Procrastinators Programs SM

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1 Procrastinators Programs SM Maritime Law: Punitive Damages in the U.S. Fifth Circuit Paul M. Sterbcow Lewis Kullman Course Number: Hour of CLE December 18, :20 a.m. 12:20 p.m.

2 PAUL M. STERBCOW, ESQ. is managing partner of the firm of Lewis, Kullman, Sterbcow & Abramson, 601 Poydras Street, Suite 2615, New Orleans, Louisiana He is a 1986 graduate of Tulane Law School. He was formerly managing partner of the law firm of Fraser & Sterbcow and an associate at Abbott, Webb, Best & Meeks. In 1987 and early 1988, he served as contract assistant to general counsel for Penrod Drilling Corporation. He is a member of the bars of the State of Louisiana, the Eastern and Western Districts of Louisiana, the Southern District of Alabama and the United States Fifth Circuit Court of Appeals. He is a member of the Maritime Law and Medical Negligence Sections of the Louisiana State Bar Association. He is a member of the Maritime Law and Medical Negligence Sections and on the Executive Committee of the Louisiana Association of Justice; a member and past president of the Admiralty Section, and the Professional Negligence Section of the American Association of Justice; Board member of the New Orleans Bar Association; the Maritime Law Association; Southeastern Admiralty Law Institute; Board Member of the Bar Association of the Fifth Federal Circuit, a Fellow of the American Bar Foundation and a Fellow of the American College of Trial Lawyers. Mr. Sterbcow was the recipient of the Louisiana Association of Justice President s Award. Mr. Sterbcow is a member of the Plaintiff s Steering Committee and lead trial counsel in MDL-2179, Deepwater Horizon Rig Explosion. Mr. Sterbcow has authored over 40 papers on maritime law and trial practice and has spoken on various maritime law topics at seminars in Louisiana, Texas, Alabama, Florida, Colorado, Massachusetts, Rhode Island and New York.

3 NEW ORLEANS BAR ASSOCIATION 2014 PROCRASTINATORS PROGRAMS Thursday, December 18, 2014 MARITIME LAW: PUNITIVE DAMAGES IN THE U. S. FIFTH CIRCUIT By: PAUL M. STERBCOW LEWIS, KULLMAN, STERBCOW & ABRAMSON 601 Poydras Street, Suite 2615 New Orleans, LA The September 25, 2014 en banc decision in McBride v. Estis Well Service 1 established that punitive damages are unavailable in unseaworthiness actions stemming from injury or death in the U. S. Fifth Circuit. The case, the first of many circuit decisions surely to come addressing whether punitive damages are recoverable in unseaworthiness actions, is another chapter in the ongoing development of maritime punitive damage law. This paper provides an overview of the law as it stands today. Since the availability of punitive damages for general maritime claims largely depends on the status of the plaintiff in the U. S. Fifth Circuit, we frame the discussion in terms of seafarers and non-seafarers as defined by the U. S. Supreme Court. 2 SEAFARERS JONES ACT SEAMAN In 1990, the U. S. Supreme Court, in a case involving a seaman who was killed by a known violent fellow crewmember, held that a non-dependent parent could not recover for loss of society pursuant to the general maritime law for the wrongful of a Jones Act seaman. 3 Noting that neither the Jones Act nor the Death on the High Seas Act provided the right to recover loss F.3d 505 (5 th Cir. 2013); overruled en banc 768 F.3d 382 (5 th Cir. 2014) 2 Yamaha Motor Corp. V. Calhoun, 516 U.S. 199 (1996), defining seafarers as seaman covered by the Jones Act, 46 U.S.C and maritime employees covered by the Longshore and Harbor Workers Compensation Act (LHWCA), 33 U.S.C. 901 et. seq. Non-seafarers are all other maritime personal injury and death claimants. 3 Miles v. Apex Marine Corp., 498 U.S. 19 (1990) 1

