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Sean P. CarrigFall 1999

ADMIRALTY IProfessor Davies

I. CARRIAGE OF GOODS

A. INTRODUCTION B. Admiralty Terms

C. Cost : both parties will probably pay about the same amount for carriage. However, the importer generally passes the coast on to the consumer.

D. Insurance :E. AccidentF. 1st Party Carrier: either party may obtain and the cost gets passed on

to the consumer.G. Benevolent Carrier: pay the insurance and freight yourself (then pass

the cost on).H. CIF : (Cost, Insurance, Freight) The exporter (supplier) pays insurance and

freight to the specified destination.I. FOB : (Freight on Board) Risk of any loss / damage passes from the seller

to the buyer when the goods pass the ship’s rail at the port of loading.J. Charter : Used when you have and entire ship-load:

K. Voyage charter party : charter for just one trip (i.e. taxi).L. Time Charter : Charter for a period of time, not just one voyage. It

is up to the TC to find work for the ship.M. Demise/Bareboat Charter : Charter gets the “bareboat.”

N. Liner Service : ship that follows the same route over & over.O. Tramp Service : roams from port to port on different jobs.P. Bill of Lading :

Q. acts as a receiptR. K terms & conditionsS. Who and where to deliver

(i) Functions of carrier:(i) Navigational (ii) Commercial

(iii) Non-Vessel Operating Common Carrier : carrier does not own or operate the vessel. It subcontracts out to an operating carrier.

(iv) Letter of Credit : Essentially, a promise from a bank to pay you for the bill of lading.

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B. BILLS OF LADING1. EXAM TIPS:

2. First, you must establish the regime applicable;3. Then the identity of the parties.

2. Definition : a document which is signed by the carrier or is agent acknowledging that goods have been shipped on board a specific vessel that is bound for a particular destination and stating the terms on which the goods are to be carried.

(a) Generally, whoever has provided credit for the deal has the BoL.

3. 3 Functions :4. a formal receipt and acknowledgment that the goods of a certain kind,

quantity, and condition have been handed over for shipment.5. a memorandum of the contract of affreightment concluded between the

carrier and the shipper. It is only evidence of the K. the actual K is formed before the issuance of the BoL.

6. a document of title to the goods themselves which enable the shipper to sell them by endorsement and delivery of the BoL (i.e. DELIVERY INSTRUCTIONS):7. Negotiable : (“TO ORDER”) may be delivered to any person

mentioned in the BoL. Carrier will be laible for misdelivery.8. Non-negotiable : (“STRAIGHT BoL”) consignee is 1 particular

name to be delivered to. Must contain the words “Non [or] Not-negotiable” on its face.

3. Typical Contents: 4. names of shipper & consignee;5. description of goods (i.e. shipping marks for i.d. purposes);6. stipulations for payment;7. details of the condition of carriage.

4. Private Carriage :5. Pomerene, COGSA, and Harter do not apply.6. BoL may only serve as a receipt.

5. Common Carriage :6. Constitutes a receipt & evidence of the K of carriage.

6. Interpretation :7. Provisions strictly construed against the issuer or draftsman.8. Separately negotiated or added terms will prevail over the printed form of

the K.9. BoL terms may supersede an earlier terms or agreements negotiated between

the parties unless specifically preserved in the BoL.

C. HARTER ACT (§ 46 USC 190, et seq. )

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1. Application :2. K’s of carriage from or between ports of the US and inland water carriage

under BOL’s.3. Does not cover shipments entering US from foreign ports;4. Applies outside the tackle to tackle period.

2. Duration(a) Provisions are in effect from the time when the carrier receives the goods

until the goods are properly delivered. This is a longer time than just when goods are loaded on and off the vessel.

(b) Proper delivery occurs when carrier or its agent:(c) discharges cargo onto a fit wharf;(d) segregates by bill of lading and count;(e) makes accessible to consignee, and(f) consignee has reasonable opportunity to take possession of cargo.

3. Exculpation:(a) Section 1 : prohibits any exculpation clause in a BoL or shipping document

relieving the carrier from liability arising out of negligence or fault in proper loading, stowage, custody, care and delivery of cargo.

(b) Section 2 : prohibits any exculpation clause whereby the carrier may relieve himself from exercising due diligence in properly equipping the vessel and providing a seaworthy vessel.

(c) Section 3: provides for exoneration of the carrier in certain circumstances IF the carrier exercised due diligence and properly manned and equipped the vessel:(d) NOT liable for damage or loss resulting from faults or errors in

navigation of the vessel;(e) NOT liable for errors in management of the vessel;(f) NOT liable for losses arising from:

n dangers of the sea;n acts of God;n acts of public enemies;n inherent defect, quality, or vice of the goods;n insufficiency of packaging;n seizure under the legal process;n any act or omission of the shipper or owner;n saving or attempting to save the goods at sea.

D. COGSA (46 USC § 1300, et seq. ) 1. Incorporated Hague rules into US law.

2. Purpose was to achieve international uniformity and to redress the edge in bargaining power enjoyed b carriers over shipper and cargo interests by setting out certain duties and responsibilities of carriers that cannot be avoided even by express contractual provision.

3. Very Pro-Carrier Statute.

2. Burdens under COGSA:

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3. Burden of going forward with evidence;4. Ultimate burden of non-persuasion;

3. Definitions 4. “Carrier” may be vessel, owner or charterer (or multiple parties)5. “K of Carriage”: applies only to this particular shipment evidenced by a

BoL.6. “Good” is anything carried other than live animals.

3. Application : (§§1300-1301) Applies to all K’s for carriage of goods by sea to or from ports of the US in foreign trade.

(a)Tackle to Tackle. COGSA 2000: from time received by carrier to delivery.

(i) for chute, this is when it hits the ship’s end of the chute;(ii) with liquids, when ship’s pipe connects with phlange;(iii) on gangplank, when over hull.

(iv) All other countries: applies only to outgoing cargo.(v) A “K of carriage” is a prerequisite for COGSA to apply. A K of carriage

may be a BoL or any similar document of title which is evidence of a K of carriage.

(vi) If the BoL is intended as a mere receipt, COGSA will not apply between the parties.

(vii) K’s of carriage between ports of the US ad inland water carriage under BoL’s are governed by Harter (However, the parties may expressly incorporate COGSA to apply).

(viii) COGSA trumps any contrary terms of BoL.

4. Responsibilities and Liabilities of Carrier & Ship (§1303)(a) Section 1 : Carrier must exercise due diligence at the beginning of the

voyage, to:(b) make the ship seaworthy;(c) properly man, equip, and supply the ship;(d) make ship fit and safe for the receipt, carriage and preservation of

the goods.(e) NOTE: There is no absolute duty to make vessel seaworthy only

applies “before and at the beginning of the voyage.”(f) Section 2 : Cargo: carrier must properly and carefully load, handle, keep,

carry, care for and discharge the goods. Continuous Duty.(g) Section 3 : Carrier, upon request, must issue to the shipper a BoL showing:

(h) leading marks necessary for identifying the goods;(i) Number of packages or pieces, or the quantity of weight;(j) Apparent order and condition of the goods, provided that no carrier

shall be required to do this if the has reasonable grounds for suspecting inaccuracy or which he had no reasonable means of checking. (However, no one does this because it takes too much time!)

(k) Section 4 : BoL is prima facie evidence of the receipt of the carrier of the goods.

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(l) Section 6 : one year statute of limitations.(m) Section 8 : EXONERATION CLAUSES Any clause relieving the carrier

or the ship of liability for loss or damage of the goods arising from negligence, fault or duties in this section shall be void.

5. Rights and Immunities of Carrier and Ship (§1304) (SEE BELOW)(a) Section 1 : Unseaworthiness

(b) Not liable for damage or loss arising from unseaworthiness unless caused by a want of due diligence to make the vessel seaworthy; and to properly man, equip, and supply the vessel; if the loss or damage is the result of unseaworthiness, the burden of proving the exercise of due diligence is on the carrier or other party claiming exemption under this section.

(c) Latent Defects therefore, do not make the carrier liable.(d) Transitory Seaworthiness (arising after the vessel leaves port) N/A.

(e) Section 2: Uncontrollable Loss: Not liable for:(f) acts or negligence in the navigation or mgt. of vessel;(g) fire, unless caused by actual fault or privity of carrier;(h) perils or dangers of the sea;(i) acts of God;(j) acts of war;(k) acts of public enemies;(l) arrests, restraint of princes, or legal seizure;quarantine;(m) act or omission by shipper or owner of goods;(n) strikes/lockouts; riots; (o) saving or attempting to safe the life of prop @ sea;(p) inherent defect, vice or quality of the goods;(q) latent defects not discoverable by due diligence;(r) any other cause arising without the actual fault or privity of carrier;

burden of proof is on the party claiming exemption to show that the carrier’s fault or privity did not contribute to the loss or damage.

(s) Sections 3, (§1305) : Amount of Liability(t) limits liability to $500 per package;(u) If not shipped in package: customary freight unit;(v) UNLESS, the value could have been declared by the shipper before

shipment (prima facie evidence);(w) (§1305) May K to increase liability, but not decrease it.

5. Rights and Liabilities Under other Provisions (§1308)(a) the provisions of COGSA shall not effect the Fire Statute.

E. HARTER v. COGSA

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1. The two acts are functionally the same except for 3 points: 2. Harter denies exoneration for errors in navigation and management if there

has been any failure to exercise due diligence to provide a seaworthy vessel, even if this is not the cause of the loss. COGSA requires some causal connection between the error and the loss, i.e. does not require carrier to first show that it exercised due diligence to make the vessel seaworthy as a predicate for asserting a defense.

3. Harter has no statute of limitations;4. Harter does not provide a limit if liability for loss or damage to cargo.

2. Other Differences: 3. Harter governs BoL’s between domestic ports. COGSA applies between

ports of US & ports of foreign countries;4. COGSA does not apply to goods carried on deck or to live animals;5. COGSA - “Tackle to Tackle”; Harter - outside this period.

F. HAGUE RULES (1921) / BRUSSELS CONVENTION (1924)1. Purpose

2. to unify certain rules relating to bills of lading damage to hull cargo.

2. Terms 3. defined both the risks assumed by the carrier that cannot be altered by

contrary agreement;4. defined immunities that carrier may enjoy (i.e. makes it more difficult to

limit liability).5. carrier relieved from liability due to negligence in navigation or

management.6. £100 sterling per package liability limitation

3. Application 4. most maritime nations did not ratify or adhere to the Brussels Convention.5. States adopted different textual variations and interpretations.

G. VISBY AMENDMENTS (1968)1. Liability Limitation

(a) Increased the value limit.(b) adjusted the £100 per package of the Hague Rules to 30 franks Poincare per

kilo ($.o9 US per pound).(c) However, in 1979, an IMF unit (SDR-Special Drawing Right) was adopted

with a daily fluctuating value using a basket of currencies as the base computation (approximately 666.67 SDR’s or 2 SDR’s per kilo).

2. Application 3. Most countries have adopted, but the US HAS NOT ADOPTED!!4. COGSA 2000: Will adopt Visby.

5. JCB SALES v. WALLENIUS LINES 6. Facts :

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7. there was damage to a machine being shipped.8. there was no BoL, only a data freight receipt, which is not a

document of title;9. parties agreed that Hague would govern the document.

10. Issue: 11. What law governed the DFR? (COGSA? Visby?); Did the parties

intend to apply the higher limit under the Hague Rules?12. Court said that COGSA was N/A because the DFR was not a document of

title. COGSA only applies to BoL’s and other similar documents of title.

13. However, in this case, it did not matter whether the DFR is covered by COGSA because even if Visby (which the US has not adopted) is applied here, it does not offend COGSA because COGSA states that you may increase liability, but not decrease it.

H. HAMBURG RULES (1978)1. Most developing (and some land-locked countries) have adopted. Not adopted by

any important maritime countries.2. More favorable to cargo.3. Adopted a unitary rebuttable presumption of carrier liability.

II. SHIPPER’S PRIMA FACIE CASE (PING PONG GAME)1. A shipper who wishes to make a cargo claim against a carrier must make a prima facie case

that the goods were damaged while in the carrier’s custody. Plaintiff is not required to show fault or negligence to explain how the damage occurred.

2. Plaintiff may meet its burden by showing:3. Good Order - Bad Order: the goods were delivered to carrier in good condition

(clean bill of lading) and the goods were damaged when they were delivered to the shipper/consignee, OR

4. How/When Damage: Evidence tending to prove that the damage occurred while in custody of carrier (i.e. sea water) Caemint Food.

5. Clean / Claused Bill of Lading :6. Clean: One without exceptions as to the condition of the goods. (i.e. states that the

goods are in apparent good order and condition).7. Creates a presumption of delivery in good condition. Constitutes the

shipper’s prima facie case and the carrier may be estopped from denying the accuracy of the statements in the BoL.

8. Rule N/A when the shipper gives goods to carrier in packages that would have prevented carrier from observing the damaged condition Caemint Food.

9. Claused : states that the goods looks like it’s damaged. Does NOT establish a PF case. Really n/a because no one would buy a claused BoL.

4. Burden Shifting: Ping Pong Game (a) If the shipper fails to meet his prima facie case, the action is dismissed.

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(i) If the burden is met, the carrier may escape liability by proving that he exercised due diligence to prevent the damage or the is exempt under an exception clause delineated in COGSA.

(ii) If the carrier meets this burden, shipper may still recover if he can show that the negligence of the carrier was a concurrent cause of the loss. This can be shown by evidencing that carrier:

(iii) did not exercise due diligence to make the vessel seaworthy (§1303(1));

(iv) did not use DD in caring for the goods (§1303)(v) The burden then shifts to the carrier to prove the part of the loss that was

caused by the excepted clause (VERY DIFFICULT).(vi) If the carrier cannot meet this burden, he is liable for the entire loss.

5. Prima Facie Case: Internal/Non-observable Damage 6. Even if the shipper fails to demonstrate that the goods were delivered in good

condition as described in the BoL, he may nevertheless demonstrate a PF case by introducing further evidence consisting:7. of the inspection certificate or other testimony relating to the actual

condition of the goods, OR8. showing that the nature of the damage is such that it could have

occurred only while in the custody of the carrier.

(b) CAEMINT FOOD v. BRASILEIRO(i) Facts : corned beef was damaged by water. Could have gotten damaged by

the rain (loading) or by “sweating” - ventilation.(ii) court said no prima facie case. (iii) A carrier can only give you a clean bill of lading for externally observable

goods. The cans, loaded in boxes, were in apparent good order and condition.

(iv) Because P failed to meet the burden, D was not required to demonstrate the shifting burden.

(v) Even if P failed to make a prima facie case by showing goods were delivered in good condition, he may nevertheless establish a PF case by showing that the NATURE of the damage suffered indicates that the damage occurred in the carrier’s custody (i.e. sea water damage).

5a. MISDELIVERY (Allied)(a) Harter Act Rule : Carrier must make “proper delivery.” Act does not define good

delivery, however, courts define proper delivery as:(b) delivery of cargo to consignee or designee set forth in the BoL (prima facie

under COGSA);(c) at fit or proper wharf;(d) with reasonable notice & reasonable opportunity to retrieve, OR(e) delivery to customs, complying with law or regulations of port of discharge.

6. POMERENE BILLS OF LADING ACT (a) §80113(a) : carrier issuing a BoL is liable for non-receipt of any part of the goods

described in the BoL by the date shown.

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(b) §80113(b) : Common Carrier is not liable:(c) when goods are loaded by shipper (shipper must show proper loading)(d) when the BoL:

(e) describes goods in terms of marks or labels or in a statement about king, quantity or condition; or

(f) is qualified by “contents of packages unknown,” “said to contain,” or “shipper’s weight, load, and count.”

(g) to the extent carrier does not know whether any part of the goods were received or conform to the description.

7. COGSA: Presumption of Good Delivery (§1303(6))(a) Delivery of the goods to the proper person is prima facie evidence of the delivery of

the goods under the BoL, UNLESS:(b) NOTICE (w/I 3 days) of the loss or damage and the general nature of such

loss or damage is given in WRITING to the carrier or his agent at the port of discharge BEFORE or AT THE TIME OF REMOVAL.

(c) However, this deprives Shipper’s PF case of its effect.

III. RESPONSIBILITIES OF THE CARRIER

A. DUE DILIGENCE TO MAKE SHIP SEAWORTHY (§1303(1)(a))1. A vessel is unseaworthy when it is not reasonably fit to carry this cargo on this

voyage. It is a very relative term (i.e. can’t put oil in a container vessel). Does not require the perfection of the vessel. It is a NONDELAGABLE DUTY!!!

2. Factors to be considered: 3. voyage undertaken4. cargo carried5. stowage

3. Duty operates before and at the beginning of the voyage, including during loading. Examples of possible unseaworthy conditions:4. fault in vessel’s construction or equipment;5. error by master or crew while the vessel is underway if the crew member

was not qualified or inadequately trained;6. improper loading or stowage;7. a condition on the vessel likely to be damaged in a storm;8. faulty or inadequate navigation devices or charts;9. improper cleaning of tanks or input lines.

