1Chapter 1: The Basics: Admiralty Jurisdiction, Conceptual Structure and Practice

A. Historical Background Generally Article III, Section 2 of the Constitution provides that the judicial power of the US shall extend to all cases of admiralty and maritime jurisdiction. Article III, Section 1 vests the judicial power of the US in one Supreme Court and in such inferior courts as Congress may from time to time ordain and establish. In the Judiciary Act of 1789, Congress did ordain and establish such a system of inferior courts consisting of 13 district courts and 3 circuit courts. Section 9 of that Act provides that the district courts shall have exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction saving to suitors, in all cases, the right of a common law remedy where the common law is competent to give it.1. There was debate over what “admiralty and maritime” meant within the Constitution. Some argued that “maritime” was added

to the admiralty grant to ensure that the jurisdiction was suitably broad (it would not have been added if it simply meant the same thing as “admiralty”). Others argue that the natural thrust of the term “maritime” was to narrow the grant of jurisdiction to exclude waters that are neither salty nor tidal, thereby excluding rivers and lakes.

B. DeLovio v. Blair (1815)1. Facts: An action brought in a district court regarding an insurance policy that insured a vessel against losses at sea. The district

court dismissed the case for lack of subject matter jurisdiction and the PL appealed to the Supreme Court.2. Supreme Court (Justice Story)

i. He takes an extremely expansive view of the admiralty and maritime jurisdictionii. There is no justifiable reason for construing the terms of the constitution in a limited and narrow sense or for imposing

upon them the limitations of English statutes (or common law decisions based upon those statutes), which are rarely supported by any consistent principle. The advantages resulting to the commerce and navigation of the US, from a uniformity of rules and decisions in all maritime questions leads the SC to believe that national policy as well as judicial logic require the clause to be construed broadly – So as to embrace all maritime Ks, torts or injuries, or, to embrace those causes that originally and inherently belonged to admiralty before any restrictions.

iii. Contracts of insurance are within the admiralty and maritime jurisdiction of the US (although not exclusively).iv. NOTES

Story focuses on the restricted condition of the English admiralty courts from 1789-1840. In 1840, however, Parliament restored much of the “natural” jurisdiction of the English admiralty.

The opinion lists dramatic limitations of the admiralty jurisdiction we may have inherited from England:o Limited to actions in rem (against a vessel), therefore excluding actions in personem (against a shipowner,

master or other person) Goneo Prohibiting the admiralty court from adjudicating matters arising within the body of a county Goneo Precluding the admiralty court from hearing cases arising on waters that did not show the influence of the

tide Goneo To be maritime and therefore within the admiralty jurisdiction, a K must be made at sea and call for

performance wholly at sea Goneo Excluding the admiralty court from hearing cases involving the building of or sale of a ship RETAINED for no

good reason

C. The Thomas Jefferson (1825)1. Facts: Suit brought in DC of Kentucky claiming wages earned on a voyage up the Missouri and back down. The trip was a

commercial failure, so to sure the employers on state breach of K law would not be fruitful. Instead, the suit is in Rem against the ship (which can be seized and sold). The question is whether the case is within the admiralty and maritime jurisdiction. The lower court dismissed the case for lack of jurisdiction.

2. Supreme Courti. Justice Story holds that in cases involving Ks for the hire of a seaman, admiralty never claimed, nor could it claim,

jurisdiction unless the service was substantially performed or to be performed upon the sea, or upon waters within the ebb and flow of the tide (he could have said that constitutional admiralty permitted this, even if judicial admiralty did not have jurisdiction over it…Congress does not have to grant all of its judicial power as per the Constitution). Services are considered to be substantially performed on the sea or tidewater even though the commencement or termination of the voyage may happen to be in some place beyond the reach of the tide.

ii. In the present case, the entire voyage (not simply its commencement and termination) was several hundred miles above the ebb and flow of the tide Therefore, in no just sense can the wages be considered to be earned in a maritime employment.

If Congress wants to extend the admiralty jurisdiction to these cases, it may do so, but this is not a decision for the Court

D. The Great Lakes Act of 1945

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21. Does not say that non-tidal water is part of Admiralty jurisdiction. It says that district courts have the same jurisdiction in certain

Great Lakes cases as they do in Admiralty cases and that they should have the same procedures and apply the same substantive law.

2. Gives rise to federal question, diversity and admiralty jurisdiction.3. Acknowledges that you cannot shoehorn non-tidal waters into Admiralty and maritime jurisdiction for constitutional purposes,

but maybe you can create federal question jurisdiction for certain cases involving non-tidal waters (Article III hook) via the Commerce Clause (Article I hook)

E. The Genesee Chief v. Fitzhugh (1851)1. Facts: Involves a collision on Lake Ontario. The PLs owned a schooner and the DFs were the owners of a propeller, The Genesee

Chief. PL was on the way from Ohio to NY when he hit the DFs boat and their ship sunk with its cargo. They claim that the accident was entirely a result of the carelessness and mismanagement of the officers and crew of the Genesee Chief. The DFs claim the opposite. The case is an in rem action in admiralty and was instituted under the Great Lakes Act of 1845 Holds that the US District Courts should have the same jurisdiction over ships traveling between states on lakes and rivers (drafted by Justice Story). The district court found for the PLs and the circuit court affirmed.

2. Supreme Courti. The Great Lakes Act contains no regulation of commerce or any provision related to the shipping and navigation on the

lakes. It merely confers a new jurisdiction to the district courts. Therefore, Congress, in passing the Act, did not intend to utilize its power to regulate commerce or to derive its authority from that article of the Constitution.

The extent of the judicial power is carefully defined and limited in the Constitution and Congress cannot enlarge it even to meet the needs of commerce.

ii. If the Act is Constitutional, it must be supported on the grounds that the lakes and navigable waters connecting them are within the scope of admiralty and maritime jurisdiction as known and understood in the US when the Constitution was adopted (there is no tidal limit in the Constitution).

iii. In reality, the Great Lakes are not regular lakes. They are huge, bordered by numerous states and another country, have commerce conducted upon them and contain many of the dangers encountered on the high seas.

However, there is no tide on the lakes or the waters connecting them, which is the traditional requirement for admiralty and maritime jurisdictiono This is because traditionally, commerce was only carried on upon public navigable tidewaterso In England, tidewater and navigable water is synonymous because there is no such body of water as there as

in the US (the Great Lakes) When the Constitution was adopted, the definition obtained from England made sense since all the navigable waters

were tidewaters. This is no longer the case.iv. If this court follows The Thomas Jefferson, it will be following a decision that was made when the present state of affairs

could not be foreseen. In past cases, there was no reason to consider whether the admiralty and maritime jurisdiction extended further in a public navigable water

A decision that would limit public rivers in the US to tidewaters would be unacceptable. There are thousands of miles of public navigable waters in which there is no tide. There is NO reason to have admiralty and maritime jurisdiction encompass public tidewaters, but not on any other public water used for commercial purposes and foreign trade. The Lakes and the waters connecting them are undoubtedly public waters and they are within the grant of admiralty and maritime jurisdiction in the Constitution of the US (3rd Circuit decision is affirmed).

3. NOTEi. The Court overruled the Thomas Jefferson to uphold the Constitutionality of the Great Lakes Act. Was this necessary? In

the Thomas Jefferson, Justice Story said that Congress was free to reverse the tidewater limitation. This may have meant that the Thomas Jefferson was an interpretation of Section 9 of the 1789 Judiciary Act rather than the meaning of the underlying Constitutional provision.

ii. Decision gives the courts jurisdiction over waters outside of those covered by the Great Lakes Act.

F. The Eagle (1863)1. Facts: The Eagle was a tugboat towing a brig and a barge and grounded the brig in the Detroit River causing the barge to collide

with the brig. The owners of the brig (PL) filed suit in District Court in MI against the Eagle and the barge. The DC held the Eagle liable and exonerated the barge and the Circuit affirmed. The Supreme Court heard the case on the limited issue of the lower court’s subject matter jurisdiction.i. PL claims that the action was not brought within the requirements of the Great Lakes Act so as to give the DC jurisdiction

It was not shown that the vessels were of the burden of 20+ lbs or enrolled and licensed for the coasting trade, or employed, at the time, in the business of commerce and navigation between ports and placed in different states.

2. Supreme Courti. Under the decision of The Genesee Chief, it is clear that the district courts would possess general jurisdiction in admiralty

over the lakes and the waters connecting them even without the Great Lakes Act (there would therefore be no more difficulty in the administration of the law than in cases upon the high seas, or bays, or rovers navigable from the sea).

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3ii. The Genesee Chief decision opens the lakes and the waters connecting them to the general jurisdiction of the district courts

in admiralty. The question is therefore whether the courts can entertain this jurisdiction in cases outside of that conferred by the Great Lakes Act.

Up until the time of The Genesee Chief, the Act was seen as “an act extending the jurisdiction of the district courts to certain cases upon the lakes and navigable waters connecting them.” When it was enacted and for sever years after, the Act had that affect. However, after The Genesee Chief, it was no longer seen as an enabling Act.

iii. The Act is no longer considered by the Court as conferring any jurisdiction in admiralty upon the district courts over the lakes or the waters connecting them. That is regarded as having been conferred to those courts by the grant of general admiralty jurisdiction by the 9th Section of the Judiciary Act of 1789. The original purpose of the Act has ceased and is of no effect and should be construed as limiting the jurisdiction in admiralty (the opposite of its stated object and intent).

The Court therefore cannot give effect to the Act as a limitation or restriction upon the admiralty jurisdiction The Act is therefore obsolete and of no effect EXCEPT the clause which gives either party the right to a trial by jury

when requested iv. Just as the Thomas Jefferson was overruled as a Constitutional case, it is also overruled as a statutory case by this decision

B. The “Navigable Waters” IssueA. Generally Although the tidewater restriction is gone, admiralty jurisdiction still does not exist unless the matter in suit had a

sufficient connection to with waters that are navigable. B. LeBlanc v. Cleveland (1999)

1. Facts: PLs suffered personal injuries when the kayak they were paddling on the Hudson was struck by a recreational motorboat operated by the DF. The collision occurred approximately 29 miles upstream from the place that they had rented the kayak. The PLs sued in admiralty claiming that DFs negligently caused the collision and their resulting injuries (they also brought 3rd party complaints against the rental outfitter). The 3rd party moved to dismiss the complaint for lack of subject matter jurisdiction claiming that the Hudson river is not “navigable in fact” at the spot where the accident occurred and that the court therefore lacked admiralty jurisdiction over the suit. The court acknowledged that the Hudson, below the rental company (at Fort Edward) is a navigable waterway because it permits passage to the open sea, but that the part of the Hudson where the accident took place cannot be accessed from Fort Edward due to the presence of numerous rapids, dams and major waterfalls. The court concluded that nothing north of Fort Edward (where the accident occurred) is not, or has ever been, an artery of marine commerce sufficient to support a finding of navigability necessary to the exercise of federal admiralty jurisdiction.

2. Second Circuiti. PLs allege that a historic test of the navigability of the waterway should be applied without reference to present day

artificial obstructions. Under such a historic construction, the district court was mistaken in refusing to take into account the fact that prior to 1951, the logging industry regularly used the Hudson River upstream of Fort Edward to float logs to timber mills.

ii. From The Daniel Ball “Those rivers must be regarded as public navigable waters which are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade or travel are or may be conducted in the customary modes of trade and travel on waters. And they constitute navigable waters of the US within the meaning of Congress, in contradistinction from the navigable waters of the states, when they form in their ordinary condition by themselves, or by uniting with other waters, a continued highway over which commerce is or may be carried on with other states or foreign countries in the customary modes in which such commerce is conducted by water.”

iii. The Hudson River downstream from Fort Edwards can be used and is used as a continuous highway for interstate commerce because it permits passage beyond NY both to the south, where it empties into the Atlantic, and to the North, via the Champlain Central (which begins near Fort Edward) and the St. Lawrence. However, the accident site is separated from Fort Edward, and therefore from any interstate or international waterway, by numerous impassable rapids, falls, and artificial dams.

iv. An otherwise unnavigable river may not be rendered navigable simply because, in extraordinary conditions, its waters rise high enough to support forms of transportation normally impossible.

v. Nothing indicates that a historically navigable river remains navigable for admiralty jurisdiction purposes when it is made impassable by an artificial construction.

vi. The definition of navigable water for the purpose of delineating Congress’s power to regulate under the Commerce Clause is different than the definition of navigable waters for the purpose of establishing the limits of admiralty jurisdiction

If a state puts artificial constructions in a waterway, it cannot and should not divest Congress of its control over a potentially useful artery of commerce, since such obstructions may always be removed. Therefore, the courts have held that a navigable river is not rendered non-navigable by artificial constructions (for commerce clause purposes).

However, if the damming of a waterway has the practical effect of eliminating commercial maritime activity, no federal interest is served by the exercise of admiralty jurisdiction over events taking place on that body of water, regardless of whether it was initially navigable. No purpose is served by the application of a uniform body of federal law, on waters devoid of trade and commerce, to regulate the activities and resolve the disputes of pleasure boaters.

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4vii. Just because a kayaker can get out and go around an obstruction (portage) does not render the body of water navigable for

admiralty jurisdiction purposes. Navigability requires that that the body of water be capable of supporting commercial maritime activity.

viii. Summary A waterway at the situs in issue is navigable for jurisdictional purposes if it is presently used, or is presently capable of being used, as an interstate highway for commercial trade or travel in the customary modes of travel on water. Natural and artificial obstructions that effectively prohibit such commerce defeat admiralty jurisdiction.

3. NOTEi. The court’s statement that navigability during “extraordinarily high water conditions” does not qualify a body of water for

admiralty jurisdiction refers to waters on which transportation is normally impossible. Conversely, seasonal nonnavigability does not defeat navigability for admiralty purposes. Bodies of water that freeze in winter do not thereby lose their navigability. Also, drying up in summer does not defeat navigability.

ii. PLs sued under federal admiralty jurisdiction rather than in state court or federal court. They are likely out of towners and the DF motorboat company is likely local so a federal court would have less sympathy for the motorboat company. Additionally, admiralty cases are always hear before the bench so any sympathy a jury may have became a non-issue.

iii. Lady-Bird lake is not within the federal admiralty jurisdiction because, since the dam was built, you cannot get anywhere but to Austin on it.

iv. Review Navigable Water - Entails the ability to float to another state. If you can get from where you are to the ocean, then

you can get to another state. LeBlanc v. Cleveland – Look at where the incident in suit occurred

o Tort – Where the person got hurto Contract – After determining the general subject matter, you must determine if it entails getting into a boat

and floating to another state

C. The “Vessel” IssueA. Stewart v. Dutra Construction Co. (2005)

1. Facts: During the Big Dig, Massachusetts hired Dutra to help extend the MassPike through a tunnel running under south Boston and Boston Harbor to Logan Airport. Dutra owned the world’s largest dredge (the Super Scoop), which is a massive floating platform. It has certain features that are common to seagoing vessels such as a captain and crew, navigational lights, ballast tanks, and a crew dining area. However, it has only limited means of self-propulsion, it travels long distances by tugboat, and it navigates short distances by manipulating its anchors and cables. PL was hired by Dutra to maintain the mechanical systems of the Super Scoop during the dredging of the harbor. When he was injured, the Super Scoop was idle because one of its scows suffered an engine malfunction and the other was at sea. PL sued Dutra in the US District Court for Mass under the Jones Act alleging that he was a seaman injured by Dutra’s negligence. Dutra moved for summary judgment claiming that PL was not a seaman since the Super Scoop was not a vessel for the purposes of the Jones Act. DF pointed to a case which held that “if a barge or other float’s purpose or primary business is not navigation or commerce, then workers assigned to it for its shore business are to be considered seaman only when it is in actual navigation or transit at the time of the PLs injury.” The court granted summary judgment to DF because the Super Scoop’s primary purpose was dredging rather than transportation and because it was stationary at the time of PL’s injury. Court of appeals affirmed.

2. Supreme Courti. Section 1 and Section 3 of the Revised Statutes of 1873 specifies that “In determining the meaning of the revised statutes,

or of any act or resolution of Congress passes subsequent to February 25th 1871, the word ‘vessel’ includes every description of water-craft or other artificial contrivance used, or capable of being used, as a means of transportation on water” (this is broader than the definition of a vessel used in Jones Act cases).

This Section 3 language was re-codified in 1947 as part of the Rules of Construction Act and remained essentially unchanged. This language therefore defines the meaning of the term vessel in the LHWCA. Prior to the passage of the Jones Act and LHWCA, courts often used this language to conclude that dredges are vessels.

Therefore, at the time Congress enacted the LHWCA and Jones Act, it was settled that Section 3 defined the term “vessel” for the purposes f those statutes. It was also settled that a structures status as a vessel under Section 3 depended on whether the structure was a means of maritime transportation. Then, as now, dredges served a waterborne transportation function, since in performing their work they carried machinery, equipment, and crew over water.

ii. A ship and its crew does not mover in and out of Jones Act coverage depending on whether the ship is at anchor, docked for loading or unloading, or berthed for minor repairs, in the same way that ships taken permanently out of the water as a practical matter do not remain vessels merely because of the remote possibility that they may one day sail again.

Section 3’s definition does not include an array of fixed structures not commonly thought of as capable of being used for water transport

Although the application of Section 3 brings many sorts of vessels (special-purpose) into the purview of the Jones Act, a PL must also meet certain stringent requirements to show that he was a seaman for the purposes of the Act

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5iii. Section 3 requires only that a watercraft be used or be capable of use as a means of transportation over water to qualify as

a vessel. It does not require that a watercraft be used primarily for that purpose. Furthermore, a vessel does not need to be in motion to qualify as a vessel under Section 3 (just as a worker does not go back and forth between Jones Act coverage and other remedies depending on the activity in which he is engaged while injured, a watercraft does not pass in and out of Jones Act coverage based upon whether it was moving at the time of the accident). The “in navigation” requirement is only relevant to whether the craft is used or capable of being used for maritime transportation.

Here the Super Scoop had not been taken out of service, permanently anchored, or otherwise rendered practically incapable of maritime transport.

iv. Since the Super Scoop was engage in maritime transportation at the time of the PL’s injury, it was a vessel within the meaning of Section 3.

3. NOTEi. River Boat Gambling was recently make legal, but the legislation commanded the boats to move along the river. When the

states said they could stay docked (because it was absurd to move in circles), the boats ensured they would not be considered a vessel by trying up at the wharf, thereby making it impossible for the boat to be a movable vessel and/or by stating that they would “sail no more.” The boats can, however, mostly still float on the river if certain things are done to them making their status an issue of debate.

4. NOTE:i. Review

Vessel – 1 U.S.C. §3 (amended): Stuart v. Dutra says that it is applicable generally absent another definitiono Any artificial contrivance that floats on water and can be used to carry people or can be used to haul

somethingo Stuart has said that previous court decisions have read “capable of transportation” to mean “practically

capable” rather than “theoretically capable” (boats that are permanently docked would not count)

D. Admiralty Jurisdiction in Tort CasesA. Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. (1995)

1. Facts: In 1990, Great Lakes bid on a K to do work for the City of Chicago on the Chicago River (a navigable waterway). After winning the K, Great Lakes carried out the work with two barges towed by a tug. One of the barges was secured to the riverbed with long metal legs that project down from the barge and anchor it. Seven months after the work, an eddy formed in the river near a bridge Great Lakes had been working on as the collapsing walls or ceiling of a freight tunnel running under the river opened the tunnel to river water. This water flowed through the tunnel and flooded basements of buildings in the downtown Chicago Loop. After the flood, may victims brought actions in state court against Great Lakes and the city of Chicago alleging that Great Lakes had negligently weakened the tunnel structure, which Chicago, its owner, had not properly maintained. i. Great Lakes then brought this suit in US District Court invoking federal admiralty jurisdiction (admiralty court was VERY

desirable for them). Great Lakes seeks the protection of the Limitation of Vessel Owner’s Liability Act (Limitation Act). This statute would permit the admiralty court to decide whether Great Lakes committed a tort and, if so, limit their liability to the value of the vessels involved if the tort was committed without the privity or knowledge of the vessel’s owner. Great Lakes also asks for indemnity and contribution form the City for any resulting loss to Great Lakes. The City and Grubart (one of the state court PLs) filed a motion to dismiss the suit for lack of admiralty jurisdiction. The DC granted the motion and the Circuit Court reversed (the dc judge likely granted it because he felt that limitation of liability would be a bad thing in a case like this…it was passed by Congress originally to help the US build up an ocean fleet in the 1850s).

2. Supreme Courti. Issue: Does a federal admiralty court have jurisdiction over claims that Great Lakes faulty work caused the flood damage?

The REAL question the SC asks is whether Grubart would hypothetically be able to get admiralty jurisdiction over Great Lakes (if so, there will be admiralty jurisdiction in the limitation of liability proceeding as well).

ii. History The Locality Test The traditional test for admiralty tort jurisdiction asked only whether the tort occurred on

navigable waters (the injury had to be wholly sustained on navigable waters).o Extension of Admiralty Jurisdiction Act, 1948 “The admiralty and maritime jurisdiction of the US extends to

and includes cases of injury or damage, to person or property, caused by a vessel on navigable waters, even though the injury or damage is done or consummated on land” (the purpose was to invest admiralty with jurisdiction over cases where the injury was caused by a ship or other vessel on navigable water, even if such injury occurred on land – Plymouth: A warehouse that was burden by a ship fire that spread would not have been able to sue the shipowner for negligence).

Rule was modified by 3 subsequent Cases:o Executive Jet Aviation Inc. v. Cleveland Tort claims arose out of the wreck of an airplane that collided with

a flock of birds just after takeoff and fell into the navigable waters of Lake Erie. A purely mechanical application of the locality test is not always sensible or consonant with the principles of maritime law (this would require the admiralty court to adjudicated tort disputes between colliding swimmers). The claims

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6arising from airplane accidents are not cognizable in admiralty despite the location of the harm, unless the wrong bears a significant relationship to traditional maritime activity.

o Foremost Ins. Co. v. Richardson Tort claims arose out of a collision between two pleasure boaters on a navigable river. The court held that there was admiralty jurisdiction, even though jurisdiction exists only if the wrong has a significant connection with traditional maritime activity. The pleasure boaters themselves had little to do with maritime commerce, but the potential disruptive impact on maritime commerce of a collision between boats on navigable waters is large.

o Sisson v. Ruby A federal admiralty court was held to have jurisdiction over tort claims arising when a fire, caused by a defective washer aboard a pleasure boat docked at a marina, burned the boat, other boats docked nearby and the marina itself. First, the incident causing the harm (the burning of docket boats at a marina on navigable waters) was a sort likely to disrupt maritime commercial activity. Second, the kind of activity from which the incident arose (the storage and maintenance of a vessel on navigable waters) bears a substantial relationship with traditional maritime activity.

Standard:o Location Did the tort occur on navigable waters and was the injury that occurred on land caused by a

vessel on navigable waters? [L or AEA]o Connection with Maritime Activity

a. Does the incident have a potentially disruptive impact on maritime commerce? [SRTMA] Must characterize the activity at a proper intermediate level of generality

b. Does the general character of the activity giving rise to the injury show a substantial relationship to traditional maritime activity? [PDMC]

Once there is an intermediate level of generality chosen, it will be easy to tell of there was a disruption

iii. Application to Case Locality

o Clearly is satisfied. The place in the river where the barge sat, and from which the workers did what eventually caused the damage, is in the navigable waters of the US. Furthermore, the tort was clearly committed by a vessel since the Great Lakes barge is, for admiralty tort purposes, a vessel.

Connectiono Incident was of a sort with the potential to disrupt maritime commerce…(PDMC)

a. This goes to the potential effects, not the particular facts of the incidentb. The “general features” (Sisson) of the incident at issue here can be described as damage by a

vessel in navigable water to an underwater structure. With this characterization, there is no question that this kind of incident has a potentially disruptive impact on maritime commerce.

o The general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity…(SRTMA)

a. The activity giving rise to the incident in this suit should be characterized as repair or maintenance work on a navigable waterway performed from a vessel. Characterized as such, there is no question that the activity is substantially related to traditional maritime activity, for barges and similar vessels have traditionally been engaged in repair work similar to what Great Lakes contracted to perform here.

b. The substantial relationship test is satisfied when at least one alleged tortfeasor was engaging in activity substantially related to traditional maritime activity and such activity is claimed to have been a proximate cause of the incident.

Even if we were to identify the activity giving rise to the incident as including the acts of the city as well as Great Lakes, admiralty jurisdiction would still attach

iv. Although the line of cases does not show that every tort involving a vessel on navigable waters falls within the scope of admiralty jurisdiction no matter what, they do show that ordinarily that will be so.

v. The City and Grubart want to adopt a multifactor test for admiralty jurisdiction (they say it has gotten so complex as it is, so why not) for the benefit of land-based parties to a tort action (the multi-factor test would help rule out admiralty jurisdiction thereby precluding the limitation of liability)

If the Sisson tests are satisfied, it is not apparent why the need for admiralty jurisdiction in aid of maritime commerce somehow becomes less acute merely because land-based parties happen to be involved. Certainly Congress, in enacting the Admiralty Extension Act, did not think a land-based party necessarily diluted the need for admiralty jurisdiction or it would have kept its hands off the primitive locality test.

vi. The City claims that since it is a potential tortfeasor too, the SC should look at its actions, which are clearly NOT maritime. Court says NO

vii. O’Connor – Just because there is admiralty jurisdiction over Dredge does not mean that there is admiralty jurisdiction over Chicago

Supplemental jurisdiction could be (would have to be) usedviii. Thomas and Scalia concurring

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7 They would return to the simple locality test (L or AEA), which is a clearer bright-line rule that is easily applicable to

other fact patterns (there is no reason to follow Sisson and treat it as stare decisis) This would be easy by simply overruling Sisson and holding that Executive Jet just applies to airlines Jurisdictional criteria should be easy and we should not be wasting time over complex jurisdictional mechanisms.

There is no need for all this Brusqueness when we are not actually getting any additional screening via SRTMC or PDMAo Almost everything is getting through anyway because once you get to the “Intermediate Level of Generality,”

these tests have no bite and no longer function as filters 3. NOTES

i. The locality rule is satisfied when conduct on land causes injury on navigable waters. If smoke from a mill obstructs navigation so as to cause a collision on a navigable river, the tort claim against the mill is maritime.

ii. One may be tempted to read Grubart as suggesting that the concept of proximate cause helps to define the types of cases that can be brought within the Admiralty Extension Act. The term “caused by a vessel” in the Act refers to factual causation rather than legal causation (legal causation is a poor tool for determining jurisdiction in a case).

B. Taghadomi v. United States (2005)1. Facts: A US citizen and his wife, a citizen of Iran, rented a kayak on their honeymoon in Maui. Harsh winds and waves caused the

Iranian to be thrown overboard and eaten by sharks. The US citizen was washed up on an island and stranded for 3 days before he was rescued. A person saw this through his binoculars and contacted the Coast Guard who conducted a brief search before nightfall when it was called off. The US citizen PL filed suit against the Kayak renting company and the US. The PLs seek damages from the US for wrongful death and emotional distress. They allege that the Coast Guard was negligent in the rescue operation and in failing to contact local authorities that may have ha better equipment. The district court granted the DF (United States) motion for summary judgment, holding that the PL’s claims are not cognizable.

2. Ninth Circuiti. The issue is whether the PLs can maintain a suit under the Federal Torts Claim Act (FTCA) (that statute does not apply to any

claim for which a remedy is provided by two maritime Acts relevant to this case - Vessels Act and Suits in Admiralty Act). PLs want the FTCA and therefore do not want the court to find admiralty jurisdiction

ii. The first question is whether the claims fall within admiralty jurisdiction since the two statutes are only relevant to maritime claims. The PLs argue that the failure-to-communicate claim is not maritime and therefore not within the scope of the SAA or PVA (and is therefore the proper subject of action under the FTCA). However, the situs of a tort for the purpose of determining admiralty jurisdiction is the place where the injury occurs. Therefore, sine the injuries occurred at sea, the locality requirement is satisfied.

