Opposition Brief — Guevara v. Maritime Overseas Corp

quyrems ' E, D

No. 95-676 ae

In The s cRK

Supreme Court of the United States

October Term, 1995

— +

DOMINGO GUEVARA,

Petitioner,

MARITIME OVERSEAS CORPORATION,

Respondent

*

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

+

BRIEF IN OPPOSITION OF

MARITIME OVERSEAS CORPORATION

°

* Rosert L. KLAWETTER

* Counsel of Record

Jerrrey R. BALE

Jerry C. VON STERNBERG

EASTHAM, Watson, Date &

Forney, L.L.P.

The Niels Esperson Building

808 Travis, 20th Floor

Houston, Texas 77002-5769

713/225-0905

713/225-2907

MicHaet F. Sturvey

727 East 26th Street

Austin, Texas 78705

512/471-6318

512/471-6988

Counsel for Respondent

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Whether a seaman can recover unliquidated punitive

damages from a shipowner for an arbitrary and capri-

cious failure to make timely payments of maintenance

and cure in an action brought pursuant to the Jones Act

and general maritime law in the wake of Miles v Apex

Marine Corp., 498 U.S. 19 (1990)?

RULE 29.1 STATEMENT

Respondent Maritime Overseas Corporation has no

parent companies or any subsidiaries that are not wholly

owned.

Pe PT a re.

TABLE OF CONTENTS

QUESTION PRESENTED

RULE 29.1 STATEMENT

TABLE OF CONTENTS...

TABLE OF AUTHORITIES

OPINIONS BELOW...

STATEMENT OF THE CASE..

REASONS FOR DENYING THE WRIT

SUMMARY OF ARGUMENT

I,

I].

Page

NO CONFLICT EXISTS SUFFICIENT TO JUS-

TIFY THIS COURT’S ATTENTION .

A. Recovery of Unliquidated Punitive Dam-

ages: The Positioning of the Circuits

B. No Conflict Exists after Miles

=

Resolved Without This Court’s Interven-

MNT Ud PUN w dete’ bis be beeedGve eeea..c,

THE FIFTH CIRCUIT IS CORRECT....

A. The Court Below Properly Interpreted

Cortes, Miles, and Vaughan...............

B. The Fifth Circuit Did not Fear “Punitives

Rampant,” but Adhered to Prevailing

SRT A Te aan

C. The Denial of Unliquidated Punitive Dam-

ages Can Only Quell the Overzealous

Advocacy of Counsel to the “Wards of the

2 Sa RS BRE a rrevuneesos

The Pre-Miles Conflict is Likely to be

11

16

rABLE OF CONTENTS

CONCLUSION

APPENDIX

Continued

A AAEM Oy

:

|

TABLE OF AUTHORITIES

Page

CASES

Al-Zawkari v. American Steamship Company, 871

See ee UNUD CED 54 wwe ¢éntnds dhwens bncbeedeas 6

American Dredging Co. v. Miller, _ U.S. __, 114

Pune ee CP ihc cud cae dibuweeNeVe ecéhebe cb cece 13

Basquall v. City of Carlisle, 39 F. 807 (C.C.D. Ore.