4. US v. ULTRAMAR SHIPPING(a) Court said the vessel was unseaworthy because the cargo was stowed

improperly (i.e. did not have proper shifting boards).

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(b) Court also held that not having the particular navigation instrument does not in itself make the vessel unseaworthy because the vessel had newer, more advanced navigational equipment. The absence of a fathometer did not cause the damage.

5. HARTER ACT v. COGSA: (a) BURDEN OF PROOF:

(b) HARTER : carrier’s duty of due diligence to make the vessel seaworthy before the beginning of the voyage is a prerequisite to its enjoyment of Harter’s exceptions. If he has breached this duty: all defenses go out the window regardless of any CAUSAL connection!

(c) COGSA : COGSA requires a causal connection (§1304(1)).(d) Must show lack of due diligence AND causation.(e) Burden is on the carrier or other party claiming

exemption. If shipper meets his prima facie case, carrier must show either:

(f) absence of causation OR(g) exercise of due diligence.

(3)nondelagable duty(b) Availability of Defenses:

(c) COGSA: To be liable for unseaworthiness under COGSA, must prove lack of due diligence .

(d) HARTER: Carrier cannot claim a defense unless he has first established that he exercised due diligence.

6. Defense Against Unseaworthiness: 7. Carrier must show he exercised due diligence to avoid liability.8. Show unseaworthy condition arose after voyage started;9. Show latent condition that due diligent inspection would not have revealed.

B. DUE DILIGENCE IN THE HANDLING OF THE GOODS (§1303(2))1. COGSA : carrier shall properly and carefully load, handle, stow, carry, keep, care

for, and discharge the goods carried.2. This is a continuing duty.3. Duty lies with carrier regardless of whether or not it uses its own employees.

4. US POSITION : Can’t K out of this duty! You can delegate the task to someone else, but you are still liable. However, they may limit the services that they provide.

5. SUMITOMO :6. Duty is not genuinely non-delegable. 7. Court held that that 1303 does not impose a nondelegable duty to load &

stow but rather that carriers remain liable for their negligence so long as they in fact control those processes.

8. DEFENSE AGAINST NEGLIGENCE IN HANDLING CARGO (a) Carrier can show that a latent defect existed.

IV. IMMUNITIES OF THE CARRIER

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A. LOSS CAUSED BY UNSEAWORTHINESS DESPITE THE EXERCISE OF DUE DILIGENCE (§1304(1))

1. Neither the carrier or the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence. No similar provision in HARTER, i.e. no causal requirement.

2. COGSA v. Harter 3. Unseaworthiness and due diligence must be causally connect under COGSA.4. Under Harter, if you can’t prove due diligence, you’re liable regardless of

causation.5. BURDEN OF PROOF:

6. HARTER : carrier’s duty of due diligence to make the vessel seaworthy before the beginning of the voyage is a prerequisite to its enjoyment of Harter’s exceptions. If he has breached this duty: all defenses go out the window regardless of any CAUSAL connection!

7. COGSA : COGSA requires a causal connection (§1304(1)).8. Must show lack of due diligence AND causation.9. Burden is on the carrier or other party claiming

exemption. If shipper meets his prima facie case, carrier must show either:

10. absence of causation OR11. exercise of due diligence.

(3)nondelagable duty(b) Availability of Defenses:

(c) COGSA: To be liable for unseaworthiness under COGSA, must prove lack of due diligence .

(d) HARTER: Carrier cannot claim a defense unless he has first established that he exercised due diligence.

3. 2 main issues where unseaworthiness arises: 4. latent defects (if discoverable through due diligence);5. transitory unseaworthiness (after ship broke ground)

4. Defense Against Unseaworthiness:(a) Carrier must show he exercised due diligence to avoid liability.(b) Show unseaworthy condition arose after voyage started;(c) Show latent condition that due diligent inspection would not have revealed.

B. ERRORS IN NAVIAGATION OR MANAGEMENT (§1304(2)(a))

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n GENERALLY n Example: If vessel is involved in collision because of faulty seamanship or bad

judgment of master or crew and cargo is damaged or lost, carrier is not liable.

n Example II: If master or crew was incompetent & owner knew or should have known of it and this incompetence caused the collision, carrier would be liable because it had breached its duty to exercise due diligence to properly man vessel.

n Example III: If collision caused by faulty navigational equipment and fault existed & was detectable beginning of voyage, carrier likewise would be liable.

1. UNSEAWORTHINESS v. ERROR IN NAVIG. OR MGT. 2. Carrier must show:

3. exercise of due diligence, and4. loss or damage is, in fact, due to error in nav. or mgt.

5. INT’L NAV. v. FARR & BAILEY 6. Before you can claim error in navigation or management, you must

show due diligence to make the vessel seaworthy. Court found that leaving the hatch open was unseaworthy rather than an error in navigation or management.

7. TEST: What was the primary nature of the act? Was the act primarily a threat to cargo or to the vessel’s movement & management? Was the vessel reasonably fit to carry the cargo (seaworthy)?

2. PROPER CARE OF CARGO v. ERROR IN NAVIGATION 3. KNOTT v. BOTANY WORSTED MILLS

4. Knott Approach: Was the risk primarily to cargo or did the act create a risk to the total adventure such that the threat to the vessel was great and the threat to cargo incidental?

5. Court found the vessel seaworthy. However, the question was whether the damage was caused by negligence or error in navigation.

6. The improper loading and stowage of the wool was held to be negligence and not an error in management.

7. THE GERMANIC 8. How do you distinguish between the fault in which carrier is not

liable, from negligence in stowing, loading, custody, care, or discharge, which he id responsible for?

9. TEST : Court makes a distinction between the vessel as a navigational unit and a cargo carrying unit (i.e. related specifically to the cargo). If the error relates to the former, it is protected (e.g. navigation & management). If it relates to the latter, it is not.

10. COGSA OVER LAND (MULTIMODAL TRANSPORTATION) 11. Although COGSA only extends over the tackle to tackle period,

most courts have held that COGSA is applicable over the entire

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trip if such intent is expressly provided for in the BoL, such as a clause paramount.

12. However, COGSA will apply as a K term rather than by statutory force. These K terms may be overcome if the conflict with applicable law (VISTAR v. SEA LAND).

13. VISTAR : 1304(2)(a) - COGSA only extends over vessels. COGSA may apply over the whole trip if the parties agreed. However, the navigation & management exception applies to “ship” only.Therefore the Harter act must apply. B/C Harter prohibits disclaimers, the party can’t be relieved from negligence for damage to cargo.

C. PERILS OF THE SEA (§1304(2)(c))1. PERILS OF THE SEA v. NEGLIGENCE IN CARGO HANDLING

2. DEFINITION : the danger must be of an extraordinary nature and peculiar to the sea (therefore, fire, lightning, or an explosion cannot be peculiar to the sea); cannot be guarded against by ordinary exertions of human skill and prudence.

3. TEST : (Vallescura) is essentially foreseeability. The unforeseeable condition of the sea, wind and / or weather which caused the damage to cargo must be so powerful that it overcomes:

4. the strength of a well-founded vessel, or5. the usual precautions of good seamanship. (Therefore, if a

storm is so severe that it cannot be foreseen, carrier may claim peril of the sea.)

6. Lack of due diligence in making the vessel seaworthy is fatal in a perils of the sea defense.

7. BURDEN OF PROVING FREEDOM FROM NEGLIGENCE THE VALLESCURA

(i) Issue : What caused the onions to decay? Was it(ii) innocent sweat : peril of the sea; or(iii) guilty sweat : should have opened the hatches when the

weather was fine.(iv) Carrier has the burden of establishing peril of the sea excuse and

not negligence in carriage of cargo. If carrier can’t distinguish between the two, he is liable for the whole amount.

(v) Negligence or fault prevents a carrier from claiming peril of the sea. This burden is VEY tough to satisfy.

(vi) Court found that the failure to ventilate was not a fault or error in mgt. The mgt was of the cargo, not the vessel. Therefore, it gets no protection under COGSA.

2. PERILS OF THE SEA v. UNEXCUSED UNSEAWORTHINESS(a) Predictability Rule: (2nd Circuit: Edmond Weil) To determine whether the

act is excused by the perils of the sea defense or is an unexcused seaworthy condition, courts will assess whether the encountered condition was predictable or not. If the condition could have been

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expected, then the ship was not fit for its intended purpose and carrier is in breach of its duty of furnishing a seaworthy vessel. If the condition is not predictable, the defense applies.

(b) Burden of Proof: (9th Circuit: Taisho Marine) Peril of sea exception to unseaworthiness requires carrier to show freedom from negligence. Seaworthiness does not presuppose that the ship is designed to stand up under unusual combination of destructive forces of wind and sea which a skilled and experienced ship’s master would not expect and which the ship encountered as a stroke of bad luck.

D. INHERENT VICE (§1304(2)(m))1. Definition:

2. Covers loss or deterioration of cargo because of some internal characteristic, defect, or inherent quality of the goods.

3. Theory is that the shipper and not the carrier should have known of the inherent characteristics of the good and should have the responsibility to guard against it.

4. EXAMPLES: 5. insect eggs;6. tendency of metal to rust;7. tendency of fishmeal to generate heat.

2. Burden of Proof: 3. Second Circuit : (Granheim) carrier need only prove that the damage was

of an internal origin, and the burden shifts back to the shipper to show the condition of the goods when shipped and the defect was not internal origin.

4. Fifth Circuit : (Quaker Oats) Carrier must shoulder the burden of proving inherent vice. Carrier must show some defect adhering to the individual cargo in question. Not enough to show that this type of cargo are susceptible to inherent vice. Burden then shifts back to shipper to show negligence or fault of the carrier.

3. US STEEL INT’L v. M.T. GRANHEIM(a) Facts : Fragile chemical shipped with clean BoL, and is found to have

discoloration when off-loaded.(b) Inherent Vice : It appears that the damage rose internally, it self-evidently

calls into question the good condition of the goods upon shipment…any existing defect, disease, decay, or the inherent nature of the commodity which would cause it to deteriorate over a lapse of time.

E. RESTRAINT OF PRINCES (§1304(2)(g))1. Definition:

2. Covers “forcible interference with the voyage or adventure at the hands of the constituted government whether done by it as an enemy of the state to which the ship belongs or not.

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2. The Balder Eems 3. Dominican authorities searched for drugs, and much was pilfered. 4. Held to be RoP, Ultra Vires argument fails - US courts won’t inquire into

the propriety of foreign government actions.5. When carrier cooperated with a person purporting to be a government

officer, restraint of princes defense is still available to carrier.

F. “Q” CLAUSE (CATCHALL) (§1304(2)(q))1. GENERALLY:

2. Omnibus Caluse: Inserted to take the place of other traditional exemptions in BoL.

3. Usually employed as a last resort because what it gives the carrier in breadth, it takes away in terms of burden of proof and persuasion.

4. “Any other cause arising without the actual fault of the carrier or his agents”

2. CARRIER MUST SHOW:(a) No actual fault or privity of carrier AND(b) no fault or neglect of agents, employees, corporate officers or servants.(c) If carriers satisfies this burden, burden shifts back to shipper.

3. BURDEN OF PROOF DOES NOT SHIFT BACK TO SHIPPER: 4. Where the cause of the damage is known: the carrier must disassociate

himself from any fault or privity with respect to it.5. IN RE CONTINENTAL PROPERTIES MGT (US VIEW):

6. Facts: Guy went nuts and sunk the ship. Carrier claims navig & magt and the Q clause.

7. No protection here, because crazy guy was a servant.8. LEESH RIVER (ENGLISH VIEW):

9. Carrier not responsible for the acts of a stevedore hired to transfer cargo who stole a brass plate which lead to cargo damage.

10. Where the cause of the damage is not known, it is not enough to show reasonable care to establish Q Clause. Must Show:11. not at fault, AND12. what cause was responsible.

13. QUAKER OATS: 14. Rule: DUE DILIGENCE IS NOT ENOUGH. Once shipper has

established good on board, bad off board, carrier has the burden to explain what happened, or suffer the consequences.

4. SUMMARY OF REQUIREMENTS 5. Requirements for Q Clause are more stringent. The catch-all no fault

exception to liability is a presumption of fault which cannot be rebutted without:6. Proof of Due Diligence AND

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7. Proof that Damage was caused by something else than carrier’s negligence.

G. FIRE (§1304(2)(b))1. DEFINITION : “Fire, unless caused by the actual fault or privity of the carrier.”

It is treated differently because it is inescapable and there is limited remedial action.

2. FIRE STATUTE : preceeded COGSA and the Hague Rules. States that carriers are not liable for any fire unless such fire is due to design or neglect of the owner. §1308 specifically lends support to the Fire Statute. COGSA does not trump it.3. COGSA: Carrier is not liable for damage caused by fire, unless shipper

establishes that fire was caused by the actual fault or privity of the carrier or carrier’s employees.

4. Once carrier shows fire, burden shifts back to shipper to show that the fire was “caused by the design or neglect of the carrier” or that such design/neglect prevented the outing of the fire (The Leslie Lykes). Courts have determined that “actual fault or privity” and “design or neglect” have the same meaning.

3. 2 nd /5 th /11 th CIRCUIT VIEW (TA CHI NAVIGATION) 4. Shipper shows prima facie case;5. Carrier shows damage is caused by fire straight away without showing due

diligence first. BURDEN LIES WITH THE SHIPPER.6. Shipper shows that it would not have happened but for actual fault or privity

of the carrier OR design or neglect of the owner. They treat the terms of COGSA and the Fire Statute as interchangeable.

7. However, the Fire Statute refers to corporate mgt / owner and NOT the crew/employees.

4. 9 th CIRCUIT VIEW (NISSAN FIRE & MARINE) 5. Carrier can’t rely on the defenses in 1304(2) unless it first shows that it

exercised due diligence in making the vessel seaworthy. Appears to be textual support for this in 1304(2)(b). Thus, before carrier can invoke fire defense, carrier must first prove it exercised due diligence to make vessel seaworthy. BURDEN ON CARRIER.

6. Same position taken in the UK and Australia.7. Under either position, you are looking at the carrier, NOT the employees.

5. OTHER IMPORTANT POINTS 6. carrier usually wins in a fire case, especially in 2/5/11.7. also includes smoke and water (to put the fire out) damage.8. §1308 - doesn’t affect the Fire Statute. This lends support to the 2/5/11 rule.

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V. DAMAGES AND LIMITATIONS OF LIABILITY (§1304(5))

A. NON-CONTAINERIZED CARGO1. FULLY ENCLOSED GOODS

(a) Generally deemed to be packages.(b) Non-containerization does not happen too often anymore.(c) If does not state so in the BoL, the package must be “sufficiently, wrapped,

bundled or tied.”(d) THRESHOLD QUESTIONS : Is it a package? What is the COGSA

package?(e) 3 GENERAL PRINCIPLES :

(f) look at the BoL to see if it says “package.” If the “number of packages” column refers to an item which can fairly be considered a COGSA package, this is determinative.

(g) look at physical nature of the packages. i.e any preparation of a cargo item for transportation that facilitates handling but does not necessarily conceal or completely enclose the goods.

(h) containers are not generally packages unless it is clear that the parties intended it and the contents and number of packages are disclosed.

(i) If it is not a package, look to the “customary freight unit” (unit that the carrier usually charges for freight like this one). This is more favorable to cargo. The BoL and published tariff schedule should provide this information.

2. PARTAILLY ENCLOSED GOODS 3. More difficult to determine. Courts generally rely on expression of parties

on the Bill of Lading.4. 9 th CIRCUIT : an un-enclosed item does not become a package just because

some packing is involved.5. 2 nd CIRCUIT : If it’s been packed to make it easier to carry, then it is a

package.6. Examples:

7. Drilling Rig - No8. Electric Transformer on Skid - No.9. Toggle Press on Skid - Yes.10. Pallets - Yes.

3. THE $500 LIMITATION (§1304(5))(a) no amount exceeding $50/package.(b) Unlike the Hague Rules:

(c) in US currency. (Hague: £100 gold value)(d) per package (Hague: package or unit)

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(e) “unless” nature and value is declared before shipment on the Bill of Lading. However, this never happens because it would make shipping too expensive. Carrier would charge more, and the cargo would be too easily marked for theft.

(f) HARTER ACT : If HA applies to a case, no limitation is specified in the statute, so the actual value rule would be applicable. (i.e. BoL).

(g) FAIR OPPORTUNITY DOCTRINE :(h) complete legal fiction.(i) US is the only country who has this.(j) the carrier can only rely on the $500 limit if the shipper is given a

fair opportunity to declare a higher value.(k) Major Issue : How much notice/time constitutes FO?

(l) Lowest Position : if carrier has filed 2 different tariffs with FTC, there is fair opportunity (legal fiction upon legal fiction).

(m) Highest Position : carrier must notify cargo by making it obvious on the BoL.

4. MONICA TEXTILE CORP. v. SS TANA 5. What is a “package” under COGSA?6. CONTAINER CASES : If the BoL says “package,” the contents of the

container are COGSA packages, not the container itself. This si usually determinative. The container may, however, be a COGSA package if there is a clear agreement by the parties so long as the contents & the number of packages or units inside are disclosed.