Nexus Requirement from Grubart:o A court must first assess the general features of they type of incident involved to determine whether the

incident has a potentially disruptive impact on maritime commerce.a. Grubart hold that this should be described at an intermediate level of generality . The relevant

activity is defined not by the particular circumstance of the incident, but by the general conduct from which the incident arose.

b. This case clearly meets this requirement since the efficacy of a search and rescue operation has a direct effect on the health and lives of seamen (regardless of the fact that kayakers were involved in this case).

o A court must determine whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity.

a. Grubart holds that we only need to look at whether one of the arguably proximate causes of the incident originated in the maritime activity of a tortfeasor. As long as one of the putative tortfeasors was engaged in traditional maritime activity, the allegedly wrongful act will “involve” such traditional maritime activity and will meet the second prong of the nexus test.

b. Here, the activity at issue can be the behavior of the Coast Guard that is arguably a proximate cause of the injury. The search-and-rescue operation does bear a significant relationship to traditional maritime activities for purposes of admiralty jurisdiction.

Grubart Noted that virtually every activity involving a vessel on navigable waters would be traditional maritime activity sufficient to invoke maritime jurisdiction.

iii. The locality test and both prongs of the nexus test are satisfied in this case and the claims therefore do fall within admiralty. Since the PVA and SAA provide remedies for the types of torts raised, the PLs claims are not cognizable under the FTCA.

3. NOTES:i. Determinations:

Most courts have held that product liability claims by shipyard workers against manufacturers of asbestos are non-maritime.

Claims relating to seaman’s injuries will usually pass the nexus test. Suits by Passengers have been held to be maritime even when there has been nothing uniquely maritime about the

type of injury.

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C. Tagliere v. Harrah’s Illinois Corp. (2006)1. Facts: PL was injured on a riverboat casino that was stationary. He fell off his tool and sued in admiralty, but the district court

dismissed. The SOL on personal injury suits is to years so if the ruling stands, the PL will be barred (the SOL applicable in admiralty tort suits is 3 year so the PL would not e barred if the suit were deemed to be in admiralty).

2. 7th Circuit (Posner)i. “Vessel” has been interpreted to include vessel’s fixtures, furniture and other appetencies so the stool was an injury caused

by a vessel in this case. The vessel was on navigable waters. Although the SC has ruled that a boat that has been permanently moored or otherwise rendered practically incapable of transportation or movement is not a vessel for purposes of admiralty jurisdiction (Dutra), there was no showing that the boat in this case is permanently moored (disabled from sailing) in the Court’s sense (and therefore equal to landfill). This was concluded despite the fact that it has been stationary for the past 2 years.

ii. As unusual as Grubart was, it involved an appurtenance (the crane) of a boat (barge) afloat on navigable waters and an accident caused by the handling of appurtenance. It is very similar to this case.

iii. The case can be heard under admiralty jurisdiction and the DF can argue, on remand, that the vessel is, in reality, permanently moored and therefore not actually a vessel.

iv. Why do we not need to do the Nexus Test?3. NOTES:

i. Courts have held that an injury is “caused by a vessel” when injury results from a seaman’s wrongful act committed on board the vessel. One case involved a booze cruise where a passenger was served too many drinks and injured another passenger after disembarking.

ii. Posner signs off on the notion that the AEA may be an independent basis for admiralty jurisdiction.

E. Admiralty Jurisdiction in Contract CasesA. Generally Most cases in the 19th C. show that the Court was concerned with: (a) Assessing and rejecting English limitations and (b)

Trying to articulate a general test or formula for determining which Ks are maritime enough to be cognizable in admiralty. 1. In Insurance v. Dunham, the SC held that admiralty jurisdiction extends over marine insurance policies. The K of insurance, and

the rights of parties arising therefrom, are effected by and mixed up with all the questions that can arise in maritime commerce – jettison, abandonment, average, salvage, capture, prize, botomry, etc. (court agrees with Story in DeLovio)i. Whether a K is maritime or not depends not on the place where the K was made, but on the subject matter of the K (if the K is

maritime in nature, the K is within admiralty jurisdiction). Congress set up a federal district court system to have tribunals well-versed in maritime disputes – You cannot get into insurance questions without dealing with historical maritime issues.

B. North Pacific Steamship Co. v. Hall Brothers Marine Railway & Shipbuilding1. Facts: Shipbuilding Company filed a claim against Steamship Company to recover money due for work in repairing their

steamship. The suit had to be brought under admiralty because the businesses were both CA corporations so there was no diversity jurisdiction and there was no federal question jurisdiction). The court ruled for the Shipbuilding Company and the Steamship Company filed a motion to vacate the ruling and dismiss the case for a lack of jurisdiction. The motion was denied. The DF contends that that the K was for the use of the facilities and labor of the PL and was in no way for a maritime service.

2. Supreme Courti. In matters of K, the jurisdiction of admiralty depends on the subject-matter and the nature and character of the K (the English

rule, which conceded jurisdiction with few exceptions only to Ks made and to be executed upon the navigable waters, is inadmissible). The true criteria is the nature of the K and whether it makes reference to maritime service or maritime Ks.

ii. It is settled that a K for building a ship or supplying materials for its construction is not a maritime K. The true difference between the construction and repair of a ship for purposes of admiralty jurisdiction is to be found in the fact that the structure does not become a ship, in the legal sense, until it is completed and launched.

When a ship is being repaired, admiralty jurisdiction extends REGARDLESS of whether the ship is in dry dock or has been hauled up upon the land.

3. NOTES: i. Contracts to sell and build vessels are not maritime

ii. Predecessor cases said that repairs to a ship in dry-dock are maritime, but that repairs on a marine railway are not. This case demonstrates that it has moved away from such a narrow locality test and that repairs can be maritime regardless of where they take place.

iii. The court very quickly rejects the notion that only in Rem actions are maritime. The PL can proceed in Personem in maritime as well.

iv. This is not a mixed K, it is just a repair K (if the K has something to do with the business of using a ship, it is maritime).

C. Kossick v. United Fruit Co. (1961)1. Facts: PL suffered a thyroid ailment while employed on a vessel belonging to the DF and it was the DF’s duty to provide

maintenance and cure (even though they did not cause the injury). The DF wanted the PL treated at a US Public Health Service Hospital, but the PL wanted to be treated by a private physician who charged $350 (PL insisted this should be paid by the DF). DF

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9did not agree, but said that if PL went to the public hospital, it would assume responsibility for all consequences of improper or inadequate treatment. PL abided by this and went to the public hospital in NY. PL alleges that by reason of improper treatment, he suffered terrible bodily harm due to his treatment at the public hospital and says that he is owed 250K by the DF. The District Court (case is brought in diversity) dismissed the complaint based on the fact that the agreement sued on was void under the NY Statute of Frauds (since there was no writing). The Court of Appeals affirmed. i. If the state law controls, the K was clearly invalid. However, if maritime law controls, the contract is clearly valid even though

it was not reduced to writing. It is a rule of ancient respectability that oral Ks are generally regarded as valid by maritime law. PL wants general admiralty law and a jury trial (he wants to blend favorable features of the 2 systems)

2. Supreme Courti. The duty to provide maintenance and cure is not simply an obligation to provide for entrance to a public hospital.

ii. The K alleged here should be regarded as an agreement on the part of the PL to forego a course of treatment that might have incurred additional expenses to the DF in exchange for DF’s promise to make PL whole for any consequences from using the cheaper alternative. The consideration for the DF’s promise was the PL’s good faith forbearance to press what he considered (maybe erroneously) to be the full extent of his maritime right to maintenance and cure.

iii. The alleged agreement was sufficiently related to peculiarly maritime concerns as not to put it beyond the jurisdiction of admiralty.

State law will not be applied so the K will not be barred by the statute of frauds.iv. The DF’s promise to cover the costs of any complications that might arise from treatment in the public hospital is a “fringe”

benefit to a shipowner’s duty in maritime law to provide maintenance and cure. Because the promise was in furtherance of a peculiarly maritime concern, it folds into federal maritime law. It does not matter that the site of the inadequate treatment (which gave rise to K dispute) was in a hospital on land.

3. NOTES:i. Preliminary Contracts Until recently, it was generally thought that certain Ks leading up to a maritime K were not maritime.

Under this view, for example, although a marine insurance policy is maritime, a contract to procure such a policy is not. Similarly, a Charterparty is maritime, but a K to procure a person to make one is not. [The rule that agency Ks and preliminary service Ks are not maritime was rejected by case law].

ii. Mixed Contracts Courts have long declared that a K is not within the maritime jurisdiction unless it is “wholly maritime.” Therefore a K to perform some maritime and some non-maritime services would traditionally have been considered a “mixed contract” that is not subject to admiralty jurisdiction.

Two Exceptions:o (1) When the maritime and non-maritime elements are “separable,” an admiralty court can exercise jurisdiction

over the maritime portion.o (2) If the non-maritime element of the K is “incidental,” the court can exercise admiralty jurisdiction over the

entire claim. Until recently, the lower courts uniformly denied admiralty jurisdiction when a K of carriage included a land transport

segment that was more than “incidental”…

D. Norfolk Southern Railway Co. v. James Kirby, Pty Ltd. (2004)1. Facts: Kirby hired ICC to arrange for delivery by through (end to end) transportation. ICC is a freight forwarding company, which

arranges for, coordinates and facilitates cargo transportation, but does not transport cargo itself. The shipment was to go from Australia to inland Alabama. In the Bill of Lading, Kirby accepted a contractual liability limitation of ICC below the machinery’s true value, resulting in lower shipping rates. ICC then hired Hamburg to transport the containers across the ocean. The Bill of Lading issued by Hamburg contained a clause extending the liability limitation to damages on land as well as sea. Hamburg then hired Norfolk RR to transport the goods from the coast to Alabama. The train derailed causing extensive damage and the delivery failed. Kirby sued Norfolk in US district court asserting diversity jurisdiction and alleging tort and K claims. In its answer, Norfolk argued that Kirby’s recovery could not exceed the amounts set forth in the liability limitation in the Bills of Lading. The court granted Norfolk’s motion for partial summary judgment ($500/container) and a divided panel of the 11th Circuit reversed. Circuit claimed that Norfolk could not claim protection under he Himalaya Clause of the first K (the ICC bill). It construed the language of the clause to exclude parties like Norfolk that had not been in privity with ICC. The court held that Kirby could be bound by the Hamburg bill’s liability limitation only if ICC was acting as Kirby’s agent when it received the Hamburg bill (which the court concluded it had not).

2. Supreme Courti. This suit could also have been maintained under admiralty jurisdiction by virtue of the maritime Ks involved, but it is brought

via diversity. The ICC and Hamburg bills are maritime Ks because their primary objective is to accomplish the transportation of goods by sea from Australia to the Eastern coast of the US. It is true that the two bills call for some performance on land (the final leg by RR), but under a conceptual rather than a spatial (tort) approach, this does not alter the essentially maritime nature of the Ks. Is the K, looked at as a whole, one of a maritime flavor and/or salty smell.

The Journey by RR was a “fringe” portion of the intercontinental journey promised in the ICC and Hamburg bills.ii. The fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce. Maritime commerce

has evolved along with the nature of transportation and is often inseparable from some land-based obligations. Containers make it easier from cargo to move from one mode of transport to another.

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10iii. Ks reflect the new technology and therefore “through” bills of lading (in which cargo owners can contract for transportation

across oceans and to inland destinations in a single transaction) have become popular. The popularity of that efficient choice – to assimilate land legs into international ocean bills of lading – should not render bills for ocean carriage nonmaritime Ks.

iv. Conceptually, so long as a Bill of Lading requires substantial carriage of goods by sea, its purpose is to effectuate maritime commerce and it is therefore a maritime K. Its character as a maritime K is not defeated simply because it also provides for some land carriage. Geography, then, is useful in a conceptual inquiry only in a limited sense: If a bill’s sea components are insubstantial, then the bill is not a maritime K.

F. The Exclusive Jurisdiction of the Federal Admiralty Courts and the Concurrent Jurisdiction of “Common Law Courts”1. Generally The accepted view is that no category of federal jurisdiction is exclusive unless Congress chooses to make it so, either

expressly or by implication. The Congressional grant of general “admiralty or maritime” jurisdiction to the federal district courts is facially ambiguous as to the exclusivity of that jurisdiction. But in specific subcategories of admiralty, Congress has spoken clearly and made the jurisdiction of the federal admiralty court exclusive. a) Exclusive to a Federal Admiralty Court A shipowners petition for limitation of liability under the Limitation of Liability Act; An

action to foreclose a preferred ship mortgage; Suits against the US under the Suits in Admiralty Act and under the Public Vessels Act; All In Rem Actions (including in Rem salvage litigation)

b) Section 9 of the Judiciary Act of 1789 “The federal district courts shall have exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction saving to suitors, in all cases, the right to a common law remedy where the common law is competent to give it.”i. The original grant of admiralty and maritime jurisdiction to federal courts by Congress

ii. The initial clause provides for exclusive federal court jurisdiction over all admiralty cases. The second clause, however, imports an immediate contradiction by contemplating concurrent common law jurisdiction in some undefined set of admiralty cases (“the savings clause”).

c) A 1948 reenactment of the statute took out the “common-law” phrase, but it as retained its exact same meaning. It also changed “admiralty and maritime” to “admiralty or maritime.”

d) What is exclusive and what is saved?i. General Answer The action in rem against the vessel or cargo is exclusive and everything else (all in personem litigation,

subject to the statutory exceptions above) is cognizable in non-admiralty courts at the option of the suitor/plaintiff. If what the PL is seeking is a common law remedy, then that case can be brought in any court that the PL has a

jurisdictional ticket to (i.e. through diversity).e) IMPORTANT State courts in admiralty cases must do what an admiralty judge would do and should not have to look at the

version of federal maritime law that its Circuit Court or fellow state courts would applyi. REVERSE ERIE…Promotes forum shopping

2. The Moses Taylor (1866)a) Facts: PL was transported by the owner of a ship to San Francisco for $100. When the guy arrived there he sued the steamship

(in state court), alleging breach of K, for $200. He alleged the breach of the K of passage was a result of unwholesome food, unhealthful crowding and insufficient air as a result of an excessively large number of people aboard. The proceeding was authorized by a CA law providing that a passenger harmed by a breach of passage K had a lien against the vessel for the damages resulting from the breach (PL wanted the court to arrest the ship, sell it to the highest bidder and give him the proceeds because the owner owes him money). The statute specifically authorized that the lien could be enforced by an action brought directly against the vessel, designating the vessel as the DF. The law further provided that the vessel would be seized as security for the satisfaction of any judgment that may be rendered (if the owner did not post a bond to secure the release of the vessel, it would be sold by the sheriff and the proceeds used to satisfy any judgment for the PL). i. The DF claimed that the court had no jurisdiction because the action was against the vessel and the admiralty courts therefore

have exclusive jurisdiction. The justice of the peace found for the PL and the appeals court affirmed. The case could not go to the State SC because the amount in judgment was too little so it went to the Federal SC by writ of error.

b) Supreme Courti. The case is clearly within the admiralty and maritime jurisdiction of the Federal Courts. The K for the transport of the PL was a

maritime K. It related exclusively to services to be performed on the high seas and pertained solely to the business of commerce and navigation. There is no difference between a K of this character and a K for the transport of merchandise.

ii. The action against the steamer by name is a proceeding in the nature and with the incidents of an in rem suit in admiralty. The distinguishing and characteristic feature of that suit is that the vessel is itself seized and impleaded as the DF. By the common law process property is reached only through a personal DF and then, only to the extent of HIS title (in that case, the title acquired by a PL can never be greater than that possessed by the individual DF personally – it is his title, and not the property itself, which is sold).

iii. The case is not within the saving clause since a proceeding in rem is not a remedy afforded by the common law courts and therefore cannot be saved to suitors.

c) NOTES

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11i. A purchaser in a common law judicial sale acquires only the judgment debtor’s interest or title in the thing sold and the

property acquired is therefore subject to existing liens and encumbrances.ii. A maritime lien can only exist upon movable things in navigation, or upon things which are the subjects of commerce o the

high seas or navigable waters.

3. Rounds v. Cloverport Foundry & Machine Co. (1915)a) Facts: PL brought suit in state circuit court to recover money from a K to repair a steamship belonging to the DF owners. An

attachment was issued, which provided a lien upon watercraft for work and supplies and the DFs procured a release of the boat by executing a bond. The DFs claimed that the court had no jurisdiction and the court eventually found for the PLs. it was determined that, by virtue of the attachment, the PL had a lien on the vessel for the payment of the judgment and the vessel was ordered to be sold and the proceeds applied to the debt. The state court of appeals affirmed.

b) Supreme Courti. This suit was in personem and the attachment was a part of that suit. It had no other effect than to provide security for the

payment of the personal judgment which was recovered and the vessel was ordered to be sold by the terms of that judgment. It was within the scope of the common law remedy to sell the property of he DFs to pay their debt. There is no encroachment upon the exclusive jurisdiction vested in the Federal court in admiralty.

The suit was in personem, not in rem. The attachment and direction for sale were incidental to the suit against the owners and for the purpose of securing satisfaction of the personal judgment. The proceeding was therefore within the scope of the common law remedy saved to suitors by the judiciary act.

ii. In an action in personam, the state court has jurisdiction to issue an auxiliary attachment against the vessel (whether or not the K is deemed to be of a maritime nature, it cannot be said that the state transcended its authority because the suit is in personam). The proceeding in rem, in the exclusive jurisdiction of admiralty, is against the vessel itself as the debtor and offender, in which the vessel is seized and impleaded as the DF and is judged and sentenced accordingly. Since the court has complete dominion over the thing, ALL persons interested in it are deemed to be parties to the suit (the decree binds all the world and the property itself passes to the PL, not merely the title or interest of one personal DF).

Note: If a suit is made in personem and the ship is then attached as a result of the statutes applied in that suit, the stat court has authority regardless of whether the K was maritime in nature.

4. Thorsteinsson v. M/V Drangur (1990a) Facts: PLs brought a suit in rem asserting various maritime liens against their vessel after it had been bought by a bank at a

judicial sale in Iceland. The District Court found that the judicial sale had extinguished all prior liens against the ship and entered summary judgment for the DF. PLs asserted claims against the vessel for unpaid wages, reimbursement of personal expenditures made on behalf of the vessel, and maintenance and cure. The vessel was seized to preserve the PLs interest in the vessel. The Bank defended the vessel with three affirmative defenses: (1) It had purchased the vessel in a judicial sale in Iceland free of all liens, thereby barring the PLs claims, (2) The fact that the PLs knew of the judicial sale bares their claim now since they were obligated to have filed their liens in the Icelandic litigation and (3) The law of Iceland governs this case.i. District Court Rejected PL’s contention that US courts should not recognize the judgment of the Icelandic court because its

admiralty procedures lacked sufficient notice to fulfill the due process required for American courts to give full effect to foreign decrees.

b) Eleventh Circuiti. The whole world, it is said are parties in an admiralty cause and therefore the whole world is bound by its decision. Every

person may make himself a party to the suit and appeal the sentence, but notice of the controversy is necessary in order to become a party. It is a principle of universal obligation that before the rights of an individual are bound by a judicial sentence, he shall have notice, either actual or implied, of the proceedings against him. When these proceedings are against a person, notice is served personally or by publication. When the proceedings are in rem, notice is served upon the thing itself This serves as notice to all people who have any interest in the thing (The Mary)

No foreign judgment regarding admiralty and maritime issues has been given effect by American court absent arrest in rem of the vessel.

The Bank, therefore, did not and could not have established as a matter of law that the mere existence of the Icelandic judgment bars PL’s claims before the district court.

ii. It is possible that actual notice of the Icelandic proceedings in time to meaningfully participate and assert their rights against the ship may have been a valid substitute for the seizure of the vessel. US courts may recognize this as constitutionally sufficient notice and treat the Icelandic judgment as barring the PL’s claim.

Note: This system is conducive to helping a ship secure credit

5. Madruga v. Superior Court (1954)a) Facts: PLs were 8 individuals who owned an undivided 85% interest in a ship ad the DF owned a 15% interest. The case was for

the sale of a vessel and the partition of the proceeds. DF challenged the jurisdiction claiming the case could only be heard in admiralty. The state court decided that it did have jurisdiction and its decision was upheld by the CA state Supreme Court.

b) Supreme Courti. The power of admiralty is broad enough for US district courts to order vessels sold for partition.

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12ii. Admiralty’s jurisdiction is exclusive only as to those maritime causes of action begun and carried on as proceedings in rem

where the vessel or thing itself is treated as the offender and made the DF by name or description in order to enforce a lien. This is the kind of in rem proceeding that state courts cannot entertain. However, the Act of 1789 does leave state courts competent to adjudicate maritime causes of action in proceedings in personam, where the defendant is a person and not a ship.

iii. The proceedings in this case were not in rem in the admiralty sense. The PLs quarrel was with the co-owner, not with the ship. The state court therefore acts only upon the interests of the parties to the suit, not upon the interests of others in the world at large, as it would were this a proceeding in rem to enforce a lien. The CA court is competent to give the partition remedy and it therefore has jurisdiction over the cause of action.

iv. Dissent There was no claim to enforce a personal right against the DF and the jurisdiction of the state court was invoked

exclusively for the sale of the vessel. If this is not an in rem action, then what the hell is? There is no suggestion whatsoever that we are dealing with a remedy to enforce a separate underlying personal claim

Here, the ship IS the thing. There is not a claim outside the ship for which an ancillary remedy against the ship is sought.

The CA Supreme Court was not sure that the remedy of selling and partitioning a ship was a remedy that the common law was competent to give, but it held that given the broadening of the “savings clause” in 1948, CA courts do now have such jurisdiction (SC affirms). o The 1948 change was not meant to broaden the meaning of the savings clause. This case has all the essential

features of an admiralty proceeding in Rem since the only thing being argued about is the ownership interest in the ship (is it really to be doubted that if the case went by the name of the ship – i.e. “In re: X” – it would not be considered admiralty?)

a. Majority says, it is only in Rem if the vessel is sold free and clear of any other parties’ interest, which is not the case here (this is in Personem).

Frankfurter gets this WRONG

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13G. The Distinctiveness of the Federal Admiralty Court and Some Fundamental Features of its Procedu

1. The Two Sides of the Federal Courta) Initially Federal District Courts had three separate compartments characterized by their own distinctive procedural

systems:i. Law

ii. Equityiii. Admiralty

NOTE: Under the 1789 Judiciary Act, District Courts were given the admiralty grant and Circuit Courts were given the diversity grant (arising under jurisdiction was not yet conferred)

b) Federal Rules of Civil Procedure (1938) Merged law and equity; Federal district courts now have two compartments:i. The Law Side (an equity)

Subject Matter Jurisdiction derives from:o Article III, § 2 – “Arising Under” grant

a. Implemented by the Federal Question Statute (28 U.S.C. §1331)o Article III, § 2 – “Controversies between citizens” grant

a. Implemented by the Diversity of Citizenship Statute (28 U.S.C. §1332)ii. The Admiralty Side

Subject Matter Jurisdiction Derives from: o Article III, § 2 – Admiralty and Maritime grant

a. Implemented by 28 U.S.C. §1333

c) Romero v. International Terminal Operating Co. (1959)i. Facts: Spanish seaman was injured aboard a Spanish boat owned by a Spanish company (his employer) while it was at

port in Hoboken. He filed suit on the law side (with a jury) in the District Court for the Southern District of NY. The complaint was against four corporate DFs, but the SC only cares about the one against the Spanish employer/shipowner

Three Claims: 1) Claim for damages based on a shipowners liability for the unseaworthiness of its vessel [under general federal maritime law], 2) Claim for maintenance (room and board) and cure (medical care) [under general federal maritime law], and 3) Claim for damages based on the employer’s liability for negligence under the Jones Act [statute – intended to allow sailors with injuries to recover money to help cover the costs of medical care and health recovery]

Jurisdiction Complaint asserted that the district court had jurisdiction under 1331 (by the terms of the Jones Act, an action invoking its remedy is maintainable as a civil action at law, with the right of trial by jury).o The Jones Act claim therefore has falls under 1331’s grant of jurisdiction (arising under the laws of the US),

but the other two claims have no similar statutory basis Procedural History District Court dismisses complaint; Action under the Jones Act must be dismissed for lack

for jurisdiction because the Act provided no right of action for an alien seaman against a foreign shipowner; General federal maritime law actions are dismissed since the parties are not diverse and 1331 does not confer jurisdiction on Federal Law Courts over claims rooted in nonstatutory federal maritime law; Court of Appeals affirms and SC grants certiorari.