SO decd auadis suc deedes eceadsdwentieiaterniés 13

BMW of North America, Inc. v. Gore, 640 So. 2d 619,

cert. granted, 64 U.S.L.W. 3034 (U.S. July 18,

Neer Tree re ere Tee TT eT TTT TTeT 16

Complaint of Merry Shipping, 650 F.2d 622 (CA5

SEE id pane tpanends hpeehiheTe cd an MCRNEs Cees Vea bes 9

Cortes v. Baltimore Insular Line, Inc., 287 U.S. 367

SOD 5 dnn hes ekenacdep dards evexained ns 11, 12, 13, 14

Deisler v. McCormack Aggregates, Co., 54 F.3d 1074

SR DN od 6 Cesdcncekel £06145 bn0) pasteccencases w. #

Ellenwood v. Exxon Shipping Co., 984 F.2d 1270

dee BPMEE Mav evdsbovnwetews o6euk can cebonvenenans 8, 9

Flores v. Carnival Cruise Lines, 47 F.3d 1120 (CA11

DOGG od sc cnwvedrvcne vd WsWsi veh vousdesveasecbedeves 9

Glynn v. Roy Al Boat Management Corp., 57 F.3d

ok eg eT Tree ee ree ee eer 5, 8

Guevara v. Maritime Overseas Corp., 34 F.3d 1279,

1990 ADE. GEE GAD BOG 6 elec ass vere teews 1

Guevara v. Maritime Overseas Corporation, 59 F.3d

1496, 1995 AMC 2409 (CA5 1995). .........-0e eee l

Harden v. Gordon, 11 F. Cas. 480 (C.C.D. Me. 1823) .... 19

Hines v. ].A. LaPorte, Inc., 820 F.2d 1187 (CA11

PEs ovckcvcsebansidscedscesicasdevedendeacens 7, 8,9

iia aii

vi

TABLE OF AUTHORITIES ~— Continued

Page

Hines v. ].A. LaPorte, Inc., 820 F.2d 1187 (CA11

ST Nici ocunshdeonsdenceetes Ktanseasess Otten 7, 8,9

Hoeffling v. United States Steel, 792 F. Supp. 1029

ae Sy BED oes ccccnccetbnunscashesseneeeeeer 7

Holmes v. J]. Ray McDermott & Co., 734 F.2d 1110

oS | Err re merry 9, 10, 18

Honda Motor Co., Ltd. v. Oberg, _ U.S. __, 114

ee a le «hk 00:00 00 00000 0dksareraaseanee 16, 17

Horsley v. Mobil Oil Corp., 15 F.3d 200 (CA1 1994) ..9, 10

Jordan v. Intercontinental Bulktank Corp., 621 So. 2d

1141 (La. App. 1st Cir. 1993), cert. denied, __

A cae BOO De Pe CHOON VecbceVercenvocpeeees 17

Kraljic v. Berman Enterprises, Inc., 575 F.2d 412

See MOPED cos vevededscvadee cebeaVeupveusyonberetes 5

Manuel v. United States, 50 F.3d 1253 (CA4 1995) ...6, 8

McMillan v. Tug Jane A. Bouchard, 885 F. Supp. 452

PRE Es. SOON <vcvvddicetedeuciozevereoteettiriwe 8

Miles v. Apex Marine Corp., 498 U.S. 19 (1990)... passim

Miller v. American President Lines, 989 F.2d 1450

SAE WEED 060.00 000cceebenetsveneas eeepuauerhaleeti 7

Neely v. Club Med Management Services, 63 F.3d 166

CONE noptevcrccusiccdsves beetaees Caleene ween 7

Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1

SUPPERS virecvoceccoscestivancndaunds is shatena cn 17

Robinson v. Pocahontas, Inc., 477 F.2d 1048 (CAI

UU tnki > 0dn0eebdunedcsarconesesesabtaniancn 7, 8, 10

TXO Production Corp. v. Alliance Resources Corp.,

FO Ue cng BAO Glace SIE (LOVED ccccccceccceces 16 |

Vii

TABLE OF AUTHORITIES - Continued

Page

Vaughan v. Atkinson, 369 U.S. 527 (1962) ll, 15, 16

Wahlstrom v. Kawasaki, 4 F.3d 1084 (CA? 1993) 18

Weason v. Harville, 706 P.2d 306 (Alaska 1985)..7, 8, 10

White v. Aviation River Transportation Company, 853

F. Supp. 300 (S.D. Ill. 1993). 5

Williams v. Kingston Shipping Company, Inc., 925

F.2d 721 (CA4 1991).. : 6, 7, 19

STATUTES

Jones Act, 46 U.S.C. § 688(a) l, 12

OrTHerR AUTHORITY

Janet Novack, Torture by Tort, Forbes, Nov. 6, 1995 17

;

-

OPINIONS BELOW

The Fifth Circuit Court of Appeals’ unanimous en

banc opinion is reported at 59 F.3d 1496, 1995 AMC 2409

(CA5 1995) (Appendix D to the Petition). The panel’s

opinion is reported at 34 F.3d 1279, 1995 AMC 321 (CAS

1994) (Appendix B to the Petition), and the district court

opinion is unreported (Appendix A to the Petition).

7

STATEMENT OF THE CASE

Petitioner Domingo Guevara (“Guevara”) filed suit

against respondent Maritime Overseas Corporation

(“MOC”) under the Jones Act, 46 U.S.C. App. § 688(a),

and general maritime law for injuries he sustained on

May 29, 1990. Guevara also sought punitive damages for

MOC’s failure to pay timely maintenance.

After his injury on May 29, Guevara remained aboard

the vessel until August 31, 1990, without complaint. He

first saw a physician in September of 1990. Despite the

doctor’s recommendation for surgery, Guevara requested

a doctor’s release for light duty. He then returned to his

native Colombia until February of 1991. Thereafter, he

again sought medical treatment. On July 18, 1991, he

reached maximum medical cure. Pursuant to the collec-

tive bargaining agreement, his medical expenses were

paid by the union from a fund to which MOC contrib-

uted. Therefore, no issue regarding cure expense was left

for the jury to decide.

Guevara's first contact with MOC after he left the

vessel in August was his counsel's letter of February 5,

1991, to MOC’s trial counsel requesting maintenance.

Guevara had surgery on February 11, 1991, just six days

after his first request for maintenance. Guevara’s counsel

also sent letters requesting maintenance to MOC’s trial

counsel on February 26, 1991, April 4, 1991, and June 7,

1991. On July 28, 1991, MOC forwarded to Guevara a

maintenance check for $448.00. Counsel for Guevara sent

letters to MOC’s trial counsel requesting additional main-

tenance on August 21, 1991, and January 31, 1992. On

January 31, 1992, MOC’s trial counsel forwarded a check

for $1,344.00, dated October 31, 1991, to counsel for

Guevara.

Because the parties stipulated that MOC’s trial coun-

sel received the letters and the court believed the letters

to be prejudicial, their contents were withheld from the

jury. Consequently, the jury awarded punitive damages

based only upon the dates of the letters and the amounts

and dates of the checks paid to Guevara. Guevara pre-

sented no evidence of any aggravation of his condition

caused by the delay in payment of maintenance.

The jury found that MOC acted “arbitrarily and

capriciously” in failing to pay maintenance on a timely

basis. The jury awarded Guevara $60,000.00 in punitive

damages because MOC was late in paying $1,792.00 in

maintenance benefits. Petitioner did not seek recovery for

attorney’s fees.

A panel of the Fifth Circuit Court of Appeals upheld

the damage awards in a per curiam opinion on September

30, 1994. On November 4, 1994, the court, on its own

Cd

motion, agreed to reconsider en banc whether a seaman

could recover unliquidated punitive damages. On July 26,

1995, the Fifth Circuit overturned the panel decision on

that issue.

REASONS FOR DENYING THE WRIT

Summary of Argument

Certiorari should be denied because the lower courts

are satisfactorily resolving the question presented with-

out the need for further guidance from this Court at the

present time.

Before this Court’s opinion in Miles v. Apex Marine

Corp., 498 U.S. 19 (1990), and its language limiting the

recoverable damages in a general maritime claim to those

recoverable under the Jones Act, a conflict existed among

the circuits on the question of a seaman’s recovery of

unliquidated punitive damages for a shipowner’s arbi-

trary and capricious failure to provide timely mainte-

nance and cure. Since Miles, the circuit courts that have

decided the question are in agreement that a seaman’s

remedy for a shipowners’ failure to provide maintenance

and cure is limited to attorney’s fees. Therefore, no con-

flict exists among the circuits that have applied the teach-

ing of Miles in the maintenance and cure context.

Although confusion may have existed before Miles,

the logic and analytical framework of Miles have pro-

vided the guidance necessary for the circuits to decide

the issue uniformly. As a result, it appears those courts

4

that decided cases before Miles, in conflict with the deci-

sion below, would be unlikely to adhere to their pre-Miles

views if they were given an opportunity to reconsider

their rulings.

Certiorari also should be denied because the unani-

mous en banc Fifth Circuit properly concluded that a

seaman cannot recover unliquidated punitive damages

from a shipowner for the failure to make timely payments

of maintenance and cure. Miles supports this conclusion.

