Source: https://law.justia.com/cases/federal/appellate-courts/F2/527/921/309749/
Timestamp: 2019-08-19 07:49:58
Document Index: 307745418

Matched Legal Cases: ['§ 594', '§ 596', '§ 597', '§ 597', '§ 371', '§ 597', '§ 594']

Earl B. Lewis et al., Plaintiffs-appellees, v. Texaco Inc., Defendant-appellant, 527 F.2d 921 (2d Cir. 1975) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1975 › Earl B. Lewis et al., Plaintiffs-appellees, v. Texaco Inc., Defendant-appellant
Earl B. Lewis et al., Plaintiffs-appellees, v. Texaco Inc., Defendant-appellant, 527 F.2d 921 (2d Cir. 1975)
US Court of Appeals for the Second Circuit - 527 F.2d 921 (2d Cir. 1975)
Argued Oct. 24, 1975. Decided Dec. 9, 1975
This is an action by 32 seamen for statutory remedies arising out of a breach of shipping articles by their employer, defendant Texaco Inc. After a non-jury trial in the United States District Court for the Southern District of New York, Judge Constance Baker Motley, in an opinion reported at 1975 A.M.C. 61 (S.D.N.Y. 1974), awarded plaintiffs an amount equal to one month's wages under 46 U.S.C. § 594, prejudgment interest and counsel fees, but denied claims under 46 U.S.C. § 596 for two days' wages for each day payment was delayed. Texaco appeals. We affirm except as to the grant of counsel fees; on that issue, we remand for further consideration.
After receiving the testimony of six witnesses,1 Judge Motley held that plaintiffs were not barred by this release. First, under Garrett v. Moore-McCormark Co., 317 U.S. 239, 248, 63 S. Ct. 246, 87 L. Ed. 239 (1942), the burden was on Texaco to show that plaintiffs had had a 'full understanding' of their rights under section 594 before releasing them, and defendant had not met this burden. Second, under 46 U.S.C. § 597, reproduced in the margin,2 'good cause' had been shown for setting aside 'the ostensible mutual consent' to termination of the voyage. The judge rejected Taxaco's other arguments and concluded that plaintiffs were entitled to 'a sum equal in amount to one month's wages,' prejudgment interest and counsel fees in the sum of $5,000.
The greater weight of authority does not confine the general rule regarding seamen's releases to personal injury claims taken 'by a shipowner's claims man in the shipowner's office,' as appellant claims.4 The sweep of the language in Garrett is so broad and the solicitude for seamen so plain that an argument for limiting traditional rule in admiralty regarding seamen's releases cannot be sustained. The discussion of releases in Garrett emphasizes 'Our historic national policy, both legislative and judicial,' which has 'generally sought to safeguard seamen's rights,' including 'wage contracts,' by 'providing summary remedies for their breach.' 317 U.S. at 246, 63 S. Ct. at 251. The historic depth of the roots of this policy is reflected in the Court's extensive quotation from Mr. Justice Story's opinion in Harden v. Gordon, 11 Fed.Cas. 480, 485 (Cir.Ct.Me.1823), which enunciated the basic principles applied in Garrett.5 The opinion in Garrett also refers specifically to the codification of the liberal seamen's release rule in 46 U.S.C. § 597, which is quoted in note 2 supra, as an example of the general 'policy' of protecting seamen against 'unjust and unreasonable' contracts, 317 U.S. at 246--47, 63 S. Ct. 246.
317 U.S. at 248, 63 S. Ct. at 252. It is notable that in Harmon, the Fifth Circuit also observed that
We therefore believe that there is no basis for treating a seaman's release of a wage claim differently from his release of a personal injury claim, and that the test remains the same regardless of the nature of the claim released or the place where, or before whom, the release is signed. See also, e.g., Young v. Alcoa Corsair, 186 F. Supp. 476 (S.D. Ala. 1960); Gonzales v. Isthmian S.S. Co., 1958 A.M.C. 97 (E.D. Pa. 1957); O'Connor v. Panama Canal Co., 1952 A.M.C. 1575 (N.Y.Mun.Ct.); 1 Norris, The Law of Seamen, §§ 371, 501--21. It is true that the effect of a release on the precise seaman's wage claim made here under section 594 is rarely discussed,6 but we see no reason for a different standard to apply in this situation. Appellant cites Jones v. American Export Isbrandtsen Lines, Inc., 285 F. Supp. 345 (S.D.N.Y. 1968), for the proposition that the releases here were valid absent fraud or coercion. In Jones, the court did not discuss the Garrett line of authority, and the case is factually distinguishable because the employer there actually had a claim against the seaman which was given up in the mutual release. In any event, to the extent that the case stands for the proposition that the considerations referred to in Garrett do not apply to a seaman's release of a claim under section 594, we would not agree.
