Trial of a Maritime Case in Idaho
By John Merriam
The case should have settled with a phone call. I didn’t know at the time that only $1,900 was at issue in a wage claim for a commercial fisherman. Instead of settling with a phone call, the case went to trial in federal court and is now on appeal to the Ninth Circuit.
Eli Dunn is a professional deckhand who lives in Oregon. In the winter of 2013 he was hired by Bryce Hatch to work on a crabber in Alaska, signing a written contract of employment as required by 46 U.S.C. 10601. Hatch later hired Dunn to work the Bristol Bay salmon fishery in Alaska that summer on a different boat owned by Hatch, a gillnetter called the Silver Bullet. Dunn’s agreed crewshare for salmon was 10% of the catch. The salmon were delivered to a processing plant on land, Leader Creek Fisheries, at Bristol Bay. As is typical in the industry, Leader Creek pays an initial base price to the boats for their catch. Later, often the following December and/or April, processing plants pay one or two price adjustments, or profit shares, if the salmon was sold to wholesalers for more than the initial low estimate. Most, but not all, boat owners share the price adjustment with their skippers and deckhands.
I first met Eli Dunn in the summer of 2014. “The owner of my boat, Bryce Hatch, didn’t give me my 10% share of the price adjustment.”
“Did your contract include price adjustments as part of your crewshare?” I asked.
“ He didn’t give me a contract to sign.”
“How much are we talking about?”
“I don’t know. Hatch claims there was no price adjustment. I heard there was.”
I called Hatch at the number Eli gave me. Eli told me Hatch lived in a gated community in Twin Falls, Idaho. After some introductory remarks, I cut to the chase. “You owe Dunn some money.”
“N-n-no I don’t. I overpaid him. He owes me money!”
“You didn’t have a written contract of employment,” I said. “That means you lose.”
Long pause. “I did too have a written contract!”
“OK, send it to me.” I gave him my address and the phone call ended. Eli went home to his fiancé in Oregon.
A few days later I received in the mail a copy of the employment contract for the 2013 Bristol Bay salmon season, apparently signed by Eli. His signature appeared to match the one on my fee agreement. I forwarded the contract to Eli.
“That’s my signature, but I never signed that contract.” Eli called me a couple of days after I sent him the salmon contract. “Hatch must have copied my signature from the crab contract.”
“I’ll ask Hatch to show me the original contract.” I called Hatch again. Hatch said that he’d sent the original of the contract to Dunn and that if I didn’t stop harassing him he was going to file a bar complaint. (I have never seen the original of the salmon contract to this day, if there is one.)
Hatch had also sent me a signed contract for the earlier, crab season. The two signatures appeared identical. Between Dunn and Hatch, I decided that Eli was definitely more credible. On October 7, 2014 I filed suit in federal court for the Western District of Washington, including a count for forgery and a prayer for punitive damages. The case was assigned to Judge Richard Jones.
On October 27, 2014, I received a visit from Seattle lawyer Paul Anderson (now retired). Paul said he’d been retained by Hatch for the limited purpose of talking me out of pursuing the lawsuit. He handed me a copy of the salmon season contract and affidavits from two of Hatch’s deckhands swearing that they’d witnessed Dunn signing it. He offered me $1,000 to settle the case. I told Paul I’d think about it.
After Paul left I called Eli in Oregon. Eli was adamant that he hadn’t signed a contract for the salmon season, and that Hatch’s deckhands were lying for him to keep their jobs. One of the deckhands, Eli told me, was the boyfriend of Hatch’s daughter. I believed him.
Meanwhile, over in Twin Falls, Idaho, process servers were having a hard time getting into the gated community where Hatch lived with his wife. When they did get in, by slipping behind entering residents, no one answered the door at Hatch’s house. Hatch had refused to accept service of process per FRCP 4(d), and the process servers’ bills were mounting up. I filed a motion to effect service by publication. Judge Jones granted the motion, specifically finding that Hatch was evading service of process. (It cost $1,600 for a Twin Falls newspaper to publish notice to Hatch for the prescribed period.)