Moreover, contrary to petitioner’s arguments, no pruden-

tial factors mandate the recovery of punitive damages for

a shipowner’s failure to pay maintenance and cure, even

if Miles did permit that result.

I.

_ NO CONFLICT EXISTS SUFFICIENT

TO JUSTIFY THIS COURT’S ATTENTION

The current position in most circuits is entirely con-

sistent with the Fifth Circuit’s decision in this case. The

two courts of appeals to address the impact of this

Court’s decision in Miles both hold that a seaman may not

recover unliquidated punitive damages in a maintenance

and cure action. The First and Eleventh Circuits, along |

with the Alaska Supreme Court, have held to the con-

trary, but those cases all pre-date Miles. There is good

evidence that all of those courts most likely would agree

with the decision below if they were to rule on the issue

today. At the very least, this Court should wait until these

dissenting courts have had the chance to re-examine their

pre-Miles decisions. If they join the emerging consensus,

as appears likely, any conflict will be resolved without

this Court’s intervention. If they adhere to their prior

views, there will be ample time for this Court to step in

then and provide further guidance.

A. Recovery of Unliquidated Punitive Damages:

The Positioning of the Circuits

In the decision below, the Fifth Circuit, en banc,

unanimously held that a Jones Act seaman cannot recover

unliquidated punitive damages for a shipowner’s failure

to pay maintenance and cure. The Ninth Circuit reached

the same conclusion in Glynn v. Roy Al Boat Management

Corp., 57 F.3d 1495 (CA9 1995).! Both the decision below

and Glynn limit a seaman’s recovery to attorney’s fees

and, more importantly, both were decided after this

Court’s opinion in Miles.

The Second? and Third Circuits also have held that a

seaman’s recovery is limited to attorney’s fees, although

the courts have described the recovery of attorney's fees

as “punitive damages.” Kraljic, 575 F.2d at 416. Petitioner

argues that the position of the Second and Third Circuits

1 The seaman in Glynn has petitioned for certiorari on the

question presented in this case and on a separate procedural

issue. No. 95-691. We believe certiorari should be denied in

Glynn (at least with respect to question 1) for the same reasons

that certiorari should be denied in the present case. But if the

Court wishes to decide the issue now, we recognize that the

present case offers a better vehicle than Glynn.

2 See, e.g., Kraljic v. Berman Enterprises, Inc., 575 F.2d 412, 416

(CA2 1978).

3 Deisler v. McCormack Aggregates, Co., 54 F.3d 1074 (CA3

1995).

6

conflicts with that of the Fifth and Ninth. Petition (“Pet.”)

at 5. However, the distinction between the recovery of

attorney’s fees and the recovery of punitive damages

limited to attorney’s fees, in practice, is nothing more

than an exercise in semantics. Indeed, the court below

found it unnecessary to decide if attorney's fee awards in

this context are “punitive” or “compensatory.” See 59 F.3d

at 1503, Pet. at D-16.

Petitioner also argues that the Fourth and Sixth Cir-

cuits are in conflict with the decision below, Pet. at 6, but

neither circuit has ever decided this issue. In Manuel v.

United States, 50 F.3d 1253 (CA4 1995), the Fourth Circuit

noted in dicta that other courts have awarded punitive

damages in maintenance and cure cases,* 50 F.3d at 1260,

but the issue decided in that case was whether a seaman

on a public vessel could bring a maintenance and cure

action against a government agent. Williams v. Kingston

Shipping Company, Inc., 925 F.2d 721 (CA4 1991), involved

only an award of attorney’s fees in a maintenance and

cure case; unliquidated punitive damages were not men-

tioned. In Al-Zawkari v. American Steamship Company, 871

F.2d 585 (CA6 1989), the Sixth Circuit denied a seaman’s

claim for punitive damages. 871 F.2d at 590 n.8. To the

extent that Al-Zawkari’s denial of punitive damages could

be read as dicta supporting an award of punitive dam-

ages in an appropriate case, it is questionable whether the

Sixth Circuit would adhere to such a reading today.°

4 One of the other courts cited was the Fifth Circuit. After

the decision below, of course, this statement is no longer accu-

rate.

5 Al-Zawkari was a pre-Miles case, and the Sixth Circuit has

since taken the lead in applying Miles to deny punitive damages

Ee

The First® and Eleventh” Circuits, along with the

Alaska Supreme Court,’ have held that a seaman may

recover unliquidated punitive damages in addition to

f attorney’s fees. The cases so holding, however, all pre-

date Miles. As explained in Section I. C, infra, it appears

| unlikely that any of these courts would adhere to this

view today.

B. No Conflict Exists After Miles

Whatever the result found in cases decided before Miles,

as explained in Section II, infra, the Fifth Circuit correctly

held that Miles compels the denial of punitive damages in

the maintenance and cure context. Petitioner cites several

post-Miles decisions that presumably support a post-Miles

conflict. Pet. at 8. However, a closer look at the cases cited

belies the presence of any relevant conflict. The appellate

cases cited are either limited to attorney's fees? or involve

in general maritime law actions. See Miller v. American President

Lines, 989 F.2d 1450 (CA6 1993). Furthermore, what little sup-

port Al-Zawkari offers to petitioner is based solely on the cita-

tion of two Fifth Circuit cases. See 871 F.2d at 590 n.8. Indeed,

| Hoeffling v. United States Steel, 792 F. Supp. 1029 (E.D. Mich.

| 1991), the pre-Miller district court decision cited by petitioner,

declares that “[djicta in [Al-Zawkari] appears to indicate that

this circuit has adopted the view of the Fifth Circuit on this

| issue.” 792 F. Supp. at 1030. The decision below, of course,

makes the Fifth Circuit’s current view abundantly clear.

) 6 Robinson v. Pocahontas, Inc., 477 F.2d 1048 (CA1 1973).

7 Hines v. J.A. LaPorte, Inc., 820 F.2d 1187 (CA11 1987).

8 Weason v. Harville, 706 P.2d 306 (Alaska 1985).

| © See, e.g., Deisler, 54 F.3d at 1087; Neely v. Club Med Manage-

ment Services, 63 F.3d 166, 173 (CA3 1995); Williams, 925 F.2d at

723.

