Petition for Writ of Certiorari — Riverboat Services Services of Indiana, Inc. v. Gaffney (No. 06-389)

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Supreme Court US.

ee 06-389 SEP 14 2006

OFFICE OF THE CLERK

Iu the

Supreme Court of the United States

RIVERBOAT SERVICES OF INDIANA, INCORPORATED;

RIVERBOAT SERVICES, INCORPORATED, ET AL.,

Petitioners,

Vv.

MICHAEL P. GAFFNEY, ET AL.,

Respondents.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

Jutia D. Mannix

Counsel of Record

JULIA D. MANNIX, P.C.

125 S. Wacker DRIVE

Suite 1700

Cuicaco, IL 60606

(312) 332-0952

Counsel for Petitioners

Becker Gallagher Legal Publishing, Inc. 800.890.5001

QUESTIONS PRESENTED

. Whether the Seventh Circuit’s decision finding that

seamen employed on a riverboat casino who appealed a

regulatory variance granted by the Coast Guard engaged

in conduct protected by the seaman’s whistle-blower

statute 46 U.S.C. § 2114?

. Whether the Seventh Circuit’s decision finding that two

seamen who did not participate in the appeal to the Coast

Guard were entitled to whistle-blower protection pursuant

to 46 U.S.C. § 2114?

. Whether the Seventh Circuit erred in ignoring its plain

precedent of Stone v. City of Indianapolis and Rogers v.

City of Chicago in ruling on causation for retaliatory

discharge where similarly situated employees who did not

appeal the Coast Guard’s variance were also terminated,

and not all the employees who appealed the variance were

terminated?

. Whether the Seventh Circuit erred in employing an abuse

of discretion standard when it upheld punitive damage

awards of $25,000 to each of the Plaintiffs regardless of

the underlying damage award when the Defendants had

challenged the excessiveness of the awards?

RULE 14.1(b) STATEMENT

A list of all parties to the proceeding is as follows:

Petitioners: Riverboat Services, Inc.; Riverboat Services

of Indiana, Inc.; and Thomas Gourguechon.

Defendant/Appellant: Robert Heitmeier

Respondents: Michael P. Gaffney; Thomas Bell; Edward

Anderson; Robert Beardon; Thomas Trundy; Thomas

Goodridge; Dean Horton; Adam Doncet; Robert Palmer; and

Neil Reilly.

RULE 29.6 STATEMENT

Petitioner, Riverboat Services of Indiana, Inc., is a

privately owned entity that is whol'y owned by Petitioner,

Riverboat Services Incorporated. Petitioner, Riverboat

Services Incorporated, is a privately owned entity. It has no

parent company and there is no publicly held company that

owns 10% or more of its stock.

ill

TABLE OF CONTENTS

QUES EMONe PUMMEIS ERED ook oo ee coe vee eee’ I

Rule 14.1(6) STATEMENT and

UES BO CRAMER Cc eet Ck eee nde li

* | ORE, MARE ROMLIAROES 6. 6b a 0b 5 vb we oe ee a Vv

PE RAE oo bie hie Cea es eee 1

eis aye peas ee area gree 1

STATUTORY PROVISIONS INVOLVED ......... 2

Pe Rg): Ceara Pare ae er aes et a err erg 2

REASONS FOR GRANTING THE PETITION .... tie

I. SEVENTH CIRCUIT’S EXPANSIVE

INTERPRETATION OF THE WHISTLE-BLOWER

STATUTE IS IN CONFLICT WITH OTHER

CIRCUITS AND STATE COURT

SIVEGUE EE PRIOR 8 ei eee 4 ie ek ea he was 6

Il. THE SEVENTH CIRCUIT IGNORED ITS OWN

PRECEDENT IN DETERMINING CAUSATION

FOR RETALIATORY DISCHARGE .......... 12

fi. THE SEVENTH CIRCUIT ERRED IN REFUS.NG

TO CONSIDER DE NOVO THE EXCESSIVENESS

OF THE PUNITIVE DAMAGE AWARD ....... 13

CE a ns es ee eee ha oS ee ee 14

APPENDIX

Appendix A - Seventh Circuit Opinion

SS ee ER ee bao la

Appendix B - District Court Order

RIE 8 EO eS FOE OER 87a

Appendix C - Judgment

SE NE 56 ok aha Bene EKA ee 96a

Appendix D - District Court Order

Dated 4/29/04

TABLE OF AUTHORITIES

Cases

BMW of North America v. Gore,

517 U.S. 559, 116 S. Ct. 1589 (1996) ...... 13, 14

Cooper Industries v. Leatherman Tool Group, Inc.,

532 U.S. 424, 121 S.Ct. 1678 (2001) ....... 13, 14

English v. General Electric Co.,

496 U.S. 72, 110 S. Ct. 2270 (1990) ......... 6-7

Garcetti v. Ceballos,

7m ee Mes Ae. AA, PCa)... 6 owe ees 6

Francisco v. Office of Personnel Management,

Boe Oe A ee Ure Ge PE oe hae ewe ens 9

Garrie v. James L. Gray,

PIs Fae ee Gs EE 2b ov iw hes eevee 8

Hitchcock v. Fedex Ground Package System, Inc.,

O5S 36 TUOE Ce PO ge Sis be 10

Kelly v. Lambda Research Inc.,

89 Fed. Appx. 535 (6" Cir. 2004) ............ 10

Merriweather v. Family Dollar Stores of Indiana, Inc.,

PGs F.36 Srp tr Ge. 1986) 2 no inte. 13

Meuwissen v. Dept. of Interior,

ri ye fg OS Ae | a oe eee 9

Obst v. Microtron, Inc.,

614 N.W.2d 196 (Minn. 2000) .............. 11

Passaic Valley Sewerage Comm’s v. United States

Dept. of Labor,

ee Wee Oe ee GA ee oe ee eee eS 10

Rogers v. City of Chicago,

320 F:36 746 C8" Ce BO). 6 vo ke ke 12, 13

Rothmeier v. Investment Advisers, Inc.,

556 N.W.2d 590 (Minn. App. 1997) .......... 1]

State Farm Mutual Automobile Insurance Co., v.

Campbell,

533 U.S. 406, 123 5S. Ce. 1913 COB) Li. ww es 13

Stone v. City of Indianapolis,

wet P36 GO 9" Cee Se oe 5 ee es 12, 13

Statutes

Oe OE ie So SE ee 8

ae tA eS ee ee ee Ce rare es 8, 10

BOSE Gate bck ee eek we a es 2, 8, 10

i I See. os 5 ho ee ha ee ee 10

Other Authorities

Private Sector Whistleblowing and the Employment-At-Will

Doctrine: A Comparative Legal, Ethical, and Pragmatic

" Analysis, 45 S. Tex. L. Rev. $43 (2004) .......... 7

PET’ “ON FOR WRIT OF CERTIORARI

Petitioners, Riverboat Services, Inc., Riverboat Services

of Indiana, Inc., and Thomas Gourguechon respectfully

petition for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Seventh Circuit in this

case.

OPINIONS BELOW

The ruling of the United States Court of Appeals for the

Seventh Circuit dated June 16, 2006 affirming the decision of

the District Court is officially reported at 451 F.3d 424 (7"

Cir. 2006), and is reproduced at App. A at la.

The order of the United States District Court for the

Northern District of Indiana dated September 22, 2004,

denying the Petitioner’s post-trial motion is reproduced at

App. B at 87a.

The opinion of the United States District Court for the

Northern District of Indiana dated April 29, 2004, entering

judgment on behalf of certain Plaintiffs and against

Defendants following a bench trial is reproduced at App. D

at 98a. The Memorandum of Judgment entered May 4, 2004

is reproduced at App. C at 96a.

JURISDICTION

The order of the United States Court of Appeals sought to

be reviewed was entered on June 16, 2006. This petition is

timely under 28 U.S.C. § 2101 and Supreme Court Rule 13.1

because it is being filed within 90 days of the entry of the

order sought to be reviewed. This court has jurisdiction to

review the order of the United States Court of Appeals for the

Seventh Circuit pursuant to 28 U.S.C. § 1254.

STATUTORY PROVISIONS INVOLVED

The relevant statutory provision is:

46 U.S.C. § 2114:

An owner, charterer, managing operator, agent,

master or individual in charge of a vessel may not

discharge or in any manner discriminate against a

seaman because the seaman in good faith has reported

or is about to report to the Coast Guard that the

seaman believes that a violation of this subtitle, or a

regulation issued under this subtitle, has occurred.

STATEMENT

The jurisdiction of the district court was invoked under 28

U.S.C. §1331 (general federal question jurisdiction). The

Plaintiffs’ federal claim is based upon allegations that

Defendants violated a federal whistle-blower statute applicable

to seamen. 46 U.S.C. § 2114. The dismissal of the remaining

three counts in the Second Amended Complaint was not

appealed.

Factual Background

The trial court found that Plaintiffs’ conduct in appealing

a variance issued by the United States Coast Guard and that

the termination of those at will employees - along with

termination of employees who had not engaged in the activity

— were covered under the seamen’s whistle-blower statute, 46

U.S.C. § 2114. The Seventh Circuit affirmed and even

expanded whistle-blower status to Plaintiffs who did not

participate in the appeal. By granting whistle-blower status

to the Plaintiffs who were not even complaining about any

conduct by their employer or informing the Coast Guard of

any fact not previously known to it, the Seventh Circuit has

expanded whistle-blower status to any communication with a

regulatory agency, a result not contemplated by any federal

or state whistle-blower statute.

Plaintiffs were employed as, seamen on board the M/V

Showboat. Prior to the employ:nent of the seamen, Riverboat

Services of Indiana, (“RSI”), in August, 1996, requested a

variance from Coast Guard regulation which required

engineers to hold an “unlimited” license when operating a

vessel the size of the M/V Showboat on the Great Lakes.

(App A, pp 6a-7a). RSI premised its request on the facts that

the vessel was similar in machinery and route as other vessels

operated by RSI, and the limited use of the gaming vessel on

the Great Lakes. In its request to the Coast Guard, RSI

disclosed all relevant regulations regarding the service of

limited licensed engineers versus unlimited licensed

engineers. After consideration of RSI’s request, the Coast

Guard granted permission to RSI-to employ limited licensed

engineers. (App. A p. 7a). Accordingly, RSI’s Certificate of

Inspection (“COI”) included an amendment allowing limited

licensed engineers to serve on board the M/V Showboat. The

COI was posted in the pilot house. (/d.)

After the COI was posted, the plaintiffs, along with six

other licensed officers, wrote a Freedom of Information

request to the Coast Guard inquiring as to the basis of the

variance granted by the Coast Guard to RSI. (App. A pp. 7a-

8a). This communication, in August, 1997, was copied to all

the seamen’s congressional representatives as well as a union

representative. (App. A pp. 9a tn. 9). Plaintiffs Horton and

Doncet were signatories to this communication, but did not

sign any other communications with the Coast Guard. (App.

A pp. 9a). The Coast Guard responded to the request by

sending to Mr. Gaffney the correspondence between it and

RSI regarding the allowance of limited licensed cagineers

serving on the M/V Showboat.

After the Coast Guard responded to the request, eight of

the Plaintiffs, aiong with eight other licensed officers, wrote

to the Coast Guard requesting an extension of time in which

to file an appeal of the Coast Guard’s decision. (App. A p.

9a). This correspondence with the Coast Guard, in October,

1997, was the Plaintiffs’ method of refuting the reasons for ~

the variance allowing limited licensed engineers to serve on

the M/V Showboat. After initially denying the appeal, the

Coast Guard continued to process the appeal through internal

»srocedures. In December, 1997, months after the P!intiffs

started their letter writing campaign with the Coast Guard, the

Commander of the Ninth District granted the Plaintiffs’

“appeal” and requested that the COI previously issued by the

Coast Guard be amended to allow only for unlimited licensed

engineers.

At all times RSI was in complete conformity with the CO]

issued by the Coast Guard and all Coast Guard regulations.

During the time that the Plaintiffs were communicating with -

the Coast Guard, the vessel was involved in a union fight

between the Seafarer’s International Union (“SIU”) and

Marine Engineers Benevolent Association (“MEBA”). The

union fighting involved suspected sabotage and escalated until

Keith Wallace, of Showboat, instructed Robert Heitmeier,

President of RSI, to fire all the seamen involved in the union

activities. Robert Heitmeier, who was not aware of any of

the prior communications by the Plaintiffs with the Coast

Guard, instructed Thomas Gourguechon, Director of Marine

Operations for RSI, to fire all seamen involved in either union

activities or suspected sabotage on board the vessel. (App. A

pp. 16a-17a).

Thomas Gourguechon fired the Plaintiffs, along with

approximately forty other employees who were not signatories

to the letters to the Coast Guard. In addition, not all the

signatories to the communications with the Coast Guard were

terminated. (App. A. p.14a, fn. 12).

Lower Court Proceedings

The lower court determined that all but two of the

Plaintiffs, those who only signed the August letter, were

terminated in retaliation for protected whistle-blowing

activities in the October appeal of the Coast Guard’s

regulations. The lower court awarded the Plaintiffs damages

in the amount of $683,328.88. The Seventh Circuit affirmed,

and also found that the two Plaintiffs who were not signatories

to the October letter were also terminated for protected

whistle-blowing communicaticns and entitled to additional

awards of back pay, compensatory damages and punitive

damages of $25,000 each. The Seventh Circuit did not apply

its Causation analysis for circumstantial evidence cases for

retaliatory discharge where similarly situated employees were

not fired, and other non-involved employees were fired.

The Seventh Circuit’s decision has wide ranging

ramifications for all whistle-blower statutes, and is in conflict

with other Circuits requiring that the employee “blow the

whistle” on an employer’s conduct, rather than merely

disagree with publicly known agency decisions. There are at

least 59 federal whistle-blower statutes, and about twenty-two

states have enacted whistle-blower statutes that may be

affected by the Seventh Circuit’s analysis. In addition, the

Seventh Circuit’s test of causation is in derogation of its own

precedents, and is potentially applicable in all whistle-blower

cases.

REASONS FOR GRANTING THE PETITION

a. SEVENTH CIRCUIT’S EXPANSIVE

INTERPRETATION OF THE WHISTLE-

BLOWER STATUTE IS IN CONFLICT WITH

OTHER CIRCUITS AND STATE COURT

INTERPRETATIONS

The Seventh Circuit has improperly expanded a whistle-

blower statute to encompass all communications by employees

to any agency regarding actions by third parties, including the

agency itself, on matters already of public knowledge. The

ruling by the Seventh Circuit abrogates the very purpose of

whistle-blower statutes and chills all actions by private

employers enforcing their own internal rules when they are

admittedly in compliance with all applicable rules and

regulations'. Indeed, the only conduct which the Seventh

Circuit found unlawful was that of the Coast Guard - not the

employer.

This Court in dicta has stated that “the powerful network

of legislative enactments-such as whistle-blower protection

laws and labor codes-[are] available to those who seek to

expose wrongdoing.” Garcetti v. Ceballos, 1268S. Ct. 1951,

' The Seventh Circuit ignored the fact that the Plaintiffs knew

that M/V Showboat was at all times in conformity with the

regulations designating that only unlimited licensed engineers

should serve on board the vessel. In addition, the Seventh Circuit

ignored the trial testimony of the Plaintiffs that there was never a

safety violation on board the vessel.

1962, 74 U.S. 4257 (2006). The classic definition of whistle-

blowing is “exposing” a fault to a third party or to the public.

Id. 126 S.Ct. at 1970, dissenting opinion of Justice Souter.

This Court has previously recognized that “many, if not most,

‘retaliatory incidents come about as a response to safety

complaints that employees re ister with federal regulatory

agencies.” English v. General Electric Co., 496 U.S. 72,

110 S. Ct. 2270, 2281 (1990). Implicit in these decisions is

the element that the whistle-blowers actually expose, or at

least believe that they are exposing, an action by their

employer. See, e.g., Private Sector Whistleblowing and the

Employment-At-Will Doctrine: A Comparative Legal, Ethical,

and Pragmatic Analysis, 45 S. Tex. L. Rev. 543, 594 (2004)

(“Whistleblowing, of course, in order to trigger the public

policy tort “exception,” must involve an employee discharge

or adverse employment relating to a complaint or a reporting

of an employer violation of an important “public policy” of

the jurisdiction. ”)

The Seventh Circuit’s opinion, however, is directly at

odds with cases requiring that the Plaintiff blow the whistle on

his employer’s conduct. In holding that the Plaintiffs’ appeal

to the Coast Guard interpreting Coast Guard regulations

constituted protected whistle-blowing activities, the Seventh

Circuit has left employers without the ability to terminate, or

even discipline their at will employee’s conduct that does not

relate to either safety concerns, violations of law, or their

own business. Employers no longer know the boundaries of

protected or unprotected conduct. Following the Seventh

Circuit’s analysis, any communication by a private employee

to any agency complaining, or inquiring, about government

procedures, or variances to any governmental rule or

regulation, would be a protected communication. Clearly,

whistle-blower statutes are not to be so broadly construed.

The Seventh Circuit’s opinion is in conflict with the Fifth

Circuit’s interpretation of the same statute, the Federal

Circuit’s interpretation of the Whistleblower Protection Act,”

the Third Circuit’s interpretation of the whistle-blower

provisions of the Clean Air Act,* as well as various State

Supreme Court’s decisions interpreting nearly identical

whistle-blower statutes.

In Garrie v. James L. Gray, 912 F.2d 808, 810 (5" Cir.

1990) the Court held that the plaintiff's discharge was not in

violation of 46 U.S.C. §2114 because the plaintiff “has not

reported a safety violation to the Coast Guard.” In Garrie,

the plaintiff had called the Coast Guard and inquired as to

whether certain regulations concerning maximum working

hours were in effect. The plaintiff then informed his

employer that he had contacted the Coast Guard and the Coast

Guard had confirmed his understanding that working in

excess of twelve hours per day would be in violation of Coast

Guard regulations. The plaintiff was subsequently terminated

after he refused to work more than twelve hours per day. In

finding that the statute did not apply, the Fifth Circuit stated

that the plaintiff was merely making an inquiry of the Coast

Guard and not filing a complaint or furnishing information so

that the Coast Guard could investigate and prosecute a

violation. The same was true here, yet the Seventh Circuit

found a violation by its expansive and incorrect reading of the

statute.

