Opinion ID: 1192482
Heading Depth: 3
Heading Rank: 2

Heading: The Exclusivity Clause of the Suits in Admiralty Act

Text: The primary question presented by this appeal is whether the exclusivity clause of the Suits in Admiralty Act precludes an injured seaman from proceeding against the private operator of a government vessel on a theory of willful failure to pay maintenance and cure. [4] The clause in question, 46 U.S.C. § 745, provides in pertinent part that where a remedy is provided by this chapter it shall hereafter 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.... By voluntarily dismissing his claim for maintenance and cure against IMC, Stone has seemingly acknowledged that the SAA designates the United States as the proper party to sue on his claim for maintenance and cure. There can be little question that this is correct. [5] Stone, however, is not now suing IMC for unpaid maintenance and cure, but rather for damages resulting from IMC's willful failure to pay that maintenance and cure. He characterizes this claim as one which seeks recovery for a tort committed by the claims department and/or Ray Douglas of IMC, and not for a tort committed on board a vessel operated for the United States. Thus, we must decide whether this claim for damages resulting from a willful failure to pay maintenance and cure also is precluded by the SAA. Several federal courts have recently addressed this question and reached conflicting results. At least four district courts and one court of appeals have held that a claim for willful failure to pay maintenance and cure against a private contractor is precluded by section 745. Manuel v. United States, 50 F.3d 1253 (4th Cir.1995); Stewart v. United States, 903 F. Supp. 1540 (S.D.Ga. 1995); Smith, 896 F. Supp. at 75; Fratus v. United States, 859 F. Supp. 991 (E.D.Va. 1994); Farnsworth v. Sea-Land Serv., 1989 WL 20544 (E.D.La. 1989), aff'd, 896 F.2d 552 (5th Cir.1990), cert. denied, 498 U.S. 880, 111 S.Ct. 214, 112 L.Ed.2d 174 (1990). Three other district courts have concluded that such claims are not precluded. Abogado, 890 F. Supp. at 626; Henderson v. International Marine Carriers, 1990 A.M.C. 400 (E.D.La. 1989), aff'd, 921 F.2d 275 (5th Cir.1990); Shields, 662 F. Supp. at 187. In light of these conflicting results, we undertake an independent analysis of the effect of the SAA on claims against private contractors for willful failure to pay maintenance and cure. It must be noted that this appeal raises the possibility that there are cognizable maritime claims which a seaman can not bring against the United States because they are beyond the scope of the SAA but which the SAA nonetheless precludes him from bringing against the government's agent. To whatever extent this might be the case, the rights of seamen employed on government vessels are diminished in relation to seamen employed on private vessels, and otherwise actionable misconduct by the government's agents is effectively immunized. The Fourth Circuit candidly acknowledged this: We recognize that our decision creates the harsh result that Manuel [the injured seaman] will not be able to recover punitive damages even if he can show that IMC arbitrarily and willfully withheld his maintenance and cure benefits. As a consequence, private operators managing ships owned by the United States can arbitrarily and willfully refuse to pay an injured seaman's maintenance and cure without suffering any penalty. Manuel, 50 F.3d at 1260. The Fourth Circuit concluded, however, that § 745 clearly dictates this result, adding that [i]f Congress considers this situation to be unfair, it can correct the problem.... Id. The content of the claim which Stone calls tortious failure to pay maintenance and cure has been described as follows: The negligent failure to pay maintenance and cure is tortious conduct that makes the employer responsible for any aggravation of the injury suffered by the seaman. In addition, an employer's willful and arbitrary failure to pay maintenance and cure renders the employer liable for (1) attorneys' fees and (2) punitive damages. 1 Thomas J. Schoenbaum, Admiralty and Maritime Law § 6-34, at 366-67 (2d ed. 1994). [6] As this description illustrates, there are three fundamental damages components to the claim of tortious failure to pay maintenance and cure: (1) compensatory damages for any aggravation of injuries caused by the failure to pay, (2) punitive damages, and (3) attorney's fees. We now turn to the preliminary question of whether, and to what extent, the SAA affords a remedy for willful failure to provide maintenance and cure. Since section 745 clearly precludes suit against IMC on all claims for which the SAA provides the same remedy against the United States, this question is potentially dispositive. Based on the language of the statute, the scope of the SAA seems quite comprehensive. The SAA authorizes in personam suit against the United States [i]n cases where if such vessel were privately owned or operated ... a proceeding in admiralty could be maintained.... 