On July 24, the 5th Circuit Court of Appeals (which covers the states of Mississippi, Louisiana and Texas) withdrew its earlier decision in the case and substituted a new opinion in the matter of “BOUDREAUX v TRANSOCEAN DEEPWATER, INC”. The case presented the question whether a Jones Act employer who successfully established a defense to liability for further maintenance & cure is automatically entitled to restitution for benefits already paid. The 5th Circuit concluded no such right of action is recognized in maritime law. However, they did recognize a right to offset any recovery of the seaman to the extent it duplicated amounts already paid in maintenance & cure.
Boudreaux began working for Transocean in 2005. In his pre-employment questionnaire, he failed to disclose prior serious back problems. Less than five months after being hired, he claimed to have injured his back while servicing equipment. Transocean paid him maintenance & cure for almost five years until, while defending Boudreaux’s lawsuit, they discovered this pre-existing history of back problems. Transocean filed a Motion for Summary Judgment pursuant to the McCORPEN decision of the 5th Circuit. Under McCORPEN, the seaman loses his right to maintenance & cure by virtue of the fact he procured his employment by intentionally concealing a material medical condition causally related to the injury later sustained while employed. Boudreaux did not oppose this motion and the district court granted summary judgment to Transocean.
Transocean then a counterclaim to recover the maintenance & cure it had paid. Transocean filed a second Motion for Summary Judgment that it was automatically entitled to recover amounts it paid by virtue of its successful McCORPEN defense. Before the court ruled on this motion, Transocean and Boudreaux reached a settlement. It was a “bracketed” settlement wherein Boudreaux would get a lesser sum of money if the Court recognized the counterclaim and a greater sum if it did not recognize the counterclaim. The district court then ruled in favor of Transocean on its counterclaim and Boudreaux appealed.
The appeal turned on whether the employer who established a successful McCORPEN defense is automatically entitled to a judgment for the maintenance & cure benefits already paid. The 5th Circuit declined to extend the McCORPEN defense into such an automatic right of recovery. It reversed the district court ruling and rendered judgment for Boudreaux on the counterclaim.
However, on issuing its substituted opinion, the 5th Circuit specifically noted that the employer could “offset” any damages the seaman recovered to the extent the damages duplicate the maintenance & cure already paid. They noted that cure payments are inherently duplicative of Jones Act damages which can be awarded for past medical expenses. They also noted that maintenance payments may duplicate the Jones Act recovery for loss of fringe benefits (award of the value of past meals) enjoyed aboard the vessel had the seaman not been injured.
The case seems to stand for the proposition that the employer should assert an affirmative defense for recoupment or restitution of any maintenance & cure paid to the extent of any damages recovered by the plaintiff if the employer proves up (a) the McCORPEN defense and (b) a duplication in the recovery of damages for amounts already paid for maintenance & cure.