Hicks v. Vane Line Bunkering, Inc., No. 13-1976 (2d Cir. 2015)
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Hicks was a deckhand on a tugboat when, while handling heavy gear, he injured his shoulder. A company doctor determined that Hicks was not fit for duty. His employer acknowledged its obligation to pay maintenance and cure and medical expenses until full recovery, maximum improvement, or until his condition was declared permanent, 46 U.S.C. 30104 (Jones Act). Hicks had surgery and physical therapy. His employer hired an investigator to videotape Hicks surreptitiously. The video showed Hicks planting a small tree and playing with his grandson. When Hicks’s doctor requested funding for an MRI scan, he was shown this footage and told that Hicks’s job required only light lifting. The doctor determined that Hicks was fit for duty. The employer terminated payments. Hicks consulted a second doctor, who diagnosed a recurrent rotator cuff tear and recommended another surgery plus rehabilitation. Under financial pressure, Hicks returned to work and missed physical therapy. His house went into foreclosure, and he was unable to pay for health insurance. Hicks sued, claiming negligence under the Jones Act and the maritime doctrines of unseaworthiness and maintenance and cure. The jury awarded $190,000 for past and future maintenance and cure and $132,000 for pain and suffering. Based on a finding that the failure to pay was unreasonable and willful, Hicks was awarded $123,000 in punitive damages and $112,083.77 in attorney’s fees. The Second Circuit affirmed.
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13-1976-cv Hicks v. Vane Line Bunkering, Inc. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2014 (Submitted: January 15, 2014 Decided: April 17, 2015) Docket No. 13-1976-cv - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CIRO CHARLES HICKS, Plaintiff-Appellee, v. TUG PATRIOT, In Rem, Defendant, VANE LINE BUNKERING, INC., Defendant-Appellant. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Before WINTER, STRAUB, and HALL, Circuit Judges. Appeal from a denial by the District Court for the Southern 28 District of New York (Katherine B. Forrest, Judge) of appellant’s 29 motion to set aside a jury verdict. 30 appellant willfully breached its maritime law maintenance and 31 cure obligations and awarded both compensatory and punitive 32 damages to appellee. 33 willful misconduct, the district court granted appellee’s motion 34 for attorney’s fees. 35 court abused its discretion in finding that the record supported 36 the jury’s pain-and-suffering award, and whether a court may The jury found that Further, based on the jury’s finding of On appeal, we consider whether the district 1 1 award both punitive damages and attorney’s fees in an action for 2 maintenance and cure. 3 4 5 6 7 8 9 10 11 12 13 14 Affirmed. Paul T. Hofmann, Hofmann & Schweitzer, New York, NY, for Plaintiff-Appellee. Michael D. Wilson, John J. Sullivan and Caspar F. Ewig, Hill Rivkins LLP, New York, NY, for DefendantAppellant. WINTER, Circuit Judge: Vane Line Bunkering, Inc. appeals from a money judgment for 15 Ciro Charles Hicks following a jury trial before Judge Forrest. 16 The jury found that appellant breached its maritime law duty of 17 providing maintenance and cure1 following a shoulder injury Hicks 18 sustained while working on board the Tug PATRIOT. 19 Hicks the unpaid maintenance and cure and damages for pain and 20 suffering caused by the breach. 21 appellant’s conduct was willful and awarded punitive damages. 