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. e du/thir dc ir c uit_1996/107UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 95-2062

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WILLIAM G. O'CONNELL, III,

Appellant

v.

INTEROCEAN MANAGEMENT CORP.

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On Appeal from the United States District Court for the Eastern District of Pennsylvan ia (D.C. No. 94-cv-04121)

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Submitted Under Third Circuit LAR 34.1( a) Monday, June 10, 1996

BEFORE: SLOVITER, Chief Judge, COWEN and GARTH, Circuit Judges

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(Opinion filed July 19, 1996)

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William G. O'Connell , III 22 Wellington Avenue West Orange, New Jer sey 07052

Pro Se Appellant

Frank W. Hunger
Assistant Attorney General
Michael R. Stiles
United States Attorn ey

Damon C. Miller U.S. Department of J ustice Torts Branch, Civil Division
P.O. Box 14271 Washington, D.C. 20 044-4271Attorneys for Appell ee

Interocean Managemen t Corp.

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OPINION OF THE COURT

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GARTH, Circuit Judge:

William G. O'Connell, III appeals from the district court's order dismissing his complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Proc edure 12(b)(1). The primary issue on appeal, which is on e of first impression in this circuit, is whether O'Connell's punitivedamage claim premised on an arbitrary and willful f ailure to pay maintenance and cure is barred by the exclusivity p rovision of the Suits in Admiralty Act ("SAA"), 46 U.S.C.  745. We hold that the SAA's exclusivity clause divested the dist rict court of subject matter jurisdiction over O'Connell's puniti ve-damage claim, and we accordingly affirm.

I. The complaint claimed subject matter juris diction under
28 U.S.C.  1333, as a case of admiralty or maritime jurisdiction. We are vested with appellate jurisdiction ov er the district court's 12(b)(1) dismissal of the complain t pursuant to
28 U.S.C.  1291. Our review of the district court's dismissa l for lack of subject matter jurisdiction is plenary. Delaware Valley Citizens Council for Clean Air v. Davis, 932 F.2d 256, 264 (3d Cir. 1991); York Bank & Trust Co. v. Federal Sa v. & Loan Ins. Corp., 851 F.2d 637, 638 (3d Cir. 1988), cert. deni ed, 488 U.S. 1005 (1989); Haydo v. Amerikohl Mining, Inc., 830 F .2d 494, 496 (3d Cir. 1987).

II. Plaintiff William O'Connell was employed a s a merchant seaman aboard the M/V Gopher State, a vessel owned by the United States Maritime Administration ("MARAD") and operat ed by defendant Interocean Management Corporation ("IOMC"), as an agent for the United States. On July 19, 1991, onboard the G opher State, O'Connell accidentally severed the tendon in his le ft little finger while operating a grinding wheel. On July 24, 1991, O'Connell sought treatme nt at St. Barnabas Medical Center, located in New Jersey. De spite two surgical procedures and a skin graft, O'Connell wil l never regain full use of his little finger, which is permanently deformed. In November 1991, O'Connell signed a relea se, pursuant to which IOMC agreed to pay O'Connell $17,500 (for lost wages)and all medical expenses incurred as a result of th e injury

sustained while onboard the Gopher State. IOMC del ayed paying O'Connell's medical expenses, however, despite O'Co nnell's numerous phone calls and letters. In May 1994, a b alance of $8,924.22 remained outstanding on O'Connell's medic al bill from St. Barnabas. Although IOMC ultimately paid the ou tstanding medical bill, it did so only after O'Connell hired an attorney to sue for payment. On July 5, 1994, O'Connell filed the insta nt action, alleging that IOMC was liable for punitive damages in that it had arbitrarily and capriciously delayed paying mainten ance and cure. Among other motions, IOMC moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), contending that 4 6 U.S.C.  745 precludes a seaman's claim for maintenance and cure against a private operator of a vessel owned by the United St ates. The district court granted IOMC's motion to dismiss, co ncluding that all of O'Connell's claims are within the same subje ct matter as a claim for which the SAA provides a remedy and there fore within the exclusivity provision. District Court Opinion at 8. The instant appeal followed.

