| “Two if by Sea”: Punitive Damages Reinvade American Shores |
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Up until recently, punitive damages had been for the most part a problem of the past, particularly in Louisiana. This was because here in 1996, in the era of “tort reform”, the Louisiana Legislature had repealed Louisiana Civil Code article 2315.3 (4), which had allowed for recovery of punitive damages in actions involving toxic or hazardous substances. Since its original passage in 1983, that codal article had resulted in hundreds of class actions for accidental spills and releases as well as countless “legacy site” cases related to remediation of abandoned oilfield sites. Once that article was repealed, however, much of that litigation dried up. At the same time, in the maritime context, the Supreme Court opinion in Miles v. Apex Marine Corporation (5) had similarly suggested that the courts should shy away from punitive damages, particularly in the context of seamen’s claims. But now that the punitive damages “spigot” has been reopened by the U.S. Supreme Court, a reverse trend can be expected insofar as the maritime world is concerned. At first blush, the two recent Supreme Court opinions seem to be related to narrow types of claims. The Townsend opinion, written by Justice Thomas, concerned the availability of punitive damages where a seaman’s employer “willfully and arbitrarily” denies the seaman “maintenance”, a required daily stipend while injured, and “cure”, the necessary medical treatment until the seaman reaches a point of maximum medical improvement. Similarly, the Exxon opinion, written by Justice Souter, arose in the limited context of an oil spill, and allegations of “willful, wanton and reckless conduct”. But the contents of both decisions make multiple references to the availability of punitive damages in a variety of other marine contexts, and also recount the history of punitive damages beginning with English common law through the present in non-maritime contexts, suggesting perhaps, broader application in the future. Prior to these decisions, the U.S. Court of Appeals for the Fifth Circuit, which governs appeals from federal courts in Texas, Louisiana and Mississippi, had seemed somewhat unsure as to how to deal with punitive damages, which led to a variance in outcomes not only at the Fifth Circuit level but also in the U.S. District Courts. In New Orleans, as recently as February and April of this year, at least two federal District judges had found punitive damages unavailable for the failure to pay maintenance and cure (6), just before the Supreme Court ruled in Townsend they were available. Meanwhile, another local Judge denied the right to recover punitive damages to a woman who was allegedly wrongfully confined on a diving vessel following her father’s disappearance (7). But in the Katrina “Barge Case,” local residents are attempting to recover punitive damages in the litigation associated with damage allegedly caused by a breakaway barge in the Industrial Canal in New Orleans during Hurricane Katrina (8). Finally, another local Judge has ruled punitive damages are available to the dependents of two deceased tank cleaning employees. At this point in time, it will simply be a matter of “waiting out the storm” as the Supreme Court’s recent rulings filter down through the lower federal courts as well as the state courts which, at times, also apply maritime law where they exercise admiralty jurisdiction. Batten down the hatches….
1 ___ U.S. ___ , 129 S. Ct. 2561(June 25, 2009)
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Relying in part upon British opinions from near to the time of the Revolutionary War, this past June the U.S. Supreme Court made it clear in Atlantic Sounding Co. v. Townsend (1), that punitive damages are still very much available under the general maritime law of the United States. This decision follows in the wake of another Supreme Court decision just one year ago related to the EXXON VALDEZ oil spill (2), wherein the Court, relying in part on British common law cases from as far back as 1763, held that a Plaintiff can add a claim for punitive damages under the general maritime law to a lawsuit based upon the Clean Water Act (3). These two decisions, taken together, suggest that for the future, in the lower courts, punitive damages may become a regular part of any suit based in whole or in part upon the general maritime law for certain types of claims or claimants. This could be a major cause for concern for the marine industry.