4 of society damages to a seaman s representative, the court said: It would be inconsistent with our place in a constitutional scheme where we would have sanctioned more expansive remedies in a judicially created cause of action in which liability is without fault then Congress has allowed in cases in death resulting from negligence. 4 The consequences of Miles have been far reaching and are well documented. The decision has been used repeatedly in the U. S. Fifth Circuit to deny non-pecuniary damage recovery to a Jones Act seaman or his family. 5 The prohibition on non-pecuniary recovery under the general maritime law was extended to punitive damages in Guevara v. Maritime Overseas Corp. 6 Relying specifically on Miles, the court labeled punitive damages as non-pecuniary and held that they were not available under the general maritime law even in a claim of employer wanton and willful failure to provide maintenance and cure. Nine (9) years later the U. S. Fifth Circuit extended the Miles Rule to claims of Jones Act seamen against non-employer third parties that involved neither the Jones Act nor the general maritime law unseaworthiness claim. In Scarborough v. Clemco Industries, 7 the spouse and adult children of a deceased Jones Act seaman made a claim for non-pecuniary damages against a non-employer third party grounded in maritime wrongful death. Recognizing a split among the district courts within the circuit on whether general maritime law limited the recovery of a seaman to pecuniary damages against non-employer third parties, the court relied on Miles as applied by Guevara and held: Even though the Guevara court s principles for application of Miles may not be met in this case, Guevara still instructs that this court should find that non-pecuniary damages are not available.first, although no Congressional act was directly applicable, the court found that Congressional acts apply to highly analogous factual scenarios in that the U.S. at See: Murray v. Anthony J. Bertucci Construction Co., 958 F.2d 127 (5 th Cir. 1992) and cases that followed 6 59 F.3d (5 th Cir. 1995) F.3d. 660 (5 th Cir ) 2

5 judiciary should not allow more expansive remedies in a judicially created cause of action then Congress has allowed in related remedial schemes. Second, the court found that a concerned for uniformity in federal admiralty law, as strongly expressed in Miles, militated against allowing punitive damages in one class of maintenance and cure actions but another. Similar concerns are applicable in this case. 8 Therefore, after the Scarborough decision, Jones Act seamen could not recover nonpecuniary (i.e. punitive) damages in the U.S. Fifth Circuit under the general maritime law for any reason. Two subsequent U.S. Supreme Court decisions changed the general maritime law punitive damage landscape. In Exxon Shipping Co. v. Baker, 9 the U. S. Supreme Court reviewed the availability and scope of punitive damages under the general maritime law. Significantly, the court used its law making authority under the grant of admiralty and maritime jurisdiction in Art. 3, Sec. 2, Cl. 3 of the U. S. Constitution. 10 One of the three major issues was whether punitive damages were implicitly barred by federal statutory law making no provision for them Specifically, Exxon argued that general maritime law punitive damages were inappropriate because the Clean Water Act, 33 U.S.C. 1251, et seq. displaced general maritime law and did not provide for punitive damages. The high court rejected this argument and held in order to abrogate a common law principle, the statute must speak directly to the question. 12 As a result, the CWA did not displace or otherwise preclude the application of the general maritime law rule allowing for punitive damages. 13 One year later, the Supreme Court held that punitive damages are available under the general maritime law to a Jones Act seaman for his employer s willful and wanton failure to pay F.3d at S.Ct (2008) S.Ct. at Id. at Id. at 13 Id. at

6 maintenance and cure. In Atlantic Sounding Co., Inc. v. Townsend 14 the court abrogated Guevara and limited the broad application of Miles. The five main points from Townsend are: 1. Punitive damages were historically available under the general maritime law; The Jones Act did not eliminate pre-existing remedies for separate common law actions based on maintenance and cure; The Jones Act was intended to enlarge a seaman s protection and gave to seaman the election to choose between Jones Act remedies and pre-existing general maritime law remedies; Reliance on Miles uniformity to bar punitive damages recovery under the general maritime law reads Miles far too broadly ; 18 and 5. The laudable quest for uniformity does not require narrowing of damages to the lowest common denominator approved by Congress for distinct causes of action. 19 These decisions were inconsistent with prior U. S. Fifth Circuit law that Jones Act seamen could never recover punitive damages under the general maritime law under any circumstances. At the very least, Townsend made it clear that punitive damages are available under the general maritime law for willful and wanton failure to pay maintenance and cure. Indeed, the Baker and Townsend decisions ushered in new efforts to reshape the availability and scope of punitive damages under the general maritime law in the U. S. Fifth Circuit. The district court in MDL 2179 (The Deepwater Horizon disaster) addressed whether punitive damages U.S. 404 (2009) U.S. at Id. at Id. at Id. at Id. at 424 4

