United States Court of Appeals
For the First Circuit
No. 09-1311
MAREK BORKOWSKI, RUFUS ALFRED AYERS and STEVEN WOOD,
Plaintiffs, Appellants,
v.
F/V MADISON KATE, SEA VENTURES, LLC, and
F/V HOLDINGS, INC. d/b/a SEA ADVENTURES, LLC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Lynch, Chief Judge,
Lipez and Howard, Circuit Judges.
John J. Bromley, with whom David B. Kaplan and The Kaplan/Bond
Group, were on brief, for appellants.
Rachelle R. Green, with whom Byron L. McMasters and Duffy &
Sweeney, LTD, were on brief, for appellees.
March 19, 2010
HOWARD, Circuit Judge. The appellants in this maritime
matter are three commercial fishermen who served aboard the F/V
Madison Kate on a fishing voyage from Stonington, Connecticut in
March 2006. Contrary to the requirements of federal maritime law,
there was no written agreement memorializing the terms of
appellants' employment. Upon return to port, each of the fishermen
and the other crew members was paid a portion of the boat's net
proceeds, consisting of the value of the trip's catch, less various
expenses and the owner's share.1 Their payments were made pursuant
to what is known in the fishing industry as the "lay-share system,"
under which the net proceeds are divided up into "shares" that are
then awarded, in whole or part, to crew members depending on, among
other things, their experience and performance. Appellants Wood
and Borkowski each received a full share; appellant Ayres received
a three-quarter share.2 The fishermen sued, claiming violations of
federal maritime law and state wage laws. After an abbreviated
bench trial, the district court awarded Ayres an additional
quarter-share; Wood and Borkowski received no damage award. The
fishermen claim on appeal that the district court committed legal
error in limiting their damages. Although we employ somewhat
1
The record reflects that the voyage yielded approximately
17,250 pounds of scallops, sold for seven dollars per pound,
resulting in a gross of $120,806. Expenses totaled $48,663.
2
A full share totaled $2,231.48. After certain deductions,
Borkowski was paid $1,984.48. Wood received $1,829.48, and Ayres
received $1,420.61.
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different reasoning than did the district court, we affirm the
judgment.
I.
In May 2007, appellants filed suit against the F/V
Madison Kate and its owner Sea Ventures, LLC.3 Their four-count
complaint alleged: 1) violation of 46 U.S.C. § 10601, which
requires, inter alia, that fishermen's wage agreements be in
writing;4 2) violation of 46 U.S.C. § 11107, which limns damages
for unlawful seaman engagements; 3) egregious conduct warranting
punitive damages; and 4) violation of Massachusetts wage laws,
Mass. Gen. Laws ch. 149, §§ 148, 150. A bench trial was scheduled
for January 2009. At the conclusion of opening statements,
however, the parties agreed to waive any further trial proceedings
and allowed the district court to rule based on the parties'
pretrial memoranda, their opening statements and related legal
arguments, and certain trial exhibits. In short order, the court
issued a written decision awarding appellant Ayers $557.87, the
difference between what he was paid and a full-share. All other
claims were rejected. This timely appeal followed.
II.
The relevant facts are not in dispute. Indeed, it was
the lack of factual dispute that led the district court to suggest
3
Sea Ventures, as the fishermen's employer, is the proper
party in interest. We therefore refer to the appellees
collectively under this name.
4
Such written agreements must contain the period of their
effectiveness, the terms of any wage, share or other compensation
arrangement, and any other agreed terms.
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the truncated procedure. Sea Ventures readily conceded that it
violated 46 U.S.C. § 10601's requirement that the owner of a
fishing vessel "make a fishing agreement in writing with each
seaman employed on board."5 Thus, the only issue before the
district court was appellants' damages.
The district court accepted Sea Ventures' argument that
the appellants' exclusive remedy for violation of 46 U.S.C. § 10601
is 46 U.S.C. § 11107, which provides as follows:
An engagement of a seaman contrary to a law of
the United States is void. A seaman so
engaged may leave the service of the vessel at
any time and is entitled to recover the
highest rate of wages at the port from which
the seaman was engaged or the amount agreed to
be given to the seaman at the time of the
engagement, whichever is higher.
Here, there was no verbal agreement regarding appellants'
wages. Nor did appellants offer any evidence about the "highest
rates of wages" at the Stonington port. The only record evidence
of "Stonington wages" is a "settlement sheet," which details the
gross proceeds of the voyage's catch, the expenses subsequently
deducted from the gross, and the distribution of shares among the
crew. Because Borkowski and Wood each received a full-share, which
the plaintiffs agree is the "highest rate of wages" on the record,
it was agreed below that only Ayres would be entitled to
5
Sea Ventures asserted below that it was unaware of the
writing requirement until it was contacted by appellants' counsel
approximately one month after the voyage at issue here. The record
also reflects that appellants, experienced fishermen, had never
entered into any written fishing agreements. Appellants' counsel
stated at oral argument that the writing requirement was uniformly
ignored at the Stonington port.
