United States Court of Appeals
For the First Circuit
No. 10-1409
RICHARD S. FAIREST-KNIGHT; VALERIE A. FAIREST-BROOKE;
CONJUGAL PARTNERSHIP FAIREST-FAIREST;
A.S. F-B, Minor; M.A. F-B, Minor,
Plaintiffs, Appellees,
v.
MARINE WORLD DISTRIBUTORS, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Camille L. Vélez-Rivé, U.S. Magistrate Judge]
Before
Torruella, Siler,* and Howard,
Circuit Judges.
Manuel Fernández-Bared, with whom Toro, Colón, Mullet, Rivera
& Sifre, P.S.C., was on brief for appellant.
Antonio Juan Bennazar-Zequeira, with whom Bennazar, García,
Robles & Milián, CSP, was on brief for appellees.
July 15, 2011
*
Of the Sixth Circuit, sitting by designation.
TORRUELLA, Circuit Judge. This case, involving the saga
of an extremely frustrated boat owner, provides further support for
the occasionally expressed view that the two happiest days of a
boat owner's life are the day he buys his boat and the day he sells
it. Appellees will have to remain satisfied with this allotment of
joy, as we now reverse the district court and hold that there was
insufficient proof of causation to support finding the appellant
liable.
I. Background and prior proceedings
Appellant Marine World Distributors, Inc. ("Marine
World") does business in the sale, service and repair of marine
vessels, with its principal offices in San Juan, Puerto Rico. In
2004, Marine World offered for sale a previously owned twenty-six
foot 2001 Bayliner Ciera 2655 motorboat (the "boat"). On March 29,
2004, Mr. Carlos Suárez, a certified marine surveyor, inspected and
appraised the boat, noting that the engine could not be tested
because no cooling water was available. Nevertheless, Suárez
concluded that the boat was good for intended cruising around
Puerto Rico and coastal waters. On August 13, 2004, Appellee
Richard S. Fairest-Knight ("Fairest-Knight") purchased the boat
from Marine World for $38,000.1 Fairest-Knight had no previous
boating experience, and this was his first boat purchase. The boat
1
Fairest-Knight's complaint lists the purchase price as $39,075,
whereas the bill of sale lists $38,000. The correct figure is not
material to this dispute.
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was purchased "as is," as expressly provided in the Sales Order,
and Fairest-Knight was aware that no express or implied warranty
resulted from Marine World's sale of the boat. Fairest-Knight
insured the boat and contracted with a company that provides
emergency towing assistance.
While operating the boat on January 22, 2005,
approximately five months after he purchased it, Fairest-Knight
observed that the boat's oil alarm was triggered and that oil had
drained from the engine into the motor compartment. On January 27,
2005, Marine World inspected the engine, and on February 8, 2005,
it performed the work necessary to correct the oil leakage, as
authorized by Fairest-Knight. This incident would become one in a
series of periodic breakdowns and other problems with the boat over
the next several years. On each occasion, Fairest-Knight would
bring the boat back to Marine World to be repaired, at which point
Marine World would inspect the problem, tender a diagnosis and
perform the indicated repairs. Marine World frequently performed
sea trials to confirm that the problem had been corrected. No
other person or entity serviced the boat during this time. Over
the years, the repairs performed by Marine World included the
following:
a) cleaning the engine room and replacing the
oil sender thread, oil sensor and various
other corroded fittings (February 8, 2005);
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b) performing a tune up, replacing the
impeller, and sanding and painting pulleys
(June 6, 2005);
c) replacing the sea water pump and serpentine
belt (August 23, 2005);
d) removing the engine, disassembling the
manifolds and elbows, starter, engine points,
power steering pump, and pulleys, as well as
cleaning and painting those parts and the oil
pan, followed by a sea trial (October 26,
2005);
e) installing a missing power steering pump
bracket (November 19, 2005);
f) reconnecting GPS terminals, performing a
tune up, and conducting a sea trial (May 17,
2006);
g) replacing the electric fuel pump, cleaning
the carburetor, and conducting a sea trial
(May 27, 2006);
h) conducting a sea trial (June 5, 2006);
i) removing and charging the batteries
(August 10, 2006);
j) replacing the fuel tank vent (August 12,
2006);
k) conducting a sea trial (August 15, 2006);
l) replacing the fuel pick-up assembly
(August 30, 2006);
m) overhauling the engine, replacing the
manifolds and elbows, and conducting a sea
trial (November 6, 2006);
n) replacing the exhaust flappers
(December 13, 2006);
o) replacing the engine longblock
(February 15, 2007);
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p) replacing the impeller kit and flappers
(May 14, 2007).