8

statements in dicta.1° Indeed, several of the district court

cases are similarly inapplicable. The district court in

McMillan v. Tug Jane A. Bouchard, 885 F. Supp. 452 (E.D.N.Y.

1995), for example, expressly denied the seaman a recovery

of punitive damages beyond his attorney's fees. 885 F. Supp.

at 466. Those district court cases cited by petitioner that held

punitive damages available in the context of maintenance

and cure, with one exception,!! were from district courts in

the Fifth and Ninth Circuits. Pet. at 10 n.39. Their holdings

have now been overruled by the decision below and Glynn.

C. The Pre-Miles Conflict Is Likely to be Resolved

Without This Court’s Intervention

The pre-Miles cases in conflict with the decision

below — Robinson in the First Circuit, Hines in the Elev-

enth Circuit, and Weason in the Alaska Supreme Court -

do not create an intolerable conflict. It is reasonable to

believe that, given the teachings of Miles, each of these

courts will fall in line with the majority of the circuits to

deny unliquidated punitive damages.

The First Circuit has not reconsidered Robinson since

Miles,}2 but it has applied Miles in the punitive damages

10 See, e.g., Manuel, 50 F.3d at 1260.

11 White v. Aviation River Transportation Company, 853 F.

Supp. 300, 301 (S.D. Ill. 1993), is the one exception, and it relied

upon two Louisiana district court cases that have since been

overruled by the decision below.

12 Contrary to petitioner’s suggestion, Pet. at 8 n.28, Ellen-

wood v. Exxon Shipping Co., 984 F.2d 1270 (CA1 1993), did not

endorse Robinson, but distinguished it. 984 F.2d at 1284. The

Ellenwood court neither addressed the issue nor even considered

context under a general maritime law claim. In Horsley,

the First Circuit held that “[uJnder the analysis pre-

scribed in Miles [citations omitted], an admiralty court

may not extend the remedies available in an unseaworthi-

ness action under the general maritime law to include

punitive damages... .” 15 F.3d at 203. This is a clear

indication that the First Circuit would likely accept the

Fifth Circuit’s majority approach the next time it faces

this issue in the maintenance and cure context.

The Eleventh Circuit, in deciding Hines, forthrightly

declared, “We follow [Complaint of Merry Shipping, 650

F.2d 622 (CA5 1981)] and a more recently decided case in

the Fifth Circuit [i.e., Holmes v. J. Ray McDermott & Co.,

734 F.2d 1110 (CA5 1984)],...” 820 F.2d at 1188; cf. id. at

1189 (“We follow the reasoning of the Fifth Circuit... .

”). Of course, the en banc Fifth Circuit has now recog-

nized that Merry Shipping is inconsistent with this Court’s

subsequent decision in Miles, and has explicitly overruled

Holmes. The entire basis for the Eleventh Circuit’s holding

is now gone, and it thus seems likely to conclude that the

Eleventh Circuit would again follow the Fifth Circuit if

the issue were properly before it today.'%

the effect of Miles. In any event, Ellenwood was decided before

Horsley v. Mobil Oil Corp., 15 F.3d 200 (CA1 1994), which does

address the impact of Miles on a claim of punitive damages

under the general maritime law, thus offering far better evi-

dence of the likely course that the First Circuit will take.

13 Contrary to petitioner’s suggestion, Pet. at 8 n.33, Flores

v. Carnival Cruise Lines, 47 F.3d 1120, 1127 (CA11 1995), did not

endorse Hines. The Flores court, in denying punitive damages,

simply cited Hines to show that the seaman had no factual basis

for his claim. See 47 F.3d at 1127. The court neither addressed the

issue here nor considered the effect of Miles.

10

In Weason, the Alaska Supreme Court noted that

there was a split in the circuits on this issue, and that the

Ninth Circuit had left the question unresolved. See 706

P.2d at 310. Thus, the Weason court followed what was

then the majority approach. Id. The Alaska courts have

not returned to this issue in a reported decision since

Weason, let alone since Miles, but the approach taken in

Weason suggests that the result would be different today.

The Ninth Circuit has now resolved this question in

Glynn, and the new majority approach in the circuits is to

limit damages for the failure to pay maintenance and cure

to attorney’s fees.

There is not a single decision awarding unliquidated

punitive damages in a maintenance and cure case that

cannot be traced to Robinson and Holmes. The Fifth Circuit

now has overruled Holmes, and Horsley offers strong evi-

dence that Robinson may suffer the same fate. Because

every case upholding unliquidated punitive damages

relied upon this now questionable authority, it is likely

that the pre-Miles conflict will be resolved in the lower

courts without any need for this Court’s intervention.’

At the very least, the Court should postpone action to

permit this to happen. If the dissenting courts do adhere

to their pre-Miles views, there will be ample opportunity

to review one of these subsequent cases. But in the mean-

time, the issue should be allowed to percolate so that the

14 The Fifth Circuit has long been particularly influential in

maritime personal injury cases. Indeed, the influence of the

Fifth Circuit in this precise context is evident in the cases on

which petitioner relies. A unanimous en banc decision of the

Fifth Circuit, such as the decision below, is thus likely to have a

major influence in resolving the pre-Miles conflict.

11

lower courts will have a chance to apply Miles in this

context.

Il.

| THE FIFTH CIRCUIT IS CORRECT

The unanimous en banc Fifth Circuit properly con-

cluded that a seaman cannot recover unliquidated puni-

tive damages from a shipowner for a failure to pay

maintenance and cure. In reaching its decision, the court

below recognized that this Court’s decisions in Cortes v.

Baltimore Insular Line, Inc., 287 U.S. 367 (1932), Miles, and

Vaughan v. Atkinson, 369 U.S. 527 (1962), compel this

result. But even if the Court’s prior decisions left the

issue open, the court below properly held that punitive

damages should not be available in a maintenance and

cure action as a matter of principle.

A. The Court Below Properly Interpreted Cortes,

Miles, and Vaughan

In Cortes, a maintenance and cure case, Justice Car-

dozo, for the Court, considered the case of a seaman who

fell ill and died in the service of a vessel. The question

was whether the seaman’s representative could bring a

survival cause of action under the Jones Act because the

shipowner had improperly denied maintenance and cure.