While Hatch was evading service of the W.D. Wash. lawsuit, he retained Steve Smith (formerly of Lane, Powell in Seattle; then partner at a big firm in Boise) to file a declaratory judgment lawsuit against Dunn in the federal District of Idaho. Through Smith, Hatch claimed that Dunn had been overpaid. Dunn got served with the Idaho federal lawsuit at his home in Oregon before Hatch was served by publication of the Wash. federal lawsuit in Idaho..
I wasn’t admitted to practice in Idaho. I ghost-wrote a motion for Eli to file, pro se, for dismissal of the Idaho federal case in favor of the W.D. Wash. case under the first-to-file rule. Chief Judge Lynn Winmill granted the motion, agreeing that Hatch was forum shopping, dismissing the case on June 16, 2015.
Back in Seattle, Magistrate Judge James Donohue had been substituted for Judge Jones in the federal case there. Steve Smith filed a motion to dismiss the W.D. Wash. case based upon lack of personal jurisdiction. Hatch lived in Idaho; Dunn lived in Oregon, and the fishing at issue took place in Alaska. The only thing in Washington was me. I argued that the forgery was consummated in Washington when I opened Hatch’s letter containing the forged contract. Magistrate Donohue didn’t buy that theory, expressing skepticism that forgery was even a maritime tort. He dismissed the W.D. Wash. lawsuit based upon lack of jurisdiction – never mind that the F/V Silver Bullet had SEATTLE emblazoned on her stern -- and transferred the case back to Idaho on August 27, 2015. This jurisdictional ping-pong is reported at Dunn v. Hatch, 2016 A.M.C. 99 (W.D. Wash. 2015).
The case went back to Judge Winmill, one of only two federal judges for the entire state of Idaho at the time. I retained Jon Volyn as local counsel and applied to practice pro hac vice in the federal District of Idaho.
There is no precedent on whether or not punitive damages are available to commercial fishermen asserting wage claims. While there are draconian penalties for not paying wages to merchant seamen on foreign voyages, 46 U.S.C. 10313, there are no federal statutory wage penalties for seamen on inland waterways or on coastal voyages, or for commercial fishermen on any waters. To address this gap in the maritime law, some admiralty courts have borrowed from state law wage penalty statutes. See, e.g., Greene v. Pacific King, 1993 A.M.C. 2578 (W.D. Wash. 1993) ( R.C.W. 49.52.050 and .070 were applied to award penalties to a commercial fisherman bringing a wage claim under the federal maritime law). I thought the facts of Eli’s case made it a good one to use in an attempt to establish precedent about the availability of punitive damages. Punitive damages would comport with the maritime law’s policy of uniformity better than did a patchwork of penalties borrowed from the laws of various states. I filed a motion for a declaration that punitive damages were theoretically available to Eli Dunn as a matter of law.
Steve Smith filed a motion for summary judgment, arguing that forgery was not a maritime tort; that Dunn had been overpaid, and that there was a written contact of employment. He supported his motion with Eli’s salmon contract and affidavits from Hatch and the two deckhands. Oral argument on both motions was scheduled for June 16, 2016. I thought the issues important enough to argue in person rather than by phone, and flew to Boise.
Oral argument did no t go well. Judge Winmill commented that I’d presented only hearsay evidence that Dunn was entitled to a higher crewshare – the remedy for not having a written contract of employment – if I proved the contract was a forgery; I’d presented no evidence of what the price adjustment was; that punitive damages were not available, and that forgery was not a maritime tort. I think Judge Winmill is an intelligent, thoughtful and caring jurist. But he’d never tried a maritime case. He seemed confused on the law during oral argument, and was on the verge of throwing the case out of court. I begged for more time in which to subpoena payment records from Leader Creek Fisheries. He gave me 30 days.
In his discovery responses, Hatch denied that he’d received any price adjustment from Leader Creek. I hadn’t pursued that issue earlier because a price adjustment seemed like small potatoes compared to a higher crewshare and wage penalties. Now it might be the only claim I had left. I served Leader Creek with a subpoena.
