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SUPREME COURT RULES PUNITIVE DAMAGES AVAILABLE IN MAINTENANCE AND CURE CASES

Posted by: James M. Beard
June 26, 2009
Topic: Legal Cases and Concerns

ATLANTIC SOUNDING v. TOWNSEND

The Supreme Court of the United States has ruled today that punitive damages may be awarded to Jones Act Seamen when their employer willfully and wantonly withholds payment of maintenance and cure benefits. The decision affirms the availability of punitive damages under the General Maritime Law and rejected arguments that the Court's prior decision in Miles v. Apex had prohibited such damages. Noting that the General Maritime Law recognized punitive damages prior to enactment of the Jones Act, the Court reasoned neither the Jones Act nor their prior decision in Miles v. Apex was intended to eliminate punitive damages in a maintenance and cure case. The Jones Act was enacted to expand remedies for injured seamen rather than to limit them, and although punitive damages are not available under the Jones Act, nothing in the Jones Act altered a seaman's preexisting right to seek punitive damages in a maintenance and cure case. The Court did not impose any cap on the amount of punitive damages that might be recovered in any given case, and left that issue to future decisions. Punitive damages are designed to punish wrongful misconduct and deter others similarly situated from engaging in such wrongful conduct.

The Supreme Court ruling in Atlantic Sounding restores a seaman's valuable right to seek punitive damages in maintenance and cure cases. Beginning in 1990 with the Supreme Court's decision in Miles v. Apex, Jones Act employers became increasingly aggressive in refusing to pay maintenance and cure benefits, believing they had no exposure for punitive damages. The results have been long delays and contentious fights to attempt to obtain basic maintenance and cure benefits for seamen. Some Jones Act employers have increasingly used wrongful withholding of maintenance and cure as a tool to punish and wrongfully attempt to beat injured seamen into submission. Restricting awards for wrongful withholding of maintenance and cure to attorney fees has not been a substantial deterrent to this practice. By restoring the seaman's right to punitive damages, the seaman once again has the ability to fight back against his employer for willful and wanton failure to pay maintenance and cure benefits. A Jones Act employer who willfully and wantonly withholds payment of benefits to an injured seaman must now realize he may be facing a claim for punitive damages. The rationale behind imposition of punitive damages will once again encourage Jones Act employers to resolve all doubts as to entitlement to maintenance and cure benefits in favor of the injured seaman. In most cases punitive damages are not covered by marine insurance policies and must be personally paid by the Jones Act employer.

The decision will also have impact on non-seaman cases. First, the case reaffirms that punitive damages are viable and remain available in General Maritime Law negligence cases. The decision importantly stated: " The Court's laudable quest for uniformity in admiralty does not require the narrowing of available damages to the lowest common denominator approved by Congress for distinct causes of action [Jones Act]." Reasonably interpreted this means that in non-seaman cases not involving the Jones Act or the Death on the High Seas Act, damages under the General Maritime Law may include such items as loss of love and affection and loss of society. Any prior cases relying upon Miles v. Apex to limit such damages in a non-Jones Act case are highly called into question.

The Supreme Court's decision in Atlantic Sounding Co. v. Townsend can be found at ___ S.Ct. ____, 2009 WL 1789469 ( decided June 25 2009). Justice Thomas delivered the majority decision of the Court with Justices Steven, Souter, Ginsberg and Breyer joined.



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