7. TEST : (PER SE CONTAINER RULE) MITSU Notwithstanding the insertion in the number-of-packages column(s) of the BoL of a number reflecting the number of containers, where the BoL discloses on its face what is inside the container(s) and those contents may reasonably be considered COGSA packages, the latter, not the container(s) are the COGSA packages.

4. VISTAR 5. Huge machine in a single container. Court found that because COGSA

applied as a K provision, $500 limit was applicable. It was a single package because the shipper had packed the carton and the BoL stated 1 package.

6. Shipper had the opportunity to declare a higher value.

5. THE PUERTO RICO 6. BoL stated that 3 electric transformers were packages.7. Where COGSA is applicable by force of law, carrier can’t limit liability

below statutory amount; and where it doesn’t operate by forces of law. They can lower liabilities. However, Harter may apply.

8. Court held that no COGSA here. COGS was not applicable here, so the super low limitation will still be enforced.

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VI. WHO IS THE COGSA CARRIER?

A. GENERALLY, THESE QUALIFY:1. A ship-owner issuing a BoL is the carrier:

2. When master signs charterer BoL as “authorized by the ship-owner” or where anyone else with the permission signs it “for the master” ship-owner is carrier. Must show that the master was authorized or required by the charter party to sign BoL’s and thereby binding the owner. Plaintiff must find out if the agent was signing on behalf of the owner or charterer. Forces P to sue everyone (therefore, you can sue the ship in rem).

3. Shipper: liable in personam.4. Vessel: liable in rem (available if the cargo was loaded & carried, even

though no in personam available).5. Charterer (because it is owner pro hac vice) usually bareboat, issuing BoL is the

carrier regardless of whether or not the ship-owner might also be classified as a COGSA carrier.

6. 3 Party Situation Rule: Party issuing a “mere receipt” BoL under charter-party becomes carrier when it gets negotiated to a 3rd party. A transaction between charterer and vessel owner does not establish a COGSA carrier because the relationship between the 2 is determined by the Charter Party and the BoL is considered a receipt. Once the charterer gives the BoL to a 3rd party (consignee) a 3 party situation is created whereby the consignee is not a party to the C/P and is in possession of the BoL.

7. Freight forwarder who issues BoL, undertaking responsibilities of carrier, will be treated as the carrier.

8. If the time charterer has issued the BoLon its own form, the shipowner is still liable under agency principles.

B. GENERALLY. THESE DO NOT QUALIFY:1. Parties to charter party.

C. QUESTIONS TO ASK:1. Who will the shipper most likely contract with?

2. Time charterer because they actually go out & solicit business.

D. COGSA §1301(a)&(b):1. 1301(a): Carrier includes the owner or charterer who enters into a K of carriage

with shipper. (More than 1 person can be the carrier).2. 1301(b): A K of affreightment is “only a KoA by BoL or other document relating

to carriage.”

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E. THE GLORIA (Good Judgment)1. Fact/Issue : BoL is signed “FOR THE MASTER.” There are several parties. Who

is liable to cargo as the COGSA carrier?2. Rules : The COGSA carrier is the “owner or charterer who enters into the K of

carriage with the shipper.” K of carriage formed between shipper and vessel owner when master or any other party signs the BoL “on behalf of” the vessel owner. There must be evidence not only that the master signed, but that he had the authority from owner to do it.

3. ***ACTUAL AUTHORITY: Master can bind charterer if he signed the BoL with actual authority to sign it as an agent on behalf of the charterer.

F. CACTUS PIPE1. Facts : Goods were issued and BoL was signed by Delpha “FOR THE MASTER.”

There was no evidence showing who Delpha is or that the had the authority to issue BoL on behalf of the master and the owner. Who is the carrier?

2. Rule : There must be actual or apparent authority to agent who claims to sign on behalf of the master/owner. When cargo is stowed and loaded on the vessel, and any BoL is issued, the vessel becomes liable in rem for that cargo by way of maritime lien: FICTION OF RATIFICATION.

3. Holding : Court found that there was insufficient evidence to justify P in believing that the BoL’s were issued by an agent actually or apparently authorized to do so on behalf of Orient to bind them in personam. Therefore, it is not a party nor bound by the BoL.

4. ***APPARENT AUTHORITY: If the principle acted in such a manner as to cause a third party to believe the agent had authority, principle may be deemed a COGSA carrier.

G. HIMILAYA CLAUSE1. Non-carrier seeks carrier limits and defense protections afforded by the BoL:

2. statute of limits under 1306(6)3. $500 limit under 1304(5);4. Navigation & Mgt under 1304(2)(a)

5. Read strictly against the party relying on them. Limited to named and intended beneficiaries.

6. Argument Against : There’s no consideration given by non-carrier.7. Most significant defect : protects stevedores, terminal operators, and other cargo

handlers (loading & unloading services)8. Enforceable to the extent they just extend carrier immunities, but not to the

extent that they totally immunize beyond COGSA constraints. However, a K, no matter how clearly and expressly stated, whose purpose is to wholly immunize a non-carrier from liability for its negligence is repugnant and contrary to public policy and traditional law.

9. GRACE LINE, INC. 10. Himalaya clause valid if the BoL clearly and expressly shows intent to

extend protections to non-carriers.

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11. Enforceable to the extent they just extend carrier immunities, but not to the extent that they totally immunize beyond COGSA constraints

12. An effective clause should: 13. be very specific in its description of its agents and general contractors to

which protection is extended;14. must specifically enumerate the COGSA benefits extended under BoL.

VII. DEVIATION

A. PAST v. MODERN APPLICATION1. Definition : An intentional departure by the vessel from the geographical route

specified in the contract of carriage.2. Past Application : Used to refer to geographic deviation only . Had tough

consequences because it used to completely negate the cargo insurance. Therefore, the carrier was liable as an insurer of the loss of goods, if the ship deviated.

(a) Policy: shipper is deprived of insurance coverage.

3. Modern Application : Readily extended to other types of deviation.(a) Quasi-Deviation : Fundamental breaches of K of Carriage that are not

geographic deviations. Includes conduct whereby the cargo is exposed to a different risk (i.e. unauthorized deck carriage, delay, re-shipping goods after carrying them too far).

(b) Non-Delivery: Non-delivery is not serious enough to be considered a deviation. C.A. Articulos.

(c) On-Deck Carriage: Quasi-deviation occurs where the carrier in disregard of KoA carries goods on deck when KoA stipulates or custom implies the goods be stored below deck.

(d) Policy : deviations are wrongful because they increase the risk to cargo beyond that permitted in the K of carriage.

B. COGSA 1304(4):1. Any deviation in saving or attempting to save life or property at sea OR any

reasonable deviation = not liable for any damage or loss.2. Provided however, if the deviation is for the purpose of loading or unloading cargo

or passengers, it shall, prima facie, be regarded as unreasonable.3. Test of Reasonableness :

4. Does the deviation substantially increases the exposure of cargo to foreseeable dangers that could be avoided ?

5. Excused: changing ports because of congestion; strike; quarantine; or risk to the cargo;

6. Unexcused: return to port for repairs due to a preexisting seaworthy condition; stop for inexpensive bunkers; picking up or discharging cargo or passengers; on-deck carriage when KoA states below deck carriage.7. Nancy Lykes: Unreasonable to deviate from the course by going out

of its way to buy cheaper fuel when it knew it might encounter gale force winds.

8. CAUSAL RELATIONSHIP:

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9. It appears that there must be some causal relationship between the deviation & the loss. Lack of causation seems to be treated as a defense which must be sustained by the carrier. (Doesn’t make sense because the insurance will be lost whether there was causation or not) GE (change in route may expose cargo to new or additional risks and this may facilitate finding a causal connection).

5. LAND-BASED DEVIATION 6. Courts are split on whether deviation applies to the land-based portion of a

K of carriage.

C. TWO DIFFERENT VIEWS1. 2 nd /5 th /9 th Circuits : deviation deprives carrier of ALL protections in the BoL &

COGSA (including $500 limitation). Essentially, unlimited liability.2. 7 th Circuit : All protections are gone EXCEPT the $500 limit on liability.3. Alternative View : Vision Today, there are “held covered” clauses. They are still

insured, regardless of deviation, therefore the insurance rationale is gone because the cargo insurer benefits from this arrangement. 4. Incentive Rationale : unless carrier takes the risk of deviation, there’s no

reason to deviate. 5. NOW ASK: DID THE DEVIATION INCREASE THE RISK TO

CARGO BEYOND THAT WHICH THE SHIPPER ANTICIPATED?

D. LIBERTY CLAUSES1. Carrier has liberty to call to any port at any time for any reason.2. Question: Is it (A) an attempt to define the voyage? OR (B) an attempt to permit a

deviation?3. OUTSIDE UNITED STATES : a definition of the voyage.4. U.S.VIEW:

5. In US it’s seen as a limitation of liability under 1304(4). Can’t do this because you can’t decrease liability under COGSA.

6. GENERAL ELECTRIC 7. Facts: Stopped in CA to take advantage of cheap fuel. As a result,

vessel hit bad weather and sunk.8. Rule: A deviation from the usual, customary, or advertised ports is

a breach of the K under COGSA. 9. NOTE: Liberty clauses may apply when COGSA does not, such as when the goods

are carried on deck.

E. ARTICULOS1. Vessel failed to show up . Deviation need not be geographic. It may be “any

variation in the conduct of a ship in carriage of goods whereby risk incident to the shipment is increased.

F. UNAUTHORIZED DECK CARRIAGE

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1. Quasi-deviation because it is a higher risk than the cargo bargained for.

2. Deck cargo is not “goods” under COGSA, UNLESS:3. states it on the BoL;4. cargo actually carried on deck.

3. If it’s not on the BoL, the K governs, therefore, liability is usually cut down.

4. It is only a deviation IF it is an unauthorized deck carriage (unreasonable under COGSA). However, if it is an authorized deck carriage, COGSA N/A.

5. COGSA 2000 : treats on deck carriage the same as under-deck carriage (New Draft 9/24/99).

VIII. EXONERATION CLAUSES

A. COGSA 1303(8)1. 1303(8): Any clause relieving the carrier or the ship from liability arising from

negligence, fault, or failure in the duties and obligations provided in this section [seaworthiness, handling of cargo], or lessening such liability otherwise than as provided in this Act, shall be NULL and VOID and of NO EFFECT.

B. EXAMPLES OF VOID CLAUSES:1. forum selection clause in foreign jurisdiction;2. unauthorized deck carriage;3. “both to blame” clause;

C. THE ASTURIAS (SWEAT)1. Generally: Carrier cannot limit liability unless COGSA authorizes it.2. Facts: Hatches had to be battoned down b/c of weather. Sweat developed,

damaging cocoa beans.3. Rule: Sweat is a peril of the sea, and is excusable provided that carrier exercised

due diligence to ventilate. This damage was covered by exoneration clause in BoL. However, b/c there was also seawater present, carrier liable.

D. M/V ARKTIS SKY (DUTY TO LOAD / STOW)1. Facts: “Free In Out Stow” Caluse. Shipper’s agents load and stow the goods.

Cargo becomes loose and is damaged. Cargo argues it should not be liable because shipper loaded and stowed.

2. Rule: Can’t use the Bart Simpson Defense: “I didn’t do it.” Carrier bears the burden of showing it was the shipper’s fault. Carrier’s duty to properly and carefully load and stow the goods it carries is non-delegable. Can’t K out of it.

E. JAMAICA NUTRITION (SEAWORTHINESS)

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F. Carrier’s duty of due diligence to make the vessel seaworthy cannot e abrogated to another.

F. CHESTER (ON-DECK CARRAIGE)1. Facts : Ro-Ro (all deck) used to carry cargo, which is subsequently damaged. BoL

stated that the carrier shall not be liable for damage to goods carried on deck. 2. Rule : COGSA does not apply to deck carriage where: (a) it’s agreed they’ll be

carried on deck (implicitly or explicitly); and (b) the goods are in fact carried on deck. Therefore, D not liable.

3. COGSA allows, Harter does not.

G. RUST / LUMBER CLAUSES (SIMILAR)1. Unique good because it continues to decline as it gets older.

2. If carrier says it is in apparent goods order and condition, he’s not saying it is rust free.

3. Such clauses are generally allowed provided that they are sufficiently brought to shipper’s attention.

4. However, under 1303(c), shipper may require that “no rust” be put on the BoL.

H. THE ELIKON (FORUM SELECTION CLAUSES)1. BoL states that all disputes are to be settled in Germany.2. Rule: In general, forum selection clauses are OK. However, in this case, it will be

disregarded when they conflict with COGSA’s mandatory US jurisdiction. This is because it would defeat the purpose of COGSA by permitting a decrease of liability. The clause would frustrate shipper’s ability to collect for negligent carriers:3. no guarantee German court would apply COGSA;4. transaction costs.

I. SKY-REEFER (ARBITRATION & CHOICE OF LAW PROVISION)1. Clause: litigation or arbitration in Japan.2. Real Issue : Whether the substantive law to be applied will decrease carrier’s

obligations to cargo below what COGSA guarantees.3. Rule: Clause is enforceable:

4. comity issues: don’t insult foreign courts;5. need to encourage arbitration;6. Can’t say whether Japanese arbitration would decrease liability;7. Dist. Ct. can always refuse to recognize arbitration judgment if need be

8. This is a decision for cargo/insurers and AMERICAN LAWYERS.

IX. STATUTE OF LIMITATIONS

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A. COGSA 1303(6)1. 1 year statute of limitations under COGSA.2. Runs : 1 year after “delivery of goods” OR date when goods should have been

delivered (for lost goods).3. NOTE : Runs when delivered NOT discharged. If the cargo is short, statute runs

when the last good was delivered; In case of delay, statute runs from the actual delivery of the goods.

B. S.S. GUARICO1. Rule : “Delivery” requires (if not receipt by the delivery) at least notice to him and

the opportunity to accept delivery. Delivery is a mutual transaction which requires the consent of the person who is to take possession, as well as that of the one who gives it.

C. TIMCO ENGINEERING:1. Himalaya Clause may extend protection of 1303(6) to 3rd parties (i.e stevedores).

II. CHARTER PARTIESA. INTRODUCTION

1. Largely governed by freedom of K. A charter party is a private contract and the parties are free to allocate risks contractually either by express contractual provision or by allocating specific duties concerning the cargo, voyage & ship.

2. Interpreting charterparties is really nothing more than understanding K’s.

3. Generally, provisions of the charter party are strictly construed a/g the drafter.

4. Virtually universal to include arbitration clause (therefore, less litigation). In addition, long-standing business relationships decrease litigation.

B. DEMISE CHARTERS1. GENERAL CHARACTERISTICS

2. Very similar to a rental car. Essentially, the lease of a ship;

3. Up to the charterer to man and equip the vessel.

4. Charterer may be a COGSA carrier if the vessel is used to transport third parties’ goods;

5. Demise charterer is owner pro hac vice:6. entire command and possession of the vessel - to the charterer;

7. owner still retains the legal title.

8. As owner pro hac vice, charterer potentially liable for collision, personal injuries to master, crew and 3rd parties, pollution damages, and for loss or damage to the chartered vessel.

(e)Owner’s Obligation : (i) provide a seaworthy vessel of the specified class & type and class at

the beginning of the voyage. After beginning, charterer responsible.

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(f) Charterer’s Obligation : (g) pay the charter hire stipulated in the charter party;

(h) vessel must be returned in the same condition received, except for normal wear and tear.

(i) to indemnify vessel owner if the damage was incurred through the charterer’s negligence or fault.

2. TEST FOR DETERMINING DEMISE CHARTER 3. Test: Difference between giving possession and giving use of the vessel

(i.e. services of the vessel, verses possession of the vessel).

4. No technical words necessary. It is a question of substance, not form.

3. US v. SHEA (CREATION OF DEMISE CHARTER)4. TEST : Is it a K of service or hiring?

5. No magic words needed. It is enough that the language shows an INTENT to transfer the management, possession, command & control of the vessel.

4. DANT & RUSSELL (WHO’S RESPONSIBLE FOR FAULTY NAVIGATION)5. Facts : Pacific (vessel owner) demise charters the vessel to Hvide, who in

turn voyage charters it to Terminal. Who is liable for unseaworthiness?

6. Rule : Time charterer had no cause of action against vessel owner because there was no privity of contract. Action must be brought against the demise charterer. During a demise charter, the vessel owner surrenders possession & control to the charterer who succeeds to most of the owner’s rights & obligations & becomes the owner pro hac vice. Demise charter knew of the unseaworthy condition which constitutes a waiver.

C. TIME & VOYAGE CHARTERS1. GENERAL CHARACTERISTICS

2. VOYAGE CHARTER: 3. Similar to a taxi ride.4. Is a K of carriage, but time and demise are not.5. Carrier promises to transport a certain amount of cargo for 1 port to

another in return for compensation, called freight (usually covers everything). Charterer promises to deliver the cargo and to pay the freight.

