Vaughn v. American Cml Barge Line

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United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED October 17, 2025 No. 23-30494 Lyle W. Cayce ____________ Clerk Jamal Vaughn, Plaintiff—Appellee/Cross-Appellant, versus American Commercial Barge Line, L.L.C., Defendant—Appellant/Cross-Appellee. ______________________________ Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:18-CV-7735 ______________________________ Before Richman, Oldham, and Ramirez, Circuit Judges.

Priscilla Richman, Circuit Judge: Jamal Vaughn sustained injuries while serving as a deckhand aboard the M/V EXPLORER, owned and operated by American Commercial Barge Line (ACBL). ACBL stipulated to liability under the Jones Act, and the case focused on Vaughn’s damages. ACBL appeals the district court’s calculation of Vaughn’s past and future wage losses while Vaughn appeals the district

_____________________  This opinion is not designated for publication. See 5th Cir. R. 47.5.

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No. 23-30494 court’s denial of his claim for punitive damages and attorney’s fees for failing to pay cure benefits timely. We vacate and remand in part and affirm in part.

I Jamal Vaughn worked as a deckhand aboard the M/V EXPLORER, owned and operated by ACBL. The EXPLORER collided with a moored vessel, and Vaughn sustained injuries to his head, neck, back, and right shoulder. ACBL stipulated to liability under the Jones Act, and the case proceeded to a bench trial to adjudicate Vaughn’s damages.1 Both parties provided reports from economic-loss and vocational- rehabilitation experts. The experts offered substantially different estimates of Vaughn’s past and future wage losses. Specifically, Vaughn’s expert estimated his past wage loss as $221,246 and his future wage loss as $1,604,256.2 In contrast, ACBL’s expert assumed Vaughn could have returned to the workforce in December 2021 and therefore estimated his past wage loss as ranging between $182,958.91 and $205,519.68. Additionally, ACBL’s expert estimated Vaughn’s future wage loss to range between $404,868.87 to $496,804.78 with a midpoint of $450,836.82.

The district court awarded Vaughn $221,246 for past wage loss (fully accepting the estimate provided by Vaughn’s expert) and $750,000 for future wage loss. The district court derived the future wage loss amount from the expert reports: “Extrapolating from the calculations by competing economists, the Court finds that Mr. Vaughn’s loss of future earnings is $750,000 (after taxes).” The district court additionally awarded damages for past and future medical expenses, pain, and suffering, and future disability.

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The district court declined to award Vaughn punitive damages or attorney’s fees for failure to pay cure benefits timely. Both ACBL and Vaughn have appealed.

II The parties debate whether the district court erred in calculating Vaughn’s past wage loss by failing to consider evidence of his ability to return to work prior to the trial.

In the Jones Act context, a plaintiff has a duty to mitigate damages.3 The defendant bears the burden of establishing the plaintiff failed to mitigate damages.4 If a district court determines a Jones Act plaintiff failed to mitigate damages by seeking reasonable employment, it should reduce damages by the what the plaintiff could have earned had he returned to work prior to the trial.5

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“In reviewing a district court’s award of damages, we review all issues of law de novo.”6 “Absent an error of law, a district court’s award of compensatory damages presents an issue of fact, subject to the clearly erroneous standard of review.”7 This standard of review also applies to the determination of whether a party failed to mitigate damages.8 ACBL argues the district court erred because it “failed to take into account undisputed evidence of Vaughn’s ability to return to work prior to trial” and therefore miscalculated his past wage loss by $38,287.09. ACBL notes medical personnel cleared Vaughn to resume some form of employment before the trial, citing three separate Functional Capacity Evaluations (FCEs) that Vaughn underwent as well as testimony of his treating physicians. Accordingly, using the date of the final FCE, ACBL contends Vaughn voluntarily failed to return to work for over a year and a half before trial and accordingly, ACBL is entitled to a reduction of past wage loss.

Vaughn offers two primary reasons why he did not return to the workforce. First, he claims his treating physician (Dr. Todd) never told him that he could return to work. Second, Vaughn argues he was in pain, was continuing his medical treatment, and was unsure whether an employer would accommodate his treatment.

We conclude that the district court did not clearly err when it fully adopted the past wage loss recommendation of Vaughn’s expert, even Case: 23-30494 Document: 66-1 Page: 5 Date Filed: 10/17/2025

No. 23-30494 though he did not consider whether Vaughn could have returned to work before trial.

