court is 160, that as 54-506. Be McCrary, 96 427 S.Ct. U.S. meaning of its (1976); obviously the final arbiter Alyeska Pipeline 49 L.Ed.2d precedents. Society, 421 U.S. Serv. Co. Wilderness 258-59, 44 L.Ed.2d Marshall, dissenting opinion, once in a 12. Justice States, (1975); Co. v. United F.D. Rich interpretation compensatory revived the 116, 128-30, 40 L.Ed.2d S.Ct. S.Ct. Alyeska, U.S. at Vaughan. See 1, 4-6, Cole, (1974); 412 U.S. Hall Vaughan ("the attorney’s ] [in fee award at 1633 36 L.Ed.2d pri- part legitimately as a included was Lehman, entitled, Siegler, plaintiff Inc. v. was Accord Lear mary 11. to which relief (9th Cir.1988) ("Although Vaughan litigation adjustment ancillary an rather than However, Supreme opinion admiralty, previous subse- Court expenses"). sounded in Court, example of bad en- quently the case as an had construed Justice Marshall written for justifying Vaughan. F.D. faith conduct view of bad-faith dorsed the Green, litigation generally.”); From S.Ct. at fees in civil Rich Fees, Attorney’s 69 Cornell L.Rev. Here to Reinschreiber, supra, ("Both (1984) 13. See the Court commen- 232 n. 148 above, upon might said, Based it seem that quoting As the Chambers Court from “ Kraljic got right: below, Second Circuit it the Fifth Circuit decision ‘[f]ee-shift- Vaughan award was a form of dam- ing a here is not matter of substantive reme- age, but one limited to the of attor- dy, vindicating judicial authority.’” but of neys’ Chambers, reading fees. A careful 55, Nasco, Id. at (quoting S.Ct. at 2138 however, belies the view awards made Radio, Inc. Calcasieu Television and exception under the bad-faith to the Ameri- (5th Cir.1990)). interpre- This essentially punitive can rule are damages. comports tation Vaughan. with the facts in The Chambers Court drew a distinction be- shipowner’s liability Because the for mainte- pursuant tween fees awarded to the bad-faith clear, perfectly nance and cure was it was an exception, which are based a federal litigation process require abuse of the him power parties court’s inherent to sanction “go get plainly to court to what was owed behavior, litigation their and other “fee-shift- him laws that are centuries old.” ing embody rules that policy, a substantive Vaughan, 369 U.S. at 82 S.Ct. at 999. a permits prevailing such as statute which a day, At the end of the one need not defi- party in certain litigation classes of to recov- nitely Vaughan resolve whether awarded er fees.” Id. at 111 S.Ct. at 2136. In compensatory damages or established an ex- words, other fee-shifting bad-faith is not ception way, to the American rule. Either suit, based on the outcome or merits of a but clearly its award was not a parties rather “on how the conduct them- award and Vaughan provides therefore no during litigation.” selves Id. at Vaughan for the Holmes rule. enti- S.Ct. at 2137. While majority the Chambers tles seamen to recover opinion equivocated question on the whether fees, perhaps or compensatory damages, a federal court power has the inherent employer when unreasonably their fails to impose relating sanctions for conduct to the timely a basis. But in case, merits rather than the conduct of Miles, light of this Court should reconsider litigation, see id. at 54 n. en banc whether should be justices 2138 n. four firmly were of the similarly available. fee-shifting view that bad-faith may not be POLITZ, KING, used to prelitigation Judge, sanction Before conduct. Chief Jus- argued GARWOOD, JOLLY, HIGGINBOTHAM, tice Scalia that the American rule is DAVIS, deeply JONES, SMITH, history “prevents DUHÉ, rooted our a (without authorization) WIENER, statutory BARKSDALE, from EMILIO M. engaging GARZA, DeMOSS, might BENAVIDES, what be termed substan- is, tive fee-shifting, that fee-shifting part PARKER, STEWART and Judges. Circuit of the merits award. It does not in principle Nov. fee-shifting bar procedural as a sanction for BY THE (dissent- COURT: abuse.” Id. at 111 S.Ct. at 2140 ing opinion; original emphasis). Likewise, majority service, A Judges in active Kennedy, Justice writing for himself and two motion, on the having Court’s own deter- others, “[wjhen argued court, a federal mined banc, to have this case reheard en through invocation of powers, its inherent IT IS ORDERED that this cause shall be party sanctions a for bad-faith prelitigation reheard the Court en argu- banc with oral conduct, goes beyond well exception ment on a date hereafter to be fixed. The the American Rule.” Id. 111 S.Ct. at specify Clerk briefing will schedule for the (dissenting opinion). filing supplemental briefs. upshot of all following: this is the exception rule, bad-faith to the American Vaughan

which the example, was an

not in a true damages. sense Puni- are awarded on the basis of the case,

merits of a whereas bad-faith fee-shift-

ing sanctions litigation abuses of the process.

Case Details

Case Name: Domingo Guevara v. Maritime Overseas Corporation

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Nov 4, 1994

Citation: 34 F.3d 1279

Docket Number: 92-4711

Court Abbreviation: 5th Cir.