The question then is to what extent the ancient

rule has been changed by modern statute [Jones

Act].

12

We are to determine whether death resulting

from the negligent omission to furnish care or

cure is death from personal injury within the

meaning of the statute.

287 U.S. at 371. The Cortes Court determined that the

remedies provided by the Jones Act were to be afforded

to seamen (or their personal representatives) whose con-

ditions were exacerbated by the shipowner’s failure to

provide maintenance and cure. The Court made clear that

a claim for denial of maintenance and cure encompasses

the “negligence” of the shipowner coupled with the “per-

sonal injury” of the seaman, therefore the employer's

conduct would constitute a tort under the Jones Act. 287

U.S. at 373-374.

The Court in Miles considered whether a non-dependent

parent of a Jones Act seaman could recover loss of society

damages under a general maritime law claim (unseaworthi-

ness) in a wrongful death action. The Court held that non-

pecuniary damages could not be recovered in a general

maritime law cause of action, and therefore specifically

rejected the parent’s claims for loss of society. 498 U.S. 33.

The Court reasoned that a Jones Act seaman may not recover

more expansive remedies under the general maritime law

than those sanctioned by Congress pursuant to the express

terms of the Jones Act, 46 U.S.C. § 688(a).145 The Court

15 In so holding, the Court stated:

But in an “area covered by the statute, it would be no

more appropriate to prescribe a different measure of

damages than to prescribe a different statute of lim-

itations, or a different class of beneficiaries.” (citation

omitted).

498 U.S. at 31.

13

reiterated the guiding principle in American Dredging Co. v.

Miller, __ U.S. __, 114 §.Ct. 981, 989 (1994): “While there

is an established and continuing tradition of federal com-

) mon lawmaking in admiralty, that law is to be developed,

. insofar as possible, to harmonize with the enactments of

! Congress in the field.”

Under Cortes, the cause of action for denial of mainte-

nance and cure is cognizable under the Jones Act, thereby

subjecting such claims to the damage limitations “Con-

gress must have intended [by incorporating] the pecuni-

ary limitation on damages [of the FELA into the Jones

Act],” Miles, 498 U.S. at 32-33.1° The court below correctly

determined that logic thus compels the exclusion of puni-

tive damages as a remedy for a denial of maintenance

and cure, because although this Court has not ruled on

the issue, punitive damages are “rightly classified as non-

pecuniary.” See 59 F.3d at 1506, Pet. at D-24.

Incorporating FELA unaltered into the Jones Act,

Congress must have intended to incorporate the

pecuniary limitation on damages as well.

498 U.S. at 32.

It would be inconsistent with our place in the consti-

tutional scheme were we to sanction more expansive

remedies in a judicially created cause of action in

which liability is without fault than Congress has

allowed in cases of death resulting from negligence.

498 US. at 32-33.

' 16 Petitioner cites the Court to several cases for the proposi-

tion that punitive damages were considered appropriate pre-

Jones Act in the context of seamen’s claims. Pet. at 21. Petitioner

cites only cases that discuss punitive damages in dicta, Pet. at

22, or to cases in which the courts assessed damages for “aggra-

vation” of the seamen’s condition. See, e.g., Basquall v. City of

Carlisle, 39 F. 807, 816 (C.C.D. Ore. 1889).

ee

14

Petitioner argues that the decision below, in applying

Miles, improperly relates a claim for denial of mainte-

nance and cure to a Jones Act claim as closely as this

Court would an unseaworthiness action to a Jones Act

claim. Pet. at 18. Petitioner confuses a claim for mainte-

nance and cure with a claim for the denial of maintenance

and cure, and in his efforts to treat the denial of mainte-

nance and cure as a “distant cousin” of the Jones Act,

petitioner presumes that there is no “overlap” at all. Pet.

at 20. Petitioner’s argument fails because in Cortes this

Court expressly held that a seaman’s action for denial of

maintenance and cure is cognizable under the Jones Act:

While the seaman was still alive, his cause of

action for personal injury created by the statute

{Jones Act] may have overlapped his cause of

action for breach of the maritime duty of main-

tenance and cure, just as it may have overlapped

his cause of action for injury caused through an

unseaworthy ship.

* * *

The overlapping is no reason for denying to the

words of the statute the breadth of meaning and

operation that would normally belong to them,

+ * *

The failure to furnish cure is a personal injury

actionable at the suit of the seaman during life,

and at the suit of his personal representative

now that he is dead.

Cortes, 287 U.S. at 374-376.

Therefore, while a maintenance and cure claim itself

may be a distant cousin, Cortes teaches that a denial of the

——— a

-

, . ‘4 Ps R

;

15

claim overlaps the Jones Act. Once the “overlap” is

found, under the Miles uniformity principle, the Jones Act

“direct[s] and delimit[s]” the seaman’s recovery for a

wrongful denial of a claim for maintenance and cure. 498

U.S. at 27.

The Court in Vaughan allowed the seaman a recovery

of attorney’s fees as “damages suffered” resulting from

the shipowner’s denial of maintenance and cure. 369 U.S.

at 531. Vaughan is completely in accord with the Miles

uniformity principle. Therefore, not only is the decision

below consistent with this Court’s holding in Vaughan, it

is squarely in accord with the rationale of Miles, because

the general maritime law cause of action for maintenance

and cure is unquestionably reached by the “pecuniary

limitation” of the Jones Act. 498 U.S. at 32. MOC readily

admits that a seaman may recover his attorney’s fees (if a

proper claim is made) and damages in aggravation (if

proven) for an arbitrary and capricious denial of mainte-

nance and cure.

Petitioner argues that the decision below “[restricts]

Vaughan to a narrow ‘abuse of litigation’ remedy... . ”

Pet. at 15. While the court below discussed the “bad

faith” exception to the American rule and how subse-

quent cases have treated the holding in Vaughan, the

court below did not in any way restrict its holding to

post-litigation activity. The court below merely attempted

to determine whether the award of attorney’s fees in

Vaughan, even if characterized as “fee shifting,” was to be

denominated as “compensatory” or “punitive.” 59 F.3d at

1503, Pet. at D-15-16. The court’s final determination was

not to limit the penalty to bad faith abuses of the litiga-

tion process. As the court below stated: “Simply put, all

i a il

EA EE I TRE SO TAAL SLT. OR ON NOE

> *

16

we can confidently say about Vaughan is that it entitles

an injured seaman to recover attorney’s fees — perhaps as

part of compensatory damages — when his employer will-

fully fails to pay maintenance and cure.” 59 F.3d at 1503,

Pet. at D-16. This analysis and result are hardly the type

of “evisceration” of Vaughan that, as petitioner claims,

will provide the legal impetus to “force seamen’s counsel

to rush to court to file suit.” Pet. at 29.

