Paul v. All Alaskan Seafoods, Inc., No. 45388-2-I.

CourtCourt of Appeals of Washington
Writing for the CourtELLINGTON, J.
Citation106 Wash. App. 406,25 P.3d 1040
PartiesMichael PAUL, David Ashton, Bjorn Bergvinsson, Jeff Heimkes, Christopher Jolibois, Jurica Kezic, Michael Mueller, Brent Reid, Kenneth Smith, Kacey Patricia Hawker, as personal representative of the estate of Mark Hawker, Dan Hobbs, and Brian Schultz, Respondents, v. ALL ALASKAN SEAFOODS, INC., AAS-DMP Management Limited Partnership, Kodiak Marine Protein, Inc., Lloyd Cannon and Patricia Cannon and their marital community, and Robert F. Wood and Carolyn Wood and their marital community, Appellants.
Docket NumberNo. 45388-2-I.
Decision Date29 May 2001

25 P.3d 1040
106 Wash.
App. 406

Michael PAUL, David Ashton, Bjorn Bergvinsson, Jeff Heimkes, Christopher Jolibois, Jurica Kezic, Michael Mueller, Brent Reid, Kenneth Smith, Kacey Patricia Hawker, as personal representative of the estate of Mark Hawker, Dan Hobbs, and Brian Schultz, Respondents,
v.
ALL ALASKAN SEAFOODS, INC., AAS-DMP Management Limited Partnership, Kodiak Marine Protein, Inc., Lloyd Cannon and Patricia Cannon and their marital community, and Robert F. Wood and Carolyn Wood and their marital community, Appellants

No. 45388-2-I.

Court of Appeals of Washington, Division 1.

May 29, 2001.


25 P.3d 1041
Jonathan P. Meier, Tom Montgomery, Montgomery & Scrap, Seattle, WA, for Appellants

Bradley H. Bagshaw, Helsell Fetterman Martin Todd & Hokanson, Scott E. Collins, Seattle, WA, for Respondents.

PUBLISHED OPINION {IN PART}

ELLINGTON, J.

We must decide whether federal maritime law preempts the Washington remedy for willful withholding of fishermen's wages. We hold it does not, and affirm the award of double wages under the state statute. We also affirm the trial court's award of attorney fees and prejudgment interest.

FACTS

All Alaskan Seafoods, Inc. and Dalmoreproduct, a Russian fishing company, agreed to fish for crab on the high seas and in the territorial waters of the Russian Federation. The parties created a joint venture, AAS DMP Management Limited Partnership. Dalmoreproduct contributed its 9,000 metric ton crab quota and Russian crewmembers, and All Alaskan contributed financial resources, vessels, American crew, and access to markets. The joint venturers agreed they would pay the crew 50 cents per pound of unprocessed crab.

25 P.3d 1042
Arrangements for the venture varied somewhat from practices common in the Alaska fishing industry. The venture consisted of 10 catcher boats and a processing barge and sold processed crab, whereas in Alaska, individual boats sell unprocessed crab. Many of the provisions in the fishermen's written contracts, however, were typical for the Alaska fishery. The contracts provided the fishermen were to be paid a specific percentage of gross receipts. No mention was made of a per-pound rate of 50 cents. The contracts contained an integration clause

This agreement constitutes the entire agreement between the parties. All prior arrangements and negotiations between the parties are hereby superseded and the agreement between the parties is as stated solely in this document. Any changes to this agreement MUST be in writing by the master and/or owner of this vessel.1

AAS DMP hired the 12 individuals who brought this action. They are 10 seamen who reside (or at all relevant times resided) in Washington, one Oregon resident, and a resident of Montana (collectively, "the fishermen"). Each was hired under the contract terms described above. Most of the crab was processed and sold for $3.50 to $14.50 per pound, although eight deliveries of unprocessed crab were also sold for $3.62 to $5.73 per pound. AAS DMP paid the fishermen's share at 50 cents per pound, rather than a percentage of gross receipts.

The fishermen filed this action in King County Superior Court. They asserted common law seamen's claims for unpaid wages, and also sought state statutory remedies for willful withholding of wages, including double wages, attorney fees, and costs. Defendants included AAS-DMP, a Washington limited partnership; All Alaskan Seafoods, Inc., an Alaska corporation; and Kodiak Marine Protein, Inc., an Alaska corporation, all of which have their principal places of business in Seattle. Also named were individual defendants who reside in the state of Washington. (We refer to the defendants collectively as "All Alaskan.")

Summary judgment on grounds of federal preemption was denied. The jury found in favor of the fishermen, and awarded wages ranging from $44,709 to $283,057.2 Based upon the jury's finding that the wages were willfully withheld, the court doubled the awards under RCW 49.52.070. The court also awarded attorney fees and prejudgment interest.