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compensation under § 11107. The district court awarded Ayres
$557.87, raising his compensation from a three-quarter share to a
full share.
The district court awarded no further damages, holding
that "§ 10601 is a liability statute, and § 11107 is its
[exclusive] companion remedy statute." Appellants argue that their
remedy is not limited to the compensation outlined in § 11107.
Instead, they ask for an application of maritime common law to
supply additional compensatory and punitive remedies for violation
of § 10601. We review the district court's interpretation of the
statute de novo. Boston & Maine Corp. v. Mass. Bay Transp. Auth.,
587 F.3d 89, 98 (1st Cir. 2009). As it turns out, we are not
required to decide whether the remedy set forth in 46 U.S.C. §
11107 is the exclusive remedy for violations of 46 U.S.C. § 10601,
nor do we decide whether federal maritime law preempts application
of the Massachusetts wage law. Rather, we affirm on the basis that
plaintiffs have failed to prove any other measure of compensatory
damages or any entitlement to punitive damages.
III.
The foundation of appellants' damage claim is that
"[c]ommercial seamen have historically been treated as wards of the
court, enjoying special protections because they are vulnerable to
exploitation by their employers at sea." Kurtz v. Comm'r, 575 F.3d
1275, 1277 (11th Cir. 2009). Appellants argue that the district
court's damage limitation runs counter to the maxim that
"'[l]egislation for the benefit of seamen is to be construed
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liberally in their favor.'" Doyle v. Huntress, 419 F.3d 3, 9 (1st
Cir. 2005) ("Doyle II") (quoting McMahon v. United States, 342 U.S.
25, 27 (1951)).6
Before we analyze appellants' argument, we note that
pinning down the precise nature of their damage claim has proven
somewhat elusive. While their trial memorandum specifically asked
that each appellant be awarded one-seventh of the $120,806 gross
proceeds from the voyage it was silent as to whether those damages
were compensatory or punitive in nature. And though their
appellate brief seeks the same monetary result and refers to their
damage formulation as a "maritime law punitive measure," counsel at
oral argument stated that appellants are seeking both compensatory
and punitive damages, with compensation represented by disallowing
Sea Ventures to keep funds improperly deducted for expenses and the
remainder of the award constituting punishment. Although either
theory -- compensatory or punitive -- leads to the same monetary
outcome,7 each requires a different analytical path. We will
explore both theories.
A. Compensatory damages
Beyond the agreed-upon damage award Ayres received
pursuant to § 11107, appellants argue that they are entitled to
6
Even within the generally hospitable environs of maritime
common law, however, "[s]eamen aboard fishing vessels . . . have
traditionally borne greater responsibility for themselves and their
provisions than those aboard other commercial vessels." Kurtz, 575
F.3d at 1277.
7
One-seventh of the $120,000 gross yields roughly $15,500 per
appellant, after deducting the amounts they've already been paid.
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compensatory damages equal to their share of the amount of expenses
deducted by the owner without the written agreement required by
§ 10601.
In holding that § 11107 is the exclusive remedy for the
violation of § 10601, the district court relied in large part on
the following language from Doyle II: "[W]here the fishermen have
already received a lay share portion of the proceeds from the
fishing voyages they participated in, there does not appear to be
any other real remedy for the vessel owners' failure to comply with
§ 10601, absent § 11107." 419 F.3d at 14. The appellants argue
that this language is dicta, as the exclusivity of § 11107 was not
before us in Doyle II. The appellants may be right that we have
not previously explicitly resolved this exclusivity issue, but we
need not do so here, either. The appellants' claim stalls for a
much simpler reason -- lack of evidence.
To the extent the compensatory relief sought under §
10601 is premised on the claim that Sea Ventures improperly
deducted expenses, there is no evidence upon which any fact-finder
could conclude that the deductions were improper, other than
counsel's say-so, through the use of descriptors such as
"incorrect," "fraudulent," and "things the seamen had never paid
before." Indeed, the record reflects that appellants conducted
little or no discovery below to gather evidence that might buttress
such a claim. By contrast, in Harper v. U.S. Seafoods, L.P., No.
C00-1610P, 2003 WL 25674101 (W.D. Wash. April 8, 2003), the
plaintiff-fisherman presented an expert witness and sought
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discovery from several non-party vessel owners about wages and
employment agreements.
