United States Court of Appeals

for the Fifth Circuit

____________

No. 22-30311

____________

Kenai Ironclad Corporation, 

Plaintiff—Appellee,

versus

CP Marine Services, LLC; Ten Mile Exchange, LLC, 

Defendants—Appellants.

______________________________

Appeal from the United States District Court 

for the Eastern District of Louisiana

USDC No. 2:19-CV-2799

______________________________

Before Haynes and Engelhardt, Circuit Judges, and deGravelles, 

District Judge.0F

*

John W. deGravelles, District Judge:

Kenai Ironclad Corporation (“Kenai” or “Plaintiff”) alleged that CP 

Marine Services, LLC, breached its contract to repair and convert Kenai’s 

offshore supply vessel to a salmon fishing tender for use in Alaska. After 

Kenai expressed dissatisfaction with the work, the relationship deteriorated. 

* United States District Judge for the Middle District of Louisiana, sitting by 

designation.

United States Court of Appeals

Fifth Circuit

FILED

October 17, 2023

Lyle W. Cayce

Clerk

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Kenai alleged that, after paying its final invoice, it attempted to remove its 

vessel from CP Marine’s shipyard, but as it did so, CP Marine and codefendant Ten Mile Exchange, LLC, (“TME”) (collectively, 

“Defendants”) rammed, wrongfully seized, detained, and converted Kenai’s 

vessel for five days before finally releasing it. 

After a five-day bench trial, the district court found that CP Marine 

did not breach its contract with Kenai but did wrongfully seize, detain, and 

convert the vessel. The court awarded punitive damages and attorney’s fees 

for Defendants’ bad faith and reckless behavior in ramming, seizing, and 

converting the vessel for five days.

Defendants appeal, arguing the trial court erred in (1) finding that they

wrongfully arrested or detained Kenai’s vessel; (2) finding that punitive 

damages were legally and factually justified; and (3) awarding prejudgment 

interest on the punitive damages award. After a careful review of the record, 

we hold that there was sufficient evidence to support the district court’s 

finding that Defendants wrongfully seized, detained, and converted 

Plaintiff’s vessel in a manner that warranted the imposition of attorney’s fees 

and punitive damages. However, because the record is unclear as to certain 

aspects of the district court’s award of punitive damages—namely, whether 

they were also intended, at least in part, to be compensatory and, if so, in 

what amount—we REMAND to the district court for clarification of its 

award.

FACTS AND PROCEDURAL HISTORY

In December 2018, Plaintiff Kenai orally contracted with Defendant 

CP Marine to repair, modify, and paint the M/V IRON DON, an offshore 

supply boat owned by Kenai that it intended to use as a salmon fishing tender 

in Alaska. Work began in January 2019. In January and February, Kenai’s 

representatives repeatedly expressed concerns about the quality of the work 

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being performed and requested a written guarantee regarding the work’s 

quality. CP Marine refused to give a guarantee. 

Thereafter, CP Marine demanded immediate payment of outstanding 

invoices, which Kenai paid immediately. Then, Kenai’s representatives 

decided to “end the working relationship with Defendants as soon as 

possible.” CP Marine next demanded that Kenai’s crew and equipment be 

immediately removed from the vessel and shipyard and threatened to charge 

a $1,000 per day storage fee if Kenai failed to comply. CP Marine further 

threatened to return the vessel from dry dock to the water and charge a 

$5,000 per day storage fee. 

CP Marine had Jefferson Parish deputy sheriffs evict Kenai’s crew 

from the vessel and then completed its work on same. On February 27, 2019, 

CP Marine sent Kenai a final invoice. Kenai’s Austin Adler 

immediately wrote a check for the final invoice and delivered it 

to CP Marine, which CP marine deposited the same day. This 

payment satisfied all outstanding CP Marine invoices to 

Plaintiff. [ ] Adler called Plaintiff’s bank to confirm that the 

check had cleared . . . [and] a representative from Plaintiff’s 

bank confirmed that Defendant had cashed the check and that 

it cleared on February 28, 2019.

Six days later, on March 5, 2019, the vessel hired by Kenai to remove 

the IRON DON from the CP Marine shipyard (the M/V SUPER T) tied onto 

the IRON DON and began to leave the shipyard. As it was doing so, a vessel 

owned by TME, the M/V AUNT DI, “rammed” the SUPER T, pinned it 

and the IRON DON against the bank, and thus prevented Kenai from 

retrieving its vessel. Joseph Dardar, a part owner of both TME and CP 

Marine, was at the wheel of the AUNT DI. Moreover, during this event, 

Dardar threatened Adler. 

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The following day, while the IRON DON was still being detained in 

the CP Marine shipyard, TME “threatened Plaintiff by sending a $20,750 

invoice from TME for ramming and detaining the IRON DON” and 

demanded payment within two days. At this point, Kenai had “no formal 

business relationship” with TME, and the invoice was sent “for the sole 

purpose of intimidating and threatening Plaintiff.” Dardar admitted at trial 

that “he never intended to collect on this invoice and ‘should never have sent 

it.’” “Plaintiff ultimately retrieved the IRON DON and left the CP Marine 

shipyard on March 11, 2019.” 

