Mansfield, Van Graafeiland and Haynsworth,*fn* Circuit Judges. Mansfield, Circuit Judge (dissenting).
VAN GRAAFEILAND, Circuit Judge.
This is an appeal from a money judgment which followed a jury trial before Judge Stewart in the United States District Court for the Southern District of New York. We affirm in part and reverse and remand in part.
In 1977, appellant, Byzantine Maritime Corporation, a Greek company, was the owner of a merchant vessel, the Zenovia D, which traded largely in the Caribbean area. On December 29, 1977, appellee, Gerassimos Vinieris, a Greek citizen, joined the vessel in Jamacia as Chief Mate. It is undisputed that appellee was not a licensed ship's officer. Appellant contends that, at the time appellee was hired, he claimed to be a licensed officer; appellee asserts that he only claimed to have had experience as an officer.
On December 30, appellee's wife joined him on board. Appellant's witnesses testified that Mrs. Vinieris was permitted aboard with the understanding that she would leave the ship at Mobile, Alabama, the first American port. Appellee denied that such an understanding existed. In any event, Mrs. Vinieris did disembark at Mobile in the midst of an acrimonious dispute between her husband and the ship's Captain. The Zenovia D then continued on to Houston, Texas. Appellee did no work on this leg of the journey. He contends that he was confined to his cabin and not permitted to work. The Captain testified that appellee was not confined and that he simply refused to work. Whatever the nature of the parties' differences, appellee was removed from the ship upon its arrival in Houston on February 18, 1978, put on a plane and returned to Greece.
On April 9, 1979, appellee brought this suit. As one cause of action, he alleged that the incidents connected with his removal from the ship constituted false imprisonment. This claim was submitted to the jury, which awarded appellee $1,000 in damages. Since the false arrest claim was a clear-cut factual issue and was presented fairly to the jury, this portion of the verdict will not be disputed.
However, the propriety of the false imprisonment award is not the real issue on this appeal. When appellee was discharged in Houston, he met with the ship's Captain and the Port Captain to secure his discharge pay. Both Captains testified that, at that time, appellee was paid $1,082, his net wages for the period between December 29, 1978 and January 31, 1979, and $770 for the period between January 31, 1979 and February 13, 1979, which was the last day on which appellee did any work. Although receipts for both payments were initialed by appellee, he testified that he actually received no part of the $1,082 and only $670 of the $770. It is undisputed that appellee was not paid for the five days during which the ship was en route from Mobile to Houston, during which he did no work.
In his opening to the jury, appellee's counsel, after stating his contentions concerning payments, said:
We are claiming, of course, the amount of wages that Mr. Vinieris earned and was not paid. We are also asking for a finding, just a finding, not an amount of money, that the owners of this ship, the Zenovia D, deliberately withheld this money from him unreasonably, without any reasonable belief that they had the right to withhold any part of that money. (Emphasis supplied)
In his summation to the jury, appellee's counsel continued in the same vein. He said that, whether or not Vinieris was a licensed officer, he "was entitled to be paid for the work that he did, and that's really what this case is about." Referring to a voucher which gave the date of appellee's discharge as February 13, 1979, counsel said:
That's not the date he was discharged. If he had been discharged in Mobile, well, we wouldn't have a claim for those five days. But he wasn't. That explains why that voucher, this handwritten voucher, says February 13, so that they could save five days' pay.
If it was $34 or $35 a day, it was a lot. But they did it so that they could save that pay.
Of course, we are asking for all the wages that were due and were not paid. That includes five days earned wages and that includes the entire amount on the first voucher and approximately $100 on the second.
We are also asking for one thing further, and that is a finding which wouldn't have any dollar amount attached to it that this was done -- this withholding of wages, is what I am talking about, both as to the five days and as to the vouchers, that that was done in such a manner as to amount to arbitrariness, unreasonableness, that it was done without substantial cause. (Emphasis supplied)
In actuality, Vinieris was claiming much, much more than the wages he had earned and not been paid. He was suing under a statute, 46 U.S.C. § 596, which the district judge described as "horrible" and "very unfair", and other judges have termed "harsh", Mavromatis v. United Greek Shipowners Corp., 179 F.2d 310, 318 (1st Cir.1950), "rigor[ous]", Bassis v. Universal Line, S.A., 322 F. Supp. 449, 459 (E.D.N.Y.), aff'd, 436 F.2d 64 (2d Cir.1970), and "punitive", Dendrinos v. City of New York, 86 F. Supp. 688, 690 (S.D.N.Y.1949), and which may produce results that are "both absurd and palpably unjust", Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 586, 102 S. Ct. 3245, 3258, 73 L. Ed. 2d 973 (1982) (Stevens, J., dissenting). That statute provides in substance that, if wages are withheld without sufficient cause, the shipowner must pay "a sum equal to two days pay for each and every day during which payment is delayed." This harsh penalty, not appellee's modest claim for lost wages, is "really what this case is about." Appellee's total claim for unpaid wages was $1,361.08. The penalty for which appellee was suing was $2,000 per month, twice appellee's monthly salary, the penalty starting on February 22, 1978 and continuing ad infinitum until paid. As this opinion is being written, the amount of the penalty is approximately $144,000, over 100 times the lost wages which the jury was informed was the gravamen of appellee's claim.