22 Finally, based on the jury’s finding of willfulness, the district 23 court granted Hicks’s motion for reasonable attorney’s fees. 24 It awarded Further, the jury found that Appellant argues that the evidence that appellant’s acts and 1 “Maintenance and cure” refers to the well-settled doctrine of maritime law that a seaman “injur[ed] in the performance of his duty is entitled to be treated and cured at the expense of the ship.” The Osceola, 189 U.S. 158, 173 (1903), superseded by statute on other grounds, The Jones Act, 46 U.S.C. § 30104 (creating a statutory cause of action for negligence). Maintenance includes a seaman’s living allowance and unearned wages. Gilmore & Black, The Law of Admiralty § 6–12, at 267–68 (2d ed. 1975). 2 1 omissions caused Hicks’s pain and suffering was insufficient as a 2 matter of law. 3 appellant also objects to the award of punitive damages in 4 addition to and/or in excess of the amount of attorney’s fees. 5 We affirm. Although it arguably waived the argument, 6 7 BACKGROUND In light of the jury verdict for appellee, we view the trial 8 record in the light most favorable to him. 9 Polaris Indus., Inc., 462 F.3d 74, 77 (2d Cir. 2006). 10 See Kosmynka v. Hicks was employed by appellant as a deckhand on the Tug 11 PATRIOT. 12 gear, he injured his shoulder. 13 diagnosed a possible rotator cuff tear. 14 Hicks with cortisone to relieve the pain and gave him a fit-for- 15 duty slip. 16 a company doctor, who determined that Hicks was not fit for duty. 17 Subsequently, appellant confirmed in writing its obligation under 18 maritime law to pay sums for Hicks’s maintenance and cure, 19 reasonable medical expenses and maintenance costs until his full 20 recovery, maximum improvement, or until his condition was 21 declared permanent. 22 On April 21, 2009, while on deck handling heavy towing Two days later, an orthopedist The doctor injected Prior to returning to work, Hicks was required to see On July 1, 2009, Hicks underwent surgery on his shoulder. 23 He experienced significant discomfort before and after the 24 surgery. For several months following the procedure, he received 3 1 in-office and at-home physical therapy while continuing to 2 experience significant pain. 3 treating physician that he still had significant limitations of 4 range of motion of his arm. 5 In December 2009, he informed his Appellant hired a private investigator to videotape Hicks 6 surreptitiously. The video captured him on videotape planting a 7 small tree and playing with his grandson. 8 requested funding for an additional MRI scan, he was shown this 9 footage and a document detailing the physical requirements of When Hicks’s doctor 10 Hicks’s job. 11 appellant now admits was false -- that Hicks’s job required only 12 light lifting, the doctor determined that Hicks was fit for duty. 13 Appellant accordingly informed Hicks that it would terminate 14 maintenance and cure payments effective May 9, 2010. 15 Based on this video and the suggestion -- which Beginning in August 2010, Hicks sought continuing care from 16 a second doctor, who diagnosed a recurrent rotator cuff tear. 17 February 2011, this doctor recommended another surgery plus six 18 months of rehabilitation to repair the additional damage. 19 financial pressure caused by the meager maintenance and cure 20 appellant had paid him -- $15 per day compared to actual costs of 21 $69.67 per day for food and lodging -- and had now terminated, 22 Hicks returned to work while still injured. 23 difficulties caused him to miss some of his physical therapy 24 appointments. 4 Under Severe financial During this time, his house was put into In 1 foreclosure, and he was unable to pay for health insurance. 2 In November 2011, Hicks brought the present action. His 3 claims were based on negligence under the Jones Act and the 4 maritime doctrines of unseaworthiness and maintenance and cure. 5 The jury found that appellant had not been negligent and the 6 PATRIOT was seaworthy, but that appellant had breached its 7 obligation of maintenance and cure by paying Hicks an 8 insufficient per diem and prematurely ceasing payments. 9 The jury awarded $77,000 in compensatory damages for past 10 maintenance and cure from April 22, 2009 to the date of the 11 verdict; $16,000 in future maintenance and $97,000 in future cure 12 through April 2013; and $132,000 in compensation for past pain 13 and suffering. 