B. The Fifth Circuit Did Not Fear “Punitives Ram-

pant,” But Adhered to Prevailing Trends

Petitioner argues that the court below ignored long-

standing prudential and judicial reasoning in limiting a

seaman’s recovery of punitive damages, such that peti-

tioner presumes the decision below was based upon an

irrational fear of “rampant” punitive damages. Pet. at

25-26. On the contrary, as shown above, the court below

utilized the soundest of reasoning in determining that

punitive damages are not available to Jones Act seamen

in the maintenance and cure context.

Moreover, the decision below, rather than evidencing

fear, correctly acknowledges the national trend in this

regard. For example, this Court has heard at least four

cases in the last five years touching on the propriety of

punitive damages and the instances in which they should

be recovered.!7 In each opinion, the Court has discussed

17 BMW of North America, Inc. v. Gore, 640 So. 2d 619, cert. |

granted, 64 U.S.L.W. 3034 (U.S. July 18, 1995) (94-896) (argued on

October 11, 1995); Honda Motor Co., Ltd. v. Oberg, __ U.S. __, |

114 S.Ct. 2331 (1994); TXO Production Corp. v. Alliance Resources

- » ; - ¥ AS

~ ‘ - . |

‘

17

the need for strict limitations on the imposition of puni-

tive damages. See, e.g., Honda, 114 S.Ct. 2331 (“Punitive

damages pose an acute danger of arbitrary deprivation of

property.”). In addition, at last count, 18 states had

enacted statutes limiting the availability of or placing

caps on the recovery of punitive damages.!* Congress has

drafted legislation designed to limit the imposition of

punitive damages,’? and the Country as a whole is rightly

concerned regarding the widespread onset and abuse of

punitive damages.?°

More specifically, since Miles, the admiralty courts to

have ruled on the matter have almost unanimously held

that punitive damages are unavailable to a Jones Act

seaman or his survivors under a general maritime

unseaworthiness action. See 59 F.3d at 1506 n.7, Pet. at

D-24. In addition, some admiralty courts have gone fur-

ther to determine that non-pecuniary damages are

Corp., 508 U.S. __, 113 S.Ct. 2711 (1993); Pacific Mutual Life Ins.

Co. v. Haslip, 499 U.S. 1 (1991).

18 See Janet Novack, Torture by Tort, Forbes, Nov. 6, 1995 at

1360.

19 Id.

20 Despite petitioner’s statements to the contrary, the admi-

ralty bar has not been left out of the punitive barrage. For

example, in one maintenance and cure case, in which certiorari

was denied by this Court, the defendant shipowner was tagged

with a one million dollar punitive award that was remitted by

the state appellate court to five hundred thousand dollars. Jor-

dan v. Intercontinental Bulktank Corp., 621 So. 2d 1141 (La. App.

ist Cir. 1993), cert. denied, ___ U.S. ___, 114 S.Ct. 926 (1994).

18

unavailable to any admiralty plaintiff.2! Therefore, it is

unlikely that the sixteen judges of the Fifth Circuit were

duped into their holding because of an irrational fear of

“rampant” punitive damages. The more likely explana-

tion is that the Fifth Circuit judges made a rational deter-

mination of the law, and considered the status of the

national trend in regards to limiting punitive damages.

C. The Denial of Unliquidated Punitive Damages

Can Only Quell the Overzealous Advocacy of

Counsel to the “Wards of the Court.”

Petitioner sails on similarly rough seas when he

argues that the denial of unliquidated punitive damages

will “foment” litigation. Pet. at 26-30. On the contrary,

overzealous advocates for seamen have, since the Holmes

decision, used the threat of punitive damages not as a foil

when shipowners act arbitrarily, but as a sword to

increase the value of their cases.?2

Petitioner further argues that the “newly discovered”

course taken by the Fifth Circuit will lead to widespread

forum shopping, and will encourage egregious acts on

behalf of shipowners, leaving the seamen at the mercy of

unscrupulous shipowners. Pet. at 14, 26-27. Petitioner’s

argument ignores almost twenty years of history. The

21 See, e.g., Wahlstrom v. Kawasaki, 4 F.3d 1084 (CA2 1993)

(negligence-recreational jet skier).

22 See, e.g., Appendix A at App. 5, Argument of Mr. Harvey

Lewis, counsel for the Louisiana Trial Lawyers Association, in

regards to the certain “flavor,” punitive damages add to his

cases. Mr. Lewis is the law partner of Paul M. Sterbcow, whose

affidavit is found at Pet. App. G.

19

Fifth Circuit itself has long been part of the pre-Miles

“conflict.” The en banc decision merely places the Fifth

Circuit in line with the Second, Third, and Ninth Circuits,

evidencing a change of sides on the issue based upon this

Court’s subsequent decision in Miles. Widespread venue

shopping and recalcitrant shipowners were not in evi-

dence in other circuits before the en banc decision, and

there is no reason to believe there will be an explosion of

such activity after the decision.

The Court is no longer required to offer extraordin-

ary protection to seamen. As aptly noted by the Court in

Miles, the seamen of today’s world no longer need look to

the courts for protection, 498 U.S. at 19, and they cer-

tainly can no longer be described by using the disparag-

ing (yet apparently endearing) terms of the admiralty

courts of Justice Story. The “poor and friendless” seaman,

with “habits of gross indulgence, carelessness, and

improvidence,”23 now most often can be seen as a union

member with excellent benefits and a salary well in

excess of the U.S. national average.