Because of the patent unfairness of a penalty which can be so grossly disproportionate to the event that triggered it, a number of courts attempted to ameliorate the penalty's effect by reading equitable time limitations into the statute. See, e.g., Forster v. Oro Navigation Co., 128 F. Supp. 113, 116-17 (S.D.N.Y.1954), aff'd, 228 F.2d 319 (2d Cir. 1955). However, in Swain v. Isthmian Lines, Inc., 360 F.2d 81 (3d Cir.1966), the Court held that those who followed this practice were placing their emphasis in the wrong place and that they should concern themselves instead with the factors surrounding the motivation of the shipowner in making a wage deduction. Id. at 87. Because the Supreme Court has adopted this literal interpretation of the statute's penalty provisions, Griffin v. Oceanic Contractors, Inc., supra, 458 U.S. 564, 102 S. Ct. 3245, 73 L. Ed. 2d 973, the sole concern of the courts must be whether and for what reason wages were withheld.
With regard to these issues, the decision in Griffin did not change in any way the well-established rule that "wrongful withholding alone does not establish the absence of sufficient cause" under section 596. Larkins v. Hudson Waterways Corp., 640 F.2d 997, 999 (9th Cir.1981). The punitive penalty of section 596 should not be imposed where payment is withheld in good faith under a reasonable belief that it is not due, Bender v. Waterman S.S. Corp., 166 F.2d 428 (3d Cir. 1948), The Velma L. Hamlin, 40 F.2d 852, 854 (4th Cir. 1930); where there is a bona fide dispute as to the amount owed, Conte v. Flota Mercante Del Estado, 277 F.2d 664, 672 (2d Cir.1960), Usatorre v. The Victoria, 172 F.2d 434, 444 (2d Cir.1949), Glandzis v. Callinicos, 140 F.2d 111, 114-15 (2d Cir. 1944); or where there has been an honest error of judgment in this regard, The Thomas Tracy, 24 F.2d 372, 374 (2d Cir.), cert. denied, 277 U.S. 595, 48 S. Ct. 530, 72 L. Ed. 1005 (1928). Before Vinieris could recover under this section, therefore, there had to be a showing of "conscious misconduct" on the part of the ship's Captain, Bassis v. Universal Line, supra, 322 F. Supp. at 459, conduct by the Captain which was arbitrary, unwarranted, unreasonable, unjust, and willful, Collie v. Fergusson, 281 U.S. 52, 55, 50 S. Ct. 189-191, 74 L. Ed. 696 (1930); Glandzis v. Callinicos, supra, 140 F.2d at 115.
Because these are the crucial issues in the instant case, the trial court should have followed a liberal policy in admitting evidence directed towards establishing the Captain's subjective state of mind. No evidence which bore even remotely on this issue should have been kept from the jury, unless it interjected tangential and confusing elements which clearly outweighed its relevancy. United States v. Brandt, 196 F.2d 653, 657 (2d Cir. 1952); United States v. Foshee, 578 F.2d 629, 632-33 (5th Cir.1978); Coleman v. United States, 167 F.2d 837, 840 (5th Cir.1948). Of course, testimony by the Captain as to his beliefs, motives, and intent was material and admissible. United States v. Kyle, 257 F.2d 559, 563 (2d Cir.1958), cert. denied, 358 U.S. 927, 79 S. Ct. 312, 3 L. Ed. 2d 301 (1959); United States v. Hayes, 477 F.2d 868, 873 (10th Cir.1973).
The district court erred, therefore, in precluding the Captain from testifying that he was under very strict orders from his superiors to pay earned wages because of the very severe penalties involved and that the Captain, himself, had a personal awareness of the possible consequences of his failure to pay. Permitting the Captain to testify only that it was important that wages be paid, without permitting him to explain to whom it was important and why, did not disclose the Captain's state of mind. Indeed, an unjustified inference of pettiness and bad faith on the part of the Captain may have been created simply because of his failure to perform this "important" duty.*fn1
The district judge's rejection of the proffered testimony might not have been so prejudicial if the judge had informed the jury in his charge of the substantial penalty for which Vinieris was suing. Had the judge done so, the jurors might have assumed that the Captain was aware of the substantial loss that his employer might incur if the Captain arbitrarily and capriciously withheld even a modest amount of salary and had governed his conduct accordingly.
