In the case of Atlantic Sounding Co., Inc. v. Edgar L. Townsend, the U.S Supreme Court was asked to decide whether punitive damages are available in a claim for maintenance and cure under general maritime law. Maintenance and cure is an obligation imposed on a shipowner to provide for a seaman who falls ill or becomes injured while in service of the ship, regardless of fault. The plaintiff, Edgar L.Townsend, had been injured while working aboard one of Atlantic Sounding's tugboats and claimed that his employer willfully refused to pay him maintenance and cure benefits. The court ruled 5-4 in favor of Townsend, holding that punitive damages are indeed available as part of such claims under general maritime law because this type of remedy has long been recognized within common law principles governing maritime actions - thus rejecting arguments by Atlantic Sounding that recent precedents implicitly overruled this tradition. This decision affirmed the longstanding principle that courts may award punitive damages not only as punishment but also as deterrence against egregious conduct; it further emphasized employers' duty towards their employees' welfare especially within high-risk industries like shipping where workers often face hazardous conditions.

In the dissenting opinion for Atlantic Sounding Co., Inc. v. Edgar L. Townsend, Justice Alito argued that punitive damages should not be awarded in cases of unseaworthiness under maritime law, as it contradicts historical precedent and statutory interpretation. He emphasized that there is no evidence to suggest that such damages were traditionally available for claims of unseaworthiness and pointed out inconsistencies with other areas of maritime law where Congress has explicitly allowed or disallowed punitive damages. Furthermore, he expressed concern about the potential negative impact on economic activity due to unpredictability in litigation outcomes if courts are given broad discretion to award punitive damages without clear legislative guidance.