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14ii. Issue: Are actions arising under the general (nonstatutory) federal maritime law “actions arising under the Constitution,

laws, or treaties of the US” within the meaning of 1331? The statutory Jones Act Claim plainly lies under 1331 (law side), so the question is whether the non-statutory

general maritime claims also lie thereiii. Supreme Court (Frankfurter)

No: Actions arising under the general federal maritime law are not considered “arising under” actions as per 1331o A district judge in this case has jurisdiction (to rule on the merits) IF there is a properly plead claim under

the Jones Acta. Rejection of a newly proposed reading of 1331 does not preclude consideration of the non-

statutory general maritime law claims (even though they cannot be justified under 1331) The district court may have jurisdiction over them pendent to its jurisdiction under the Jones Act

o Concluded that all claims were within the district court’s subject matter jurisdiction but held that none had substantive merit

a. Controlling choice-of-law principles compelled the conclusion that non of the US law remedies sought were available a Spanish seaman and his Spanish employer

Three Principleso Language and Construction : The Judiciary Act of 1789 (Section 9) granted the district courts maritime

jurisdiction and recognized that some remedies in maritime could be administered by the common-law courts of the states (this is preserved by the “savings to suitors” clause). Common law remedies for maritime causes could also be enforced by federal courts when diversity jurisdiction existed.

a. The Judiciary Act of 1875 Enlarged the jurisdictional power of the lower federal courts by taking the “arising under” language from Article III, § 2, Clause 1 – 1st Provision of the Constitution (the enlarged power, however, cannot be understood to have affected the admiralty and maritime jurisdiction of the federal courts provided by the 1789 Act which derives its words from the same source: Article III, § 2, Clause 1 – 3rd Provision)

b. Admiralty jurisdiction was complete by 1875 so that when congress enacted the “arising under” statute, they were not in fact contemplating general federal maritime law cases (the only thing it dealt with were all the new statutes created since the civil war)

c. Article III, § 2 does not use Redundant language in its clauses (it would be inane to think the framers, mostly lawyers, were not careful)

o History and Reasona. The “arising under” provision of the Judiciary Act of 1875 was designed to give a new content

to the jurisdiction of the federal courts, but not to affect the method by which federal courts have dealt with admiralty (allowing cases based upon general federal maritime law to come within 1331 arising under jurisdiction would change the time-honored system of trying admiralty cases without a jury and there is no indication that this was desired or intended)

b. There was a far-reaching extension of national power resulting from the victory of the North and federal courts were used to vindicate this power during Reconstruction (led to the enlarged jurisdiction of the federal courts over federal rights and the aim of the 1875 Act was to provide a forum for the vindication of the new federally created rights) Nothing indicated that maritime is included in this

o Important Difficulties of Judicial Policy (has to do with the allocation of power between federal and state courts)

a. The historic option of a maritime suitor pursuing a common-law remedy to select his forum (state via the savings clause or federal) would be taken away through an expanded view of 1331: Savings clause actions would be freely removable through 1441 Juries would be freely available in federal court since people would be able to get their

cases in through “arising under” jurisdiction (they would no longer need diversity)b. This would change the traditionally exercised concurrent jurisdiction of the state courts in

admiralty matters (which it was the aim of the savings clause to preserve) States have played an important role in the development of maritime law and there has

been a significant effort to maintain this role At the end of the day, when there is a conflict between state law and federal law, you

will get federal substantive maritime law, but could also get state court procedures and decisions

We must preserve the role of the state courts to uphold the quasi-constitutional savings clause from the Judiciary Act of 1789

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15 “Romero Pendant Jurisdiction” (created by Frankfurter) is still used in a very limited number of cases involving

seamen’s personal injury suits under the Jones Act

1. Admiralty Procedure Before 1966d) The First Judiciary Act (1789)

i. District Courts were given original jurisdiction over several categories of cases including “all civil causes of admiralty and maritime jurisdiction”

Congress did not bestow the Constitutionally permissible “arising under” (federal question) jurisdiction on the lower federal courts until the Judiciary Act of 1875

e) The Process Act (1792)i. Gave the Supreme Court the authority to promulgate general rules of procedure for equity and admiralty when it deemed

it necessary (Note: The process act also gave the SC the authority to promulgate general rules of procedure governing the lower courts in their handling of common law cases, but the 1789 judiciary act required federal conformity to state procedure in common law cases which undermined this feature)

For Equity, the SC issued procedural rules in 1822, 1842 and 1912, but it did not exercise its authority to establish general rules of admiralty procedure until 1844o Until 1844, District Court judges looked to the admiralty practice in England for general guidance, but were

free to implement divergent views The 1844 Admiralty Rules were modified and added to via amendments here and there and in 1920, a new set of

rules were issuedf) Movement toward Unification of Federal-Court Procedure

i. People thought that although the federal regulation and periodic modification of admiralty and equity procedure worked reasonably well, common-law procedure was crippled by the required conformity t state law

ii. The Rules Enabling Act (1934) Restored the Supreme Court’s authority to make procedural rules for common-law cases (congress asserted its authority over creating federal rules of procedure and did so by taking the SC’s recommendations)

Enabled the SC to move toward procedural unification Act specifically authorized the unification of law and equity (but did NOT mention admiralty)

o Law and Equity were formally merged under the Federal Rules of Civil Procedure (1938)a. The admiralty bar resisted unification

Admiralty procedure was still governed by the 1920 rules and it became increasingly clear that full unification was the only sensible step (Chief Justice Taft)

iii. July 1st, 1966 The 1920 rules were rescinded (by an order of the SC) and amendments to the FRCP were promulgated designed to accommodate the inclusion of admiralty cases

Admiralty Procedure Since 1966 (Big Picture)g) FRCP Rule 9(h) Admiralty or Maritime Claim

i. (1) How Designated – If a claim for relief is within the admiralty or maritime jurisdiction and also within the court’s subject-matter jurisdiction on some other ground, the pleading may designate the claim as an admiralty or maritime claim…A claim cognizable only in the admiralty or maritime jurisdiction is an admiralty or maritime claim for those purposed, whether or not so designated

ii. (2) Designation for Appeal – A case that includes an admiralty or maritime claim within this subdivision (h) is an admiralty case

iii. NOTE: The pleader has the power to determine procedural consequences by the way in which he exercises the classic privilege given by the savings-to-suitors clause (in 1333)

One of these important procedural consequences is that in a civil action, either party may demand a jury trial, while in a suit in admiralty there is no right to a jury trial

h) Until ’66, if you had a case as the PL and you wanted it to be a 1333 admiralty case, you went to the admiralty side and filed it. Now that everything is merged, FRCP Rule 9(h) says that you can still make it an admiralty case by pleading it as 1333 and so designating it for the procedural purposes spelled out in 9(h) (chief of which it is a bench trial + the In Rem remedy)

i. Admiralty stayed substantively admiralty and procedurally admiralty (in its important respects), but the machinery was fixed so that the federal litigant could do everything it needed to within the same lawsuit

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2. The Right to a Jury Trial in Maritime Cases

a) In re Lockheed Martin Corp. (2007)i. Facts: Lockheed owned a ship that was damaged at sea and insured by National Casualty Company; In April of 2005, Lock

submitted a claim for damages and notified National that it intended to sue them unless they acknowledged that the policy had a 6-year SOL; In July of 2005, National preemptively filed a declaratory judgment action seeking a declaration that Lock’s claims were time-barred under the policy and National designated its action as a non-jury admiralty claims (later amended its complaint seeking, in the alternative, a declaration of Lock’s amount of loss); Lock filed an answer and asserted a counterclaim seeking payment for damage to the ship predicating its claim on the court’s diversity jurisdiction with the attached right to a jury trial

Procedural History District Court concluded that the policy established a six-year limitations period and the court therefore dismissed National’s first request for declaratory relief. District Court then concluded that Lock did not have the right to a jury trial (it therefore declined to dismiss National’s second request for declaratory relief). Lock filed a petition for a writ of mandamus arguing that the District Court’s ruling improperly deprived it of its right to a jury trial

ii. Circuit Court An admiralty plaintiff choosing to proceed at law, whether in state or federal court, has the right under the

savings-to-suitors clause to demand a jury trialo If an admiralty claim is tried “at law,” the claim nonetheless remains an admiralty claim, and substantive

admiralty law governs the disposition of the claim (just because the claim is still an admiralty claim does not mean that the seventh amendment is inapplicable – The fact that Lock’s claim is maritime in nature does not prevent it from containing a 7th A. right since it was brought in diversity)

Two good Arguments by Lock (court took the harder way out):o 1) Simpler One: This is a 7th Amendment case Lock’s counterclaim is a suit at common law regardless of

whether National has a 9(h) bench trial right. Lock is seeking damages and it is therefore a 7th A. case that must be tried to a jury (the only thing that makes sense is to try it first swallowing up anything left to be done in the declaratory action)

a. Allowing a PL’s 9(h) designation to preclude a jury trial on compulsory legal counter claims improperly elevates the traditional bench trial in admiralty to a right NOT to proceed before a jury; The Constitution does not give an admiralty PL the right to a jury trial AND it does not give him a right to a bench trial [“To permit the PL’s choice of a customary but not constitutionally required mode of trial to prevent a DF from taking advantage of his constitutionally guaranteed mode of trial is inconsistent with the SC’s admonition that the 7th A. right to a jury trial must be preserved wherever possible”]

o 2) Harder One: Beacon Theatres Argument A declaratory action lies in whatever sphere the underlying substance of the dispute rests in. In order to decide whether a declaratory action is tried to a jury, we must look at how the action would have proceeded without the declaratory judgment request (as if the DF in the declaratory action had won the proverbial race to the courthouse); Lock is seeking monetary damages at law under 1332 diversity jurisdiction with a jury trial

a. Without the declaratory judgment vehicle, Lock would have sued National for breach of the insurance policy, a claim over which admiralty and “law” courts have concurrent jurisdiction. As the PL, Lock would have been entitled under the savings-to suitors clause to designate its claim as a legal one as to which there is a 7th A. right to a jury trial

iii. Hybrid Procedures (post-1966): In this case, the court is confronting a new kind of post-1966 problem How to accommodate an admiralty-based and a related diversity-based claim in the same case (two separate procedures used and each party is invoking one of them)

The court came up with the only sensible answer: If you cannot accommodate the bench trial without accommodating the 7th A. right to a jury trial, the 7th A. right must be elevated

Prior to 1966, the court would have insisted that the two actions be brought completely separately o The main action in Admiralty would have been tried and the other action would have had to wait (the

diversity action would likely wither away via collateral estoppel)iv. Almost every time the court uses the terms “admiralty” and “maritime” it gets them backwards

The 7th A. is inapplicable to procedural “Admiralty” claims BUT this does not meant that a substantive “Maritime” claim based on another form of jurisdiction (saving-to-suitors) does not have a 7th A. guarantee (if there are maritime features of an action and it is not brought in admiralty, the claim should have 7th A. privileges)

b) Ghotra v. Bandila Shipping Inc. (1997)

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17i. Facts: A Captain (Ghotra), who was hired to coordinate and inspect the progress of a cleaning job aboard a ship, fell to his

death while working. His family brought a wrongful death and survival action against the owner of the vessel, Bandila, in personem and against the vessel, Gracious, in rem. The action against Bandila asserted diversity jurisdiction and demanded a jury while the action against The Gracious was necessarily based solely on the court’s admiralty jurisdiction (bench trial; they wanted to arrest the ship and hold it).

Procedural History: The District Judge granted Bandila’s motion to strike the Ghotras’ jury demand and subsequently conducted a three-day bench trial finding for the defendants (accepted a Fifth Circuit analysis)

Issue: Did the district judge commit constitutional and legal error by denying the Ghotras the right to a jury trial for claims brought under the court’s diversity jurisdiction?

ii. Ninth Circuit The Ghotras’ in personam maritime claim against Bandila was based upon an assertion of diversity jurisdiction

“at common law.” They are therefore entitled to a jury trial on those claims. Does the assertion of an in rem claim in the same complaint with the diversity claim serve to preclude the right

to a jury trial? NOo The Fifth Circuit has steadfastly restricted the use of a jury trial on claims brought under diversity

jurisdiction where combined with in rem admiralty claims (if you want in rem, go to admiralty and stop thinking about juries). The Ninth Circuit rejects this restrictive perspective The reasoning used by the 5th

Circuit unnecessarily constrains the flexibility created by the unification of the historically separate departments of law and admiralty by the FRCP (1966); Ninth Circuit does not care as much about tradition and believes the PL should be able to have it both ways

o Under the 7th A., the Ghotras were entitled to a jury trial on the claims brought under the court’s diversity jurisdiction…There is nothing inherently incongruous about bringing an in rem and in personem claim before the jury when the claims arise out of a single occurrence

iii. Case looks like someone “trying to have it both ways” (would be a ridiculous assertion to a traditional admiralty court)

3. Impleader Under Rule 14(c)a) General Rule of Impleader (applicable in admiralty and non-admiralty cases) FRCP 14(a) The DF can bring into the lawsuit a

nonparty who is or may be liable to the DF for all of part of the claim against itb) FRCP (14)(c)(1) The DF in an admiralty action may, as a third party PL, bring in a third party DF, who may be wholly or

partially liable (either to the PL or third party PL) for remedy over, contribution, or otherwise on account of the same transaction, occurrence or series of transactions or occurrences

c) FRCP 14(c)(2) The third party PL may demand judgment in the PL’s favor against the third-party DF. In that event, the third part DF must defend under Rule 12 against the PL’s claim as well as the third party PL’s (the action proceeds as if the PL had sued both the third party DF and the third party PL)

4. Personal Jurisdictiona) Basis for Jurisdiction

i. Two fundamental requirements (prongs) for Personal Jurisdiction to exist over the DF in Federal Court: 1) Must be federal legislative authorization for the exercise of jurisdiction over the DF 2) Must be enough of a relationship between the DF and the forum to justify the conclusion that the DF can be

“hailed into court” there without offending the constitutional guarantees of due process The Minimum Contacts Requirement (International Shoe - There must be constitutionally significant contacts by the DF with the territory of the forum; “DF must establish sufficient contacts or ties with the state of the forum to make it reasonable and just according to our traditional concept of fair play and substantial justice to permit the state to enforce the obligations which the DF has incurred there”)o International Shoe holds that the 5th and 14th Amendments place severe constraints on bringing foreign DFs

before courtsii. Legislative Authorizations for the exercise of federal court personal jurisdiction:

FRCP 4(k)(1)(A) Serving a summons or filing a waiver of service established personal jurisdiction over a DF who is subject to a court of general jurisdiction in the state where the district court is locatedo PLUS 14th A. Minimum Contacts Prong (with state)

FRCP 4(k)(1)(B) Authorizes personal jurisdiction over an impleaded or compulsorily joined DF who is served within a judicial district of the US and not more than 100 miles from where the summons was issued

FRCP 4(k)(2) Authorizes personal jurisdiction over foreign defendants sued under federal law who have significant nationwide contacts while at the same time not being subject to jurisdiction in any state’s courts of general jurisdictiono PLUS 5th A. Minimum Contacts Prong (with nation)

FRCP Rule B Maritime Attachment FRCP Rule C Actions in Rem

iii. Two kinds of Personal Jurisdiction:

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18 Specific Personal Jurisdiction PL is asserting that the DF’s contacts with the forum are specifically related to

the case (establishing personal jurisdiction is easy) General Personal Jurisdiction The forum is not involved with the merits of the lawsuit and this is therefore

more difficult to obtain

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19a) In re Rationis Enterprises of Panama (2001)

iv. Facts: M/V MSC Carla broke in held on its way to the US from France; Half of the ship and its cargo (shipping containers) sank; HMD, a Korean Shipyard was responsible for elongating the ship by installing a mid-body insert where the ship split; The Ship’s owner filed a petition under the Limitation of Shipowner’s Liability Act in the Southern District of NY (provides an Admiralty procedure for a single federal court to determine all relevant issues related to liability; limits the shipowner’s liability to the salvage value of the vessel plus the value of the freight if he is not exonerated); HMD was brought into the action when the cargo claimants in the limitation proceeding put the shipyard on notice that they were going to hold it jointly and severally liable; HMD responded by seeking a declaratory judgment of non-liability from a Korean court (HMD served only 3 of the 1K cargo claimants in that action – these are the three that are responding to the appeal here); When the cargo claimants began to serve third-party complaints on HMD, the three Cargo complainants sued by HMD in Korea moved in the Southern District to enjoin HMD’s action against them

Procedural History: District Court granted the injunction and found no merit to the claim that the court lacked personal jurisdiction over HMD:o HMD has a sales office in NJ and a NYC telephone listing in the White Pages; HMD has not moved to

dismiss for lack of personal jurisdiction and HMC has availed itself to the US at largeo Personal Jurisdiction has been established because HMD has sufficient contacts to the “bulge area” [FRCP

4(k)(1)(B)] The Circuit courts have uniformly concluded that if a party delineated in 4(k)(1)(B) has minimum contacts with the bulge area, the district court in the forum state gains personal jurisdiction over him through Service of Process pursuant to Rule 4

v. Second Circuit Forfeiture of Objections to the Exercise of Personal Jurisdiction

o Cargo claimants contend that HMD has forfeited its lack of personal jurisdiction defense arguing that HMD missed the deadline imposed by a magistrate judge’s scheduling order for filing motions to dismiss The scheduling order is ambiguous (on remand, the District Court should determine whether HMD missed the deadline and whether it forfeited its defense by participating in the litigation)

The Need for an Evidentiary Hearingo HMD argued that the District Court erred by issuing the injunction without first holding an evidentiary

hearing on jurisdiction; HMD contends that the telephone listing does not belong to it and disputes that its contacts in NJ suffice to establish the court’s jurisdiction; While a local office may constitute a “continuous and systematic” contact sufficient to allow a court to hold that a DF subjected itself to personal jurisdiction of the forum state, the presence of such an office is not dispositive

a. Should the district court, on remand, conclude that HMD did not forfeit its jurisdictional defense, an evidentiary hearing will be required on the merits of HMD’s defense (claim of no personal jurisdiction)

b. Although 1) Legislative Authorization exists, it is unclear that 2) Sufficient minimum contacts exist for personal jurisdiction

vi. The District Court ended up granting a huge judgment for the cargo claimants and the Second Circuit held that the lower court’s choice of law analysis was incorrect

Korean law should have been applied, where a contractor is no longer liable to anyone after 10 yearsvii. Cargo claimants could have tried to use Rule 4(k)(1)(A)

The “ bulge area” language is added when discussing 4(k)(1)(B) because of situations like here, where a company is across the river in another state from the courthouse

4(k)(2) did not yet exist

b) Submersible Systems, Inc. v. Perforadora Central, S.A. De C.V.i. Facts: SSI contracted with Quantum to provide submersible vehicles for Quantum’s inspection of pipelines in Mexico;

Quantum also contracted with Central to transport SSI’s equipment and personnel to the site on their ship; Quantum was late in its payments to both SSI and Central and Central ended its charter to Quantum; SSI’s equipment was seized by Central to force Quantum to pay Central what was owed for the use of its vessel (they thought the equipment was Quantum’s); The equipment sat in Central’s shipyard and was ultimately destroyed by the elements; While attempting to get Central to return its property, SSI discovered that Central was building a marine drilling rig in Mississippi;

Procedural History: SSI filed suit in district court in Mississippi for the conversion of its equipment by Central invoking both the court’s admiralty and diversity jurisdiction; SSI wanted the attachment of the rig, pursuant to Rule B [Rule B(1)(a) – If a DF is NOT found within the district when a verified complaint asking for attachment AND the affidavit required by Rule B(1)(b) are filed, the complaint may ask for attachment of the DF’s property up to the amount sued for in the hands of the garnishees named]o Central responded by moving to dismiss for lack of personal jurisdiction arguing that it had insufficient

contacts with MS to subject it to suit there; It argued against attachment pursuant to Rule B by arguing that the district court had no admiralty jurisdiction, or in the alternative, that it could not be found in that district so attachment would be improper

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20o District Court The nature of Central’s contacts with MS made it subject to suit there and admiralty

jurisdiction exists; However, attachment under Rule B was denied because 1) Central was subject to personal jurisdiction in the district so it could also “be found” within that district and 2) SSI did not file the affidavit required by Rule B

a. The District Court awarded a large sum of money to SSI after a Bench Trial and Central’s appeal challenges the court’s decision on many grounds, one of which is personal jurisdiction

ii. Fifth Circuit FRCP 4(k)(1)(A) For this to work, jurisdiction must 1) Be proper under the state’s long-arm statutes and 2) Be

proper under the due process clause of the 14th A.o Here, Central is not subject to the personal jurisdiction of the MS courts under the terms of MS’s long-arm

statuteso Jurisdiction over Central would also not comport with the due process clause of the 14th A. – Central’s

contacts with MS are wholly unrelated to SSI’s claim that Central converted SSI’s equipment in Mexicoa. When a PL’s claim does not arise out of a DF’s contacts with the forum, the DF’s contacts with

the forum must be “continuous and systematic” to satisfy the requirements of due process (General Personal Jurisdiction)

FRCP 4(k)(2) For a claim that arises under federal law, serving a summons or filing a waiver of service established personal jurisdiction over a DF if 1) The DF is not subject to jurisdiction in any state’s court of general jurisdiction and 2) Exercising Jurisdiction is consistent with the US Constitution and lawso Central is not subject to jurisdiction in any state’s court of general jurisdictiono However, this case (as stated above), does not arise out of Central’s contacts with the US; Therefore, in

order for Central’s contact to be consistent with due process in the 5th A. of the US Constitution, they must be continuous and systematic; Just as they are not continuous and systematic with the forum, Central’s contacts are not continuous and systematic with the US as a whole

FRCP Rule Bo Requirement that a DF “is not found within the district” means two things: 1) The DF is not subject to the

jurisdiction of the district court AND 2) The DF is amenable to service of process within the districto District Court gave two grounds for denying Rule B attachment/personal jurisdiction: 1) Central CAN be

found within the southern district of MS because its contacts with MS made it subject to jurisdiction there and 2) SSI did not submit the affidavit required by Rule B stating that Central could not be found in the southern district of MS (assures that the PL has been diligent in searching for the DF)

a. Circuit Central’s contacts are not sufficient to subject it to jurisdiction in the district SO the lack of the required affidavit required by Rule B bars the attachment (the district court came to the correct conclusion, but the only mistake was SSI’s failure to file the necessary paperwork)

Circuit concludes that Central was NOT subject to the personal jurisdiction of the district court; The judgment was vacated and the case was remanded with instructions to dismiss for lack of jurisdiction

It is easier for an Admiralty action to obtain personal jurisdiction under Rule B IF it is done righto In Rationis and Submersible, any time a PL attempted to show continuous and systematic contacts, the

court made it very difficult (there was quite a bit of national contact in submersible)a. Porina v. Marward Shipping Co. – The owner of a cargo vessel that made regular voyages to US

ports (60 in the four years before the DF bought the ship and 16 in the eighteen months after) was not subject to personal jurisdiction because the vessel’s charterers decided where the ship would go and the owner merely reaped the profits

c) Aqua Stoli Shipping Ltd. V. Gardner Smith Pty Ltd.i. Facts: Aqua chartered its ship to Gardner Smith to carry cargo from Brazil to Pakistan; When the ship arrived, Smith

refused to load the cargo believing that the ship was not seaworthy; Aqua disagreed and began an arbitration proceeding in London claiming damages; Smith counterclaimed for a similar amount and obtained security by seizing the ship in Singapore; Aqua asked Smith to post security for his claim in the London arbitration; Smith refused and Aqua brought this action in the Southern District of NY seeing an attachment order under Rule B to attach any assets Smith has within the district (in the circuit, Electronic Funds Transfers are attachable as they pass through banks within the court’s jurisdiction); The district court granted the order subject to a subsequent hearing via Rule E(4)(f), at which Smith could contest the attachment (which he did)

Procedural History: The DC held that Rule E authorized it to vacate any attachment, although facially valid, if a PL failed to demonstrate at a subsequent hearing that the attachment was necessary to obtain personal jurisdiction over the DF or to secure a payment of a potential judgment. Even if the PL can establish such a necessity, the attachment can still be vacated if the DF proves that the attachment was sought to simply gain a tactical advantage or that the prejudice to the DF outweighed the benefit to the PL; Using these rules, the DC ruled that Aqua had no need for the attachment and vacated it; Aqua appeals

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21 Issue: To what extent may the district court require a showing by the PL beyond the simple fact that the textual

requirements of Rule B have been metii. Second Circuit

Rule B governs the process by which a party may attach another party’s assets The PL must file a verified complaint asking for an attachment and an affidavit stating that, to the best of the PL’s knowledge, the DF cannot be found within the judicial district. If the PL’s filings comply, the court must authorize the attachment, which the PL can then serve on any person in possession of the DF’s property located within the district (this can be requested and granted ex parte)

Rule E(4)(f) gives the DF an opportunity to appear before the district court to contest the attachment once his property has been restrained Whenever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the PL shall be required to show why the arrest or attachment should not be vacated or other relief grantedo The Rule does not explain under what circumstances the district court should vacate an attachment (the

hearing certainly gives the DF an opportunity to argue that the Rule B requirements were not met but it is unclear to what extent the court can require a showing by the PL beyond the fact that the requirements were met)

The District Court believed it possessed “inherent power” to fashion an appropriate test for the vacatur of an attachment despite its validity under Rule Bo This is untrue – The district court only has limited power in this respect (as argued by Aqua)o Maritime attachments exist because it is frequently, but not always, more difficult to find property of

parties to a maritime dispute than of parties to a traditional civil action (maritime parties are peripatetic and their assets are often transitory)

o An attachment will not be authorized if a DF is present in a district in BOTH senses: 1) The DF is present in the district for the purposes of minimum contacts and 2) The DF has an agent in the district for service of process

a. This rule comports with the historic role of maritime attachment and there is no case law support for the arbitrary test imposed by the district court (Gardner Smith’s assets are presently located in the Southern District of NY but he cannot be “found” in the district so Aqua IS entitled to a Rule B attachment)

In addition to having met the filing and service requirements of Rules B and E, an attachment should issue if the PL shows that 1) It has a valid prima facie admiralty claim against the DF, 2) The DF cannot be found within the district, 3) The DF’s property may be found within the district and 4) There is no statutory or maritime law bar to the attachment o A district court must vacate an attachment if the PL fails to show that he has met the requirements of

Rules B and E or in other “limited circumstances”a. It is not clear how broad the set of facts a court will look at are and there is no clear limit either

o Circuit gives a narrower reading to Rule E(4)(f) than the District Courta. Uses the background to Rule E It was added in response to the Sniadach line of cases which

held that a 14th A. restraint existed with respect to garnishing wages (namely, that people must be heard before their wages are garnished)] The maritime bar was alarmed because this would have killed Rules B and C so they

pushed through Rule E(4)(f) holding that you don’t get a hearing before the seizure, but you can after

b. District Court judgment is vacated and the case is remanded for further proceedings NOTE: Winter Storm says that EFTs, when in transit, is the property of both the sender and recipient and can

therefore be attachedo This is controversial because litigants because their funds can be attached despite no connection between

the litigant and the district (often transfers go through random cities like NYC)o Prompted the District Court to use Rule E aggressively but the Circuit insisted that attachments cannot be

easily set asided) Potential Limitation to Rule B

i. Shaffer v. Heitner Held that assertions of quasi in rem jurisdiction under state law have to satisfy the same due process criteria (minimum contacts requirements stemming from international shoe) as assertions of jurisdiction over individuals and corporations

However, all of the courts of appeal that have been confronted with Shaffer challenges to Rule B have upheld the Ruleo In Admiralty, traditional notions of fair play and substantial justice will often best be served by permitting

suitors to seek redress in a district where the shipowners goods can be found, since the vessel itself may be in a distant port and the owner’s home may be far away

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22o Tradition suggests that jurisdiction by attachment of property should be accorded special deference in the

admiralty context and that maritime actors must reasonably expect to be sued where their property may be found

e) Personal Jurisdiction in Actions In rem under Rule Ci. Rule C describes the in Rem process

ii. A foreign ship may be sued even though it would not satisfy the “minimum contacts” test from International Shoe. The theory of the ship’s own liability is sufficient to confer in rem jurisdiction without regard to the contracts its owner may have with the district

There is a long-standing admiralty fiction that a vessel may be assumed to be a person for the purpose of filing a lawsuit and enforcing a judgment (this is useful in allowing actions against ships where a person owning the ship could not be reached)

iii. Burnham v. Superior Court Held that the 14th A. is not offended when an individual is “tagged” with service of process and thereby subjected to personal jurisdiction in a state he happens to be passing through

It would be very easy to say that an in rem suit against a vessel is securely insulated from due process challenge by the Burnham principle (relaxes the pressure admiralty lawyers felt after Shaffer)

iv. The non-admiralty personal jurisdiction devices have strong constitutional restrictions, whereas the admiralty ones do not

5. Venuea) FRCP 82 An admiralty or maritime claim under Rule 9(h) is not a civil action for purposes of the federal-court venue statutes

i. In cases classified as admiralty under Rule 9(h), venue is proper in any district where the parties are subject to personal jurisdiction and can be served with process

6. Removal of Maritime Casesa) FRCP 1441 (a) Any civil action brought in a state court of which the district courts of the US have original jurisdiction, may be

removed by the DF to the DC of the US for the district embracing the place where the action is pending; (b) Any civil action of which the DCs have original jurisdiction founded on an “arising under” claim shall be removable without regard to residence of the parties. Any other such action shall be removable only if none of the parties serving as a DF is a citizen of the state in which the action is brought

b) FRCP 1445(a) State court actions brought under the Federal Employers’ Liability Act (FELA) cannot be removedi. Includes the Jones Act

ii. The number of savings-clause cases removed to federal court on federal question grounds (through “arising under” jurisdiction) is virtually non-existent because FRCP has taken the Jones Act out

It is almost true to say that you can remove savings clause cases only on diversity grounds because Romero casts a long shadow

c) Romero Claims based on federal general (nonstatutory) maritime law do not “arise under the Constitution, treaties or laws of the US” for purposes of the district court’s original jurisdiction

i. A savings-clause case cannot be removed if a properly joined DF is a citizen of the forum state [1441(b)]ii. Can a savings-clause case in which no DF is a citizen of the forum state be removed?

