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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2006

## Text

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

Vv

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

1
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

2

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

3

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

4

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

5

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

6

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.

7

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.

8

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).

9

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

10

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.

11

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

12

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.

13

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

14

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

la

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,

7.

SHOWBOAT MARINA CASINO
PARTNERSHIP, SHOWBOAT, INCORPORATED,

SHOWBOAT INDIANA, INCORPORATED, et al.,
Defendants-Appellees.

meee ee eee ee ee”

2a

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.

3a

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.

4a

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

4

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

Sa

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.

6a

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

7a

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).

8a

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.
ee

® These two individuals are not parties to the present litigation,
but were signatories to the August I Ith letter.

9a

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

9

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.

Il
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.

26

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 th

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1480%3A1. Public record. Not legal advice.