In response to the subpoena, Leader Creek Fisheries provided documents showing that it paid Hatch a price adjustment for the 2013 catch of salmon in the amount of $19,054.50. A 10% share of that amount equals $1,905.45.
Judge Winmill entered his order on the two motions on August 2, 2016. 2016 U.S. Dist. LEXIS 103019. He held that the claim for 10% of the price adjustment was still in the case but that neither punitive damages nor state law wage penalties were available to commercial fishermen asserting wage claims. His decision stated that 46 U.S.C. 11107 provided the only remedy for fishermen cheated on their wages and that this federal statute preempted state law penalties.
46 U.S.C. 11107 does provide a remedy for fishermen who are not given a written contract of employment. That statute requires vessel owners who don’t have written contracts to pay their fishermen the higher of the verbally-agreed rate or the highest crewshare paid to fishermen in the port where the fisherman was hired. I was stuck with the verbally-agreed rate, 10%, because Judge Winmill had thrown out as hearsay my evidence of higher crewshares paid to deckhands in the Bristol Bay salmon fishery. During oral argument I’d tried to convince Judge Winmill that 46 U.S.C. 11107 provided a penalty rate of wages, not a penalty for non-payment of wages. If it was established that Dunn was entitled to a 10% crewshare, what was the penalty for Hatch’s failure to pay that 10% crewshare – for the price adjustment? The judge didn’t buy that argument, seizing upon some unfortunate dictum from a Ninth Circuit decision calling higher wages imposed per section 11107 a “penalty” rather than a penalty rate. He further ruled that punitive damages were not available under the maritime law for forgery, even if it was a tort.
Later, in response to subsequent motions filed by Steve Smith, Judge Winmill dismissed the tort claims for forgery and fraud. He allowed that claim to stay in the case, however, as “fraud on the court”, if I could prove the forgery. Memorandum Decision and Order, 2017 WL 1839279 (D. Idaho 5/8/17). All I had left in the case was $1,905.45 for 10% of the price adjustment, and whatever damages Judge Winmill thought suitable if I could prove fraud on the court. Trial was scheduled for November 13, 2017.
I hired a handwriting expert, Hannah McFarland of Port Townsend, to prove that the salmon contract was forged. Ms. McFarland confirmed what Eli had told me all along: It’s impossible for two signatures to be absolutely identical. Eli’s signature had been transposed from somewhere -- likely the crab contract – onto a copy of the salmon contract. The salmon contract was an obvious forgery and a poor one at that. To save the expense of bringing her from Washington to Idaho for trial, I perpetuated Ms. McFarland’s testimony by way of a telephone deposition from a court reporter’s office in Port Townsend.
Just before Hannah McFarland’s deposition, Hatch switched lawyers again, hiring Kim Trout of Boise.
Up to this point there had been no serious settlement negotiations and the case was never mediated. Mr. Trout was aggressive and apparently had been given an unlimited budget by Hatch. He filed a blizzard of motions for both discovery sanctions and renewal of partial summary judgment motions brought by Steve Smith that had been earlier denied. Neither Steve Smith nor I ever thought that this case would actually go to trial and both of us had been lax about discovery. No depositions had been taken. There had been little follow-up to the sparse amount of written discovery propounded, and I’d missed some pre-trial deadlines. I was reprimanded by Judge Winmill but the motions were denied and I managed to keep my case from being thrown out entirely. I prepared for trial of a maritime case in a landlocked state against a lawyer named Trout, representing a defendant named Hatch, before a judge named Winmill. Trial was to begin on schedule, November 13, 2017. I flew to Boise again.
It was a one-day bench trial. My only witnesses were Eli and the deposition of Hannah McFarland. Another deckhand with Eli on the F/V Silver Bullet, Colin Allen, had also claimed he had not been given a written contract by Hatch and had been shorted on his crewshare. I had amended him into the case as a plaintiff, but he disappeared shortly thereafter. He didn’t show up for trial and Judge Winmill dismissed him from the case.