Moreover, as a result of the agreement between the
district court and parties' counsel, none of the appellants
testified, either in person or through deposition transcripts.8
Thus, even if appellants' theory is correct, and additional
compensatory remedies exist under § 10601 for failure to
memorialize the expenses to be deducted or the crew members'
shares, the lack of evidence as to how such deductions should be
made or how such shares should be divvied up is fatal to
appellants' compensatory claim. See Astro-Med, Inc. v. Nihon
Kohden Am., Inc., 591 F.3d 1, 13 (1st Cir. 2009) (damages may not
be recovered if purely speculative).
B. Punitive damages
While not directly addressed, implicit in the district
court's ruling was its rejection of appellants' claim for punitive
damages.
As an initial matter, federal courts sitting in admiralty
have the power, at least in some circumstances, to award common-law
punitive damages to supplement statutory remedies. Atlantic
Sounding Co., Inc. v. Townsend, 129 S. Ct. 2561, 2567 (2009); Exxon
8
Appellants' counsel at oral argument alluded to the
fishermen's deposition testimony that none would have embarked on
the voyage had they been aware of the abstemious wages that awaited
them. As noted, however, no such testimony was placed in the
record. See also Doyle v. Huntress, 513 F.3d 331, 337-38 (1st Cir.
2008) ("Doyle IV") (rejecting as "sheer speculation" fishermen's
testimony that they would not have gone on trips had they known
their shares beforehand).
-8-
Shipping Co. v. Baker, 128 S. Ct. 2605, 2619-21 (2008). At the
same time, however, "[t]he prevailing rule in American courts also
limits punitive damages to cases . . . of enormity, where a
defendant's conduct is outrageous, owing to gross negligence,
willful, wanton, and reckless indifference for the rights of
others, or behavior even more deplorable." Baker, 128 S. Ct. at
2621 (citations and footnote omitted).9
Appellants argue that Sea Ventures should be punished for
intentionally violating § 10601 and as a deterrent against future
misconduct. We disagree. It is undisputed that Sea Ventures'
violation of the writing requirement was unknowing and commonplace.
Under appellants' theory, because "ignorance of the law is not an
excuse," any violation of § 10601's writing requirement is
intentional and therefore warrants punitive damages. Punitive
damages do not, however, automatically follow a statutory
violation. Ignorance of the law sometimes can be an excuse when it
comes to punitive damages. See, e.g., Kolstad v. Am. Dental
Assoc., 527 U.S. 526, 536-37 (1999). Simply put, not all
intentional behavior constitutes "reckless indifference for the
rights of others." Baker, 128 S. Ct. at 2621. We need not here
decide what conduct might support a punitive damages award. It is
enough to say that Sea Ventures' violation of its statutory
obligation -- an obligation of which it was unaware -- cannot
9
Baker also discussed appropriate ratios of punitive damages
to compensatory damages as limiting factors in punitive awards.
128 S. Ct. at 2633. Given our decision, we do not reach this
issue.
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support an award of punitive damages. Here, appellants were paid
under a lay-share system that "is not illegal or unjust." Doyle v.
Huntress, 474 F. Supp. 2d 337, 344 (D.R.I. 2007) ("Doyle III"). As
in the Doyle line of cases, "[t]he violation of § 10601 was not
that the seamen were not paid, but that they were not given fixed
written employment contracts before each trip." Doyle IV, 513 F.3d
at 337. Against this legal and factual backdrop, we find nothing
in the record that supports an award of punitive damages.
C. Massachusetts Wage Act
The district court ruled that Sea Ventures' failure to
abide by § 10601's writing requirement did not constitute a failure
to pay appellants' "wages earned," and was thus not a violation of
the Massachusetts' Wage Act, Mass. Gen. L. ch. 149, §§ 148, 150.
In so ruling, the district court did not reach the disputed issue
of whether the state law was preempted by federal maritime law. On
appeal, however, appellants address only the undecided preemption
issue that was assumed in their favor. They never engage the
district court's reasoning and conclusion that there was no
violation of Massachusetts law. As such, we consider any argument
that the district court wrongly decided the merits of the wage
claim to be waived. See Sonoran Scanners, Inc. v. Perkinelmer,
Inc. 585 F.3d 535, 545 n.7 (1st Cir. 2009) (failure to sufficiently
brief issue on appeal constitutes waiver) (citing United States v.
Zannino, 895 F.2d 1, 17 (1st Cir. 1990)).
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IV.
The judgment of the district court is affirmed. Costs to
appellees.10
10
Appellees' costs are awarded pursuant to Fed. R. App. P. 39
and L.R. 39. Appellees' Motion for Attorneys' Fees, Damages and
Costs is denied in all other respects.
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