14 pay maintenance and cure was unreasonable and willful and awarded 15 $123,000 in punitive damages. 16 willfulness, the district court, upon a motion under Fed. R. Civ. 17 P. 54(d), granted Hicks an additional $112,083.77 in attorney’s 18 fees. 19 The jury also found that appellant’s failure to Based on the finding of Appellant moved, unsuccessfully, for judgment as a matter of 20 law or a new trial under Fed. R. Civ. P. Rules 50(b) and 59 21 respectively. This appeal followed. 22 23 24 DISCUSSION We review a denial of a Rule 50(b) motion de novo and the denial of a Rule 59 motion for abuse of discretion. 5 See Fabri v. 1 United Techs. Int’l, Inc., 387 F.3d 109, 119 (2d Cir. 2004); 2 Devlin v. Transp. Commc’ns Int’l Union, 175 F.3d 121, 131-32 (2d 3 Cir. 1999). 4 of the district court’s grant of attorney’s fees implicates a 5 question of law, our review is de novo.” 6 Dist., 561 F.3d 97, 102 (2d Cir. 2009). 7 With respect to attorney’s fees, because “resolution We, therefore, consider: Garcia v. Yonkers Sch. (i) the evidence underlying the 8 award of pain and suffering damages, and (ii) the award of both 9 punitive damages and attorney’s fees. 10 11 a) Pain and Suffering Damages An injured seaman may recover damages if the shipowner’s 12 failure to pay maintenance and cure caused pain and suffering by 13 prolonging or aggravating the initial injury. 14 Atkinson, 369 U.S. 527, 539 (1962) (Stewart, J., dissenting); 15 Cortes v. Baltimore Insular Line, Inc., 287 U.S. 367, 371 (1932); 16 Williams v. Kingston Shipping Co., 925 F.2d 721, 723 (4th Cir. 17 1991) (discussing availability of “money damages for any 18 prolongation or aggravation of the physical injury”); accord 19 Hines v. J. A. LaPorte, Inc., 820 F.2d 1187, 1190 (11th Cir. 20 1987) (per curiam) (pain and suffering damages awarded where 21 failure to pay maintenance “aggravated Hines’ condition, 22 prolonged his pain and suffering, and lengthened the time 23 required for him to reach maximum cure”). 24 See Vaughan v. In arguing that the evidence was insufficient as a matter of 6 1 law to support an award for pain and suffering, appellant relies 2 heavily on statements by Hicks that his condition did not 3 significantly improve after the initial injury. 4 from these statements that Hicks’s pain and suffering were 5 entirely attributable to the original injury and not to 6 appellant’s failure to fulfill its maintenance and cure duties. 7 However, under our caselaw, a plaintiff need not show an 8 additional discrete injury or illness resulting from the failure 9 to pay maintenance and cure. Appellant argues See Rodriguez Alvarez v. Bahama 10 Cruise Line, Inc., 898 F.2d 312, 314-15 (2d Cir. 1990) (duty to 11 furnish maintenance and cure continues until seaman fully 12 recovers). 13 a result of the employer’s breach will sustain a pain and 14 suffering damages award. 15 F.3d 78, 84-85 (2d Cir. 2012) (duty to pay maintenance and cure 16 extends to aggravation of preexisting illness). 17 maintenance and cure cases, “doubts regarding a shipowner’s 18 liability . . . should be resolved in favor of the seamen.” 19 Padilla v. Maersk Line, Ltd., 721 F.3d 77, 81-82 (2d Cir. 2013), 20 cert. denied, 134 S. Ct. 1309 (2014) (citing Atkinson, 369 U.S. 21 at 532). 22 Rather, the prolonging or worsening of a condition as See Messier v. Bouchard Transp., 688 And, in In the present case, the jury could easily have found that 23 appellant’s discontinuation of maintenance and cure benefits 24 caused injuries to Hicks, both physical and otherwise. 7 It could 1 also have found that the insufficient payments forced Hicks back 2 to work before physical therapy could render him fit. 3 Hicks’s second doctor diagnosed a recurrent rotator cuff tear and 4 determined the need for a second surgery, which would have 5 required yet another long bout of physical therapy. 