Amicus Curiae Brief — Dutra Grp. v. Batterton, 139 S. Ct. 627 (2018) (No. 18-266)

No. 18-266

In THE

Supreme Court of the United States

THE DUTRA GROUP,

Petitioner,

Vv.

SHRISTOPHER BATTERTON,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE

THE CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA AND

INTERNATIONAL GROUP OF P&I CLUBS

SUPPORTING PETITIONER

DARYL JOSEFFER Scort A. KELLER

JONATHAN URICK Counsel of Record

U.S. CHAMBER BAKER Borrts L.L.P.

LITIGATION CENTER 1299 Pennsylvania Ave. NW

1615 H St. NW onan DC 20004

pr 20062 (202) TT00

(202) scott. keller@bakerbotts.com

Counsel for Amicus J. MARK LITTLE

Curiae The Chamber of BAKER Borts L.L.P.

Commerce of the United 910 Louisiana St.

States of America Houston, TX 77002

(713) 229-1489

Counsel for Amici Curiae

Wit_son-Epes Paovrino Co. Inc. — (202) 789-0096 — Wasiinoron, D.C 20002

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TABLE OF CONTENTS

Interest of Amici Curiae

Summary of Argument

Argument

I. The Framers’ Fundamental Interest In

Page

1

3

6

ii

TABLE OF AUTHORITIES

Page

CASES

AT&T Mobility LLC vy. Concepcion,

563 U.S. 333 (2011) 4,11

Atlantic Sounding Co. v. Townsend,

557 U.S. 404 (2009) 17, 18

Clausen v. Icicle Seafoods, Inc.,

272 P.3d 827 (Wash. 2012) 7

Exxon Corp. v. Cent. Gulf Lines, Inc.,

500 U.S. 608 (1991) 6

Exxon Shipping Co. v. Baker,

554 U.S. 471 (2008) 3, 7, 8, 14

Foremost Ins. Co. v. Richardson,

457 U.S. 668 (1982) 6

Garnerv. Energy Transp. Corp.,

No. 95-7969, 1996 WL, 346631 (2d Cir.

1996) 7

Ledet v. Smith Marine Towing Corp.,

455 F. App’x 417 (5th Cir. 2011) 7

Lewis v. Lewis & Clark Marine, Inc.,

531 U.S. 438 (2001) 18

Miles v. Apex Marine Corp.,

498 U.S. 19 (1990)................. 9, 10 ,14 ,15, 16, 17, 18

Moragne v. States Marine Lines, Inc.,

398 U.S. 375 (1970) 17

Norfolk S. Ry. Co. v. Kirby,

543 U.S. 14 (2004) 3, 5, 6, 14

Pac. SS. Co. v. Peterson,

278 U.S. 130 (1928) 15, 16, 18

Patsy v. Bd. of Regents of State of Fla.,

457 U.S. 496 (1982) 15

TABLE OF AUTHORITIES—Continued

Page

Salazar v. Buono,

559 U.S. 700 (2010) 15

Sisson v. Ruby,

497 U.S. 358 (1990) 6

The Lottawanna,

88 U.S. (21 Wall.) 558 (1874) 3, 6, 7,9

CONSTITUTIONAL PROVISION AND STATUTE

U.S. Const. art. III, § 2 6

28 U.S.C. § 1333 6

MISCELLANEOUS

maritimepartnership.com/about/faq/ 13

Mar. L.J. 156 (2013) 10

(Le. Plunderers)?, 45 J. Mar. L.. & Com.

415 (2014) 13

Eisenberg et al., The Predictability of

Punitive Damages, 26 J. Legal Stud.

623 (1997) 11

Gilmore & Black, Law of Admiralty § 6-23

(2d ed. 1975) 18

iv

TABLE OF AUTHORITIES—Continued

Gotanda, Punitive Damages: A

Analysis, 42 Colum. J.

Page

14

Comparative

Transnat’!] L. 3914 (2004)

Henderson, The Impropriety of Punitive

Damages in Mass Torts, 52 Ga. L.. Rev.