Kenai sued CP Marine and TME for breach of contract, wrongful 

vessel seizure, conversion, and tortious interference with contractual 

relations. After a five-day bench trial, the district court held that defendant 

CP Marine did not breach its oral contract and implied breach of warranty of 

workmanlike performance in connection with CP Marine’s painting, repair, 

and modifications to the M/V IRON DON. The trial court held in part that 

“Plaintiff has not met its burden to show that Defendants’ allegedly dilatory 

performance caused [the IRON DON’s] late arrival in Alaska.” 

However, the district court also found that “Defendants acted with 

bad faith . . . [and] detained the [IRON DON] pursuant to an invalid maritime 

lien.” The court awarded punitive damages measured by “the value of [the 

vessel’s] missed contract days for the days that Defendants wrongfully 

detained the vessel.” Specifically, the court stated it was awarding punitive 

damages in the amount of $17,580.50, measured by the vessel’s daily rate of 

$3,516.10 times the five days the vessel was wrongfully detained, plus 

attorney fees, expenses, and court costs. 

In addition, the court awarded “pre-judgment interest in accordance 

with La. R.S. § 9:3500 from March 5, 2019, to the date of judgment, and postjudgment interest in accordance with 28 U.S.C. § 1961(a).” Judgment was 

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entered on May 17, 2022, and Defendants timely appealed on May 25, 2022.

Kenai did not.

The matter of the amount of attorney’s fees to be awarded was 

referred to the magistrate judge. Although Kenai submitted attorney’s fees 

totaling $78,017.68, the magistrate judge only recommended payment of 

$38,831.40, reflecting a downward adjustment due in part to Kenai’s loss of 

its breach of contract claim.1 On August 9, 2022, the district court adopted 

the magistrate judge’s recommendation. Defendants separately appealed the 

district judge’s adoption of the report and recommendation, but that appeal 

was dismissed for want of prosecution because Defendants failed to timely 

file a brief and record excerpts. Kenai Ironclad Corp. v. CP Marine Servs., 

L.L.C., No. 22-30492, 2022 WL 18776210, at *1 (5th Cir. Dec. 7, 2022). The 

award of Kenai’s attorney’s fees is therefore final. 

ISSUES ON APPEAL

Defendants’ appeal raises the following issues: did the district court 

err (1) in finding that Defendants wrongfully seized, detained, and converted 

Kenai’s vessel; (2) in awarding punitive damages; or (3) in awarding 

prejudgment interest on the punitive damages award?

Resolution of the second issue turns on the proper relationship 

between punitive damages and compensatory damages, both generally under 

maritime law and in this case specifically. Sub-issues include: (a) whether the 

district court erred in awarding punitive damages exceeding the 1:1 punitive 

damage to compensatory damage ratio set by Exxon Shipping Co. v. Baker, 554 

U.S. 471 (2008); (b) whether the district court erred as a matter of law in 

1 The magistrate judge’s report and recommendation and the district court’s order 

adopting same were not made a part of the ROA. The ROA goes only to E.D. La. ECF No. 

113, whereas these orders are E.D. La. ECF Nos. 116, 122. 

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awarding punitive damages in the absence of an explicit award of 

compensatory damages; and (c) if so, whether the district court’s award 

nevertheless should be affirmed because it had a compensatory component, 

either because the award of attorney’s fees was compensatory or because the 

punitive damage award itself was in part compensatory. 

DISCUSSION

I. Did the district court err in finding Defendants wrongfully 

arrested and converted Kenai’s vessel? 

“To recover for wrongful arrest of a vessel, there must be (1) no bona 

fide claim of a maritime lien on the vessel and [(2)] a showing of bad faith, 

malice, or gross negligence [on the part] of the offending party.” Comar 

Marine, Corp. v. Raider Marine Logistics, L.L.C., 792 F.3d 564, 574–75 (5th 

Cir. 2015) (citations and internal quotations omitted). “Whether a maritime 

lien exists is a question of law, reviewed de novo.” Id. at 575 (citations 

omitted). A district court’s determination of bad faith, on the other hand, is 

“a conclusion of fact, which we review under the deferential clear error 

standard.” Id. (citation omitted).

“[F]or a bench trial, . . . we will upset the district court’s findings of 

fact only if we are ‘left with the definite and firm conviction that a mistake 

has been committed.’” Luwisch v. Am. Marine Corp., 956 F.3d 320, 326 (5th 

Cir. 2020) (quoting Barto v. Shore Constr., LLC, 801 F.3d 465, 471 (5th Cir. 

2015)). “Moreover, and of particular relevance here, the clearly erroneous 

standard of review following a bench trial requires even ‘greater deference to 

the trial court’s findings when they are based on determinations of 

credibility.’” Id. (quoting Guzman v. Hacienda Records & Recording Studio, 

Inc., 808 F.3d 1031, 1036 (5th Cir. 2015)). “Accordingly, ‘[w]e entertain a 

strong presumption that the court’s findings must be sustained even though 

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this court might have weighed the evidence differently.’” Id. (quoting 

Johnson v. Cenac Towing, Inc., 544 F.3d 296, 303 (5th Cir. 2008)). 

The Federal Maritime Lien Act, 46 U.S.C. §§ 31341–31343, grants 

maritime liens to parties “providing necessaries to a vessel” and allows such 

parties to bring a civil action in rem to enforce the lien. Id. § 31342(a)(1)–(2). 

