Originally published November 3, 2008

Keywords: Miles, Apex Marine, maritime law, wrongful death, Atlantic Sounding Co, Townsend, Albertson's, Inc., Kanter, Federal Food, Drug, and Cosmetic Act, Trainer Wortham & Co., Betz, securities fraud

The Supreme Court granted certiorari today in one case of interest to the business community:

Maritime Law—Punitive Damages

In Miles v. Apex Marine Corp., 498 U.S. 19 (1990), the Supreme Court held that certain non-pecuniary losses are not recoverable in general maritime wrongful-death actions. The lower courts have since divided over whether Miles precludes a seaman's recovery of punitive damages under general maritime law for willful failure to pay "maintenance and cure" (which includes medical care, a living allowance, and wages). The Supreme Court granted certiorari in Atlantic Sounding Co., Inc. v. Townsend, No. 08-214, to resolve the conflict.

The issue in this case is of vital importance to businesses that operate under maritime law. The Court's decision will determine whether such businesses are subject to punitive liability for willful failure to pay maintenance and cure, and it may establish broader principles governing the availability of non-pecuniary damages under general maritime law.

The respondent in Atlantic Sounding Co. allegedly sustained injuries as a result of a fall on a tugboat. He filed suit, alleging, among other things, a willful failure to pay maintenance and cure and seeking punitive damages on that claim. The petitioners moved to strike the request for punitive damages, arguing that they were precluded by Miles. The district court denied the motion but certified the question for review on interlocutory appeal. The Eleventh Circuit affirmed, deeming itself bound by a prior decision of that court and rejecting the petitioners' argument that the prior decision had been abrogated by Miles.

Absent extensions, amicus briefs in support of the petitioners will be due on December 26, 2008, and amicus briefs in support of the respondent will be due on January 27, 2009.

* * * * *

On October 6, 2008, the Supreme Court invited the Solicitor General to file briefs expressing the views of the United States in two cases of interest to the business community:

Albertson's, Inc. v. Kanter, No. 07-1327. The question presented is whether private parties' state-law claims to enforce the requirements of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., are preempted by Congress' mandate that the Act be enforced only by the federal government or state governments.

Trainer Wortham & Co. v. Betz, No. 07-1489. This case presents two related questions: whether the statute of limitations for securities fraud begins to run when the plaintiff receives evidence that her investment advisor intended to defraud her, rather than when the plaintiff is on inquiry notice that there may have been a misrepresentation or when a reasonable investigation would have revealed that the plaintiff had a possible fraud claim; and whether a plaintiff who is on inquiry notice that she has a basis for a fraud claim may reasonably end her investigation because the suspected defrauders have made assurances that contradict known facts.

Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Copyright 2008. Mayer Brown LLP, Mayer Brown International LLP, and/or JSM. All rights reserved.