The Seventh Circuit recognized that the purpose of the

statute is to “ensure that the United States Coast Guard

$US.C. $2302.

* 33 U.S.C. § 1367(a).

receives accurate and timely information about the violation

of safety regulations....” However, expanding the scope of

the statute to include the Plaintiffs’ Freedom of Information

Act request, the Plaintiffs’ request for an extension of time in

which to appeal the Coast Guard’s decision, and a subsequent

appeal of the Coast Guard’s decision, goes way beyond the

purpose of the statute to inform the Coast Guard of safety

violations. This is especially true where, as here, the

Plaintiffs admit that there were no safety violations on board

the vessel. Indeed, RSI at the time of the communications by

the Plaintiffs, had not employed limited licensed engineers,

even though it had the right to do so.

The Seventh Circuit’s interpretation of the whistle-blower

statute is also contrary to other Circuit Courts interpreting

other federal whistle-blower statutes. The Federal Circuit in

Francisco v. Office of Personnel Management, 295 F.3d 1310

(Fed. Cir. 2002), held that the plaintiff did not enjoy whistle-

blower protection where he complained that the Office of

Personnel Management violated the civil service laws in its

interpretation of public law. As the Federal Circuit held, a

“report of publicly known information concerning alleged

errors in the adjudicative process did not constitute a

protected disclosure within the meaning of the Whistleblower

Protection Act of 1989....”. 295 F.3d at 1311. Obviously

here the Plaintiffs were corresponding with the Coast Guard

about a COI posted in the pilot house and which was

explicitly authorized by the Coast Guard.

In Meuwissen v. Dept. of Interior, 234 F.3d 9 (Fed. Cir.

2000), the Federal Circuit, in interpreting the federal

Whistleblower Protection Act, held that the plaintiff did not

make a protected disclosure when he published his decision

finding that prior administrative law judges’ determinations

were erroneous. “A disclosure of information that is publicly

known is not a disclosure under the WPA. The purpose of the

WPA is to protect employees who possess knowledge of

wrongdoing that is concealed or not publicly known, and who

step forward to help uncover and disclose that information.”

Id. at 13.

The Seventh Circuit’s opinion is also at odds with the

Third Circuit’s analysis of the whistle-blower statute in the

Clean Water Act.* In Passaic Valley Sewerage Comm’s v.

United States Dept. of Labor, 992 F.2d 474, 478 (3d Cir.

1993), a case relied upon by the Seventh Circuit, the Court

stated that the purpose of the whistle-blower provisions were

to allow employees to assert “company violations of statutes

protecting the environment....” The substantive goal of the

statutory scheme is not furthered by extending whistle-blower

protection to persons complaining about the regulatory

agency’s rules, instead of their own employer’s conduct.

Circuit Courts construing state whistle-blowing statutes

virtually identical to the language in 46 U.S.C § 2114 have

held that the purpose of a whistle blower statute is to expose

an illegality. The Eighth Circuit in Hitchcock v. Fedex

Ground Package System, Inc., 442 F.3d 1104, 1106 (8" Cir.

2006), held that since the plaintiff had “no whistle to blow

because she reported to FedEx only what it already knew”

there was no violation of the Minnesota Whistleblower

Statute’. The Sixth Circuit denied Ohio state law whistle-

blower protection to a plaintiff who complained to the

Nuclear Regulatory Commission. Kelly v. Lambda Research

Inc., 89 Fed. Appx. 535 (6" Cir. 2004). In Kelly the Third

4 33 U.S.C. §1367(a).

5 M.S.A. section 181.932.

Circuit found that once the plaintiff was informed by the

Commission that there was no safety concern with the alleged

issue raised earlier by the plaintiff, any actions by the plaintiff

after receiving this information would not constitute whistle-

blowing activities. Here, not only did the Coast Guard grant

the variance in the first place, it affirmatively informed the

Plaintiffs that limited licensed engineers did not pose a safety

threat for the vessel. (App. A p. ila).

The Seventh Circuit’s construction of the statute is also at

odds with state court decisions regarding liability under

whistle-blower statutes. In Obst v. Microtron, Inc., 614

N.W.2d 196 (Minn. 2000) the Minnesota Supreme Court held

as a matter of law that the plaintiff's report of his employer’s

conduct to a third party of a fact openly acknowledged by

both his employer and the third party could not constitute a

good faith report under the whistle-blower statute because

there was no whistle to blow. Accord, Rothmeier v.

Investment Advisers, Inc., 556 N.W.2d 590 (Minn. App.

1997), plaintiff's communication with employer of suspected

violation not a “report” under the whistle-blower statute

because the employer was already aware of the issue.

Clearly, the Coast Guard already knew about its own

action here - that is the grant of the variance under its

regulations governing licensing for engineers. Plaintiffs did

nothing to expose this. Defendants had already done so by its

request for the variance at the outset. Whistle-blower status

should not be accorded these Plaintiffs.

The Seventh Circuit’s expansive interpretation of the

seamen’s whistle-blower statute to include an appeal of a

Coast Guard’s decision to grant a variance to a private

employer is beyond the intention of Congress in enacting the

statute. The Seventh Circuit’s decision has wide ranging

ramifications for all whistle-blower statutes, and is in conflict

with other Circuits requiring that the employee “blow the

whistle” on an employer’s conduct, and not on publicly

known information.

II. THE SEVENTH CIRCUIT IGNORED ITS OWN

PRECEDENT IN DETERMINING CAUSATION

FOR RETALIATORY DISCHARGE

The trial court found that the plaintiffs, with the exception

of Gaffney, produced only circumstantial evidence of

retaliatory discharge. (App. D p. 124a). When only

circumstantial evidence exists the Seventh Circuit has held

that plaintiffs must demonstrate that only the terminated

plaintiffs, and not any similarly situated employee who did

not complain, were subjected to the adverse action. See,

Stone v. City of Indianapolis, 281 F.3d 640 (7" Cir. 2002); -

Rogers v. City of Chicago, 320 F.3d 748, 754-55 (7" Cir.

2003). Here, the evidence was undisputed that not all the

signatories to the letters were terminated, and at least forty

other “similarly situated” employees who did not

communicate with the Coast Guard were terminated at the

same time. The Seventh Circuit, however, did not address

these facts or its prior decisions in Stone and Rogers.

The Seventh Circuit’s error in failing to address the causal

link under the Rogers and Stone analysis is particularly

troubling due to the fact that the Seventh Circuit found Mr.

Heitmeier, the President and sole shareholder of RSI, had no

knowledge of the Plaintiffs’ communications with the Coast

Guard. Yet, it was Mr. Heitmeier who _ instructed

Mr.Gourguechon to fire the Plaintiffs. The Seventh Circuit

found Mr. Heitmeier could not be liable as a matter of law for

retaliatory discharge, but that his subordinate, Mr.

Gourguechon, acting upon instructions from Mr. Heitmeier,

was found to be personally liable for retaliatory discharge.

The Seventh Circuit also compounded its error in ignoring

the Rogers and Stone line of cases when it found that two

Plaintiffs who were not signatories to the protected

communication with the Coast Guard were nonetheless

whistle-blowers within the protection of the statute.

Il. THESEVENTH CIRCUIT ERRED IN REFUSING

TO CONSIDER DE NOVO THE

EXCESSIVENESS OF THE PUNITIVE DAMAGE

AWARD

The trial court awarded each prevailing Plaintiff punitive

damages in the amount of $25,000, despite the fact that the

statute only specifically enumerates equitable relief, such as

reinstatement, back pay and injunction. Defendants argued

before the trial court and the Seventh Circuit that punitive

damages were not warranted on the record, were determined

without regard to the injury sustained, and were not warranted

in the amount awarded. Defendants cited to the guidelines for

punitive damages established by this Court in State Farm

Mutual Automobile Insurance Co., v. Campbell, 538 U.S.

408, 123 S. Ct. 1513 (2003), and BMW of North America v.

Gore, 517 U.S. 559, 116 S. Ct. 1589 (1996), in support of its

argument that the punitive damage awards, which for one

Plaintiff was 250 times the amount awarded as compensatory

damages, were excessive as a matter of law.

The Seventh Circuit, relying on Cooper Industries v.

Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678

(2001) and Merriweather v. Family Dollar Stores of Indiana,

Inc., 103 F.3d 576 (7" Cir. 1996) held that the standard of

review of the excessiveness of the awards was abuse of

discretion. This is directly contradicted by this Court’s

decision in Cooper Industries holding that Courts of Appeals

must review a District Court’s application of the Gore test de

novo.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

JULIA D. MANNIX

Counsel of Record

Julia D. Mannix, P.C.

125 S. Wacker Drive

Suite 1700

Chicago, Illinois 60606

(312) 332-0952

September 14, 2006

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Nos. 04-3829, 04-3900

[Decided June 16, 2006]

As Amended, June 26, 2006

MICHAEL P. GAFFNEY, THOMAS BELL,

EDWARD ANDERSON, et al.,

Plaintiffs-Appellees, Cross-Appellants,

Vv.

RIVERBOAT SERVICES OF INDIANA,

INCORPORATED, RIVERBOAT SERVICES,

INCORPORATED, ROBERT HEITMEIER, et al.,

Defendants-Appellants, Cross-Appellees,

SHOWBOAT MARINA CASINO

PARTNERSHIP, SHOWBOAT, INCORPORATED,

SHOWBOAT INDIANA, INCORPORATED, et al.,

Defendants-Appellees.

meee ee eee ee ee”

Appeals from the United States District Court

for the Northern District of Indiana, Hammond Division

No. 98 C 10--Andrew P. Rodovich, Magistrate Judge

Before RIPPLE, WOOD and WILLIAMS, Circuit Judges.

OPINION

RIPPLE, Circuit Judge. The plaintiffs, who are licensed

merchant marine officers,’ brought this whistleblower action

under 46 U.S.C. § 2114 against Showboat Marina Casino

Partnership, Showboat, Inc., Showboat Indiana, Inc.,

Showboat Mardi Gras Casino and M/V Showboat (collectively

“Showboat”), Riverboat Services, Inc. and Riverboat

Services of Indiana, Inc. (collectively “Riverboat”), and

Robert Heitmeier and Thomas Gourguechon in their

individual capacities. See Pub.L. No. 98-557, § 13(a), 98

Stat. 2863 (1984) (current version at 46 U.S.C. § 2114

(2002)).” The plaintiffs claim that they were discharged in

retaliation for engaging in_ statutorily protected

correspondence with the United States Coast Guard (“Coast

Guard”) about a change in hiring guidelines on the vessel on

which they were employed, the M/V Showboat. After a bench

trial on the plaintiffs’ claims against Riverboat and the

individual defendants, the United States District Court for the

' The individual plaintiffs are merchant marine officers

Michzel Gaffney, Thomas Bell, Edward Anderson, Robert

Beardon, Thomas Trundy, Thomas Goodridge, Dean Horton,

Adam Doncet, Robert Palmer and Neil Reilly.

2 Since the events in this case, 46 U.S.C. § 2114 has been

amended. Neither party argues that these amendments—which were

enacted after this litigation began—apply to the present case. See

footnote 19, infra.

Northern District of Indiana entered judgment in favor of all

but two plaintiffs and awarded back pay, expenses and

punitive damages. Those defendants now appeal, contending

that the district court erred in holding that the plaintiffs

established the requisite causation between their

correspondence with the Coast Guard and their subsequent

terminations. These defendants also submit that the plaintiffs

did not prove that they are entitled to whistleblower protection

under § 2114: according to the defendants, the plaintiffs did

not act in “good faith,” did not make a “report[]” to the Coast

Guard, and did not have a reasonable belief that a violation of

safety laws and regulations had occurred at the time of the

correspondence. /d. Further, the individual defendants

contend that they are not subject to § 2114 liability because

they do not qualify as “individual{s] in charge of a vessel.”

Id. The two plaintiffs who did-not obtain relief’ cross-appeal

the district court’s ruling denying them relief. All ten

plaintiffs appeal the denial of attorneys’ fees. Finally,

Riverboat appeals the district court’s judgment granting

partial summary judgment to Showboat. Riverboat contends

that Showboat was required to obtain insurance for the

plaintiffs’ claims and, thus, it is entitled to indemnification

from Showboat. For the reasons set forth in the following

opinion, we affirm in part and reverse in part the judgment of

the district court.

> These two plaintiffs are Mr. Hor:on and Mr. Doncet.

BACKGROUND

A. Facts

This appeal involves the claims of ten* licensed merchant

marine officers, formerly employed as captains, chief

engineers, assistant engineers or deck officers on the M/V

Showboat, a large gaming vessel that carried passengers on

excursions on Lake Michigan.° They allege that they were

terminated in retaliation for reporting the violation of safety

regulations to the United States Coast Guard and that their

terminations violate 46 U.S.C. § 2114(a).° See § 13(a), 98

The eleventh plaintiff, Robert B. “Barry” Wood, was

dismissed with prejudice by the district court on July 16, 1999.

> Specifically, during the events in this case, Mr. Gaffney and

Mr. Reilly were Chief Engineers; Mr. Bell was a Captain; Mr.

Anderson, Mr. Beardon and Mr. Horton were Deck Officers; and

Mr. Trundy, Mr. Goodridge, Mr. Doncet and Mr. Palmer were

Assistant Engineers. All held unlimited licenses for their respective

positions.

° The plaintiffs’ second amended complaint contained four

counts: Count I alleged that the defendants violated 46 U.S.C. §

2114. Count II alleged that the defendants violated general maritime

law. Count III alleged an in rem action against the M/V Showboat.

Count IV alleged that the defendants violated Indiana state law by

wrongfully terminating the plaintiffs. Count I is the only count at

issue on appeal; the other counts previously were dismissed by the

district court. See R.192 at 19 n.4 (holding that the plaintiffs’ state

law claims are preempted by federal law); id. at 18 (dismissing the

plaintiffs’ claim based on maritime law as irrelevant and

cumulative, given that maritime law recognizes the tort of wrongful

Stat. at 2863. The plaintiffs filed suit in 1998 against

Showboat, the registered owner of the M/V Showboat, and

Riverboat, the operator and manager of the vessel. The

plaintiffs also named two individuai defendants: Robert

Heitmeier, the President, member of the Board of Directors

and sole shareholder of both Riverboat Services, Inc. and

Riverboat Services of Indiana, Inc.; and ‘Thomas

Gourguechon, who during the events in this case was both the

Director of Marine Operations for Riverboat and the Director

of Project Management for Showboat.

1. The M/V Showboat

The M/V Showboat, the ship on which the plaintiffs were

employed, is one of the largest casino vessels currently

operating in the United States; it weighs 2,803 gross tons, is

332-feet long and can carry up to 4,250 passengers and crew

at a time. During the period at issue in this litigation, the M/V

Showboat operated on a daily basis gambling excursions on

Lake Michigan that departed from, and returned to, East

Chicago, Indiana.

The vessel’s operation is governed by a Marine

Management Services Agreement (the “Agreement” ) between

Riverboat and Showboat. See R.37, Ex.A. This Agreement

gives Riverboat the “exclusive right and obligation to manage

and operate the marine aspects of the [M/V Showboat].” Id.

§ 3.01. Specifically, Riverboat is responsible for ensuring that

the vessel’s operation complies with applicable state and

discharge only when a seaman is terminated in contravention of an

“important public policy,” which, in substance, is the same right

recognized by federal statute). These findings have not been

challenged on appeal.

federal laws, including United States Coast Guard regulations,

see id.; employing and training the vessel’s crew in a manner

consistent with generally accepted standards of the riverboat

gaming industry, see id. §§ 3.01, 3.02(1); monitoring the

qualifications of the vessel’s staff, as well as assuring that the

maritime staff is properly licensed, see id. § 3.02(iv); and the

hiring, firing, promotion and supervision of all executive and

service employees, see id. § 3.04.1. In turn, the Agreement

obligates Showboat to obtain insurance and to name Riverboat

as the insured party. Section 5.01.1 specifies that Showboat

should obtain insurance covering all “acts, omissions and

injuries to persons or property” caused by Riverboat or its

agents, in the amount of not less than five million dollars. See

id. § 5.01.1. Section 5.01.01.1 then lists five types of

insurance coverage required: worker’s compensation

insurance; comprehensive general liability insurance for

accidents and property damage; full form protection and

liability insurance on all vessels and floating equipment; hull

and machinery insurance; and collision liability insurance for

damage to vessels and floating objects. In addition, the

Agreement mandates that Showboat obtain coverage for

liabilities arising under the Jones Act. See id.

The operation of the M/V Showboat also is required to

abide by federal statutes and regulations. In pertinent part,

applicable Coast Guard regulations provide that a limited

engineer license permits a chief or assistant engineer to “serve

within any horsepower limitations on vessels of any gross tons

on inland waters,” but not on vessels of “more than 1600

gross tons in . . . Great Lakes service.” 46 C.F.R.

§ 10.501(b); see also id. § 15.915(b)-(d). At 2,803 gross

tons, the M/V Showboat falls into the latter category. Fearing

that the Coast Guard under these regulations would require

‘ne M/V Showboat to hire exclusively engineers with

unlimited licenses, on August 27, 1996, Mr. He‘imeier wrote

to Lieutenant Commander Rich Brundrett at the Regional ©

Examination Center of the United States Coast Guard in

Toledo, Ohio. See R.81, Ex.6. He requested that the Coast

Guard amend M/V Showboat’s Certificate of Inspection

(“COI”)’ to permit the employment of engineers with limited

engineer licenses. In support of his request, Mr. Heitmeier

submitted that the M/V Showboat was similar in terms of

installed machinery, route and length of voyage to vessels

operated by Riverboat on rivers and inland waters; in short, -

he contended that, because of its limited use as a sailing

vessel, the M/V Showboat should not be characterized as a

vessel in Great Lakes service and should be permitted to

employ engineers with limited licenses. Riverboat’s request

was granted. The Coast Guard issued the M/V Showboat’s

first COI in April 1997; it provided that “[a]n individual

holding a license as chief engineer limited or assistant

engineer limited may serve as chief engineer or assistant

engineer respectively.” R.34, Ex.1. Shortly thereafter, the

COI was posted and the vessel was opened to the public.