“‘Necessaries’ includes repairs, supplies, towage, and the use of a dry dock 

or maritime railway . . . .” Id. § 31301(4). Prior to Kenai’s payment of its final 

invoice, CP Marine had a valid lien on the IRON DON. See World Fuel Servs., 

Inc. v. MAGDALENA GREEN M/V, 464 F. App’x 339, 341 (5th Cir. 2012) 

(quoting, inter alia, Equilease Corp. v. M/V Sampson, 793 F.2d 598, 602 (5th 

Cir. 1986) (en banc) (A maritime lien “arises when the debt arises . . . .”)).

Because all amounts due had been paid with funds deposited in CP 

Marine’s account six days prior, the district court did not clearly err in 

finding that no valid lien existed at the time the IRON DON was seized. Once 

the debt giving rise to the lien was paid, the lien ceased to exist. World Fuel 

Servs., 464 F. App’x at 341 (“Where, as here, the debt is repaid and 

satisfaction is acknowledged, the lien ceases to exist.” (citing Mullane v. 

Chambers, 438 F.3d 132, 138 (1st Cir. 2006))). See also Argos Ports (Hous.) 

LLC v. Kirby Inland Marine, LP, 598 F. Supp. 3d 512, 519 (S.D. Tex. 2022) 

(“[A]ny claim T&T might have had would have been extinguished by 

payment.”).

2

Defendants argue that they seized the vessel because (a) Kenai’s 

check had not cleared and (b) Dardar was concerned that Plaintiff might 

2 See also Bunkers Int’l Corp. v. M/V Wuchow, No. 15-5221, 2016 WL 1161288, at *3 

n.1 (E.D. La. Mar. 23, 2016) (“BIC’s purported maritime lien would be extinguished if BIC 

received payment from China Navigation pursuant to its invoice.”); Maritrend, Inc. v. M/V 

SEBES, No. 96–3140, 1997 WL 660614, at *2 (E.D. La. Oct. 23, 1997) (“the contractor 

acquires a maritime lien against the vessel until payment is satisfied”).

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cancel the check and remove the funds from CP Marine’s account. The 

district court rejected this explanation because (a) Defendants had 

“produced no evidence that these check payments did not clear or were 

cancelled;” (b) Dardar’s testimony lacked credibility; (c) the check had 

cleared on February 28, 2019; and (d) the funds had been in CP Marine’s 

account for six days at the time the IRON DON was seized. On this record, 

ample evidence supports the district court’s conclusion that well before the 

seizure, CP Marine’s bill was paid in full, so there was no longer a valid lien.

Defendants also argue that the IRON DON was never arrested and 

thus could not have been arrested wrongfully. Contrary to the district court’s 

finding that the AUNT DI “rammed” the SUPER T and endangered lives, 

“the evidence overwhelmingly shows that the bumping was controlled, safe 

and appropriate under the circumstances.” According to Defendants, the 

bumping of the SUPER T was “initiated for a proper purpose,” i.e., “to 

create a pause in the unfolding events so they could be rationally 

discussed . . . .” Furthermore, there is no evidence that Defendants ever 

refused a request to return the IRON DON, and once the request was made 

on March 10, it was returned the next day. 

Next, Defendants contend that Kenai did not prove that any arrest or 

detention was in bad faith: “the ‘gravamen of the right to recover damages 

for wrongful [arrest] or detention of vessels.’” Defendants were “fully 

justified in the name of safety in stopping Kenai’s effort to unilaterally 

remove the vessel from the shipyard . . . .” According to Defendants, the 

manner in which the SUPER T was removing the IRON DON was unsafe in 

that (a) it was being moved through a narrow channel, which imperiled CP 

Marine’s hopper barge and dry dock, and (b) the removal attempt was 

reckless in that the attempt was being made with only a single vessel. 

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Contrary to Defendants’ argument, the record contains ample 

evidence that the IRON DON was wrongfully arrested and, indeed, rammed 

and pinned against the bank. This evidence includes the testimony of 

Jonathan Tingley, video evidence of the ramming, the testimony of Austin 

Adler, and even that of Joseph Dardar.3 Defendants’ bad faith detention and 

conversion of the vessel is also supported by Defendants’ intentional 

blocking of the canal for five days following the ramming.

Kenai presented sufficient evidence and testimony to support the trial 

court’s finding that Defendants acted “in bad faith and with wanton 

disregard of the legal rights of Plaintiff.” This evidence includes the backdrop 

against which the seizure occurred: the deterioration of the parties’ 

relationship following Plaintiff’s request for a written guarantee on the 

quality of the work and Defendants’ refusal to provide same. It also includes 

(a) Defendants’ demand that Plaintiff remove its personnel from the vessel 

and equipment from the shipyard although their presence had been a part of 

the original agreement; (b) Defendants’ threat to charge Plaintiff a storage 

fee of $1,000 per day if the equipment wasn’t removed; (c) Defendants’ 

threat to move the IRON DON from the dry dock to the water and thereafter 

charge $5,000 per day until it was removed because “[Dardar] wanted them 

off [his] property . . . to motivate them to get off [his] property”; (d) the 

AUNT DI’s ramming of the SUPER T and the IRON DON, which the trial 

court found to be in “callous disregard for the safety of the people aboard the 

3 Although Defendants portray the contact as “the bumping of one tug into the 

other,” Dardar admitted that he “laid up against him hard, and [Dardar] had a hold against 

him.” Tingley described it as “extreme acceleration.” After viewing the video, the district 

judge said, “[W]hat I’m seeing here is very troubling. The behavior here is very troubling.” 