Moreover, the threat of unliquidated punitive dam-

ages is not necessary to deter a prudent shipowner from

treating its employees arbitrarily. As shown by Williams,

the damages for the aggravation of a seaman’s condition

and attorney’s fees should be sufficient deterrence to

“egregious” and “recalcitrant” shipowners. The ship-

owner in Williams was held liable for an additional

$150,000.00 in aggravation damages and approximately

75% of the seaman’s attorney’s fees, even though the

23 Harden v. Gordon, 11 F. Cas. 480, 482-83 (C.C.D. Me. 1823).

—————

20

seaman unsuccessfully prosecuted both a Jones Act and

an unseaworthiness claim in addition to his maintenance

and cure action. 925 F.2d at 722, 726. In short, the Fifth

Circuit reached the correct decision regardless of whether

Miles compels the result, and none of the prudential

arguments made by petitioner provide a valid justifica-

tion for reversal.

CONCLUSION

The Petition for Writ of Certiorari should be denied.

Respectfully submitted,

* Rosert L. KLAWETTER

* Counsel of Record

Jerrrey R. BALE

Jerry C. VON STERNBERG

EastHaM, Watson, DALE &

Forney, L.L.P.

The Niels Esperson Building

$3 Travis, 20th Floor

Houston, Texas 77002-5769

713/225-0905

713/225-2907

MicHaet F. SturLey

727 East 26th Street

Austin, Texas 78705

512/471-6318

512/471-6988

iit

APPENDIX

App. 1

NO. 92-4711

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

DOMINGO GUEVARA,

PLAINTIFF-APPELLEE

VERSUS

MARITIME OVERSEAS CORPORATION,

DEFENDANT-APPELLANT

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

STATEMENT OF FACTS

EN BANC HEARING

VOLUME I

iid

App. 2

* + *

MR. LEWIS: Your Honor, may it please the court,

my French is not nearly as good as my good friend Mr.

Gelpi’s, I guess because I was born and raised in

Houston, so you'll forgive me. I represent or my group

represents the folks who work on the amicus vessels that

opposes [sic] in this argument.

I would like very briefly to try to provide some

history. The punitive damage remedy under the general

maritime law, Judge Barksdale, dates back to 1818 with

the Amible Nancy. It’s been carried through consistently

to the modern day in a series of cases, including this case

decision most recently in P & E Boat Rentals. I think six

circuits considered the abstract proposition of punitive

damages are recognized as recoverable under the general

maritime law. The interesting thing about that is that

there’s yet to be a single federal appellate case, since

1880, where an award of punitive damages, except in the

context of maintenance and cure, has ever been affirmed.

The only time in this court’s history that the issue of

punitive damages, under the general maritime law has

ever been before the court was in P & E Boat Rentals, I

believe an ’89 decision. And in this court, like every other

circuit court, said under the facts of that case punitive

damages were not recoverable.

Now, in contrast, starting with Holmes and ignoring

the Gaspard for a moment, on nine different occasions

this court has had a chance to consider and affirm cases

awarding damages, punitive damages, for failure to pay

maintenance and cure. That gives you some idea of the

relative importance in having the remedy available. If

App. 3

you will, the sort of (unintelligible) to be able to respond

to a situation where a ship owner callously disregards his

obligation under the general maritime law.

So my first proposition, briefly, is that the general

maritime law provides a punitive damage remedy in

those instances where you have obligations created by

the general maritime law, specifically the obligation to

pay maintenance and cure and that obligation is ignored.

I should mention to the court, I should have said

from the outset I waive my time and please interrupt me

with any question. Forgive me, your honors, for not

doing so.

JUDGE GARWOOD: How do you account account

[sic] that it’s so important for maintenance and cure that

there be punitive damages that it’s not until 1973, almost

two centuries after we had American courts award main-

tenance and cure that anybody awarded it?

MR. LEWIS: I’m glad you asked that question,

Judge Garwood. The answer to that, I think, is a function

of the fact that in ‘73 the public health service hospitals

were closed and the - ?

JUDGE GARWOOD: Were there public health ser-

vice hospitals in 1900?

MR. LEWIS: Sir? Yes, sir, there were. But what I’m

saying is during the time that they were functioning it

was a simple question for a master to get a certificate for

a seaman to go and get treatment. That avenue was

readily available. When Congress shut down the public

health service hospital and left the seaman and his

employer to the private sector, that created problems; and

App. 4

consequently it was after that that the problem began to

crop up where employers just ignored their obligations

and there was not a readily available source, and I think

that probably is the major explanation why the problem

did not become as pronounced as it did until later, Judge.

JUDGE GARWOOD: Justice Story’s opinion put out

in 1818 and so on, his descriptions of maintenance and

cure, the riders, do they talk about punitive damages?

MR. LEWIS: No, sir. And I think also I should have

included in the fact that up until the seventies you're

pretty much dealing with union contracts, unionized sea-

men and -

JUDGE GARWOOD: Sure. They’re not back in the

great depression.

MR. LEWIS: No. No. No. Not back then but -

JUDGE GARWOOD: You’re worshiping at the altar

of this ancient maritime remedy and I’m just wondering

what's on the altar.

MR. LEWIS: That’s a good question, Your Honor,

my suggestion - it would be difficult for me to support

the fact that seamen in the seventies and since have

simply become more irresponsible but the fact is that’s

what the jurisprudence demonstrates. Now, why that is

true, I can’t say, but -

JUDGE GARWOOD: So you've got to start getting

jury’s [sic] in these cases for the Jones Act case?

MR. LEWIS: Well, whatever mischief your honor

feels that the jury may inject into the system the courts

App. 5

manage to clear up because the awards haven't been

affirmed.

JUDGE GARWOOD: It’s specific to counsel, isn’t it,

to bring a punitive damage, failure to pay maintenance

claim when he’s trying a Jones Act case at the same time?

MR. LEWIS: Judge, I’m delighted when my oppo-

nent neglects to pay my client’s medical expenses

whether I try my case to a judge or a jury. I think it does

add a flavor. But I’m satisfied that the same system has

prevailed, that if there is any inappropriate response by

the jury, the appellate court will straighten it out. That

doesn’t mean that the underlying remedy should be

ignored.