Despite these repairs, Fairest-Knight experienced repeated
malfunctions while using the boat, often involving complete engine
failures that required towing the boat back to port.
The culmination of these incidents occurred on April 14,
2007 when Fairest-Knight, together with his wife and two sons, also
appellees, embarked on a trip to Costa Bonita, located on the
island of Culebra, approximately twenty miles east of Puerto Rico.
After several engine failures, large amounts of smoke began to
emanate from the engine compartment. Fearing that the boat might
ignite, sink and/or explode, the family donned life jackets and
prepared to abandon the vessel. Fairest-Knight opened the engine
compartment and the smoke began to dissipate. The boat was then
towed back to Puerto del Rey in Fajardo, where the boat has since
remained, unused. Between May 14 and May 22, 2007, Marine World
performed repairs to the boat without charge to Fairest-Knight, who
was unaware that this work had been completed until after
proceedings in this case had begun.
Between August 2004, when the boat was first delivered to
Fairest-Knight, until he last used it in April 2007, Fairest-Knight
incurred expenses totaling $16,139.34 for repairs, $3,195.20 for
towage and $2,990.00 for wharfage and insurance. During this time,
a period of 32 months, the boat was undergoing service or was
otherwise unuseable for 276 days, or approximately 9 months.
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On August 8, 2007, Fairest-Knight filed a complaint
against Marine World in the District Court of Puerto Rico, raising
claims under admiralty law and Article 1802 of the Puerto Rico
Civil Code. After a four-day bench trial, the district court found
that Marine World "breached its duty to a workmanlike performance
upon which plaintiffs had a right to rely." The district court
found that the "repeated repairs which had to be done to the boat
over an extended period of time" was evidence of Marine World's
breach, noting that "there was a repeated failure to identify the
source of the engine's failure despite representations to
plaintiffs that the boat was in a seaworthy condition," and that
"Marine World was the only entity which serviced the boat during
the period of time at issue." The district court rejected Marine
World's theory that Fairest-Knight failed to properly maintain the
boat as not credible, given that the evidence at trial showed that
Fairest-Knight "followed the recommendations made by Marine World
as to replacement of parts and the boat's maintenance," and that,
given how much time the boat spent in its shop, the onus was on
Marine World to notice and inform Fairest-Knight of any need for
maintenance. The district court awarded Fairest-Knight $15,739.96
for the faulty repairs; $3,195.20 for towage expenses; $2,990 for
storage and insurance expenses up to June 20, 2007, and $13 per day
thereafter until the entry of judgment; $55,000 to Fairest-Knight
and his family for the negligent infliction of emotional distress
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and pain and suffering; and costs and attorneys' fees. Marine
World appealed on March 5, 2010.
II. Discussion
A. Standard of review
"'Where, as here, the district court conducts a bench
trial and serves as the factfinder, its determinations of
negligence, proximate cause, and similar issues are entitled to
considerable deference.' Specifically, such review is for clear
error." N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579 F.3d
61, 67 (1st Cir. 2009) (quoting Jackson v. United States, 156 F.3d
230, 232 (1st Cir. 1998)). A finding qualifies as "clearly
erroneous" when our review of the record leaves us "with the
definite and firm conviction that a mistake has been committed."
United States v. United States Gypsum Co., 333 U.S. 364, 395
(1948).
B. Was Marine World liable?
Marine World contends that the district court erred in
finding it liable to appellees for having breached its duty to
carry out the agreed-upon repairs in a workmanlike fashion. Marine
World insists that there was insufficient evidence that their
repairs were the cause of the repeated problems experienced by
appellees' boat. Fairest-Knight argues that a party does not need
to act negligently to be in breach of the implied warranty, and
that Marine World's inability to finally resolve the various
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problems plaguing his boat shows that it was in breach of its
implied warranty of workmanlike performance.