The court also stated, “[H]ow somebody goes to that extreme and puts life at stake because 

they think somebody owes them money is a very hard hurdle for me to overcome in my fact 

finding.” We conclude that there was no clear error in the district court’s assessment.

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vessels”; (e) Joseph Dardar’s threat made during the course of the vessel’s 

arrest that “[i]f I had my shotgun, you’d be dead”; (f) Defendants blocking 

the canal for five days following the seizure; (g) the district court’s disbelief

of Dardar’s purported reason for holding the vessel (waiting for the check to 

clear); and (h) TME’s billing Plaintiff for TME’s wrongful seizure of the 

IRON DON on March 5, which the court found was “for the sole purpose of 

intimidating and threatening Plaintiff” and which Dardar later admitted was 

“inappropriate” and should never have been sent. 

In conclusion, the district court did not clearly err in finding that 

Kenai’s vessel was wrongfully seized and converted in bad faith and in 

reckless disregard of Kenai’s rights. 

II. Did the district court err in awarding punitive damages?

A. Did the facts support such an award?

General maritime law has long recognized the availability of punitive

damages in the appropriate case. Atl. Sounding Co. v. Townsend, 557 U.S. 404, 

414–15 (2009). As the Court in Townsend stated, “[P]unitive damages have 

long been available at common law[,] [and] . . . the common-law tradition of 

punitive damages extends to maritime claims.” Id. at 414. See also Exxon, 554 

U.S. 471.4 “Punitive damages have long been an available remedy at common 

law for wanton, willful, or outrageous conduct,” Townsend, 557 U.S. at 409, 

but have also been awarded when a defendant engaged in “reckless action,” 

4 “[Exxon] and Townsend affirm that, as a general rule, punitive damages are 

available in appropriate cases under the general maritime law. Thus, punitive damage 

awards are generally proper in cases in admiralty jurisdiction.” 1 Thomas J. Schoenbaum, 

Admiralty & Maritime Law § 5:10 (6th ed. 2022).

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that was “worse than negligent but less than malicious,” Exxon, 554 U.S. at 

510–11.

5

As summarized in the preceding section, Kenai presented sufficient 

evidence and testimony to support the district court’s finding that 

Defendants’ conduct was in bad faith, in callous disregard for the safety of 

the people aboard the vessels, and in reckless disregard of Kenai’s rights. 

Hence, the district court did not clearly err in finding facts sufficient to 

support an award of punitive damages.

5 The Court in Townsend noted that maritime punitive damages are available in a 

wide variety of circumstances as exemplified in maritime law’s earliest cases, citing, for 

example, Boston Manufacturing Co. v. Fiske, 3 F. Cas. 957, 957 (Story, Circuit Justice, C.C. 

Mass. 1820) (No. 1,681) (“In cases of marine torts, or illegal captures, it is far from being 

uncommon in the admiralty to allow costs and expences, and to mulct the offending parties, 

even in exemplary damages, where the nature of the case requires it[.]”). Townsend, 557 

U.S. at 411–12.

In short, prior to enactment of the Jones Act in 1920, “maritime 

jurisprudence was replete with judicial statements approving punitive 

damages, especially on behalf of passengers and seamen.” Robertson, 

Punitive Damages in American Maritime Law, 28 J. Mar. L. & Comm. 73, 

115 (1997) (hereinafter Robertson); see also 2 Sedgwick § 599b, at 1156 

(“Exemplary damages are awarded in Admiralty, as in other 

jurisdictions”); 2 J. Sutherland, Law of Damages § 392, p. 1272 (4th ed. 

1916) (“As a rule a court of equity will not award [punitive] damages, but 

courts of admiralty will . . .” (footnote omitted)).

Id. at 412.

Townsend cited with approval Professor Robertson’s article which discussed the 

general availability of punitive damages in admiralty. Id. Professor Robertson’s article 

surveyed a variety of early maritime cases recognizing such awards. 28 J. Mar. L. & Com. 

at 88–115. Two such cases involved conversion, id. at 114–15, and one dealt with a 

steamboat that “deliberately rammed its rival, causing relatively slight property damage 

and no personal injuries,” id. at 90.

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B. Was there legal error?

1. Is Exxon v. Baker’s ratio absolute?

“A district court’s damages award is a finding of fact, which this court 

reviews for clear error.” Comar Marine, 792 F.3d at 574 (quoting Jauch v. 

Nautical Servs., Inc., 470 F.3d 207, 213 (5th Cir. 2006) (per curiam)). But, 

“[d]espite this court’s typical deference to a district court’s factual findings, 

‘a judgment based on a factual finding derived from an incorrect 

understanding of substantive law must be reversed.’” Barto, 801 F.3d at 471

(quoting Mobil Expl. and Producing U.S., Inc. v. Cajun Const. Servs., Inc., 45 

F.3d 96, 99 (5th Cir. 1995)). Thus, this court reviews de novo the legal 

questions of whether Exxon’s 1:1 ratio applies in all maritime cases, and 

whether that ratio should have been applied by the district court, regardless 

of its specific factual findings as to Defendants’ level of culpability and the 

amount of harm done to Kenai. 

According to Defendants, Exxon held that “a 1:1 [punitive damage to 

compensatory damage] ratio . . . is a fair upper limit in such maritime cases.” 

554 U.S. at 513. Thus, Defendants argue, since no compensatory damages 

were awarded here, any punitive damage award impermissibly exceeds the 

ratio.