6 Hicks suffered emotional distress stemming from the loss of his 7 home and health insurance, both of which could have been found by 8 the jury to have been caused, at least in part, by appellant’s 9 inadequate payments and discontinuation of benefits. Indeed, Furthermore, See, e.g., 10 Sims v. U.S. of Am. War Shipping Admin., 186 F.2d 972 (3d Cir.), 11 cert. denied, 342 U.S. 816 (1951). 12 Although appellant attempts to cast the causation issue as 13 one of law, the causal link between the cessation of benefits and 14 the harms to Hicks for which damages are sought was for 15 determination by the jury. 16 district court did not abuse its discretion in holding that the 17 jury acted reasonably in its award for pain and suffering. 18 b) Attorney’s Fees in Addition to Punitive Damages 19 Based on the evidence, therefore, the In the district court, the parties did not squarely address 20 the issue of the amount of punitive damages recoverable in a 21 maintenance and cure action. 22 pure question of law, we may reach it regardless of waiver. 23 Magi XXI, Inc. v. Stato della Città del Vaticano, 714 F.3d 714, 24 724 (2d Cir. 2013) (“[W]e have exercised our discretion to hear However, because this issue is a 8 See 1 otherwise waived arguments . . . where the argument presents a 2 question of law and there is no need for additional fact- 3 finding.”)(internal quotation marks and citations omitted). 4 We perceive a need to address the issue here. The judgment 5 of the district court here is inconsistent with a decision of 6 another district court in this circuit. 7 Bouchard, 885 F. Supp. 452, 466 (E.D.N.Y. 1995) (holding that 8 punitive damages in maintenance and cure cases are limited to 9 reasonable attorneys’ fees). McMillan v. Tug Jane A. The conflict is the result of our 10 decision in Kraljic v. Berman Enter., Inc., 575 F.2d 412, 415-16 11 (2d Cir. 1978). 12 cases, the amount of punitive damages is limited to the amount of 13 reasonable attorneys’ fees. 14 That decision held that, in maintenance and cure As a result, we examine the decision in Kraljic, and the one 15 by the Supreme Court, Vaughan v. Atkinson, 369 U.S. 527 (1962), 16 that spurred it, in some detail. 17 after Kraljic, including a Supreme Court decision, Atlantic 18 Sounding Co. v. Townsend, 557 U.S. 404 (2009), that undermines 19 Kraljic. 20 We also examine developments Kraljic, 575 F.2d at 416, reluctantly concluded that 21 limiting punitive damages in maintenance and cure cases to 22 reasonable attorney’s fees was required by Atkinson. 23 was a cryptic decision embodied in an opinion written by Justice 24 Douglas. Atkinson It involved a shipowner’s failure to pay maintenance 9 1 and cure, after which the ill seaman successfully sought damages 2 for the unpaid amounts and counsel fees for being forced to go to 3 court to remedy the owner’s breach. 4 Atkinson’s discussion of the attorney’s fees issue was all 5 of three paragraphs long and conflated the issues of compensatory 6 and punitive damages. 7 attorney’s fees did not concern taxable costs; rather, it 8 involved “necessary expenses” incurred as a result of the owner’s 9 breach of duty, 369 U.S. at 530, i.e. being “forced to hire a Atkinson noted that the seaman’s claim for 10 lawyer . . . to get what was plainly owed him,” id. at 531. 11 However, after this language, which clearly sounds in 12 compensatory damages, Kraljic, 575 F.2d at 413 (“This might lead 13 one to conclude that the award of attorney’s fees was 14 compensatory . . . .”), the Atkinson opinion then noted that the 15 owner’s conduct involved both the lack of any investigation into 16 the seaman’s claim and silence as to the claim’s merits. 17 U.S. at 530-31. 18 “recalcitrance” that was “callous,” “willful,” and “persistent.” 19 Id. 20 Kraljic, 575 F.2d at 414 (“Recovery of [attorney’s] fees is 21 therefore based upon the traditional theory of punitive 22 damages.”) 