2. The Communications with the Coast Guard

Shortly after the amended COI was posted, the plaintiffs

initiated contact with the Coast Guard. On August 11, 1997,

a group of twelve officers, including six plaintiffs—Messrs.

Gaffney, Goodridge, Palmer, Reilly, Horton and

Doncet—sent a letter to the Commandant of the Coast Guard,

A COI is a document issued by the Coast Guard, which

certifies that the vessel complies with applicable regulations. It also

delineates other necessary conditions for safe operation of the

vessel, including the requisite number of officers and their

qualifications. See 46 U.S.C. § 3307 (requiring “inspection for

certification before [a vessel is] put into service”); id. § 3309

(setting forth the requisite procedures for issuing a COI).

Admiral Robert E. Kramek. Mr. Gaffney authored this letter

and obtained the signatures of the other officers. In the letter,

the officers expressed concern that “the relaxation of licensing

requirements for the engineers on the M/V Showboat. . .

substantially reduces passenger safety by not requiring

experienced personnel to crew the vessel.” R.34, Ex.2. The

plaintiffs concluded the letter by requesting information from

the Coast Guard about the amended COI. Mr. Gaffney

testified that this letter was sent to obtain clarification about

licensing requirements because the COI did not specify “what

{the change] actually meant.” Tr.I at 113. The Coast Guard

responded with two separate letters that, according to Mr.

Gaffney, did not answer the plaintiffs’ questions about the

nature of the licensing relaxation but did provide necessary

information about proper appeals procedures. Gaffney Dep.,

R.81, Ex.7 at 42.

A second letter was sent to the Coast Guard on October 3,

1997, this time signed only by Mr. Gaffney and addressed to

Lieutenant Neil Shoemaker. R.34, Ex.3. In this letter, Mr.

Gaffney expressed concern that two employees® had been

fired because of their correspondence with the Coast Guard

about the relaxation of licensing requirements. In addition,

Mr. Gaffney reiterated his concern that the licensing changes

risked “a serious disaster,” given the “shear [sic] number of

people onboard” and the relationship between licensing and

experience. Jd. Mr. Gaffney also inquired about the “specific

qualifications for limited engineers,” including the number of

years’ experience required to obtain the license in question.

® These two individuals are not parties to the present litigation,

but were signatories to the August I Ith letter.

On October 5, 1997, Mr. Gaffney sent follow-up

correspondence to Lieutenant Shoemaker. See R.34, Ex.4. He

reported that one of the assistant engineers with an unlimited

license recently had been approved to sit for his limited

license for a chief engineer position. Mr. Gaffney expressed

concern that allowing “a person with so limited experience”

to “sign{] on as Chief Engineer of this vessel is the reason

why myself and my fellow officers wrote the initial letter to

{Coast Guard] Commandant.” /d.

The last letter to the Coast Guard, which is the focus of

this appeal, is dated October 10, 1997. All of the plaintiffs

except Mr. Horton and Mr. Doncet signed this letter, as did

eight other individuals not parties to this suit. See R.34,

Ex.5.” In this letter, the plaintiffs requested a thirty-day

extension of time to file an appeal challenging the relaxation

of licensing requirements granted to the M/V Showboat. “Our

request,” the plaintiffs explained, “is based on the following

reasons”:

The lowering of licensing standards for engineering

officers aboard the M/V Showboat occurred April

lith, 1997... . It was not publicized until mid June,

1997 . . . . After some preliminary research into the

lowered licensing requirements, we wrote the USCG

Commandant in an effort to understand the exact

reason for relaxing these standards. . . . As a group

directly effected [sic] by this decision, we feel that we

Copies of these letters, as well as individual pleas for

assistance in resolving labor disputes with the owners and operators

of the M/V Showboat, also were sent to various members of

Congress. See R.64, Ex.Q.

10a

should have been extended the opportunity to have our

thoughts, opinions and concerns heard... .

It is our contention that the change in licensing

requirement for the engineers on the M/V Showboat

Mardi Gras from Unlimited to Limited has served to

potentially and substantially compromise safety

standards aboard the vessel.

The safety requirements set by the United States Coast

Guard are minimum requirements for safe operation

of vessels, and the operative word here is minimum.

Typically, vessel owners and managers conform only

to the bare minimum requirements while viewing

additional safety items as an inconvenience or extra

cost. The request from Riverboat Services

Incorporated (RSI) to lower the license requirement

for the engineers is a prime example of this tenet as

evidenced by their letter of request. . . . Approval of

their request. has effectively lowered required

experience for engineers to a substandard level.

Id. at 1. The letter also described the training discrepancies

between an engineer with a limited license and an engineer

with an unlimited license. Further, it set forth the reasons

why extensive experience on board a large vessel ts an

essential qualification of engineers navigating the M/V

Showboat—the difficulty of maneuvering in shallow waters

and around obstacles, the passenger capacity of the vesse] and

the dangers of wind gusting. Finally, the letter rebutted the

claim that engineers with limited licenses generally have

sufficient experience to serve on inland vessels such as the

M/V Showboat.

lla

In a letter dated October 31, 1997, Captain M. W. Brown,

the Officer in Charge of Marine Inspection, denied the

plaintiffs’ appeal. See R.34, Ex.8. Captain Brown

acknowledged receipt of the October 10th letter, which--

although phrased as a request for an extension of time--he

classified as an “appeal[]” of the “decision to permit the use

of engineers with ‘limited’ licenses aboard Great Lakes

vessels not more than 4,000 gross tons.”'? /d. After

researching the issue raised in the “appeal,” he disagreed that

the use of limited licensed engineers threatens the

safety of M/V SHOWBOAT.

While the service requirements between unlimited

and limited engineers are different, limited engineers

are still required to have appropriate and relevant

experience. The regulations currently permit the use

of limited engineers for vessels of any gross tons on

inland waters. The SHOWBOAT, due to its extremely

short “close in” route, combined with its fair weather

operating criteria, is analogous to operation on inland

waters... .

Accordingly, your appeal is denied, and the

SHOWBOAT’s existing Certificate of Inspection

remains valid.

‘© Captain Brown misquoted the applicable regulation. 46

C.F.R. § 15.915(b)-(d) prohibits vessels of more than 1,600 gross

tons, not 4,000 gross tons, in Great Lakes service from employing

either chief or assistant engineers with limited licenses. The

provision permitting vessels of not more than 4,000 horsepower to

employ engineers with limited licenses applies only to designated

duty engineers. See 46 C.F.R. § 15.915(a){1).

12a

Id. The signatories to the October 10th letter appealed Captain

Brown’s decision to the Commander of the Ninth Coast Guard

District. See R.34, Ex.9. In the appeal, the plaintiffs

expressed frustration with Captain Brown’s failure to

“differentiate between passenger vessels and cargo vessels.”

Id. “We feel,” they wrote, “that the highest standards should

be required, not wavered, on high capacity passenger vessels

such as the M/V Showboat, which carries 4,250 passengers

and crew.” Id. This letter also expressed concern that the

relaxation of licensing requirements was a growing trend. In

that regard, it noted that the Coast Guard recently had issued

an amended COI, endorsing the employment of engineers

with limited engineering licenses for a vessel similar in size

and function to the M/V Showboat.

Captain G. S. Cope, acting at the direction of the Ninth

District Commander, granted the plaintiffs’ appeal on

December 19, 1997. See R.34, Ex.10. Captain Cope wrote:

In reviewing the record of this appeal, I found that the

endorsement of the M/V SHOWBOAT’s certification

of inspection to allow limited engineers, did not

comply with 46 CFR 15.915. That regulation

authorizes individuals licensed as Chief Engineer

(limited) or Assistant Engineer (limited) to serve as

Chief or Assistant Engineer on vessels up to 1,600

Gross Tons upon the Great Lakes. Since the M/V

SHOWBOAT is greater than 1,600 Gross Tons, an

individual holding only a “limited” engineer license

could not legally serve as the vessel’s Chief or

Assistant Engineer.

Id. The Captain directed the Officer in Charge of Marine

Inspection at the Coast Guard to remove the endorsement

allowing for employment of limited license engineers from the

13a

M/V Showboat’s COI. An amended COI was sent to

Riverboat on December 31, 1997. It was posted on the vessel

on January 5, 1998.

It is undisputed that, by January 5, Mr. Gourguechon had

become aware of the plaintiffs’ correspondence with the Coast

Guard. Mr. Gourguechon testified that, in late October, he

found the plaintiffs’ October 10th letter to the Coast Guard,

which he characterized as merely a “job security letter,” in

the pilot house. Tr.IV at 47-48. Further, at the end of 1997,

Mr. Gaffney had approached Mr. Gourguechon with his

concerns about the relaxation of licensing requirements, as

well as discussed with him developments in the plaintiffs’

October 10th “appeal.”'' Tr.I at 154-57. There is no

evidence, however, that--before the complaint was filed on

January 13, 1998, to which was attached the relevant Coast

Guard correspondence--Mr. Gourguechon had read any of the

previous letters or that Mr. Heitmeier had read any of the

four letters at all. See Gourguechon Test., Tr.IV at 47;

Heitmeier Dep., R.81, Ex.2 at 59-60.

'' The parties dispute the scope and substance of these

conversations. For example, Mr. Gaffney testified that, on January

5, before the amended COI was posted, he informed Mr.

Gourguechon that the plaintiffs’ appeal to the Coast Guard

concerning licensing requirements had been granted. According to

Mr. Gaffney, Mr. Gourguechon told him that Mr. Heitmeier and

Mr. Wallace, the President and CEO of Showboat’s East Chicago

operation, “were upset” and that Mr. Gaffney would “takfe] the

heat for (the appeal].” Tr.I at 181. Mr. Gourguechon denies having

made these statements, although he admits knowing of the

plaintiffs’ October 10th letter to the Coast Guard prior to the

plaintiffs” terminations. See Tr.1V at 47-48.

14a

3. The Plaintiffs’ Terminations

On January 6, 1998, Mr. Gaffney received a letter from

Mr. Gourguechon, notifying him that his employment as

Chief Engineer on the M/V Showboat had been terminated,

effective immediately. The letter identified the reasons for

termination as:

Unauthorized communication and correspondence

with regulatory bodies having jurisdiction over the

operation of the vessel. Unauthorized correspondence

and the regulators [sic] response has had a material

adverse effect on the company’s ability to efficiently

run it’s [sic] business.

R.81, Ex.15. Mr. Gaffney was offered no other explanation,

either in writing or verbally, for his termination. According

to Mr. Gaffney, upon receiving this letter, he told Mr.

Gourguechon, “You can’t fire me for that.” /d., Ex.7 at 84.

The other nine plaintiffs were fired over the course of the

next two-and-a-half weeks.'* Unlike Mr. Gaffney’s

'2 Messrs. Bell and Beardon both received their termination

letters from Mr. Gourguechon on January 6, 1998. See R.81,

Ex.16-17. Mr. Anderson received his termination letter on January

7, 1998. See id., Ex.18. Mr. Trundy received his termination letter

on January 8, 1998. See id., Ex.19. Mr. Goodridge received his

termination letter on January 14, see id., Ex.20, and Mr. Horton

received his on January 15, see id., Ex.21. Mr. Reilly was notified

of his discharge on or about January 21, 1998, although he did not

receive a written termination notice. On January 22, Mr. Doncet

was terminated. See id., Ex.22. Mr. Palmer was discharged the

next day. See id., Ex.23.

lS5a

termination letter, the letters received by these individuals did

not contain reference to Coast Guard correspondence but,

instead, gave no reason for their discharges. When confronted

by these plaintiffs, Mr. Gourguechon denied that their

discharges were in any way related to the Coast Guard

correspondence."

Mr. Gourguechon testified that, although he drafted and

hand-delivered all but one of the plaintiffs’ termination

notices, he was acting at the direction of Mr. Heitmeier. See

Tr.1V at 76-78. Specifically, according to both Mr.

Gourguechon and Mr. Heitmeier, in late 1997, Mr.

Gourguechon approached Mr. Heitmeier about problems he

was having with the plaintiffs’ employment on the M/V

Showboat. Id. at 36-38. This conversation focused on the

plaintiffs’ potential connections to the Marine Engineers’

Beneficial Association (‘MEBA”), the union responsible for

picketing near the vessel that was sometimes violent and often

disruptive. They also discussed the plaintiffs’ involvement in

defective rewiring of the M/V Showboat. A number of the

During this time, approximately forty other individuals, who

had not signed any of the letters to the Coast Guard, also had their

employment terminated. Additionally, the jobs of a number of other

signatories to the October 10th appeal, including Eric James, Steve

Habermehl, Duane Hunt and Derek Melanson, were not affected.

' For example, Mr. Doncet stated that, after he was told of his

termination, he asked Mr. Gourguechon whether it was related to

the plaintiffs’ correspondence with the Coast Guard. Mr.

Gourguechon “did not say anything in response.” R.81, Ex.25 at

2. Mr. Trundy testified that Mr. Reilly asked Mr. Gourguechon

about his termination in Mr. Trundy’s presence, and Mr.

Gourguechon responded that “[t}here [was] no reason” for it. Tr.III

miiz.

16a

plaintiffs had been assigned to assist in repositioning the

gaming machines on the vessel; improper wiring later caused

a circuit breaker to blow and was responsible for expensive

damage to the vessel. Various Riverboat executives, including

Mr. Gourguechon and Mr. Heitmeier, believed that the

plaintiffs—in cooperation with MEBA—had sabotaged the

ship, and they cite this incident as the cause of the plaintiffs’

terminations. See Gourguechon Test., Tr.IV at 38-43;

Heitmeier Dep., R.81, Ex.2 at 61-63.

According to the defense, after this conversation, Mr.

Heitmeier approached Mr. Wallace, the President and CEO

of Showboat’s East Chicago, Indiana, operations. At this

meeting, Mr. Heitmeier informed Mr. Wallace of the

plaintiffs’ connections to MEBA and the suspected acts of

sabotage. Mr. Wallace directed Mr. Heitmeier to terminate

the individuals involved. As Mr. Wallace later explained,

“{i]f they had anything to do with the union, I wasn’t. . .

interested in the continued aggravation they were causing.”

R.81, Ex.3 at 25, 28; see also Heitmeier Dep., id., Ex.2 at

62-63. Mr. Heitmeier in turn conveyed these instructions to

Mr. Gourguechon, who drafted the termination notices.

B. Procedural History

On January 13, 1998, Messrs. Gaffney, Bell, Beardon,

Anderson and Trundy filed suit against Riverboat, Showboat,

and Mr. Heitmeier and Mr. Gourguechon in their individual

capacities.'* The First Amended Complaint added Messrs.

'* Plaintiffs Bell, Beardon, Anderson and Trundy also filed a

complaint with the National Labor Relations Board (“NLRB”),

alleging a violation of § 8(a)(1) of the National Labor Relations Act

(“NRLA”). The matter was heard by an Administrative Law Judge

17a

Goodridge, Horton and Doncet as plaintiffs; the Second

Amended Complaint added Messrs. Palmer and Reilly. The

plaintiffs asserted that their terminations violated 46 U.S.C.

§ 2114, the anti-retaliation statute protecting seamen who

report the violation of safety regulations on board a vessel to

the Coast Guard. They sought reinstatement with back pay,

injunctive relief, compensatory and punitive damages and

attorneys’ fees.

1. The Counterclaim and Cross-Claim

On December 10, 1998, Showboat filed a cross-claim

against the Riverboat defendants, contending that Riverboat

was solely responsible for all employment matters on the M/V

Showboat, including termination of the plaintiffs; therefore,

Showboat claimed, Riverboat was required to indemnify

Showboat for all litigation expenses and for the cost of

settlement. See R.37. In turn, on March 1, 1999, Riverboat

filed a counterclaim against Showboat, claiming that

Showboat was obligated under the terms of their Agreement

to insure or indemnify Riverboat for all “acts and omissions”

causing injury, including violation of § 2114. See R.46. On

June 30, 2000, Showboat moved for summary judgment

against Riverboat on its cross-claim, as well as on Riverboat’s

counterclaim. See R.68. The district court granted this motion

in part and denied it in part. See R.99. First, the court found

that the Agreement did not obligate Showboat to insure

(“ALJ”) on July 26 and 27, 1999. The ALJ found that the

defendants had violated the NLRA and ordered back pay and

reinstatement. The district court held that these proceedings barred

these plaintiffs from pursuing their state law claims in federal court.

See R.95 at 16 (dismissing Bell, Beardon, Anderson and Trundy’s

State law claims as “preempted by the September 23, 1999

N.L.R.B. adjudication”).

18a

against retaliatory discharge claims. See id. at 5-9.

Specifically, it held that, although § 5.01.1 of the Agreement

speaks broadly of insurance policies for Riverboat’s “acts,

omissions, and injuries,” see R.37, Ex.A, this provision is

modified by § 5.01.01, which specifies, and thereby limits,

the requisite scope of coverage. Under § 5.01.01, Showboat

was obligated to obtain insurance policies that included within

their scope the following: worker’s compensation insurance,

comprehensive general liability insurance, full form

protection and indemnity insurance on all vessels and floating

equipment, hull and machinery insurance and collision

liability insurance for damage to vessels. See R.99 at 9.

However, it was not required to obtain “an additional,

general ‘acts and omissions’ policy which would have covered

intentional acts,” such as violation of § 2114. See id.

(emphasis in original). Riverboat now appeals this decision.