Plaintiff offers three reasons why Defendants’ position is wrong. First, 

Exxon’s 1:1 ratio does not apply in this case because it only applies in cases 

involving gross negligence and only where the compensatory damages are 

significant. Here, Defendants’ conduct was intentional and malicious, and 

the district court “limited [compensatory damages] to attorney’s fees.” 

Second, Plaintiff maintains that if Exxon does require compensatory damages 

as a prerequisite to an award of punitive damages, the attorney’s fees 

awarded by the district court were compensatory. Finally, even if attorney’s 

fees cannot be considered compensatory, the district court’s punitive 

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damage award recognized and was measured by the harm that Plaintiff 

suffered from Defendants’ five-day seizure and detention of its vessel. Thus,

the punitive damage award “was, in fact, compensatory – or at the very least, 

it had . . . a compensatory flavor[.]” 

Regarding Plaintiff’s first argument, this court has not had occasion to 

consider whether Exxon’s 1:1 ratio applies in all cases or only in cases “like” 

Exxon, involving “reckless action, profitless to the tortfeasor, resulting in 

substantial recovery for substantial injury[,]” and where the conduct was 

“worse than negligent but less than malicious.” Exxon, 554 U.S. at 510–11. 

Nor, to our knowledge, have the other federal courts of appeal or district 

courts. Some state courts, however, have.

The majority of the cases that have squarely considered whether 

Exxon sets a hard rule applicable to all cases hold that it does not. See, e.g., 

Clausen v. Icicle Seafoods, Inc., 272 P.3d 827, 835 (Wash. 2012), cert. denied, 

568 U.S. 823 (2012) (“The Exxon case cannot be read as establishing a broad, 

general rule limiting punitive damage awards, primarily because nowhere in 

the opinion can such a rule be found.”); McWilliams v. Exxon Mobil Corp.,

2012-1288 (La. App. 3 Cir. 4/3/13), 111 So. 3d 564, 579, writ denied, 2013-

1402 (La. 11/8/13), 125 So. 3d 451 (Exxon “did not establish a general rule 

pertaining to punitive damages, but rather, narrowly tailored that result to 

the unique case before it.”); Colombo v. BRP US Inc., 179 Cal. Rptr. 3d 580, 

606 (Cal. Ct. App. 2014) (“[W]e conclude that the [C]ourt [in Exxon] did not 

intend to create . . . a bright-line rule limiting punitive damages to the amount 

of compensatory damages awarded to a plaintiff.”); Warren v. Shelter Mut. 

Ins. Co., 2016-1647 (La. 10/18/17), 233 So. 3d 568, 590 (“[W]e find the Court 

in Exxon was expressly attempting to set a ‘fair upper limit’ for punitive 

damages ‘in cases with no earmarks of exceptional blameworthiness . . . .’” 

(quoting Exxon, 554 U.S. at 513)). In a Winter 2021 article surveying the 

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jurisprudence on this issue, Professor Thomas C. Galligan, Jr. summarized 

the case law as follows: 

To recap, virtually all of the courts that have meaningfully 

discussed the impact of Exxon’s statement concerning the 1:1 

ratio of punitive to compensatory damages have refused to 

treat it as a per se rule applicable in all admiralty cases. Rather 

than emphasizing the broad scope of Justice Souter’s review of 

the relevant social science data on punitive damages, the lower 

courts have emphasized the limiting language in Justice 

Souter’s opinion. That is, the lower courts have treated the 1:1 

ratio as the precise holding of the Exxon case, a holding 

applicable to the facts before the Court. At most, the courts 

have treated Exxon as a rule for cases “like” Exxon. Those are 

cases where the defendant’s conduct constituted recklessness 

or gross negligence and not worse, such as willful, wanton, 

malicious, arbitrary, capricious, or intentional wrongdoing. 

Additionally, Exxon was a case in which the damage was not 

difficult to detect—it was substantial and overt. It was also a 

case where the compensatory damages, fines and penalties, 

cleanup costs, and settlements of claims were substantial, even 

gargantuan. Moreover, Exxon was a case in which the 

defendant’s behavior—not taking action to relieve a known, 

relapsed alcoholic of command of an oil tanker—was not 

motivated by profit.

Thomas C. Galligan, Jr., There Are More Things to Punitive Damages in 

Admiralty Than the 1:1 Ratio Set Forth in Exxon’s Legal Philosophy, 81 La. L. 

Rev. 395, 420–21 (2021).6

6 Galligan’s article argues that the appropriate reading of Exxon is that it created a 

variable, multi-factor approach to punitive damages in maritime cases, rather than a 

universal 1:1 rule. The variable approach is supported by a careful reading of Exxon itself, 

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Schoenbaum’s treatise, on the other hand, states without elaboration 

that Exxon “ruled that ‘a punitive to compensatory ratio of 1:1 . . . yields 

maximum punitive damages[ ]’” and that “[t]his ratio, the Court held, 

constitutes a ‘fair upper limit’ for maritime punitive damage awards.”

Schoenbaum, supra, at § 5:10. Schoenbaum cites for this proposition Norfolk 

& Portsmouth Belt Line Railroad Co. v. M/V MARLIN, No. 08-134, 2009 WL 

1974298, at *4 (E.D. Va. Apr. 3, 2009), and Priyanto v. M/S Amsterdam, No. 