General Rule: No removal into admiraltyo Reflects Frankfurter’s concerns into Romero about state court’s losing access to savings clause cases

7. Admiralty Appealsa) Although 19th C. admiralty appeals were considered proceedings in which the appellate court could hear new evidence without

owing any deference to the trial court’s findings of fact, this power was seldom used (it was swept away in the 1966 unification)

i. FRCP 52(a)(6) A trial judge’s findings of fact must not be swept aside unless clearly erroneous, and the reviewing court must give due regard to trial court’s opportunity to judge the witnesses credibility

A Jury’s findings of fact should not be reversed on appeal unless there is no evidence in the record on which a reasonable juror could base the finding

b) One Difference (survived unification): 1292(a)(3) Allows for interlocutory appealsi. It is easier to take an admiralty case up to the Court of Appeals before it is over than a non-admiralty case

H. The Sources of the Substantive Law Applied in Admiralty and Maritime Cases1. The Lesser Difficulty: The Maritime Authority of Congress

a) Congress has the Constitutional authority to pass maritime law statutesi. Article VI (clause 2) The Constitution, and the laws of the US which shall be made in pursuance thereof…shall be the

supreme law of the landii. Generally Accepted View: Congress gets its admiralty and maritime authority from Article III, § 2 by way of the Necessary

and Proper Clause (Genesee Chief)

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23b) Occasionally, the SC has found federal maritime legislation to be unconstitutional under Article III, § 2 simply because Congress

departed too much from the Court’s own ideas on the matter (the Court gets this sense of entitlement from the notion that Article I of the Constitution includes no express grant of congressional authority to issue admiralty or maritime legislation)

c) Separation of powers question (vs. a federalism question as below)…Congress almost always gets its way

2. The Greater Difficulty: Nonstatutory Federal Maritime Law vs. State Law-It is unclear to what extent federal court-made maritime law will trump state statutory law, but there will always be a conflicta) Ballard Shipping Co. v. Beach Shellfish

i. Facts: An Oil Tanker owned by Ballard ran aground in Rhode Island spilling a massive amount of heating oil into the bay; The oil slick forced RI to close the bay to all shellfishing activity for 2 weeks during the cleanup; Ballard filed a petition in the district court invoking admiralty jurisdiction and seeking the protection of the Limitation of Liability Act; The claimants in this appeal are a group of shellfish dealers who are seeking recovery from Ballard for severe economic losses allegedly arising from the hiatus in shellfishing activity - They are alleging negligence under the general maritime law and the common law of RI AND a claim for economic losses pursuant to the RI Environmental Injury Compensation Act

Procedural History: Ballard moved to dismiss the claims on the basis of the SC’s decision in Robbins Dry Dock & Repair Co. v. Flint, which held that compensation for economic losses, standing along (unaccompanied by physical injury to property or person), is unavailable in admiralty cases; The DC granted the motion holding that Robins preempted recovery of purely economic losses arising from an oil spill and the shellfish dealers are appealing the dismissal of their state claims

Issue: Does federal maritime law (Robins) preempt RI legislation affording expanded state-law remedies for oil pollution damage?

ii. First Circuit: Jensen Doctrine: State legislation affecting maritime commerce is invalid if: 1) It contravenes the essential

purpose expressed by an act of congress, 2) It works material prejudice to the characteristic features of the general maritime law or 3) It interferes with the proper harmony and uniformity of that law in its international and interstate relations (Three Prongs from Southern Pacific Co. v. Jensen)o Since Jensen, the SC has upheld the application of state law in a number of maritime related cases despite

the existence of a direct conflict between maritime rules and state law (without ever repudiating its Jensen language)

o American Dredging Co. v. Miller (came down while THIS case was on appeal) SC upheld a LA open-forum statute, making the forum non-conveniens doctrine unavailable in savings-clause cases (even though forum non-conveniens is a part of federal maritime law)

Application of Jensen Doctrine:o Contravenes an essential purpose of an act of Congress No act of Congress directly governs this case

(Robins is case law)o Works material prejudice to the characteristic features of federal maritime law American Dredging

(surprisingly) reads the “characteristic features” language to ONLY apply to a federal rule that either 1) Originated in admiralty or 2) Has exclusive application in admiralty

a. Robins denial of recovery for purely economic losses did not originate in admiralty and it does not have exclusive application in admiralty

o Interferes with the proper harmony and uniformity of federal maritime law Scalia (in American Dredging) said that this may look to be important, but it is only a procedural question of venue and nobody ever believed state law must follow federal law in that; There is no preemption where the relevant state law is procedural rather than substantive

a. In this case, however, the law is undoubtedly procedural The Court says that it must balance the state interest in regulation against a potential overriding federal need for harmony and uniformity; The RI Compensation Act wins Even absent the Robbins rule, there are still limitations on the scope of recovery under

the RI Compensation Act adequate to limit the burdens it imposes on maritime commerce (tort limitations of foreseeability and proximate cause)

The recent Oil Pollution Act passed by Congress provides for the recovery of purely economic damages in oil spill cases and expressly provides that it does not preempt state imposition of additional liability requirements (this act was passed after the present cases started so although it does not apply retroactively, it is compelling evidence that Congress does not view laws like RI’s as burdening maritime commerce)

RI’s Compensation Act is not preempted by the admiralty clause of the Constitution; The dismissal of the PL’s state claims is reversed and the case is remanded for further proceedings o The Federal Courts within this Circuit must apply Robins Dry Dock to federal claims o Robertson: Think of this as a contest between the entire legislature of RI and a single federal district judge

who is saying something different

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24 “Reverse Erie” The Ballard Court uses the term broadly to refer to the Jensen-derived obligation of all courts

to apply federal substantive maritime law in cases of admiralty jurisdiction. More narrowly, however, the term refers to the obligation of state courts in saving clause cases to apply the same substantive law that a federal admiralty court would applyo There is a prevailing assumption that the reverse-Erie doctrine is based upon the Supremacy Clause (this

has only been stated once by the SC in an unclear fashion); Robertson disagrees with bringing judge-made law under the Supremacy Clause

o In an effort to comply with the reverse-Erie doctrine, state courts often look to the decisions of the lower federal courts for guidance BUT it is important to Note that the courts are not bound by these decisions

a. They are only obligated to follow higher state courts and the Supreme Court

b) Southern Pacific Co. v. Jenseni. Facts: Jensen, an employee of Southern Pacific was killed while unloading one of the company’s steamships. His widow

and two children sought worker’s compensation benefits under NY law. The workers comp commission awarded the money to Jensen’s family and Southern Pacific appealed, contending that the NY worker’s comp statute was unconstitutional as applied to injuries on navigable waters because the statute conflicts with the general maritime law under Article III, § 2. The state court’s rejected Southern pacific’s argument and affirmed the award.

ii. Supreme Court Congress has paramount power to fix and determine the maritime law which shall prevail throughout the

country. In the absence of some controlling statute, the general maritime law, as accepted by the federal courts, constitutes part of out national law, applicable to matters within the admiralty and maritime jurisdictiono It is difficult to define with exactness how much the general maritime law may be changed, modified or

affected by state legislation. State statutes may not contravene an applicable Act of Congress or affect the general maritime law beyond certain limits

a. The NY state worker’s compensation statute is inconsistent with the Supremacy Clauseo If NY could subject foreign ships coming into her ports to such obligations as those imposed by its

Compensation Statute, other states may do the same. This would result in the destruction of the very uniformity in maritime matters that the Constitution has tried to establish

Three Prongs (a state statute is invalid if…):o 1) It contravenes the essential purpose expressed by an act of Congress o 2) It works material prejudice to the characteristic features of the general maritime lawo 3) It interferes with the proper harmony and uniformity of that law in its international and interstate

relations Comparison to Interstate Commerce – “Where the subject is national in its character, and admits and requires

uniformity of regulation, affecting alike all the states, such as transportation between the states…Congress can alone act upon it and provide the needed regulations. The absence of any law of Congress on the subject is equivalent to its declaration that commerce in that matter shall be free (dormant commerce clause)”o Same reasoning makes imperative the stated limitation upon the power of the states to interpose where

maritime matters are involved The facts in this cases clearly bring it within the realm of a maritime matter

o The remedy the Compensation Statute seeks to give is not a common law remedy (it is derived from an administrative agency) and therefore not saved-to-suitors from the grant of exclusive federal jurisdiction over admiralty

iii. Justice Holmes (dissent) “The common law is not a brooding omnipresence in the sky, but the articulate voice of some sovereign or quasi

sovereign that can be identified”o Majority is arguing for this brooding omnipresence

It is too late to say that the mere silence of Congress excludes the statute or common law of a state from supplementing the wholly inadequate maritime law of the time of the Constitution

The idea that has been in vogue for centuries that a judge can find maritime law in some divination process rather than create it is bullshit (nobody actually finds it…it is in fact created). Once this is realized, you will see that a federal judge in an admiralty case must look to see if there is a federal maritime statute and, if not, some form of case law as of 1787. If neither is found, they should look to state law [American Legal Realist Formulation]

Judges are confined to molar, not molecular motions (little steps)

c) Erie Railroad Co. v. Tompkinsi. Facts: Tompkins, a citizen of PA was injured while walking along the tracks by a train from the Erie RR company. He

claimed that the accident occurred via the negligence of Erie, that he was properly on the footpath and that he was struck by something projecting out of the train. To enforce is claim, he brought his action in the Southern District of NY, which

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25had diversity jurisdiction since the company is corporation in NY. Erie insisted that its duty to Tompkins was no greater than that owed to trespasser and contended that its duty to Tompkins should be determined in accordance with PA law (under PA law, Tompkins would be deemed a trespasser and the RR would not be liable unless its negligence were willful and wanton). Tompkins argued that the matter is to be determined by federal law since no statute existed on the matter. The court ruled for Tompkins and the decision was affirmed by the Circuit Court as per Swift.

Swift v. Tyson “Upon questions of general law, the federal courts are free, in the absence of a local statute, to exercise their independent judgment as to what the law is; and it is well settled that the question of the responsibility of a RR for injuries caused by its servants is one of general law.”

Erie argues that the application of PA law is required by Section 34 of the Federal Judiciary Act of 1789 (Rules of Decision Act): “The laws of the several states, except where the Constitution, treaties, or statutes of the US otherwise require or provide, shall be regarded as the rules of decision in trials at common law, in the courts of the US, in cases where they apply.

ii. Supreme Court (granted certiorari) Under Swift v. Tyson, the federal courts assumed, in the broad field of “general law,” the power to declare rules

of decision which Congress was confessedly without power to enact as statutes. People have constantly doubted this interpretation of section 34 of the Act and the soundness of this ruleo In reality, this was the wrong interpretation and Section 34 was meant to ensure that, in all matters except

those in which some federal law was controlling, the federal courts exercising diversity jurisdiction would apply the laws of the state (written and unwritten) as their rules of decision

There are many defects with the Swift doctrineo Persistence of state courts in their own opinions on questions of common law has prevented uniformity

(with federal law)o Diversity jurisdiction was given to prevent discrimination in state courts against non-citizens of the state.

Swift brought massive discrimination against litigants that are citizens (rights enjoyed under the “general law” varied according to whether relief was sought in state or federal court and it was up to the noncitizen to choose which forum he wanted)

o In attempting to promote uniformity throughout the US, the doctrine prevented uniformity within the state (now you don’t just have dis-uniformity from state to state, but also dis-uniformity within the same state)

Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. And whether the law of the state shall be declared by the legislature in a statute or by its highest court in a decision is not a matter of federal concern…There is NO FEDERAL GENERAL COMMON LAW. Congress has no power to declare substantive rules of common law applicable in a state... and no clause of the Constitution purports to confer such power upon the federal courts.

iii. The day after Erie came down, maritime lawyers were PISSED People (ship owners, seamen, etc.) were nervous that they were now going to go from operating under 1 general

federal maritime law to over a dozen state laws Judge John R. Brown – This concern is nonsense

o 1) Erie merely holds that it is unconstitutional to read the RDA as enabling federal judges to ignore state law (the RDA, however, is limited to trials at common law)

o 2) Erie has nothing to do with Admiralty and Maritime law because when Brandeis said “no clause of the Constitution,” he was looking exclusively at the diversity grant which is different (the admiralty grant is and always has been a source of law giving authority while the diversity grant has not)

o 3) In Swift v. Tyson, the Court was legislating on things that Congress could not have legislated on (at that time, the Interstate Commerce Clause would not have given Congress sufficient power). This cannot be the case in Admiralty where both Congress and the Court explicitly have mutual/shared power…

a. Both get their Admiralty and Maritime power from Article III, § 2, with Congress obtaining a hook from the Necessary and Proper Clause (Article I, § 8 To make all Laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this Constitution in the government of the US…)

b. Congress can legislate on substantive maritime matters and the SC can create general federal maritime law as well

If Erie were to do anything to admiralty and maritime law, it would essentially undo it completely (so much of it is general federal law created by the Court)o This never gets played out!o It is never made clear whether or not Erie overruled Jensen

a. This is all because of an accident of litigation, namely the way that Pope & Talbot got played out

d) Pope & Talbot, Inc. V. Hawn

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26i. Facts: Ship was berthed at a pier in the PA waters of the Delaware River when the PL sustained severe physical injuries

from slipping and falling through an uncovered hatch hole on Pope & Talbot’s vessel. PL was not an employee of Pope & Talbot’s but of the company that had been hired to make repairs. PL (Hawn) brought a diversity suit in the US district court to recover damages for his injuries (claiming that the injuries resulted from the ship’ unseaworthiness and from Pope & Talbot’s negligence) – He wanted the maritime version of victim tort law and a jury. Pope and Talbot denied both charges and asserted contributory negligence as a defense to each. The jury found that the ship was unseaworthy and that Pope & Talbot had been negligent (and that Hawn’s own negligence contributed to his injuries). The Court of Appeals affirmed the verdict for Hawn.

Argument: Pope and Talbot argue that the juries finding of contributory negligence should serve as a complete bar to Hawn’s recovery. This claim is based on two bases: 1) Admiralty has not developed any definite rule as to the effect of contributory negligence, and therefore the common-law rule under which contributory negligence bars recovery should govern admiralty and 2) PA law controls this case and under PA’s law, any contributory negligence is an insuperable bar to recovery

ii. Supreme Court 1) The harsh common law rule under which contributory negligence wholly bars recovery is completely

incompatible with modern admiralty. Admiralty has developed and follows its own fairer and more flexible rule allowing contributory negligence to be considered in the mitigation of damages (but not serve as a total bar). Pope & Talbot does not offer a persuasive argument for a total bar.

2) PL was injured on navigable waters while working on a ship so the basis of his action is a maritime tort (a type of action which the Constitution has placed under national power to control in its substantive as well as procedural features)

The PL also argues that PA law must govern as per Erie because the district court’s jurisdiction was based upon diversity of citizenship. The PL is basically arguing that a person injured on navigable waters suing in federal court under diversity jeopardizes his right to recover (bc/ of PA’s total bar rule) as he otherwise would had the suit been filed under admiralty. It is therefore contended that a person suing on the “law side” has much less of chance to recover than a person suing on the “admiralty side.”o Erie was designed to ensure that litigants with the same kind of case would have their rights measured by

the same legal standards. The court is being asked to use Erie to bring about the same unfairness it was designed to end (the rights of the parties would depend on which “side” of the courthouse the suit had been filed on…Before Erie, it depended on what courthouse.

o The substantial rights of an injured person are not to be decided differently based upon whether a case is labeled “law side” or “admiralty side.”

a. Since the SC found that there is no total bar rule to contributory negligence in admiralty, if a person brings a maritime suit under diversity jurisdiction, the rule will be the same

iii. The Court failed to examine the underlying premise of the case: That the grant of admiralty jurisdiction, unlike the grant of diversity jurisdiction, (as determined via Erie) gives federal courts the power to formulate federal common-law rules of decision (rules of general maritime law).

Professor Earnest Young says that this premise is wrong He finds no legitimate basis for a broad rule of preemption that allows federal courts to preempt state regulatory authority without grounding their decisions in a federal statute or Constitutional provision. The admiralty grant in Article III, Section 2 is no more a legitimate source of preemptive federal common law than the diversity granto Had Young been representing Pope & Talbot, he would have brought up Jensen and said that Erie

essentially overturned it Pope & Talbot was the first case in which Erie could have had an effect on federal maritime law. Instead, the

ruling in Pope & Talbot reinforced the notion that federal general maritime law is supreme and that Erie really had no effect on ito The PL in Pope & Talbot did not lead the court to look at the bigger picture (the notion that Erie is

inconsistent with Jensen is therefore not played out in any case)

e) Kossick v. United Fruit Co.i. Supreme Court:

After determining that the K in suit was maritime, the SC then turned to the source-of-law issue It blinks at reality to assert that because a longshoreman, living ashore and employed ashore by shoreside

employers, performs seaman’s work, the State with these contacts must lose all concern for the longshoreman’s status and well-beingo If the intrusion of the state remedial system does not bring with it any undesirable disuniformity in the

scheme of maritime law, state law can be applied In the present case, several considerations point to an accommodation favoring the application of maritime law:

o We are dealing with a K with obligations voluntarily undertaken…Not, as in the case of tort liability, obligations imposed simply by virtue of the authority of the State or Federal Government. This creates some presumption in favor of applying the law tending toward the validity of the alleged K.

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27o It is difficult to deny the essentially maritime character of this K A sailor of any nationality may join a

ship in any port and it is the clear duty of the ship to put into the first available port if necessary to provide adequate maintenance and cure to an ill seaman…This is therefore a K that could very well have been made anywhere in the world (the validity of it should therefore be judged by one law, wherever it was made)

a. It is difficult to see how this K was peculiarly a matter of state and local concern (unless it is in NY’s interest to not allow its courts to e used to accomplish fraud… this is not a strong enough interest in light of countervailing considerations)

b. It many situations, maritime Ks cannot be reduced to writing simply by the nature of the business (NY law, however, outlaws certain categories of oral Ks through the SOF)

o Since the effect of the application of NY law would be to invalidate the K, this case cannot be analogized to cases where state law had the effect of supplementing the remedies available in admiralty for the vindication of maritime rights

a. This is not a scenario where there is no provision of maritime law governing the matter presented

b. Sometimes, it is easy to perceive of a state law as a gap=filler, but this situation is the opposite of that (there is close to being a clear maritime rule)

The Court (Harlan) is using “Benevolent Gratuity” He makes it seem like he is accommodating the state and implied that he is, but in actuality pre-empts it

ii. Frankfurter Dissenting When a legal doctrine is as loose as “the duty to observe the uniformity of maritime law,” it is even more

incumbent on the judiciary to apply it with well-defined concreteness The Court, relying as it does on Jensen, is reinvigorating the notion that if a limited and local transaction such as

the K at issue here were allowed to be governed by a local statute of frauds, it would disturb the uniformity of maritime lawo This is too abstract

iii. This case exemplifies the “interest balancing” that was also used in Ballard The court has also used interest balancing in non-maritime cases to decide whether the commerce clause

invalidates state law. Scalia has said: “This process is ordinarily called “balancing,” but the scale analogy us not really appropriate, since the interests on both sides are incommensurate. It is more like judging whether a particular line is longer than a particular rock is heavyo The federal interest is all about validating the substantive right the seaman is asserting whereas the state

right is way more abstract and general Horizontal Choice of Law vs. Vertical Choice of Law

o Horizontal State/State: Both states start equally; There is, however, a tilt with respect to the forum (anything procedural is forum law and even substantively, there is a preference for the forum)

o Vertical Federal/State: The federal interest has a thumb on the scale The process is “surely one of accommodation,” entirely familiar in many areas of overlapping state and federal

concern, or a process somewhat analogous to the normal conflict of laws situation where two sovereigns assert divergent interests in a transaction as to which both have some concern

No state law can apply unless it defeats the federal interest

f) Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd.i. Supreme Court (O’Connor)

A maritime K’s interpretation may so implicate local interests as to beckon interpretation by state lawo But when state interests cannot be accommodated without defeating a federal interest, as is the case

here, the federal substantive law should govern (the process of deciding whether federal law should apply is surely one of accommodation, entirely familiar in many areas of overlapping state and federal concern, or a process somewhat analogous to the normal conflict of laws situation where two sovereignties assert divergent interest in a transaction)

Applying state law to cases such as this one would undermine the uniformity of federal general maritime lawo The same liability limitation for a single bill of lading for international intermodal transportation often

applies to both sea and land If more than one body of law governs a given K’s meaning, it will result in confusion and inefficiency

o When a maritime K may well have been made anywhere in the world, it should be judged by one law wherever it was made (Kossick)

ii. There is a serious lack of clarity with respect to the principles governing when federal maritime law will pre-empt state law (Scalia emphasizes this in American dredging) “It would be idle to pretend the line separating permissible from impermissible state regulation is readily discernible in our admiralty jurisprudence .

g) Exxon Valdez Punitive Damages Case27

28i. In the 2008 matter, Exxon Shipping Co. v. Baker, the SC created a new maritime law that punitive damages may not

exceed compensatory damages in cases in which the DF’s conduct, while sufficiently blameworthy to deserve civil punishment, was not actuated by avarice or the purpose of inflicting injury

This meant that the $2.5 Billion punitive damages award against Exxon arising from the 1989 Exxon Valdez oil spill was reduced to $507.5 million

Case also presented the issue as to whether a corporate employer can be held vicariously liable for punitive damages based on the conduct of a managerial agent (here, the captain of the ship). The court divided 4-4 on

this (Alito did not participate) so the 9th Circuit’s affirmative answer to the question was left undisturbed ii. This as a dramatic decision:

Most importantly is the Court’s strong affirmation of the federal admiralty court’s authority to decide substantive issues of maritime law “in the manner of a common-law court, subject to the authority of Congress to legislate otherwise if it disagrees with the judicial result.”o When considered together with Kirby, Exxon Shipping suggests that the resent Court’s conception of its

maritime-law-making authority may not be too distant from that of Judge John R. Browno In this case, Souter confidently described the SC of the US as the SC of the state of admiralty (when a cause

arises that is in conflict with Alaskan law, we, the SC will tell you what law applies)iii. NOTE: 1333 is not coterminous with the Constitutional grant of admiralty jurisdiction (it is more limited and Congress can

give the courts more power if it were to so choose)

Lowesman v. City of Rivera: New Case Name: City of Rivera v. that old gray two-story house ship 100 yards out in sea

Evicted: lowesman did not put a muzzle on his 10-ln doxin and his dog was terrorizing others, and he had work done by unlicensed contractorsProcedure: bring proceeding to state court

Lease was a commercial contract in tenancy (therefore FL land-lord tenant law applies)11th Circuit Issue: definition of vesselIssue:

1. Maritime tort of Trespass2. In Rem Proceeeding Pursuant 46 U.S.C. 31342 Establishing Maritime Liens

i. Except as to provided in subsection b of this section, a person roviding its necessaries to a vessel on the order to of power of owner

1. 2. 3. 4. 5.

Chapter 2: Personal Injury, Death, and Tortious Harm to Property

A. The Basic Maritime Tort Law1. Kermarec v. Compagnie Generale Transatlantique

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29i. Facts: DF’s vessel was birthed at a pier in the North River in NYC when Kermarec (PL) came on board to visit a member of the

ship’s crew (the visit was entirely personal). While leaving the ship, Kermarec fell and was injured while descending a stairway. On the theory that his fall resulted from the defective construction of the carpet covering the steps, Kermarec sued for personal injury in the DC for the Southern District of NY alleging both the unseaworthiness of the vessel and negligence on the part of its crew. He invoked federal diversity jurisdiction and requested a jury. The district judge viewed substantive New York law as being applicable and eliminated the unseaworthiness claim from the case. He instructed the jury that Kermarec was a gratuitous licensee who could recover only if the DF had failed to warn him of a dangerous condition within his actual knowledge and only if Kermarec was entirely free of contributory negligence. The jury returned a verdict in Kermarec’s favor, but the court granted a JNOV holding that there had been a complete failure of proof that the shipowner had actually known the stairway was in bad condition. The appellate court affirmed.

ii. Supreme Court The DC was in error in ruling that NY law governed this case Kermarec was injured aboard a ship upon navigable

waters. The legal rights and liabilities arising from the events are within the full reach of the admiralty jurisdiction and measurable by the standards of maritime lawo If this action had been brought in state court, reference to admiralty would have been necessary to

determine the rights and liabilities of the parties. When the PL exercises the right conferred by diversity jurisdiction to choose a federal forum, reference to admiralty is still necessary even though he exercises his right to a jury trial (Pope & Talbot)

It must be determined whether prejudice resulted from the curt’s application of the substantive law of NY:o The judge was in error in instructing the jury that contributory negligence by the PL would operate s a

complete bar. The jury should have been told that Kermarec’s contributory negligence should be considered only in the mitigation of damages. This, however, did not prejudice Kermarec (he was no found to have been contributorily negligent at all)

o The judge refusal to submit the claim of unseaworthiness since it is unknown to the common law of NY. Although this was the incorrect reasoning, the judge was correct not to submit that claim because it Kermarec was not a member of the ship’s company or a member of the class of workmen to whom admiralty law has extended the absolute right to a seaworthy ship

o Prejudicial error occurred ONLY IF the maritime law imposed upon the shipowner a standard of care higher than the duty which the district judge found owing to a gratuitous licensee under the law of NY (i.e. he should have known the conditions were dangerous). If the shipowner owed Kermarec a duty of exercising ordinary care, then Kermarec was entitled to judgment via the jury’s verdict.

a. Does admiralty law recognize the same distinction between an invitee and licensee as does common law? It is settled that the shipowner owes the duty of exercising reasonable care toward those

lawfully aboard the vessel who are not members of the crew. The Court has never determined that a different and lower standard of care is owes to a ship’s visitor who can be termed a licensee.

The distinctions between licensee and invitee were inherited from a culture deeply rooted to the land which traced many of its standards to a heritage of feudalism. For the admiralty law, at this late date, to make such a distinction would be foreign to its traditions of simplicity and practicality

b. We hold that the owner of a ship in navigable waters owes to all who are aboard the ship the duty of exercising reasonable care under the circumstances of each case. The judgment must be vacated and the remanded with instructions to reinstate the jury verdict

iii. The SC is not interested in dealing with the baroque differences between an invitee and licensee when admiralty is at issues Kermarec shows that if a PL can prove substandard contact hurt him, he ought to get damages Known as a

“Kermarec Action”

2. Brotherhood Shipping Co. v. St. Paul Fire & Marine Insurance Co.i. Facts: Brotherhood, the owner of the ship in suit, brought an action against the City of Milwaukee which owns the port

where its ship was damaged. Brotherhood seeks damages for the damage to the ship and for the loss of revenue from the ship’s being out of service due to the accident. The PL designated this suit as being in admiralty in accordance with Rule 9(h) of the FRCP (PL sued in admiralty because he did not want a state judge or a Milwaukee jury – He wanted a federal judge with no allegiance to the city deciding the fate of his ship). The DC judge granted the city’s motion for summary judgment and dismissed the shipowners complaint (did the DC judge use state law? How could he if the case was designated a 9(h) matter in admiralty? There would not be any “balancing,” right? Or did he just find no negligence by the City?)

ii. Issue: Whether viewing the evidence obtained through pretrial discovery as favorably to the shipowner as reason allows, the court can say that no reasonable trier of fact could conclude that the city had been even a little bit negligent.