In an earlier motion for summary judgment filed by Kim Trout, he’d used the Leader Creek ledger, showing the $19,000 paid to Hatch as a price adjustment, as an exhibit to support his argument that Dunn had been overpaid. At trial I neglected to introduce the Leader Creek discovery into evidence, confident that Trout would continue to use the price adjustment figures as part of his defense. After I rested my case, Trout moved for a directed verdict of dismissal because I’d failed to introduce evidence of any damages. Red-faced, I stammered that the judge could take judicial notice of evidence already in the court’s file. Judge Winmill said he’d take the motion under advisement and later asked for post-trial briefing on the issue.
Trout put on testimony from two or three fishing-captain-buddies of his to testify about practices involving price adjustments, some of which didn’t help his case; and a representative from Leader Creek Fisheries who confirmed that the processing plant had paid an extra 18.5 cents per pound for salmon in the 2013 season as a price adjustment – resulting in a $19,054.50 payment to Hatch. Trout didn’t put Hatch on the stand and didn’t introduce the salmon contract as an exhibit, tacitly conceding that it was a forgery. In closing argument he argued that Dunn had suffered no damage from the forged contract because Dunn hadn’t relied on it, and there was no fraud on the court because Hatch wasn’t using the contract to support his case at trial. The trial ended mid-afternoon.
On January 4, 2018, Judge Winmill entered his Findings of Fact & Conclusions of Law & Order. Dunn v. Hatch, 2018 A.M.C. 371 (D. Idaho 2018). Regarding my failure to present evidence on the amount of the price adjustment, the judge noted that Hatch, through Trout, had submitted evidence of the price adjustment paid as an exhibit in support of a motion for summary judgment. Instead of taking judicial notice of that court filing, Judge Winmill ruled that Hatch’s submission of the price adjustment evidence constituted a “judicial admission”, and was therefore binding on Hatch without the need for Dunn to separately prove it at trial. Trout’s motion for dismissal under FRCP 52(c) was denied. Whew!
Judge Winmill found that the salmon contract was forged and that the two deckhands were lying when claiming they’d seen Dunn sign it. He ruled that the forged contract constituted litigation fraud, and found that Hatch had acted in bad faith.. The penalty for litigation fraud, he ruled, was $5,025 for the expense and preparation time for taking the handwriting expert’s deposition, documentation of which he’d requested by way of post-trial submissions. He left the door open to a further request for attorney fees from Dunn.
Based upon a finding of bad faith on the part of Hatch, I filed a post-trial motion to be awarded attorney fees for the entire case. Judge Winmill limited additional attorney fees to $5,000, “for Hatch’s failure to reveal in discovery the price adjustment figures.” Memorandum Decision and Order of 5/23/18, reported at Dunn v. Hatch, 2018 A.M.C. 1326.
Final judgment was entered on May 23, 2018. After five years, Eli Dunn was awarded what he should have been paid in the first place: $1,905.45. After hundreds of hours of litigating the case for over four years, I was awarded attorney fees in the total amount of $10,025.
I appealed to the Ninth Circuit on the issues of punitive damages – for both the wage claim, and for forgery and fraud – and for attorney fees for the entire litigation based upon the trial court’s finding of bad faith. Trout filed what he called a “protective cross-appeal”, contending that Dunn had been overpaid by $209.77. Through Trout, Hatch contended that the trial judge had failed to consider the total wages paid to Dunn, and that Dunn should not have been awarded any attorney fees at all.
Bryce Hatch was never criminally prosecuted for forgery. The U,S. Attorney for the District of Idaho would not prosecute because the matter was being pursued civilly, I was told. The state prosecutor for Twin Falls County told me that she would not bring charges against Hatch because she could not prove that the forgery occurred in Twin Falls County.
It is now six years after the 2013 Bristol bay salmon season and Eli Dunn has still not been paid his $1905 share of the price adjustment. Oral argument before the Ninth Circuit is scheduled for August 27, 2019. Stay tuned . . .
Eagle John Merriam is a former merchant seaman , now a sole practitioner at Fishermen’s Terminal in Seattle, who restricts his practice to the representation of claimants for maritime wages and injury.