07-3811, 2009 WL 1202888 (C.D. Cal. Apr. 30, 2009). But neither cited case 

dealt directly with the issue here: whether Exxon’s 1:1 ratio applies in all 

cases.7

Notably, Professor Galligan discusses Norfolk & Portsmouth at length. 

81 La. L. Rev. at 407–09. He concludes that Norfolk & Portsmouth 

“essentially stands alone.” Id. at 409.

the desirability of flexibility in imposing punitive damages for purposes of adequate 

punishment and efficient deterrence, and the jurisprudence since Exxon. 

81 La. L. Rev. at 395. See also Erin L. Brooks, A Rule Old and New, Borrowed and Blue: 

Exxon Adapts State Punitive Liability Law to Craft New Interpretation in Admiralty, 54 St. 

Louis U. L.J. 357, 380 (2009) (“Under Exxon, punitive damages must only be limited in 

precise proportion to actual damages when the conduct is not exceptionally blameworthy 

(intentional, malicious, or driven for gain) or when it is without ‘modest economic harm or 

[low] odds of detection.’”) (citing Exxon, 554 U.S. at 513).

7 For example, in Norfolk & Portsmouth, a maritime allision case, the court denied 

plaintiff’s motion to amend its complaint to add a claim for damages pursuant to a Virginia 

punitive damage statute that provided for a “strict and inflexible [3:1] ratio of punitive 

damages to actual or compensatory damages . . . [which] automatically applied . . . .” 2009 

WL 1974298, at *4. The court denied plaintiff’s motion to amend because Virginia’s 

“automatic punitive damage remedy in the form of triple damages is inconsistent with 

Exxon’s 1:1 ratio . . . and therefore conflicts with the general maritime law.” Id. But while 

Norfolk & Portsmouth did not confront the precise issue of whether Exxon created a hard 

cap on all maritime punitive damage awards, it suggested in dicta that it did not. See id. at 

*3 (characterizing Exxon’s holding as, “except for the most extreme cases, the maximum 

permissible ratio is likely 1:1.” (emphasis added) (citing Exxon, 554 U.S. at 514–15)).

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We hold that the majority position is the correct reading of Exxon for 

the following reasons. First, the language of Exxon itself strongly suggests 

that the 1:1 ratio applies, to use the words of the Court, in “cases like [that]

one,” 554 U.S. at 513, which was described as “a case of reckless action, 

profitless to the tortfeasor, resulting in substantial recovery for substantial 

injury[,]” id. at 510–11. The court further defined Exxon’s conduct as 

“worse than negligent but less than malicious.” Id. at 510. 

Second, there is nothing in the Supreme Court’s subsequent maritime 

punitive damage cases suggesting that 1:1 is a hard and inflexible rule. In 

Townsend, decided a year later, the Court considered this an open question. 

See Townsend, 557 U.S. at 424 n.11 (“Nor have petitioners argued that the 

size of punitive damages awards in maintenance and cure cases necessitates 

a recovery cap, which the Court has elsewhere imposed. We do not decide 

these issues.” (internally citing Exxon, 554 U.S. at 514–15)).

Third, where the conduct is intentional and malicious, and the 

compensatory damages are small, imposing the 1:1 ratio would do little to 

serve the twin purposes of punitive damages: to punish the wrongdoer and 

deter his and others’ similar future conduct. Exxon, 554 U.S. at 492 (“[T]he 

consensus today is that punitives are aimed not at compensation but 

principally at retribution and deterring harmful conduct.”).

Defendants’ conduct here, unlike that in Exxon, was intentional: the 

ramming of the SUPER T and its tow, the IRON DON. It was not done for 

purposes of safety but in anger. (See, e.g., Dardar’s threat that “[i]f I had my 

shotgun, you’d be dead.”). The district court found that Defendants’ 

conduct displayed “callous disregard for the safety of the people aboard the 

vessels” and was “in bad faith and with wanton disregard of the legal rights 

of Plaintiff.” As reviewed above, there is no clear error in this finding. 

Furthermore, unlike Exxon, where the compensatory damages were massive,

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the harm suffered by the five-day delay in the return of Kenai’s vessel was 

relatively small.8

2. Do punitive damages require compensatory damages?

We need not resolve this issue now. As explained below, it is unclear 

whether the district court intended her award to be compensatory, at least in 

part. Because we remand to the district court for clarification on that issue, 

we pass on this thornier question.

3. Was this attorney’s fee award compensatory?

Kenai contends that, even if a compensatory damage award is 

necessary in order to obtain punitive damages, the attorney’s fees were 

awarded as compensatory damages. Defendants cite Budinich v. Becton 

Dickinson & Co., 486 U.S. 196, 200 (1988) for the proposition that “[a]s a 

general matter . . . a claim for attorney’s fees is not part of the merits of the 

action to which the fees pertain.” Therefore, contend Defendants, the 

attorney’s fees awarded by the district court were awarded as costs and not 

damages and cannot form a foundation for the award of punitive damages. 

Defendants maintain that The Apollon, 22 U.S. 362 (1824), relied on by Kenai, 

is inapposite in that here, unlike in Apollon, there was no proof of attorney’s 

fees offered at trial. 