The district court, however, denied Showboat’s motion for

summary judgment on its cross-claim against Riverboat. The

court held that, although the Agreement provides that

Riverboat is solely responsible—as between Riverboat

and Showboat—for discharging plaintiffs, this does not

absolve Showboat as “owner . . . of a vessel” of

liability to plaintiffs since plaintiffs have also brought

a direct § 2114 claim against Showboat for

discrimination, and, construing the evidence in the

light most favorable to the non-moving plaintiffs, a

directive that plaintiffs be fired could certainly

arguably constitute a “manner” of discrimination.

Because the court is not prepared on the briefs before

it to enter judgment in favor of Showboat on plaintiffs’

discrimination claim, Showboat’s motion for summary

judgment against plaintiffs is DENIED.

19a

Id. at 9-10 (internal citation omitted) (alteration in original).

Showboat has not appealed the district court’s denial of

summary judgment. Because the parties never sought

resolution of the factual issues implicating the disposition of

this cross-claim, Showboat’s cross-claim against Riverboat is

still pending in the district court.

2. The Plaintiffs’ Claims Against Showboat

In August 2001, the plaintiffs reached a settlement with

Showboat in the form of a loan receipt agreement.’° Also in

August, the district court, pursuant to Federal Rule of Civil

Procedure 21, severed the plaintiffs’ claims against Showboat

from the plaintiffs’ claims against the other defendants, in part

because Showboat had not consented to the jurisdiction of the

magistrate judge. See R.168. On December 13, 2004, the

district court dismissed the plaintiffs’ claims against Showboat

with prejudice. See R.209.

3. The Plaintiffs’ Claims against Riverboat

After the district court denied Riverboat’s motion for

summary judgment, the plaintiffs’ claims against Riverboat

were scheduled for a bench trial before a magistrate judge.

The trial was held from August 19 to August 22, 2002. All

ten plaintiffs testified, as did Mr. Gourguecb. 9. In addition,

'S In pertinent part, the loan receipt agreement provides that

Showboat shall advance to the plaintiffs. an undisclosed sum of

money; the plaintiffs are obligated to repay this sum, with interest,

from the proceeds of any amount received from a settlement with

or tial pudgment against the other defendants in the case.

20a

the defense offered into evidence the deposition testimony of

Mr. Heitmeier.

At trial, the defense argued that‘ the plaintiffs were

terminated not because of their correspondence with the Coast

Guard, but because of their involvement in disruptive union

activity on and near the vessel. According to the defense,

although Mr. Gourguechon knew of the plaintiffs’ letters to

the Coast Guard prior to the initiation of the lawsuit, he

viewed the letters as a benign job preservation effort, which

did not threaten Riverboat’s operations.

In addition, the defense submitted that the plaintiffs were

not entitled to § 2114’s whistleblower protections. It viewed

this statutory protection as narrowly tailored to protect

seamen who make a formal complaint to the Coast Guard by

reporting an actual violation of safety regulations caused by

the captain or master of the vessel and who believe that this

violation poses a significant safety hazard. According to the

defense, the plaintiffs did not fulfill these requirements

because: (a) they subjectively did not believe that the

employment of limited license engineers would impair the

safety of the vessel; (b) the plaintiffs’ belief that Riverboat

had committed a violation of safety regulations was

unreasonable, given that Riverboat had yet to employ an

engineer with a limited license; © the plaintiffs did not file a

formal complaint with the Coast Guard; and (d) they were not

discriminated against by a “master[] or individual in charge

of a vessel.” § 13(a), 98 Stat. at 2863.

At the conclusion of the bench trial, each party submitted

post-trial briefs. Subsequently, the district court entered an

order finding for all but two of the plaintiffs, Mr. Doncet and

Mr. Horton. The district court first concluded that cight of the

ten plaintiffs, those who had signed the October 10th letter,

2la

had established a causal link between their correspondence

with the Coast Guard and their subsequent terminations.

Although the court recognized that Riverboat also was

concerned with disruptive union activity on and near the

vessel, it held that the activity protected by § 2114 need not

be the “sole cause of the discharge.” R.191 at 24, 27.

Instead, relying on both Jones Act and civil rights case law,

see, e.g., Smith v. Atlas Off-Shore Boat Serv., Inc., 653 F.2d

1057, 1063 (Sth Cir. 1981), the court held that the seamen

only must “affirmatively establish that the employer’s

decision was motivated in substantial part” by the plaintiffs’

protected activities. R.191 at 24 (internal quotation marks

omitted).

____The district court concluded that Riverboat’s decision to

terminate the plaintiffs was motivated in substantial part by

their correspondence with the Coast Guard. In support, the

court cited four pieces of evidence: (1) that Mr. Gaffney’s

termination letter explicitly cited the communication with the

Coast Guard as the cause of termination; (2) that the other

plaintiffs were “fired in rapid succession and only days after

the Coast Guard informed [Riverboat] that it was rescinding

the COI limited endorsement”; (3) that the defendants’

justifications for the terminations changed “at each stage of

the proceedings”; and (4) that disruptive union activity or

sabotage was not cited when the terminations occurred or at

the NLRB proceedings as a reason for the plaintiffs’

discharges. Jd. at 27-29. In light of these findings, the district

court concluded that there existed both direct and

circumstantial evidence that the plaintiffs were terminated

because of their report to the Coast Guard.

The court also concluded that the eight prevailing

plaintiffs had fulfilled the legal requirements of § 2114. The

October 10th letter was a “report,” rather than merely a

22a

request for information, and thus was entitled to protection

under § 2114. /d. at 20. The plaintiffs acted in “good faith”

in reporting the violation, which the district court defined as

the absence of “an improper purpose.” Jd. at 22. This

requirement was satisfied because each plaintiff “generally

believed that the lowering of the requirements created a safety

hazard onboard the vessel.”/d. at 2. Mr. Heitmeier and Mr.

Gourguechon were both “individuals in charge of a vessel,”

defined by the district court as a person with responsibility for

“hir[ing] and fir[ing] personnel” and for “day-to-day

operations of the vessel.” /d. at 29. Consequently, both

defendants could be held liable in their individual capacities

for the illegal discharges. And, although Riverboat had not

yet hired an engineer with a limited license at the time that the

plaintiffs’ letters were written, and therefore had not yet

committed a violation of safety laws or regulations, the

“statute does not specifically state that the alleged safety

violation must have been committed by the vessel owner

rather than a third party.” /d. at 16. In fact, according to the

court, “it would be unreasonable to hold that the reporting of

a perceived violation committed by a third party, like the

Coast Guard itself, does not fall within the ambit of the

statute,” given that its purpose is “to promote safety and to

remedy unsafe conditions on a vessel.” /d. Thus, the Coast

Guard, in authorizing the employment of engineers with

limited licenses in violation of 46 C.F.R. §§ 10.501 and

15.915, committed a regulatory violation cognizable under

§ 2114. Id. at 22-23.

Nevertheless, because Mr. Horton and Mr. Doncet were

not signatories to the October 10th letter and because there

was no evidence that the August letter they signed was a

“report,” the court determined that they had not met their

burden of proving causation between activity protected by

§ 2114 and their subsequent terminations. /d. at 21.

23a

The district court awarded the eight prevailing plaintiffs

back pay, expenses and punitive damages." It concluded that

all three remedies were authorized both by § 2114, which

makes available any “appropriate relief,” id. at 33-34, and by

general maritime law, see id. at 37-39. The court, however,

rejected the plaintiffs’ request for attorneys’ fees, concluding

that, as a general matter, fees are available only when

explicitly authorized by statute. See id. at 42-43.

After the district court denied Riverboat’s post-trial

motion to set aside the judgment, Riverboat timely appealed.

The plaintiffs subsequently filed a timely notice of cross-

appea., challenging the district court’s judgment as it relates

to Mr. Horton and Mr. Doncet, as well as the denial of the

plaintiffs’ request for attorneys’ fees.

APPELLATE JURISDICTION

We first must resolve the question of whether the district

court’s decision constituted a final judgment—a prerequisite

to exercising jurisdiction over this appeal. See 28 U.S.C.

§ 1291. Showboat contends that, as of October 21, 2004, the

date that Riverboat filed its notice of appeal, there were two

‘© Specifically, the district court awarded damages in the

following amounts: Mr. Gaffney: $35,632; Mr. Goodridge:

$126,505; Mr. Anderson: $77,060; Mr. Bell: $55,564; Mr.

Beardon: $122,046; Mr. Palmer: $127,767; Mr. Trundy:

$113,564; and Mr. Reilly: $25,100. See R.192. Included in these

sums are $25,000 in punitive damages per plaintiff. /d.; see also

R.191 at 40 (finding that punitive relief is appropriate, given that

Riverboat “acted willfully and wantonly in its dismissal of each of

the plaintiffs”).

24a

issues still pending in the district court that deprived its

judgment of finality. First, the plaintiffs’ claims against

Showboat had been settled and severed from the proceedings

between the plaintiffs and Riverboat, but not yet dismissed.

Second, Showboat’s cross-claim against Riverboat, alleging

that Riverboat was exclusively responsible for all employment

matters on the M/V Showboat and seeking reimbursement for

the costs of settlement with the plaintiffs, also severed from

the case now before us, has not yet been dismissed by the

district court.

Upon careful examination of the record, we are confident

that the pendency of these two matters does not deprive us of

jurisdiction to review the judgment of the district court with

respect to the plaintiffs’ claims against Riverboat and

Riverboat’s counterclaim against Showboat for

indemnification.

On August 13, 2002, the district court severed the

plaintiffs’ claims against Showboat from the plaintiffs’ claims

against Riverboat under Federal Rule of Civil Procedure 21.

See R.168. At the same time, the district court also severed

Showboat’s cross-claim against Riverboat from the plaintiffs’

claims against Riverboat. /d.

As a general matter, Rule 2] severance creates two

discrete, independent actions, which then proceed as separate

suits for the purpose of finality and appealability. We first

adopted this rule in Hebel v. Ebersole, 543 F.2d 14 (7th Cir.

1976), when we held that, because the claims resolved by the

district court and those remaining in that court had been

severed pursuant to Rule 21, that court’s judgment was “final

and properly appealable.” /d. at 17. This rule enjoys continued

vitality. See Rice v. Sunrise Express, Inc., 209 F.3d 1008,

1014 n.8 (7th Cir. 2000) (“If the district court severed [the

25a

claims against the successor corporation] under Rule 21, then

it created two separate actions, each capable of reaching final

judgment and being appealed.”)."”

The district court clearly and unambiguously classified its

severance order as one “pursuant to Federal Rule of Civil

Procedure 21.” R.168 at 1, 7 (holding that, because they are

“distinct and separate,” it had “broad discretion. . . under

'7 Almost all of the circuits have adopted this same approach

to Rule 21 severance. See, e.g., Acevedo-Garcia v. Monroig, 351

F.3d 547, 560 (1st Cir. 2003) (holding that the Rule 21 severance

rendered the district court verdict a “final and appealable judgment

under 28 U.S.C. § 1291”); United States ex rel. LaCorte v. Smith

Kline Beecham Clinical Labs., Inc., 149 F.3d 227, 231 n.3 (3d Cir.

1998) (“A severed claim [under Rule 21] proceeds as a discrete suit

and results in its own final judgment from which an appeal may be

taken.”); Chrysler Credit Corp. v. Country Chrysler, Inc., 928

F.2d 1509, 1519 (10th Cir. 1991) (“[W]here certain claims in an

action are properly severed under Fed. R. Civ. P. 21, two separate

actions result; a district court may transfer one action while

retaining jurisdiction over the other.”); United States v. O’Neil, 709

F.2d 361, 368 (Sth Cir. 1983) (“Severance under Rule 21 creates

two separate actions or suits where previously there was but one.

Where a single claim is severed out of a suit, it proceeds as a

discrete, independent action . . . . The presence of unresolved

claims in the other action does not of itself implicate Fed.R.Civ.P.

54(b), because that Rule applies only where the unresolved claims

are in the same action or suit.”); Spencer, White & Prentis, Inc. v.

Pfizer, Inc., 498 F.2d 358, 361 (2d Cir. 1974) (“[A]ppeal from a

judgment on a validly severed single claim may be timely taken as

of right notwithstanding the pendency of the remaining claims or

counterclaims .. . .”); see also 7 Wright & Miller, Federal

Practice & Procedure § 1689 (2001) (“Once a claim has been

severed [under Rule 21} . . . it proceeds as a discrete unit with its

own final judgment, from which an appeal may be taken.”).

26a

Rule 21" to sever the plaintiffs’ claims against Riverboat from

what remained of the plaintiffs’ claims against Showboat).

Nevertheless, because “the district court cannot by this

characterization of its order create a severance under Rule 21

where one did not exist before,” United States v. O'Neil, 709

F.2d 361, 368 (Sth Cir. 1983), we necessarily must examine

whether the district court erred in classifying its severance

order as a Rule 21 order rather than a severance under

Federal Rule of Civil Procedure 42(b).

The distinction between the two rules is jurisdictionally

significant: “A separate trial order under Rule 42(b) is

interlocutory and non-appealable.” Reinholdson v. Minnesota,

346 F.3d 847, 850 (8th Cir. 2003). By contrast, “[s]everance

under Rule 21 creates two separate actions or suits where

previously there was but one. Where a single claim is

severed out of a suit, it proceeds as a discrete, independent

action, and a court may render a final, appealable judgment

in either one of the resulting two actions notwithstanding the

continued existence of unresolved claims in the other.”

O’Neil, 709 F.2d at 368.'* We review the district court’s

'8 Moore’s Federal Practice explains the difference between

Rule 21 and Rule 42(b) severance as follows:

Severance under Rule 21 results in separate actions. A

single claim that is severed from a multiclaim action “may

be . . . proceeded with separately.” In other words, the

severed claim proceeds as a discrete, independent suit. It

and the original case result in their own separate final

judgments from which appeals may be taken. If a severed

claim is one of multiple claims asserted by a single plaintiff

against a single defendant (or vice versa), neither party is

severed from the original action. Rather, both parties are

involved in two separate actions. In contrast, an order of

27a

decision to sever the plaintiffs’ claims against Showboat from

their claims against Riverboat under Rule 21, rather than

under Rule 42(b), for abuse of discretion. See Rice, 209 F.3d

at 1016 (“It is within the district court’s broad discretion

whether to sever a claim under Rule 21.”); Hebel, 543 F.2d

at 17.

The district court did not abuse its discretion in severing

the plaintiffs’ claims under Rule 21 rather than under Rule

42(b). We have held previously that a district court may sever

claims under Rule 21, creating two separate proceedings, so

long as the two claims are “discrete and separate.” Rice, 209

F.3d at 1016. In other words, one claim must be capable of

resolution despite the outcome of the other claim. /d. By

contrast, bifurcation under Rule 42(b) is appropriate where

claims are factually interlinked, such that a separate trial may

be appropriate, but final resolution of one claim affects the

resolution of the other. See, e.g., Reinholdson, 346 F.3d at

850 (holding that, because the “trials of [the] individual

claims may expose issues of systemic violation that would

cause the district court to reconsider its decision to dismiss

plaintiffs’ claims against the State defendants in their

entirety,” severance under Rule 21 was inappropriate; instead

construing the district court’s order as an order for separate

separate trials does not result in the filing of separate cases.

Instead, it simply leads to two or more separate factual

inquiries in the coniext of a single, properly joined case.

No matter how many separate trials the court may order,

they remain part of a single case. While judgment on a

severed claim is final for purposes of appeal, judgment on

a Claim tried separately is not an appealable final judgment,

unless certified for immediate appeal under Rule 54.

4 Moore’s Fed. Practice § 21.06 (2005).

28a

trials under Rule 42(b), such that the individual claims may

not be appealed until “a final judgment has been rendered in

the entire action”).

In Rice v. Sunrise Express, 209 F.3d at 1016, we

addressed when Rule 21 severance constitutes an abuse of

discretion. There, the plaintiff sued Sunrise Express, Inc. for

violation of the Family and Medical Leave Act. At a pre-trial

conference, the district court raised the concern that Gainey

Corporation might be liable as a successor corporation to or

as a joint employee of Sunrise. The parties stipulated that

Gainey was not the successor corporation and the case

proceeded to trial before a magistrate judge. On appeal,

Sunrise contended that the order below was not final because

Gainey had not consented to the jurisdiction of the magistrate

judge. We held that the district court, as indicated by a nunc

pro tunc order and acting pursuant to Rule 21, previously had

severed Gainey from the proceedings. We further found that

severing Gainey under Rule 21, as opposed to under the

bifurcation procedures set forth in Rule 42(b), did not

constitute an abuse of discretion:

As long as there is a discrete and separate claim, the

district court may exercise its discretion and sever it.

Here, the district court effectively took Gainey, and

the separately pled claim for successor liability against

Gainey, out of the suit. . . . Because Gainey did not

face primary liability, and, in all likelihood, no

liability at all, its presence was not necessary, and, in

the view of the district court, its removal significantly

simplified the case.

Id.

29a

The same is true here as well. At the time that the district

court issued its severance order, the “Showboat defendants

[had] indicated to the court that all of the plaintiffs’ claims

against them ha[d] been settled.” R.168 at 2. Showboat’s only

remaining claim was its indemnification claim against

Riverboat. This claim resis on section 3 of Showboat’s

agreement with Riverboat and claims that Riverboat had the

“sole authority” to terminate the plaintiffs. R.37 at 6. If so,

Showboat contends, it had no responsibility for the plaintiffs’

discharges. By contrast, after severance, the present case

involved only the plaintiffs’ claims against Riverboat and

Riverboat’s claim for indemnification against Showboat.

Notably, Riverboat’s indemnification claim rests on the

insurance clause in section 5 of the Agreement and is

completely independent, both theoretically and practically, of

Showboat’s claim against Riverboat.