The City argues that, even if it was negligent, the Captain of the ship was also negligent (and to a much greater extent than the city

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30o This point is irrelevant The rule in admiralty, when property damage results from a collision between two

ships or between a ship and the shore, is comparative negligence (the PL’s negligence will reduce the amount of damages he can collect, but it does not serve as a defense to liability)

o In many states that embrace comparative negligence, the PL’s negligence remains a defense to liability if he fails to prove that the DF’s negligence was more than 50% responsible for the accident (i.e. Wisconsin)

a. The DF argues that WI law should be applied. The admiralty doctrine of comparative negligence, unlike some state comparative negligence statutes, has never had a threshold above which a PL’s negligence barred all recovery. The Court is given no reason to depart from the pure comparative negligence standard of admiralty.

iii. Seventh Circuit (Posner) We apply the standard of negligence laid down by Judge Hand in United States v. Carroll Towing Co. A DF is

negligent if the burden (cost) of the precautions that he could have taken to avoid the accident (B) is less than the loss that the accident could reasonably be anticipated to cause (L), discounted (multiplied) by the probability that the accident would occur unless the precautions were taken (B<PL)o L The magnitude or gravity of the loss that an accident [that the precautions the DF failed to take would

have averted] could be expected to inflict --- was substantial a. The ships that dock at this port are expensive machines carrying expensive goods. An accident to

such a ship, even while berthed, could endanger human life. o P The likelihood of such an accident cannot be small, given the history of accidents to ships at the two

exposed slips in the harbora. Therefore PxL (the expected accident cost) was substantial and imposed on the DF a duty of

taking substantial precautionso B There are three possible precautions that could have been taken

a. Structural alteration to the harbor that would have eliminated the problem once and for all (or greatly reduced the risk of an accident)

b. Having pilots, tugs and linesmen available round the clock in the winter to remove endangered ships at short notice

c. Giving the masters of the ships berthed at the bad slips sufficient early warning to enable them to obtain a pilot, tugs and linesmen before the close of business on the day of a storm

For the purposes of this appeal, it is enough that the PL has raised an issue of material fact concerning the adequacy of the precautions the city took to prevent the type of serious, and by no means remotely unlikely, accident that occurred. The court does not deny the possibility that the accident would never have occurred had the captain been more alert or cautions, but the issue of the party’s relative fault does not matter. o There is evidence from which a reasonable trier of fact could infer that the city was negligent and that the

accident would not have occurred had it not been negligent. The judgment of the DC must be reversed.iv. Posner: We do not want to force the district courts into a straitjacket, so we do not hold that they must use the Hand

formula in all maritime negligence cases. We merely commend it to them as a useful tool.v. Defending the role of the SC in traditional admiralty and maritime law We obtain a lot of benefit by having the SC so richly

endowed with time and personnel; Having the SC do substantive Tort and K work will make lawyers throughout the country better

3. The E.M. Ford Litigationi. Lengthy litigation generated by the sinking of the E.M. Ford in Milwaukee harbor on Christmas Eve, 1979. Initially, the trial

judge assessed the City’s negligence at 4% and the vessel’s at 96%. The Court of Appeals found this allocation to be erroneous and assessed the City with 1/3 of the fault and the vessel with 2/3. The City settled but disagreed about the issue of pre-judgment interest. The trial court concluded that there should not be any pre-judgment interest despite the fact that it is normally issued in admiralty law (the trial court judge invoked his discretion to deny this on the basis that the PL was 2/3 at fault). The issue of pre-judgment interest also worked its way up to the Circuit Court, which reversed on the basis that mutual fault in an admiralty collision case does not constitute a peculiar circumstance justifying the denial of pre-judgment interest.

ii. Supreme Court On the basis of a “deepening circuit split on the criteria for denying pre-judgment interest in maritime collision cases,” the SC granted certiorari and affirmed the court of appeals’ decision that the city owed prejudgment interest (the case had taken 11 years for its appeal in the Circuit Court)

Congress did enact a statute governing the award of postjudgment interest in federal court litigation, but there is no comparable legislation regarding prejudgment interest. This, however, does not indicate a legislative determination that prejudgment interest should not be awarded The absence of such a statute merely indicates that the question is governed by traditional judge-made principleso These principles are well-developed in admiralty, where the Judiciary has traditionally taken the lead in

formulating flexible and fair remedies:a. The general rule is that prejudgment interest should be awarded in maritime collision cases

subject to a limited exception for “peculiar” or “exceptional” circumstances. The rationale for

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31awarding it is to ensure an injured party is fully compensated for its loss (an example of a justifiable reason for denying interest is a PL’s responsibility for undue delay in prosecuting the suit)

b. Denying prejudgment interest on the basis of mutual fault would seem to penalize a party twice for the same mistake (contribution is taken into account in the judgment in addition to the denial of interest)

4. East River Steamship Corp. v. Transamerica Delavali. Facts: Delaval was hired to design, manufacture, and supervise the installation of turbines that served as the main

propulsion units for 4 Supertankers that were being built. Ship 1 had its high pressure turbine malfunction around the time of its maiden voyage (it was subsequently repaired by Delaval). Ship 2 and Ship 3 were inspected while in port due to the problems with Ship 1. These inspections revealed similar damage (repairs were again made). Ship 4 was completed with newly designed parts, but encountered problems on its maiden voyage after which it was discovered that two of its turbines had been installed backwards (this was also repaired).

The complaint (on behalf of the 4 charters) was filed in New Jersey district court and invokes admiralty jurisdiction. It alleges tortious conduct on the part of Delaval and seeks $8 Million for the costs of repairs and for lost income while the ships were out of service. Delaval moved for summary judgment claiming that these actions are not cognizable in tort.

The DC granted summary judgment and the 3rd circuit (en banc) affirmed. Circuit held that damage solely to a defective product is actionable in tort if the defect created an unreasonable risk of harm to persons or property other than the product itself, and harm materializes.o Disappointment over the quality of a product is protected by warranty law The charterers were

disappointed over the product’s quality and the only risk was that the turbines would operate at a lower capacity. Neither the negligence claim nor the strict liability claim is cognizable.

One of the Circuit Judges sitting En Banc: Would permit recovery for a “near miss” where the risk existed, but no calamity occurred. He believed that Ship 1’s exposure to a severe storm when the ship was unable to operate at full power due to the defective party created an unreasonable risk of harm. SC granted certiorari…

ii. Issues Is a cause of action in tort stated when a defective product purchased in a commercial transaction malfunctions,

injuring only the product itself and causing purely economic loss?o Requires the court to consider:

a. 1) Whether federal maritime law has a strict liability doctrine for products liability?b. 2) Whether injury to a product itself is the same kind of harm that should be protected by

products liability or left entirely to the law of Ks?iii. Supreme Court

The Courts of Appeals sitting in Admiralty overwhelmingly have adopted concepts of products liability, based both on negligence and on strict liability (the SC joins the Courts of Appeals). The SC’s rationale – that strict liability should be imposed on the party best able to protect persons from hazardous equipment – is equally applicable when the claims are based on products liability. To the extent that products actions are based on negligence, they are grounded in principles already incorporated into the general maritime law. o SO, admiralty law does incorporate principles of products liability including strict liability

a. Court could have said we don’t have to decide this issue in this case because even if we did, it would not cover the present case

Products liability grew out of a public policy judgment that people need more protection from dangerous products than is afforded by the law of warranty (it is clear that if this development were allowed to go to far, K law would drown in a sea of tort). The SC must determine whether a commercial product injuring itself is the kind of harm against which public policy requires manufacturers to protect, independent of any contractual obligation. The paradigm for a products-liability case is one in which a product, reasonably certain to place life and limb in peril, is distributed without re-inspection and causes bodily injury. This was broadened to include protection against property damage (in the traditional “property damage” cases, the defective product damages other property).o In this case, there is no damage to other property (there was only damage to the turbine itself in each

scenario). Since each turbine was supplied by Delaval as an integrated package, each is a single unit or “Single Integrated Product” (if it were not, there would be property damage in virtually every case where a product injures itself eliminating the distinction between warranty and strict products liability). An injury to the a product itself is the essence of a warranty action (through which a contracting party can seek to recoup the benefit of its bargain).

Should injury to a product itself be able to be brought in tort?o 1) Seely v. White Motor Co. (Majority Land-Based Approach) Preserving a proper role for the law of

warranty precludes imposing tort liability if a defective product causes purely monetary harm (economic losses)

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32a. Justice Traynor – When a dump truck blows itself up, it is just a bad dump truck and it did not tort

anyone else (SC adopts this view)o 2) Santor v. A&M Karagheusian, Inc. (Minority Land-Based Approach) Held that a manufacturers duty to

make non-defective products encompassed injury to the product itself, whether or not the defect created an unreasonable risk of harm (marred carpeting)

a. The majority of Courts of Appeals sitting in Admiralty that have adopted this approach find that the safety and insurance rationales behind strict liability apply equally where the losses are purely economic. They find it arbitrary that economic losses are recoverable if a PL suffers bodily injury or property damage, but not if a product injures itself

b. SUPREME COURT Not Good: Raises legitimate questions, but the countervailing arguments are more powerful; Fails to account for the need to keep products liability and K law spheres separate and to maintain a realistic limitation on damages.

o 3) Intermediate Approach Permits products liability actions under certain circumstances when a product injures only itself (attempt to differentiate between disappointed users and endangered ones and permit only the latter to sue in tort). The determination rests on the nature of the defect, the type of risk, and the manner in which the injury arose

a. SUPREME COURT Not Good: The intermediate approach is too indeterminate to allow manufacturers to structure their business behavior; Since no person or property is damaged, the resulting loss is still purely economic – even of a person is endangered - and is likely to concern a loss related to the failure of the purchaser to receive the benefit of its bargain (a concern of K law).

SUPREME COURT HOLDING Adopts an approach similar to Seely and holds that a manufacturer in a commercial relationship has no duty under either a negligence or strict products liability theory to prevent a product from injuring itselfo When a product injured only itself, the reasons for imposing a tort duty are weak and those for leaving a

party to its K remedies are stronga. The tort concern with safety is reduced and a person stands to lose only the value of the product.

Losses like these can be insured and society does not need to provide a customer with special protection (the increased cost to the public that would result from holding a manufacturer liable in tort for injury to the product itself is not justified) When a person is injured, however the cost can be an overwhelming misfortune that that

the person is not prepared to meetb. Damage to a product is a warranty claim and a manufacturer can restrict liability, within limits, by

disclaiming warranties and limiting remedies (in exchange for this, the purchaser pays less for the product)

c. Permitting recovery for all foreseeable claims for purely economic loss would make a manufacturer liable for vast sums Here, for example, if the shipowners were permitted to recover for the economic loss, the

companies that sub-chartered the ships may recover for losses from the delays and customer can claim economic losses, etc.

o Judgment for Delaval was affirmed NOTE: Robins Dry Dock The prohibition against recovery in tort for damage to the product itself can be seen as

part of the larger principle that people believe derives from Robinso In that case, Justice Holmes held that a vessel could not recover loss-of-use damages from dry dock that

attempted to repair the ship and negligently damages it. a. Narrow Holding – A DF (dry-dock) who negligently damages a PL (charter) only through

interference with the PL’s K agreement with a third party (shipowner) is not liable in tortb. Broader Holding – There can be no recovery in negligence for economic loss from an accident that

does not cause physical damage to the PL’s person or property (no tort if purely economic loss) East River sweeps damage to a product itself under the rubric of Robbins broader ruling

NOTE: Scalia does not want to be the SC of Admiralty We are not good at this nitty gritty tort shit. We have bigger fish to fry than this.

5. McDermott, Inc. v. AmClydei. Facts: A construction accident in the Gulf of Mexico occurred in which numerous DFs are sued. Invoking federal court’s

jurisdiction under 1332 and 1333, PL brought suit against AmClyde, River Don and Sling DFs. PL settled with the sling DFs for $1 Million and released them from all liability (with a promise to indemnify them against any contribution action). The case was tried on the law side and a jury found that the total damages amounted to $2.1 and allocated responsibility to the parties as follows: 32% to AmClyde, 38% to River Don and 30% to PL/Sling DFs. The court denied a motion to reduce the judgment pro tanto by the $1 Million settlement and entered judgment against AmClyde for 672K (32% of 2.1 Million) and River Don for 798K (38% of 2.1 Million).

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33 Circuit Court The Court of Appeals then held that a contractual provision precluded recovery against AmClyde

and that the trial judge had improperly denied a pro tanto settlement credit. The Court dropped the judgment against AmClyde completely and reduced the judgment against River Don to 470K (the court got to this figure by reducing the 2.1 Million by the 30% settlement by the PL/Sling DFs and the 1 Million received in settlement). This can be seen as giving the DF a double credit.

ii. Supreme Court Because we have not previously considered how a settlement with less than all of the DFs in an admiralty case

should affect the liability of non-settling DF, and because the Court of Appeals have adopted different approaches to this important question, we granted certiorari

Three Approaches identified by the ALI:o Pro Tanto with Contribution The money paid extinguishes any claim that the injured party has against the

party released and the amount of his remaining claim against the other tortfeasors is reached by crediting the amount received; but the transaction does not affect a claim for contribution by another tortfeasor who has paid more than his equitable share of the obligation.

a. Discourages settlement because the other DFs can sue the settling DF for contribution if his settlement happens to have been in his favor (pays less than the amount the court later determines is his share of liability)…Worst Option

o Pro Tanto without Contribution The money paid extinguishes both any claims on the part of the injured party and any claim for contribution by another tortfeasor who has paid more than his equitable share of the obligation and seeks contribution (as in the first alternative, the amount of the injured party’s claim against the other tortfeasors is calculated by subtracting the amount of the settlement from the PLs damages).

a. A litigating DF’s liability will frequently differ from his equitable share because a settlement with one DF for less than his equitable share requires the non-settling DF to pay more than his share. This will be common because settlements rarely reflect an accurate prediction of the outcome at trial (settlement figure is likely to be less than the settling DF’s equitable share because the settlement reflects the uncertainty of trial and provides the PL with a war chest to finance the litigation with the other DFs). . NOTE: Here, unlike in most situations, the settling DFs did not get off cheap.

o Proportionate Share The money paid extinguishes any claim that the injured party has against the released tortfeasor and also diminishes the claim that the injured party has against the other tortfeasors by the amount of the equitable share of the obligation of the released tortfeasor.

a. No suits for contribution from the settling DF are permitted or necessary because the non-settling DFs pay no more than their share of the judgment

Supreme Court (Stevens) chooses the Proportionate Share Approach (best option)o The most important consideration is judicial economy We should encourage settlement o Most consistent with Reliable Transfer (trumps other considerations) A 1975 case in which it was clear that

the victim fault penalty rule for almost all maritime torts was pure comparative fault. However, for vessels litigating against each other in a collision, the US was clinging to a 50/50 split regardless. Reliable Transfer put collision with vessels into the rest of tort law so consistency with reliable transfer means consistency with the rest of maritime tort law in the way the court handles reductions (reduce by the percentage blame assignment with a percentage for settlement credit).

o NOTE: The SC dodged a bullet here by treating AmClyde as a settling tortfeasor. In this manner, the Court was able to keep AmClyde’s percentage IN the case and charge it against the PL (as opposed to simply reducing the 2.1 Million by the 30% attributed to the PL/Sling DFs and leaving River Don with 1.47 Million to pay…Its own percentage and that of AmClyde)

a. The court introduced this notion by using the word “immune” This is problematic because it implies that AmClyde’s % should never have been assigned and River Don’s share should be 38/68

iii. Contribution and Indemnity Percentage-fault based contribution is the method by which the maritime law normally adjusts the responsibilities

of multiple tortfeasors (assessing the sling DFs % fault against the PL was a way of acknowledging that, by settling with those DFs, the PL had sold away the contribution rights that the remaining DFs would otherwise have had against the settling DFs)

In some situations, maritime law provides that one of several tortfeasors is entitled to indemnity (the recovery of ALL of the indemnitee’s liability to the PL). These rights generally stem from contractual arrangements. However, an indemnity action will lie on behalf of a tortfeasor (who is liable to the PL only on some “no-fault” basis) against another tortfeasor whose actual fault was a cause of the PL’s injuries o An employer who owes a seaman maintenance and cure (a no-fault remedy) may be entitled to indemnity

from a third party whose negligence hurt the seaman o In general, the law is moving toward the elimination or drastic restriction of tort indemnity doctrines and in

the direction of proportional-fault sharing of responsibility

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346. Exxon Co. v Sofec

i. Facts: Case is based on a stranded tanker, the Exxon Houston that broke away from its mooring system manufactured by Sofec. An oil hose was attached t and trailing from the ship after it broke loose. This threatened the ships propeller and its ability to move was restricted but eventually reached a safe position and was heading out to sea in no further danger of stranding. The Captain actions after the ship was free of danger were negligent (as concluded by the lower courts), including his failure to have someone plot the ship’s position when people were still working to disconnect the hose form his ship. Without knowing his position, the Captain was unable to make effective use of the navigational chart to check for hazards (the Courts found this grossly and extraordinarily negligent). His failure to plot the ship’s position was entirely independent of the prior problem (it was a voluntary decision). The ship ended up hitting a reef, which resulted in the ship’s total loss. Exxon filed a complaint in admiralty against Sofec for the loss of its ship and cargo. Before the trial, Sofec suggested that the Captain’s actions were the superseding and sole proximate cause of the accident and moved to bifurcate the trial. The DC granted the motion and limited the first phase of the trial to the issue of proximate causation with respect to actions taken after the ship’s initial breakout (the PL made a forum-shopping mistake by not bringing this to a jury first). After a 3-week admiralty bench trial, the DC found that the Captain (and Exxon’s) extraordinary negligence was the superseding and sole proximate cause of the ship’s loss. Exxon appealed.

ii. Ninth Circuit Court rejected Exxon’s argument that the doctrine of proximate causation and superseding cause are no longer

applicable in Admiralty in light of the same Court’s decision in Reliable Transfer (“an intervening force supersedes prior negligence and therefore breaks the chain of proximate causation required to impose liability on the original actor…where a subsequent actor’s negligence is extraordinary, defined as neither ordinary nor reasonably foreseeable”)

Court also rejected Exxon’s argument that the DC erred in rendering judgment against Exxon on its breach of warranty claims (“where, as here, the district court finds the inured party to be the superseding or sole proximate cause of the damage complained of, it cannot recover from a party whose actions or omissions are deemed to be the causes in fact, but not the legal causes of the damage”)

Under these circumstances, the DC’s bifurcation of the trial was not an abuse of discretioniii. Supreme Court

Exxon’s Arguments:o 1) The Superseding Cause doctrine does not or should not apply in Admiralty (the lower Court’s failure to

allocate any share of damages to parties whose fault was a cause in fact of Exxon’s injury conflicts with the decision in Reliable Transfer)

a. WRONG Reliable Transfer simply discarded the longstanding rule in admiralty that damaged in property damage cases where to be divided equally between those liable for the injury. The Court adopted comparative fault instead, but did not deal with the issue of proximate causation and did not suggest that the requirement was inapplicable in admiralty

b. There is nothing internally inconsistent with a system that apportions damages based upon comparative fault ONLY among tortfeasors whose actions were proximate causes of an injury There also is no incompatibility between the superseding cause doctrine (which is a facet of

the proximate causation requirement) and a comparative fault method of allocating damages

The doctrine of superseding cause is applied where the DF’s negligence substantially contributed to the PL’s injury, but the injury was actually brought about by a later cause of independent origin that was not foreseeable. It is properly applied in admiralty cases. It can also be reconciled with comparative negligence: Superseding cause operates to cut off the liability of an admittedly negligent DF, and there is properly no apportionment of comparative fault where there is an absence of proximate causation.

c. Exxon argues that the Court should ignore proximate causation in admiralty anyway. They say that a system in which damages are allocated based upon the degree of comparative fault of any party whose act was a cause in fact of injury is fairer and simpler Proximate Causation principles are a necessary limitation on liability

o 2) The DFs breaches of warranty were the causes in fact of the loss of the Exxon Houston and therefore they should be liable for that loss

a. Agrees with the 9th Circuit that where the injured party is the sole proximate cause of the damage complained of, that party cannot recover in K from a party whose breach of warranty is found to be a mere cause in fact of the damage The finding that the Captain’s extraordinary negligence was the sole proximate cause of

Exxon’s injury suffices to cut off respondent’s liability for the injury on a K breach of warranty theory as well

o The lower court’s findings that the Captain’s extraordinary negligence was the sole proximate cause of the loss of the Houston was in error

a. The court declines to reconsider this

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35o The DC abused its discretion and deprived Exxon of due process in bifurcating the issue of proximate

causation from the other issuesa. Exxon relies on Reliable Transfer in asserting that the fault of all parties must be considered

together in order that they may be compared This is wrong…A party whose fault did not proximately cause the injury is not liable at all

b. The court declines to reconsider the issue of bifurcationiv. NOTE: Justice v. CSX Transportation (Posner)

The family of a motorist killed by a train at a grade crossing shed a landowner whose building had obstructed the deceased’s view of the crossing. The landowner agued that the deceased’s recklessness in disregarding the warning signal was the sole proximate cause of the accident

Posner called this argument “untenable” It is, indeed, a transparent effort to circumvent Indiana’s comparative negligence statute by relabeling contributory negligence as proximate cause and thereby using a victim’s negligence to eliminate his cause of action rather than merely to reduce the size of the damages award to which he is entitled o Following this model, Exxon may have been able to usefully narrowed it primary argument (1)

Problem with Exxon’s lawyers/argument: You don’t need to throw superseding cause away…you just need to ensure that it does not do away with the legal cause requirement. All Exxon had to do was say that the proximate cause argument (that Sofec was not a proximate cause) was misused because it was only applied due to the PL’s negligence.

B. Injuries to Seamen1. Historical Introduction

i. Seamen were treated badly for a very long time (Germany was the worst abuser, then the UK then the US)ii. Congress took steps to ameliorate the worse abuses. It outlawed “Cruel and Unusual” punishment of sailors and abolished

flogging in the navy and aboard vessels of commerce. Eventually it repealed statutes authorizing the arrest of deserters. The main protectors of seamen have been the federal admiralty courts. Justice Story laid down a broad “wards of

the admiralty” theme that had been a significant influence in the entire body of seamen’s-injury jurisprudence:o “The doctrine requiring shipowners to meet the medical needs of injured and ill seamen appears to me so

consonant with humanity, with sound policy, and with national interests…It is the great public policy of preserving this important class of citizens for the commercial service and maritime defense of the nation. Every act of legislation which secures their healths, increases their comforts, and administers to their infirmities, binds them more strongly to their country; and the parental law, which relieves them in sickness by fastening their interest to this ship, is a wise policy…It encourages seamen to engage in perilous voyages with more promptitude, and at lower wages. “

i. The Osceolaii. Facts: A Seaman sustained injuries aboard a vessel three miles from the port of Milwaukee. The PL alleges that the

master was negligent in ordering him to use a derrick and hoist a gangway while in open sea, where the operation might be impeded and interfered with by the wind (which it was). The PL filed his suit in admiralty in the District Court for the Eastern District of Wisconsin against the Osceola (in rem) to recover damages for his personal injury. The case resulted in judgment for the PL and the Osceola appealed to the Circuit Court, which certified certain questions to the SC.

iii. Issues 1) Is a vessel responsible for injuries happening to one of the crew due to the negligent order of a master in

respect to the management and navigation of a vessel?o NO

2) Are the master of the vessel and the crew “fellow servants” in the navigation and management of a vessel?o SC felt that it did not have to answer this question

3) Are the vessel and its owners, as a matter of law, liable to the PL (who was a member of the crew) for the injury he sustained due to the negligence of master (assuming that the order was in fact negligent)?o NO

iv. Supreme Court The statutes of the US do not contain provisions on the subject of the liability of a ship or its owners for

damages resulting from the negligence of its captain towards a member of the crew. However, in all but some recent cases, recovery has been limited to the wages and expenses of maintenance and cure

Declared the following propositions:o The vessel and her owners are liable, in case a seaman falls sick or is wounded in the service of the ship,

to the extent of his maintenance and cure and to his wages (at least for as long as the voyage is continued)

o The vessel and her owner are liable to an indemnity for injuries received by seamen in consequence of the unseaworthiness of the ship, or failure to supply and keep in order proper appliances

a. This differs from the Continental Codes in allowing an indemnity beyond the expense of maintenance and cure in cases arising from unseaworthiness

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36o All the members of the crew are fellow servants and therefore seamen cannot recover for injuries

sustained through the negligence of another member of the crew beyond the expense of his maintenance and cure

a. Since all members of the crew are fellow servants, there is no tort remedyo The seaman is not allowed to recover an indemnity for the negligence of the master or any member of

the crew, but he is entitled to maintenance and cure (whether the injuries were received by negligence or accident)

The first and third questions are therefore answered in the negativev. NOTE: By 1900, the land-based tort law in the UK and US had developed a set of doctrines precluding recovery for most

injured workers from their employers. These doctrines included a robust version of the defensive doctrine in modern negligence law of legal causation plus the “unholy trinity” of affirmative defenses: Assumption of Risk, Contributory Negligence and Fellow Servant. Workers Compensation statutes therefore became prominent in Germany and the UK and some states in the US (in order to protect injured industrial workers).

Seamen had something similar to workers compensation in the Maintenance and Cure Doctrine (the Osceola court felt that this, in addition to indemnity for unseaworthiness, was adequate).

The Fellow Servant Doctrine – negating an employer’s vicarious liability when the victim of workplace negligence was a fellow servant of the errant employee – was deeply imbedded at the time of The Osceola and many courts believed that it applied to maritime tort cases (if someone sues a fellow worker for an injury at work, the employer is not vicariously liable)

vi. NOTE: While many industrial workers began obtaining protection under worker’s compensation, RR workers had an act passed in 1906 designed to provide them with a liberal negligence action against their employers. After the SC declared the Act unconstitutional (beyond the authority of Congress to regulate interstate commerce), it was re- written and passed in 1908:

The Federal Employer’s Liability Act (FELA)o Tort remedy without contributory negligence barrier

vii. NOTE: Seamen were falling behind land-based workers (who now had a “modern” worker’s compensation remedy) and RR employees (who now had a first-class tort remedy). Congress thought Seamen needed more protection Section 20 of The Act to Promote the Welfare of American Seamen (1915) provides:

That in any suit to recover damages for any injury sustained on board a vessel or in its service, seamen having command shall not be held to be fellow servants with those under their authority (the purpose of this provision was to overrule The Osceola and thereby permit Seamen to sue their employers for negligent injury) o Did not work…

viii. Chelentis v. Luckenbach Steamship Co.ix. Facts: PL was employed as a fireman aboard the Luckenbach when he was injured by a wave that came aboard

during heavy wind and broke his leg. He received due care immediately and when the vessel arrived at its destination, he was taken to a marine hospital where he remained for 3 months and had to eventually have his leg amputated. When he was discharged, he claimed that his injuries resulted from the negligence and improvident order of a superior office. He brought suit in state court in NY and it was removed to federal court based upon diversity jurisdiction. The PL demanded full indemnity for his damages (the seaworthiness of the ship was not questioned and PL did not announce a claim for maintenance, cure or wages). The Court directed a verdict for the DF and the Circuit Court affirmed the judgment.

x. Supreme Court Unless there was some liability imposed upon the owners of the ship that is different that prescribed by

maritime law under the rules laid out by The Osceola, the PL can only properly demand wages, maintenance and cure

Despite Section 20 of the Act to Promote the Welfare of Seamen, maritime law imposes liability upon a shipowner to a member of the crew injured at sea by reason of another member’s negligence without regard to their relationship The language of the section discloses no intention to impose upon shipowners the same measure of liability for injuries suffered by the crew while at seas as common law prescribes for employers in respect of their employees on shore

xi. NOTE: IN 1920, Congress responded to the lesson by enacting the statute presently known as the Jones Act: “A seaman injured in the course of employment, or, if the seaman dies from the injury, the personal

representative of the seaman, may elect to bring a civil action at law, with the right to trial by jury, against the employer. Laws of the United States regulating recovery for personal injury to, or death of, a railway employee apply to an action under this section” (this reference is to the FELA) This is the Statute’s Current Form

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37o Any seaman (whose injuries are sufficiently connected with the US as per Romero) hurt at work

can maintain an action for damages at law (1331) with the right to trial by jury using any statutes applied to RR employees

xii. Panama Railroad Co. v. Johnsonxiii. Facts: Action by a seaman against his employer (who owns the ship on which he was serving) to recover

damages for personal injuries suffered while at sea allegedly as a result of the negligence of the employer and ship’s officers. The action was brought on the law side of a US District Court and the right to recovery was based expressly on Section 20 of the Act to Promote the Welfare of American Seamen which states (the PL’s lawyer assumed the action had to be brought under 1331): “Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such actions all statutes of the US modifying or extending the common-law right or remedy in cases of personal injury to RR employees shall apply” (this became the Jones Act). The issues were tried before a jury who decided for the PL. The Circuit Court affirmed.

xiv. Supreme Court The DF objects that the statute upon which the PL bases his right of actions conflicts with Article III, § 2

of the Constitution, which extends the judicial power of the US to “all cases of admiralty and maritime jurisdiction.“o There is no reason to doubt that the power of Congress extends to the entire subject and permits

the exercise of wide discretion BUT there are limitations: There are boundaries to maritime law and admiralty jurisdiction which inhere in those subjects and cannot be altered by legislation, as by excluding something falling clearly within them or including something falling clearly without

o Conflict with Article III: The DF asserts that this statute enables a seaman asserting a cause of action essentially maritime to withdraw it from the reach of maritime law and the admiralty jurisdiction, and to have it determined according to the principles of a different system

The statute is concerned with the rights and obligations of seamen and their employers arising out of personal injuries during the course of employment. This is a matter that falls within the recognized sphere of maritime law (which has differed from common law rules applicable to injuries by employees in non-maritime service). But since Congress is empowered to alter, qualify or supplement the maritime rules, there is no reason that Congress cannot bring them into relative conformity with the common-law rules. o The statute neither withdraws injuries to seamen from the reach of maritime law nor enables

seamen to do so. It brings new rules into maritime law that extends a right to seamen to invoke either the relief accorded by the old rules or the new rules. The option is between alternatives accorded by the maritime law as modified, and not between that law and some other non-maritime system.

o Section 20 was re-enacted in its amended form (used in this case) after Chelentis demonstrating that it is intended to, and does, bring the rules to which it refers into maritime law

The terms of the statute are not imperative, but permissive – It says “may maintain” an action at law “with the right to a trial by jury.” This means that an injured seaman is permitted, but not required to proceed on the common-law side of the court with the concomitant and incidental right to a trial by jury. o The words “in such action” are troubling The SC does not regard them as meaning a seaman

may have the benefit of the new rules if he sues in the law side, but not if he sues on the admiralty side (this would be unreasonable and the court is not willing to attribute such an intention to Congress). A more reasonable meaning (consistent with the spirit and purpose of the statute as a whole) would indicate the reference to be to all actions brought to recover compensatory damages under the new rules as distinguished from the allowances covered by the old rules (wages and maintenance/cure).

a. This understanding leaves the seaman free to assert his right of action under the new rules on the admiralty side of the court. In this way, the statute does not encroach on the admiralty jurisdiction intended by the Constitution, but permits that jurisdiction to be invoked and exercised as it has from the beginning.

xv. The holding and most implications of Panama are good law today. However, the implication that a seaman must choose between his traditional maritime remedies (maintenance an cure and unseaworthiness) and the new Jones Act remedies, did not survive.