The clearly erroneous standard grants district courts great deference,9 and an appellate court may not “reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently.”10 Here, the district court found Vaughn credible.11 The district court could have concluded Vaughn sufficiently attempted to mitigate damages based on his statement that he called potential employers. Further, the district court could accept the past wage loss recommendation of Vaughn’s expert.12 Based on this evidence, the district court’s implicit finding that Vaughn did not fail to mitigate his damages was not clearly erroneous because “it is plausible in the light of the record.”13

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III As to Vaughn’s future wage loss, the parties debate whether the district court erred by failing to calculate Vaughn’s future wage loss in accordance with Culver II. Our circuit’s method for determining future wage loss is derived from Culver v. Slater Boat Co. (Culver II).14 In that en banc decision, we stated: The calculation of damages suffered either by a person whose personal injuries will result in extended future disability or by the representatives of a deceased person involves four steps: estimating the loss of work life resulting from the injury or death, calculating the lost income stream, computing the total damage, and discounting that amount to its present value.15 Under Culver II, adjusting for inflation must occur after a fact-finder calculates the lost income stream.16 Absent party stipulation, Culver II held that “fact-finders shall determine and apply an appropriate below-market discount rate as the sole method to adjust loss-of-future-earnings awards to present value to account for the effect of inflation.”17 Above all, Culver II established that “[t]he paramount concern of a court awarding damages for lost future earnings is to provide the victim with a sum of money that will, in fact, replace the money that he would have earned.”18

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As previously mentioned, in reviewing a district court’s award of damages, “we review all issues of law de novo.”19 “Absent an error of law, a district court’s award of compensatory damages presents an issue of fact, subject to the clearly erroneous standard of review.”20 However, damages cannot be speculative,21 and the district court must express its findings and conclusions “with sufficient particularity to allow us to determine rather than speculate that the law has been correctly applied.”22 In cases in which the district court did not properly apply Culver II, we held the calculation of damages was clearly erroneous.23 ACBL raises two primary concerns about the calculation of Vaughn’s future wage loss. First, ACBL points to alleged issues with the report produced by Vaughn’s economic loss expert. Second, ACBL argues that in extrapolating from calculations by the competing economic loss experts, the district court “did not provide a Culver II analysis or any indication that it incorporated Culver II into its calculations.” Specifically, ACBL claims the Case: 23-30494 Document: 66-1 Page: 8 Date Filed: 10/17/2025

No. 23-30494 district court “did not utilize the below-market discount method in its calculation.”

In response, Vaughn argues there was no error in the district court’s calculation of his future wage loss, and both experts properly utilized the below market discount method. He contends the district court’s extrapolation between the two estimates complied with Culver II.

Although the district court acknowledged the “two economists calculated widely disparate estimates,” the court did not explain how it reconciled the two figures. The award of $750,000 is an average between the estimate of Vaughn’s expert ($1,604,256) and the estimate of ACBL’s expert (ranging between $404,868.87 to $496,804.78 with a midpoint of $450,836.82). Consequently, the district court’s declaration that it determined future wage loss as $750,000 by “[e]xtrapolating from the calculations by competing economists” does not provide sufficient reasoning for appellate review. In the absence of more information, our court cannot “determine rather than speculate that the law has been correctly applied.”24 Because Culver II generally requires district courts to explain their decision- making,25 we vacate and remand on the calculation of Vaughn’s future wage loss so that the district court may outline its reasoning in line with our precedent. That includes application of the four steps set forth in Culver II, with an explanation of the evidence that supports the findings at each step.

The district court can also address the issues raised regarding Vaughn’s expert report, to the extent the district court relies on part or all of that report.

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IV We turn to Vaughn’s claim for punitive damages and attorney’s fees for ACBL’s alleged failure to timely pay cure benefits.

“A claim for maintenance and cure concerns the vessel owner’s obligation to provide food, lodging, and medical services to a seaman injured while serving the ship.”26 An injured seaman may recover punitive damages as well as attorney’s fees27 for “his employer’s willful failure to pay maintenance and cure.”28 As explained by our court: [T]here is an escalating scale of liability: a shipowner who is in fact liable for maintenance and cure, but who has been reasonable in denying liability, may be held liable only for the amount of maintenance and cure. If the shipowner has refused to pay without a reasonable defense, he becomes liable in addition for compensatory damages. If the owner not only lacks a reasonable defense but has exhibited callousness and indifference to the seaman’s plight, he becomes liable for punitive damages and attorney’s fees as well.29 There is “[n]o bright line” distinguishing what conduct entitles the seaman to punitive damages.30 However, our court has provided types of employer behaviors that could merit punitive damages. These examples Case: 23-30494 Document: 66-1 Page: 10 Date Filed: 10/17/2025

No. 23-30494 include “(1) laxness in investigating a claim; (2) termination of benefits in response to the seaman’s retention of counsel or refusal of a settlement offer; (3) failure to reinstate benefits after diagnosis of an ailment previously not determined medically.”31 The seaman faces a high burden in establishing he is entitled to punitive damages. The employer must have been not only “unreasonable”32 but also “egregiously at fault.”33 Our court has described “this higher degree of fault in such terms as callous and recalcitrant, arbitrary and capricious, or willful, callous and persistent.”34 Ultimately, the seaman must demonstrate “an element of bad faith.”35 Moreover, the employer is permitted to investigate claims before tendering cure,36 and untimely payments are not an independent basis for punitive damages.37 To this point, our court previously declared: “an employer is entitled to investigate a claim for maintenance and cure before tendering any payments to the seaman—without subjecting itself Case: 23-30494 Document: 66-1 Page: 11 Date Filed: 10/17/2025