The issues raised by Showboat’s severed cross-claim are

also “discrete and separate,” Rice, 209 F.3d at 1016, of the

claims raised by the plaintiffs against Riverboat. The

plaintiffs’ claims require an analysis of the legal requirements

of § 2114, including whether Riverboat officials who were

“individual[s} in charge of [the] vessel,” § 13(a), 98 Stat. at

2863, were motivated by a retaliatory animus in terminating

the plaintiffs. Showboat’s claim, by contrast, mandates an

analysis of the contractual relationship between Showboat and

Riverboat and of whether the actions of Showboat, as an

“owner” of the vessel, id., constitute a “manner of

discrimination,” rendering indemnification improper, R.99 at

9. While the facts underlying these claims overlap, the claims

are independent of one another. Riverboat’s liability is

unaffected by whether Showboat also was involved in the

decision to discharge the plaintiffs; even if Mr. Wallace of

Showboat gave a directive to terminate the plaintiffs or

otherwise affected the termination decision, Mr. Gourguechon

30a

of Riverboat also is alleged to have played (and did play) a

key role in that decision, making Riverboat liable for

retaliatory discharge. Similarly, Showboat could be held

liable as an “owner” of the vessel absent a finding that the

“individual{s] in charge of [the] vessel” retaliated against the

plaintiffs. § 13(a), 98 Stat. at 2863. Because the issues raised

by Showboat’s claim against Riverboat and those raised by the

plaintiffs’ claims against Riverboat are easily separable for

analysis, the district court did not abuse its discretion in

finding that the severance would simplify the proceedings.

In short, while the overall financial exposure of Riverboat

or Showboat will be affected by the final outcome of both

actions, the claims in each action are clearly independent of

each other. See Rice, 209 F.3d at 1016 (holding the

indemnification claims to be severable under Rule 21 from the

primary liability inquiry). The validity of the claims before us

does not depend, as a matter of law, on the outcome of the

severed claims.

Therefore, by virtue of its Rule 21 order, the district

court, in the exercise of its sound discretion, initiated two

separate proceedings: (1) the plaintiffs’ suit against Riverboat,

from which Riverboat’s counterclaim against Showboat flows;

and (2) the plaintiffs’ suit against Showboat, from which

Showboat’s cross-claim against Riverboat arises. Post-

severance, these suits are independent for purposes of

appellate jurisdiction. As a result, the plaintiffs’ severed

claims against Riverboat reached “final decision{],” 28

U.S.C. § 1291, vesting jurisdiction in this court without

regard to the disposition of the plaintiffs’ claims against

Showboat. The same is true of the relationship between the

current appeal and Showboat’s cross-claim against Riverboat.

While the cross-claim is still pending in the district court, it

has no impact on our jurisdiction under § 1291: Because the

3la

cross-claim logically stems from the plaintiffs’ claims against

Showboat, rather than from the plaintiffs’ claims against

Riverboat, and because these two sets of claims previously

were severed, Riverboat’s present appeal and the resolution

of Showboat’s cross-claim can be “proceeded with

separately.” Fed. R. Civ. P. 21.

Ill

ANALYSIS

A. Statutory Protection Under 46 U.S.C. § 2114

At the time of the events in this case, 46 U.S.C. § 2114(a)

provided that:

An owner, charterer, managing operator, agent,

master, or individual in charge of a vessel may not

discharge or in any manner discriminate against a

seaman because the seaman in good faith has reported

or is about to report to the Coast Guard that the

seaman believes that a violation of this subtitle, or a

regulation issued under this subtitle, has occurred.

§ 13(a), 98 Stat. at 2863.'° The statute authorizes a seaman to

bring an action in an “appropriate [United States] District

'? This provision was amended by the Maritime Transportation

Security Act of 2002, see Pub.L. 107-295, § 428(a), 116 Stat. 2064

(2002), which expanded the protections available to seamen and

made available an award of attorneys’ fees. These amendments

became effective after the events in this case took place, and

Congress expressed no clear intent to make the amendments

retroactive; neither party asks that these amendments be applied

here.

32a

Court” and to seek reinstatement with back pay, as well as

“any other appropriate relief.” § !3(b), 98 Stat. at 2864.

Section 2114 is intended to facilitate Coast Guard

enforcement of maritime regulations by ensuring that the

Coast Guard is aware of potential safety violations that could

endanger vessels, their passengers and their crew. The statute

accomplishes this goal by guaranteeing that, when seamen

provide information of dangerous situations to the Coast

Guard, they will be free from the “debilitating threat of

employment reprisals for publicly asserting company

violations” of maritime statutes or regulations. Passaic Valley

Sewerage Comm'rs v. United States Dep't of Labor, 992 F.2d

474, 478 (3d Cir. 1993) (discussing a similar retaliatory

discharge provision in the Clean Water Act).

We must decide whether the plaintiffs’ correspondence

with the Coast Guard qualifies for protection under § 2114

and, if so, whether the plaintiffs were terminated in retaliation

for this protected activity. Riverboat submits that the district

court erred in concluding that the plaintiffs’ correspondence

constituted a “report” of a safety violation and in holding that

the plaintiffs established that they acted in “good faith” in

corresponding with the Coast Guard. We shall address each

of these contentions.

1. Whether the Plaintiffs’ Correspondence is

Protected by the Statute

Riverboat contends that the plaintiffs’ correspondence with

the Coast Guard is not entitled to statutory protection under

§ 2114 because it did not constitute a “report.” In support of

this contention, Kiverboat relies upon Garrie v. James L.

Gray, Inc., 912 F.2d 808 (Sth Cir. 1990). In its view, Garrie

stands for the proposition that § 2114 requires a formal

33a

complaint be made to the Coast Guard. The district court did

not accept this argument. First, it noted that, although the

plaintiffs’ October 10th letter “xi not “usef] the catchword

‘report,’” "it is hard to imagine that Congress would have

intended for such specificity,” © ’en that “the statute itself

does not prescribe the manner ir. which such a report must be

made.” R.191 at 21. The district court concluded that the

October 10th letter to the Coast Guard satisfied this

requirement. In that letter, the plaintiffs did not merely seek

information. Rather, they made a specific complaint “about

the limited endorsement on the COI and sought its removal:

they reported what they believed was a violation of a safety

law.” Id.

Whether a particular form of communication qualifies as

a “report” under § 2114 is a question of law that we review

de novo. See Olson v. Risk Mgmt. Alternatives, Inc., 366

F.3d 509, 511 (7th Cir. 2004) (holding that we review issues

of statutory interpretation de novo). As always, when

approaching a question of statutory interpretation, “we begin

with the plain wording of the relevant statutory provision{].”

United States v. Vitrano, 405 F.3d 506, 509 (7th Cir. 2005).

When read in isolation, the term “report” arguably could

have more than one meaning.*? However, we do not read a

word or words of a statute in isolation; rather, we read them

in the context in which they appear in the provision. When

read in its entirety, the purpose of § 2114 is quite clear. Its

° One legal dictionary defines the term “report” as an “official

or formal statement.” Black’s Law Dictionary 1464 (4th ed, 1968).

Other sources, however, indicate that the definition of “report” is

more broad, including a detailed account not limited by its purpose,

content or form. American Heritage Dictionary of the English

Language (4th ed. 2000).

34a

import is to ensure that the United States Coast Guard

receives accurate and timely information about the violation

of safety regulations so that it in turn may fulfill its statutory

obligations to keep vessels and those who voyage in them safe

and to keep the lanes of maritime transportation free from

hazards and impediments. From the Coast Guard’s

perspective, being “always prepared””' requires timely and

accurate information. In this context, we cannot attribute to

Congress the imtent to give the term “report” a narrow or

formal meaning. Seamen are not professional report writers;

they staff ships and have the skills necessary to their

appointed role on the crew and to ensure the vessel’s safe and

efficient passage. The obvious point of the term “report” in

§ 2114, plainly and fairly read, is to require that the crew

member’s message to the Coast Guard addresses a safety

violation and contains sufficient detail to apprise the Coast

Guard of the nature of the alleged violation. To require any

further formality would narrow the statute in a manner that

Congress clearly avoided, and, in the process, would frustrate

the clear purpose of the provision.

We note that our interpretation of the statutory language

comports with the legislative history of the provision. Section

2114 was intended as a response to the Fifth Circuit’s

7! The motto of the United States Coast Guard is “Semper

Paratus”—“Always Prepared.” The Coast Guard’s mission

includes: “(A) Marine safety[;] (B) Search and rescue[;] © Aids to

navigation{;} (D) Living marine resources (fisheries law

enforcement) [;] (E) Marine environmental protection|;] [and] (F)

Ice operations.” 6 U.S.C. § 468(a)(1). The Coast Guard also is

responsible for assisting in “homeland security missions,” which

encompasses: “(A) Ports, waterways and coastal security[;] (B)

Drug _interdiction{;} © Migrant interdiction{;] (D) Defense

readiness[;] [and] (E) Other law enforcement.” Jd. § 468(a)(2).

35a

decision in Donovan v. Texaco, Inc., 720 F.2d 825 (Sth Cir.

1983). See S. Rep. No. 98-454, at 12 (1984), as reprinted in

1984 U.S.C.C.A.N. 4831, 4842.Donovan, which was

decided before seamen were covered by a specific retaliatory

discharge provision, involved an engineering officer who

corresponded with the Coast Guard in a manner similar to the

plaintiffs in this case. He placed a phone call to the Coast

Guard to complain about the condition of certain generating

equipment on the vessel; after he was demoted, and later

terminated, he filed suit under the Occupational Safety and

Health Act (“OSHA”), claiming that his discharge was

motivated by retaliatory animus. The Fifth Circuit held that

OSHA’s prohibition against retaliatory discharge of a

complaining employee does not apply to seamen. Donovan,

720 F.2d at 828-29. Congress signaled its disagreement with

the result in Donovan by enacting § 2114. It made clear that,

although OSHA does not forbid retaliation against seamen,

termination for corresponding with the Coast Guard also

should be protected by statute. Notably, Congress took this

action even though the Donovan plaintiff never memorialized

his complaint in a formal written statement. This

history—coupled with Congress’ decision not to define

“report” in the statute or in the course of discussing Donovan

in the relevant legislative history—supports the conclusion that

§ 2114 does not require a formal complaint, or even a written

Statement, as a prerequisite to statutory whistleblower

protection.”

2 Moreover, both at the time of the events in this case and in

its current form, § 2114 protects a seaman who “has reported or is

about to report” the violation of safety regulations to the Coast

Guard. Compare 46 U.S.C. § 2114 (emphasis added), with Pub.L.

No. 98-557, § 13(a), 98 Stat. 2863 (1984) (current version at 46

U.S.C. § 2114 (2002)). This statutory language suggests that

36a

This conclusion is bolstered by the holding of the only

other federal appellate case to address the requirements of

§ 2114. In Garrie, 912 F.2d 808, the plaintiff had placed a

phone call to the Coast Guard to discuss his employer’s

violation of a regulation setting maximum working hours for

officers on the vessel. The plaintiff identified himself, but no

this employer; he never indicated to the Coast Guard that he

wished to file a complaint; and he testified that his main

purpose in calling was to “get information about running

times” and to “verify his understanding of the applicable

rules,” rather than to request that the Coast Guard take any

particular action. Jd. at 812 (internal quotation marks

omitted). The Fifth Circuit concluded that, because the

plaintiff “did [not] reveal the name of his employer or the

vessel upon which he was employed--information without

which the Coast Guard could not investigate or prosecute a

violation”--the communication could not be considered a

“report.” Jd. Although Riverboat relies on this case as

establishing that § 2114 requires a formal complaint be made

by the seaman, we instead believe that Garrie held simply

that, had sufficient information been conveyed to the Coast

Guard, such as the name of the seaman’s vessel, his employer

and the nature of the safety violation, the communication

would have been within the ambit of the statute’s protection

despite the absence of a formal complaint. So long as the

correspondence makes clear that the seaman is reporting a

specific regulatory violation with respect to a vessel, the

statute protects the reporting crew member.

Therefore, the plaintiffs’ October 10th letter clearly

qualifies as a “report”: It identified the company responsible

Congress is focused less on the nature, or even the existence, of the

report than on the fact that communication was made.

37a

for the alleged regulatory violation, the vessel in question, the

plaintiffs’ employer, as well as the Coast Guard department

that had granted the amended COI. In sum, the letter put the

Coast Guard on notice that, in the view of the crew members,

the ship was being operated in derogation of applicable

regulations. This communication was, in both purpose and

effect, just the sort of communication protected by the

statute.”°

2. “Good Faith” Belief

Riverboat further contends that the plaintiffs did not have

a “good faith” belief that a violation of safety regulations had

occurred when they contacted the Coast Guard, but instead

were acting in their own self-interest, primarily motivated by

job and wage preservation. The district court rejected this

contention; it made factual findings that the plaintiffs

+> Riverboat also conterds that the October 10th letter-was not

a “report” because, at the time the letter was received, the Coast

Guard already was aware of the licensing changes in M/V

Showboat’s COI. This contention, despite having a superficial

appeal, cannot be squared with our obligation to interpret § 2114 in

a manner consistent with its evident purpose of promoting

compliance with maritime statutes and regulations. The plaintiffs’

correspondence with the Coast Guard plainly furthered that goal;

there is no evidence that the Ninth District Coast Guard

Commander, who ultimately was responsible for revoking the

limited endorsement, knew before the plaintiffs informed him that

subordinates had granted a waiver of licensing requirements for the

M/V Showboat. Indeed, so far as this record suggests, it is because

of the plaintiffs’ October 10th appeal that the Coast Guard revoked

the endorsement, aligning the employment practices of the M/V

Showboat with the maritime regulations governing officer licensing.

See 46 C.F.R. §§ 10.501, 15.915. Therefore, the plaintiffs’

October 10th letter properly qualifies as a “report.”

38a

genuinely believed that the relaxation of licensing

requirements on board the M/V Showboat threatened the

safety of the vessel and its passengers. “Each of the

plaintiffs,” the district court explained, “testified that his main

concern regarding the COI was that the vessel would be

unsafe if limited license engineers were allowed to do the

work of unlimited license engineers.” R.191 at 8. And,

although some of the plaintiffs admitted that they “never told

the Captain of the vessel not to take the ship out because it

was unsafe,” id., the district court concluded that these

witnesses were credible with respect to their good faith belief,

id. at 22.

A district court’s findings of fact made after a full bench

trial are entitled to great deference and shall not be set aside

unless they are clearly erroneous. See Fed. R. Civ. P. 52(a);

see also Levenstein v. Salafsky, 414 F.3d 767, 773 (7th Cir.

2005) (noting that this is a “highly deferential standard”). “A

finding of fact is clearly erroneous only when the reviewing

court is left with the definite and firm conviction that a

mistake has been committed.” Carnes Co. v. Stone Creek

Mech., Inc., 412 F.3d 845, 847 (7th Cir. 2005). “If there are

two permissible views of the evidence, the trial court’s choice

between them cannot be clearly erroneous.”/d. This rule

holds special force in the context of a district court’s

assessment of a witness’ credibility; “we have stated that a

trial court’s credibility determination can virtually never

amount to clear error.” /d. at 848 (internal quotation marks

omitted).

The record does not justify a conclusion that the district

court’s factual findings about the plaintiffs’ good faith belief

are clearly erroneous. The district court heard first-hand the

plaintiffs’ testimony and assessed the demeanor of those

witnesses. After carefully examining the other evidence in the

39a

case, the court concluded that, when making their report to

the Coast Guard, the plaintiffs did not have an ulterior motive

but instead believed that the relaxation of licensing

requirements threatened the safety of the vessel and its

passengers. The record contains testimony that supports the

conclusion of the district court. We therefore cannot hold

that the district court clearly erred in finding that the plaintiffs

honestly believed that the change in licensing requirements for

the staff of the M/V Showboat was in violation of governing

safety regulations.

4 See, e.g., Horton Test., Tr.II at 65-66 (“[{The report to the

Coast Guard] was based on our concern for passenger safety. . . .

{Ijn this case, [the Coast Guard] wf{as] actually reducing the

minimum requirements, and we were concerned.”); Gaffney Test.,

Tr.I at 119 (“[WJhat they did was they lowered the minimum safety

requirements, and we felt that they were in error by reducing the

requirements at all. . . . We already thought it was

understaffed . . . [iJn the number of officers onboard, and now

they’re reducing the requirements of what the minimum

requirements were to have onboard.”); Goodridge Test., Tr.1 at 25

(“[W]e were worried about . . . having people there that did not

have as much experience as either myself or Bob Gates or the chief

engineers there were there [sic] sailing in a chief engineer

position.”); Anderson Test., Tr.II at 134-35 (“[I signed the October

letter because I was worried that} a limited engineer would be

allowed on the vessel. . . . [I]t scared me that with two years of

Sailing experience, I could be a limited chief engineer. And |

definitely would not be able to handle a boat like the Showboat.”);

Bell Test., Tr.II at 194 (“I agreed with the contents of the letter.

And basically what the letter was asking for . . . .”); Beardon

Test., Tr.I] at 273 (“There was a concern for the safety of the

passengers, that if engineers with limited experience were able to

serve on this vessel, that we may not be able to guarantee the same

level of passenger safety as we could with unlimited engineers in

the same positions.”).

40a

Riverboat responds that the plaintiffs could not have

“reasonabl[y]” believed that the employment of engineers

with limited licenses posed a “safety issue.” Appellants’ Br.

at 29. However, § 2114 does not require that a seaman

believe that there is a “safety hazard” on board a vessel;

rather, it requires that the “seamen believe[] that a violation

of [U.S. Code Title 46, subtitle II or Coast Guard regulations

issued under that subtitle] has occurred.” § 13(a), 98 Stat. at

2863. In this case, the plaintiffs reasonably and in good faith

believed that the Coast Guard’s approval of the M/V

Showboat’s future employment of unlicensed chief and

assistant engineers constituted a “violation of . . . a [Coast

Guard] regulation. . . .” § 13(a), 98 Stat. at 2863. Coast

Guard regulations provide that a chief or assistant engineer

with a limited license is permitted to “serve within any

horsepower limitations on vessels of any gross tons on inland

waters,” but not on a vessel of “more than 1600 gross tons in

ocean, near coastal or Great Lakes service.” 46 C.F.R.