III. Under general maritime law, a member of a ship's crew who was injured or became ill while serving onboard the vessel could recover "maintenance and cure" from the shipo wner/employer. "The right to maintenance and cure is an ancient ri ght given to seamen by the maritime law." Jordine v. Walling, 1 85 F.2d 662, 665 (3d Cir. 1992). See generally Cox v. Dravo Cor p., 517 F.2d 620 (3d Cir.) (providing a detailed historical exeg esis of the origin of "maintenance and cure"), cert. denied, 42 3 U.S. 1020 (1975). "Maintenance is the living allowance for a seaman while he is ashore recovering from injury or illness. Cu re is payment of medical expenses incurred in treating the seaman 's injury or illness." Barnes v. Andover Co., L.P., 900 F.2d 63 0, 633 (3d Cir. 1990) (citing Vaughan v. Atkinson, 369 U.S. 52 7, 531 (1962); Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 528 (193 8)). An employer's obligation to furnish maintenance and cu re continues "until the seaman has reached the point of maximum cure, that is until the seaman is cured or his condition is diagn osed as permanent and incurable." Id. at 633-34. The remedy of "maintenance and cure" is a contractual obligation, which is independent of the shipowner's negligence or even the seaman's own negligence: [T]his obligation [of maintenance and cure ] has been recognized consistently as an implied provision in contracts of marine employment. [T]he liability . . . in no sense is predicated on the fault or negligence of the shipowner. . . . So bro ad is the shipowner's obligation, that negligence or acts short of culpable misconduct on the seaman's part will not relieve him of the responsibility.Aguilar v. Standard Oil Co., 318 U.S. 724, 730-31 ( 1943)

(footnotes omitted). If the shipowner unreasonably refuses to p ay a marine employee's claim for maintenance and cure, the empl oyee may recover consequential damages, including lost wages , pain and suffering, and attorneys' fees and costs. See Deis ler v. McCormack Aggregates, Co., 54 F.3d 1074, 1084-85, 1 087 (3d Cir. 1995). See also Sims v. United States War Shipping Admin., 186 F.2d 972, 973-74 (3d Cir.) ("We may regard it as se ttled law that if a man is injured or becomes ill while on a voyag e, neglect to fulfill the duty to provide maintenance and cure ma y impose damages beyond mere cost of food and medicines.") ( citing The Iroquois, 194 U.S. 240 (1904)), cert. denied, 342 U .S. 816 (1951). Although we have yet to address the issue directly, some courts have allowed recovery of punitive damag es against private shipowners who were not agents of the Unite d States and who, taking a "callous" or "recalcitrant" view of t heir obligations, "arbitrarily and willfully" refused to pay maintenance and cure. See Hines v. J.A. LaPorte, I nc., 820 F.2d 1187 (11th Cir. 1987); Robinson v. Pocahontas, Inc. , 477 F.2d 1048 (1st Cir. 1973). The majority of courts, howe ver, do not allow punitive damages, other than attorneys' fees, in those
circumstances. See Guevara v. Maritime Overseas Co rp., 59 F.3d 1496, 1513 (5th Cir. 1995), cert. denied, 116 S. Ct . 706 (1996); Roy Al Boat Management Corp., 57 F.3d 1495, 1505 (9 th Cir. 1995), cert. denied, 116 S. Ct. 708 (1996); Kraljic v. Ber man Enters., Inc., 575 F.2d 412 (2d Cir. 1978).

