Two recent Louisiana federal court decisions demonstrate the importance of investigating and documenting a Jones Act seaman’s medical conditions. Failure to properly investigate a seaman’s medical claim may leave a Jones Act employer vulnerable to the kind of maintenance award handed down in Jefferson v. Baywater Drilling, LLC, CIV.A. 14-1711, 2015 WL 365526 (E.D. La. Jan. 27, 2015): “reasonable” costs that almost double actual costs, punitive damages and attorneys’ fees. By contrast, the U.S. Fifth Circuit in Meche v. Doucet, 14-30032, 2015 WL 293877(5th Cir. Jan. 22, 2015) confirmed an employer has a complete defense to a maintenance and cure claim when an employee fails to disclose a medical condition, even if the employer’s predecessor organization called for the disclosure.
Jefferson v. Baywater
In Jefferson v. Baywater Drilling, the parties’ dispute about maintenance and cure centered on when the seaman’s skin condition manifested. According to the plaintiff, he began suffering from painful, burning sensations on his feet just as he started his work hitch offshore. Baywater Drilling argued the skin condition was caused by herpes and had manifested prior to his employment. Therefore, the defendant argued, it was not obligated to pay for maintenance and cure.
In rejecting the defendant’s argument, Judge Susie Morgan focused on what she found to be an “impermissibly lax investigation,” of the plaintiff’s condition. The investigation consisted primarily of reviewing incident report and having conversations with the plaintiff and his co-worked of taking statements from Baywater employees. A second investigation consisted of Defendant’s counsel attempting to find a medical provider that treated Plaintiff for genital herpes. Noting that the plaintiff was never tested for herpes, Judge Morgan rejected defendant’s argument and awarded maintenance and cure to the plaintiff. Further she found denial of maintenance and cure to be arbitrary and awarded compensatory damages in the amount of $10,000.
The Jefferson decision is also notable for the amount of maintenance the court awarded to the plaintiff. Under a three-part test for determining the amount of the maintenance award, the court first estimated the plaintiff’s actual costs of food and lodging and compared it to the reasonable cost of food and lodging for a single seaman in the plaintiff’s locality. Second, the court found reasonable expenses exceeded actual expenses, and noted it would ordinarily award the lesser: actual expenses. However, in the third step, the court asked whether the plaintiff’s actual expenses were inadequate to provide him with reasonable food and lodging.
The court found that even though plaintiff was able to support himself on actual expenses of $23.33 per day, a $40 per day award was appropriate. Noting that “a maintenance award should generally not exceed actual expenses,” the court still awarded $40 per day, the extent of its reasoning being, “no reasonable seaman could live on $23.33 per day.”
This maintenance award might be considered an outlier and perhaps motivated in part on how the court viewed the Jones Act employer’s treatment of the plaintiff. Judge Morgan concluded Jefferson was shipped off the rig without arrangements for a ride home, was left stranded at a gas station in debilitating pain and unable to walk, and was harassed by the drilling company’s human resources manager after being taken to the hospital.
Whether or not the award in Jefferson is an outlier, the decision nevertheless shows how critical a proper medical investigation can be to defending a claim. An “investigation” based only review of incident reports and interviews is vulnerable to the kind of award Judge Morgan handed down. Instead, Jones Act employers should verify the etiology of a condition through medical testing, especially if they intend to withhold maintenance and cure.
Meche
We wrote about the district court opinion in Meche earlier. The Fifth Circuit reversed the finding of M&C and punitive damages in strong terms. The Court held that a captain of a crew boat was precluded from obtaining maintenance and cure from his employer because he willfully concealed from his employer a preexisting medical condition involving his back. This is in keeping with the Fifth Circuit’s decision in McCorpen v. Cent. Gulf S. S. Corp., 396 F.2d 547, 550 (5th Cir.1968). What makes Meche noteworthy is the court’s clarification of the standard for concealment: Courts should apply and “objective intentional concealment standard, not the subjective disclosure standard.”
Applied to the facts of Meche, this meant that plaintiff’s employer Key Marine could rely on a pre-employment questionnaire performed by its predecessor Moncla. The plaintiff was originally hired by Moncla after he falsely stated he had not sustained any lower back injuries. Key Marine then purchased Moncla’s marine division, along with all of its assets and liabilities.
The Meche court agreed with Key Marine’s argument that a misrepresentation to Moncla is tantamount to a misrepresentation to Key for the purposes of the McCorpen defense. The court noted it makes little economic or logical sense to require a successor company to reexamine its predecessor’s employees solely for the purpose of avoiding maintenance and cure liability. Therefore, the appropriate standard is objective intentional concealment.
Meche not only reiterates what Jones Act employers already know – a thorough pre-employment screening can avoid maintenance and cure liability. It also shows the benefit of looking into what pre-employment examinations and questionnaires a predecessor company has performed. Together, Jefferson and Meche both reiterate the importance of relying not only on conversation and available record in defending a maintenance and cure claim, but asserting a strong defense by actively verifying pre-existing medical conditions.
In the district court opinion, Judge Haik likened maintenance and cure to health insurance – an almost absolute requirement. It was striking that he found not only that M&C were owed but also that the defendant was arbitrary and capricious in their denial despite (a) the plaintiff’s many different versions of the accident and (b) the strong McCorpen defense (even though the district court didn’t buy McCorpen). The Fifth Circuit’s decision can be understood not only as strengthening the McCorpen defense but also as walking back the finding of punitive damages to truly arbitrary and capricious behavior.
Author: Matt Hamilton