§ 10.501(b); see also 46 C.F.R. § 15.915. Although, as a

general matter, the Coast Guard has discretion to “vary the

application of inspection standards based on the intended

operation of the vessel,” Smith v. United States Coast Guard,

220 F. Supp. 2d 275, 282 (S.D.N.Y. 2002) (discussing 46

C.F.R. § 176.800(b)), the Coast Guard is bound by a

regulation that specifically restricts the exercise of this

discretion. See Frizelle v. Slater, 324 U.S. App. D.C. 130,

111 F.3d 172, 177 (D.C. Cir. 1997) (“The Coast Guard, like

the military departments and agencies in general, is bound to

follow its own regulations.”). In this case, 46 C.F.R.

§§ 10.501 and 15.915 clearly set forth the conditions under

which a chief or assistant engineer with a limited license may

serve on a vessel, and by contrast, the conditions under which

a limited licensed engineer may not serve. In permitting the

employment of chief and assistant engineers with limited

licenses on board the M/V Showboat—a vessel over 1,600

4la

gross tons and in Great Lakes service—the Coast Guard failed

to follow these regulations, and acted beyond the scope of its

authority. Even if this was not true, the plaintiffs were

reasonable in believing that, in issuing the M/V Showboat’s

COI, the Coast Guard acted contrary to the applicable

regulations.” Therefore, the plaintiffs reporting this violation

are entitled to whistleblower protection under § 2114.”

> The legislative history of § 2114 indicates that Congress

intended that the statute provide protection to a plaintiff who

honestly believed that there was a regulatory violation, but who

turned out to be incorrect. For example, in Donovan v. Texaco,

Inc., 720 F.2d 825 (Sth Cir. 1983)—the factual scenario that § 2114

was enacted to address—the plaintiff had reported to the Coast

Guard an alleged defect in generating equipment on the vessel.

After inspection, the Coast Guard determined that the equipment

was not defective and that the plaintiffs’ belief that there was a

safety violation on board was incorrect as a factual matter.

Nevertheless, according to the legislative history, because the

Donovan plaintiff honestly believed when making the report that

there was a violation of governing safety regulations, he was

entitled to whistleblower protection. See S. Rep. No. 98-454, at 12

(1984), as reprinted in 1984 U.S.C.C.A.N. 4831, 4842.

Riverboat also submits that, by issuing the April 1997

amended COI, the Coast Guard “directly informed the plaintiffs .

. that employing limited licensed engineers was not a safety

concern.” Appellants’ Br. at 30. Therefore, according to Riverboat,

the plaintiffs could not have believed reasonably that employment

of engineers with limited engineering licenses posed a safety

hazard. Jd. However, as discussed in the text, that the plaintiffs

believed that the employment of unlicensed engineers was a “safety

concern” is not a prerequisite to statutory protection. Instead, the

plaintiffs are entitled to whistleblower protection because they

reasonably and in good faith believed that the Coast Guard, by

granting Riverboat’s petition for variance from the licensing

42a

Riverboat, however, responds that the reported violation

of a safety regulation must be committed by the employer,

rather than by the Coast Guard. Moreover, Riverboat submits

that, at the time the plaintiffs’ letters were sent to the Coast

Guard, neither Showboat nor Riverboat had yet hired an

engineer with a limited license, and therefore, they were

technically in compliance with their COI, as well as with

Coast Guard regulations. See 46 C.F.R. §§ 10.501, 15.915.

Consequently, according to Riverboat, the plaintiffs “as a

matter of law” could not have believed in good faith that a

violation of statute or regulation had occurred. Appellants’

Br. at 28. By contrast, the plaintiffs submit that § 2114 does

not limit its protection to a report of a safety violation

committed by their employer; instead, the statute encompasses

the report of a violation of safety regulations committed by

less senior officers of the Coast Guard. The district court

resolved this dispute in favor of the plaintiffs. According to

the court, less senior Coast Guard authorities committed a

“violation” cognizable under § 2114 when they issued the

amended COI under circumstances in which departure from

governing regulations was not compatible with the safety of

ihe vessel. Therefore, in reporting this violation, the plaintiffs

fell within the ambit of § 2114’s protections.

Here, we must ask whether § 2114 protects a seaman who

reports a violation committed by a third party such as the

Coast Guard upon application of the employer. This is a

question of statutory interpretation that we review de novo.

See Schmude v. Sheahan, 420 F.3d 645, 650 (7th Cir. 2005).

As we have noted earlier, when interpreting a statute, we

must begin with the plain wording of the provision.

requirements set forth in 46 C.F.R. §§ 10.501 and 15.915,

committed a violation of those regulations.

43a

We hold that the language of the statute makes clear that

the reporting of such a violation is covered. Section 2114

provides that a seaman is entitled to protection if he reports

that he “believes that a violation of this subtitle, or a

regulation issued under this subtitle, has occurred.” § 13(a),

98 Stat. at 2863. By employing passive language and by not

specifying whose safety violation must have occurred for a

seaman to receive protection under the statute, the statutory

language evinces a deliberate choice on Congress’ part to

protect a seaman who reports a violation by either an

-employer or a non-employer.”’

The purpose of § 2114 further supports reading its plain

language to protect a seaman who reports a regulatory

violation that has the approval of less senior authorities in the

Coast Guard. As we have noted earlier, whistleblower.

*” Riverboat relies upon Seymore v. Lake Tahoe Cruises, Inc.,

888 F. Supp. 1029 (E.D. Cal. 1995), for the proposition that

§ 2114 is not designed to “turn seamen into private enforcers of

Coast Guard regulatory decisions.” /d. at 1033 (quoted in

Appellants’ Br. at 35). Seymore, however, is inapposite. It

addressed a narrow factual scenario not at issue in this case. There,

the plaintiff had refused a management directive to take the vessel

out to sea because of a safety violation; he never made a report to

the Coast Guard. The Seymore court denied whistleblower

protection to the plaintiff. It contrasted § 2114 with § 11° of

OSHA, see 29 U.S.C. § 660°, which “proscribes retaliatory

discrimination . . . because of the exercise by [an] employee on

behalf of himself or others of any right afforded by [OSHA],” 888

F. Supp. 2d at 1033 (alteration in original). The court then held that

§ 2114 does not protect the exercise of rights afforded by law or

regulation; instead, it concluded, it “provides only a narrow

protection for reporting violations to the Coast Guard.” /d. at 1034.

Seymore simply does not discuss the question we now face: whose

safety violation the complaint to the Coast Guard must report.

44a

protections, such as § 2114, are designed to encourage

employees to aid in the enforcement of maritime laws and

Coast Guard regulations by making claims through protected

channels.” This purpose certainly is served by a report of an

employer’s imminent violation, even when the violation

already has the approval of Coast Guard personnel, given that

those individuals do not have the last word on enforcement

matters.

B. Causation

Now that we have determined that the plaintiffs’

correspondence with the Coast Guard is protected under

§ 2114, we must decide whether the district court correctly

determined that the plaintiffs were terminated in retaliation for

having sent this correspondence to the Coast Guard.”

8 Cf. Passaic Valley Sewerage Comm'rs v. United States Dep't

of Labor, 992 F.2d 474, 479 (3d Cir. 1993) (noting, in the context

of interpreting retaliatory discharge provisions of the Clean Water

Act, that broad whistleblower “protection is necessary to prevent

the Board’s channels of information from being dried up by

employer intimidation of prospective complainants and witnesses”

(internal quotation marks omitted)).

29 We pause here to address Riverboat’s contenticn that the

district court erred in not entering judgment in its favor at the close

of the plaintiffs’ case-in-chief. According to Riverboat, the

plaintiffs failed to present a prima facie case of retaliatory

discharge, requiring the district court to “direct a verdict” in its

favor. Appellants’ Br. at 19.

As a preliminary matter, because this is a bench trial, we

construe Riverboat’s motion as a Rule 52®© motion for judgment on

partial findings, rather than as a motion for a directed verdict. See

Fed. R. Civ. P. 52© (“If during a trial without a jury a party has

45a

At the bench trial, the parties presented very different

factual scenarios. In the plaintiffs’ view, their discharges were

the direct result of their communication with the Coast Guard

about the staffing of the vessel. The defendants contended,

however, that the discharges were due to the plaintiffs’ union

been fully heard on an issue and the court finds against the party on

that issue, the court may enter judgment as a matter of law against

that party with respect to a claim or defense that cannot under the

controlling law be maintained or defeated without a favorable

finding on that issue .. . .”). A district court is not required to

make findings of fact on a Rule 52© motion; the Rule merely

“authorizes the court to enter judgment at any time that it can

appropriately make a dispositive finding of fact on the evidence.”

Fed. R. Civ. P. 52° advisory committee’s notes (1991

amendments). “As under the former Rule 41(b), the court retains

discretion to enter no judgment prior to the close of the evidence.”

Id. \n light of the substantial evidence supporting the court’s finding

of causation, see infra, we cannot conclude that the district court’s

decision not to rule on the Rule 52© motion was an abuse of

discretion.

Riverboat also asserts th»t, in reviewing the district court’s

decision, we should evaluate the record at the close of the plaintiffs’

case—the time at which the motion was made—rather than the

record as a whole. Riverboat’s position is not supported by our case

law nor by Rule 52®. The defendants can point us to no rule of law

that prohibits us, in reviewing the district court’s Rule 52° order,

from evaluating the record as a whole. See Duval v. Midwest Auto

City, Inc., 578 F.2d 721, 723-24 (8th Cir. 1978) (holding that, once

a defendant introduces evidence on its own behalf, it waives the

right to dismissal under Rule 41(b) [now Rule 52°] and stating that

“{ijn such situations the sufficiency of the evidence is tested on

appeal by viewing the entire record,” even when “the trial judge

reserved ruling on the motion when made” (emphasis added)).

46a

activities and concomitant actions that compromised

Riverboat’s business success.

The district court resolved this dispute definitively. Sitting

as the trier of fact, the court decided that Riverboat’s case was

simply not worthy of belief. In its order following the

submission of post-trial briefs, the court characterized as

based on “speculation and conjecture” the testimony of Mr.

Gourguechon and of Mr. Heitmeier that the plaintiffs were

fired because of their refusal to join a union other than MEBA

and because they may have been involved in sabotaging

wiring aboard the vessel and causing expensive transformers

to blow. R.191 at 27. The court found no specific evidence of

sabotage and no evidence that the plaintiffs were involved in

the rewiring problems that led to the blown circuit breakers.

Id. Indeed, the court noted that there was evidence that the

wiring had to be done under time constraints—evidence that

was quite compatible with the plaintiffs’ testimony that the

wiring was first replaced temporarily and later brought up to

code specifications.*° Jd. The district court also found the

defendants’ testimony on the reasons for the plaintiffs’

discharges to be unworthy of belief because, at each stage of

the proceedings, the defendants offered a different

” See, e.g., Gaffney Test., Tr. at 260-62 (explaining that the

wires, as temporarily replaced, were not dangerous); Doncet Test.,

Tr.Ilf at 67 (testifying that the crew was told by Mr. Gourguechon

to leave the wires as they were, to be “taken care of later on as

things progressed”); Reilly Test., Tr.Ill at 162 (stating that wiring

was not in compliance with governing regulations, but “[i}Jn the

short term, absolutely, it was very safe”; also testifying that the

crew’s long-term intention was to bring the wiring “up to code”).

47a

justification for the firings.*’ The district court believed that

this pattern supported the conclusion that the defendants first

fired the plaintiffs and then came up with post hoc

rationalizations for having done so. Management’s letter of

discharge to Mr. Gaffney, which was drafted the day that the

amended COI was posted, specifically stated that the reason

for his discharge was his contact with the Coast Guard; there

was no reference to union activities or to sabotage. The other

plaintiffs were terminated in rapid succession—all within two

weeks of the Coast Guard’s revocation of the limited

endorsement. Although their termination letters did not

include the reason for termination set out in Mr. Gaffney’s

letter, the district court thought the difference was quite

explainable because, upon receipt of his letter, Mr. Gaffney

had told Mr. Gourguechon that he legally could not be

discharged because he had contacted the Coast Guard. /d. at

28-29.

' For example, at trial, the defendants posited that the

plaintiffs were terminated because of “a pattern of disruptive

activity.” Gourguechon Test., Tr.IV at 19. The defense also

claimed that ail the plaintiffs were involved in some form or

another in the rewiring incident. See id. at 38-41 (testifying that

each of the plaintiffs were part of, or had “more or less direct

responsibility” over, the work crews involved in the incident).

However, these rationales directly conflict with those previously

relied upon. At the NLRB proceedings, for instance, Mr.

Gourguechon explained that Mr. Bell was fired because of his

“rough” “bedside manner,” R.70 at 64; that Mr. Gaffney was fired

for not following the “chain of command,” id. at 35; that Mr.

Truady and Mr. Doncet were fired to get a “different group of

people, different skills” in the engine room, id. at 44, 46; and that

Mr. Goodridge was fired because it was “time to make a change in

the crew,” id. at 53.

48a

Returning to this issue once again in the course of ruling

on the Rule 52 and Rule 59(b) motions, the district court

repeated its earlier analysis and then pointedly said that the

“defendants” motivation for firing the plaintiffs was because

the plaintiffs reported to the Coast Guard that the COI

violated safety regulations. This was the sole reason that the

defendants fired the plaintiffs, not based on later asserted

allegations of sabotage or union activity.” R.199 at 8.

When a district court makes findings of fact regarding

causation, as it did in this instance, those findings are

conclusive and binding upon this court unless they are clearly

erroneous. Jutzi-Johnson v. United States , 263 F.3d 753, 763

(7th Cir. 2001) (discussing factual findings as to the existence

of proximate cause). Although the record does contain

evidence that if believed by the trier of fact might have led to

a different coriclusion, the record also contains the evidence

relied upon by thie district court to reach the conclusions that

it did. See id. (“[A] district court’s choice between two

permissible inferences from the evidence cannot be clearly

erroneous.” (internal quotation marks omitted)). Accordingly,

we must accept those findings.

Riverboat urges us to reverse the district court’s findings

because, even if the Coast Guard correspondence played a

marginal role in the termination decisions, the “motivating

cause” for terminating the plaintiffs was their union activities.

Appellants’ Br. at 40. As is made clear by the legislative

history, the private right of action made available under

§ 2114 was modeled after OSHA’s retaliatory discharge

provision, 29 U.S.C. § 660°. See S. Rep. No. 98-454, at 12

(1984), as reprinted in 1984 U.S.C.C.A.N. 4831, 4842.

Under OSHA, in order for a plaintiff to establish that he was

terminated in retaliation for filing a health or safety

complaint, he must show that the “protected activity was a

49a

substantial reason for the action,” although it “need not be the

sole consideration behind discharge.” 29 C.F.R. § 1977.6(b).

In such circumstances, as under § 2114, the ultimate question

is whether the discharge or other adverse action would have

“taken place ‘but for’ engagement in protected activity.” Id. ;

see also Dole v. H.M.S. Direct Mail Serv., Inc., 752 F. Supp.

573, 580 (W.D.N.Y. 1990) (holding that, although the

plaintiff was a “problem employee” and eventually may have

been terminated for that reason, the immediate cause of his

termination was the OSHA report); Donovan v. Commercial

Sewing, Inc., 562 F. Supp. 548, 552-53 (D. Conn. 1982)

(concluding that the OSHA complaint was the but-for cause

of the plaintiff's termination, given the temporal connection

between that complaint and the subsequent termination). In

this case, however, a mixed-motive or “but for” analysis is

not necessary. The district court specifically found that the

defendants did not act from a mixed motive but from a sole

motive—the plaintiffs’ correspondence with the Coast Guard.

The defendants also contend that the district court erred in

failing to engage in McDonnell Douglas’ burden-shifting

analysis. As in the case of the OSHA statute, we have no

doubt that a defendant can defend against an allegation that he

discharged a seaman in retaliation for reporting a matter to —

the Coast Guard by introducing evidence that the discharge

was non-pretextually based on another, legally permissible

ground. Indeed, the defendants in this case attempted to avail

themselves of just such a defense. However, the findings of

che district court that the evidence proffered by the defendants

was not worthy of belief simply precludes this defense.

Moreover, the availability of the defense of a non-

pretextual reason for discharge does not necessarily make the

McDonnell Douglas paradigm the appropriate analytical tool

for the evaluation of this defense. We have held repeatedly

50a

that the McDonnell Douglas burden-shifting method of proof

is relevant onlv before trial, both to determine whether the

plaintiff has met her burden of creating a triable issue of

material fact and to determine the sequence of presenting

evidence at trial. See Mattenson v. Baxter Healthcare Corp.,

438 F.3d 763, 767 (7th Cir. 2006) (“The judge on his own

initiative gave a McDonnell Douglas instruction despite

tireless repetition by appellate courts that the burden-shifting

formula of that case is not intended for the guidance of jurors;

it is intended for the guidance of the judge when asked to

resolve a case On summary judgment.”).

C. Mr. Doncet and Mr. Horton

The district court entered judgment in favor of all but two

plaintiffs—Mr. Doncet and Mr. Horton. It held that there

was no evidence that Riverboat executives were aware that

these individuals were involved in a report of a violation of

safety regulations prior to their terminations. See R.191 at 21.

The plaintiffs signed only the August letter, not the October

10th letter; according to the district court, there is no

evidence that Mr. Gourguechon read the August letter or that

the August letter qualified for statutory protection under

§ 2114 as a “report.” Therefore, according to the district

court, Mr. Doncet and Mr. Horton did not meet their burden

of proving that they were terminated in retaliation for

protected correspondence with the Coast Guard. We review

this finding of fact for clear error.

Although Mr. Doncet and Mr. Horton did not sign the

October 10th “report,” the facts of the case compel a finding

that the defendants believed them to be involved in protected

communications with the Coast Guard. On January 13, 1998,

five of the ten plaintiffs filed a complaint in the district court.