IV. As noted earlier, see supra note 1, O'Conn ell, in the instant action against IOMC, seeks compensatory dam ages, as well as punitive damages for IOMC's "arbitrary and willf ul" mishandling of his claim for maintenance and cure. O'Connell's claims, which are based on an injury sustained whil e employed as a crew member of a vessel owned by the United State s (through MARAD), are governed by the Clarification Act, 50 U .S.C. app.
 1291, which incorporates the Suits in Admiralty Ac t (SAA), 46

U.S.C.  741-52. See McMahon v. United States, 342 U.S. 25 , 26 (1951); Gaynor v. Agwilines, Inc., 169 F.2d 612, 61 4-15 (3d Cir. 1948), aff'd sub nom., Fink v. Shepard S.S. Co., 33 7 U.S. 810 (1949). The SAA and the Public Vessels Act ("PVA") , 46 U.S.C.
 781-790, permit admiralty suits, including an acti on to
enforce a seaman's entitlement to maintenance and c ure, to be brought against the United States for causes of act ion arising out of the operation of vessels owned by, or operat ed for, the United States. Manuel v. United States, 50 F.3d 12 53, 1255 (4th Cir. 1995). "Neither the SAA nor the PVA create ca uses of action against the United States. Instead, they act only as a waiver of the sovereign immunity of the United States in admi ralty cases."
Id. at 1255 n.1. Section 745 of the SAA, the so-called excl usivityprovision, precludes recovery against an agent of t he United

States operating a government-owned vessel on any c laim for which the SAA or the PVA provides a remedy against the fe deral government. Specifically, the exclusivity clause p rovides that "where a remedy is provided by [the SAA] it shall h ereafter be exclusive of any other action by reason of the same subject matter against the agent or employee of the United States . . . whose act or omission gave rise to the claim." 46 U.S.C.  745 (emphasis added). O'Connell argues that his claim charging a n arbitrary and willful failure to pay maintenance and cure in a timely manner, which, in essence, is a claim seeking punit ive damages, is distinct from the underlying claim for maintenan ce and cure. Because punitive damages cannot be recovered from t he United States, see Manuel, 50 F.3d at 1254, O'Connell reas ons that the SAA does not provide a "remedy" and therefore such punitivedamage claims do not fall within the purview of the exclusivity provision of section 745. There is a split of authority among the di strict courts
on this issue. Three district court have held that section 745 does not preclude claims for arbitrary and willful failure to pay maintenance and cure. See Abogado v. International Marine Carriers, 890 F. Supp. 626, 632 (S.D. Tex. 1995) (h olding that actions for willful and arbitrary denial of mainten ance and cure "do not fall within the exclusivity clause of  745"); Henderson v. International Marine Carriers, 1990 A.M.C. 400, 402 (E.D. La. 1989) ("[P]laintiff's claim for willful and arbitra ry failure to pay maintenance and cure must focus against the one who stopped the payments . . . . [The] SAA does not provide a remedy for this claim; therefore, the SAA exclusivity provisio n does not apply . . . ."), aff'd mem., 921 F.2d 275 (5th Cir. 1990); Shields v. United States, 662 F. Supp. 187, 190 (M. D. Fla. 1987) ("[S]uch arbitrary claims handling is an entirely d ifferent subject matter from the negligent conduct for which the SAA provides a remedy."). Several other district court s have reached the opposite conclusion. See Stewart v. United Sta tes, 903 F. Supp. 1540 (S.D. Ga. 1995); Smith v. Mar, Inc., 896 F. Supp. 75 (D.R.I. 1995); Fratus v. United States, 859 F. Supp . 991 (E.D. Va. 1994); Manuel v. United States, 846 F. Supp. 47 8 (E.D. Va. 1994), aff'd, 50 F.3d 1253 (4th Cir. 1995); Farnswo rth v. SeaLand Serv., Inc., 1989 WL 20544 (E.D. La. March 7, 1989), aff'd mem., 896 F.2d 552 (5th Cir.), cert. denied, 498 U. S. 880 (1990). To date, the only published court of appea ls decision
which addresses this issue is the Fourth Circuit's affirmance of Manuel. In Manuel, Michael Manuel, a crew member a board the M/V Cape Florida, a vessel owned by the United States a nd operated by International Marine Carriers, Inc. ("IMC"), sustai ned back injuries while lifting a water cooler cover. 50 F. 3d at 1254. IMC paid maintenance and cure until it found Manuel fit for duty approximately one month later. Id. Manuel alleged that he continued to experience back pain and required cont inuing medical care after his employer determined he was fit for d uty. Id. The district court granted summary judgment in favor of IMC and denied Manuel's motion for leave to amend his compl aint to statea claim for arbitrary and willful failure to pay ma intenance and