6. Owner provides : a ship, master & crew, and places them at the disposal of the charterer for the carriage of cargo to a designated port.

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7. May lease all of the vessel or series of voyages or lease only a part of the vessel (“space charter”).

(b) TIME CHARTER: (c) Contract of affreigtment to use a ship in order to ship goods for a

specified period of time. (Usually say “about” what time).

(d) Charterer bears the expenses connected with each voyage and pays hire to the carrier based upon the time the ship is under charter.

(e) Owner : retains management & control.

(f) What information do you want to know?(g) What can the vessel do?

(h) How mush?

(i) Condition (age) (Affects insurance price);

(j) Duration (delivery, redelivery);

(k) How much does it cost to run?(l) TRIPTIME OWNER:

(m) charters party for the duration of a trip, not for a period of time.

(n) used for the transport of a single cargo bit is a time charter, not a voyage charter.

(o) Just buying use of the ship; you assume operating costs.

2. THE ALAIA (WHEN DOES A C/P COME INTO EFFECT?)3. Issue : When does the charter party come into effect?

4. Rule : Charter-parties are governed by K principles; Signature is not what is required to commence the charter-party, offer & acceptance is. In this case, performance had already begun!

D. CONTRACT FORMALITIES1. BACKGROUND:

2. Charters are often made through the use of brokers.3. Agreements are usually made in 2 stages:

4. Main Agreement 5. Fixture

6. The main agreement sets forth all the main details that the parties agreed to. Courts are split as to whether parties have to agree on all the details in a fixture.

2. THE JUNIOR “K”

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(a) Facts : Several telexes back and forth indicating terms / potential terms of the charter. One telex says “FIXTURE SUB DETAILS.”

(b) English : No deal. All details must be fixed. If there is no meeting of the minds, there can be no enforceable K. Junior “K”

(c) US: Deal is done. Not all the details must be fixed. Just the main ones. If the main terms, such as length of time & price, are set & less significant terms which have not been agreed to can be based on a form of fixture / charter, then an enforceable K exists.

E. LATE DELIVERY F. RULE: If a charter contains a cancellation clause the charterer can exercise his

option to cancel the charter if the vessel is not “ready to load” cargo by a specific date, regardless of whether owner was at fault or not. Pan Cargo. (local authorities prevented vessel from loading because the vessel had made a trip to Israel. Charterer was free to cancel).G. Notice of Readiness: Does not constitute “ready to load” if the vessel

cannot load as a result of denied entry.

F. FAILURE OF VESSEL TO COMPLY WITH CHARTER PARTY1. Promises From a Shipowner

2. IFO: fuel & oil

3. MDO: diesel oil

4. Speed and Consumption

5. Carrying Capacity: 6. Volume : (cubic feet) grain capacity;

7. Deadweight : amount of cargo able to carry (use “about”)

2. Consequences of Breach 3. Repudiation by a CP is permitted only where the breach of the owner’s

undertaking of seaworthiness is so substantial as to defeat the commercial purpose of the charter.

4. Damages

3. SPEED & CONSUMPTION:::GIANNELIS v. THE ATLANTA 4. Facts: Charterer sues owner because vessel was too slow and too small,

contrary to specifications in the charter-party.

5. Rule : Where the charter-party provides that the vessel shall carry a certain volume, go a certain speed, consume certain amount of fuel, and it states language like “owners guarantee”…this is an express warranty, the breach of which permits the charterer to sue for damages and to rescind (despite the fact that the charterer did the actual loading).

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6. ROMANO : Need not have to use the word warranty. It’s enough to say the vessel goes “9 knots.”7. Was the natural tendency of making this statement done to

induce the chartering of the ship?

4. WARRANTY OF SEAWORTHINESS 5. General Rule: Every Charter implies a warranty that the owner will

furnish a vessel at the beginning of the voyage in a seaworthy condition, unless parties agree otherwise.

6. If owner breaches this duty, no action against the charterer is available for damage to the ship.

7. Parties can agree to lessen the standard of seaworthiness. Any waiver of the duty of seaworthiness must be EXPLICIT.

8. Not a due diligence obligation, but an actual warranty of fitness;

9. Knowledge of the unseaworthy condition by the charterer will not deny him the right to rely on the owner’s implied warranty of seaworthiness.

10. Charterers don’t have to accept an unseaworthy vessel - they can make owner fix, or repudiate;

11. Not a continuing obligation of owner, unless it states ship will be “maintained in a thoroughly efficient state.”

12. Once the vessel has been accepted, he can only repudiate the contract if a substantial material breach on the part of the owner that frustrates commercial purpose of K.

G. OFF HIRE1. Generally

2. When one of the events listed in the off hire clause deprives the charterer of the vessel’s use, the hire is automatically suspended without regard to fault on the part of the owner.

3. Typical Off Hire Clause Events: 4. drydocking or other necessary measures to maintain vessel

efficiency;

5. deficiency of men or the Owner’s stores;

6. breakdown of machinery;

7. damage to hull or other accident;8. Suspends only the obligation to pay hire; other obligations continue. If the

off hire event is triggered by the fault of the charterer, payment of hire is not excused.

9. GENRAL RULE: payment of hire is suspended for the period equal to the net overall time lost to the charterer.

2. M/V MARILENA (WHEN CAN A PARTY REPUDIATE?)

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3. Facts : Crew refuses to sail to Vietnam. Charter stated that in the event of loss of time due to strike or deficiency of men, payment of hire shall cease. All warranties of seaworthiness were qualified by due diligence.

4. When can party repudiate? Only permissible where breach of owner’s seaworthiness, or other K provision is so substantial as to frustrate commercial purpose.

5. Court held that it was unnecessary to address the unseaworthy issue here because there was an off hire clause. Court held that the parties did not intend for such grave results as the result of a breach.

6. Off hire clause trumped the unseaworthiness issue here. Therefore, unseaworthiness did not give the US the right to repudiate here.

3. “PREVENTING OF THE WORKING VESSEL” (KNUTSFORD)4. Facts: Fire occurred in cargo area during unloading, so cargo had to e

unloaded to assess damage and then reloaded. Charter said hire shall cease if …damage for 24 hours or more. Charterer refuses to pay hire.

5. Court held that the fire prevented the full-working of the vessel, HOWEVER NO TIME WAS LOST HERE. If the off-loading is to fix the ship, then it is a defect in the vessel. Therefore, it’s the owner’s time and therefore, NOT OFF HIRE.

6. RULE : Charterer must show:7. ship not working properly, AND

8. lost time.

4. “ANY LOSS OF TIME” (WOODS HOLE)5. Facts: Woods Hole chartered a research vessel to the US. Engine breaks

down. They cease the mission, and Woods Hole brings feds back. Charter provides off hire for “any cause whatsoever not due to the fault of the government, preventing the full working of the vessel.”

6. Charter terms control the situation. Government owes hire only up until the time the engine failed. Charter hire due only if the charterer employs the vessel to do the service. Off hire from the time the master takes over use of vessel in the interest of the vessel. (Mattered not that the gove received the benefit of their cargo being carried back to shore).

7. HYPO: English ship goes into the Chinese River. Boxer Rebellion ensues, can’t get out. NOT OFF HIRE because the charterer takes the risk of where the vessel will be located. (SEE APP. 62, clause 15).

H. REMEDIES: DAMAGES - WITHDRAWAL1. Owner’s Remedies:

2. Withdrawal : Commercially, owner will only do this if the market rate > the contract rate.

3. Sport of the Shipping Market:

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4. There are cases where the owner will withdraw hours after the missed payment. He will then recharter the vessel to the current charterer at a higher rate.

2. DIANA CO. MARITIMA 3. Facts : Charterer went bankrupt and did not pay, so owner gave notice

withdrawing the vessel, and took the cargo along with all the related claims to freight, subfreights (i.e. owner gets a lien on the cargo).

4. Court’s Reasoning: 5. Shipowner has a lien but only when it is expressly stated in the

charter of the vessel;

6. Maritime liens always have priority over rights of bona fide purchasers, i.e. ahead of all other creditors;

7. Does the maritime lien attach under the circumstances?:8. US Position : Notice of withdrawal mid-voyage is NOT

effective. Withdrawal occurs at discharge.

9. Therefore, because owner’s withdrawal did not become effective until cargo is discharged, his lien on amounts due is as of that date

I. SAFE PORT - SAFE BIRTH1. Generally

2. Define: Through this clause, the owner gives the charterer the authority to designate ports only if they are safe.

3. Time & Voyage charters typically provide that the ship shall “safely lie, safely afloat.”

4. Unless this is modified by language reducing the obligation to due diligence, the charterer who nominates a port is held to warrant that the particular vessel can proceed to port or berth without being subjected to the risk of physical damage.5. may be political dangers; physical safety - vessel; natural hazards

6. Is it safe for the particular vessel involved? RELATIVE QUESTION.

7. Ship may refuse to proceed to the port nominated without being in breach of the charter.

8. Poor weather do not ordinarily render a port unsafe.

2. Uses of Safe Port Doctrine: 3. Offensive : Suing charterer when the berth proves to be dangerous. Owner

can use clause as a “sword” if the ship was damaged while the master tried to enter the port.

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4. Defensive : master protected by safe berth clause when he goes to a different port b/c he feels that the charterer’s choice is unsafe. Owner can use as a “shield” if master refuses to eter an unsafe port (no breach).

3. DIFFERENT COURT VIEWS 4. 2 nd Cir./Eng./Aust : Charterer warrants the safety of the berth it selects

when the charter party includes a safe berth clause. It is strictly liable for any damages resulting from an unsafe berth / port because the clause is equated to a “warranty” that the port it designates the vessel to go to is safe. Regardless of fault, an unsafe port is a breach of charter.

5. ***5 th Circuit : (MAJORITY) Zen-NOH Grain: Charterer owes a duty of due diligence to select a safe berth. Must take all reasonable measures to ensure it was safe. (i).NEGLIGENCE STANDARD: Test is “reasonable care.”(ii) Rejects 2 nd Cir.: warranty could discourage the master at the scene

from using his best judgment in determining the safety of the berth.

(iii) Requiring negligence as a predicate for charterer liability does not raise the risk that the vessel will be exposed to an unsafe berth.

4. THE EVIA 5. 2nd Cir. & English law in harmony.

6. Facts : Vessel gets to berth & a war breaks out b/w Iran & Iraq, making berth a lot less safe.

7. Rule : Safe berth is judged at the time the order is given. If it turns out that the berth is unsafe when vessel gets there, it’s a safe berth nonetheless.

8. Charterer is expected to act reasonably under the circumstances. Therefore, the vessel does not have to go if it is unsafe.

J. REDELIVERY1. WEAR & TEAR

2. COMPASS MARINE CORP: 3. Facts : Charterer returns the vessel in bad shape and the owner wants

him to pay for repairs, and to pay demurrage while they’re being done.

4. Charterer is responsible for paying for repairs outside ordinary wear & tear.

5. Presumption of charterer negligence if owner can show good drop-off, damaged on return, unless charterer can rebut by showing how the damage occurred and that he didn’t do it.

6. Owner entitled to demurrage & repairs when vessel has to go to shop because demise charterer was negligent in upkeep.

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7. Wear & Tear: Normal depreciation which corresponds to the practices in the service for which the vessel is intended. Just because the damage could be anticipated does not mean it is wear & tear.

8. Charter Hire: Owner is entitled to charter hire until the vessel is returned in good condition.

9. Lost Time: Charterer is liable for damages from any time lost due to necessary repairs caused by charterer’s fault.

2. OVERLAP & UNDERLAP (“ABOUT”)3. GENERALLY:

4. Overlap : Refers to the use of the vessel after the date of redelivery as dictated by the charter. Charterer is allowed a reasonable overlap at regular freight rate.

5. arguments if market rate goes up: wants to hold on to the ship as long as possible.

6. Underlap : Refers to the redelivery of the vessel prior to the designated termination of the charter. Charter still pays the regular freight until the end of the charter.

(1)arguments in down market.(iii) Reasonableness Test: It would be unreasonable to underlap 14 days

of hire instead of taking the voyage and taking an overlap of 3 days. Therefore, owner can make charterer take on an additional voyage. Britain S.S. Co.

(b) MUNSON S.S. LINE(i) Facts : Charter for “about” 36 months. “About” defined as 1 month.

Charterer keeps the vessel for 40 months.(ii) If there’s an express overlap / underlap period, that’s what you get.

Nothing else, pretty much without fail.(iii) Issue : Underlap. Is to too early a redelivery?(iv) Court states that an underlap is implied unless a reasonable last

voyage could be conducted.(v) Reasonable Last Voyage : If charterer could send it on another

voyage that would be concluded before overlap period ends.(vi) Held : Charterer liable for 37 months of hire at the regular rate, and

an additional 3 months at the fmv as it stood at the end of the 37.

(c) MUNSON II (d) Rule : Where overlap created by undertaking a 2nd voyage is <

underlap to be created by surrendering the vessel after end of 1st, 2nd voyage is reasonable.

(e) If the voyage is reasonable, charterer pays hire rate for the extra time, but if it’s unreasonable, he has to pay the fmv rate.

(f) In the case of a 2nd voyage, the owner may collect hire for 2nd voyage not taken if it’s part of the K.

(g) (Contract - Market) + b days = damages. If so can prove that it absolutely can’t recharter ship during time period, then (Contract - 0) x b days.

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K. DEMURRAGE 1. CHARTERPARTY LAYTIME DEFINITIONS:

2. Laytime: period of time allowed for loading and unloading. After it expires, charterer is liable for delay at a rate of demurrage that is stipulated in the charter.

3. Customary Depatch: charterer must load and or discharge as fast as possible under the circumstances.

4. Reversible: an option given to the charterer to add together the time allowed for laoding and discharging.

5. Demurrage: means the money payable to the owner for delay for which the owner is not responsible in loading and or discharging after the laytime has expired. Esentially, liquidated damages.

6. “On Demurrage:” means that the laytime has expired.7. DISTINGUISH WITH “DETENTION”: penalty imposed on a charterer

for a wrongful or unnecessary delay usually period of time after demurrage is over and ship is still late.

8. Weather Delays: will usually stop the laytime clock and extend it. If it exceeds laytime (i.e. sever weather) it becomes real time (on the charterer).

9. Notice of Readiness: Notice that the vessel has arrived at port and is ready to load or discharge.

2. SHIPPING CORP OF INDIA:(a) Facts: Permitted laytime used before it even starts to load. Vessel on

demurrage prior to commencement of loading. 6 hour notice time.(b) Issue: Has the ship been on demurrage the whole time?(c) Judge’s Formula : All laytime used - allowed laytime = demurrage. But

what is “used laytime?” Therefore, charterer will always get the benefit.(d) Correct Formula : Once notice is given, then clock starts ticking. If still

delayed, shifts and demurrage begins. However, if shift is on laytime, it is not on demurrage, not on charterer’s time.

(e) 3 instances where charterer not liable for demurrage: (f) specific exoneration clause in charterparty;(g) delay attributable to vessel owner;(h) Vis Major: sudden/unforseen act preventing loading/unloading not

due to charterer.

3. ORIENT SHIPPING CO. (PORT CONGESTION)4. Facts : Vessel arrived on time, but it could not unload due to serious port

congestion (STRIKE). Charter party has an exception clause relieving D from liability for demurrage / excess laytime due to port congestion where that port congestion is beyond charterer control.

5. Reversible Laytime : an option given to the charterer to add together the time allowed for loading and discharging. Where it is exercised, the effect is the same as a total time being specified to cover both options.

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6. Despetch: ($) credit you get back from owner if you finish early. Usually half the amount of demurrage.

7. Calculable Laytime: can’t calculate how much laytime you have unless you know how much cargo is on the vessel.

8. Holding : 9. Court upholds the catchall clause: anything beyond charterer’s

control does not count.10. Although strike itself is over, there was still time lost11. Result: shipowner gets no demurrage but charterer gets dispetch b/c

time was on the owner.

4. ARRIVED VESSEL 5. GENERALLY:

6. Important because it sets forth when laytime begins to run.7. Can mean that the vessel has reached either a port, a dock, or a berth,

depending on the terms of the charter.8. Vessel must also be clean and ready to receive cargo.9. Notice of readiness must be given to the charterer.10. Laytime will cease to run if loading or unloading is delayed due to

the fault of the shipowner or his agents. 11. Charterer is also obliged to load the amount of cargo stipulated in the

charter party, and will be liable for dead weight if not done.12. Port: waiting on charterer’s time, even though there’s no berth ready.13. Berth: wait on owner’s time. Not arrived until in berth.14. WIBON: whether in berth or not. Turns a berth charter party into a

port charter party. May give notice of readiness WIBON. Has the effect of shifting risk of waiting time from owner to charterer.

(b) 4 PERIODS OF TIME IN VOYAGE CHARTER PARTIES

Loading Voyage Loading Carrying Voyage Discharge(1) (2) (3) (4)

(i) (1) & (3) are on the owner’s time (risk).(ii) (2) &(4) are on the charterer’s time (risk).

(c) Arrival : you shift from (1) to (2).