7 would be available for all claimants. 20 The district court followed Miles and held that nonpecuniary damages are not available to seamen. However, plaintiffs who were not Jones Act seamen were allowed to assert claims for punitive damages since punitive damages have long been available at common law and neither the Jones Act nor the Death on the High Seas Act applied to non-seamen claims. 21 Then came McBride v. Estes Well Service, LLC. 22 McBride involved a wrongful death and three personal injury claims under the Jones Act and general maritime law unseaworthiness doctrine for damages caused by a capsized drilling rig in Louisiana territorial waters. Relying on Baker and Townsend, the plaintiffs also sought punitive damages for wanton unseaworthiness. The trial court relied on Miles and held that punitive damages were not available for either wrongful death or personal injury claims under the general maritime law. 23 McBride appealed. In a decision authored by Judge Stephen A. Higginson, U. S. Fifth Circuit overruled the trial court and held that punitive damages were indeed available to seamen under the general maritime law unseaworthiness action. The court relied heavily on Townsend and its abrogation of the Guevara holding which, according to the majority, occurred because of Guevara s interpretation of Miles, not in spite of it. 24 In sum, the court held: Townsend established a straight forward rule going forward: If a general maritime law cause of action and remedy were established before the passage of the Jones Act, and the Jones Act did not address that cause of action or remedy, then that remedy remains available under that cause of action unless and until Congress intercedes. 25 Given that neither the Jones Act nor DOHSA touched on the issue of general maritime law 20 In Re: Deepwater Horizon, 2011 WL (E.D.La. 9/30/2011), as amended (10/4/11) WL *11 22 See fn F. Supp. 2d 511, 515, 518, 521 (W.D. La. 2012) F. 3d. at Id. 5

8 punitive damages, and the prior U. S. Fifth Circuit decision in In Re Merry Shipping 26 recognized the availability of punitive damages for unseaworthiness, Congress did not intend to displace this cause of action or foreclose it going forward. 27 On rehearing en banc, the appeal court reversed the three judge panel and reinstated the judgment of the district court. The en banc court reverted back to reliance on Miles. The Jones Act incorporates the Federal Employers Liability Act (FELA) as the predicate for liability and damages to seamen and their survivors. 28 FELA limits recover to pecuniary loss, so the Jones Act has the same limitation. 29 Punitive damages are non-pecuniary because they are intended to punish and deter conduct, not to compensate the plaintiff for an actual loss. 30 Therefore, because Congress limited the survivor s recovery to pecuniary losses under the Jones Act and the general maritime law, punitive damages are not recoverable in a general maritime law wrongful death case based on vessel unseaworthiness. 31 The same rationale applies to seamen asserting claims for personal injury. 32 Judge W. Eugene Davis wrote for the majority. Five judges concurred in an opinion written by Judge Edith Brown Clement. This concurrence focuses on the distinctions between maintenance and cure and unseaworthiness, calling the right to maintenance and cure ancient and the unseaworthiness action an obscure and relatively little used remedy until it became a strict liability action during the 1940s. 33 Given this, the lack of persuasive authority that punitive damages for unseaworthiness pre-existed the Jones Act, and characterization of unseaworthiness claims and Jones Act claims as Siamese twins, Miles prohibits an aggressive F.3d. at 5 27 Id. at F.3d at Id., citing Michigan Central Railroad Co. v. Vreeland, 227 U.S. 59 (1913) F.3d at Id. at Id. 33 Id. at

9 expansion of punitive damages in the unseaworthiness context. 34 A second, two judge concurrence, authored by Judge Catharina Haynes, distinguishes between the wrongful death action and the personal injury action for the surviving seaman. The action for wrongful death did not exist in common law and was created by Congress. Therefore, to determine remedies available under the general maritime law unseaworthiness doctrine, an admiralty court must look primarily to legislation for guidance. 35 Although this concurrence disagrees with the majority opinion regarding the surviving injured seaman, it concludes that Congress must decide whether injured seamen have a punitive damage remedy under the general maritime law unseaworthiness doctrine, not the federal court sitting in admiralty. 36 This concurrence concludes We join the judgment of the court expressed in majority opinion, although, as to the remaining surviving seamen, not its reasoning. 37 Five judges joined in a descent authored by Judge Higginson, the author of the original McBride decision. This dissent essentially tracks the first opinion. It criticizes the majority s over broad view of Miles and rejects the notion that the Jones Act s damages provision is determinative of the availability of punitive damages for willful unseaworthiness. Judge Higginson concludes with: Like maintenance and cure, unseaworthiness was established as a general maritime claim before the passage of the Jones Act, punitive damages were available under general maritime law, and the Jones Act does not address unseaworthiness or limit its remedies. I would conclude that punitive damages remain available to seamen as a remedy for the general maritime law claim of unseaworthiness until Congress says they do not. 38 He further invites reexamination of the availability of punitive damages for negligence claims 34 Id. at Id. at Id. at Id. 38 Id. at 419 7