cure. Id. at 1254-55. On appeal, Manuel made the same argument r aised by O'Connell in the present case: a claim for arbitra ry and willful failure to pay maintenance and cure when due does n ot fall within the exclusivity provision of the SAA because puniti ve damage claims do not lie against the United States. The F ourth Circuit, in Manuel, acknowledged that a seaman could not bri ng a claim for punitive damages against the United States, but nev ertheless concluded that section 745 precluded Manuel's actio n for arbitrary and willful failure to pay maintenance cu re, reasoning that "[p]unitive damages [remedy] is merely an addi tional remedy
in the seaman's maintenance and cure action." Id. at 1260. Manuel reviewed the Supreme Court preceden ts which ultimately gave rise to the 1950 Congressional amen dment of
section 745 of the SAA. The Manuel court then reas oned: The SAA requires a seaman to bring his action against the U nited States, and not its agent, to collect unpaid maintenance an d cure. Because the subject matter of the seaman's claim is maintenance and cure, any arbitrary and willful failure to pay that claim must deal with and come within the same subject mat ter. Hence, it cannot be regarded as a cause of action separate from the simple failure to pay maintenance and cure benefits when due. Such punitive damages can be considered no more tha n an additional remedy within the seaman's maintenance a nd cure action. Thus the remedy provided by the SAA encomp asses the seaman's remedy for arbitrary and willful failure t o pay maintenance and cure benefits when due, and necessa rily bars any such action against IOMC.
The Manuel court then went on to discuss t he argument that the SAA does not provide a remedy for arbitrar y and willful failure to pay maintenance and cure because the Uni ted States is not subject to punitive damages by reason of its so vereign immunity. The Manuel court explained: [W]e reject [the] argument that the SAA do es not "provide a remedy" for the arbitrary a nd willful failure to pay maintenance and cur e. Manuel argues that the only remedy for the arbitrary and willful failure to pay maintenance and cure is punitive damages.
Because the SAA has not waived the United States' sovereign immunity with respect to suits for punitive damages, Manuel argues that the SAA does not provide a remedy for the arbitrary and willful failure to pay
maintenance and cure. We conclude that Manuel's argument merely attempts to creat e a cause of action out of the punitive damage s remedy. Manuel's action against IMC is on e to vindicate his entitlement to maintenanc e and cure resulting from his injury aboard the ship. In resolving his maintenance and cu re action against IMC, a court may grant punitive damages if it concludes that themaintenance and cure benefits were

arbitrarily and willfully withheld. The S AA, however, allows Manuel to vindicate his entitlement to maintenance and cure agains t the United States, but the sovereign immun ity power of the United States limits his remedies. Nonetheless, the SAA provides a remedy for Manuel's maintenance and cure
claim. Section 745 therefore bars Manuel' s action against IMC.

Id. at 1260 n.6. The reasoning of the Fourth Circuit in Man uel is persuasive, and we have no reluctance in following that rationale and disposition here. We agree that an action for arbitrary
denial of maintenance and cure benefits when due ar ises "by reason of the same subject matter" as the available claim against
the United States for maintenance and cure. We the refore hold that the exclusivity provision of the SAA bars O'Co nnell's claim for damages resulting from IOMC's arbitrary and wil lful failure to pay maintenance and cure when due.

V. For the foregoing reasons, we will affirm the judgment of the district court, dated October 30, 1995, whic h dismissed O'Connell's complaint for lack of subject matter ju risdiction.