(d) YONE SUZUKI : (“AT OR OFF DISCHARGING PORT”)(e) Facts : Vessel arrived but had to wait outside the port until a berth

was available due to local navigational rules. Charter states laydays shall begin 24 hours after arrival at or off the discharging port.

(f) Normally, this is not an arrival. However, clause stated at or off the discharging port (WIPON).

(g) VERY SHIP OWNER BENEFICIAL.

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(e) DEAN H (f) Facts : Vessel got near the port, but couldn’t get inside because

vessel would have been damaged. Therefore, discharge took a lot longer.

(g) A vessel has arrived when it has reached the point that is as close as it can get safely to the named port.

(h) Charter bears the loss b/c it specified “port” and should have known about it.

5. VIS MAJEUR 6. CROSSMAN v. BURRILL

7. Facts : Vessel arrived at Rio, and was pinned in position because of war activity. Owner wants demurrage for time spent waiting.

8. Holding : This was vis majeur, not detention by default of charterer. Therefore, he isn’t liable.

6. CESSER CLAUSE 7. Charterer pays part of the freight in advance and is relieved of any further

liability to the owner for the remainder of the freight. 8. In such circumstances, the owner will look to the consignee of the cargo and

to the vessel’s lien on the cargo for payment of the remainder of the freight.

9. AEGIS BRITANNIC

III. PERSONAL INJURY AND DEATH CLAIMS

I. REMEDIES OF SEAMAN

A. MAINTENANCE, CURE, & WAGES1. GENERALLY:

2. QUESTIONS TO ASK: 3. What is the P?4. Who is the D?5. What theory of recovery?

(b) When in doubt, things construed for the injured.

(c) MAINTENANCE & CURE:

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(i) D: employer, regardless of negligence.(ii) Plaintiff must show :

(iii) Employee at time injury manifested;(iv) He was a seaman;(v) In service of ship;(vi) No willful misconduct by injured;(vii) Sickness not intentionally concealed at sign-on

(viii) Fault irrelevant;(ix) M&C must be paid regardless of fault or contributory negligence or

causation;(x) Right to be paid unearned wages from the onset of the injury or illness to the

end of the voyage.(xi) Unseaworthiness is not necessary;(xii) Virtually any illness, even purely psychological problems, can render a

seaman eligible for M&C.(xiii) Duty to pay M& C commences when the seaman falls ill or is injured and

leaves the ship.(xiv) Obligation to pay continues until cured, or to point of max recovery(xv) Damages :

(1) Medical, meals & lodging he would have:(a) M& C up to maximum only;(b) No double recovery (i.e. insurance)(c) wages (2X id wrongly withheld)(d) any aggravation of the injury(e) No punitive; attorney fees if employer recalcitrance

(f) Defenses : (g) Fraudulent Concealment; (h) Willful Misconduct.(i) Fighting if the seaman is the aggressor;(j) Venereal disease;(k) some drunkenness

(l) Maintenance: Daily living expenses that are sufficient to maintain a seaman in the manner comparable to that which he would have had if he was aboard a ship.

(e) Cure: Medical expenses incurred in treating the injury or illness.

(f) Wages: Wages for the remainder of the voyage or for the full period of his contracted employment.

2. ELEMENTS OF A M&C CAUSE OF ACTION: 3. WARREN v. UNITED STATES: (General Elements)

4. Facts: Seaman injured when he fell off a balcony, drunk, on shore leave in Italy. Owner interests argue that he wasn’t in the service of the ship and that it was due to his own fault / misconduct. Seaman argues that shipowner’s duty to provide M&C is absolute.

5. RULE: Shipowner liable for M&C for any injury between signing-on and termination, EXCEPT:6. NOT IN SERVICE OF SHIP:

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7. Was he subject to recall?8. Would he be there if not for the voyage?9. Did his activity or presence serve some business purpose?

10. INJURY DUE TO WILLFUL ACT, FAULT, MISCONDUCT: 11. To lose M&C seaman “fault” must really be vicious, gross

negligence (i.e. willful disobedience of orders).

3. “IN SERVICE OF THE SHIP” 4. ARCHER (“Service of the Ship”)

5. Facts: Jamaican cook was told to show up in Miami 2 days prior to shove-off. He was injured while racing around in a Ferrari.

6. Held: Cook was in the service of the ship. If he wasn’t told to show up 2 days early, he would not have been there. Allowed to recover wages for the entire period that is the basis of the employment K.

(b) Blue Water Seaman: Shore Leave or Vacation (c) Shore Leave : Is covered. Consists of brief periods ashore at home or

foreign ports in the course of the voyage. KEY: Can he be recalled?(d) Vacation: Not covered because they are not answerable to the ship.

(c) Commuter Seaman (d) Those who live at home and commute to work or who serve for a fixed

period of time on a vessel and are then on shore for a period of time fixed or otherwise.

(e) Fifth Circuit Test: (f) whether the seaman was on authorized shore leave when injured;(g) whether the seaman was answerable to the call of duty.

4. PERSONS LIABLE TO PAY M&C(a) Usually vessel owner who is usually the seaman’s employer;(b) Charterers normally not responsible for M&C unless P shows a demise charter

(they are owner pro hac vice and therefore likely to be the employer);(c) If seaman is employed by one person, and the vessel is owned by another person,

seaman’s employer is liable as employer, and vessel owner may be liable under agency principles.

(d) In any event, the vessel is liable in rem.

5. SCOPE OF DUTY 6. RITCHIE v. GRIMM

7. Facts : P sues for all of his actual costs (i.e. wife’s visits), plus punitive damages and attorneys fees. D argues that P only gets M&C solely with reference to sea accommodations.

8. Holding : M&C to be reinstated based on his actual share of living expenses. He gets what he would have on board. Punitives N/A in maintenance action. Attorneys fees granted because of callous and

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recalcitrant yanking of medical expenses. Can’t collect expenses for family members.

(1) Burden on P to show his living expenses.

(b) Amount of Maintenance: (c) Per Diem: A few courts award the fix sum of $8.00 per day.(d) Seaman has the burden of proving his actual expenses for food & lodging.

Not entitled unless he actually incurred the expenses. Burden then shifts to D to show that the expenses were excessive, in light of any realistic alternatives for room & board available to him.

(e) Majority: say that the court will agree with whatever maintenance unions deem to be appropriate.

(f) Minority: say that courts should determine amount themselves.(g) Ambiguities or doubts are resolved in favor of the seaman.(h) If seaman lives @ home with parents and therefore, no expenses were

actually incurred.

(c) Damages for Failure to Pay M&C (d) Usually gives a seaman an independent cause of action for compensatory

damages, attorney’s fees and possibly punitive damages. NO CLEAR STANDARD.

(d) Punitive Damages (e) Denied in 5th and 9th Circuits.(f) Some courts allow if there is evidence of arbitrary, callous or egregious

conduct, such as:(g) failure to conduct investigation into the claim;(h) withholding payments when investigation showed they were due;(i) rejection of a claim because failure to consult employer before

seeking treatment for his injury;(j) withholding statements on a pretext because P rejected settlement.

(k) Preexisting Injury: (l) GAUTHIER

(m) Facts : Seaman in service of the vessel found to have hepatitus & a heart problem. Sues both of his former employers.

(n) “Last Ship Rule”: Vessel owner has M&C obligation to seaman for problems that MANIFEST while in their employment, provided that seaman believed in good faith that he was fit to sign on. (Regardless of the origin of the cause of the disability occurring on a prior voyage or another vessel).

7. Contribution / Indemnity: 8. GENERALLY:

9. An employer who pays M&C has a right to complete indemnity from an independent tortfeasor whose fault or negligence was the sole cause of the accident.

10. May recover contribution from a 3rd party tortfeasor whose fault also contributed to the injury.

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(b) BLACK v. RED STAR TOWING (c) Facts : P injured while crossing to shore on defective ladder supplied by

port. Vessel paid M&C, and now wants indemnity from the port.(d) No contractual basis for recovery. Port was not privy to employment

contract. However, equity requires reimbursement of vessel for port’s portion of fault.

(c) CONTRACTS FOR M&C: (d) Circuits are split on whether a fixed rate of maintenance by a collective

bargaining agreement are binding on the seaman.

(d) DISABILITY & HEALTH CARE PLANS (e) An employer established disability plan will satisfy maintenance

requirements only if they are not considered to be the payment of maintenance. It will suffice if it is categorized as “deferred compensation.”

(e) PUBLIC HEALTH HOSPITALS & MEDICARE (i) If seaman qualifies for Medicade, maintenance is satisfied.

8. Duration of the Obligation: 9. GENERALLY:

10. Maximum Cure Rule: Obligation to pay continues until the seaman is cured, or if there is a permanent impairment, until he reaches the point of maximum recovery. Farrell.

11. TEST FOR MAX RECOVERY: When it appears probable that further treatment will result in no betterment of the seaman’s condition. Vella.

12. Point of maximum cure is a medical determination, not a legal one.13. If seaman delays med treatment, employer’s obligation may be suspended.14. Employer should seek a declaration from the responsible doctor that the

maximum point has been reached.15. No obligation to provide treatment that arrests the progress of a

deteriorating condition.16. However, if after maximum point of recover, seaman may reinstate

proceedings if there is a breakthrough in medical treatment. Cox.

(b) FARRELL v. UNITED STATES(i) Rule : Vessel does not owe the chronically injured seaman life-long support.

Only up to maximum cure. (ii) VELLA v. FORD MOTOR

(iii) Facts : Seaman is permanently injured, but not diagnosed until he gets ashore. For what period of time does vessel owe M&C?

(iv) Until he was diagnosed by a physician as permanently injured - at that point, the liability for M&C ceased. This was maximum cure.

9. Wage Penalties:

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10. Employer must pay wages through the end of the voyage or until the term expires pursuant to a term contract.

11. GRIFFIN v. OCEANIC 12. Facts : Seaman injured; Vessel refused him any M&C or even transportation

back to the US.13. RULE : For every day wages are wrongly withheld, seaman’s compensated

DOUBLE. He also gets medical, lodging & meals.

B. ACTIONS FOR NEGLIGENCE - THE JONES ACT C. GENERALLY:

D. TWO CENTRAL QUESTIONS IN JONES ACT: E. WHAT IS A SEAMAN?F. WHAT IS A VESSEL?

G. D: is the negligent employer.H. Proof of negligence is essential for recovery.I. Employer liable for damages for injury or death resulting in part or in whole from

the negligence of is officers, agents, or employees.J. Negligence must be within the course & scope of the offending employee’s

employment (i.e. act of neg employee was to further employer’s business);

K. Contributory negligence & assumption of risk will not bar recovery.L. Causation:

M. Requires owner negligence, but the causation standard is featherweight;N. No claim where sole source of injury is seaman’s own negligence;O. Where employer gives employee a safe and unsafe option - if employee

takes the unsafe one, he is negligent.P. Employer/employee relationship necessary in Jones Act Claims;Q. WHERE TO BRING THE CLAIM?

R. JA claim may be brought as an admiralty claim in federal court or in state court; may also be brought as a law claim in a federal court.

S. JA claim brought in state court may not be removed to federal court.(1) Unless the JA claim is brought with an unseaworthiness claim.

(e) REQUIRED ELEMENTS:(i) Seaman(ii) Vessel in Navigation(iii) Injured in course of employment

1. INJURY BUT NO DEATH 2. THE OSCEOLA

3. Duty to pay maintenance and cure;4. indemnity for injuries as a result of unseaworthiness / failure to supply and

upkeep proper appliances;5. Can’t get more than M&C for injuries due to negligence of crew member;6. No indemnity for negligence

(b) Jones Act overrules propositions 3 and 4.

2. JONES ACT: THE STATUTES:

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3. §688 (a) picks up the FELA and applies it to seaman;4. election as to where you want to bring the suit: law side, with jury; admiralty side,

without jury. Jury trial (significant, b/c no right to jury trial in admiralty law);5. May sue in the venue where D has principle place of business;6. Seaman can’t proceed against the vessel in rem; However, an in rem claim might

be brought if it is joined with a claim under general maritime law:(i) Unseaworthiness, M&C, wages.

(a) 3 year statute of limitations

3. THE CASELAW 4. BARRIOS : Need not be owner or operator of a vessel to be liable.5. PATE v. STANDARD : If you bring the action in state court, can’t remove to fed

ct, even if there is complete diversity among the parties. Follows the FELA rationale. ****Davies says this may not be so accurate!!!! If you have separate and independent causes of action, you can remove both under 28 USC §1441(c).

4. SCOPE OF THE JONES ACT EMPLOYERS’ DUTY 5. Fundamental duty is to provide the employee with a reasonably safe place to work;6. This duty is absolute & nondelegable; includes reasonable safe means of ingress

from or to a vessel.7. Consistent with FELA, employer is liable for the negligence of its officers, agents,

or employees. Includes injury by the negligence of fellow crewman.8. Independent Contractor: is not chargeable to the employer. Nevertheless, if the

IC performs operational activities or was engaged as the agent of the employer, employer may be liable for his negligence SEE BORROWED SERVANT.

9. Employee Overboard: Employer has a duty use every reasonable means to rescue seaman who fell overboard (if readily discernible) If not readily discernible, required to search as long as the seaman is reasonably alive Reyes v. Vantage SS Co..

5. COVERAGE: “ANY SEAMAN”(a) SENKO:

(b) Mutual exclusivity between seaman and longshoreman.(c) TEST : Was he a master or member of the crew?

(b) GRIMES v. RAYMOND CONCRETE: (c) Facts : Employee worked on a platform. Injured while being transferred to a

tug. (d) Member of a crew of any vessel.

(c) TRILOGY OF SUPREME COURT CASES: (d) WILANDER:

(e) Facts : Paint foreman on tide water boat falls off while at sea and is injured due to negligence of vessel owner. Is he a Jones Act Seaman?

(f) Two views were used by lower courts:

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(g) Johnson Test : Does the employee make a significant contribution to the maintenance, operation, or welfare of the transportation function of the vessel? (REJECTED)

(h) Robison Test: Does the seaman contribute to the function of a vessel in navigation or to the accomplishment of its mission?

(i) Court adopts the Robison Test. In addition, the court rejects the notion that the seaman actually aid in the navigation of the vessel.

(j) RESULT: VERY BRAOD TEST. The Elvis impersonator would fall under seaman status because he is contributing to the function of the vessel or to the accomplishment of its mission (entertainment).

(ii) CHANDRIS(1) Facts : Maritime engineer attached to a set group of vessels.

Although he operated from shore, he was inured while on navigable waters. Is a Jones Act Seaman? What connection with a vessel must he show?

(2) 2 options: (3) Voyage (Broad) Test : Are you contributing to the function

of the vessel on this particular voyage? (REJECTS)(4) ***Status Based Test:

(5) Must have a substantial connection in duration AND nature to a vessel or identifiable group of vessels AND

(6) duties must contribute to the function of the vessel OR to the accomplishment of its mission.

(7) Court says Jones Act is for sea-based maritime employees. JA Seamen must do the “ship’s work.”

(8) Land-based maritime workers do not become seamen because they happen to e working on board a vessel when they are injured, and seamen do not lose JA protection when the course of their service to a vessel takes them ashore.

(iii) PAPAI (iv) Facts : P was injured while painting a tug. Here, there is an

identifiable group of tugs, but P painted different vessels for different companies.

(v) This case turns on the Wilander prong of the test.(vi) Court says he does not have the requisite substantial duration

and nature to a particular vessel or group of vessels. Question is whether the vessels are subject to common ownership or control.

(d) WISNER (TESTS NOT NECESSARILY BEING FOLLOWED)(e) Fact s: P was a diver. 90% of time working for vessels. 10% non-vessel

work. One employer who owned no vessels. Worked on different vessels all the time. Under Papai, you ask whether the vessels have

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common ownership or control. Here, there is none so Jones Act should not apply.

(f) HOWEVER : SC of LA said that he is a seaman. The court asked if they were sea-based duties. The purpose is to separate seamen from nonseamen. It does not matter that he works on diverse vessels. IS IT CLASSICAL MARITIME WORK?

(e) PILOTS (f) BACH : No seaman status. Satisfies Wilander prong, but there is no

permanent attachment to a vessel or fleet of vessels.(g) Davies: Does not really matter because river pilots are generally self-

employed and well-paid.

6. WHO IS THE EMPLOYER OF THE INJURED SEAMAN?(a) Employer need not own or operate the vessel on which his employee serves as a

member of the crew. Guidry.

(b) Must have an employer / employee relationship for Jones Act claim. Burden is on the seaman to establish this relationship.

(c) Among the factors to be considered in determining whether a party is an employer are:(d) the degree of control exercised over the details of the operation, beyond

mere suggestion;(e) amount of supervision;(f) amount of investment in the operation;(g) method of payment;(h) parties’ understanding of the relationship.(i) whose work is being performed;(j) who had the right to discharge the employee;(k) did original employer terminate his relationship with the employee;

7. VESSEL IN NAVIGATION (a) Jones Act requires it because LHWCA requires “member of crew.”

(b) Jones Act Vessel : Every description of water-craft or other artificial contrivance used as a means of transportation on water.