"[C]ontracts for repairs to a vessel . . . come under the
scope of admiralty jurisdiction." La Esperanza de P.R., Inc. v.
Pérez y Cía. de P.R., 124 F.3d 10, 16 (1st Cir. 1997). This brings
such a case under federal jurisdiction. See U.S. Const. art. III,
§ 2. "Admiralty jurisdiction brings with it a body of federal
jurisprudence, largely uncodified, known as maritime law." Ballard
Shipping Co. v. Beach Shellfish, 32 F.3d 623, 625 (1st Cir. 1994).
"In the absence of a relevant statute, the judicially-developed
norms of the general maritime law, 'an amalgam of traditional
common-law rules, modifications of those rules, and newly created
rules,' governs actions in admiralty." La Esperanza, 124 F.3d at
16 (quoting East River S.S. Corp. v. Transamerica Delaval, Inc.,
476 U.S. 858, 865 (1986)). Although state law may supplement
federal maritime law when the latter is silent or where a local
matter is at issue, it "may not be applied where it would conflict
with [a federal] maritime law." Floyd v. Lykes Bros. S.S. Co., 844
F.2d 1044, 1047 (3d Cir. 1988).
The First Circuit has acknowledged three potential
sources of liability under federal maritime law for a ship
repairer's infelicitous work. These are liability via expressly
assumed contractual obligations, the maritime tort of negligence,
and the "implied warranty of workmanlike performance that attaches
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to admiralty contracts under the rule of Ryan Stevedoring Co. v.
Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S. Ct. 232, 100 L.Ed. 133
(1956)." La Esperanza, 124 F.3d at 16-17. The theory of liability
relevant to this appeal is the latter, the implied warranty of
workmanlike performance.
Although originating in disputes involving the
indemnification of shipowners, we recognized in La Esperanza that
liability under the implied warranty of workmanlike performance
extends to disputes between shipowners and shipyards. In La
Esperanza, a shipowner sued a shipyard for negligently damaging the
boat it had been hired to repair. We affirmed the district court's
finding that the shipyard was liable for the negligence of its
repairs, noting that the shipyard's failure to properly complete
the requisite repairs "constituted a breach of an express and
implied contractual obligation, particularly in view of the fact
that evidence in the record substantiates that similarly situated
ship repairers could have" completed the repairs correctly. Id. at
19.2
We additionally noted that although the implied warranty
of workmanlike performance does not impose a strict liability
regime on ship repairers, and instead "parallels" a negligence
2
The contract between the shipowner and the shipyard included a
provision stating that the shipyard committed "to use materials and
execute work to standard ship repair practice," a clause that we
found made express "the otherwise implied warranty of workmanlike
performance in marine contracts." La Esperanza, 124 F.3d at 18-19.
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standard, nevertheless, a shipowner could recover for a breach of
the implied warranty of workmanlike service even when "such
performance was done without negligence." Id. at 17 (quoting SS
Amazonia v. N.J. Export Marine Carpenters, Inc., 564 F.2d 5, 8 (2d
Cir. 1977)); see also Feliciano v. Compañía Transatlántica
Española, S.A., 411 F.2d 976, 978 (1st Cir. 1969) (noting that the
implied warranty cause of action acknowledged in Ryan was based
neither on negligence or unseaworthiness, but "is strictly
contractual in nature, existing independently of tort."). However,
La Esperanza did not reduce or eliminate a plaintiff's burden of
proving that the defendant's conduct caused his injury. See SS
Amazonia, 564 F.2d at 8 (stating that recovery under a breach of an
implied warranty of workmanlike performance claim requires showing
that the sub-standard work performed "caused the damage claimed").