719 (2018)

ll

Plitt et al., 12 Couch on Ins. § 172:43

(2018)

10

Polinsky & Shavell, Punitive Damages:

An Economic Analysis, 111 Harv. L.

Rev. 869 (1998)

- 12

Life Preserver: An Overview

of U.S. Maritime Law for Non-

Maritime Lawyers, 26 U.S.F. Mar. L.J.

1 (2014)

weve LI

42 Am. U.L. Rev. 1465 (1993)

v

TABLE OF AUTHORITIES—Continued

Page

Sunstein et. al., Assessing Punitive

Damages (with Notes on Cognition and

Valuation in Law), 107 Yale L.J. 2071

(1998) 8, 12

Viscusi, The Social Costs of Punitive

Damages Against Corporations in

Environmental and Safety Torts, 87

Geo. L.J. 285 (1998) 12

Yetka, Insurance Coverage for Punitive

Damages, 44-F ALL Brief 18 (ABA

2014) 10

IN THE

Supreme Court of the United States

No. 18-266

THE DUTRA GROUP,

Petitioner,

Vv.

CHRISTOPHER BATTERTON,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE

THE CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA AND

INTERNATIONAL GROUP OF P&I CLUBS

SUPPORTING PETITIONER

INTEREST OF AMICI CURIAE'’

The Chamber of Commerce of the United States of

America is the world’s largest business federation. It

represents 300,000 direct members and _ indirectly

represents the interests of 3 million companies and

professional organizations of every size, in every industry

sector, and from every region of the country. An

' Pursuant to Supreme Court Rule 37.6, amici curiae state that no

counsel for any party authored this brief in whole or in part and no

entity or person, aside from amici curiae, their members, and their

counsel, made any monetary contribution intended to fund the

preparation or submission of this brief. All parties have consented to

the filing of this brief.

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important function of the Chamber ia to represent the

interests of is members in mattiors before Congress, the

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SUMMARY OF ARGUMENT

ostablished goal of ensuring “uniformity and consistency”

in maritime law, The Lottawanna, 88 U.S. (21 Wall.) 558,

Es

é

Ht

TH

punitive damages at the amount of compensatory

—

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would cause maritime businesses to overcorrect and

§

maritime businesses, Yet many countries around the

world, using the civil-code tradition, do not allow punitive

“protecting!” it. Kirby, 543 U.S, at 25.

Congress has already recognized the problema in thin

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ARGUMENT

l. Toe FRAMERS’ FUNDAMENTAL INTEREST IN

PROTECTING MARITIME COMMERCE WOULD Br

UNDERMINED By ALLOWING PUNITIVE DAMAGES

FoR UNSEAWORTHINESS CLAIMB.

The Framers vested federal courta with maritime

jurisdiction to protect maritime commerce, The

Constitution extends the federal “judicial power” to “all

Cases of admiralty and maritime Juriadiction.” U.S,

Conat, art. IIL, $2. Likewise, Congress has long vested

federal district courts with original jurisdiction in “lalny

civil case of admiralty or maritime juriadiction.” 28

U.S.C, § 1393301), As this Court has repeatedly reiterated,

the “fundamental interest giving rise to [this grant of|

maritime jurisdiction is the protection of maritime

commerce,” Kirby, 643 U.S. at 25 (emphasis and internal

quotation marks omitted); Exxon Corp. v. Cent. Gulf

Linea, Ine., (OO US, 608, 608 (1991); Sisson vy. Ruby, 497

U.S. 368, 367 (1990),

Consequently, this Court has long recognized the

necessity for “uniformity and consistency” in maritime

law. The Lottawanna, 88 U.S. (21 Wall.) at 575. The

fundamental interest in protecting maritime commerce

“eannot be fully vindicated unless ‘all operators of vessels

on navigable waters are subject to uniform rules of

conduct,” Sisson, 497 U.S. at 367 (quoting Foremost Ina,

Co, v. Richardson, 457 U.S, 668, 675 (1982) (emphasis

omitted)),

Far from fulfilling the Framers’ aim of “protectil ng]

damages are available in maritime casos,

514, But this cap has proven to be leas effective in

practice than it might seem in theory,

Punitive damages can pose a multimillion-dollar risk

in maritime cases, As an initial matter,

“(njotwithatanding the Supreme Court's ruling, state

fell outside the seope of

. v.