46 U.S.C. § 742. It has been observed that, under the SAA, [f]or the most part the United States is liable in admiralty to the same extent as a private entity. [7] As mentioned above, admiralty claims for maintenance and cure fall within the scope of this section. From the facts in this record, it appears that IMC administers maintenance and cure claims, for which the government is ultimately answerable, in its capacity as an agent for the United States. Given this fact, we fail to see any reason why the government could not be held liable for IMC's shortcomings in this respect under agency principles as they are embodied in 46 U.S.C. section 742. Insofar as Stone's claim seeks compensatory or aggravation damages flowing from IMC's willful failure to pay maintenance and cure, section 742 appears to allow him to proceed against the United States. [8] With respect to the punitive damages component of the claim, the analysis is more difficult. Although punitive damages were traditionally available in suits against a private employer for willful failure to pay maintenance and cure, Weason v. Harville, 706 P.2d 306, 310 (Alaska 1985); Holmes v. J. Ray McDermott & Co., 734 F.2d 1110 (5th Cir.1984), the SAA does not authorize punitive damages against the United States. Abogado, 890 F. Supp. at 631-32. This discrepancy is generally the locus of dispute among the earlier cases. Some courts have held that since this remedy is unavailable under the SAA, there is no reason that the exclusivity clause of that statute should bar a party from proceeding against the culpable agent of the government. See, e.g., Abogado, 890 F. Supp. at 632-634. Other courts have held that since the remedy arises from the same subject matter as a general claim for maintenance and cure, it is precluded by section 745. See, e.g., Manuel, 50 F.3d at 1259. Since we conclude that punitive damages are no longer available against any party for a claim of willful failure to pay maintenance and cure, we need not resolve this dispute. The Fifth Circuit Court of Appeals, sitting en banc, recently concluded that subsequent to Miles v. Apex Marine Corp., 498 U.S. 19, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990), punitive damages should no longer be available in cases of willful nonpayment of maintenance and cure under the general maritime law. Guevara v. Maritime Overseas Corp., 59 F.3d 1496, 1513 (5th Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 706, 133 L.Ed.2d 662 (1996). The Ninth Circuit, in Glynn v. Roy Al Boat Management Corp., 57 F.3d 1495, 1505 (9th Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 708, 133 L.Ed.2d 663 (1996), reached the same conclusion. These rulings were predicated on the fact that the personal injury aspect of a failure to provide maintenance and cure overlaps with the personal injury coverage of the Jones Act. Guevara, 59 F.3d at 1511. The Miles Court observed, in the context of rejecting a claim for loss of society, that [m]aritime tort law is now dominated by federal statute, and we are not free to expand remedies at will simply because it might work to the benefit of seamen and those dependent upon them. Miles, 498 U.S. at 36, 111 S.Ct. at 327. The Fifth and Ninth Circuits both held that allowing the recovery of punitive damages in a maintenance and cure case would be inconsistent with the principles set forth in Miles. We agree. The fact that punitive damages are no longer available in cases for tortious or willful failure to pay maintenance and cure under the general maritime law renders moot the question of whether section 745 precludes Stone from seeking punitive damages against IMC. Even if IMC were not an agent of the government, punitive damages would be unavailable. This leaves us only with the third component of a willful failure to pay maintenance and cure claim: attorney's fees. Both the Fifth and Ninth Circuits have held that although punitive damages are no longer available in these cases subsequent to Miles, attorney's fees remain available when the proper showing of egregious fault is made. Guevara, 59 F.3d at 1513; Glynn, 57 F.3d at 1505. However, as a federal district court has noted, Although attorney's fees may be awarded where a shipowner's failure to provide maintenance and cure is shown to be arbitrary, recalcitrant or unreasonable, Kopczynski v. The Jacqueline, 742 F.2d 555, 559 (9th Cir.1984) [ cert. denied, 471 U.S. 1136, 105 S.Ct. 2677, 86 L.Ed.2d 696 (1985)], counsel fees may not be awarded against the United States in the absence of specific statutory authority. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 267-268 [95 S.Ct. 1612, 1626-1627, 44 L.Ed.2d 141] (1975). Bailey v. United States, 1993 WL 87813 (N.D.Cal. 1993). There is consequently a discrepancy between the remedies available to injured seamen employed on private vessels and those employed on government vessels with respect only to attorney's fee awards. Since they are not authorized by the SAA, attorney's fees are not available to seamen whose claims are against the United States. However, suits under the SAA are hardly unique in this respect. In most contexts, attorney's fees are not available against the United States. This does not mean, however, that Stone may maintain an action against IMC for attorney's fees. SAA provides a remedy for compensatory damages suffered as a result of willful failure to pay maintenance and cure. The fact that that remedy does not encompass attorney's fees does not make the SAA remedy any less exclusive under the terms of section 745. In light of the foregoing analysis, we conclude that the only remedy that section 745 precludes Stone from seeking is his attorney's fees. He is authorized under the SAA to seek compensatory damages against the United States for injuries that he may have suffered as a result of its agent's willful refusal to pay maintenance and cure, and he would have no punitive damages remedy even if he were permitted to sue IMC directly. Consequently, in this context, the scope of claims precluded by section 745 does not exceed to any significant extent the scope of claims sustainable against the United States under the SAA. Our understanding of the scope of the SAA and of the Supreme Court's holding in Miles leads us to conclude that the critical dimensions of recovery on a claim of willful failure to pay maintenance and cure are now effectively the same against the government as they are against a private employer. As such, we need not endorse a reading of the exclusivity section which significantly diminishes the rights of seamen injured on board government vessels. Since the same type of recovery could have been had against the United States on the claim raised by Stone as could be had against its agent, the SAA designates the United States as the only proper defendant.