For starters, although recovery for breach of implied
warranty does not invariably require proof of negligence, the
implied warranty does not go so far as to "impos[e] strict
liability." La Esperanza, 124 F.3d at 17. But in this regard, it
is surely notable that even claims of unseaworthiness, which do
"impose a strict liability regime upon shipowners," Napier v. F/V
DEESIE, Inc., 454 F.3d 61, 68 (1st Cir. 2006), require the
plaintiff to show that the defendant's conduct was the proximate
cause of his injury. In other words, even the "absolute duty [of]
shipowners to furnish a 'seaworthy' ship" is limited to those
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injuries "caused by any defect in a vessel or its appurtenant
appliances or equipment." Id. at 67-68 (emphasis added); see also
Poulis-Minott v. Smith, 388 F.3d 354, 366 (1st Cir. 2004); Ferrara
v. A. & V. Fishing, Inc., 99 F.3d 449, 453 (1st Cir. 1996).
Because La Esperanza acknowledged liability under a theory of a
breach of an implied warranty to be more limited than strict
liability, and because strict liability claims (in the form of
claims of unseaworthiness) themselves require proof of causation,
it stands to reason that La Esperanza did not absolve parties
claiming breach of an implied warranty of workmanlike service from
proving that the alleged breach caused their injury. Causation
must be established by a preponderance of the evidence. See
Marquette Trans. Co., Inc. v. La. Mach. Co., Inc., 367 F.3d 398,
402 (5th Cir. 2004).3
Moreover, although in La Esperanza we stated that
"[h]ere, one witnesses a ship that came in for repairs under her
own power . . . but somewhere, somehow, something went wrong," 124
F.3d at 18, a substantial portion of the opinion in La Esperanza
3
The appellees contended at oral argument that Marquette is
inapplicable in light of our opinion in La Esperanza. We
acknowledge that Marquette is in tension with La Esperanza insofar
as it suggests that plaintiffs pursuing a breach of an implied
warranty claim must show negligence, see Marquette, 367 F.3d at 402
("[T]he evidence available must be sufficient to find both
negligence and causation." (emphasis modified)). However, whatever
may be the case with proof of negligence in implied warranty cases,
proof of causation remains indispensable, and on that score we
agree with Marquette's description of the applicable burden of
proof.
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was in fact devoted to explaining how the shipyard's performance --
its unsuited method of removing the existing hull plates, its
equally unsuited method of patching the holes it thereby created,
and the careless way in which the boat was subsequently stored --
had caused significant damage to the ship's hull, electrical
system, upper deck and carpeting. See La Esperanza, 124 F.3d at
14-15, 17-19. The shipyard also never fully completed the
contracted-for repairs and, "seeking to extricate itself from a
predicament of its own making . . . told the shipowner,
essentially, that it . . . had a problem on its hands, and maybe it
should consider hiring a special welding consultant." Id. at 18.
Rather than mere speculation, in other words, there was quite
substantial evidence that the shipyard's conduct had caused the
damage to the plaintiff's vessel.
By the same token, our observation that where a shipyard
represents itself as being "a competent shipyard skilled in doing
the type of work requested by the shipowner," then the latter has
"a right to rely on the [shipyard's] expertise" and may "expect a
stable seaworthy vessel upon completion of the repairs, regardless
of the condition of the boat[] prior to repairs," La Esperanza,
124 F.3d at 18 (internal quotation marks omitted), should not be
read -- as appellees appear to suggest -- to hold that once a
shipyard has undertaken to repair a boat, any subsequent breakdowns
or problems may, without more, be presumed to have been caused by
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the shipyard. The facts in La Esperanza clearly indicated that it
was the shipyard's inability and/or unwillingness to properly
complete the work it had specifically contracted to do that had
caused the damage to the ship, which bolstered the finding of
liability.
In light of these observations, the fact that neither the
appellees nor the district court were able to provide an
explanation as to how the chronic problems with the boat were the
result of Marine World's acts or omissions takes on dispositive
salience.4 In supporting its liability determination, the district
court stated that
[e]vidence of the breach of Marine World are
the repeated repairs which had to be done to
the boat over an extended period of time . . .
there was a repeated failure to identify the
source of the engine's failure . . . Marine
World was the only entity which serviced the
boat during the period of time at issue. . . .