As inferred by Romero, the present understanding is that the PL can cumulate all three counts in the same lawsuit and that this suit can, at the PL’s election, be pursued in admiralty or on the law side (or in state court).

xvi. NOTE: The Supreme Court reconstructed the statute in Panama

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38 It says that it is just granting seamen additional maritime rights (we are adopting RR workers rights and

remedies and making them a part of seamen’s law). However, when it says “you may at you election choose FELA,” the statute (and SC) is really saying that you may at your election invoke the new maritime rights based on FELA

Problem: The statute says that the only way to get this new maritime right is to come to the law side and “in such action” invoke the righto The Court claims that the phrase “in such action” is the only problem with the statute. The SC

deals with this by saying that “such action” is an action for negligence damages, not an action at law with a right to trial by jury

The SC fixed the statute for Congress so that it would be Constitutional (ensured that the federal admiralty jurisdiction was not tampered with)o Now, if a Jones Act action ends up under 1331, we know that it is there because it is just like any

other maritime action brought under the Savings Clause a. Jones Act cases can also be maintained in state court under the savings clause

Panama maritimized the Jones Acto On its face, the Jones Act is pulling something out of the exclusive federal admiralty jurisdiction

and creating a cause of action on the law sidea. In practice, no lawyer for a seaman will stick with the traditional admiralty remedies

when they have FELA

2. Maintenance and Cure

1. Generally Maintenance and Cure cases are not exclusively admiralty. They can be brought under the savings clause, but the award is not up to the jury (when such a case arises, it is usually brought in admiralty because of the speed with which a bench trial can product the needed remedy). NOTE: In Rem actions and actions against the government must be brought in admiralty.

i. The fact that the US government is a DF is not relevant. The cases below resulted from the government’s operation of merchant ships during WWII and the PLs were merchant semen (not in the armed forces). In these scenarios, the government owes the seamen the same basic duties a private shipowner owes its employees.

2. Warren v. United Statesi. Facts: PL seeks maintenance and cure from the US as owner of the ship he was employed on when his injury occurred. PL

went ashore in Naples, Italy in 1944 when he was on shore leave and went to a dance hall that overlooked the ocean where he drank with other seamen. The PL went close to an unprotected ledge to take a look and fell (as he was leaning over, he grasped an iron rod which seemed to be attached to the building but ended up coming off). He broke his leg and the district court awarded maintenance with the Second Circuit disallowing it due to “willful misconduct” (the court only talks about maintenance so cure was probably already provided here).

ii. Shipowner’s Liability Convention (1) The shipowner shall be liable in respect of:

o (a) Sickness and injury occurring between the date specified in the articles of agreement for reporting for duty and the termination of the agreement

o (b) Death resulting from such sickness or injury (2) Provided that national laws or regulations may take exceptions in respect of:

o (a) Injury incurred otherwise than in the service of the shipo (b) Injury or sickness due to the willful act, default or misbehavior of the sick, injured or deceased persono (c) Sickness or infirmity intentionally concealed when the engagement is entered into

NOTE: Section (1) pretty much resembles the PL’s prima facie case and Section (2) looks like a list of affirmative defenses o This is almost right, but 2(a) would have to be moved up into (1)

iii. PL’s Argument Under Section (1) of the SLC, a shipowner’s duty to provide maintenance and cure is absolute and the exceptions

specified in Section (2) are not operative until a statute is enacted putting them in force Even if Section (2) is operative without an Act of Congress, his conduct was not due to a “willful act, default or

misbehavior”

iv. Supreme Court38

39 The exceptions (“national laws or regulations”) permitted by Section (2) are operative by virtue of the general

maritime law and no Act of Congress is necessary to give them force (the term “law” refers to the rules of court decisions as well as Acts of Congress as per Erie’s construction of “the laws if the several states” in the first Judiciary Act)o The US signed onto the treaty to force the world to get up to date and meet our standards…We were not

trying to raise our own standards by insisting on an Act of Congress for (2) to be operative The district court held that the PL’s degree of fault did not bar recovery for maintenance and cure, but the Circuit

disagreed…Issue Was the injury “due to the willful act, default or misbehavior” of the PL within the meaning of the Convention?o The standard prescribed is NOT negligence, but willful misbehavior (maritime law has long held that while the

fault of the seaman will forfeit the right to maintenance and cure, it must be some “positively vicious misconduct such as gross negligence or willful disobedience of orders”)

o Some cases have made an exception for intoxication (Aguilar), but the amount of wine the PL consumed does not permit such a finding (the PL was clearly negligent, but you would have to strain to find willfulness)

DF also argues that the injury did not occur “in the service of the ship” as that term is used in Section (2). The SC held in Aguilar that Maintenance and Cure extends to injuries occurring while the seaman is departing on or returning from shore leave. The DF argues that the doctrine should NOT be extended to cover injuries received during the diversions of the seaman after he has reached the shore. The reason for the Aguilar holding is that an opposite holding would throw liability upon a seaman for hazards encountered solely by reason of the voyage. Shore leave is an elemental necessity in the sailing of ships. “The voyage creates not only the need for relaxation ashore, but the necessity that it be satisfied in distant and unfamiliar ports” (increasing the risk of injury).o The reasoning in Aguilar extends to the period of relaxation on shore (not just the time spent reaching and

leaving it) The decision of the circuit is reversed Dissent

o Jackson and Clark The injuries were not sustained in the service of the ship and the PL must be in the service of the ship to get maintenance and cure. Aguilar held a seaman to be in the service of the ship while going to or from the ship even if for shore leave. The route of access is not the choice of the seaman, but the venue for relaxation is and he is therefore not in the service of the ship while actually relaxing ashore. If Congress wants to enact a policy of accident insurance that is fine, but it should depend on legislation and not the court

o Frankfurter A man who acts as the PL did under circumstances of danger (as in this case) does not show even a minimal degree of regard for the consequences of his act. Unless the ship is a insurer of the PL’s safety, he should not be able to recover against it

a. He was applying a higher standard of care but this was not made clear by the majority or dissent. Scale: Intent (in tort law – Purpose/Desire OR Acted with Knowledge that the conduct was Substantially Certain to bring something about); Recklesness (acting in conscious disregard of a substantial risk ); Gross Negligence (lots of negligence and therefore no mental state); Negligence; Strict Liability

v. NOTES Maintenance and Cure actions are not actions in tort and they are within the admiralty jurisdiction regardless of

whether the injury occurred on land or in water Service of the Ship The holding that shore leave is in the service of the ship (as in Warren) causes problems in

litigation involving “brownwater” seamen on jack-up rigs and other floatable oil drilling apparatuses (they serve the “vessel” for a week or two and then go home for several days)o The 5th Circuit has held that their time ashore should not be analogized to shore leaveo Complicated issue and highly litigious

Willful Misconduct Defense Judicial attitudes to “the traditional instances of disqualifying misconduct, venereal disease and injuries received from intoxication” have been variable

The Intentional Concealment Defense o Leading Case is McCorpen v. Central Gulf S.S. Corp: Maintenance will be awarded even when the seaman has

suffered from an illness pre-existing his employment, but it will be denied where he knowingly or fraudulently conceals his illness from the shipowner. Courts have made a distinction between nondisclosure and concealment: When the shipowner does not require a pre-employment medical examination or interview, the rule is that a seaman must disclose a past illness or injury only when, in his own opinion, the shipowner would consider it a matter of importance. If the shipowner is unable to persuade the court or jury that the seaman could reasonably be expected to have considered his medical history to be a matter of importance, he will be liable for maintenance. He will also be liable if it is found that there exists reasonable grounds for the seaman’s good-faith belief that that he was fit or duty. On the other hand, if the seaman is required to have a pre-hiring medical examination and intentionally misrepresents or conceals material medical facts, the

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40disclosure of which is plainly desired, he is not entitled to maintenance and cure (the defense that there was intentional concealment will not work unless there is a causal link between the pre-existing disability that was concealed and the disability incurred during the voyage).

a. A highly productive defense and very litigious

3. Farrell v. United Statesi. Facts: PL brought suit in admiralty to recover damages for his employer’s alleged negligence under the Jones Act and to

recover for Maintenance and Cure under general maritime law. The issue of negligence was decided against him by both lower courts so the Jones Act claim fell out. PL was docked in Palermo in 1944 and was granted shore leave, which required him to return to the ship at 6PM the same day. PL overstayed his leave and at 8PM, when it was dark and had begun to rain, began to make his way back to the ship. He got lost, was misdirected to the wrong gate about a mile from his ship and fell over a guard chain into a dry-dock which was lighted sufficiently for the night work then in progress (his companion witnesses this close by). PL was treated without expense to himself at various government hospitals until June of 1944, when he was discharged completely disabled. The US District Court for the Southern District of NY concluded that the duty of a shipowner to furnish maintenance and cure does not extend beyond the time when the maximum cure possible has been effected (Second Circuit Affirmed). The obligation is to provide maintenance and cure until the injury is no longer treatable – “maximum medical cure.”

PL argues that he is entitled to maintenance for as long as he is disabled (which in his case is for the rest of his life). He admits that although there is no authority in any US statute for the proposition that he is entitled to maintenance for life, an argument is made based upon the ancient authority of Cleirac, Jugmens d’Oleron (medieval pronouncement of maritime law):o “If in defending himself or fighting against an enemy or corsairs, a mariner is maimed, or disabled to serve o

board a ship for the rest of his life, besides the charge for his cure, he shall be maintained as long as he lives at the cost of the ship and cargo”

PL also argues that he is entitled to lifelong maintenance and cure because he was in the service of the ship when injured (“Calmar Caveat” – From Calmar Steamship Corp v. Taylor)

DF (employer/US) does not try to prevent him from obtaining maintenance and cure…they just try to prevent him from getting it for life. If they had tried to prevent it, they could have argued that the PL not within the Aguilar ingress and egress sphere or said that he was guilty of willful misconduct.

ii. Supreme Court Oleron Laws were written when pirates were real and if seamen did not protect their ships, all would be lost.

Lifelong maintenance was therefore more an incentive to save the ship than induced by humanitarian considerations. Even if the old law is construed liberally, it does not cover the facts in this case.o Although this was during WWII, the ship was not being attacked and the PL was not injured in its defense

PL claims that he was in the service of the ship when he was injured and that he is therefore entitled to a different measure of maintenance and cure (lifelong)o Logically and historically, a seaman’s right to maintenance and cure derives from his dependence on the ship

and the court refuses to look at the personal nature of the seaman’s activity at the moment of injury to determine his right to an award

o Aside from gross misconduct or insubordination, what the seaman is doing and why he is doing it at the time he sustains his injury does not affect his right to maintenance and cure, however decisive it may be as to claims for damages for negligence (derived from Aguilar)

o For any purpose to introduce a graduation of rights and duties based on some relative proximity of the activity at time of injury to the “employment” or “service of the ship” would alter the basis and be out of harmony with the spirit and function of the doctrine and would open the door to litigiousness which has made the landman’s remedy so often a promise to the ear only to be broken

It is not clear that the PL could gain if a distinction were introduced. If the SC were to concede that a larger amount is due to people whose injury is caused by the nature of their employment, it would still not be applicable here…o PL was disobedient to his orders and overstayed his shore leaveo PL fell into a dry-dock that was sufficiently lighted for workers and his injuries were solely due to his own

negligence o None of this is invoked to reduce his and a seaman’s usual remedy, but it is hard to see how these

circumstances would justify an enlargement of that remedy

PL is entitled to the usual amount of maintenance and cure at the ship’s expense. Maintenance and cure is more certain if it is more limited in its benefits. The government does not contend that if the PL receives further

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41treatment of a curative nature, he may not recover in a new proceeding the amount expended for such treatment and for maintenance while receiving it

iii. NOTES The relatively conservative duration rule in Farrell has remained stable…Maintenance and Cure is provided until a

doctor says that from this point on, he is not going to improve with future treatment. However, if it is possible for to be further treated and made better in the future, the PL is allowed to come back for more Maintenance and Cure (however, there will be no lump sum awarded as there is in tort)o Vela v. Ford Motor Co. The maintenance and cure obligation continues until such time as the seaman’s

incapacity is medically declared to be permanent Burden of Proof The logic in Farrell pushed the employer to present medical evidence that the maximum recovery

point was reached before payments were stopped and therefore militates toward saddling the employer with the burden of producing evidence on the issue (authority also suggests that the employer has the burden of persuasion)

4. Maintenance Ratesi. Maintenance is meant to provide for the cost of food and lodging comparable to what the seaman would have had

on the ship.ii. In the 40s and 50s, courts fell into the habit of awarding $8/day; Now union Ks often specify a maintenance rate

(which is generally relatively low) Most circuits uphold the validity of these Ksiii. In cases not constrained by union agreements, courts will receive evidence on the costs of food and lodging. Usually

a seaman’s own testimony is sufficient and the amount awarded vary widely

5. Damages for Failure to Provide Maintenance and Curei. An employer who non-negligently fails to furnish maintenance or cure that a court determines was due will be held

liable only for the unpaid benefits. Under the “American Rule,” the attorney’s fees the seaman incurs in this situation are the seaman’s own problem

ii. If the employer is negligent in withholding the maintenance and cure (if it turns out that there was no reasonable defense), then the liability imposed will include any compensatory damages (i.e. enhancement of the illness or injury, costs of finding alternative medical care, pain and suffering) that the seaman can show proximately resulted from the employer’s failure to pay. Here, also, the winning PL’s attorney’s fees remain the PL’s problem.

iii. If the employer’s failure to provide maintenance and cure was more blameworthy (i.e. willful and wanton). Then the award can include a punitive element (in some circuits, full punitive damages can be awarded and in other circuits, the award is limited to attorney’s fees

Dissuades employers from being hardnosed about payment and gives incentives to attorneys to take on these cases (a lawyer will not want to take on a stand alone maintenance and cure case because there is really not a sizeable contingency fee; usually a PL come to court with the “trilogy” consisting of the Jones Act, Wages and Maintenance/Cure and the lawyer is in line for a sizeable fee)

6. Wagesi. Statutes require a seaman’s earned wages to be paid periodically upon demand and upon termination of the

seaman’s employment There is a penalty of 2 days’ wages for each day payment is delayed without cause

ii. Unearned Wages – The right to wages an injured or rill seaman would have earned if he had been able to complete the contractual terms of employment (generally work until the end of the voyage) is viewed as incident to maintenance and cure and is traditionally considered part of the right

In Farrell, the SC was split on the measure of unearned wages due to the injured seamano Majority In light of the custom of the industry and the condition of the times, the DF is obligated to

pay wages only for the voyage on which the ship was engaged when the PL signed on. When the voyage terminated at a port in the US, the PL’s right to unearned wages ended. The 12-month period is a limitation on the duration of the voyage and not a stated period of employment.

o Dissent The PL was entitled to unearned wages for the 12-month period he signed up for. The number of voyages he was able to participate in is immaterial. The controlling matter and premise for payment of unearned wages is the extent of the voyage that could be demanded of the PL (12 months worth).

7. Litigation Pointsi. Any Maintenance and Cure case will stand in Admiralty (there is no need for Grubart, nexus test, etc.). It is a stand-

alone exception to the normal jurisdiction rule. You are not required to bring a Maintenance and Cure case in Admiralty Court

ii. Did the injury or illness occur in the service of the ship?

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42 Generates lots of litigation

iii. For how long is Maintenance and Cure owed? Generates lots of litigation

iv. Willful Misconduct Defense More straightforward and less attractive as a defensive doctrine

v. Intentional Concealment Defense Generates lots of litigation

vi. Penalty for Failure to Provide Maintenance and Cure Generates lots of Litigation

2. The Negligence Remedy Provided by the Jones Act1. Generally The Jones Act was enacted in1920 to overrule the portion of the Osceola holding that seamen have no cause of

action for injuries resulting from the negligence of their employeri. “A seaman injured in the course of employment, or, if the seaman dies from the injury, the personal representative of the

seaman, may elect to bring a civil action at law, with the right to trial by jury, against the employer. Laws of the United States regulating recovery for personal injury to, or death of, a railway employee apply to an action under this section”

ii. Panama RR holds that a Jones Act PL can sue in admiralty as well as at lawiii. Jones Act Coverage The principle limitations are the “seaman” and “course of employment” requirements

No requirement that the injury occur on navigable water Braen v. Pfeifer Oil Transportation Co. Holds that a seaman does not lose seaman status or step out of the

“course of employment” when temporarily assigned by his employer to a job that is unrelated to his regular vessel-based duties. The opinion included a troublesome dictum by Justice Douglas: He equated the “course of employment” requirement for Jones Act protection to the “service of the ship” formula used in maintenance and cure cases…Some lower courts have refused to adhere to this

2. Gautreaux v. Scurlock Marine, Inci. Facts: Scurlock hired Guatreaux (PL) as his ship’s relief captain. When he was serving in that capacity and started the

motor, a manual crank handle flew off an apparatus and struck Gautreaux on the right side of his face, crushing his right eye and inflicting other severe injuries. PL sued Scurlock Marine alleging that his injuries were caused by its negligence and the unseaworthiness of the ship. PL’s primary complaint was that the DF failed to properly train him in the use and operation of the apparatus that malfunctioned, thereby not providing him a safe place to work. DF responded seeking exoneration from or limitation of its liability. After a two-day trial, the jury found in favor of the PL for his Jones Act Negligence claim, but found that the ship was seaworthy. The jury found the PL 5% at fault and the DF 95% at fault (jury came back with a special verdict).

On appeal, the DF argues that in its instructions regarding contributory negligence, the district court erred by charging the jury that a Jones Act seaman need exercise only “slight care” for his own safety. DF asserted that the standard PL and all seamen should be held to is that of a reasonably prudent person exercising ordinary due care under the circumstances. The circuit panel acknowledged that the viability of the slight care standard had recently been questioned but considered it settled law in the Circuit and therefore refused to hold that the district court had erred. The court held that the standard can only be changed, absent action by the SC, by this court sitting en banc.

ii. Fifth Circuit Rehearing (sitting en banc) Acknowledged confusion in the Circuit as to the proper standard of care by which juries should measure a PL’s

duty under the Jones Act to protect himself (slight care vs. ordinary prudence). Nothing in the statute indicates that Congress intended to hold Jones Act employees to a standard of a slight duty of care in the exercise of concern for their own safetyo Overreaching The Court was not asked to say anything about the amount of care (level of duty). It was

asked only to comment on whether the duty was the same on both sides of the V FELA provides that “every common carrier by railroad shall be liable in damages for such injury or death resulting

in whole or in part from the negligence of any of the officers, agents, or employees of such carrier.”o The phrase “in whole or in part” (has come to be understood as “slightest”) modifies only the causation

prong so that a DF employer can still be found liable even if his negligence was only part of the cause of the injury. It does NOT modify the substance of the word “negligence” The duty of care owed is the same as it is under the normal rules of statutory construction which is that of ordinary prudence

The jurors were improperly instructed regarding the PL’s duty to exercise care for his own safety. The judgment of the district court as to comparative fault is therefore vacated and the case is remanded for proceedings consistent with this opinion

iii. NOTE: A panel of the second circuit has expressed partial disagreement with the holding in this case, stating that the 2nd circuit construes FELA/Jones in light of its broad remedial nature, as creating a relaxed standard for finding employer negligence as well as causation

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43iv. NOTE: Duty will rarely be an issue in Jones Act litigation and the fight almost always centers on the issue of Breach (was

there sub-standard conduct?). Courts have moved toward saying that there is really not much of a Legal Cause issue. Page 1 Jones Act PL must technically show: Duty, Breach, Cause in Fact, Legal/Proximate Cause and Damages Page 2 DF can indict the PL’s conduct by showing: Breach, Cause in Fact and Legal/Proximate Cause Page 3 When there is culpable conduct on Page 1 AND Page 2, you make a percentage assignment

v. NOTE: The law of the Fifth Circuit was in fact a mess and did need to be fixed/clarified. It makes no sense to say that a Jones Act PL owes himself very little in the way of self-care (this would not help from an economic efficiency standpoint)

3. Norfolk Southern Railway Co. v. Sorrelli. Facts: PL sustained neck and back injuries while working as a trackman for the RR company (while he was driving on a

gravel road along the tracks, another Norfolk truck approached causing PL to veer off the road, tip over and get injured). He filed suit in Missouri State Court under FELA. Contributory negligence is not a bar to recovery under FELA, but damages are reduced in proportion to the amount of negligence attributable to the employee (PL was awarded $1.5 Million by a jury and the employer was held vicariously liable). Missouri applies different standards of causation to RR and employee contributory negligence in its jury instructions: The instructions direct a jury to find an employee contributorily negligent if the employee was negligent and his negligence “directly contributed to cause the injury,” while allowing a finding of RR negligence if the RR was negligent and its negligence contributed “in whole or in part” to the injury. The DF RR objects that the jury instructions reflected a more lenient causation standard for RR negligence than for employee contributory negligence (wants the lenient standard to apply to the employee too). The trial court overruled the objection and the RR moved for a new trial, asserting that the different standards were improper because FELA’s comparative fault system requires the same causation standard to apply to both parties. The trial court denied the motion and the Court of Appeals affirmed. The Missouri SC denied discretionary review so the US SC granted cert.

The jury was told that the causation issue on Page 1 should be answered affirmatively if the DF’s conduct caused the injury “in whole or in part,” which essentially gets rid of the Legal Cause issue and rolls it into Cause in Fact (therefore, the causation standard for the DF is essentially bare “but for” causation. On Page 2, the jury was told not to attribute any negligence to the PL as a Cause in Fact unless it was a “Direct Cause” (this therefore retains Legal Cause with respect to the PL)

ii. Supreme Court Did the Missouri Court err in determining that the causation standard for employee contributory negligence

under FELA differs from the causation standard for ordinary RR (DF) negligence?o RR NOW argues that the Legal/Proximate Cause standard reflected by the Missouri instruction for

employee contributory negligence (higher POP standard) should apply to the RR’s negligence as wello PL raises 2 objections:

a. Substantive The Court departed from the proximate cause standard for RR negligence under FELA in Rogers v. Mississippi Pacific R. Co. (holds that a RR can be found liable if it’s negligence played even the slightest part in causing the injury); The PL’s burden of proof in showing RR negligence is therefore less onerous than the proximate cause standard of common law

b. Procedural The SC did not grant cert to determine the appropriate standard of causation, but to decide whether different standards for RR and employee negligence are permissible under the Act; The RR is not only trying to enlarge the question, but it taking a contrary position to what it held below: In Missouri, the RR argued that the lower standard should also apply to employee contributory negligence and now says that a higher standard should apply to it (the RR)

Court will only decide the limited question of whether different standards can apply There is no reason to believe that different standards for causation should be applied across the “V” (this is what the common law said and there is not reason to believe that FELA changed it)o Practically, it is difficult to reduce damages in proportion to the employee’s negligence if the relevance of

each parties negligence is measured by a different standard of causationo PL Argument: Section 1 addresses RR negligence and uses the term “in whole or in part” while Section 3

addresses employee contributory negligence and does not (PL argues that this reflects a an intent to depart from the common-law causation standard with respect to RR negligence but not that of the employee)

a. Problem: It would have made little sense to include the term “in whole or in part” in Section 3 because if the employee’s contributory negligence had contributed “in whole,” there would have been no recovery against the RR in the first place

Souter (concurrence)o The traditional common-law Proximate/Legal Cause standard still applies to FELA suits (and this standard

applies across the V to both parties)a. There is no relaxed standard

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44 Ginsburg (Concurrence)

o The Proximate/Legal Cause standard in FELA suits is more relaxed than in tort litigation generally (and this standard applied across the V to both parties) Most courts follow this

a. Rogers describes the applicable standard as whether “employer negligence played any part, even the slightest, in producing the injury or death for which damages are sought”

b. FELA was prompted by concerns about the welfare of RR workers and a FELA PL should get to a jury if he can show that his employer’s negligence was even the slightest cause of his injury (this is far less exacting than legal/proximate cause)

iii. NOTE: Rogers v. Missouri Pacific R. Co. The SC reviewed a decision of the Missouri SC that took away a FELA PL’s jury verdict on the view that, regardless whether the DF was guilty of causal negligence, under the facts of the case, the PL’s own negligence was the sole proximate cause of the accident. The SC reversed and said that under FELA, the test of a jury case is simply whether the proofs justify the with reason the conclusion that employer negligence played any part, even the slightest, in producing the injury or death for which damages are sought.

iv. NOTE: The SC has often held that FELA and Jones Act cases need to be applied uniformly throughout the country This is in tension with Justice Roberts statement (majority in Sorrell) that “Missouri has the same flexibility as the

other States in deciding how to instruct a jury on FELA causation issues

4. Kernan v. American Dredging Co.i. Facts: PL (widow) made a claim for damages on the behalf of a seaman who died on the DF’s tugboat in a fire caused by

the violation of a Navigation Rule. The seaman died when an open-flamed kerosene lamp on the deck ignited highly flammable vapors that had collected above oil lying on the surface of the river. The trial court (DC in Pennsylvania) found that the lamp was not more than 3 feet above the water and maintaining it at less than 8 feet violated the Navigation Rule. The trial court found that the vapor would not have ignited if it had been at 8 feet. However, the court also found that the risk of the fire was unforeseeable so the DF was not negligent in having the open flame at 3 feet (the ordinary Jones Act case therefore failed on Breach grounds). Additionally, the violation of the coast guard rule did not impose liability (a la negligence per se) because the rule had to do solely with navigation and was intended for the prevention of collisions (and for no other purpose). It is true that the origin of the collision can be traced to the violation of the regulation, but the question is not causation, but whether the violation of the regulation, in itself, imposes liability. The 3rd Circuit affirmed and the SC granted cert.