Turning to those considerations, the district court found that the shipping articles to which plaintiffs fixed their signatures did not mention their rights under section 594, that the shipping commissioner did not advise them of such rights and directed their attention only to the basic wage due and that plaintiffs were not made fully aware of their section 594 rights until they consulted their attorney two weeks later. On the record before us, these findings were not clearly erroneous. In addition, plaintiffs were paid at sign-off only wages concededly due, making pertinent the caution in Garrett that 'The adequacy of the consideration and the nature of the . . . legal advice available to the seaman at the time of signing the release are relevant to an appraisal of this understanding.' 317 U.S. at 248, 63 S. Ct. at 252. We hold that the district judge committed no error in concluding under Garrett that the release did not bar plaintiffs' claims here.7
Finally, Judge Motley also independently applied the standard of 46 U.S.C. § 597, see note 2 supra, in setting aside the 'ostensible mutual consent.' See Brown v. United States, 283 F. 425 (N.D. Cal. 1922). We have already indicated that this standard and the test to be applied to seamen's releases generally are substantially the same. We do not agree with Texaco that the release can be set aside under this section only if plaintiffs can show fraud or coercion. Pacific Mail S.S. Co, v. Lucas, 258 U.S. 266, 42 S. Ct. 308, 66 L. Ed. 614 (1922); Cox v. Lykes, 237 N.Y. 376, 143 N.E. 226 (1924). Section 597 allows a district court to set aside the release 'for good cause shown . . . and take such action as justice shall require.' The district court concluded that on these facts it was unfair to bar plaintiffs' claim and we will not disturb that decision.II
We turn now to appellant's remaining arguments. It is not clear whether appellant still claims that by immediately signing up for the coastwise voyage, plaintiffs waived their rights under section 594.8 On the assumption that the point is still pressed, we note our agreement with the analysis of Judge Thomsen in Lunquist v. S.S. Seatrain Maryland, 359 F. Supp. 663, 665--66 (D. Md. 1973), that to find such a waiver there must be 'an intentional relinquishment' of the section 594, or analogous, right. Since Judge Motley found that plaintiffs were not fully informed of their rights under that statute, signing on for a new voyage was not a waiver. See also Newton v. Gulf Oil Corp., 180 F.2d 491 (3d Cir.), cert. denied, 340 U.S. 814, 71 S. Ct. 42, 95 L. Ed. 598 (1950); Neil v. Gulf Oil Corp., 101 F. Supp. 347 (E.D. Pa. 1951).
Finally, appellant objects to the award of prejudgment interest and of counsel fees. The former was within the discretion of the district court and, on this record, was unobjectionable. Lunquist v. S.S. Seatrain Maryland,supra, 359 F. Supp. at 666; see also Van Nievelt, Goudriaan Co.'s Stoomvart Maatschappij, N.V. v. Cargo & Tankship Management Corp., 421 F.2d 1183, 1185 (2d Cir. 1970). The award of counsel fees, however, requires more discussion. The district court apparently relied on two lines of cases in awarding fees: those in which the success of the party in the lawsuit benefits others in his class, e.g., Hall v. Cole, 412 U.S. 1, 93 S. Ct. 1943, 36 L. Ed. 2d 702 (1973); and those in which the award was predicated on defendant's bad faith, e.g., Vaughan v. Atkinson, 369 U.S. 527, 82 S. Ct. 997, 8 L. Ed. 2d 88 (1962). The district judge also relied upon 'the basic purpose of . . . § 594 . . . to aid generally impecunious seamen' to justify an award because otherwise 'the average seaman might be forced to forego his legal remedy by reason of the reluctance of competent counsel to undertake such cases.'
After the district court's decision, the Supreme Court decided Alyeska Pipeline Service Co. v. The Wilderness Society, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975). In that case, the Court held unjustified an award of counsel fees to groups that had unsuccessfully attempted to restrain construction of the Alaska pipeline. The Court of Appeals for the District of Columbia Circuit had approved such fees in principle on the theory that the groups had each acted as a 'private attorney general' in attempting to vindicate 'statutory rights of all citizens.' 495 F.2d at 1028--31. The Supreme Court reversed, rejecting the 'private attorney general' exception to the general American rule refusing to allow attorneys' fees. However, the Court expressly affirmed the continued vitality of Hall v. Cole, supra, and Vaughan v. Atkinson, supra. 421 U.S. at 258--59, 95 S. Ct. 1612.
Citing Alyeska and the Court's earlier decision in F. D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 94 S. Ct. 2157, 40 L. Ed. 2d 703 (1974), appellant claims that the fee award must be set aside. Appellant says that Judge Motley clearly relied on the private attorney general theory in awarding counsel fees because she pointed out that otherwise 'the average seaman' might not be able to pursue his legal remedies.
In view of Alyeska, we believe that the district court should reconsider the fee award. To the extent the district court relied on the plaintiffs' efforts to aid all 'impecunious seamen,' the award is at least open to question under Alyeska. We are not sure that the district judge did rely on the private attorney general theory, but if she did, that would now be impermissible. Moreover, in view of the explanation of the common benefit line of cases in F. D. Rich Co., 417 U.S. at 130, 94 S. Ct. at 2165, as a 'shifting of fees . . . to spread the cost proportionately among the members of the benefited class,' see also Alyeska, 421 U.S. at 257--58, 95 S. Ct. at 1612, we are not sure that the rationale of Hall v. Cole, supra, applies here either. On the other hand, if the district court, relying on Vaughan v. Atkinson, supra, would have awarded counsel fees based solely on the recalcitrance of Texaco in failing to pay the sums due plaintiffs here, these questions might not be relevant. Accordingly, we remand the issue of counsel fees to the district court to consider the effect of Alyeska and to make clear the basis of the award, if one is appropriate.
At 317 U.S. 246--47, 63 S. Ct. 251, the Court quoted with approval the following from Harden v. Gordon:
Brown v. United States, 283 F. 425 (N.D. Cal. 1922)