(c) DESPER : (Vessel up for repairs)(d) Facts : P worked on some seasonal river cruise boats. He had been an

operator last season, and probably would be one this year. He was laid off, then rehired for no specific duty. At the time of death, he was doing repair work on vessels and had not yet done an operation of them.

(e) Not a seaman because there was no vessel in navigation at the time of decedent’s death.

(f) Unless vessel is in navigation, it does not matter what activity you do.(g) ****Therefore, if vessel is withdrawn from water for some time, it ceases

to be in navigation.

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(d) WIXOM (Vessel: 3 years out of water)(e) Facts : P fell off scaffolding while working on part of a 3 year overhaul of

Navy ship. The crew was nowhere by and the propellors were inoperable.

(f) 3 years: Vessel is no longer in navigation. Doesn’t matter if 90% of his work was on vessels in navigation.

(e) VESSELS UNDERGOING REPAIRS (f) CHANDRIS : SC adopted the general rule that vessels undergoing repairs

or spending a relatively short period of time in dry dock are still considered to be in navigation whereas ships being transformed through major overhauls or renovation are not.

8. VESSEL OR WORK PLATFORM?(a) MANUEL

(b) Facts : Truck drives on to barge & is bolted in place. No power, pumps, navig devices on the barge. Does nat have any objective vessel features.

(c) If it was constructed for moving stuff over water [1] (PURPOSE), or it is engaged in the business of moving stuff over water [2] (BUSINESS), it’s probably a vessel.

(d) Two Lines of Cases: (e) 9 th Circuit : Unusual looking crafts whose purpose is NOT the transportation

of persons or thins CAN be considered Jones Act Vessels.(f) 5 th Circuit : Transportation function must be present. Despite outward

appearance, if the primary purpose of the craft is to transport passengers, cargo or equipment from place to place across navigable waters, then the structure is a vessel.

9. OCEANIC RESEARCH VESSEL (a) Not a Jones Act Seaman.

10. “IN THE COURSE OF HIS EMPLOYMENT”(a) GENERALLY:

(b) Temporary duties on shore count.(c) Courts are liberal. Shore Leave - most likely counts.(d) Personal business / vacation does not count.(e) If seaman returns home every night, not covered to & from work.

(f) HOPSON (g) Facts : 2 seaman abroad were sick. Employers send them in a taxi to be

shipped home. Dies in an accident. In the course of employment?(h) YES. The Jones Act employer is liable for injuries negligently inflicted on

employees by its agents, officers, or employees. Here, seaman was in the service of the ship.

(b) MOUNTEER

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(c) Taxi on the way to service counts. He was already in the service of the ship. Employer has broader liability than under the regular law of torts.

11. BORROWED SERVANT DOCTRINE(a) A person may be a member of the crew of a vessel, therefore, a Jones Act Seaman,

even though he is employed by an independent contractor rather than the ship-owner.

(b) The crucial element is control. Helpful factors are:(c) who has control over the employee and the work, beyond mere suggestions?(d) whose work is being performed?(e) who furnished tools and place to work?(f) who had the obligation to pay employee?

12. STANDARD OF CARE AND CAUSATION 13. Standard of Care : Ordinary prudence under the circumstances; Gautreaux.

14. Jones Act has a different causation standard, not standard of care.15. Seaman’s burden of proving CAUSATION IS FEATHERWEIGHT, such

that the seaman need only prove that the employer’s negligence was A cause, not THE cause.

(b) PROOF OF CAUSATION: (c) Burden is featherweight.(d) P need not show that the employer is the sole cause of the injury.(e) P need not prove proximate cause in the traditional sense.(f) D’s negligence played any par, even the slightest in producing the injury.

(c) GAUTREAUX:(i) Screwed up when failed to remove winch-handle. Is the Jones Act seaman

bound of ordinary prudence, or a lesser duty of “slight care?’(ii) Lower court interpreted “in whole or in part” as meaning “slightest.”(iii) Courts have consistently screwed up by interpreting “slight negligence” to

mean even the slightest bit of negligence will do, thereby increasing the duty of care for employers and decreasing duty of care by employees. Scholars have compared slight negligence to “slight pregnancy.”

(iv) RULE : Court rejects “slight negligence” as the standard. STANDARD: Ordinary Prudence under the circumstances for both parties. Otherwise, you’d be rewarding unreasonable conduct.

(d) EXAMPLES OF FREQUENTLY LITIGATED NEGLIGENCE QUESTIONS:(i)maintaining reasonably safe equipment & appliances;(ii) requiring unreasonably dangerous work or unsafe work methods;(iii) requiring excessive overtime work;(iv) failure to make inspections;(v) failure to warn of known hazards;(vi) failure to correct dangerous conditions if known.(vii) Negligent failure to select a competent master or crew;(viii) NOT liable for intentional assaults by fellow employees unless employer

knew of dangerous disposition or it was to further employer’s business.

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(e) FERGUSON(i) Facts : Cook cuts fingers off using knife to chop ice cream because no

scooper was supplied. Was there sufficient evidence for the jury to determine that the employer was negligent for not providing an adequate scooper?

(ii) D said that there is no way this was foreseeable. However court said the evidence was enough to satisfy the FEATERWEIGHT BURDEN.

(iii) TEST: P must show:(iv) the employer is at fault; and(v) employer’s negligence played any part, even the slightest, in

producing the injury.(vi) Need not be foresseable.

(f) KERNAN (Breach of Statutory Duty: Negligence Per Se)(i) Facts : Employer puts lantern too close to water in violation of a statute;

lantern ignites pollution, causing injury to a seaman.(ii) Rule: Breach of statutory duty automatically means fault for JONES ACT

PURPOSES, regardless of whether or not it was intended to prevent the kind of harm or not. Negligence is irrelevant.

(g) CHISHOLM (Unseaworthiness)(i) Facts: Seaman injures back while tossing scrap metal, kept in way, into the

water. (ii) Jones Act Causation Std : “Producing Cause” Std: D liable if his negligence

played any part, even the slightest, in producing the injury.(iii) Unseaworthiness Causation Std : More demanding, requires proximate

cause.(iv) No recovery because guy can’t show negligence or unseaworthiness.

(h) RECOVERY FOR FRIGHT(i) Actions for fright are available under FELA and presumably under Jones

Act.(ii) Supreme Court adopted Zone of Danger test is the standard of recovery(iii) Other courts use the bystander test or physical impact test.

13. CONFLICTS OF LAW: 14. GENERALLY:

15. Choice of law rules may be established by statute, judicial precedents, or by agreement of the parties.

16. Choice of law rules are part of the law of the forum. Therefore, when a foreign seaman is injured abroad a foreign-flag vessel in a US port, and the action is brought in a federal court under the grant of admiralty jurisdiction, the court is bound to apply federal law.

17. If a court has SMJ of a controversy and the parties are properly before the court, then it is proper for the court to decide question of the applicable law.

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18. Forum Non Conveniens determination. Hard pressed to find a case where the court decided that foreign law was applicable and retained jurisdiction.

19. In 1982, Congress amended the Jones Act to bar suits for M&C or personal injury and death by a person not a citizen or resident of the US who is employed in the production of off-shore mineral or energy resources of nations other than the US. An exception to this bar can be established by showing that no remedy is available under the laws of the nation asserting jurisdiction.

20. QUESTIONS TO ASK: 21. Is there personal jurisdiction?

22. is he in the jurisdiction?23. is there a long arm statute?24. Rule B - attach the vessel - D is a person.25. Rule C - arrest the vessel - D is a vessel.

26. What law to apply?27. Forum Non Conveniens?28. How do you read the Jones Act Seaman? Who is the employer?

29. HELLENIC LINES (HOW TO DETERMINE CHOICE OF LAW)30. LAURITIZEN TEST FOR JONES ACT APPLICABILITY: These factors are needed because Congress could not have intended to legislate for the world. Factors to be considered in deciding Jones Act Employer:

(1) place of harm;(2) law of the flag;(3) allegiance or domicile of the injured seaman;(4) allegiance of D ship owner;(5) place where the K of employment was made;(6) inaccessibility of a foreign forum;(7) the law of the forum;(8) ADDED FACTOR: base of operations Rhoditis.

(9) KUKIAS: (10) rejected the notion that place of initial treatment should be a factor;

(11) FORUM SELECTION CLAUSE: (12) Forum selection clause is presumptively valid;

14. DAMAGES 15. Non-Fatal Injuries: recovery can be for both pecuniary & non-pecuniary loss.16. OVERLAPS:

17. JA & Unseaworthiness: May recover under 1 only.18. JA & M&C: May recover under both, but no double recovery for medical

expenses.19. NO PUNITIVE DAMAGES 20. JA is not fault based, so contributory / comparative negligence may only

reduce, not bar damages.

C. ACTIONS FOR UNSEAWORTHINESS

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D. GENERALLY: E. ABSOLUTE DUTY.

F. Does not require SO fault;G. Extends to conditions that arise after the voyage has begun;H. Applies to acts of 3rd parties without any knowledge or negligence on the part of

SO or employee.I. TEST : Similar to cargo claims. Was the vessel reasonably fit for its intended use?

Need not be a perfect vessel.J. STANDARD : more strict than for a Jones Act Claim of Negligence. Causation

requires a showing of “proximate cause in the traditional sense:K. unseaworthiness played a substantial part in bringing about or actually

causing the injury;L. injury was either a direct result or a reasonably probable consequence of

the unseaworthiness.M. Intended Use: Vessel must be reasonably fit place to live and to work.N. Warranty of seaworthiness is largely confined to seaman who are members of the

crew of a vessel.O. P must show that his injury was caused by a defective condition of the ship, its

equipment, or appurtenances;P. Coverage: Warranty extends to the hull of a ship, ships’ cargo handling machinery,

hand tools aboard the ship, ropes and tackle, and all types of equipment either belonging to the ship or brought aboard by stevedores; A ship may be unseaworthy if it does not have certain types of equipment, such as maps or lifesaving gear. Also requires that the SO provide a competent crew.

Q. Question of fact.R. A seaman employed by the bareboat charterer of a vessel may sue his employer

under the Jones Act for negligence and the shipowner in rem for unseaworthiness.

2. MITCHELL v. TRAWLER (STANDARD)3. Facts : Fisherman injures himself passing over the ship’s rail by slipping on fish

guts.4. Holding : Unseaworthiness has nothing to do with fault or constructive notice. It is

a species of liability without fault. Duty only to furnish a vessel & appurtenances reasonably fit for its intended use. Standard is not perfection, but “REASONABLE FITNESS.”

3. MARTINEZ v. SEA - LAND (VERY BROAD)4. Seaman carrying soda cases.5. Seaworthiness extends to the stores of a ship. (Soda cases not reasonably safe).

4. USNER 5. Opposite of Mitchell.6. Unseaworthiness can come from an unfit crew, but there’s no seaworthiness

claim where the injury comes from some independent 3rd party’s negligence.7. Court held that this was a casual act of negligence. P was a longshoreman. Because

there is no unseaworthiness, he has no remedy.

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8. Operational Negligence: The mere single act of negligence of a crew member does not mean that the vessel is unseaworthy. UNSEAWORTHINESS IS A “CONDITION” NOT A “HEPPENING.”

5. FEEHAN 6. Longshoreman injured on dock y a forklift which struck them. C/A for

unseaworthiness?7. No. Longshoreman injured on dock only has c/a against vessel for

unseaworthiness where injured by a part of the ship’s gear (stowed on board or attached). Unseaworthiness will only lie where the injuring instrumentality was under vessel’s control.

6. COMPARATIVE FAULT (LEWIS v. TIMCO)7. What happens if P seaman is also at fault?8. Comparative fault has always been the admiralty rule. Therefor, it applies in

Jones Act cases also.

II. LONGSHOREMEN & HARBOR WORKERS (LHWCA)

A. GENERALLY B. COVERAGE UNDER LHWCA:

C. P must satisfy, BOTH:D. situs test;E. status test.

F. Look to see if the employee is excluded under §902(3) exceptions:G. Disability or death occurring on the navigable waters of the US

(including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, or building a vessel).

H. Concurrent remedies possible, but no double recovery;I. Sieracki Seamen: not really a seaman, but entitled to bring actions based on seaman

remedies (i.e. unsea). Longshoreman injured on a vessel in navigable waters.J. §905(a):

K. when LHWCA applies, it’s the employers exclusive liability;L. K will be deemed employer only where subcontractor fails to provide

LHWCA - but once he does, he’s insulated.M. §905(b):

N. Where longshoreman injured by negligence of vessel, he can sue vessel under §933 for damages without giving up LHWCA.O. can’t use 933 to get unseaworthiness, just negligence;P. Longshoreman can’t sue ship for own negligence.

Q. This act is an assignment of his rights to employer, UNLESS he brings action within 6 months. If he fails to bring it, employer assigned his right.

2. TRADEOFF : Employees get prompt and direct compensation irrespective of fault and in return, employers responsible for benefits which are substantially less than tort

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damages, and get immunity from tort liability, regardless of how serious its fault may have been.

3. JENSEN: (Pre-LHWCA)4. HELD: that a NY Worker’s Comp statute could not be constitutionally applied,

because it would destroy the uniformity of maritime law designed in the Constitution. Therefore, a longshoreman would be denied no fault remedy (i.e. harder to recover) on navigable waters. Furthermore, Congress cannot delegate legislative authority to states for matters falling within maritime jurisdiction of the United States.

5. CONSEQUENCES: 6. Left maritime workers, other than seamen, without an adequate remedy

against their employers in work related injuries occurring on water.7. Because they usually lacked a sufficient relationship with a vessel, they could

not qualify for Jones Act.8. If injured on land, they could recover state worker’s compensation.

9. JENSEN LINE: line beyond which state worker’s comp N/A. Seaward of water’s edge is admiralty, and therefore, federal jurisdiction. 10. Longshoreman injured on navigable waters (seaward of Jensen Line) was

denied the statutory no fault remedy.

3. GARCIA 4. Court held that the CA wrongful death statute could be applied to a suit seeking

damages for the death of a longshoreman on navigable waters because the subject of the litigation was maritime but local and the application of state law did not derrogate from the uniformity of maritime law.

4. §902(3): GROUPS PRECULDED FROM LWHCA COVERAGE: 5. Office / secretarial/ administration;6. Club/ camp/ recreational / restaurant / museum / retail outlet;7. Marina employees not in construction;8. (1) suppliers / transporters / vendors / (2) temporarily doing business, and (3) are

not engaged in work normally performed by employees in this chapter;9. aquaculture workers;10. employed to work on any recreational vessel <65’ in length

B. TERRITORIAL APPLICATION OF LHWCA C. RELATIONSHIP WITH STATE COMPENSATION ACTS

D. Originally, under §903(a), compensation was thought to be limited to injuries on navigable waters and the limit concerning recovery through state workman’s comp proceedings was thought to be a reference to the SC “maritime, but local rule.”

E. Geographic Demarcation: State law applies on land & LHWCA on water.F. If the matter was maritime but local state statutes could constitutionally apply and

there was no need for a federal remedy.

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G. As a result, if a remedy could be provided under state law for injuries occurring upon navigable waters, a claim under LHWCA would be dismissed. Conversely, if a remedy could not be provided by state law, it would be dismissed.

2. DAVIS: 3. Worker drowned. Not clear if actually on land or floating work platform when he

fell. 4. Maritime But Local Rule: (Exception) If the matter was maritime but local, state

statutes could constitutionally apply and there was no need for a federal remedy. As a result, if a remedy could be provided by state law for injuries occurring on navigable waters, a claim for LHWCA compensation would be dismissed.

5. There’s a TWILIGHT ZONE where employees rights must be determined case-by-case.6. Uncertainty: Area of uncertainty in which either the LHWCA or JA may

apply.

3. INJURIES ON THE PIER: 4. NACIREMA:

5. Supreme Court held as a matter of statutory construction, that injuries to longshoremen occurring on piers permanently affixed to shore were not compensable under LHWCA.

6. Therefore, state law only applied landward of the Jensen Line.7. Legislatively overruled by 1972 amendments.

4. INJURIES ON THE HIGH SEAS 5. 1972 AMENDMENT EXPANDING SITUS

6. No longer confined to water side of Jensen Line. Out “only if state law does not apply.”.

7. Lose right to unseaworthiness claim. 8. Disability or death occurring on the navigable waters of the US

(including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, or building a vessel).

(b) SUN SHIP (c) Facts : LHWCA applied, but P filed under state law. May a state apply its

comp scheme to land-based injuries that fall within the coverage of LHWCA?

(d) Court acknowledged an overlap of state & fed comp schemes after 1972;(e) Obvious intention of 1972 amendment to remove the twilight zone analysis.(f) CONCURRENT JURISDICTION IS OK. If state and fed (LHWCA)

overlap, employee may choose the more generous option.

5. MUTUAL EXCLUSIVITY OF LHWCA & JONES ACT 6. No overlap between JA & LHWCA.7. State worker’s comp acts do not apply to seaman because of the Jensen Doctrine.

However, there is authority for the proposition that the state comp schemes may

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operate concurrently with JA; that is there is a twilight zone in which either remedy may be available. Mc Dermott.