23 24 369 The Atkinson opinion described this conduct as a This language was deemed by us to sound in punitive damages. The dissenters in Atkinson argued that there was no basis for an award of counsel fees as compensatory damages but that the 10 1 conduct of the owner might support an award of “exemplary damages 2 in accord with traditional concepts of the law of damages.” 3 U.S. at 540. 4 “would not necessarily be measured” by counsel fees but might 5 provide “indirect compensation for such expenditures.” 369 The dissent noted, however, that punitive damages Id. Our decision in Kraljic read Atkinson to authorize punitive 6 7 damages in maintenance and cure cases but to limit such damages 8 to an award of reasonable attorney’s fees. 9 416. Kraljic, 575 F.2d at We did so reluctantly, believing that we were “constrained” 10 by Atkinson. 11 impose such a limit, as best we can determine at this distance in 12 time, was that Atkinson authorized an award of attorney’s fees 13 only where the owner’s conduct was sufficiently egregious to 14 justify a punitive award. 15 that a punitive award, but not one measured by fees, was 16 available and our view in Kraljic that “[t]he seaman surely is 17 not entitled to separate awards of both [punitive damages and 18 fees],” id. at 414, we inferred that the Atkinson majority 19 authorized an award of punitive damages but limited it to 20 attorney’s fees. 21 Id. However, our rationale for reading Atkinson to Based on the Atkinson dissent’s view Lost in this chain of reasoning was the fact that the seaman 22 in Atkinson sought only counsel fees and not punitive damages. 23 The Supreme Court majority, therefore, had no reason to consider, 24 much less discuss, the availability of punitive damages in excess 11 1 of, or in addition to, counsel fees. While the dissenters did 2 mention punitive damages and the fact that they are not measured 3 by attorney’s fees, as described above, the majority ignored the 4 dissent. 5 dissent, based in part on our view that separate awards of both 6 punitive damages and counsel fees would be impermissible, id., 7 was certainly not an inescapable interpretation of the cryptic 8 opinion in Atkinson. 9 damages to counsel fees is an outlier, expressly rejected by some The inference that we appeared to have drawn from the Indeed, Kraljic’s limitation of punitive 10 courts, e.g., Hines, 820 F.2d at 1189, simply ignored by others, 11 e.g., Robinson v. Pocahontas, Inc., 477 F.2d 1048, 1051-52 (1st 12 Cir. 1973), and adopted by no one outside this circuit. 13 conclude that it is no longer governing law in this circuit for 14 two reasons.2 15 We First, the landscape of Supreme Court caselaw has been 16 substantially altered since Atkinson and Kraljic. In Atlantic 17 Sounding, the Supreme Court held that punitive damages, as 18 traditionally available under the common law, are available in 19 claims arising under federal maritime law, including claims for 20 maintenance and cure. 21 incontestable that traditional punitive damages are not limited Atlantic Sounding, 557 U.S. at 424. 2 It is We have circulated this opinion to all active members of this Court prior to filing. See Shipping Corp. of India v. Jaldhi Overseas Pte Ltd., 585 F.3d 58, 67 & n.9 (2d Cir. 2009); see also Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991). 12 1 to the amount of attorney’s fees. 2 Sounding opinion is there the slightest hint that such damages 3 are limited to counsel fees. 4 Atkinson, id. at 417 -- seemingly relying more on the dissenting 5 than on the majority opinion -- it never stated or implied that 6 such a limit was contemplated, or was even an open issue left to 7 the future. 8 not survive Atlantic Sounding. 