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Dunn v. Hatch

United States District Court, D. Idaho

August 2, 2016

ELI DUNN and COLIN ALLEN, Plaintiffs,
v.
BRYCE HATCH, an individual; HATCH MARINE ENTERPRISE, LLC, et al, Defendants.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill Chief Judge

         INTRODUCTION

         The Court has before it (1) motions to dismiss, for summary judgment, and to strike filed by defendants, Bryce Hatch and Hatch Marine Enterprise, LLC, and (2) a motion for additional discovery filed by plaintiffs Dunn and Allen. The Court held oral argument on June 16, 2016, and took the motions under advisement. For the reasons explained below, the Court will grant the defense motions only in part, and grant the plaintiffs’ motion for additional discovery.

         BACKGROUND

         Plaintiffs were employed by defendants as deckhands aboard the F/V Silver Bullet for the 2013 Bristol Bay (Alaska) salmon season during the months of June and July. They allege that defendant Hatch verbally promised them a ten percent share of the catch. While the value of the catch is estimated at the time of the vessel’s return, buyers typically pay more than the estimate, and the crew is entitled to have this upward “adjustment” added to the value of the catch for purposes of computing the ultimate share due each seaman. The plaintiffs allege that defendants failed to pay them the full amount due by not including the adjustment in the valuation computation, by falsifying the value of the catch, and by not providing an accurate accounting as required by statute.

         Both plaintiffs allege that their agreements were verbal in nature and never reduced to writing. Defendants originally disputed this for both plaintiffs but conceded in oral argument that plaintiff Allen had only a verbal agreement. Defendants continue to allege that plaintiff Dunn had a written agreement, and have proffered a contract with Dunn’s signature affixed. Dunn counters that his signature was forged. Whether the contracts for hire are in writing or merely verbal makes a big difference in terms of the remedies available.

         As remedies, plaintiffs seek recovery for (1) wages equal to the highest crew-share paid out of the port of engagement; (2) double wage penalties under state law; (3) punitive damages under the general maritime law; (4) the sale of the vessel Silver Bullet to satisfy the wages and penalties due to plaintiffs; and (5) attorney fees.

         ANALYSIS

         A seaman who is cheated on his wages has three options. If his contract was not in writing, he can obtain his wages and, in some instances an additional sum, pursuant to 46 U.S.C. §§ 10601[1] and 11107.[2] If his contract was in writing, he has two options. First, he can proceed in rem, to obtain a lien against - and ultimately sell - the vessel as provided in 46 U.S.C. § 10602(a)[3], or he can proceed in personam against his employer under § 10602(c)[4] and receive damages under general maritime law.

         Plaintiffs are pursuing all of these avenues of relief. Under each, they seek punitive damages. The defendants have filed a motion to dismiss arguing that plaintiffs are not entitled to punitive damages under any of these three options. The Court will consider each option and whether plaintiffs are entitled to punitive damages under that option.

         Motion to Dismiss - Punitive Damages for Breach of an Oral Contract

         Defendants seek to dismiss plaintiffs’ claims for punitive damages and double wages under § 11107. The Court will use the single phrase “punitive damages” to refer to (1) punitive damages that are available under general maritime law, Atlantic Sounding Co., Inc. v. Townsend, 557 U.S. 404, 411 (2009), and (2) double wage penalties that are available under various state laws.

         Section 11107 contains the remedy due to a seaman for breach of an oral contract for hire. While plaintiff Allen is clearly suing under an oral contract, it remains to be determined whether plaintiff Dunn is proceeding under a written or oral contract.

         Whether the contract was oral or written makes a difference. To protect seamen, Congress declared under § 10601 that all contracts for hire must be in writing. To add teeth to this requirement, Congress declared in § 11107 that an oral contract is void, allowing a seaman to quit at any time and still be able to “recover the highest rate of wages at the port from which the seaman was engaged or the amount agreed to be given the seaman at the time of engagement, whichever is higher.” In other words, these statutes were designed to penalize ship owners who failed to offer written contracts for hire. See Seattle-First Nat. Bank v. Conway, 98 F.3d 1195, 1198 (9th Cir. 1996) (agreeing that “§ 11107 provides a penalty against vessel owners who employ seamen without written agreements in violation of § 10601”) (emphasis added).

         Plaintiffs seek punitive damages under § 11107. Yet the statute already provides for a potential penalty by allowing a seaman to quit early and receive the highest rate of wages at his port as if he worked for the full duration of the contract. Punitive damages are not typically piled onto a statutory recovery that is already punitive in nature. Priyanto v M/S/ Amsterdam, 2009 WL 1202888 (C.D.Cal. April 30, 2009) (holding that “[t]o allow the recovery of punitive damages in addition to this statutory penalty [under the Seaman’s Wage Act] would permit an unlawful double recovery of punitive damages for the same act”). This is especially true where the statute says nothing about punitive damages generally, is “precisely drawn [and] detailed, ” and was enacted to provide a specific remedy where “no remedy was previously recognized, or when previous remedies were problematic. . . .” See Hinck v. U.S., 550 U.S. 501, 506 (2007). In that case, the statutory remedy becomes exclusive and preempts any remedies available elsewhere in the law. Id.

         Those circumstances exist here. Section 11107 was “precisely drawn” by Congress to protect seamen from the “problematic” remedies associated with oral contracts. Hence, under Hinck, the remedies set forth in § 11107 are exclusive. That statute says nothing about punitive damages generally, and so any claim by Allen for punitive damages under § 11107 must be dismissed. Likewise, if Dunn’s contract is ultimately found to be oral in nature, his claim for punitive damages under § 11107 must be dismissed.

         Motion to Dismiss - Punitive Damages for Breach of a Written Contract

         If Dunn loses his forgery claim, he will be suing for breach of a written contract governed by § 10602. Defendants seek to dismiss his claim for punitive damages under § 10602.

         That statute governs wage claims for seaman suing on a written contract. It states that the “the vessel is liable in rem for the wages and shares of the proceeds of the seamen.” See § 10602(a). That in rem action must be “brought within six months after the sale of the fish.” Id. The statute also requires the employer to “produce an accounting of the sale and division of proceeds under the agreement” and in the event the ...


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