Seafoods, Ine, 272 PAd B27, B34-8386 (Wash,

(upholding a $1.3 million punitive damages award on a

maintenance-and-cure claim despite the jury awarding

only $37,420 in compensatory damages).)

And even when courta do enforce the cap, the punitive

damages may still be substantial because plaintiffs can

secure large compensatory damages awards in maritime

casos, See, o.g., Ledety, Smith Marine Towing Corp., 466

¥. App’x 417, 421 (6th Cir, 2011) (upholding a $1.8 million

compensatory damages award); Garner v, Hnorpgy

Corp., No, 96-7909, 1996 WL, 346631, at *1 (2d

Cir, 1996) (upholding a $1.1 million compensatory

damages award).

8. Like most businesses, maritime businesses have a

substantial interest in and need for predictability in

connection with business risks and costs, As a result,

maritime law has always emphasized uniformity and

consistency. See The Lottawanna, 88 U.S, (21 Wall.) at

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576, But punitive damages present a real and inherent

danger of arbitrariness,

remedially similar Jones Act statutory claim. Permitting

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that weighty remedy to turn on whether a plaintiff

asserts an alternative common-law claim for the same

injury fractures the “uniformity and consistency” that

should be the hallmark of maritime law. The Lottawanna,

88 U.S. (21 Wall.) at 575.

Proposed Changes to Discovery Rules in Aid of “Tort

Reform”: Has the Case Been Made?, 42 Am. U.L. Rev.

1465, 1487 (1993); see Redish & Amuluru, The Supreme

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on the remedies available “for seamen’s injury or death,”

498 U.S. at 36 (emphasis added), and the Jones Act

prohibits punitive damages for both personal injury and

wrongful death claims, see Pet. Br. 26-28.

The Ninth Circuit’s effort to shove the square peg of

punitive damages into the round hole of an

jurisdictions hold that public policy prohibits

il

context. Concepcion, 563 US. at 350. “Faced with even a

small chance of a devastating loss, defendants will be

pressured into settling questionable claims.” Jbid.

Indeed, “{t}he risk of suffering a crushing punitive

damages penalty gives rise to so-called ‘blackmail

settlements’ in which defendants pay more than the * * *

claims are reasonably worth.” Henderson, The

of Punitive Damages in Mass Torts, 52 Ga.

L. Rev. 719, 747 (2018); see also Scheverman, Two

Worlds Collide: How the Supreme Court’ Recent

Punitive Damages Decisions Affect Class Actions, @

Baylor L. Rev. 880, 916 (2008) (demonstrating that the

presence of punitive damages “increases exponentially”

the pressure to settle and “creates acute settlement

leverage”); Eisenberg et al. The Predictability of

Punitive Damages, 26 J. Legal Stud. 623, 625 (1997)

(“Perhaps uncounted thousands of cases settle on terms

different than those on which they would otherwise settle

because of the possibility of punitive damages.”).

If maritime businesses cannot adequately predict the

scope of potential punitive damage liability, they will be

forced into overpriced settlements. Rather than litigate

to final judgment an unseaworthiness claim, a maritime

business would face significant pressure to settle the case

simply to avoid a significant punitive damages award.

This, too, undermines uniformity and consistency that

should be the hallmark of maritime law.

D. The overpriced settlements that unseaworthiness

plaintiffs could extract will come at a significant cost. The

American maritime industry will pay that cost not only in

the form of the substantial settlements themselves, but

also by the attendant overdeterrence of desirable

economic activity.

Liability for wrongful conduct must be commensurate

with the wrong involved so businesses can put in place

appropriate deterrents to wrongful conduct. This interest

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is substantially undermined by punitive damages. The

likely effect of allowing such an award is to make

maritime commerce (and hence the goods transported in

it) more expensive by injecting greater uncertainty into

the system.