No. 23-30494 to liability for compensatory or punitive damages.”38 We review the grant or denial of punitive damages for abuse of discretion.39 Some background about the payment of Vaughn’s medical expenses is in order. In February 2021, ACBL’s attorney stated the company would pay for “the outstanding medical expenses incurred by [Vaughn] for Dr. Todd’s treatment, the updated cervical MRI, lumbar MRI, the discogram and post discogram CT scan and related expense[s].” Vaughn’s attorney sent bills in March and April 2021, and a paralegal sent a follow up email (asking whether more information was necessary) in August 2021. ACBL’s attorney responded shortly thereafter that he would communicate with the medical coordinator for the company “who was supposed to take care of this.” The paralegal sent another follow up email in June 2022. In May 2023, ACBL’s counsel requested proof of payment and followed up twice that month. Later that month, the paralegal sent an updated list of medical expenses as well as copies of cancelled checks representing payment. At the district court, ACBL explained that it paid (or would pay) for the services it received medical bills for, but needed proof of payment for the other bills.

ACBL eventually agreed to pay the bills without proof of payment. The record reflects that ACBL paid $149,813.56 in medical expenses prior to trial.

However, ACBL refused to pay for a service it claimed was palliative.

The district court denied Vaughn’s claim for punitive damages and attorney’s fees for ACBL’s failure to pay cure benefits timely. Vaughn challenges that determination. He stresses that ACBL agreed to pay in 2021 but only requested proof of payment in 2023. According to Vaughn, “[i]t Case: 23-30494 Document: 66-1 Page: 12 Date Filed: 10/17/2025

No. 23-30494 should not have taken the employer, ACBL, two and a half (2 ½) years to investigate and pay the bills incurred by plaintiff for his medical treatment.”

ACBL counters that Vaughn is not entitled to punitive damages because the company “was actively making good faith efforts to reimburse Vaughn’s medical expenses, despite not receiving the necessary paperwork documenting the expense.” ACBL also argues it is permitted to investigate claims, and its “good faith efforts to work with Vaughn to reconcile any unpaid medical bills” do not satisfy the heavy burden required to establish an entitlement to punitive damages. Additionally, ACBL highlights Vaughn’s lack of injury resulting from the delayed reimbursement.

The district court did not abuse its discretion by concluding Vaughn was not entitled to punitive damages or attorney’s fees. Simply put, the present case is unlike those in which our circuit permitted punitive damages because ACBL (1) acknowledged Vaughn’s claim;40 (2) investigated his claim;41 (3) did not refuse to make payments entirely;42 and (4) did not terminate payments once Vaughn retained counsel.43

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ACBL’s untimely payments are not an independent basis for punitive damages.44 Additionally, there is no indication that ACBL was “lax”45 in its investigation of Vaughn’s expenses. On the contrary, ACBL followed up with medical providers directly and was navigating “administrative confusion” because Vaughn’s attorney did not submit proof of payment and also incorrectly claimed charges that were already paid by the company. To this point, our court previously held that a failure to pay cure is reasonable if “the seaman does not submit medical reports to document his claim.”46 This case resembles McWilliams v. Texaco, Inc.47 In that case, the plaintiff appealed the district court’s entry of a directed verdict against his claim for punitive damages based on the employer’s refusal to pay for several months.48 However, the employer had a policy requiring medical reports, and when the employer “received the requested documentation, it commenced maintenance payments shortly thereafter.”49 Our court affirmed the directed verdict, holding the employer’s actions were Case: 23-30494 Document: 66-1 Page: 14 Date Filed: 10/17/2025

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“reasonable under the circumstances”50 and were not “the kind of arbitrary and calloused conduct necessary to trigger liability for punitive damages.”51 Here too, ACBL required documentation, but once it received proof of the cancelled checks, the company promptly disbursed funds. Prior to this point, ACBL had no obligation to pay cure benefits in light of Vaughn’s failure to submit proof of payment. ACBL’s conduct does not evidence bad faith or indicate the company was “egregiously at fault.”52 Accordingly, the district court did not abuse its discretion in denying Vaughn’s claim for punitive damages and attorney’s fees. * * * For the foregoing reasons, the district court’s judgment with respect to Vaughn’s future wage loss is VACATED and REMANDED. The district court’s judgment with respect to Vaughn’s past wage loss and claim for punitive damages and attorney’s fees is AFFIRMED.