While there is some basis for Kenai’s position as a general proposition, 

it ultimately falls short under the law governing wrongful arrest and the facts 

8 Awards of punitive damages are, of course, constrained by “[t]he Due Process 

Clause of the Fourteenth Amendment [which] prohibits the imposition of grossly excessive 

or arbitrary punishments on a tortfeasor.” State Farm Mut. Auto. Ins. Co. v. Campbell, 538 

U.S. 408, 416 (2003). See also TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 446 

(1993); Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867, 884–85 (5th Cir. 2013), cert denied 

sub nom., Accenture, L.L.P. v. Wellogix, Inc., 573 U.S. 904 (2014); Lincoln v. Case, 340 F.3d 

283, 292 (5th Cir. 2003).

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of this case. We have stated the following about the award of attorney’s fees 

as damages in wrongful seizure cases:

The reasons for the award of [such] damages are analogous to 

those in cases of malicious prosecution. The defendant is 

required to respond in damages for causing to be done through 

the process of the court that which would have been wrongful 

for him to do himself, having no legal justification therefor and 

acting in bad faith, with malice, or through a wanton disregard 

of the legal rights of his adversary.

Frontera Fruit Co. v. Dowling, 91 F.2d 293, 297 (5th Cir. 1937).

Thus, by way of analogy, for common law malicious prosecution 

actions, “[c]ompensatory damages for tangible losses or harm normally 

include reasonable attorney fees and other expenses incurred in defending 

the wrongful criminal or civil litigation or avoiding or quashing abusive 

process . . . .” Dobbs, Hayden, & Bublick, supra, at § 596; cf. also Hale v. Fish, 

899 F.2d 390, 403–04 (5th Cir. 1990) (reinstating § 1983 plaintiff’s award of 

$25,000 “for the amount expended in his defense of the criminal charges 

against him”).

Such awards are more properly categorized as compensatory damages 

only when they were incurred as “collateral legal expenses”—defined as 

attorneys’ fee outlays incurred in some way other than the proceeding in 

which the attorneys’ fee award is being sought . . . .” David W. Robertson, 

Court-Awarded Attorneys’ Fees in Maritime Cases: The “American Rule” in 

Admiralty, 27 J. Mar. L. & Com. 507, 511 (1996) (emphasis added). 

However, many courts make such awards without drawing this distinction.

See id. at 539 (citing, inter alia, State Bank & Tr. Co. of Golden Meadow v. Boat 

D.J. Griffin, 755 F. Supp. 1389 (E.D. La. 1991)).

Here, since the attorney’s fees awarded were in connection with 

services rendered in this case, there was no other proceeding in which 

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attorney’s fees were incurred and thus, no “collateral legal expenses.” The 

magistrate judge’s recommendation limited the attorney’s fees in large 

measure to that part of the case dealing with the wrongful seizure (excluding 

the fees incurred in connection with the unsuccessful breach of contract 

claim). Still, the fees awarded were earned in this, not a collateral, proceeding 

and, therefore, may not properly be considered compensatory damages.9

4. Was the punitive damage award partly compensatory?

In connection with its argument on prejudgment interest, Kenai 

argues that the language and reasoning of the district court’s award of 

punitive damages shows that the award was intended to be compensatory, at 

least in part. Defendants maintain the award was “entirely punitive” because 

“the district court found that Kenai suffered no damage from delay at CP 

Marine’s shipyard.” 

In this case, the district court’s ruling strongly suggests that the 

punitive damages award was intended, at least in part, to compensate Kenai 

for the five-day loss of its vessel:

Although the Court finds that Defendants’ performance was 

not dilatory and did not cause Plaintiff’s late arrival in Alaska, 

Defendants’ wrongful detention of Plaintiff’s vessel plainly delayed 

Plaintiff by five days. Therefore, as a measure of punitive 

damages, the Court will award Plaintiff the value of its missed 

contract days for the days that Defendants wrongfully detained 

the vessel.

Here, the district court found that Defendants converted Plaintiff’s 

vessel for five days. The district court’s discussion of Defendants’ bad faith 

9 We again note that Defendants’ separate appeal of the attorney’s fees award was 

dismissed for want of prosecution. Kenai Ironclad, 2022 WL 18776210, at *1. Thus, this 

award is final.

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conduct in the court’s Conclusions of Law is entitled “Wrongful Arrest and 

Conversion.”

“Under the general maritime law, as under the common law of torts, 

a person may be liable for certain intentional wrongs, such as conversion[.]”

Schoenbaum, supra, at § 5:3 (citing The Lydia (Hugh D. MacKenzie Co. v. 

Steamship Lydia), 1 F.2d 18 (2d Cir. 1924)). The Fifth Circuit looked to the 

“landside context” for this maritime tort to define it as “the unlawful and 

wrongful exercise of dominion, ownership or control over the property of 

another, to the exclusion of the same rights by the owner.” Goodpasture, Inc. 

v. M/V Pollux, 602 F.2d 84, 87 (5th Cir. 1979) (citing Bankers Life Ins. Co. v. 

Scurlock Oil Co., 447 F.2d 997, 1004 (5th Cir. 1971) (applying Texas law)). 

See also 4 H Const. Corp. v. Superior Boat Works, Inc., 659 F. Supp. 2d 774, 

780 (N.D. Miss. 2009), aff’d, 579 F. App’x 278 (5th Cir. 2014) (finding 

Mississippi state law of conversion relevant because its application “would 

not interfere with the uniformity or characteristic features of admiralty and 

maritime law[]”); Restatement (Second) of Torts § 222A (Am. L. Inst. 

