He Does Not Deserve It, but You Can’t Have It Back: The Right to Restitution in the Face of a Successful McCorpen Defense

Graham Williams | Note

After five years and $276,263.36 in payments, Transocean Deepwater, Inc., discovered that Wallace Boudreaux had no right to maintenance and cure. Boudreaux failed to disclose a previous back injury, which he allegedly injured while working for Transocean. Acknowledging a valid McCorpen defense, the district court granted Transocean’s unopposed motion for partial summary judgment on Boudreaux’s maintenance and cure claims. Transocean then filed a counterclaim against Boudreaux seeking restitution of maintenance and cure payments already made. Transocean asserted a right to restitution pursuant to state law theories of fraud and unjust enrichment. Because of the claim’s nature, the district court declined to apply state law. Among other guiding principles, “[M]aintenance and cure is a right . . . particular to maritime law and should [therefore] be governed by federal law as much as possible.” The district court held that the claim was properly brought under general maritime law and granted the claim for restitution.

On appeal, the parties reached a bracketed settlement contingent on Transocean’s establishing an automatic right to restitution. Initially, on interlocutory appeal, the United States Court of Appeals for the Fifth Circuit reversed the district court’s finding. The Fifth Circuit then denied Transocean’s petition for rehearing en banc, but granted a panel rehearing and substituted a new opinion. On rehearing, the Fifth Circuit held that once maintenance and cure payments have been made, they can be recovered only as an offset against a seaman’s damages award to the extent that the two are duplicative, not by an independent suit seeking affirmative recovery. Boudreaux v. Transocean Deepwater, Inc. (Boudreaux III), 721 F.3d 723, 727, 2013 AMC 2457, 2462-63 (5th Cir. 2013), cert. denied, 134 S. Ct. 1001 (2014).