8. LHWCA does not apply to master or member of the crew of any vessel;9. JA does not apply to longshoremen or harborworkers covered under LHWCA.

6. SOUTHWEST MARINE v. GIZONI 7. Issue : P already been paid under LHWCA. May a maritime worker whose

occupation is enumerated in LHWCA still be a Jones Act Seaman (and recover under JA)?

8. Yes. You can still be a Jones Act Seaman even though your position is listed under LHWCA, as long as you satisfy seaman status test. It’s not the employee’s particular job that’s determinative of LWHCA v. Seaman status, but the employee’s relation to the vessel in navigation.

9. Is he doing the ship’s work in furtherance of its mission? If yes, he’s a JA Seaman.

10. May get both remedies.11. If there’s no possible issues of fact as to whether he is a JA seaman, then he’s

limited to LHWCA.

7. APPROACH FOR THESE SITUATIONS 8. Jones Act Test (Latsis Test)

9. Seaman status if furthers the mission of the vessel & has sufficient connection with the vessel.

10. If seaman, then cannot get LHWCA benefits11. If not, eligible for LHWCA.

C. COVERAGE OF LHWCA: STATUS & SITUSD. 1972 AMENDMENT DEFINITIONS

E. §903(a) NAVIGABLE WATERS: (SITUS)F. includes any adjoining pier, wharf, dry dock, terminal, building way, marine

railway, or other adjoining area customarily used by an employer in loading, unloading, repairing or building a vessel.

G. §902(3) EMPLOYEE (STATUS)H. means any person engaged in maritime employment, including any

longshoreman or other person engaged in longshoring operations, and any harbor worker including a ship repairman, shipbuilder, and ship breaker.

(c) §902(4) EMPLOYER:(i) any of whose employees are employed in maritime employment, in whole or

in part, upon the navigable waters of the US.

1a. PERINI RULE: LOOK HERE FIRST(a) If a worker is injured while performing his job on actual navigable waters he is

engaged in maritime employment (unless excluded under 902(3)). Rationale:(b) They would have been covered by LHWCA before the 1972 Amendments;(c) No Congressional intent to withdraw coverage from these workers.

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2. P.C. PFEIFFER LOOK HERE SECOND3. 2 workers employed in dockside warehouse. Not allowed on the vessels.4. “Maritime employment” if moving the goods between vessel and “inland

transportation” ant any step of the deal.5. 2 LHWCA REQUIREMENTS:

6. SITUS: §903(a)7. STATUS : Engaged in maritime employment. Need not be on or over

actual navigable waters. Maritime employment defined on basis of employee activity (not employment location) - transferring of goods between sea and land transportation is maritime employment.

3. HERB’S WELDING (STATUS) LOOK HERE THIRD4. P went out to rigs out in navigable water and did welding work. He was injured in

state waters while welding.5. Not LHWCA covered. No situs: not on navigable water, but on artificial island.6. TEST : maritime employment requirement is (either enumerated in statute or) an

occupational test that focuses on loading and unloading.7. If offshore drilling is not considered maritime activity, welding cannot be

considered maritime employment solely because it occurred on an offshore platform.

4. BLANQ v. HAPAG-LLOYD 5. Facts : River pilot injured boarding via jacob’s ladder. Pilots are essentially

independent contractors who belong to an association that acts as a job conduit. Not attached to any vessel or identifiable group of vessels.

6. Although not a JA seaman b/c not attached to vessel or identifiable group of vessels, pilots qualify as Sieraki Seamen because they are doing seaman’s work and incurring seaman’s hazards. Thus, they can recover from vessel under general maritime law.

D. EXCLUSIVE LIABILITY OF THE EMPLOYER E. LHWCA §905 Exclusive Liability of

F. “liability of an employer [for compensation] shall be exclusive and in place of all other liability of such employer to the employee.”

G. Provides an action to a longshoreman injured due to the negligence of the vessel.

H. Although the section 905(a) bar does not preclude the concurrent application of state worker’s compensation laws, it is broadly construed as a shield against tort liability under state and general maritime law.

I. Joint ventures are immune from suit as well as employers of “borrowed servants.”

J. General contractors are not immune from suit by employees of subcontractors unless they actually receive the payment of compensation for subcontractors’ employees as the statutory employer under 904.

K. 33 U.S.C. 933(i): fellow servants of an injured longshore worker are also immune.

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L. 933(a): Where longshoreman is injured due to the negligence of the vessel, he does not need to choose either to receive benefits from hi employer under LHWCA or to sue the negligent party

M. 933(b): Acceptance of compensation under LHWCA operates as an .assignment to the employer of all rights of the injured longshoreman, unless the longshoreman commences an action against a third party within 6 months of acceptance of the compensation.

2. GRANTHAM v. AVONDALE ISSUE 1: WHO CAN CLAIM EXCLUSIVE LIABILITY:

(a) Facts : Painter injured while working on vessel in drydock. Gets LHWCA from his employer, the sucontractor. Avondale, who’s the contractor above the employer, argues that the exclusiveness of liability provision in LHWCA protects them also.

(b) Rule: Only the actual employer/subcontractor who has paid LHWCA to the injured is immune to other liabilities - the other contractors on up the line all have liability exposure.

(c) Avondale cannot become the “statutory employer.”

ISSUE 2: CONFLICT OF LAW (What’s the Underlying Issue)Once the employee has accepted LHWCA benefits, doe state or fed law apply? Here, LA law said that the employer was the statutory employer. Therefore he gets immunity.(a) 5 th Circuit : Conflict between state & federal law. (which to apply?)

(b) 4 th Circuit (Garvin): Is the P entitled to a remedy? When state law creates a cause of action, state law should determine who employer is and whether he can be sued.

(c) Grantham Analysis : (4th Cir. Can P recover or is he barred by his actions? When there is a conflict of federal & state law, apply the state law b/c it’s an issue of preemption and that’s a federal question.

E. ACTIONS AGAINST SHIPOWNERS1. LHWCA §905(b): NEGLIGENCE

(a) Employee can bring an action against the vessel for negligence. Employer shall not be liable to the vessel.

(b) Must show:(c) duty to protect against the hazard;(d) breach of duty;(e) injury(f) proximate cause

(g) Can’t sue for negligence of fellow crew members. Can’t base action on unseaworthiness.

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2. GENERALLY 3. Shipowner who negligently inflicts injuries on a maritime worker commits a

maritime tort. Therefore it is subject to admiralty jurisdiction and federal maritime law. 4. Contributory Negligence: not a bar but acts in mitigation of damages.

5. Sieracki: Warranty of seaworthiness extends to longshoreman & other harbor workers.6. Employee can proceed directly against a shipowner to recover for injuries

sustained as a result of the unseaworthiness.7. SO may the proceed against the employer of the longshoreman for

indemnity.

3. NEGLIGENCE: DUTY & STANDARD OF CARE 4. 3 STANDARDS OF CARE GOVERNING SO & STEVEDORE (Scindia)

5. Turnover Duty : Prior to onset of cargo operations, duty of care “under the circumstances” includes having vessel & its equipment in reasonably safe condition & warning the stevedore of hidden dangers that are, or should be, known through the exercise of reasonable care.

6. Control Duty : Once cargo operations commence, SO is liable if it actively involves itself in the cargo operations & negligently injures a longshoreman if it fails to exercise due care to avoid exposing them to harm

7. Duty to Intervene : No duty to discover dangerous conditions. However, whenever it is (1) “so obviously improvident” to SO that use of equipment “presents an unreasonable risk of harm to the longshoreman”, and (2) if SO knows of defect and (3) stevedore is continuing to use it, SO has a duty to intervene and repair the dangerous condition. Lemon.

(b) LEMON v. BANK LINES (c) Facts: P (longshoreman) injured by negligently stowed cargo. P knew

cargo was stowed improperly. Did SO have a duty to ward?(d) Consideration of stevedore’s awareness of danger is irrelevant.(e) (#1 Scindia Duty) §905(b) negligence standard: Vessel has responsibility

for eliminating or at least warning of a hazardous condition at the outset.

(c) LAMPKIN (d) Facts: P slipped on a grease spot while loading. (e) Court held that Scindia standard 2 requires constructive, not actual

knowledge. SO must warn stevedore of latent hazards that are known or should be known.

(d) HOWLETT (e) P slipped on plastic sheeting covering cargo. P claimed it was a latent

hazard present when SO turned over the vessel to the stevedores.(f) SO must warn of latent hazards that are known or should be known in

the exercise of reasonable care.

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(g) Latent Hazards: not known to stevedores and would neither be obvious nor anticipated by a skilled stevedore.

(h) Does not require (for reas care) that the SO to supervise the ongoing operations of the loading stevedore or to inspect the completed stow.

4. CONTRIBUTION & INDEMNITY 5. To what extent can SO or 3rd party pass on the liability if sued by the P?6. EDMONDS

7. Facts : Jury decided longshoreman 10%; stevedore 70%; Ship 20%. Who is liable for what?

8. RULE: B/C the LHWCA provides exclusive liability for the employer, a SO may not sue the stevedore for indemnity or contribution on a 905(a) claim. Employer is immune because it paid LHWCA. Each tortfeasor is jointly & severally liable under 905(b).

9. P must eat his 10%; Therefore, SO must will pay 90% of the loss even though only 20% to blame.

(c) McDERMOTT (SETTLEMENT RULE)(d) Proportionate Fault Rule: Where parties settle out, the other parties don’t

have to take up their liability, but they are on the hook for their % of liability.

F. STEVEDORE’S LIEN & ASSIGNMENT OF EMPLOYEE’S ACTION

1. An employee who may have a claim for damages against a 3rd party (other than his employer) is not required to elect between receiving compensation from his employer (who is required to pay irrespective of fault) and commencing a negligence action against the 3rd party. He may pursue both remedies.

2. From the time he accepts an award under a comp order, however, the employee has 6 months to commence a 3rd party action against a 3rd party tortfeasor.

3. If he does not commence, his acceptance of the compensation acts as an assignment to the stevedore (or other employer) of his right to recover damages from a 3rd party.

4. Employer then has 90 days to commence, then the right reverts back to P.

5. Employer-Assignee May Get:

6. expenses and attorney’s fees;

7. a sum = medical & compensation benefits the employer has already paid to the worker;

8. present value of all amounts thereafter payable as comp and the present value of the cost of all benefits thereafter to be furnished to pay such comp & the costs of such benefits as they become due

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9. If the longshore worker commences suit in a timely fashion against the 3rd party, the stevedore-employer may asset a lien against any recovery for the full amount of its comp payments.

10. Bloomer : The lien is not reduced by any proportionate amount of the longshoreman’s expenses in obtaining recovery form the 3rd party.

11. Strong incentive to pay LHWCA comp.12. If you believe in good faith that you are making payments a longshoremen and it

turns out that he’s not, employer’s gonna want a lien anyway (cts are split).

G. SUITS AGAINST NON-SHIPOWNER 3 rd PARTIES H. HOLLAND:

I. P injured on a dock next to the vessel. Got LHWCA from employer, now he has sued negligent non-shipowner 3rd party under fed maritime law.

J. Action in tort recognizable under federal maritime law if:K. on navigable waters;L. Bore a significant relationship to maritime activity.

(c) State and not fed law governs land injuries.

III. REMEDIES OF OFFSHORE (OIL & GAS) WORKERS IV. Exam Approach:

V. What status does he have?VI. Is he a seaman under the Latis test?

VII. Seaman v. ERn Jones Act Negligencen Maintenance & Cure

(2) Seaman v. SOn Unseaworthinessn Maritime negligence where SO is NOT ER

(3) Seaman v. Othern Navigable Waters - general maritime lawn Fixed Platform/Land - state law remedy

(ii) Is he a maritime worker (as defined by status and situs under LHWCA)?(iii) EE v. ER

n LHWCA compensation(2) EE v. SO

n Suit for damages under LHWCA 905(b).(3) EE v. Others

n In navigable waters - general maritime negln Land - state law remedy.

2. OCSLA:(a) 3 nautical miles to the edge of the outer continental shelf

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(b) Applies to artificial islands and fixed structures on the outer continental shelf beyond state jurisdiction, and the Longshore Act is applicable to offshore workers without regard to any situs or status test:

(c) Status: is different. “Involved in the operations for the purposes of…oil & gas”

(d) Situs: On the way to the rig: you’re covered under OCSLA.

(e) The federal law will be the law of the adjacent state.

(f) Get 905(b) action against negligent vessel, and 933 action for injuries of other parties.

(g) If in state waters, must recovery under state comp laws because he is not covered of OCSLA and his employment is not maritime for the purpose of the status requirement under the Longshore Act.

IV. REMEDIES FOR WRONGFUL DEATH1. DOHSA: (Death on the High Seas Act)

2. Exclusive remedy for wrongful death of any person [NOT SEAMAN] on the high seas beyond a marine league [12 miles / 3 nautical miles] or in foreign territorial waters. Only applicable to maritime torts.3. Allows recovery for wrongful death caused by:

4. negligence / fault5. unseaworthiness (if decedent was a seaman)6. intentional conduct7. products liability

8. May be brought by personal representative of the decedent 9. Beneficiaries: wife, husband, parent, child, or dependent relative.

(b) §762 P can recover pecuniary losses. (loss of support; loss of services; loss of inheritance; funeral expenses) P cannot recover non-pecuniary damages (that which is generally recoverable under state wrongful death statutes):(c) Punitive damages;(d) Loss of consortium / society(e) grief, bereavement; mental anguish

(b1) §763(a) Statute of limits is 3 years.

(c) §766 Contributory negligence does not bar recovery.(i) Comparative Fault Standard still applies. Some states say fault od deceased

is irrelevant b/c it is an action for loss of support.

(d) Any “person” not just seaman. Seamen may get DOHSA AND Jones Act.

(d1) DOHSA does not provide for a survival action.

(e) HIGH SEAS

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(i) In Re Air Crash: SDNY said you need to show:(ii) High seas, AND(iii) Beyond marine league

(f) State Law v. DOHSA (g) DOHSA preempts state law. When DOHSA is available, it is the

exclusive remedy. State law cannot supplement recovery under DOHSA. Tallentire.(h) Therefore, beneficiaries could not “borrow” the state wrongful death

statute where the seaman’s death was caused by some wrongful act other than negligence, such as unseaworthiness.

(ii) §767: “shall not disturb state law” was just a statement of jurisdiction.

2. WRONGFUL DEATH ACTIONS UNDER GENERAL MARITIME LAW (WITHIN STATE TERRITORIAL WATERS)

(a) MORAGNE (b) Overrules The Harrisburg. 3 Anomalies :

(c) In territorial waters, identical conduct violating federal law produces liability if victim is injured but not if he’s killed.(d) Court is not talking about whether a seaman is covered by JA:

not an anomalous position b/c it is fault based. Court talking about unseaworthiness, where there’s an action already. However, states do not have a remedy for death b/c of unseaworthiness b/c states do not have unseaworthiness claims.

(e) Identical breaches of duty to provide a SW ship resulting in death, produce liability OUTSIDE the 3 mile limit but not within the territorial waters of a state whose local statute excludes unseaworthiness.

(f) A true seaman (JA seaman) doesn’t have a remedy for death within territorial waters, while a longshoreman to whom a duty of seaworthiness was extended only because he performs seaman’s work does have a state remedy. Federal law (Jones Act) preempts state law, so a seaman couldn’t get a state remedy even if it wanted to because:(g) state law doesn’t cover seaman b/c it’s in fed territory.(h) Fed law (JA) trumps state law

(i) There is a wrongful death action under general maritime law. (j) Applies to state waters when no state remedy is available. (k) OVERLAPS with Jones Act. Nothing in JA says it was meant to be the

only remedy.(l) OVERLAPS with State Statutes for NON-SEAFARERS.(m) NO OVERLAP WITH DOHSA. DOHSA is exclusive remedy on the

high seas.(n) Particularly desirable when death results from unseaworthiness rather than

negligence.

3. DAMAGES: PECUNIARY & NON_PECUNIARY LOSSES

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4. Survivors of a seafarer (civilian) can sue under state law in wrongful death actions. Essentially, survivors have the right to choose whichever remedy is better. Yamaha Motor.

5. P argued water = fed = Moragne = preempt state law6. Court says the accident occurred on navigable waters and therefore fed law applies.7. However, did not occur on high seas, therefore no DOHSA.8. Moragne was not meant to preempt state law, but to broaden protections for those

who are not covered by JA or LHWCA.9. State wrongful death actions have always applied here. Moragne was meant to be a

floor, not a ceiling.10. Higginbothom: The Moragne remedy is applicable beyond 3 miles but in such

cases, the survivors could not recover under Moragne, the non-pecuniary damages - loss of society - that are not available under DOHSA

4. RESTRICTION ON DAMAGES (APEX)5. Rule : P is not entitled to recover non-pecuniary loss (i.e. loss of society) in

wrongful death under general maritime law. No loss of consortium.6. Rationale : For uniformity between federal (DOHSA, Jones Act) and state (Jones

Act) and because Jones Act is legislative and court should not go beyond what legislature created. JA explicitly says only pecuniary losses (negligence). It would e inconsistent for court to sanction MORE expansive remedies in a judicially made cause of action in which liability is without fault than Congress has allowed for negligence.