9 Nowhere in the Atlantic While Atlantic Sounding cited We believe, therefore, that Kraljic’s holding did The landscape has changed in another way that undermines 10 Kraljic. While that opinion relied heavily upon the 11 incompatibility of an award of punitive damages and a separate 12 award of counsel fees, see 575 F.2d at 414, the availability of 13 both punitive damages and attorney’s fees awards in the same 14 case, albeit for statutory violations but often on common law 15 grounds with regard to punitive damages, is today not uncommon. 16 See, e.g., Stanczyk v. City of New York, 752 F.3d 273, 275 (2d 17 Cir. 2014) (in Section 1983 case, the jury awarded plaintiff 18 compensatory damages and punitive damages, and the court 19 subsequently awarded attorney’s fees); Kolstad v. Am. Dental 20 Ass’n, 527 U.S. 526, 529 (1999) (“[P]unitive damages are 21 available in claims under Title VII of the Civil Rights Act of 22 1964.”); Farias v. Instructional Sys., Inc., 259 F.3d 91, 101-03 23 (2d Cir. 2001) (under Title VII, a plaintiff may be entitled to 24 reasonable attorney’s fees and punitive damages) (citing Kolstad, 13 1 527 U.S. at 529); Feltner v. Columbia Pictures Television, Inc., 2 523 U.S. 343, 346 (1998) and 17 U.S.C. §§ 504, 505 (under the 3 Copyright Act, a court may “increase the award of statutory 4 damages to a sum of not more than $150,000" and may “award a 5 reasonable attorney’s fee”); Fort v. White, 530 F.2d 1113, 1118 6 (2d Cir. 1976) (under the Fair Housing Act, a plaintiff may be 7 awarded actual as well as punitive damages and attorney’s fees); 8 35 U.S.C. §§ 284, 285 (under the Patent Act, the court “may 9 increase the damages up to three times the amount found or 10 assessed” and may award “reasonable attorney fees”); accord 11 Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 12 F.3d 1337, 1347 (Fed. Cir. 2004) (in a patent infringement case, 13 under 35 U.S.C. § 285, “[t]hat there were not actual damages does 14 not render the award of attorney fees punitive. 15 are compensatory, and may provide a fair remedy in appropriate 16 cases.”); cf. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1573 n.4 (Fed. 17 Cir. 1996) (“As a general rule, attorneys fees under [35 U.S.C. 18 §] 285 may be justified by any valid basis for awarding increased 19 damages under section 284. 20 deem ‘exceptional’ and a basis for awarding attorneys fees may 21 not qualify for an award of increased damages. 22 damages are increased under section 284, a court may decline to 23 award attorneys fees under section 285.”) (internal citations 24 omitted). Attorney fees However, conduct which a court may 14 Even where 1 Therefore, Atkinson’s holding that an award for attorney’s 2 fees may be made where the refusal to pay maintenance and cure 3 was “callous,” “willful,” and “persistent” is not inconsistent 4 with a punitive award. 5 holding that counsel fees are available for a willful breach of 6 an employer’s maintenance and cure obligations is not settled 7 law. 8 any hint of reservation as to the award of fees. 9 417. We also perceive no reason why Atkinson’s Indeed, as noted, Atlantic Sounding cited Atkinson without 557 U.S. at Moreover, Atlantic Sounding also cited, seemingly with 10 approval, a court of appeals decision affirming awards of both 11 punitive damages and fees in maintenance and cure cases. 12 408 (citing Hines, 820 F.2d at 1188). 13 developments in the Supreme Court, we follow those cases.3 14 15 Id. at Pending further CONCLUSION We therefore affirm. 16 17 18 3 We note one small departure from Atkinson. We believe that an award of punitive damages is for the jury while attorney’s fees must be awarded under Fed. R. Civ. P. 54(d), which was promulgated in 1993. This departure aligns the award of fees in maintenance and cure cases with post-Atkinson practices regarding fees. See Incandela v. Am. Dredging Co., 659 F.2d 11, 15 (2d Cir. 1981) (trial court assesses attorney’s fees after a jury finding that defendant’s behavior was “callous” or “recalcitrant”). 15
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