The best evidence that the repairs to the boat
by Marine World were faulty are the invoices
which show the boat could not be used for its
4
Appellees emphasize that the inspection of the boat commissioned
by Marine World did not include any test of the engine. The
inspection report clearly stated that the engine had not been
tested, Fairest was apparently aware of the certification at the
time of purchase, and the purchase agreement explicitly specifies
that the boat was being sold "as is" -- meaning, as Fairest
conceded at trial, that "there was not an expressed or implied
warranty for [the] boat." We see no reason, on these facts, to
construe the incomplete inspection as a breach of the implied
warranty of workmanlike performance. See N. Ins. Co. of N.Y., 579
F.3d at 67-68. In any case, the basis for this lawsuit is whether
Marine World breached their duty of providing workmanlike
performance in repairing the boat, not whether they improperly sold
appellee a boat that had not been fully tested.
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intended use over extended periods of time
because the boat was being repaired for
multiple malfunctions.
We cannot agree. The fact that multiple repairs were
required, without more, cannot be taken to establish that it was
Marine World's unworkmanlike conduct that brought about the need
for the repairs. In other words, if the hypothesis is that Marine
World's unworkmanlike performance caused the need for the repeated
repairs, then the fact that the repairs were required cannot itself
be adduced as evidence supporting that hypothesis -- it is what
needs explaining, and so cannot, on pain of circularity, be what
does the explaining.5 From what we are able to ascertain in the
record, Marine World was generally able to diagnose and repair each
problem as it arose.6 Fairest-Knight conceded at trial that he had
no evidence of sub-standard performance by Marine World. No
evidence was introduced that Marine World employed improper repair
procedures or used sub-standard parts, nor is there any evidence
that Marine World at any point mis-diagnosed the specific problem
reported by Fairest-Knight. There is no evidence that it was poor
work by Marine World rather than poor design, poor manufacture,
5
Why does opium make men drowsy? Because it possesses a
dormitive power. (With apologies to Molière, Le Malade Imaginaire
(1673), Act III, scene iii.)
6
Appellees note that Marine World incorrectly diagnosed the
source of an oil leak in January, 2005. It is undisputed, however,
that Marine World made the correct repair after discovering the
actual cause of the leak.
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poor maintenance or abuse by the boat's previous owner, or
something else -- including the appellee's admitted inexperience
with boat ownership -- that caused the boat's various problems. We
have no basis on which to even speculate as to whether the same
series of problems would have arisen had Fairest-Knight brought the
boat to a different shipyard for repairs. See La Esperanza, 124
F.3d at 19.
Although circumstantial evidence may in some cases be
used to establish causation, the circumstances must nevertheless
allow for a "strong inference[]" of causation. See Marquette, 367
F.3d at 402, 404. Exclusivity of control or possession is an
important factor in supporting this inference. Id. at 404; N. Ins.
Co. of N.Y., 579 F.3d at 69-70 (where defendant marina did not have
exclusive possession of the boat, no presumption of fault would
apply.) In this case, we note that possession of the boat
alternated between Fairest-Knight and Marine World during the
relevant time period, and that Fairest-Knight made use of the boat,
even if not always successfully, on multiple occasions. Fairest-
Knight claims that between the time the boat was delivered and the
final April 14, 2007 incident, the boat spent 276 days "in repairs,
undergoing service, or simply not working." Assuming this to be
accurate, we can infer that during this time the boat spent nearly
700 days, or approximately 23 months, in Fairest-Knight's
possession. This makes it difficult to say that it is more likely
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than not that the problems with Fairest-Knight's boat were caused
by Marine World, which did not even have possession of the boat for
the majority of the time in question. See id. at 70 (describing
owner's presence on the boat several days before its sinking, his
hiring of an independent mechanic, and his implied permission to
his friends to access the boat without prior approval as "the kind
of activity which, through its interference with [defendant
marina's] control over the boat, would cast doubt on the fairness
of presuming that [defendant marina] was responsible [for the
boat's sinking]").
The appellees insist that their inability to identify the
cause of the boat's problems should not defeat their claim. They
cite Ryan for the proposition that a "contractor, as the warrantor
of its own services, cannot use the shipowner's failure to discover
and correct the contractor's own breach of warranty as a defense."