Instead of telling the jurors "really what this case is about", the district judge simply instructed them that plaintiff was claiming that defendant failed without sufficient cause to pay wages that were due him. The judge told the jury that "without sufficient cause" meant a willful, unreasonable, and arbitrary refusal to pay, and defined those words in general terms. His entire charge on the important issue of sufficient cause was given in seven sentences.
After instructing the jurors that it was they "who have to decide whether the defendant is liable and plaintiff suffered damages", the court submitted the entire case to them by way of special interrogatories, as it was permitted to do under Federal Rule of Civil Procedure 49(a). However, the court refused appellant's repeated requests that the jury be informed of the penalty which was plaintiff's major claim. Relying on what he believed to be a rule of nondisclosure in antitrust cases, the district judge refused to remove the blindfold which he had placed on the jury.
The district court was mistaken concerning this Court's position on disclosure in antitrust cases. In Bordonaro Bros. Theatres, Inc. v. Paramount Pictures, Inc., 203 F.2d 676, 678 (2d Cir.1953), the complaint pleaded the appropriate sections of the Sherman and Clayton Antitrust Acts and specifically claimed the treble damages provided by statute. Writing for the Court, Judge Clark said:
Surely reference either to the pleadings or to the governing statute is so usual a course in jury trials as to occasion no comment. Hence the recital in the trial judge's charge of just what had happened in the former action and what was claimed in this suit was quite appropriate.
Moreover, the theory espoused by some, that juries should not be informed of the legal effect of their answers in Rule 49(a) cases, has been the subject of both judicial and scholarly criticism. See, e.g., Lowery v. Clouse, 348 F.2d 252, 261 (8th Cir.1965); Porche v. Gulf Mississippi Marine Corp., 390 F. Supp. 624, 632 (E.D.La.1975); Green, Blindfolding the Jury, 33 Tex.L.Rev. 273, 280-84 (1955). Indeed, at least one early advocate of the nondisclosure rule has acknowledged that, upon further study and reflection, he finds the contrary position preferable. See 9 Wright & Miller, Federal Practice and Procedure, § 2509, at 513 n. 8.
Even those who advocate nondisclosure could hardly quarrel with the proposition that, when a party's intention is at issue, the jury should make its determination only after considering all the circumstances connected with the act charged. See United States v. Lichota, 351 F.2d 81, 89-90 (6th Cir.1965), cert. denied, 382 U.S. 1027, 86 S. Ct. 647, 15 L. Ed. 2d 540 (1966). Moreover, even the most ardent advocate of noninformation would be unlikely to support a policy of misinformation. While we do not suggest here that appellee's counsel deliberately misled the jury concerning what the case was about and in stating that he was seeking "just a finding" of insufficient cause, "not an amount of money", he sailed rather close to the wind in making the statements quoted above. See Conway v. Chemical Leaman Tank Lines, Inc., 525 F.2d 927, 930 (5th Cir.1976).
Motivation and intent were not, of course, the only issues which called for a fair determination knowledgeably made. Equally important was the issue of credibility. The district judge denied appellant's motion for a new trial despite the fact that he "did not believe the plaintiff" and would have reached a different result. Had the jurors known, as did the judge, how large a financial stake plaintiff had in the outcome of the case, their reaction might have been the same as that of the judge. A jury should not be asked to weigh credibility with only half the facts on the scale.
In close cases, where affirmance is inconsistent with substantial justice, trial errors should not be disregarded lightly. Bickerstaff v. South Cent. Bell Tel. Co., 676 F.2d 163, 169 (5th Cir. 1982); United States v. Kahaner, 317 F.2d 459, 485 (2d Cir.), cert. denied, 375 U.S. 836, 84 S. Ct. 74, 11 L. Ed. 2d 65 (1963); E.I. du Pont de Nemours & Co. v. Berkley & Co., 620 F.2d 1247, 1257 (8th Cir.1980). Because we conclude that the errors above discussed cannot be treated as harmless in this case, we reverse the award for loss of wages and the section 596 penalty and remand for a new trial on these issues. The award for wrongful imprisonment is affirmed.
On page 6 of appellant's brief, its counsel said:
With respect to the payment of earned wages, Captain Gerolimatos and Captain Balactaris were both prepared to testify that it was a strict policy of the ship operator that all earned wages be paid at the time of a seaman's discharge. Captain Gerolimatos would have testified that he and other Masters received strict orders to pay earned wages, particularly where seamen were paid off in American ports because of the severe penalties imposed by American law for failure to pay earned wages.
However, the trial Judge excluded this tesimony [sic], in accordance with his previous ruling that the jury should not be informed that this was a penalty wage claim, or that the defendant would be required to pay approximately $125,000 if the jury found that it wrongfully withheld the plaintiff's earned wages. (A275, 304)
The record clearly supports this statement and makes clear the basis of our holding. During a robing room conference, the following colloquy took place:
MR. MAHONEY: Your Honor, what I want to discuss a little further, there is another aspect of this penalty wage problem that arose that I hadn't thought of ...