On January 22, 2015, the United States Court of Appeal for the Fifth Circuit held that an intervening asset sale does not relieve a seaman from the consequences of his or her prior intentional concealment of material medical information from a predecessor company for purposes of his entitlement to maintenance and cure.

The case came to the Fifth Circuit on appeal of a decision from the Western District of Louisiana (Judge Richard Haik).

The seaman Meche was initially employed by Moncla. Moncla was subsequently bought out by defendant Key. Although Key did not subject the seaman to a pre-employment examination, Moncla did. So, the issue was whether a successor company (Key) could avail itself of its predecessor’s (Moncla) pre-employment medical exams with respect to a seaman’s entitlement to maintenance and cure.

In McCorpen v. Central Gulf Steamship Corp., the Fifth Circuit held that a seaman who “knowingly fails to disclose a pre-existing physical disability during his pre-employment physical examination” may not recover maintenance and cure. 396 F.2d at 548. Briefly,

In order to establish a McCorpen defense, an employer must show (1) that the claimant intentionally misrepresented or concealed medical facts; (2) the non-disclosed facts were material to the employer’s decision to hire the claimant; and (3) a connection exists between the withheld information and the injury complained of in the lawsuit.

In addition to the above, whether the employer required a pre-employment medical examination triggers two separate standards:

  1. Subjective nondisclosure standard: Where the shipowner does not require a pre-employment medical examination or interview, the rule is that a seaman must disclose a past illness or injury only when in his own opinion the shipowner would consider it a matter of importance.
  2. Objective concealment standard: On the other hand, where the shipowner requires a seaman to submit to a pre-hiring medical examination or interview and the seaman intentionally misrepresents or conceals material medical facts, the disclosure of which is plainly desired, then he is not entitled to an award of maintenance and cure.

Judge Richard Haik held and the seaman urged on appeal that because Key “did not require a pre-employment medical examination or interview,” the subjective nondisclosure standard should be applied. Judge Haik reasoned that because Key never questioned plaintiff about any medical problems and allowed him to continue working as a boat captain just as he had done for his prior employer (Moncla) since 2006, Meche “did not believe Key considered his existing medical problems a matter of importance.” As a result, Judge Haik awarded Meche maintenance and cure.

On appeal, Key argued that the district court should have applied the objective concealment standard and that a misrepresentation to Moncla is “tantamount to a misrepresentation to Key for purposes of the McCorpen defense.” The Fifth Circuit agreed:

It makes little economic or logical sense to require a successor company to reexamine its predecessor’s employees solely for the purpose of avoiding maintenance and cure liability for their previously concealed medical conditions. This is especially true when, as here, the predecessor has recently received an application for employment and conducted a thorough medical examination of the seaman, and the successor relied on the seaman’s representations on the application and questionnaire when deciding to retain him.”

So, the Fifth Circuit applied the objective concealment standard and held that the seaman was not entitled to maintenance and cure.

Quite significantly, Judge Haik also found that there could be no intentional concealment because Meche orally told a representative of Moncla (the predecessor company) about his prior medical conditions. But the Fifth Circuit rejected this argument and held that “if a seaman intentionally provides false information on a pre-employment medical questionnaire and certifies that the information therein is true and correct, that seaman may not later argue that his concealment was not intentional based on his statement, which the employer disputes, that he verbally disclosed medical information that contradicted the written questionnaire.”

The case is Meche v. Doucet and Key Marine Services, No. 14-0032.

A link to a previous Marine & Energy News Alert on the Fifth Circuit's decision can be found here.

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