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another, even in that subset of cases in which insurance

coverage is available and effective. There is no reason to

upset the settled insurance expectations that reflect the

longstanding balance Congress struck in the Jones Act

between the interests of shipowners and the rights of

injured seafarers.

These insidious inefficiencies act as a drag on not only

the maritime industry, but the economy as a whole. The

American maritime industry is massive. Its

a calatnahd quadiive Gina en tee cat Oem

the generic common-law duty to provide a seaworthy

efficient means of shipping goods, see, e.g, Dubner &

Pastorius, On the Ninth Circuits New Definition of

Piracy: Japanese Whalers v. the Sea Shepherd-Who Are

the Real “Pirates” (ie. Plunderers)?, 45 J. Mar. L. &

Com. 415, 418 (2014)}—would become much more

expensive. Whether businesses will pay the inevitably

higher rates for maritime shipping or turn to less

efficient and more costly modes of transportation, the

result is the same: higher shipping costs that inflate

prices on goods for everyone. These reverberating

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will necessarily be felt by businesses throughout the

economy. At a minimum, the Court should be cognizant

of these drastic costs when it acts as a common-law court

general maritime law.” 498 U.S. at 33. The Jones Act

does not allow punitive damages for maritime personal

injury claims, as petitioner correctly explains. See Pet.

Br. 17-19. And a Jones Act claim overlaps with a

common-law unseaworthiness claim. See Pet. Br. 19-21.

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So in addition to thwarting the Framers’ goals in vesting

the federal courts with maritime jurisdiction, awarding

punitive damages for unseaworthiness would also defy

Congress’s expressed judgment on this question in the

Jones Act.

A. “Congress’s prerogative to balance opposing

interests and its institutional competence to do so * * *

[merits] deference to its policy determinations.” Salazar

v. Buono, 559 US. 700, 717 (2010) (plurality op.); see

Patsy v. Bd. of Regents of State of Fla., 457 U.S. 496, 513

(1982) (“The very difficulty of these policy considerations,

and Congress’ superior institutional competence to

pursue this debate, suggest that legislative not judicial

solutions are preferable.”). The Court has honored this

“fundamental principle[|” in the maritime context. Miles,

498 U.S. at 27.

The Jones Act and unseaworthiness claims have

overlapping remedies. This Court made that clear shortly

after the Jones Act’s passage, when it explained that this

statute created an “alternative of the right to recover

indemnity under the old rules on the ground that the

injuries were occasioned by unseaworthiness.” Pac. S.S.

Co. v. Peterson, 278 U.S. 130, 138 (1928). In other words,

when a seaman’s injuries are caused by conduct covered

by an unseaworthiness claim or the Jones Act, “there is

but a single wrongful invasion of his primary right of

bodily safety and but a single legal wrong.” Ibid.

In Miles, the Court noted the “extensive[]” legislation

on maritime law and acknowledged that “Congress

retains superior authority in these matters.” 498 U.S. at

27. It follows, the Court explained, that “an admiralty

court should look primarily to these legislative

enactments for policy guidance.” [bid. Courts must “keep

strictly within the limits imposed by Congress” and be

not to overstep the well-considered boundaries

imposed by federal legislation.” Ibid.

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“Cognizant of the constitutional relationship between

the courts and Congress,” Miles declined to “create,

under our admiralty powers, a remedy that * * * goes

well beyond the limits of Congress’ ordered system of

recovery for seamen’s injury and death.” Jd. at 36-37.

Instead, the Court “actjed] in accordance with the

uniform plan of maritime tort law Congress created in

*** the Jones Act,” and it held that “[bjecause [a

seaman’s| estate cannot recover for his lost future income

under the Jones Act, it cannot do so under general

maritime law.” Id. at 36.

That reasoning mandates reversal of the Ninth

Circuit’s decision here. As Miles recognized, Congress

has legislated “extensively” in the area of maritime law.