DISCUSSION

State courts have jurisdiction to consider actions for fishermen's wages under the "savings to suitors" clause: "The district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled."3 The savings clause means that state courts may adjudicate maritime cases, and that each state is free to adopt "such remedies... as it sees fit," so long as such remedies "conform to governing federal maritime standards."4

The test for determining the validity of state legislation affecting maritime commerce was originally set forth in 1917 in Southern Pacific Co. v. Jensen,5 and recently reaffirmed in American Dredging Co. v. Miller.6

25 P.3d 1043
State legislation applies to maritime commerce unless "it contravenes the essential purpose expressed by an act of Congress, or works material prejudice to the characteristic features of the general maritime law, or interferes with the proper harmony and uniformity of that law in its international and interstate relations."7

I. Double Wages

The principal issue in this case is whether the Washington statutes providing a doubling penalty for willful withholding of wages are preempted by maritime law. Washington statutes provide that an employer who, willfully and with intent to deprive the employee of any part of his wage, pays the employee less than is due under a contract, is guilty of a misdemeanor8 and liable "to judgment for twice the amount of the wages," together with costs and attorney fees.9

We must first determine whether Washington's double wage provision conflicts with a federal statute. If not, we must consider whether as applied in this case, the provision works material prejudice to the "characteristic features of the general maritime law," or if its application unduly interferes with the harmony and uniformity of the admiralty system.10 If so, maritime law preempts the state remedy. We review the preemption question de novo.11

All Alaskan alleges Washington's double wage provision conflicts with the federal statutory scheme relating to fishermen's wage claims. This argument rests upon a statute that applies to seamen, but not to fishermen. Under 46 U.S.C. sec. 10313(g), a seaman may recover double wages for each day that payment of wages is delayed without sufficient cause. The purpose of the provision is remedial, but "Congress has chosen to secure that purpose through the use of potentially punitive sanctions designed to deter negligent or arbitrary delays in payment."12

The fishermen here have no claim under 46 U.S.C. sec. 10313(g), because Congress specifically exempted them from the statute: "This chapter does not apply to a vessel on which the seamen are entitled by custom or agreement to share in the profit or result of a voyage."13 All Alaskan argues that this exemption amounts to congressional articulation of a federal policy against wage penalties for fishermen.

We do not agree. First, the exemption was codified in 187814 and we find no legislative history supporting All Alaskan's contention.

Second, logic does not support All Alaskan's argument. In Sewell v. M/V Point

25 P.3d 1044
Barrow,15 defendants contended that another section of the same statute, exempting seamen on coastwise voyages from the double wage remedy otherwise available to seamen, evidenced a congressional intent that coastwise seamen not benefit from an Alaska statute providing a penalty for withheld wages.16 The court found the state statute compatible with federal statutes governing seamen's wage claims, and concluded that the exemption of coastwise seamen simply recognized the impracticality of applying rules for seamen generally to seamen on coastwise voyages, because their employment conditions differ.17 Similarly, fishermen's wages and customs are "peculiar to their business."18 The exemption of fishermen from the seaman's federal doubling remedy merely recognizes this difference.19

Under the federal statutes governing fishermen's recovery of wages and shares, the master and owner of a vessel must execute a written agreement with each seaman, setting forth the agreed wages, shares, or other compensation arrangement peculiar to the fishery.20 The vessel is liable in rem for the highest value alleged for the shares.21 Congress explicitly preserved other remedies: "This section does not affect a common law right of a seaman to bring an action to recover the seaman's share of the fish or proceeds."22

Common law remedies are simply in personam remedies, including statutory remedies:

The "right of a common-law remedy," so saved to suitors ... include[s] all means other than proceedings in admiralty which may be employed to enforce the right or to redress the injury involved. It includes remedies in pais, as well as proceedings in court; judicial remedies conferred by statute, as well as those existing at the common law; remedies in equity, as well as those enforceable in a court of law.23

There is no conflict between the double wage provision of RCW 49.52.070 and the federal statutory scheme governing fishermen's wages.

State law may still be preempted, however, if its application "works material prejudice to the characteristic features of the general maritime law or interferes with the proper harmony and uniformity of maritime law in its international and interstate relations."24 A characteristic feature of general

25 P.3d 1045
maritime law is one that originates in or has exclusive application in admiralty.25

Despite the "long history of awarding punitive damages in maritime claims,"26 All Alaskan asserts that maritime law uniformly prohibits punitive damages in contract cases. For this proposition All Alaskan relies on Thyssen, Inc. v. S.S. Fortune Star,27 in which cargo was damaged after it was...

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