10 under the Jones Act. 39 His invitation is sure to be accepted in the not too distant future. Finally, Judge James E. Graves, Jr. authored a second dissent joined by Judge James L. Dennis. It criticizes the majority s focus on the statutory pecuniary damage limitation as applying only to survivors bringing wrongful death claims and not to plaintiffs asserting claims for their own injury. 40 Indeed, it is beyond dispute that the Jones Act permits non-pecuniary damages for the injuries of a decedent himself, including pre-terminal pain and suffering. 41 Therefore, if a pecuniary damage limitation were applicable, it should apply only to the survivor claim and not to the punitive damage claim for gross unseaworthiness brought by claimants with non-fatal injuries. 42 This is not a resounding repudiation of the availability of general maritime law punitive damages for gross unseaworthiness. The current U. S. Fifth Circuit court is clearly struggling with this issue. While punitive damages are unavailable for wanton unseaworthiness in this circuit today, the U. S. Supreme Court will ultimately have to decide the issue. MARITIME EMPLOYEES The LHWCA, enacted in 1927, provides covered maritime workers with an exclusive no fault remedy against their employer for work related injuries. 43 The Act also provides covered workers with a cause of action grounded in the general maritime law against a vessel and its owner in his ownership capacity for injuries caused by their negligence. 44 Additionally, 933 of the Act preserves the covered worker s state law and general maritime law claims against third parties other than his employer and the vessel owner Id. at fn Id. at Id. at Id. at U.S.C. 904,905(a) 44 Id. 905(b); Robertson v. ARCO Oil & Gas Co., 766 F. Supp. 535, 538 (W.D. La. 1991) 45 Id. at 933; McLaurin v. Noble Drilling (US) Inc., 529 F. 3d. 285, 291 (5 th Cir. 2008) 8

11 Sections 905(b) and 933 are silent on available remedies. Congress neither limited the available remedies nor created a new or broader general maritime law remedy. Instead, it merely preserved an injured worker s right to recover damages in accordance with non-statutory negligence principles. 46 Therefore, the right to punitive damages under the LHWCA emanates from the general maritime law and is unlimited by statutory constraint. 47 In addition to the absence of statutory limitations on remedies, the general maritime law has long recognized the availability of non-pecuniary damages for longshoremen injured or killed in state territorial waters. 48 Given the U. S. Fifth Circuit s McBride pronouncement that punitive damages are nonpecuniary, it is clear that longshoremen injured or killed in state territorial waters may recover punitive damages under the general maritime law for willful misconduct that resulted in injury or death. Indeed, there are district court cases recognizing this remedy. 49 Given this, this same class of maritime worker likely can use state punitive damages statutes to supplement remedies available under 933. Like Jones Act seamen, punitive damages under the general maritime law are not currently available to maritime employees injured or killed in federal waters. 50 NON-SEAFARERS The Baker (supra) and Townsend (supra) decisions unequivocally confirmed the availability of punitive damages under the general maritime law. As the Townsend court noted: 46 Parker v. South La. Contractors, Inc., 537 F.2d. 113, 118 (5 th Cir. 1976) 47 Robertson(supra) 48 Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573 (1974); American Export Co. v. Alvez, 446 U. S. 274 (1980) (limited to longshoremen injured in territorial waters by Miles v. Apex Marine Corp., 498 U.S. 19 (1990)) 49 Rutherford v. Mallard Bay Drilling, LLC, 2000 WL (E.D. La. 6/21/2000); Callahan v. Gulf Logistics, LLC, et al, 2013 WL (W.D. La. 9/16/2013); Lucas v. Terrel rriver sservices, LLCInc., 2002 WL (E.D. La. 8/8/02) 50 See Miles (supra) and DOSHA (supra) 9