I, too, share the conviction that the Jones Act is not

the polar star that guides this court’s determination. If

the court has to read Miles in a way that dictates consid-

eration of jurisprudence, the appropriate legislation’s

been referred to, but I’d like to address the question that

Judge King asked and that is: Look, if the seaman has a

potential Cortez [sic] type Jones Act remedy, and if the

court would permit me, two things have to coalesce for

that to occur. Number one, there has to be an injury or

illness caused by negligence; and, two, the injury has to

be increased or affected by the negligent failure to pro-

vide that cure.

I have serious misgivings that a ship owner who is

guilty of intentional, arbitrary and capricious conduct,

that this in effect, this intentional conduct, may not con-

stitute negligence, so we need to have a situation where

there is a third level of remedy. There’s also a situation

that may exist that where the injury is not aggravated, it’s

App. 6

just this poor man suffers in his condition and he doesn’t

get the appropriate care, and medical science cannot

come in and say, well, the failure to pay this man’s

medical care made him any worse. Now, I grant you he

had to suffer longer but that may be a very difficult thing

to prove. But the basic proposition is it may be that the

intentional act falls outside of the Jones Act.

JUDGE KING: Well, that’s certainly how it will be

presented.

MR. LEWIS: Oh, indeed. No question about that.

JUDGE KING: And, you know, no one has said

anything about American Dredging and about the con-

cept of harmonizing all of this. If we buy your proposi-

tion, no one’s going to say that his situation has been

exacerbated by the failure to provide cure, by the willful

failure to provide cure. We’re gonna say that this is -

we're really going to look to the maintenance and cure

situation and we’re going to say we're going to have

punitive damages for this. So what we’re talking about is

sort of coming in by the back door, when what you've

really got is a situation where you’re trying to get puni-

tive damages for a Jones Act claim.

MR. LEWIS: No, ma’am, what I’m saying is we may

not have a Jones Act claim at all.

JUDGE KING: Well, I know, that’s exactly what

you’re gonna say; but what I'm saying is, is this a case of

which, you know, which hole you pigeon it into, and it

makes all kinds of creative pleading possible to vary the

result of a situation that — really that ought not to be in

this set-up.

App. 7

MR. LEWIS: Will my client be entitled, Judge, to

recover maintenance and cure until he — until the end of

his medical treatment, which may well extend beyond the

maximum recovery point of view, which is the cut-off for

maintenance and cure but not the cut-off for Jones Act

liability? Are my opponents going to pay my attorneys’

fees if my client succeeds in the Jones Act claim?

I think that to accept the thesis that this issue is

driven by the Jones Act invites a lot of problems and

possibilities and concerns that disturb the existing har-

mony of the maritime law.

I believe my time is up and I thank the court.

JUDGE HIGGINBOTHAM: What is your example of

a claim for denial of maintenance and cure that does not

in spark [sic] a Jones Act claim?

MR. LEWIS: A seaman catches pneumonia in the

middle of a voyage.

JUDGE HIGGINBOTHAM: You disagree with your

MR. LEWIS: Indeed I do. Indeed I do. I think there

are many, many instances where you can, and are entitied

to maintenance and cure for injuries —- or let’s take ill-

nesses that have nothing to do with negligence.

JUDGE GARWOOD: You don’t think that - I

thought Cordozo [sic] said in Cortez [sic] that it was a

tort of which you could recover under the Jones Act if

you didn’t pay the maintenance without regard to

whether the underlying obligation for the maintenance or

cure arose from a negligent act or not.

App. 8

MR. LEWIS: Judge Garwood, as I appreciate the

court’s opinion in Cortez [sic], it presupposes an unrea-

sonable failure to provide cure that results in an

increased injury because of the deprived medical care.

JUDGE GARWOOD: I’m with you entirely there,

but I did not read into Cortez [sic] a requirement that the

occasion for medical care had arisen out of itself tortious

conduct.

MR. LEWIS: I agree with that, Your Honor. I think

you're absolutely right in that regard.

JUDGE GARWOOD: If you do agree with me then

your answer to Judge Higginbotham’s question doesn’t

follow.

MR. LEWIS: No, sir, what I said was you’re in the

middle of a voyage and you catch pneumonia, you get

maintenance and cure. If the medical care is cut off unrea-

sonably and the condition progresses to the other lung

and it causes death then I’ve got a Cortez [sic] type of

medical care case.

JUDGE GARWOOD: Even though your underlying

cause was of pneumonia wasn’t per se an act under the

Jones Act.

MR. LEWIS: That's true. I could not have filed a

Jones Act case because I caught pneumonia.

JUDGE GARWOOD: But you can still file a Cortez

[sic] case.

MR. LEWIS: If it progresses as a result of the delay,

unreasonable failure to provide that care, yes, sir.

App. ?

JUDGE HIGGINBOTHAM: What’s your example of

a claim for willful failure to pay maintenance and cure

that does not implicate the Jones Ac:?

MR. LEWIS: Your Honor, that gets back to the

answer I tried to give Judge King and that is that if the

employer simply says “we’re not gonna pay medical

expenses at all, period, we just don’t think we owe it, that

man wasn’t even on our vessel, he doesn’t show on our

crew list.” Now, I suggest to you that an argument can

and will be made that there’s no negligence there. We just

absolutely, arbitrarily said “we are not going to pay main-

tenance and cure, period.” Now, I have a difficult time, I

concede, Your Honor, escalating past unreasonableness to

arbitrating — to get to arbitrariness without going through

unreasonableness, but I think indeed it is possible in the

case of intentional denial of maintenance and cure.

JUDGE GARWOOD: An intentional tort on the sea-

man by the master of the vessel is not covered by the

Jones Act, is it?

MR. LEWIS: I’m sorry?

JUDGE GARWOOD: An intentional.

MR. LEWIS: I’m sorry, your Honor, I couldn’t hear

you.

JUDGE GARWOOD: An intentional tort committed

on the seaman. If the master of the vessel beats him on

the head to get him to do something.

MR. LEWIS: I don’t believe so. I don’t. It could not

be couched as an intentional tort. I would not, if I were

pleading and arguing that case to the jury, would not

suggest that it was an intentional tort. I have misgivings

App. 10

that intentional torts are necessarily covered by the Jones

Act but I don’t know of a case ov that point one way or

another, Judge Garwood. I can’t cite you precedent for

either side of that proposition.

JUDGE POLITZ: Thank you, counsel.

* * *