This complaint, to which were attached the four letters sent to

Sla

the Coast Guard during August, September and October of

1997, was served on the M/V Showboat on January 14, 1998.

The defendants admit having seen and read these attached

letters at this time. See R.69, Ex.B at 110; Tr.IV at 47. Mr.

Doncet and Mr. Horton were terminated shortly thereafter, on

January 22 and January 15, 1998, respectively.

As we have noted earlier, the district court found that,

although the termination letters delivered to seven of the

prevailing plaintiffs did not contain explanations for their

discharges, like Mr. Gaffney’s letter, the timing and

circumstances prove that these plaintiffs also were fired

because of correspondence with the Coast Guard.

Specifically, these plaintiffs were “fired in rapid succession

and only days after the Coast Guard informed [Riverboat] that

it was rescinding the COI limited endorsement.” R.191 at 28.

The “smoking gun”—Mr. Gaffney’s termination letter—also

demonstrated retaliation against all eight plaintiffs, given that

Mr. Gaffney had “testified that he told the defendants, upon

receiving his termination letter, that they could not fire him

for the reason stated. The{] rapid firings are at least

circumstantial evidence that [all of] the plaintiffs were

terminated because of their report to the Coast Guard.” /d. at

28-29.

We cannoi see why these findings do not apply with equal

force to the terminations of Mr. Doncet and Mr. Horton. As

in the case of the other eight plaintiffs, the defendants were

aware of Mr. Doncet and Mr. Horton’s involvement in the

petition to remove the limited endorsement from the M/V

Showboat’s COI. Moreover, the terminations of all ten

plaintiffs occurred in “rapid succession,” id. at 28; the

terminations of Mr. Doncet and Mr. Horton occurred within

eight days after the defendants learned that they had signed

the August letter to the Coast Guard. Given this sequence of

52a

events, we conclude that there is sufficient evidence linking

the report to the Coast Guard to the terminations of Mr.

Doncet and Mr. Horton. The district court’s contrary

conclusion is unsupported by the evidence and, therefore,

clearly erroneous.

Riverboat maintains that, unlike the eight prevailing

plaintiffs, Mr. Doncet and Mr. Horton did not sign the

October 10th letter and therefore never submitted a “report”

to the Coast Guard. § 13(a), 98 Stat. at 2863. However, given

that the letters were served on the M/V Showboat

simultaneously and Mr. Doncet and Mr. Horton were

terminated shortly thereafter, nearly concurrently with the

terminations of the other eight plaintiffs, the logical inference

is that the defendants believed that Mr. Doncet and Mr.

Horton were involved in a broader effort to obtain the

revocation of the licensing waiver. Although timing is not

dispositive, see Culver v. Gorman & Co., 416 F.3d 540, 546

(7th Cir. 2005) (“We have never said that [temporal

proximity] is dispositive in providing or disproving a causal

link.” (internal quotation marks omitted)), it is a significant

factor to be considered, particularly when there is “other

evidence that supports the inference of a causal link,” id.

Here, the terminations of Mr. Doncet and Mr. Horton

followed closely on the heels of the terminations of the other

plaintiffs, which we have held were in retaliation for their

protected communication with the Coast Guard. As in

justifying the terminations of the other plaintiffs, the

defendants offered shifting rationales for terminating Mr.

Doncet and Mr. Horton. Compare Gourguechon Test., R.70

at 46 (testifying at NLRB proceedings that Mr. Doncet was

fired to get a “different group of people, different skills” in

the engine room), with Gourguechon Test., Tr.IV at 19, 38-

41 (testifying at the bench trial that all of the plaintiffs were

fired because of their union involvement and concurrent

53a

activities). It is also undisputed that the defendants knew that

Mr. Doncet and Mr. Horton were involved in the first inquiry

to the Coast Guard, a letter which, although classified as a

Freedom of Information Act request, also expressed safety

concerns with the relaxation of licensing requirements. See

R.34, Ex.2 (noting that “the relaxation of licensing

requirements for the engineers on the M/V Showboat...

substantially reduces passenger safety by not requiring

experienced personnel to crew the vessel”). This

document—while not formally a “report” —put the defendants

on notice that Mr. Doncet and Mr. Horton were concerned

about, and motivated by, the safety implications of hiring

engineers with limited licenses. Moreover, the defendants

knew that Mr. Gaffney spearheaded the drafting of all four

letters attached to the complaint, making reasonable the

conclusion that the signatories to these letters were involved

in a general, larger effort to petition the Coast Guard for an

amended COI. We conclude, on the basis of these pieces of

circumstantial evidence, that Mr. Doncet and Mr. Horton’s

communication with the Coast Guard and their implicit

connection to the October “report” was a motiving factor in

their discharges, entitling them to whistleblower protection

under § 2114. We therefore reverse the judgment of the

district court as it relates to Mr. Doncet and Mr. Horton and

remand for further proceedings consistent with this opinion,

including the calculation of proper damages with respect to

these two plaintiffs.

D. Mr. Heitmeier and Mr. Gourguechon’s Liability

1. “Individuals in Charge of a Vessel *

Section 2114, at the time of the events in this case, limited

its scope to “owner[s], charterer[s], managing operator[s},

agent[s], master[s], [and] individual[{s] in charge of a vessel.”

54a

§ 13(2), 9& Stat. at 2863. Riverboat’s contention that this

language does not encompass either Mr. Heitmeier or Mr.

Gourguechon is without merit. The plain meaning of the

phrase “individual in charge of a vessel” refers to persons

who have “control over or responsibility for” the vessel’s

operation. American Heritage Dictionary (4th ed. 2900)

(defining the phrase “in charge of”); see also Black’s Law

Dictionary 685 (5th ed. 1979) (defining “in charge of” as “in

the care or custody of, or intrusted to the management or

direction of”). Mr. Heitmeier, as the President, sole

shareholder and member of the Board of Directors of both

Riverboat Services, Inc. and Riverboat Services of Indiana,

Inc., certainly exercises substantial control over the M/V

Showboat and its operations; it would be preposterous to

suggest otherwise. Similarly, Mr. Gourguechon, as the

Director of Marine Operations for Riverboat during the events

in this case, was in a position of significant responsibility;

among other things, he was in charge of managing the

vessel’s crew, including making promotion and termination

decisions. Indeed, Mr. Gourguechon played a large, if not

dispositive, role in the termination decisions in question in

this case. Were § 2114 construed so as to not permit the

plaintiffs to sue the director of personnel matters—the person

actually responsible for the discharges—the statute indeed

would be enfeebled. We therefore hold that both Mr.

Heitmeier and Mr. Gourguechon qualify as “individuai[s] in

charge of a vessel” and may be sued in their individual

capacities under the terms of § 2114.

2. Mr. Heitmeier’s Liability

Riverboat also submits that the district court erred in

holding Mr. Heitmeier liable, given that, until after this

litigation began, he did not know about the plaintiffs’ letters

to the Coast Guard. Instead, according to the defendants, Mr.

55a

Heitmeier believed that the plaintiffs were involved in the

disruption and miswiring of the vessel and directed Mr.

Gourguechon to fire them for this reason. Specifically, the

defendants submit that, at the time of the plaintiffs’

discharges, Mr. Wallace

had at least three “run-ins” with the MEBA, and in

one instance, members of the union barged into [Mr.]

Wallace’s East Chicago office and were escorted out

by security. [Mr.] Wallace . . . directed [Mr.]

Heitmeier to get rid of any employee involved in the

union activity because he did not want to deal with the

aggravation of the union activity.

R.191 at 9 (summarizing trial testimony). Mr. Heitmeier, in

turn, conveyed this request to Mr. Gourguechon, who was

solely responsible for drafting the termination letters and

delivering these letters to the plaintiffs.

The district court made factual findings that the

defendants’ proffered reason for terminating the

plaintiffs—primarily their union involvement and related

activities—was “unconvincing” and “based on speculation and

conjecture.” /d. at 27. As a general rule, we shall defer to

such findings unless they are shown to be clearly erroneous;

moreover, these findings are compatible with the district

court’s conclusion that Riverboat fired the plaintiffs in

retaliation for their protected communication with the Coast

Guard. See supra.

Nevertheless, in Mr. Heitmeier’s case, the district court’s

findings, while affording a factual basis for discrediting Mr.

Heitmeier’s given reasons for terminating the plaintiffs, do

not provide a basis for establishing the requisite causation

between Mr. Heitmeier’s direction that Mr. Gourguechon fire

S6a

the plaintiffs and the retaliation for their report of a violation

of safety regulations to the Coast Guard. In finding a causa!

link between the plaintiffs’ communications with the Coast

Guard and their subsequent terminations, the district court

relied heavily upon the “smoking gun” in the case—Mr.

Gaffney’s termination letter which cited the Coast Guard

correspondence. Although the plaintiffs suggest that Mr.

Heitmeier retained supervisory responsibility for the drafting

of this letter, the record contains no affirmative evidence to

support this contention; there is no evidence that Mr.

Heitmeier even knew of the letter’s contents before it was

delivered to Mr. Gaffney. Instead, Mr. Gourguechon testified

that he typed that letter and chose its words, including

reference to the phrase “unauthorized communication and

correspondence with regulatory bodies having jurisdiction

over the operation of the vessel.” Tr.IV at 113. Moreover,

Mr. Gourguechon admitted at trial that he made the ultimate

decision to terminate the plaintiffs:

Q: You made the decision to terminate Mike Gaffney,

and only after you made that decision you went to

Captain Heitmeier and told him that and he just

said okay, go ahead.

A: Yes, that could be correct.

Q: So you did make the decision to terminate Mike

Gaffney?

A: Yes.

Id. at 76-77.

Additionally, there is no evidence that Mr. Heitmeier

knew of the plaintiffs’ letters to the Coast Guard until the

S7a

complaint was served on the M/V Showboat on January 14,

1998; by that date, Mr. Gaffney, as well as four other

plaintiffs, had been fired in retaliation for their protected

communications with the Coast Guard. Absent proof that Mr.

Heitmeier knew of the plaintiffs’ reports of a safety violation

on board the M/V Showboat prior to the drafting of Mr.

Gaffney’s termination letter, and, indeed, prior to the

termination of five of the ten plaintiffs, there is no support,

direct or circumstantial, for the conclusion that Mr. Heitmeier

was motivated by this communication in ordering the

plaintiffs’ terminations.

E. Damages

1. Availability of Compensatory and Punitive

Damages

The partics dispute whether the district court erred in

awarding the plaintiffs punitive damages, as well as in

awarding the plaintiffs expenses incurred in the course of

obtaining new employment. Before we address the merits of

these issues, we pause to consider whether Riverboat waived

the argument that § 2114 permits only equitable

relief—limited to reinstatement with back pay—by failing to

raise it in a timely fashion. Specifically, Riverboat neglected

to make this argument in its post-trial brief; it instead

responded for the first time to the plaintiffs’ request for

compensatory and punitive damages in its Rule 52 Motion for

Judgment or, in the Alternative, for Amendment of Judgment

Pursuant to Rule 59.

Ordinarily, a challenge to damages not raised until post-

judgment motions is deemed waived. See NutraSweet Co. v.

X-L Eng’g Co., 227 F.3d 776, 791 (7th Cir. 2000); see also

Ameritech Info. Sys., Inc. v. Bar Code Res., Inc., 33\ F.3d

58a

571, 574 (7th Cir. 2003).** However, this general waiver

principle does not resolve, by itself, the situation before us.

Given the very unique procedural history of this case, we

must examine and evaluate the record as a totality to

determine whether the defendants waived this issue. The

plaintiffs first contend that Riverboat should have objected to

their request for punitive damages in their proposed jury

instructions and that the failure to do so constitutes waiver.

However, Riverboat did file objections to the plaintiffs’ jury

instructions, including to the plaintiffs’ request for an

instruction on punitive damages. See R.160 at 6 (objecting to

the proposed instruction on damages as “placing undue

emphasis on an award of damages, and incorrectly allowing

punitive damages and other compensatory damages for

violations of general maritime law and statutory violations.

Defendants suggest that no instruction be given”). That

Riverboat did not further develop this objection is, in all

likelihood, attributable to the procedural development of the

case. The trial was not sent to a jury but instead was heard by

the magistrate judge. Notably, the district court was given a

full opportunity to address the merits of Riverboat’s position

on the availability of compensatory and punitive damages

during post-trial proceedings, and the district court, who

obviously was far more knowledgeable about the course of

2 Cf. Los Angeles News Serv. v. Reuters Television Int'l, Ltd.,

149 F.3d 987, 996 (9th Cir. 1998) (holding that the defendants

waived their objection to the imposition of statutory penalties on the

basis of contributory infringement by (a) not raising the objection

in their proposed findings of fact and conclusions of law post-trial;

and (b) “calculat[ing] statutory damages on the basis of

{contributory} infringement|}” in this same filing). Unlike the party

in Los Angeles News, however, there is no indication that Riverboat

assumed the availability of punitive damages in the course of

calculating its proposed damages.

59a ;

proceedings than the cold record allows us to be, considered

_—— the possibility of waiver but nevertheless decided to proceed

to the merits of the issue. The plaintiffs certainly were given

a “meaningful opportunity to respond” to the defendants’

challenges in their responses to the defendants’ post-trial

motions. Jones-El v. Berge, 374 F.3d 541, 545 (7th Cir.

2004). Similarly, the district court was given ample

opportunity to address the issue. In light of these

circumstances, we cannot say that the district court erred in

determining that the availability of damages had been

preserved adequately.

Therefore, we turn to the merits of Riverboat’s challenge

to the availability of compensatory and punitive damages. The

district court examined the text of 46 U.S.C. § 2114, as well

as general maritime law and analogous retaliatory discharge

case law, and concluded from these sources that

compensatory and punitive damages were available in this

case. See R.191 at 36-40 (also noting that punitive damages

would further the purpose of § 2114 in light of the potential

chilling effect that flows from workplace retaliation). As a

question of law, we review this conclusion de novo. Kramer

v. Banc of America Sec., LLC, 355 F.3d 961, 964 (7th Cir.

2004) (reviewing the district court’s conclusion that punitive

damages were permissible under the governing statute de

novo).

At the time of the events in this case, 46 U.S.C. § 2114

provided that, if a seaman is terminated in retaliation for

protected correspondence with the Coast Guard, he is entitled

to “any appropriate relief, including—(1) restraining

violations of this section; and (2) reinstatement to the

seaman’s former position with back pay.” § 13(b), 98 Stat. at

2864. Riverboat contends that the statute does not make

available either compensatory or punitive damages, but rather

60a

“limits the plaintiff's [sic] relief to equitable remedies such as

reinstatement and back pay.” Appellants’ Br. at 43.

The plain text of the statute, however, makes clear that the

plaintiffs’ relief is not so limited. The statute authorizes a

federal court to award any and all relief that the court deems

appropriate. Equitable remedies, including an injunction and

reinstatement, are listed in a demonstrative fashion; such

remedies may be awarded, but do not represent the exclusive

options available to the court.*? This conclusion is bolstered

by § 2114’s legislative history. First, the legislative history

describes § 2114 as making available a “legal remedy,” see

S. Rep. No. 98-454, at 12 (1984), as reprinted in 1984

U.S.C.C.A.N. 4831, 4842, a term of art that—as a historical

matter—encompasses and is defined by monetary relief. See

Int’l Fin. Servs. Corp. v. Chromas Techs. Canada, Inc., 356

F.3d 731, 736 (7th Cir. 2004) (“Legal remedies traditionally

involve money damages.”). Second, Congress noted in the

legislative history that § 2114 is intended to create a “private

right of action similar . . . to that in OSH Act section 11°.”

S. Rep. No. 98-454. Indeed, Congress employed precisely the

same Statutory language in § 2114 as it did in OSHA, in both

cases making available all “appropriate relief.” Compare

§ 13(b), 98 Stat. at 2864, with 29 U.S.C. § 660(c)(2). This

provision in the OSHA statute has been held to authorize both

compensatory and punitive damages. See Reich v.

Cambridgeport Air Sys., Inc., 26 F.3d 1187, 1191-92 (Ist

Cir. 1994). Specifically, the First Circuit in Reich deemed

See also Brown v. Sea-Land Service, Inc., 1992 U.S. App.

LEXIS 32623, 1992 WL 161045, at *2 (9th Cir. 1992) (holding

that it is within the court’s discretion to award both reinstatement

and punitive damages for violation of § 2114, although finding that

the district court’s decision not to award such remedies did not

const)mete an abuse of discretion).

6la

Congress’ choice of words, in light of governing Supreme

Court precedent, significant. It pointed out that, in Franklin

v. Gwinnett County Public Schools, 503 U.S. 60, 112 S. Ct.

1028, 117 L. Ed. 2d 208 (1992), the Supreme Court held

that, as a general matter and “absent clear direction to the

contrary by Congress, tite federal courts have the power to

award any appropriate relief in a cognizable cause of action

brought pursuant to a federal statute,” including

compensatory and punitive damages. /d. at 70-71 (emphasis

added). In turn, when a statute « plicitly makes available

“any appropriate relief,” referencing the broad power of the

federal courts to award both compensatory and punitive

damages, we can infer that Congress intended prevailing

plaintiffs to recover compensatory and punitive remedies.

This is true of § 2114, as it is of OSHA § 11°.*

Riverboat, however, submits that by detailing available

forms of relief that are equitable in nature—an injunction,

reinstatement and back pay—Congress thereby limited the

available remedies to those listed in the statute. We cannot

accept this argument. Use of the term “including,” followed

by a list of equitable remedies, “indicates the availability of

the named remedies, but does not purport to limit ‘all

appropriate relief’ to those remedies only.” Reich, 26 F.3d at

1191; see also Black’s Law Dictionary 687 (Sth ed. 1979)

(“‘Including’ within a statute is interpreted as a word of . . .

illustrative application”). By choosing to begin with the

phrase “any appropriate relief” —rather than merely providing

** See Reich v. Cambridgepon Air Sys., Inc., 26 F.3d 1187,

1191 (ist Cir. 1994) (“[A]ll appropriate relicf as written in [OSHA]

§ 11° embraces monetary damages as well as other relevant forms

of relief normally available, Congress having provided no clear

direction to the contrary.” (internal quotation marks omitted)).