12 Punitive damages have long been an accepted remedy under general maritime law. 51 As has been shown, the waters get muddy when seafarers are involved because of statutes such as DOHSA and the Jones Act and the application of the Miles Rule. However, in the context of non-seafarers, there are no similar bars to recover punitive damages. As the district court in MDL 2179 noted: As explained in Townsend, neither the Jones Act nor the Death on the High Seas Act speak to negligence claims asserted by nonseamen under general maritime law, and punitive damages have long been available at common law. 52 Before Townsend, general maritime law non-pecuniary damages were unavailable in the U. S. Fifth Circuit for non-seafarers. In Walker v. Braus, 53 the widow of a bass fisherman sued for loss of consortium due to the death of her husband in a collision between his bass boat and an oilfield crew boat. Applying Miles, the appeal court stated: The Supreme Court has clearly indicated its desire to achieve uniformity of damage recoveries in the exercise of admiralty jurisdiction. Allowing Trahan to recover loss of consortium damages would directly contradict the policy of uniformity emphasized and relied on by the court in Miles; and without expressly so deciding at this time, we acknowledge the strength of the argument that damages for loss of society may no longer be permitted in a general maritime wrongful death action involving the operator of a fishing boat. 54 On remand, the district court concluded that the Miles rationale must apply with equal force in cases involving non-seafarers and observed that permitting non-seafarers to recover damages that the beneficiaries of seamen could not produce an anomalous result-- those who are entitled the greatest degree of protection under maritime law would be afforded a lesser degree U.S. at WL at * F.2d. 77 (5 th Cir. 1993) 54 Id. at 82 10

13 of protection than non-seamen. 55 Indeed, after Guevara and before Townsend, the position of the district courts within the Fifth Circuit was summed up in In Re Diamond B Marine Services, Inc. 56 as follows: With the death of Merry Shipping, there is no longer any authority in the Fifth Circuit for an award of punitive damages under the general maritime law. 57 However, as the court noted in MDL 2179, this is no longer the case. Baker and Townsend have reopened the door on punitive damages closed by Miles. Although, there is no U. S. Fifth Circuit decision since Townsend confirming that punitive damages are recoverable in a general maritime law claim made by a non-seafarer, the MDL 2179 opinion provides support that the prior prohibition is no longer valid. Unlike seafarers, non-seafarers have an additional avenue to recover punitive damages. Maritime practitioners will recall the U. S. Supreme Court case of Yamaha Motor Corp. v. Calhoun. Yamaha involved a minor child who was killed in a jet ski accident in Puerto Rico territorial waters. Her parents argued that in a resident state wrongful death statute should apply because the general maritime law limited compensation to burial expenses. Defendant argued that the general maritime law wrongful death cause of action established in Moragne v. States Marine Lines, Inc. 58 provided the exclusive remedy for deaths occurring in state territorial waters. The court held that in non-seafarer territorial water death cases, general maritime law provides the liability standard and state law can supplement remedies available to the claimants. Further, on remand, the district court decided that the law of the decedent s domicile applies to compensatory damages and punitive damages are governed by the law of the state where the F. Supp. 527, 536 (E.D. La. 1994) WL (E.D. La. 2/23/2000) 57 Id. at * U.S. 375 (1970) 11

14 harm occurred. 59 Yahama permits a non-seafarer plaintiff to supplement available remedies in a maritime wrongful death action. Indeed, a district court held: Since Yahama, it has become settled that, in many cases, state law remedies can be accessed and applied by plaintiffs in non-seaman wrongful death actions to supplement those provided by maritime law. 60 Therefore, if a state within the U. S. Fifth Circuit has a statute permitting non-pecuniary damages in non-seafarer injury and death cases, these statutes can be used to supplement available remedies under the general maritime law. In Louisiana, examples are La. Civil Code Art. 2315, which allows the non-pecuniary loss of consortium remedy, and Art , which allows punitive damages against a defendant whose intoxication was a cause in fact of injuries in a boating collision. 61 There is no principled reason to distinguish between personal injury and death cases in this context. Indeed, Felarise (fn 60) involvedallowed a claim for loss of consortium for debilitating but non-fatal injuries suffered in a boating accident. SUMMARY Despite the district court s admonitionishment on remand in Walker (fn 55) to avoid the anomalous result of those who are entitled to the greatest degree of protection (seafarers) receiving a lesser degree of protection than non-seafarers, that is exactly what we have in the U.S. Fifth Circuit. As it stands today the law can be summarized as follows: 1. Jones Act seaman no punitive damages for personal injury or death under the general maritime law regardless of location of incident except in cases of willful failure to pay maintenance and cure F. Supp. 288, 293 (E. D. Pa. 1999) 60 In Re Antill Pipeline Construction Co., 866 F. Supp. 2d. 563, 566 (E.D. La 2011); see also Felarise v. Cheramie Marine, LLC, 2010 WL (1/26/2010) Under Yahama, state law may supplement the general maritime law for the recovery of non-pecuniary damages. 61 Phelps v. White, 645 So. 2d. 698, (La. App. 3 Cir. 10/5/94) 12