Id. at 27. The most important of these enactments, the

Jones Act, sought to “establish{| a uniform system of

seamen’s tort law.” Jd. at 29. That statute s

addresses the same “wrongful invasion of [a seaman’s|

primary right of bodily safety” that the common-law

unseaworthiness cause of action also protects. Peterson,

278 U.S. at 138. Exercising its legislative power to weigh

the costs and benefits of various remedies, Congress

chose to disallow punitive damages for that type of legal

wrong. See Pet. Br. 15-21. Miles thus controls this case.

Translated to this context, “[bjecause [a seaman’s| estate

cannot recover [punitive damages] under the Jones Act,

it cannot do so under general maritime law.” Miles, 498

U.S. at 36.

Permitting punitive damages for unseaworthiness

claims would severely undermine Congress's statutory

mandate on this issue. This Court’s “transformation of

the shipowner’s duty to provide a seaworthy ship into an

absolute duty”—to which strict applies—has

resulted in “unseaworthiness” displacing the Jones Act

as “the principal vehicle for recovery by seamen for

injury or death.” Moragne v. States Marine Lines, Inc.,

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398 U.S. 375, 399 (1970). Awarding punitive damages for

these ubiquitous unseaworthiness claims would thus

drown out Congress’s considered judgment in

disallowing that exact remedy for this type of conduct.

Plaintiffs would not even have to go out of their way to

circumvent the congressional mandate. They would

merely do as they do now—file a common-law

unseaworthiness claim in lieu of or alongside a Jones Act

claim.

Congress’s determination about how to balance the

competing interests involved here cannot be so easily

thwarted by a court-created cause of action. Rather,

when the will of the legislature and the common law

clash, it is the common law that must yield: “{i}t would be

inconsistent with [this Court’s] place in the constitutional

scheme were [it! to sanction more expansive remedies in

a judicially created cause of action.” Miles, 498 U.S. at 32.

B. Atlantic Sounding Co. v. Townsend, 557 U.S. 404

(2009), changes none of this. As petitioner explained, the

maintenance-and-cure context of that case renders it

inapplicable in this unseaworthiness setting. See Pet. Br.

21-26.

The maintenance-and-cure cause of action differs

from the unseaworthiness cause of action in several key

respects. The most important here is that the

maintenance-and-cure claim is not an alternative,

overlapping remedy to a Jones Act claim—whereas an

unseaworthiness claim is an alternative to a Jones Act

claim. See Townsend, 557 U.S. at 420 (“[T]he Jones Act

does not address maintenance and cure or its remedy.”).

While the Jones Act “created a statutory cause of action

for negligence,” maintenance-and-cure “concerns the

vessel owner’s obligation to provide food, lodging, and

medical services to a seaman injured while serving the

ship.” Id. at 407-408, 415 (quoting Lewis v. Lewis & Clark

Marine, Inc., 531 U.S. 438, 441 (2001)).

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Accordingly, “a seaman’s action for maintenance and

cure is *** ‘in no sense inconsistent with, or an

alternative of, the right to recover compensatory

damages [under the Jones Act]. Jd. at 423 (quoting

Peterson, 278 U.S. at 138-139) (alteration in original).

Stated another way, “both the Jones Act and the

and also one of the other two.” Id. at 424 (quoting

Gilmore & Black, Law of Admiralty § 6-23 (2d ed. 1975)).

outside the remedial scope of the Jones Act.

But here, the court of appeals’ treatment of the

unseaworthiness common-law claim puts it in direct

conflict with the Jones Act—just as in Miles. This case

at issue here. Thus, Miles, not Townsend, controls the

outcome here. And it mandates reversal of the Ninth

Circuit’s decision.

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CONCLUSION

The judgment of the court of appeals should be

reversed.

DARYL JOSEFFER

JONATHAN URICK

U.S. CHAMBER LITIGATION

CENTER

1615 H St. NW

=

Counsel for Amicus Curiae

The Chamber of Commerce

of the United States of

America

January 2019