7. Nondependant parent cannot recover for loss of society in general maritime claim.8. Gen maritime law does not permit a survival action for decedent’s lost future

earnings.

4. SURVIVAL ACTIONS 5. Generally:

6. Lost of future earnings;7. Medical expenses & loss of wages before death.8. Pre-death pain & suffering.

9. DOOLEY 10. Zicherman: DOHSA applies over the Warsaw Convention.11. Under DOHSA, you can only get pecuniary losses. Can’t be supplemented

by other law. Therefore, no loss of society recovery.12. Although P argued a general maritime law survival action, court said

DOHSA applies and it is not supplemented.13. Court did not say that there WAS a survivor action in general maritime law,

just that there is none in this case b/c of DOHSA. Congress intended it to be an exclusive remedy.14. DOHSA does include a limited survival action. therefore, don’t

mess with Congressional intent.15. DOHSA only applies to people who are injured on the high seas and

then dies prior to completion of suit.16. JONES ACT:JONES ACT : §59 If you’re a seaman, you get this survival action

instead of DOHSA.17. State Survival Actions:

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18. DOHSA preempts state wrongful death actions, so you’d expect survival claims to be preempted as well.

19. Jacobs v. N. King: Deceased is not a seaman, just a rep of the shipowner. 20. NO JA, because not a seaman.21. No TX survival because general maritime law preempts22. 5 th Cir.: Overrules. No preemption because outside territorial

waters - DOHSA applies & DOHSA preempts because of DOOLEY.

6. INFLATION (Pfeiffer) 7. Must take into consideration:

8. Future earnings9. Earning capacity of the money

10. SC refused to make a hard rule.11. Many parties agree in advance to what methods for calculation will be used in order

to avoid the time $ money of getting economic analysts & actuaries.

7. REMEDIES FOR NON-MARITIME PERSONS (i.e. passengers)8. No Jones Act9. Can bring a general maritime cause of action based on fault: reasonable care.10. No unseaworthiness action Dove v. Belcher. Fault only. No reason.

11. Therefore, passengers are less protected than cargo!12. Kermarec : Duty of reas care only. (Rape on Board)

13. 2 nd Cir : Reasonable care. Would have to show negligence in hiring the rapist.

14. 9 th Cir .: May be absolutely liable for intentional torts of crew.

IV. COLLISION & OTHER ACCIDENTS A. LIABILITY (PRESUMPTIONS)

B. INEVITABLE ACCIDENT C. DEFINITION: A collision that was not preventable by exercise of due care,

causation and nautical skill.D. Not limited to acts of God or perils of the sea.

(b) Inscrutable Fault: If no negligence can be imputed to either vessel, there is a presumption that they are navigating in a lawful manner & where no fault can be shown, the accident may be said to be inevitable. The Jumna(c) Test: Could the collision have been prevented by ordinary care, caution, and

maritime skill?

(c) Seldom Arises because it is generally easy to:(i) establish fault; or(ii) impugn fault.

(d) PRESUMPTION OF FAULT OF MOVING PARTY (The Louisiana)

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(i) When a moving vessel strikes a stationary vessel, it is presumed that the moving vessel is at fault, UNLESS you can show:(ii) result of an inevitable accident; or(iii) vis major:

(iv) Which human skill and precaution, and a proper display of nautical skill co(uld not have prevented.

2. ERROR IN EXTREMIS (M/V Manhattan Prince)3. Facts: Ship captain had never been to the port; had never sailed such a ship; very

tricky harbor; found to be going too fast; poor communication (3 different languages). Moving vessel allides with a pier. Tug got the hell out of the way.

4. Doctrine: Where one ship has, by wrong maneuvers, placed another ship in a position of extreme danger, the other ship will not be held to blame if she has done something wrong, and has not been maneuvered with perfect skill and presence of mind.5. Only applies if party asserting freedom from fault was not at fault until the

point that the emergency arose.6. Negligent ship will not be liable for negligent conduct if its action was done

in response to a condition that was not their fault.7. Need not do anything to avoid the allision (i.e. holding the lines)

8. Vessel Claiming In Extemis Must show: 9. that it did not cause the in extremis position (i.e. the emergency)10. that the safety of the vessel & crew was out into peril, and11. the casting of the lines (i.e. its actions) was a reasonable response to the

danger.12. D was looking for indemnity from:

13. tug (for letting lines go and not averting the allision);14. pilot;15. port authority as employer of the pilot.

16. The LA presumption applied to tug, pilot, & ship. Therefore, the case becomes a question of who can meet this burden.17. tug: in extremis18. ship: no vicarious liability (insurance burden placed here)19. pilot gets screwed.

3. ALLOCATION OF FAULT: THE MODERN RULE 4. Rule of Divided Damages: (Old Rule) US used to have the 50/50 Rule. Damages

were divided equally regardless of fault.5. Rationale : Rough Justice. better than old C/L land-based rule: If P is at fault

at all, he gets $0. However, in GML, of you were only 10% at fault, you still get 50%.

6. 1910 Brussels Convention : Rest of world followed proportional fault rule.

(b) RULE OF PROPORTIONAL FAULT (Reliable Transfer)(c) Each party is liable only for the damages caused by their portion of

negligence.(d) Damages are to be allocated equally only when they are equally at fault OR

when it is not possible to fairly measure the comparative degree of fault.

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(e) Old rule unfair especially in light of the PA Rule (i.e. even a minor statutory violation would lead to 50% fault.

4. PROXIMATE CAUSE (Exxon co.)5. Proportional fault does not mean causal questions become immaterial. Rules

relating to proximate cause and superseding causes are still applicable in collision cases notwithstanding the adoption of proportional fault rule.6. Nothing in Reliable Transfer says you can’t allocate 100% to one party.

(b) Superseding causes: bars recovery.(i) Exxon argued that the defective product & its poor operation is causally

connected to the vessel drifting & causing damage. (ii) Held: Even under Reliable Transfer it is still possible for a court to

conclude that there is a single proximate cause (superseding cause) which would wipe out previous proximate causes.

5. VIOLATION OF SAFETY STANDARDS: THE PENNSYLVANIA RULE(a) Doctrine: If a vessel is guilty of a statutory violation, the defaulting ship must

show “not merely that her fault might not have been one of the causes, or that it probably was not, but that IT COULD NOT HAVE BEEN [causally significant].

(b) Application: Applies in all tort cases, not just in collisions. Candies Towing.

(c) Per Se Rule of Causation Which Reverses the Burden of Proof: (d) Once P shows that there has been a violation of a statutory regulation, then

the party who committed the violation must show that the violation was not causally significant to the damage. [i.e. cause of the damage](e) P need only show D’s statutory violation;(f) It does not matter whether the safety standard was designed to

protect the interest that was ultimately invaded or not.

(d) PA RULE CAN BE INVOKED A/G MORE THAN 1 PARTY (Otto Candies)(e) Where both parties have violated a statute, the presumption that both parties

are at fault and each contributed to the accident [and the damages will be divided between the 2 of them] may be rebutted by proof that, in fact:(f) the fault of either of the parties was the sole cause of the accident,

OR(g) instead, not a substantial contributing cause thereof.

(h) P&D are not estopped from asserting the PA Rule to fix the other with liability.

(e) IMCO ‘S COLREGS (“Rules of the Road”) 1972(f) Purpose: Traffic Regulation Schemes. Rules designed to keep vessels out

of each other’s way. US adopted by statute. Therefore, breach of COLREGS triggers PA RULE.

(g) RULE 2 RESPONSIBILITY:

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(h) (a) Nothing in these rule shall exonerate any vessel, or the owner, master or crew thereof, from the consequences of any neglect to comply with these Rules or of the neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case.

(i) (b) In construing and complying with these Rules due regard shall be had to all dangers of navigation & collision and to any special circumstances, including the limitations of the vessels involved, which may make a departure from these Rules necessary to avoid immediate danger.

(f) STATIONARY OR UNMARKED OBJECT (g) If fault can be attributed to the presence of a stationary object, the object

must bear its share of fault. PA Rule survived Reliable Transfer. P may apply:(h) PA RULE(i) RELIABLE TRANSFER

(g) WRECK ACT (A.K.A.: HRAA)(h) Requires: owner of a sunken vessel accidentally or otherwise to visibly

mark it and to remove it. (i) Statute is not exclusive. Under tort liability, a negligent owner may be

liable for the costs of removal or may be required to remove the vessel.(j) P gets PA Rule & Reliable Transfer Feeder Line Towing.(k) PIPELINE MUST BE ADEQUATELY MARKED.

(B) DAMAGES (C) GENERALLY

(D) TOTAL LOSS: (E) market value of vessel at the time of the loss (plus pending freight on that

particular voyage);(F) Pollution cleanup, salvage wreck removal, and other incidental costs

proximately resulting from the casualty. (G) Loss of earnings & Detention are NOT recoverable. UMBRIA:

(1) Too speculative - where do you stop measuring the potential loss?(b) NOT TOTAL LOSS:

(c) costs of repairs (or diminution of value if no repairs made);(d) detention (i.e. loss of earnings for the period the vessel is out of service;(e) other incidental costs (i.e. salvage costs, piloting)

2. LOST TIME 3. Frequently litigated.4. D argues that the proper measure is post-collision voyage or at most, post- plus

collision voyage ( would decrease damages)5. Generally, 3voyage rule is the rule of thumb. i.e. the average of daily earnings over

the entire period of 3 voyages to be used for measuring damages for detention.6. ESSO CAMDEN

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7. Take the average of pre- and post- earnings over 3 voyages:8. Last pre-accident voyage before the collision9. Collision Voyage10. First post-collision voyage after.

3. OWNER’S TIME (Bouchard Trans. Co.)4. If the ship has to be laid up for some time, owner may use the time to do any work

which he needs to do anyway.5. Ship owner gets the windfall. D MAY NOT ARGUE THAT P MUST SHARE

THE DAMAGES.

4. M/V STRAUMA (4th Cir. View)5. Either owner, or time charterer, but not both, may claim damages for loss of use

depending upon the charterer’s placement of the risk of loss of use. If owner is paid loss of use by tortfeasor, should not be required to pay ALSO the charterer’s loss of anticipated profits.

6. Charterer not entitled to lost profits, loss of use et. Transferor only has to pay for charterer’s loss arising directly from non-use of vessel: charter hire that he paid. (If charter hire had been suspended, he could have recovered)

7. Modifies Robins Dry Dock: Where there is a “hell or high water” clause in a C/P (which means charterer pays charter hire whether or not the vessel is in use), charterer becomes owner with respect to owner’s rights to recover any payment that would have been received had there been a suspension.

4. ROBBINS DRY-DOCK 5. Bright-Line Rule: You can only recover damages if you’ve suffered actual

physical injury. i.e. P must have had a proprietary interest in the property damaged.

6. FINANCIAL LOSS I OF ITSLEF IS NOT ENOUGH.

5. M/V TESTBANK 6. FACTS: Huge spill of PCP. Coast Guard suspended all fishing & shrimping in the

area. D claims Robins Dry Dock. Many claims against defendant’s from several different parties:7. Commercial fishermen;8. Seafood Restaurants;9. Bait & Tackle Shops

10. Court dismissed all claims except from the commercial fishermen. To recover for economic loss, there must be damage to a proprietary interest (i.e. property). Only true ownership losses will be compensated. (Ex.: River Walk Plaintiffs got screwed here).

11. Rationale: Hard rule; but generally a good one. Too hard to draw the line anywhere else. Where do you draw the line? Wisdom’s “PARTICULAR DAMAGE” APPROACH. Consider the following factors when deciding how far down the chain the cause of action will be allowed:12. Negligence;13. Foreseeability;14. Proximate cause &

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15. Whether there has been damage that affects the community but private individual has no remedy for it.

16. TOTAL LOSS 17. THE TUG FAJARDO

18. Where the Vessel is Totally Lost: (Damages) = F.M.V. + Interest + Net Freight Pending when vessel went down.

19. NOR RECOVERY FOR LOST PROFITS OR OTHER CONSEQUENTIAL DAMAGES (Too Speculative).

(C) CARGO LOSSES (D) BOTHY TO BLAME COLLISION

CARRIER (30%) D VESSEL (70%)

CARGO

n Cargo can sue carrier, but he will lose. (1304(2)(a) Navigation & Management - carrier is protected).

n Therefore, it can sue other vessel (easy to prove fault; Both to Blame Collision);

(a) ALTANTIC MUTUAL (Pre-Reliable Transfer)(b) Chattahoochee Rule: The fact that Harter gives carrier immunity, does

not mean P can’t recover 100% from other vessel.(c) D vessel may then sue carrier for it’s 30% fault indemnification. This may

violate the purpose of COGSA, however, COGSA only prohibits direct law suits, not indirect law suits.

(d) BOTH to BLAME CLAUSE: Owners of goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship. DOES NOT WORK IN US!!!

2. BOTH TO BLAME CLAUSES:Carrier 3rd Party Vessel

Cargo

(a) ALLIED CHEMICAL v. HESS (Post-Reliable Transfer)(i) Two vessels collide and are 50/50 at fault. How do you calculate damages

to cargo?(ii) Defendant (non-carrier) argued that RobinsDry Dock did away with:

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(iii) Chattahoochee Rule which states that cargo can sue non-carrying vessel for 100% loss. Therefore, if P sues defendant non-carrier for only the share it is at fault, the non-carrier may not sue carrier for indemnification. ARGUMENT FAILS.

(iv) Reliable Transfer does not abolish the procedure by which innocent cargo owner traditionally cold recover his damage in FULL from the tortious non-carrying vessel no matter what the degree of fault between the tortious actor. Reliable Transfer just changes the 50/50 rule to proportional damages.

(v) RULE: Cargo may sue the 3rd party for 100% of the cargo damage / loss; 3rd

party may then sue carrier for its share of fault.(vi) EFFECT: Both to Blame Clauses therefore have no effect. COGSA

prevents direct suits against the carrier; NOT INDIRECT SUITS.

(b) THE SUCARSECO (c) General Average Contributions: shares among all parties in a voyage,

losses sustained in order to preserve a venture. Loss should not fall solely on cargo because everyone has benefited from this sacrifice.(d) Example: If a ship is threatened with imminent harm, master throws

cargo overboard in order to save the ship. (e) Modern Example: Fire aboard. Goes to a different port for repairs

in order to complete the voyage. Carrier does not want to bear the full cost.

(f) Pre-Jason Clause: If need was caused by fault of carrier and the fault would make carrier immune under Harter, carrier may seek contribution.

(g) NEW JASON CLAUSE: If carrier is guilty for negligence in management & navigation of the vessel, may seek contribution from other parties in a general average contribution situation (i.e. loss sustained by few to benefit the whole).

(h) Contribution can be claimed from non-carrying ship notwithstanding Robins Dry Dock. RDD just transfers the % of loss. This doesn’t change the fact that it’s the same damage.

(c) MASON LYKES ML (Carrier) 90% Amoco 10%

Cargo

(i) Facts: 2 vessels collided in fog. What can cargo owners recover from X&Y?

(ii) Who bears the $Millions in lost freight?(iii) Clause: “Freight Earned & Non-Returnable Whether Lost or Not

Lost” (iv) P can’t sue carrier for the 90% because it is immune, so it sued 3rd party

vessel.

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(v) Robins Dry Dock: Does not knock out this type of claim. Relies on Sacaresco to distinguish dry dock. If clause was not there, carrier would have to give freight back, it’s lost profits can sue for 10%.

(vi) Clause Effect: Simply transfers lost freight risk from carrier to cargo Then, you can recover from Amoco.

(d) ALL 3 CLAUSES HAVE NO EFFECT IN THE US BECAUSE THERE IS A THIRD PARTY TO SUE.(e) Therefore, P can sue 3rd party, which can then sue carrier (whom the clause

was supposed to protect).

3. PROBLEM (Page 4-51)Vessel Ajax (20% at Fault)(1) Cost of Repairs & Incidentals: $600,000(2) Lost Profits Based on Charter Rate: $ 50,000(3) Damage Paid to Injured Seaman: $ 50,00 .

TOTAL: $700,000

Vessel Bjax (80%)(1) Market Value of Vessel (Total Loss) $950,000(2) Wreck Removal $ 50,000 .

TOTAL: $1,000,000

(A) How Are Losses Allocated:Total Losses: $1.7 Million

A - 20% B - 80%(20% of $1.7M) (80% of 1.7M)

FINAL SHARE: $340,000 $1.36M

(B) How would it differ if cargo on B was also a total loss valued at $300,000?Bjax (80%) Ajax (20%)

Cargo

n Cargo can’t sue Bjax because of carrier immunity.n However, Cargo can sue Ajax for 100% of the $300K loss = $300K.n Ajax can then sue Bjax for it’s 80% share of fault = $240K;n Ajax eats it’s 20% share = $60K

FINAL OUTCOME:n A = $400K ($340 + $60);n B = $2M ($1.7M + ??????????

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