Ryan, 350 U.S. at 134-35. The appellees' reliance on Ryan might be
more convincing if it had already been established that Marine
World's conduct was the cause of their injury. After all, in Ryan
the Supreme Court acknowledged liability premised on breach of an
implied warranty of workmanlike service provided that said breach
had caused the complained-of injury. See Ryan, 350 U.S. at 132
("The other question is whether . . . a stevedoring contractor is
obligated to reimburse a shipowner for damages caused it by the
contractor's improper stowage of cargo." (emphasis added)). It was
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in this context that the Supreme Court rejected the stevedoring
contractor's argument that "because the shipowner had an obligation
to supervise the stowage and had a right to reject unsafe stowage
of the cargo," its failure to object prior to the accident
extinguished its right to indemnification from the shipowner. Id.
at 134. There was, in this context, no question as to whether the
contractor's acts or omissions had caused the injury. But that
question lies at the heart of this case, and nothing in Ryan
suggests that the appellees may avoid having to answer it.
In short, absent sufficient proof of causation, the
troubles experienced by Fairest-Knight with his boat -- while
undeniably frustrating -- do not make out a viable breach of
warranty claim. We therefore hold that the district court clearly
erred in finding otherwise, and reverse its finding that appellants
breached the implied warranty of workmanlike service.
C. Damages
The appellees claimed damages both under admiralty law
and Article 1802 of the Puerto Rico Civil Code, 31 L.P.R.A. § 5141.
The district court, exercising pendent jurisdiction over the state
law claim, cited Article 1802 of the Puerto Rico Civil Code as the
basis for its award of damages for negligent infliction of
emotional distress and pain and suffering.7 This statute provides
7
It is possible that federal maritime law would preclude the
appellees' state law cause of action for the negligent infliction
of emotional distress. State law may supplement maritime law when
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that "[a] person who by an act or omission causes damage to another
through fault or negligence shall be obliged to repair the damage
so done." 31 L.P.R.A. § 5141 (emphasis added). Causation is thus
clearly an element under Article 1802. See Santini Rivera v. Serv.
Air, Inc., 137 D.P.R. 1, 1994 JTS 121, 1994 P.R.-Eng. 909,527, slip
op. at 10 (P.R. 1994); Marital Cmty. k/a Luz M. Hernández and
Edgardo López Flores v. González Padín Co., Inc., 117 D.P.R. 94, 17
P.R. Offic. Trans. 111, slip op. at 125 (P.R. 1986). Because
appellees failed to establish that Marine World was the cause of
the boat's chronic problems, there was no basis for an award of
damages under either the admiralty or Article 1802 claims.
III. Conclusion
We take it as clearly settled that shipowners may only
recover from ship repairers under an implied warranty theory if the
alleged breach is shown to have caused the plaintiff's injury.
maritime law is silent or where a local matter is at issue. See
Floyd v. Lykes Bros. S.S. Co., 844 F.2d 1044, 1047 (3d Cir. 1988).
However, "state law may not be applied where it would conflict with
[a federal] maritime law." Id. at 1047; see also Askew v. Am.
Waterways Operators, Inc., 411 U.S. 325, 341 (1973). A maritime
tort of negligent infliction of emotional distress has been
recognized in the Ninth Circuit; see Chan v. Society Expeditions,
Inc., 39 F.3d 1398 (9th Cir. 1994). The First Circuit has not yet
definitively addressed this question. See, e.g. Peemoller Sultan
v. Pleasure Craft Contender 25, 139 F. Supp. 2d 230, 234 (D.P.R.
2001); Ellenwood v. Exxon Shipping Co., 984 F.2d 1270, 1282-83
(1st Cir. 1993) (declining to decide whether "a seaman may recover
emotional distress damages without showing a physical injury.").
We decline to decide this question, as it is apparent that
appellees' failure to show causation dooms their claim, regardless
of whether it is brought under the auspices of federal maritime or
state law.
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Appellees failed to prove that appellant's conduct caused their
injury. Accordingly, the district court's finding of liability is
reversed, and its award of damages and attorneys' fees in favor of
appellees is vacated.
So ordered.
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