There were two potential causes of action here: A) Ordinary Negligence and 2) Case of Negligence per Seii. Supreme Court (Brennan)

The defect or insufficiency in the vessel’s lighting equipment due to a violation of the statute resulted in the death of the seaman. The question is whether, in the absence of any showing of negligence, the Jones Act (which incorporates provisions of the FELA) permits recovery for the death of a seaman resulting from a violation of a statutory duty YES it doeso The tort doctrine the lower courts apply imposes liability for the violation of a statutory duty ONLY when

the injury is one which the statute was designed to prevent. The SC refuses to apply such a limiting doctrine in FELA cases (the nature of the Act violated is not a controlling consideration since the basis of liability is the FELA)

o The common law has attempted to limit liability by adopting the rule that the violation of a statutory duty creates liability only when the statute was intended to protect those in the position of the PL from the type of injury that in fact occurred This limiting approach does not apply to FELA

o If a DF violates a statute and it was a Cause in Fact of the harm inflicted, that is sufficient. This approach takes Legal/Proximate cause in negligence per se cases out of Jones Act negligence per se law.

There is liability on the behalf of the employer under FELA when his conduct falls short of that required by the act and this conduct, in whole or in part, causes injury. This is the result whether the fault is a violation of a statutory duty or the more general duty of acting with careo Wow Brennan thinks that in ordinary Jones Act negligence cases, this rule should apply as well (if a DF’s

conduct was a Cause in Fact of the harm inflicted, it should be sufficient without legal/proximate cause inquiries).

iii. Harlan (dissent) The Court bases its decision on a line of cases which imposed absolute liability for violations of the Safety

Appliance and Boiler Inspection Acts. These decisions concentrate and explicitly rest on the unique relationship between those acts and the FELA. The majority interprets the FELA to provide a cause of action based on absolute liability for injuries traceable to violations of these two acts (like the Navigation Act) and this interpretation rests exclusively on its view of congressional intent.o No general rule of absolute liability without regard to negligence (negligence per se) for injuries resulting

from violation of any other statute can be said to emerge from these decisions The court reads out of the FELA and Jones Act the common-law concepts of foreseeability and risk of harm which

lie at the very core of negligence liability and treats these statutes as making employers in this area virtual insurers of the safety of their employees

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45iv. NOTE: Brennan (lion of liberalism at the time) deletes the legal causation requirement from Jones Act cases in which the

DF’s wrongful conduct consists in a violation of a statute. This has held sway in lower courts. [FELA also provides that an employer who violates an employee-safety statute is not entitled to any reduction on the basis of victim fault thereby Negating the Victim Fault Defense]

Additionally, however, Brennan states that “the same result follows whether the fault is a violation of a statutory duty or the more general duty of acting with care.” This seems to signal an intention to delete the legal causation requirement from Jones Act cases in which the DF’s wrongful conduct simply consists of ordinary negligence (as opposed to negligence per se). No courts have really extended their reading of the case this far.

v. NOTE: Why was this case (which Robertson thinks is 100% correct) not mentioned in Sorrell? Maybe because only Brennan’s holding was followed and not his dicta about non-negligence per se cases

o This case would have made Sorrell a no-brainer through its implication that FELA clearly only requires Cause in Fact and that this standard is so on both sides of the V…Brennan’s dicta implies that Ginsburg is right and has been right forever

5. Jones Act Summaryi. The Jones Act, whose basis is the FELA, says that an employer is liable to an employee for injury or death resulting in

whole or in part from the negligence of the employer Rogers modified this language to a statement that an employer is liable if his negligence played any part (“even

the slightest”)…Really does not change the meaningo That case also emphasized that the Jones Act is more pro-PL than every day Tort law in is causation

standardii. There is a relaxed standard of causation in Jones Act cases

There is only a Cause In Fact requirement (but for). Nonetheless, we keep the legal/proximate cause label in the doctrine to prevent the human mind from recoiling at the notion of responsibility for something absurdly remote (Ginsburg from Sorrell emphasizes this relaxed causation standard)

Sorrell makes clear (majority) that the causation requirement is the same on both sides of the “V” (and most people, such as Ginsburg, believe that it is a relaxed standard)

Most people follow Ginsburg (I.E. Kernan says that in Jones Act Negligence Per Se cases, the only requirement is Cause In Fact). Kernan also has dicta that this relaxed standard ALSO applies in ordinary Jones Act negligence cases since, after all, there cannot be such a stark contrast between the causation requirements in these two kinds of cases

iii. The Fifth Circuit in Gautreaux makes clear that BREACH is the same on both sides of the “V” and that it is reasonable care under the circumstances (B<PL)…It is not relaxed like causation!!!

C. Seamen’s Actions for Injuries Caused by Unseaworthiness1. Generally

i. 1876 A British statute brought the concept of unseaworthiness into seamen’s injury law for the first time (it had been an issue in carriage of goods and insurance cases already). The act simply said something that a seaman may be protected from an Unseaworthy ship.

ii. 1903 The Osceola proclaims that “the vessel and her owner are…liable to an indemnity for injuries received by seamen in consequence of the unseaworthiness of the ship.”

Seamen have a cause of action for unseaworthiness. It almost certainly meant a cause of action for negligently caused unseaworthiness (NOT Strict Liability). A seaman could not recover unless a shipowner’s negligence created a condition on a vessel which harms the seaman.

iii. 1922 Sandanger – The first reference in the SC to a shipowner’s obligation to furnish a seaworthy ship as explicitly unrelated to the standard of ordinary care in a personal injury case. Gasoline had been put in a can labeled “coal oil” and the vessel had not been provided with life preservers (the reference to a notion of strict liability’s attachment to Unseaworthiness probably did not even need to be brought up here because the injuries had clearly been caused by a failure to exercise ordinary care). The unseaworthiness existed when the ship left the port (“initial unseaworthiness”).

o First case in which the breach requirement is significantly relaxed The Unseaworthiness requirement tries the ship, not the shipowner.

iv. 1944 Mahnich – Suit was brought by a seaman under the general maritime law (SOL on the Jones Act had run) for injuries, which he incurred at sea when a rope, holding up his platform, parted and fell. The mate in charge had taken the 2 year old rope he used from a box used for life-saving devices (after the accident, it appeared that the rope had been decayed). The district court found that the selection of the rope had been negligent, but dismissed the action on the grounds that negligent injury alone (aside from the Jones Act) was not compensable and that the vessel (since other good rope was aboard) was not unseaworthy. The SC reversed, but fount it unnecessary to decide the question of negligence – Held that the exercise of due diligence does not relieve the owner of his obligation to furnish adequate devices to the seaman.

The Court left unclear whether 1) An unseaworthy condition arose during the voyage as a result of negligence (negligent transitory unseaworthiness) OR 2) The ship was unseaworthy when it left port because of the old rotten rope (strict liability initial unseaworthiness)

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46v. 1946 Sieracki - Action was instituted by a longshoreman who was injured while loading a vessel. A defect in a forged

shackle gave way which had existed since the time the ship was constructed. Both parties admitted that the ship was unseaworthy and that if a seaman had been injured in the same way, he could have recovered compensatory damages. The SC was faced with the question of whether the warranty of seaworthiness covers longshoremen doing seamen’s work. The SC ruled that it did, but that the case still covered initial unseaworthiness.

vi. 1954 Petterson – Held a shipowner liable for injuries to a longshoreman caused by defective equipment brought on board his vessel by a contract stevedore (longshoreman) for use in loading operations. The owner gave the stevedore the option to substitute his own equipment for that of the vessel (which eventually caused the injury). Per Curiam opinion suggesting that strict liability applies to transitory (or temporary) unseaworthiness.

2. Mitchell v. Trawler Race, Inc. (1960)i. Facts: PL was a member of the crew of a vessel owned and operated by the DF. Upon its return to port, PL stepped on the

ship’s rail to reach a ladder attached to the pier and slipped thereby injuring himself. To recover, he filed an action for damages in the US District Court for the district of Massachusetts. His complaint contained 3 counts: Negligence alleged under the Jones Act, Unseaworthiness and Maintenance and Cure. At trial, it was revealed that the ship’s rail was covered with tons of slime and fish gurry which had remained there from the earlier unloading operations. The district judge told the jury that for them to allow recovery on either the negligence or unseaworthy count, they must find that the slime had been on the ship’s rail for a period of time long enough for the DF to have learned about it and have it removed. The PL asked the judge distinguish between negligence and unseaworthiness in this respect (specifically asking to instruct that notice was not a necessary element in proving liability based on unseaworthiness). The request was denied and the jury awarded maintenance and cure but found for the DF on both negligence and unseaworthiness.

PL appealed solely on the unseaworthiness instruction an the First Circuit affirmed holding that “with respect to an unseaworthy condition that arises only during the progress of the voyage, the shipowner’s obligation is merely to see that reasonable care is used under the circumstances incident to the correction of the newly arisen defect.”

The SC granted cert due to the divergence of Circuit viewso Everyone had already agreed that unseaworthiness has a strict liability element for “Initial

Unseaworthiness.” The question is about “Transitory” Unseaworthiness and whether strict liability applies there too

ii. Supreme Court Issue: With respect to “transitory” unseaworthiness, is the shipowner’s liability limited by concepts of common-

law negligence? NO…strict liability applies (looks at line of cases…What has evolved is a complete divorcement of unseaworthiness liability from concepts of negligence…The SC tries to make it seem like the decision had already been answered in case law)o Carlisle Packing Co. v. Sandanger First reference by the SC to the shipowner’s obligation to furnish a

seaworthy ship as explicitly unrelated to the standard of ordinary care in personal injury casesa. Led to the view that the Osceola had stated a concept of absolute liability for unseaworthiness

unrelated to principles of negligence lawo Mahnich v. Southern S.S. Co. Gave an unqualified stamp of approval to the view that the Osceola was

correctly understood as holding that the duty to provide a seaworthy ship depends not at all upon the negligence of the shipowner or his agents

o Sea Shipping Co. v. Sieracki The liability is neither limited by conceptions of negligence nor contractual in character (from that point, the SC decisions have consistently reflected the notion that the owner’s duty to furnish a seaworthy ship is absolute and completely independent of his duty under the Jones Act to exercise reasonable care

o There is no suggestion in any of the decisions that the duty is less onerous with respect to an unseaworthy condition arising after the vessel leaves her home port, or that the duty is any less with respect to an unseaworthy condition which may only be temporary

a. Alaska Steamship Co. v. Petterson Court affirmed a judgment holding shipowner liable for injuries caused by defective equipment temporarily brought on board by an independent contractor over which the owner had no control. Is specific authority for the suggestion that a shipowner’s actual or constructive knowledge of the unseaworthy condition is not essential to his liability. Also disposes of the suggestion that liability for a temporary unseaworthy condition is different from liability that attaches when the condition is permanent.

Dissent (Frankfurter) Just rebuts the cases used but makes no policy arguments…o There is no case in an English or US court prior to Carlisle in which the absolute duty to provide a

seaworthy vessel for cargo carriage and marine insurance K’s was applied to a seaman’s suit for personal injury. The majority’s desire to extend this decision, since the rule was so dubiously initiated, requires that its rational, historical and social basis be scrutinized and not merely accepted

a. Frankfurter acknowledges that Carlisle has dictum saying that initial unseaworthiness is a strict liability cause of action but he says the Justice McReynolds was a fool

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47o Alaska S.S. Co. v. Petterson This was an unrevealing per curiam decision founded on decisions providing

no justification for the results here. The DF did not argue that the vessel was seaworthy at the start of the voyage and that no absolute liability attached to subsequently arising conditions. It therefore did not rule against the DF on those grounds and establish the principle argued by the majority.

a. Frankfurter has trouble distinguishing this case iii. Dissent (Harlan)

Finally makes a public policy argument instead of just distinguishing case after case The majority’s decision not only finds no support in past cases, but is also unjustified in principle and directed at

ends not appropriately within the SC’s domain The question should be whether the absence of an alternative means for removing the fish from the vessel or for

facilitating the seaman’s egress had made the vessel seaworthyo The case would then have been governed by the absolute liability rule in Carlisle and the DF’s failure to

remove the slime from the vessel would be immaterialo As the case is decided, we are told that even though there is no claim that that vessel should have made

better provisions for offloading the fish or the debarking of his crew, there is still liability for the temporarily unsafe condition (arising from the normal operation of the vessel) that caused injury. The liability is not the result of anyone’s fault onboard or of a situation which anyone had a reasonable opportunity to remedy The Court cannot therefore be seen as fashioning a rule designed to protect life, for there appears no real basis for expectation that the decision will promote the taking of greater precautions at sea. The DF is held liable without being told that there was something left undone which should have been done because the PL is not asked to show that the vessel should have been outfitted differently (in a way that would have prevented the condition from arising at all). The DF is also not allowed to show that the condition was not due to his fault. Therefore, the sole interest served by the court’s decision is compensation

iv. NOTE: In one major respect, the law of unseaworthiness is more liberal (pro-PL) than Jones Act law because it is generally easier to prove a deficiency in a vessel that that the employer was negligent. This is, however, often offset by the fact that liability for unseaworthiness requires a showing of legal causation, whereas Kernan dispenses with that requirement (at least in negligence per se cases)

v. NOTE: This decision was very powerful. It essentially says the if a ship innocently hits an iceberg and takes a few hours to burn up, it has become unfit for its purposes and there can be liability found based upon strict liability for transitory unseaworthiness (this is highly problematic)

There is NO negligence requirement (no need to wait for the deficiency to be discovered)…A PL will have trouble making the argument that the ship was unseaworthy without pointing to its initial unseaworthiness

3. Usner v. Luckenbach Overseas Corp. (1971)i. Facts: A longshoreman employed by an independent stevedoring contractor was injured while engaged with his fellow

employees in loading cargo aboard the Luckenbach. He brought an action for damages against the owner and charterer of the ship in federal district court alleging that his injuries were caused by unseaworthiness. Neither before nor after the injury on the ship was any difficult experienced with the equipment that caused the injury. The DFs moved for summary judgment on the grounds that a single negligent act by a fellow longshoreman could not render the ship unseaworthy. The District Court denied the motion but granted an interlocutory appeal.

The Fifth Circuit allowed the appeal and, reversing the DC, held that instant unseaworthiness resulting from the operational negligence of the contractor is not a basis for recovery for an inured longshoreman (unseaworthiness is a CONDITION and this is an ACT). The SC granted cert.

ii. Supreme Court We may accept it as fully settled that a shipowner’s liability for an unseaworthy vessel extends beyond the

members of the crew and includes longshoremen like the petitioner. Furthermore, a shipowner is liable even though the unseaworthiness is transitory and even though the injury is suffered somewhere other than aboard the ship. This does not solve the question before the Court, which asks exactly what unseaworthiness is and what it is not.o Liability based on unseaworthiness is wholly distinct from liability based on negligence (this is because

unseaworthiness is a CONDITION and how that condition came into being – whether by negligence or otherwise – is irrelevant to the owner’s liability for personal injury resulting from it

Cases have held that the scope of Unseaworthiness is not limited to defective conditions of a physical part of the ship itself (as in Mitchell). A vessel’s condition of unseaworthiness may arise from a number of circumstances. What caused the PL injuries here was not the condition of the ship, her appurtenances, her cargo, or her crew, but the isolated, personal negligent act of a fellow longshoreman. o To hold that this individual act of negligence rendered the ship unseaworthy would be to subvert the

fundamental distinction between unseaworthiness and negligencea. In Mitchell, there was a condition of unseaworthiness and the SC held that it was a mistake to

require a finding of negligent conduct to hold the shipowner liable

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48b. HERE, there is no condition of unseaworthiness and it would be a mistake to hold the

shipowner liable for a 3rd party’s single and wholly unforeseeable act of negligence Dissent (Justice Douglas)

o In Mahnich, the SC held that the obligation of an owner to furnish a seaworthy ship extends to seaworthy appliances. It also held that an owner was not insulated from liability by the negligent failure of one of his officers or members of the crew to furnish seaworthy appliances

o In Crumady v. The J.H. Fisser, the vessel which paid damages was allowed to recover over from the stevedores whose negligence made the vessel pro tanto unseaworthy.

o Changes in membership do change decisions and those changes are expected at the level of Constitutional Law. But when private rights rooted in the Constitution are at issue, it is surprising to find law made by new judges taking the place of law made by prior ones

Dissent (Harlan)o Past decisions of this court have expanded the doctrine of unseaworthiness almost to the point of absolute

liability. Although this may be bad, he must in good conscious regard the particular issue in this case as having been decided by Crumady.

a. This decision will only make the decisions of he lower court that much harderiii. NOTES

The decision in Sieracki permitting longshoremen to sue for unseaworthiness was legislatively overruled by the 1972 amendments to the Longshore and Harbor Workers’ Compensation Act (LHWCA). Today, only semen really have that right. Although Usner involved an injured longshoremen, the limitation it imposes on the unseaworthiness doctrine is applicable in semen’s cases.

Reconciling Mitchell and Usner is a source of constant struggle for the lower courts Seemingly, what is required is an understanding of the distinction between an ACT and a CONDITION, no matter how short-lived (a short lived condition can still be the basis for unseaworthiness, but not an Act). o “A ship is not unseaworthy because it has glass in the window which might be broken (that is a condition,

but not a defective one]. The injuries of a seaman who negligently breaks such a glass are not the result of unseaworthiness, nor are the injuries of a seaman who is cut by the falling glass. But injury incurred in stepping on the broken glass does result from unseaworthiness.”

Unseaworthiness requires/applies an ordinary legal cause argument so if it had been available in Kernan, it would not have worked

1. Seaman Status1. Generally The combination of the Jones Act, unseaworthiness, and maintenance and cure causes of action makes seamen

the most generously treated personal injury victims in American law. Consequently, seaman status is hotly contested in case after case. The SC has never said so, but the lower courts and commentators take it as settled that the criteria for seaman status are the same for Jones Act, unseaworthiness, and maintenance and cure purposes.

i. Over time, it came to be accepted that the LHWCA phrase “the master of crew of any vessel” draws the line between two mutually exclusive lines of relief…

If he is a member of the crew, he can have the trio If he is not a member of the crew, he get the LHWCA remedy

ii. History The Jones Act is passed in 1920 and there is immediately litigation over whether a worker can be classified as a

“seaman” In almost all of the cases leading up to Robinson, the worker ended up being classified as a seaman…The problem

was that the Court was extending seaman status to all kinds of workers that did not meet the criteria of “aiding in navigation.”

Offshore Co. v. Robinson (1959) Robinson was an oil worker permanently assigned to a drilling rig mounted on a barge in the Gulf of Mexico. The 5th Circuit abandoned the “aid in navigation requirement” and came up with a 2-Prong test (concluded that the barge was a vessel and that the worker was a member of its crew). There is an evidentiary basis for a Jones Act case to go to the jury:o 1) If there is evidence that the injured workman was assigned permanently to a vessel, or performed a

substantial part of his work on the vessel ANDo 2) If the capacity in which he was employed or the duties he performed contributed to the function of the

vessel or the accomplishment of its mission or to the operation or welfare of the vessel in terms of its maintenance during its movement or during anchorage for its future trips

Robinson – Willander The Court tried to prevent people from being classified as a seaman. In 1991, the SC in McDermott Int’l. v. Willander tried for the first time in 33 year to define “Seaman” under the Jones Act. The “aid

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49in navigation” issue finally went up to the SC where it was concluded that Robison court was right in getting rid of that criteria: Although it is not necessary that a seaman aid in navigation or contribute to the transportation of the vessel, a seaman must be doing the ship’s work. The key to seaman status is employment-related connection to a vessel in navigation…an employees duties must contribute to the function of the vessel or to the accomplishment of its mission (Robinson has the right idea, but it is not necessarily THE test).o Gizoni (1991) A Jones Act remedy may be available to maritime workers who are employed by a

shipyard and who spend a portion of their time working on shore but spend the rest of their time at sea. It is not the employees particular job that is determinative, but the employee’s connection to the vessel.

2. Chandris Inc. v. Latsisi. Latsis was employed by Chandris as a superintendant engineer. He was responsible for maintaining and updating the

electronic and communications equipment on the Chandris fleet of vessels, which consisted of 6 passenger cruise ships. Each ship had between 12 and 14 engineers who were assigned permanently to that vessel. Latsis was one of two supervising engineers based at Chandris’ Miami office. His duties extended to the entire fleet and included not only overseeing the vessel’s engineering departments (which required him to take a number of voyages), but also planning and directing ship maintenance from the shore. He claimed at trial that he spent 72% of his time at sea (his immediate supervisor attested that it was closer to 10%). While sailing to Bermuda on a ship in order to plan for that ship’s upcoming renovation, he developed a problem in his eye on the day of departure. He saw the ship’s doctor as the ship left port. The ship’s doctor diagnosed a suspected detached retina but failed to follow standard medical procedure, which would have directed Latsis to be air lifted to a doctor on shore immediately. He received no additional care until he reached Bermuda where he had surgery right away. Although the operation was a partial success, he lost 75% of his vision in that eye. He subsequently went to Germany with the ship where it was dry-docked for a 6-month refurbishment. He returned to the US, his employment was later terminated and he filed this suit.

Latsis filed suit in the United States Court for the Southern District of New York seeking compensatory damages under the Jones Act for the negligence of the ship’s doctor. The district court instructed the jury that it could conclude Latsis was a seaman within the meaning of the statute if it found as follows: “The PL was either permanently assigned to the vessel or performed a substantial part of his work on the vessel. In determining whether Latsis performed a substantial part of his work on the vessel, you may not consider the period of time that the ship was in dry-dock in Germany, because during that time period she was out of navigation. You may, however, consider the time spend sailing to and from Germany for the conversion. Also, on this first element of being a seaman, seamen do not include land-based workers.”o Latsis didn’t object to the seaman status instructions in their entirety…only the part of the charge that

explicitly took from the jury’s consideration the period of time that the ship was in dry-dock. The jury returned a verdict in favor of Chandris solely on the issue of Latsis’ seaman status under the Jones Act.

Latsis appealed to the 2nd Circuit, which vacated the judgment and remanded for a new trial (Latsis’ Manhattan litigator felt that the jury instruction placed too much emphasis on time). The Court emphasized that its longstanding test for seaman status under the Jones Act required a “more or less permanent connection with the ship” (a connection need not be limited to time spend on the vessel but could also be established by the nature of the work performed). The Circuit felt that the test used by the District Court – permanent assignment to a vessel or performance of a substantial part of his work on the vessel – improperly framed the issue for the jury primarily in terms of Latsis’ temporal relationship to the vessel. The court took the opportunity to clarify its seaman status requirements by directing the district court that its instructions should be as follows: “The test of seaman status under the Jones Act is a employment-related connection to a vessel in navigation. The test will be met where a jury finds that (1) The PL contributed to the function of or helped accomplish the mission of a vessel, (2) The PL’s contribution was limited to a particular vessel or identifiable groups of vessels, (3) The PL’s contribution was substantial in terms of its (a) duration or (b) nature and (4) The course of the PL’s employment regularly exposed the PL to the hazards of the seao The Circuit held that the district court erred in instructing the jury that the time Latsis spent with the ship

while it was in dry-dock could not count in the substantial connection equation

ii. Supreme Court Congress provided some content for the Jones Act requirement in 1927 when it enacted the Longshore and

Harbor Workers’ Compensation Act (LHWCA) providing compensation for injury to a broad range of land-based maritime workers but explicitly excludes from its coverage “a master or member of a crew of any vessel.”

In Wilander, the Court disposed of the “aid to navigation” requirement, but did not consider the requisite connection to the vessel in further detail

Jones Act coverage depends not on the place where the injury is inflicted, but on the nature of the seaman’s service, his status as a member of the vessel, and his relationship as such to the vessel and its operation on navigable waters.

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50o Therefore, maritime workers who obtain seaman status do not lose the protection automatically when on

shore and may recover under the Jones Act whenever they are injured in the service of the vessel, regardless of whether the injury occurs on or off the ship.

o The LHWCA cases recognize that land-based maritime workers injured while on a vessel in navigation remain covered by the LHWCA

Stevens (dissent) argues for the “Voyage Test” Any maritime worker who is assigned to a vessel for the duration of the voyage, and whose duties contribute to the vessel’s mission, should be classified as a seaman for the purpose of injuries incurred during the voyage (relies on statements by the SC that the Jones Act was designed to protect maritime workers who are exposed to the special hazards and particular perils characteristic of work on vessels at sea) The worker’s activities at the time of the injury would be controlling o This is problematic based on the LHWCA cases (a worker is not just a seaman because he is doing seamen’s

work)o This would conflict with an understanding of the Jones Act as fundamentally status-basedo We should not employ a “snapshot” test inspecting only the situation as it existed at the time of the injuryo The rejection of this test is consistent with the interest of workers and maritime workers in being able to

predict who will be covered by the Jones Act when the day begins The Fifth Circuit has begun to consistently analyze the problem in terms if the percentage of work performed on

vessels of the employer in question and has declined to find seaman status when the employee spends less than 30% of his time aboard ship

Supreme Court’s “Two Prong Test”o Prong 1 An employee’s duties must contribute to the function of the vessel or to the accomplishment of

its mission. a. All who work at seas in the service of the ship are eligible for seaman’s status (from Wilander)

o Prong 2 A seaman must have a connection to a vessel in navigation (or to an identifiable group of such vessels) that is substantial in terms of both its duration and its nature.

The SC Test really has 4 Prongs:o 1) Vessel or Fleet (this is required by the LHWCA)o 2) Contribute to the Function/Missiono 3) Substantial in Durationo 4) Substantial in Natureo SECOND CIRCUIT: a) Vessel or Fleet, b) Function/Mission, c) SID or SIN and d) Perils

a. The SC has always agreed that the underlying purpose of the doctrine is to give protection to people who encounter the “perils of the sea.” Although they took it out of the 2nd Circuit’s doctrinal formulation, we must assume that it is accommodated by the “Substantial in Nature” prong The fundamental purpose of this substantial connection requirement is to separate the

sea-based maritime employees who are entitled to Jones Act protection from those land-based workers who have only a transitory or sporadic connection to the vessel in navigation, and therefore whose employment does not regularly expose them to the perils of the sea.

b. This requirement therefore determines which maritime employees in Wilander’s broad category of people eligible for seaman status (because they are doing “the ship’s work”) are in fact entitled to the benefits conferred upon seamen by the Jones Act because they have the requisite employment-related connection to a vessel in navigation

c. Unlike the 2nd Circuit, the SC thinks a connection needs to be significant with respect to BOTH duration AND nature (circuit said duration OR nature). Although the SC agrees with the Court of Appeals that seaman status is not merely a temporal question, it necessarily includes a temporal element (departure from the 30% rule is appropriate in certain circumstances)

d. We are still unsure if all these prongs really need to be met or if it more just a matter of balancing

o If reasonable people, applying the proper legal standard, could differ as to whether the employee “was a member of the crew,” it is a question for the jury

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51 If a maritime employee receives a new work assignment in which his essential duties are changed, he is entitled

to have the assessment of the substantiality of his vessel-related work made on the basis of his activities in the new position.

