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Punitive Damages Ahoy!

November 16, 2017

By Alfred J. Kuffler

In Tabingo v. American Triumph LLC, No. 92913-1 (Wash., March 9, 2017), the Supreme Court of the State of Washington recently upheld an award of punitive damages to a seaman claiming injuries from the unseaworthy condition of his vessel.  Building on the U. S. Supreme Court’s 2009 decision in Atlantic Sounding Co. v. Townsend, 557. U. S. 404 (1995) (allowing punitive damages on a claim for wrongful denial of maintenance and cure), the Washington State court reasoned that since maintenance and cure is a claim arising out of the general maritime law, and unseaworthiness finds its genesis from the same source, then allowance of punitives in the latter circumstance is justified. In so doing, the Washington State court declined to follow decisions from federal courts in other states that rejected claims for punitive damages relating to injuries caused by the unseaworthiness of the vessels on which seamen were serving.

While the U. S. Supreme court has not addressed the precise issue of awarding punitive damages for unseaworthiness, certain federal circuits have.  See, e.g., McBride v. Estis Well Service, LLC, 768 F.3d 382 (5th Cir. 2014) (punitive damages not allowed for a claim of unseaworthiness.  The Washington State Supreme Court in Tabingo recognized that federal maritime law controlled, relied on the U.S. Supreme Court’s Townsend decision, and distinguished the U.S. Supreme Court’s decision in Miles v. Apex Marine Corp., 498 U.S. 19 (1990) (as non-pecunary damages, punitive damages were not recoverable in a general maritime wrongful death action).

At the moment, whether a seaman’s claim for unseaworthiness can result in an award of punitive damages remains unsettled. The issue is ultimately one of federal law and will be resolved in the federal courts. But because federal courts may look to state courts pronouncements for guidance, Tabingo may well wield some influence in the ultimate resolution of this question. Likewise, whether Townsend may ultimately be limited to maintenance and cure claims, or if construed more broadly as was the case in Tabingo, and thus be considered as conflicting with Miles remains to be seen. In the meantime, we can expect that seamen’s unseaworthiness claims will now routinely include claims for punitive damages.

Not only will such claims increase the stakes in these cases, the claim for punitives may also affect the defendant employers’ insurance coverage at least for that aspect of any judgment. However, under U. S. law, the elements of proof required to establish the right to punitive damages, including willful misconduct or even malice, may simultaneously give insurers grounds for challenging all coverage. For instance, such proof may form the basis for a challenge to coverage on the grounds that the basic concept underlying all insurance is that the cover is for fortuities – that is, unintentional conduct. If the conduct is intentional, then there should be no cover at all.  Thus, there may be a possible defense for insurers and food for thought for plaintiffs’ counsel before they allege a right to punitive damages.