1965) (defining “conversion” as “an intentional exercise of dominion or 

control over a chattel which so seriously interferes with the right of another 

to control it that the actor may justly be required to pay the other the full 

value of the chattel.”).

Some courts have found that maritime law requires a finding of bad 

faith to establish conversion, at least in the context of wrongful attachment. 

See Furness Withy (Chartering), Inc., Panama v. World Energy Sys. Assocs., Inc., 

854 F.2d 410, 412 & n.6 (11th Cir. 1988). See also Comar Marine, 792 F.3d at 

575 n.32 (citing Furness with approval in describing burden of proving 

wrongful seizure and stating that it requires showing of bad faith). See also 

Restatement (Second) of Torts § 222A (identifying good faith as one of six 

“important” factors “[i]n determining the seriousness of the interference 

and the justice of requiring the actor to pay the full value”). Ultimately, the 

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exact contours of the maritime tort of conversion need not be defined here, 

as the district court correctly found that Defendants wrongfully exercised 

control over Kenai’s vessel to Kenai’s exclusion and that Defendants did so 

in bad faith.10

Defendants argue that despite the district court’s finding that 

Defendants converted Kenai’s vessel resulting in its loss of use for five days 

and despite the court’s use of the vessel’s daily rate as the measure of 

punitive damages, the court’s award was in no way compensatory. While the 

district court’s reference to the tort of conversion tends to support Kenai’s 

position that the award is in part compensatory, there is some ambiguity in 

the trial court’s decision. As a result, we remand for clarification. If the award 

was intended to be compensatory in part, the court should make clear its 

delineation of compensatory and punitive damages. 

III. Did the district court err in awarding pre-judgment interest?

Defendants urge that the district court erred in awarding prejudgment 

interest, as it is not allowed under Louisiana law or federal law.11 Kenai 

responds that, while “prejudgment interest is not [generally] applicable to 

punitive damages awards under maritime cases[,]” the award here is actually 

10 The district court called this an act of conversion, but there is some authority 

that this is perhaps more accurately called trespass to chattel. See Restatement (Second) of 

Torts § 222A cmt. c (distinguishing between two torts and explaining that conversion 

entitled plaintiff to “full value of the chattel” while trespass to chattel allows a plaintiff to 

“recover for the diminished value of his chattel because of any damage to it, or for the 

damage to his interest in its possession or use” (emphasis added)). Again, the exact contours 

of the tort need not be fully explored, as, either way, Kenai is entitled to compensation for 

the loss of use of its property.

11 Defendants also argue that the district court’s judgment did not grant 

prejudgment interest on the award of attorney’s fees, but, to the extent that it did so, this 

was inappropriate. This is not before the court since the attorney’s fee award was appealed 

separately and dismissed for want of prosecution. 

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compensatory in nature, at least enough so to justify an award of prejudgment 

interest. Kenai points the panel to Illinois Central Railroad Co. v. Texas 

Eastern Transmission Corp., 551 F.2d 943 (5th Cir. 1977), where the court 

affirmed pretrial interest on demurrage although the demurrage award was 

partly punitive in nature. 

Defendants dispute Kenai’s allegation that the punitive damages 

award was partly compensatory because “the district court found that Kenai 

suffered no damage from delay at CP Marine’s shipyard.” This, argue 

Defendants, is a critical fact that distinguishes Illinois Central. 

“As a general rule, prejudgment interest should be awarded in 

admiralty cases—not as a penalty, but as compensation for the 

use of funds to which the claimant was rightfully entitled.” The 

district court has discretion to deny prejudgment interest 

“only when there are ‘peculiar circumstances’ that would 

make it inequitable for the losing party to be forced to pay 

prejudgment interest.”

Comar Marine, 792 F.3d at 580 (quoting Noritake, 627 F.2d at 728–29). See 

also In re Signal Int’l, LLC, 579 F.3d 478, 500 (5th Cir. 2009) (citing Corpus 

Christi Oil & Gas Co. v. Zapata Gulf Marine Corp., 71 F.3d 198, 204 (5th 

Cir.1995)).

As discussed earlier, we are unable to resolve this issue because it is 

unclear whether the district court intended the punitive damages award to be 

in part compensatory. If, as in Illinois Central, it was intended to be partly 

compensatory, the district court’s grant of prejudgment interest was 

appropriate. The case is remanded to the district court for clarification of this 

issue.

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CONCLUSION

In sum: we AFFIRM the district court’s finding that Defendants 

wrongfully seized and converted Kenai’s vessel in bad faith and in a manner 

egregious enough to warrant an award of punitive damages. We VACATE

the district court’s award of damages and REMAND on the limited basis of 

clarifying the court’s award, specifying whether any part of the award was 

intended as compensatory damages and, if so, in what amount. In doing so, 

the district court should make whatever findings of fact and conclusions of 

law are necessary to arrive at its decision. Additional briefing of the parties is 

strongly encouraged. Whatever the decision of the district court, it will not 

be necessary for the parties to file a new notice of appeal in order to obtain 

appellate review of that decision. The parties need only file certified copies 

of the district court’s ruling plus any supplementary briefs and materials. The 

matter will then be referred to this panel. See United States v. Gaston, 608 

F.2d 607, 614 n.3 (5th Cir. 1979); Chaney v. Schweiker, 659 F.2d 676, 679 n.5 

(5th Cir. 1981); Royal Bank of Canada v. Trentham Corp., 665 F.2d 515, 519 

(5th Cir. 1981).

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