62a

that a seaman is entitled to an award “restraining violations of

this section; [and] reinstaiement to the seaman’s former

position with backpay,” § 13(b), 98 Stat. at 2864—Congress

made it clear that it was not presenting an exhaustive list of

available remedies.*° Thus, we read “any appropriate relief”

“including” serves a limiting function in § 2114, both of which are

inapposite. In Kramer v. Banc of America Securities, LLC, 355

F.3d 961 (7th Cir. 2004), we addressed a claim of retaliation under

the Americans with Disabilities Act (“ADA”). The remedies

available under the ADA are those provided by the 1964 Civil

Rights Act; that statute makes available “such affirmative action as

may be appropriate,” including an injunction, reinstatement, back

pay or “any other equitable relief as the court deems appropriate.”

42 U.S.C. § 2000e-5(g)(1) (emphasis added). Unlike § 2114, which

authorizes “any” appropriate relief, see § 13(b), 98 Stat. at 2864,

the ADA explicitly restricts the relief available to a prevailing

party. Not only does the statute suggest that “affirmative action”

consists only of “equitable relief,” 42 U.S.C. § 2000e-5(g){1)

(emphasis added), but “affirmative action” is an equitable term of

art. See Black's Law Dictionary 55 (Sth ed. 1979) (defining

“affirmative action” as action to “make effective the redress of

rights”).

Riverboat also finds support in Espinueva v. Garrett, 895 F.2d

1164 (7th Cir. 1990). There, the plaintiff sought compensatory and

punitive damages under both Title VII and the Age Discrimination

in Employment Act (“ADEA”). The court held that neither statute

authorizes an award of compensatory or punitive damages. /d. at

1165. Espinueva is also inapposite. First, the remedy for violation

of Title VII, like for violation of the ADA, is provided by the 1964

Civil Rights Act. That Act, unlike § 2114, limits available relief

to “affirmative action” and other “equitable relief.” 42 U.S.C.

§ 2000e-5(g)(1). Moreover, since the ADEA” adopts the

enforcement scheme used in Title VII cases brought by federal

employees,” Smith v. Office of Personnel Mgmt. , 778 F.2d 258, 262

63a

as an umbrella label; in turn, the phrase “including restraining

violations . . . and reinstatement” indicates that the umbrella

of available remedies encompasses both legal and equitable

relief.

2. Calculation of Back Pay Awards

Riverboat also submits that, although the statute explicitly

authorizes the district court to award the plaintiffs back pay

for lost income, the district court erred in its calculations.

Specifically, Riverboat contends that the plaintiffs did not

mitigate their damages by immediately seeking re-

employment, but instead spent significant amounts of time

walking the picket line, taking various classes and traveling

after being terminated by Riverboat. Riverboat also submits

that the district court failed to calculate carefully the income

earned by each plaintiff post-termination.

a. mitigation

The plaintiffs were required to mitigate their damages by

using reasonable diligence in seeking employment after their

terminations. However, because the lack of mitigation is an

affirmative defense, the burden of proof for this issue falls on

the employer. See Hutchison v. Amateur Elec. Supply, Inc.,

42 F.3d 1037, 1044 (7th Cir. 1994) (discussing mitigation

rules applicable to the calculation of damages under Title

VII). The district court found that Riverboat had failed to

meet this burden. After four days of testimony at trial

detailing with particularity the plaintiffs’ post-termination

activities, including the specifics of their job search efforts,

(Sth Cir. 1985), the same analysis limits the remedies available for

violation of the ADEA.

64a

the district court decided that the plaintiffs had made

reasonable efforts to find new employment. The court

recognized that various plaintiffs walked the picket line in

front of the M/V Showboat, R.191 at 30-33, and that some

plaintiffs took time off after being terminated to attend various

classes, id. at 31-32. However, it concluded that the

defendants had not proven that the plaintiffs failed to mitigate

their damages; instead, the evidence showed that “the

plaintiffs walked the picket line for negligible amounts of

time,” and were “actively seeking employment during that

time.” Jd. at 35. We are bound by these findings unless they

are clearly erroneous. See Wichmann v. Board of Trustees,

180 F.3d 791, 805 (7th Cir. 1999).

The defendants have provided us very litle reason to

question the district court’s findings. For example, Riverboat

offers no evidence refuting the testimony that the union was

actively looking for employment on behalf of some of the

plaintiffs during the weeks and months after thcir

terminations.*° Nor does Riverboat challenge the district

court’s finding that the plaintiffs were able to “actively seek{]

employment” while also walking the picket line, a finding that

is aptly supported by the plaintiffs’ testimony.*’ R.191 at 35.

Test., Tr.II at 162 (explaining that the MEBA was unable to find

him a job).

” See, e.g., Gaffney Test., Tr.1 at 186 (“I updated my resume

and grabbed my phone book and starting sending out resumes and

started looking for new work.”); Anderson Test., Tr.II at 178

(explaining that, even on days when he walked the picket line, he

also was actively searching for a job); Palmer Test., Tr.II] at 90

(explaining that, after being terminated, he “made some phone

calls” and “got a job”).

65a

From this evidence, we conclude that the plaintiffs

“demonstrat[ed] a continuing commitment to be a member of

the work force” after being discharged by Riverboat.]

Donnelly v. Yellow Freight Sys., Inc., 874 F.2d 402, 411 (7th

Cir. 1989) (discussing Title VII mitigation requirements).

The same is true of the classes taken by three of the

plaintiffs post-termination. Riverboat does not contest the

district court’s conclusion that compensation for the time

spent engaging in alternative activities is appropriate, given

that, had the plaintiffs not been discharged, they would have

no need to engage in such activities. /d. at 34-35. Further,

this conclusion is consistent with our case law. See David v.

Caterpillar, Inc., 324 F.3d 851, 866 (7th Cir. 2003)

(rejecting the argument that the plaintiff's back pay award

should be reduced to take into account a term of voluntary

educational leave and holding that, had the plaintiff been

properly promoted, “she would not have taken the educational

leave”).

Additionally, even if the defendants’ view of the evidence

was a legitimate interpretation of the underlying events, we

cannot conclude that the district court’s finding—that the

plaintiffs’ efforts to find alternative work were reasonable—is

clearly erroneous. Cf. Kasper v. St. Mary of Nazareth Hosp..,

135 F.3d 1170, 1176 (7th Cir. 1998) (holding that testimony

concerning whether employee failed to mitigate damages is a

question of credibility and deferring to jury’s assessment of

whether or not to believe him).

b. calculation of lost wages

Riverboat also challenges the district court’s calculation of

the plaintiffs’ lost earnings. As in other retaliatory discharge

contexts, salary earned after a plaintiff is terminated should be

66a

deducted from the back pay otherwise allowable. Cf.

Donnelly, 874 F.2d at 411 (discussing calculation of damages

under Title VII). In this case, the district court detailed with

precision the salaries earned by the plaintiffs after being

discharged by Riverboat; the number of work days missed

between their terminations and finding new employment; and

the income earned, and hours worked, in their new positions

in relation to their salaries and hours while employed by

Riverboat. See R.191 at 30-36. “In reviewing the claim for

‘loss of wages,’ we note that we are bound by the district

court’s determination as to the appropriate amount of damages

unless that determination is clearly erroneous.” Fleming v.

County of Kane, 898 F.2d 553, 560 (7th Cir. 1990).

To be sure, the testimony of some of the plaintiffs on this

issue is slightly vague. For example, Mr. Palmer responded

to a question about his income in 1998 with, “Maybe

$30,000. I don’t know.” Tr.III at 91. He then estimated that

his income for the next few years was “[p]robably somewhere

in the same ball park.” Jd. Nevertheless, Riverboat has failed

to offer any evidence that Mr. Palmer’s estimate that he

earned $30,000 per annum does not reflect accurately his

actual income. In calculating lost income, the district court is

free to credit the plaintiffs’ testimony regarding their sources

and levei of income. In this respect, the record supports the

district court’s conclusion that Mr. Palmer earned $30,000 a

year in his new position,$20,020 less than his annual salary

while employed by Riverboat.

c. reductions to back pay awards

The parties also dispute whether the district court erred in

calculating the back pay to which Messrs. Goodridge,

Gaffney and Beardon were entitled. Specifically, Riverboat

submits that, because these plaintiffs held positions after being

67a

terminated that paid a higher salary than did their positions on

board the M/V Showboat, their back pay entitlements should

have been adjusted downward accordingly.

Riverboat’s contention as it relates to Mr. Beardon is

without merit. Although Mr. Beardon’s annual salary in

various positions post-termination was greater than his annual

salary at Riverboat, the court properly discounted these

earnings to take into account the mumber of hours worked.

Mr. Beardon worked an eight-hour workday at Riverboat, but

he worked a twelve-hour workday in both of his new, higher-

paying positions. Had he only worked eight hours a day, he

would have earned less than he did while employed by

Riverboat, warranting back pay.

We next turn to Riverboat’s claim concerning the

calculation of Mr. Goodridge and Mr. Gaffney’s earnings. In

all but one of his positions after being terminated by

Riverboat, Mr. Goodridge earned less than he would have

earned had he remained on the M/V Showboat; the only

exception is 34 days in 2002, during which he worked for

MTL Lines on board a tanker. He was paid $325 per day for

this 34-day period, which is $36 per day more than he made

while employed by Riverboat. Riverboat contends that the

district court erred in failing to subtract this amount, which

totals $1,224, from his back pay award. Similarly, Mr.

Gaffney lost 14 days of wages looking for work, as well as

suffered miscellaneous expenses related to his termination;

but, after he obtained new employment, he earned more than

he did while employed by Riverboat. Riverboat submits that

Mr. Gaffney’s higher salary should offset any losses he

suffered while unemployed.

In the context of a retaliatory discharge claim under

OSHA § 11(c)—a statute which we have already explained is

68a

analogous to § 2114, see S. Rep. No. 98-454, at 12 (1984),

as reprinted in 1984 U.S.C.C.A.N. 4831, 4842—the court

will award back pay to the plaintiffs “as compensation for

income that would have accrued to them had they not been

wrongfully dismissed.” Donovan v. Freeway Const. Co., 551

F. Supp. 869, 880 (D. R.I. 1982) (holding that the plaintiffs

were entitled to the differential between their new and old

wages); see also Martin v. H.M.S. Direct Mail Serv., Inc.,

936 F.2d 108, 109 (2d Cir. 1991) (holding that the plaintiff

was entitled to back pay for the differential between

unemployment compensation received and the salary he would

have earned if not terminated). In other words, under OSHA,

“[t}he award of back pay must be reduced by the amount of

any income from employment earned by complainants during

the period covered by the back pay award.” Donovan, 551 F.

Supp. at 880; see also Martin, 936 F.2d at 109 (subtracting

from the back pay award unemployment compensation

received). This same rule applies in the analogous context of

Title VIl. See, e.g., Chesser v. Illinois, 895 F.2d 330, 338

(7th Cir. 1990).

The district court, in calculating back pay entitlements,

implicitly** made a factual determination that the period

during which Mr. Goodridge was eligible for back pay—and

thus the period in which his earnings should be subtracted

from his back pay award—terminated when his employment

with MTL Lines began; it therefore awarded back pay for

losses suffered up until mid-2002, when Mr. Goodridge took

* The district court did not set forth specifically the period of

backpay applicable to each plaintiff. Instead, the court merely

agreed with the plaintiffs’ back pay calculations and noted that these

calculations “have not been challenged by the defendants.” R.191

at 36. The final calculations, however, reflect the conclusions

discussed in the text.

69a

this position. As for Mr. Gaffney, the district court held that

the 14-day period between termination and obtaining new

employment was the period in which he was entitled to back

pay and calculated equitable relief accordingly. These factual

conclusions shall be reversed only if clearly erroneous. See

Matthews v. A-1, Inc., 748 F.2d 975, 978-79 (Sth Cir. 1984)

(reviewing the district court’s “refus[al] to deduct [the

plaintiff's} earnings at a higher paying position from her

damage award” for clear error).

The district court’s conclusions are not clearly erroneous,

but rather are consistent with the calculation of the period in

which a plaintiff is entitled to back pay in a variety of

analogous contexts. For example, in the context of Title VII,

a plaintiff is eligible for back pay from the date of her injury

to the date that she acquires a higher-paying job. See id. at

978. The same is true in the context of both OSHA § 11°, see

Donovan v. George Lai Contracting, Ltd., 629 F. Supp.

121,122-23 (W.D. Mo. 1985) (awarding back pay for the

period between termination and obtaining new employment),

and the ADEA, see Stephens v. C.1.T. Group/Equip. Fin.,

Inc., 955 F.2d 1023, 1029 (Sth Cir. 1992); Kolb v. Goldring,

Inc., 694 F.2d 869, 874 (ist Cir. 1982).

Therefore, although Mr. Goodridge and Mr. Gaffney are

not entitled to back pay for any period in which they earned

the same or more than they would have earned at Riverboat,

their ““excess’ earnings are not to be subtracted from the

back-pay award for the period of unemployment.” Skalka v.

Fernald Envil. Restoration Mgmt. Corp., 178 F.3d 414, 426

(6th Cir. 1999) (discussing back pay for violation of the

ADEA). Indeed, Riverboat has referred us to no case in

which the plainiffs’ excess income—earned after the period

of time covered by the back pay award—was subtracted from

losses suffered during the applicable period of either

70a

unemployment or underemployment. In this light, we

conclude that the district court did not err in refusing to

subtract from their back pay awards Mr. Goodridge’s

earnings for the 34 days in which he was employed by MTL

Lines and Mr. Gaffney’s earnings after he obtained new

employment.

3. Calculation of Punitive Damages

The district court, after concluding that the defendants

acted willfully and wantonly in discharging the plaintiffs, see

R.191 at 40, awarded each of the eight prevailing plaintiffs

$ 25,000 in punitive damages. Riverboat submits that the

district court erred in two respects. First, Riverboat

challenges the district court’s factual finding that the

defendants acted willfully and wantonly in discharging the

plaintiffs. According to Riverboat, Mr. Heitmeier did not

know about the letters to the Coast Guard and thus did not

willfully violate § 2114. Similarly, Mr. Gourguechon viewed

the report as a job preservation effort, and instead terminated

the plaintiffs because of their pro-union activity. We review

the district court’s conclusions, which present questions of

fact regarding the defendants’ state of mind, for clear error.

NRC Corp. v. Amoco Oil Co. , 205 F.3d 1007, 1014 (7th Cir.

2000).

As discussed above, Mr. Heitmeier is not liable in his

individual capacity for violation of § 2114, and, thus, punitive

damages with respect to his conduct are inappropriate. The

district court, however, did make specific factual findings that

Mr. Gourguechon’s conduct warranted punitive relief and

those findings are entitled to deference in this court. For

example, the court found that, after being told by Mr.

Gaffney that he could not fire someone for corresponding

with the Coast Guard, Mr. Gourguechon did not “reconsider{]

Tila

his decision or tak[e] the time to obtain legal advice,” but

instead “quickly fired the remaining plaintiffs.” R.191 at 40.

It also found that the fact that Mr. Gourguechon “remove[d]

the offending language from the subsequent termination

notices” supports the conclusion that he “believed that there

was something seriously wrong in terminating [Mr.] Gaffney

and the other plaintiffs.” /d.

The district court’s award of punitive damages is not

against the weight of the evidence. While there is some

contrary evidence in the record-for example, Mr.

Gourguechon’s willingness to provide various plaintiffs with

a letter of recommendation after their terminations--the

district court’s rationale for awarding punitive damages is

aptly supported by the facts of the case. Mr. Gourguechon

was aware, as of January 6, 1998, that terminating the

plaintiffs in retaliation for communicating with the Coast

Guard was unlawful; nevertheless, within the next two weeks,

he made the decision to terminate seven other signatories to

the October 10th report. In light of this conduct, and in light

of other, related justifications for awarding punitive relief in

this case, such as the possibility that the “defendants’

actions . . . may have a chilling effect on the willingness of

other seamen to report a violation,” id., we find that the

district court did not err in awarding the plaintiffs punitive

damages.

Riverboat also submits that, even if the statute authorizes

punitive damages, they were not appropriately calculated in

this case. Specifically, it contends that the $25,000 awards are

excessive, given that the plaintiffs “suffered no long lasting

effects of the termination.” Appellants’ Br. at 48 (internal

quotation marks omitted).

72a

A district court’s calculation of punitive damage awards

is reviewed for abuse of discretion if no constitutional

violation is alleged.” Cooper Indus., Inc. v. Leatherman

Tool Group, Inc., 532 U.S. 424, 433, 121 S. Ct. 1678, 149

L. Ed. 2d 674 (2001). We shall “set aside such an award only

if it exceeds an amount necessary to serve the objective of

deterrence and punishment.” Merriweather v. Family Dollar

Stores of Indiana, Inc., 103 F.3d 576, 581 (7th Cir. 1996)

(internal quotation marks omitted).

We cannot conclude on the basis of this record that the

district court abused its discretion in awarding each prevailing

plaintiff $25,000 in punitive damages. The district court

carefully considered and balanced the competing factors: On

the one hand, it noted that the plaintiffs’ request for treble

damages was “disproportionate to the type of harm suffered

here and would result in a windfall for the plaintiffs.” R.191

at 40-41. Nevertheless, the court held, the need to “vindicate

{the plaintiffs’] rights” made some measure of punitive relief

appropriate. /d. at 41. As required by our case law, the court

also carefully considered the amount “necessary to serve the

objective of deterrence and punishment.” Merriweather, 103

*° While Riverboat cites State Farm Mutual Automobile

Insurance Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L.

Ed. 2d 585 (2003), and BMW of N

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