15 2. Maritime (LHWCA) employees punitive damages available under the general maritime law for injury or death in state territorial waters caused or contributed to by reckless or willful misconduct 3. Non-seafarers trend toward the availability of punitive damages under the general maritime law for injury in state or federal waters; no punitive damages for death in federal waters; trend toward availability of punitive damages under the general maritime law for death in state territorial waters; ability to supplement available general maritime law remedies in injury and death cases with state law, including recovery of non-pecuniary (punitive) damages As it turns out, the recreational fisherman injured or killed in territorial waters and his family have greater rights than those whose workplaces expose them to the hazards of marine employment and reckless employers. PUNITIVE DAMAGE AWARD The availability of punitive damages under the general maritime law or as supplement by state law is one issue. Actually proving entitlement to and the specific amount of punitive damages is another. In the U. S. Fifth Circuit, the reckless conduct giving rise to punitive damages under the general maritime law must be at the highest corporate level. Indeed, a corporation is liable for punitive damages under the general maritime law only if: 1. The corporation recklessly employs someone who commits a grossly negligent act; 2. An employee commits a grossly negligent act which the corporation authorized beforehand; 3. An employee commits a grossly negligent act which the corporation ratified after the 13

16 fact; or 4. The employee who commits the grossly negligent act is a managerial agent with policy making authority. 62 This standard varies from the Restatement of Torts as applied by the U. S. Ninth Circuit, which allows punitive damages against the corporate entity when the actor was in a managerial capacity and performing within the scope of his employment. 63 The Fifth Circuit also differs from the U.S. First Circuit, which uses the Ninth Circuit s maritime rule with the added requirement that there be some level of corporate culpability for the misconduct. 64 This issue was before the court in the Phase I (limitation of liability) trial in MDL The district court noted that while certain BP personnel engaged in the reckless conduct necessary to impose punitive damages under the general maritime law for non-seafarers, those employees were not policy making officials, nor did the reckless conduct emanate from corporate policy. 65 Given the ongoing development of general maritime law punitive damages, the importance of the corporate culpability issue and the split among the circuits, this question appears to be headed to the U. S. Supreme Court for resolution. Finally, should punitive damages be awarded under the general maritime law in the U. S. Fifth Circuit, what is the appropriate measure of damages? The U. S. Supreme Court discussed this extensively in Baker (fn 9). The court considered three basic approaches to create a rule placing limits on maritime punitive damages to bar penalties that reasonable people would think 62 P. & E. Boat Rentals, 872 F.2d 642, (5 th Cir. 1989) 63 See: Protectus Alpha Nav. Co. Ltd. v. N. Pac. Greengrowers, Inc., 767 F.2d. 1379, (9 th Cir. 1985). NOTE: The U. S. Supreme Court split on this issue 4 to 4 with one judge abstaining. 64 CEH, Inc. v. F/V SEAFARER, 70 F.3d 694, 705 (1 st Cir. 1995) 65 Case 2:110-MD-2179-CJB SS, rec. doc (9/04/14), pp of

17 excessive for the harm caused in the circumstances. 66 The three basic approaches were: 1. To create or adopt criteria to guide juries and reviewing courts in determining an appropriate punitive damages award; 2. To set a hard dollar cap on punitive damages; and 3. To peg punitive compensatory damages using a ratio or multiple maximum. 67 The court rejected the first and second approaches in favor of using a ratio or maximum multiple. 68 The upper limit is 3 to 1 and is applicable to cases involving the most egregious conduct, including malicious behavior and dangerous activity carried on for the purpose of increasing a tortfeasor s financial gain. 69 The court then noted that the 1 to 1 ratio to compensatory damages, although above the median award is a fair upper limit in maritime cases where reckless action is not taken for the purpose of increasing financial gain. 70 At the end of the day, punitive damages must balance fundamental fairness while accomplishing its twin goals of punishment and deterrence. Although the use of a compensatory damage ratio provides guidance, each case will stand on its own particular facts, and the trial court has significant discretion in deciding whether an award punishes and deters reckless conduct while being fair to the tortfeasor. 66 Baker, 128 S.Ct. at Id. at Id. 69 Id. at Id. 15