Did the district court make a mistake by instructing the jury that it could not consider the period of time that the ship was dry-docked in Germany since, during that time, the ship was our of navigation?o The SC feels (as did the court of appeals) that it dido It is generally accepted that a vessel does not cease to be a vessel when it is not voyaging, but is at anchor,

berthed or dockside even if the vessel is undergoing repairs. The general rule among the Courts of Appeals is 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

o The record does not support the conclusion by the District Court that the modifications to the ship were sufficiently extensive to remove the vessel from navigation as a matter of law

The jury should be given the new instruction and should be able to consider the time Latsis spent in Germany (reasonable people, applying the proper legal standard, could differ on whether Latsis was a member of the crew and this is therefore a question for the jury)

Concurrence (Justice Stevens)o The majority has reached the odd conclusion that a maritime engineer, injured aboard a ship on the high

seas while performing his duties as an employee of this ship, might not be a seaman within the meaning of the Jones Act. This decision is unprecedented. It ignores the critical distinction between work performed aboard ship during a voyage – when the members of the crew encounter the perils of the sea – and maritime work performed on a vessel moored to a dock in safe harbor. In my judgment, an employee of this ship who is injured at sea in the course of his employment is always a “seaman.”

iii. NOTES On remand, in the Southern District of NY, a jury (under the instructions modeled those laid out by the SC) still

concluded that Latsis was not a seamano The PL should have pointed the judge to the part of the SC opinion where the Court says that the

Substantial in Duration prong restarts (new clock) if the seaman is given a brand new assignment by an employer (as was the case here) Change of Assignment addendum

3. Scheuring v. Traylor Brothers, Inc.i. Facts: PL was hired by the DF as a crane operator on a barge used in construction projects (he was hired to work for the

duration of a specific project). He was trained as a crane operator, received wages as a crane operator and did not consider himself a specialist in marine work. His primary job while employed by the DF was to operate the crane. At times PL helped to move the barge for the purpose of repositioning it. He occasionally handled lines, weighed and dropped anchors, stood lookout, monitored the radio and spliced wire and rope PL alleges that the barge was subject to tides and tossed by sea swells, wind waves, vessel wakes and tidal currents. The barge did not operate by its own power, but by means of lines. The barge was also unmoored and towed by a tugboat to a new anchorage on at least 3 occasions while the PL was aboard. To get to the barge, the crew had to walk down a long ramp, which often would often end up in the water. While trying to pull it out of the water on one occasion, the PL slipped and injured his back.

PL filed this suit against his employer claiming that he is entitled to recover for his personal injuries as a seaman under the Jones Act. DF filed a motion for summary judgment and the district court granted the motion.

ii. Ninth Circuit The DF contends that the PL is not a seaman an is therefore not entitled to recover under the Jones Act. If

reasonable persons, applying the proper legal standard, could differ as to whether the employee was a member of the crew, it is a question for the jury

Court applies the Chandris two (4) prong test:o 1) Vessel or Fleet (this is required by the LHWCA)o 2) Contribute to the Function/Missiono 3) Substantial in Durationo 4) Substantial in Nature

a. DF concedes that the ship was a Jones Act vessel, does not dispute that PL’s employment contributed to the vessel’s function and does not question the substantial duration component of the second prong.

b. The only question is therefore whether the PL’s duties were substantial in nature (in relation to the vessel)

Court cites two cases for comparison:o Cabral v. Healy Tibbits Builders The court affirmed the district court’s grant of summary judgment to the

DF, holding that the PL crane operator aboard a construction barge was a land-based worker, with only a transitory or sporadic connection to the barge Importantly, there was no mention of the Barge’s moving during the PL’s time aboard.

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52o Delange v. Dutra Construction Co. The PL was hired as a carpenter on a piledriving crew engaged in

construction. The PL rode to the construction site on a barge that was used as a work platform. While attempting to anchor the barge to the construction site, the PL severely injured his hand . In reversing the district court’s grant of summary judgment, the Circuit distinguished the case from Cabral by examining the specific activities or duties of each PL. Unlike in Cabral, the PL here claimed that a big part of his job was to serve as a lookout, cargo stower, line handler, and occasional pilot when the barge was being moved – all of which are clearly seaman’s duties – and he only devoted 10% of his time to carpentry. He also stated that more than 80% of his time was spend onboard the barge where most of the work involved crewman and deckhand duties. Although he was hired as a carpenter, the PL’s duties were more appropriately characterized as sea-based duties.

a. The PL is more similar to the PL in Delange. Most importantly, on at least three occasions, the PL was aboard the barge as she was unmoored and moved by a tugboat. During these periods, the PL performed duties that could be characterized as sea-based. These claims show the existence of a factual dispute as to whether the PL’s employment was land or sea based (the movements, although minor and infrequent, are enough to distinguish the case from Cabral and warrant reversal). There is a genuine issue of material fact as to the PL’s seaman status, which warrants jury consideration.

b. You do not have to be facing the “perils of the sea” (substantial in nature requirement) when you are injured…Only in general. It is a video, not a snapshot.

The PL urges this court to rely solely on the PL’s account of surges, tides and swells to classify him as a seaman. This should be rejected as it would render the second prong (that the employee have a substantial connection to the vessel, both in terms of duration and nature) meaningless. By analyzing only the vessel’s movements, the activities and duties of the employee would become inconsequential. Therefore, the SC examines the vessel’s movement in light of the PL’s duties in order to assess whether the PL has presented evidence that would allow a jury to fins a substantial connection to the vessel both in terms of duration and nature.

iii. CRITICAL TO UNDERSTAND The SC in Chandris (and later in Scheuring) characterized the seaman status test as having Two Prongs. However,

it is apparent that the test in Chandris included 5 elements:o The Vessel (or fleet) was in navigationo The employee worked on, for, or with a vessel (or fleet of vessels)o The employee’s duties contribute to the vessel’s (or fleet’s) function or missiono The employee’s connection to the vessel (or fleet) was substantial in durationo The employee’s connection to the vessel (or fleet) was substantial in nature

Stewart v. Dutra Construction Co. (2005) Shortens the list to 4 elements by taking the “navigation” element out. “The ‘in navigation’ requirement is an element of the vessel status of a watercraft. It is irrelevant to whether the craft is used or capable of being used for maritime transportation.”

Stewart therefore leaves us with a 4 prong test for seaman statuso 1) The worker must work on, for, or with a vessel (or fleet of vessels)

a. A vessel is a watercraft or other artificial contrivance used, or practically capable of being used, as a means of transportation on water

b. Keeps crewboat helicopter pilots, fixed platform workers, and workers on watercraft that have been taken out of service, permanently anchored, or otherwise rendered particularly incapable of maritime transport from being seamen

o 2) The worker’s duties must contribute to the vessel’s (or fleet’s) function or missiona. This contribution requirement is intended as a threshold requirement that is very broad, but it

nevertheless keeps amphibious workers who merely ride a vessel to work or sleep and eat on a vessel without doing any work there out of seaman status.

o 3) The worker’s connection to a vessel (or fleet) must be substantial in durationa. This keeps every day longshoremen out of seaman status by generally requiring that the

worker must have spent at least 30% of his time while working for the current employer (or, if there has been a change of assignment, in the current assignment with the employer) in the service of a particular vessel or fleet of vessels under common ownership or control

o The worker’s connection to the vessel (or fleet) must be substantial in naturea. This keeps various sorts of amphibious workers out of seaman status by addressing whether

the worker’s duties regularly or significantly expose the worker to the peril’s of the sea…………

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Pecuniary Damages Issue1. Atlantic Sounding Co., Inc. v. Townsend

i. Facts: PL was a member of a crew on a tugboat owned by Atlantic when he fell and injured his arm and shoulder. Atlantic refused to provide maintenance and cure and sought declaratory judgment as to their obligations. PL counterclaimed under the Jones Act and General Maritime Law alleging arbitrary and willful failure to ay maintenance and cure and sought punitive damages.

The US District Court for the Middle District of FL denied the PL’s motion to strike the request for punitive damages and the 11th Circuit affirmed. d/v

ii. History Pre-Jones There is plenty of dicta and there are a few holdings saying that a seaman can get punitive damages

against employers for some forms of abuse (however, there are few cases involving maintenance and cure) Jones to Miles (1990) When the Jones Act was passed, it was reiterated that the Act does not take anything

away. If seamen could get punitive damages before, then they still have that ability. People assumed that in the interval leading up to Miles, there were at least some cases in which seamen were entitled to punitive damageso Miles Involved compensatory damages for wrongful death (loss of support – pecuniary, loss of services

– pecuniary and loss of society – nonpecuniary). A wrongful death action under FELA cannot yield loss of society damages because they are nonpecuniary. Miles held and affirmed that if FELA PLs (pre-Jones) could not get loss of society, then Jones Act PLs cannot either. Since Unseaworthiness and Maintenance and Cure are in the same Penumbra of jurisprudence as the Jones Act, cases in those areas should abide by the same rule. We should try to conform the general maritime law to congressional maritime acts where damages for loss of society are not permitted because they are nonpecuniary.

Guevara (1995) In a 17-0 Fifth Circuit decision, the court held that Miles does in fact restrict the ability of a PL to get punitive damages in a Maintenance and Cure case (which is in the penumbra of the Jones Act). Certiorari was denied.o A Jones Act limitation on loss of society covers a limit on punitive damages under the assumption that

punitive damages, like loss of society, belong under nonpecuniaryo See Chart (the court here views scheme B as correct)

iii. Supreme Court Thomas Wrote for a divided court [5-4], holding that this is a no-brainer: Seamen had punitive damages

before the Jones Act and the Act and, since the Act takes nothing away, Mules cannot mean that we are taking punitive damages away from PLs in maintenance and cure caseso Really may mean nothing since the SC was divided and the highly respected 5th Circuit as 17-0

iv. NOTE: Punitive damages are a controversial remedy. Is it right to punish someone in a civil proceeding without the safeguards of the criminal system

The SC clearly upheld the paternalistic feeling that seaman are the wards of admiralty

C. The Longshore and Harbor Workers Act (LHWCA)1. Generally The LHWCA provides a compensation remedy for maritime workers who do not qualify as seamen. It was enacted

in 1927 and extensively amended in 1972 and 1984. Disputes over worker’s compensation benefits under the LHWCA are adjudicated by administrative law judges (ALJs) in the US Department of Labor. ALJ determinations are reviewable by a three-member body called the Benefits Review Board (BRB). BRB determinations are reviewable by the US Court of Appeals for the appropriate Circuit.

i. The compensation part is the Act is administered by the Department of Labor and, when it become litigious, it goes before an administrative law judge (regarding the degree and extent of the workers’ injury and if there is any available post-injury employment).

2. LHWCA Definitions and Coverage

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54i. Section 2(3) “The term ‘employee’ means any person engaged in maritime employment, including any longshoremen

and any person engaged in Longshoring operations, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker, but such term does not include…(G) a master or member of a crew of any vessel”

The Act does not define the term “including” and this leads to confusion. The term is always ambiguous unless it is defined because sometimes it signals that the things immediately following it constitute an exhaustive list and sometimes an illustrative list

“Including” does not mean “and” here The SC has sais that the term including is not exhaustive in this context (there are some other maritime workers that are covered, but it is a small group)

Chart:o Maritime Employment (“Including…”)

a. Longshoremen and Longshoremen Operationsb. Harbor Workers (“Including…”)

Ship Repairmen Ship Builder Ship Breaker ?

c. ?ii. Section 3(a) “Except as otherwise provided in this section, compensation shall be payable under this Act in respect of

disability or death of an employee, but only if the disability or death results from an injury occurring upon 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, dismantling, or building a vessel).”

The language “Except as otherwise provided in this section…” refers to a) Government Workers and b) Drunks “In Respect of disability or death of an employee…”

o Employee is defined in 2(3) Two pronged test:a. Situs 3(a) Requirement b. Status 2(3) Requirement

“Occurring upon the navigable waters of the US…”o The full definition is not given in the Act so we must refer to LeBlanc v. Cleveland (as long as you can get in

a boat and there and get to the ocean somehow without disembarking)a. Definition of the US: Even if the statute did not say “land and territorial waters,” it would be

presumptively the meaning that the waters do not travel beyond a 3-mile line from the shore “Including”

o It has been fully assumed that in 3(a), “including” simply means “and” since nobody thinks that navigable waters include a pier [injuries on navigable waters AND injuries on land in the following places]

a. It has been taken for granted that the term “adjoining” modifies everything following it Generally 3(a) moved the Act inland to pick up those things that would regularly involve workers that are

normally covered aboard ships

3. Northeast Marine Terminal Co. v. Caputoi. Facts: Two separate employees, Blundo and Caputo, were injured while working on the NYC waterfront and the SC must

determine whether they are entitled to compensation under the LHWCA as amended in 1972 (to extend coverage to additional workers). Specifically at issue is whether the workers were “employees” within the meaning of the Act and whether their injuries occurred on the “navigable waters of the US”

ii. Bundo At the time of his injury, Blundo had been employed for 5 years as a “checker” by the DF at its facility in Brooklyn known as the 21st street pier (responsible for checking and recording cargo as it was loaded onto or unloaded from vessels, barges, or containers. He was assigned his tasks at the beginning of every day and until he arrived, he did not know of he would be working on a ship or on the shore. He was also reassigned during the day if he completed his initial task. One the day of the injury the container Blundo was checking had been taken off a vessel at another facility outside of BK and brought overland unopened by an independent trucking company to the Pier. It was his job to break the seal on the container, show it to customs and then check the contents of the container against the manifest. He was injured as he was marking the cargo from the container when he slipped on some ice on the pier He seeks compensation under the LHWCA (the administrative law judge concluded that he satisfied the coverage requirements and the BRB affirmed).

iii. Caputo Was a member of a long shoring gang that worked for another company. When his gang was not needed, he went to the waterfront hiring hall, where he was hired by the day by other stevedoring companies or terminal operators with work available. On the day of his injury, he was hired by the DF to work as a “terminal laborer” (who may be assigned to load and unload containers, lighters, barges and trucks). He was assigned to help truckers load their trucks with cargo that had been taken off ships at the terminal. He was injured while rolling a dolly loaded with cheese into a truck The administrative law judge found that he satisfied the requirements of the Act and awarded him compensation. The BRB affirmed.

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55iv. Case: The employers in both cases filed petitions to review the decisions and the 2nd Circuit consolidate the cases. After

considering the language, history and purpose of the 1972 amendments, the Circuit found that the injuries were compensable under the LHWCA. The SC granted cert based on the conflict regarding the 1972 Amendments and the coverage that they afford.

v. Supreme Court History

o LHWCA was enacted in 1927 after the SC restricted efforts of States and Congress to give compensation to maritime workers injured on navigable waters through state compensation programs (Jensen held that states had no power to give a workers comp remedy to longshoremen injured on the seaward side of a pier, while those injured on the pier were protected by the state compensation acts)

a. Every time Congress tried to give this power to states their actions were struck down as an unlawful delegation of power

o Finally, Congress passed the LHWCA in 1927, convinced that the only way to provide coverage to longshoremen and harbor workers injured on navigable water was through a federal system

a. The Act provided coverage for injuries occurring on the navigable waters of the US and permitted compensation awards only if recovery through workmen’s compensation proceedings could not be provided through state law

o A Tort Bonanza was created:a. Sieracki had allowed longshoremen to sue vessels for unseaworthinessb. Ryan (1956) held that when a shipowner is liable to a longshoreman for unseaworthiness

because of a Stevedore’s actions, the vessel should be able to recover from the Stevedore The Ryan Triangle The Longshoreman sued the ship or shipowner who impleaded the

Stevedorec. Sieracki – 1972 was a goldmine for waterfront lawyers. Longshoremen would recover very

easily on strict liability and the lawyer would get 40%.o The main concern of the 1972 amendments was not the scope of the coverage, but with the

accommodating the desires of three interest groups: 1) Shipowners discontented with decisions allowing maritime workers to use the doctrine of “seaworthiness” to recover full damages from shipowners regardless of fault, 2) Employers of the longshoremen who could be required to indemnify shipowners and thereby lose the benefit of the intended exclusivity of the compensation remedy and 3) Workers who wanted to improve the benefits that were deemed inadequate.

a. Congress attempted to meet these desires by: 1) Eliminating suits against vessels brought for injuries to longshoremen under the doctrine of seaworthiness and outlawing indemnification actions (against the Stevedores), 2) Continuing to allow suits against vessels and other third parties for negligence and 3) Raising benefits to a level commensurate with present day salaries and the needs of injured workers

b. Congress realized that the modern technology had moved much of the longshoreman’s work onto the land so that if coverage were not extended, there would be many workers who would be relegated to the inadequate state compensation systems (the disparity between the Act’s remedies and State remedies was too great for such a small difference as the side of the pier the injury takes place on) To prevent this CONGRESS EXTENDED THE COVERAGE SHOREWARD (partly by broadening the definition of navigable waters of the US and partly by amending the definition of people covered by the Act).

The 1972 Amendments changes what had been a “Situs” Test of eligibility for compensation to a test that looks at both the “Situs” of the injury and the “Status” of the injuredo Once the line of coverage was moved shoreward, a tremendous number of additional people were

covered and a Status provision was needed Status The language of the amendments is broad and suggests that one should take an expansive view of the

extended coverage (Congress recognized that “the advent of modern cargo-handling techniques” has moved much of the longshoreman’s work off the vessel and onto the land)o Blundo He was a statutory “employee” when he slipped on the ice. He was checking cargo as it was

unloaded from a container, which is an integral part of the unloading process as altered by the advent of containerization and was intended to be reached by the Amendments

o Caputo The advent of modern technological change and Congress’ desire to incorporate this in the Act does not apply to him because he was injured in the old fashioned process of putting unloaded goods into a delivery truck. However, another dominant theme from the 1972 Amendments applies…Congress wanted a uniform compensation system to apply to employees who would otherwise be covered by the Act for part of their activity. Congress wanted a system that did not depend on the fortuitous circumstance of whether the injury occurred over water or land. Therefore, the Situs was extended to encompass the waterfront areas where the loading and unloading process occurs. When Congress said it wanted to cover “longshoremen,” it had in mind people whose employment is such that they spend at

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56least some of their time in indisputably Longshoring operations and who, without the 1972 Amendments, would be covered for only part of their activity…Based on Caputo’s job description (see above), he is clearly covered.

a. Caputo is part of a Longshoring gang and had different assignments and tasks at different points of the day. We do not want an employee going in and out of LHWCA coverage (it would make it virtually impossible for an employer to figure out how much insurance to get

o DF’s “Point of Rest” Theory Maritime employment of a longshoreman includes only the stevedoring activity of the Longshore gang which, in the case of unloading, takes cargo out of the hold of the vessel, moves it away from the ship’s side, and carries it to its point of rest on the pier or in a terminal shed. Since the PLs were handling cargo that had already reached its first point of rest, they are not covered

a. This theory is too restrictive It does not comport with the Act’s focus on broad occupations and its desire for uniformity (or with the intent to cover the Longshoring operations that modern technology has moved to land)

Situso Caputo No dispute that he is covered since the truck he was helping to load was parked inside the

terminal area [See 3(a)]o Blundo His injury was sustained while checking a container being stripped on a pier located within the

facility known as the 21st street pier. The fenced in facility ran between 19th and 21st streets and included two finger-piers. The 21st street pier was used to berth ships for loading and unloading them while the 19th

street pier was used only for stripping container and storage (this is where Blundo was when he was injured). DF argues that Blundo is not on a covered Situs because the 19th Street pier was not customarily used by an employer for loading or unloading a vessel.

a. It is not clear that the phrase “customarily used” was intended to modify anything more than the immediately preceding phrase: “other areas”

b. Even if the phrase should be read to modify all the preceding terms, Blundo still satisfied the Situs test by working in an “adjoining…terminal… customarily used…in loading and unloading.” The entire terminal facility adjoined the water and one of its two finger-piers clearly was used for loading and unloading vessels

Both Blundo and Caputo satisfy the Status and Situs testsvi. NOTES

Justice Marshall never answers the question as to whether “customarily used” modifies only the “other adjoining areas” phrase immediately preceding it or all of the terms preceding it…He solves the issue by holding that the entire facility is a terminal used for loading and unloading

Preemption of State Workers’ Compensation Laws The LHWCA itself does not preempt state workers’ compensation statutes. Workers injured under circumstances covered by both the LHWCA and a state workers’ compensation statute (that validly applies despite Jensen) may choose which remedy to pursue. o Up until 1972, Congress said that the LHWCA will apply on water and only where a state workers’ comp

remedy did not apply In 1972, Congress extended the Act landward and made it evident that there was no intention to preempt state law. Today, state law may apply regardless of the applicability of the LHWCA whenever Jensen will so permit.

o There is no Statutory preemption in the LHWCA, there is only a Constitutional limitation in Jensen

The Intersection of the LHWCA with the Seaman’s Remedies The LHCWA phrase, “master or member of a crew of any vessel” draws a line separating the theoretically mutually exclusive coverages of the LHWCA and the seaman’s remedies. Despite the theoretical mutual exclusivity, as a practical matter, many workers will be injured under circumstances leaving it unclear which regime they fall under.

4. LHCWA §5i. 5(a) The liability of an employer prescribed in section…shall be exclusive and in place of all other liability of such

employer to the employee… A Longshore worker cannot sue his employer in Tort (the act gives employers tort immunity and gives employees

workers compensation)ii. 5(b) In the event of injury to a person covered under this act caused by the negligence of a vessel, then such person…

may bring an action against such vessel as a third party…and the employer shall not be liable to the vessel for such damages…If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel. If such person was employed to provide shipbuilding, repairing or breaking services and such person’s employer was the owner…of the vessel, no such action shall be permitted…against the injured person’s employer or against the employees of the employer. The liability of the vessel under the subsection shall not be based on the warranty of seaworthiness…The remedy provided on this subsection shall be exclusive of all other remedies against the vessel except remedies available under this Act.

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57 Pre-1972 This meant that Unseaworthiness was an available remedy (via Sieracki). Furthermore, Kermarec

held that a longshoreman working aboard a vessel has a typical negligence action. Post 1972 Unseaworthiness was taken out, but Kermarec presumptively still existed. The legislative history

shows that the negligence action contains a narrowly limited duty (not a full blown Kermarec duty of care)o Basically: A Longshoreman is free to sue a 3rd party non-employer vessel for negligence

This is NOT a 1331 arising under cause of action (not a federal question statute) because 5(b) is not granting anything. Instead, it is taking a lot out of the general federal maritime law (it is modifying it, not creating a cause of action).o On the other hand, 5(a) is in fact creating a 1331 cause of action

5. Howlett v. Birkdale Shipping Co.i. Facts: PL was a longshoreman employed in PA by stevedore Northern and was injured while unloading bags of cocoa

beans from a cargo hold on a ship owned by the DF. PL jumped down about 3 feet to the deck where he slipped on a sheet of clear plastic that had been placed under the cargo and fell. He sustained serious injuries that prevented him from returning to his job as a longshoreman. He brought suit against the Shipowner under 5(b). Howlett claims that before jumping, he did not see the plastic and charged the DF as being negligent for failing to warn Northern and its employees of the dangerous condition. The US district Court granted summary judgment for the DF shipowner and the 3rd

Circuit affirmed. SC granted cert to resolve a conflict among the Circuits regarding the scope of the shipowner’s duty to warn of latent hazards in the cargo stow.

ii. Supreme Court The question of whether PL produced enough evidence sufficient to hold the DF liable for his injuries depends

upon the meaning of the term “negligence” in 5(b). There are 3 general duties that a shipowner owes to a longshoreman (from Scindia Steam):o 1) “Turnover Duty” Relates to the condition of the ship upon the commencement of the stevedoring

operationso 2) Applicable once the Stevedoring operations have begun Provides that a shipowner must exercise

reasonable care to prevent injuries to longshoremen in areas that remain under the active control of the vessel

o 3) “Duty to Intervene” Concerns the vessel’s obligations with regard to cargo operations in areas under the principal control of the independent stevedore

This case implicates only the vessel’s Turnover Duty…o A vessel must exercise ordinary care under the circumstances to turn over the ship and its equipment and

appliances in such condition that an expert and experienced stevedoring contractor, mindful of the dangers he should reasonably expect to encounter, arising from the hazards of the ship’s service or otherwise, will be able by the exercise of ordinary care, to carry on cargo operations with reasonable safety to persons and property.

a. COROLLARY Requires the vessel to warn the stevedore of any hazards on the ship or with respect to its equipment so long as the hazards are known to the vessel or should be known to it in the exercise of reasonable care and would likely be encountered by the stevedore in the course of his cargo operations, are not known by the stevedore and would not be obvious to or anticipated by him if reasonably competent in the performance of his work Absent actual knowledge of a hazard, the duty to warn may attach only if the exercise of

reasonable care would place upon the shipowner an obligation to inspect for, or discover, the hazard’s existence

b. PL confines his case to an allegation of the DF’s failure to warno Howlett contends that the vessel must make reasonable inspections, both during and after stevedoring

operationsa. This contradicts the principles in Scindia Steam:

Absent contractual provision, positive law, or custom to the contrary, a vessel has no general duty by way of supervision or inspection to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations that are assigned to the stevedore. The stevedore’s obligations may not be diminished by transferring them to the vessel (The shipowner has no duty to pay attention to see that the operation is safely done).

o When between ports, the vessel and its crew have direct access to and control over the ship itself and its gear, equipment, and tools. The vessel’s responsibilities to inspect these areas of the ship are commensurate with its access and control. Because the vessel does not exercise the same degree of operational control over, and does not have the same access to, the cargo stow, its duties with respect to the stow are limited by comparison.

a. The vessel’s turnover duty to warn of latent defects in the cargo stow is a narrow one. Generally: The duty attaches only to latent hazards, defined as hazards that are not known to

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58the stevedore and that would be neither obvious nor anticipated by a skilled stevedore in the competent performance of his work. Additionally, the duty encompasses only those hazards that are known to the vessel or should be known to it in the exercise of reasonable care. Contrary to the PL’s argument, the exercise of reasonable care does not require the shipowner to supervise the ongoing operations of the loading stevedore or to inspect the completed stow.

b. The Turnover Duty is reasonable care to warn of hazards that would not be discovered by a stevedore. However, when the defect is in the cargo hold, there is no duty of reasonable care because that would involve inspection Here there is a duty with respect to the Shipowner’s actual knowledge only (case does not say this but it is implied)

o The Court found that summary judgment, however, was not appropriate because one of the crew members (who may have held positions such that their knowledge should be attributable to the vessel) may have observed the plastic and therefore have had constructive knowledge

iii. NOTES It is a fluke when a 5(b) case actually wins. The SC was ensuring that unseaworthiness was actually dead and that

any form of robust Kermarec action could not function like unseaworthiness did by putting an enormous duty in the shipowner.

6. Entity that is BOTH a Vessel and Employer

i. Is there a basis for tort liability? 5(a) says that employers are immune 5(b) says that some employers are immune, but not those that are also vessels

ii. If a PL is to establish a cause of action under 5(b): 1) He must somehow channel the case into one of the 3 categories from Scindia and then 2) Characterize this category as the negligence of the DF in its VESSEL CAPACITY and not its employer capacity

o 5(b) makes clear that a vessel owner acting as its own stevedore is liable only for negligence in its “owner” capacity, not for negligence in its “stevedore” capacity

7. Jones & Laughlin Steel Corp v. Pfeiferi. Facts: PL was injured as a loading helper on a coal barge. As his employer, DF was required to compensate him for his

injury under the LHWCA. As the owner of the barge, the DF may also be liable for negligence under 5(b). The SC granted cert to decide whether the DF may be subject to both forms of liability. PL alleges that his injury had been caused by the negligence of the vessel within the meaning of 5(b). The District Court found in favor of the PL holding that the receipt of compensation payments via the Act did not bar a separate recovery of damages for negligence. The 3rd Circuit Affirmed.

Most longshoremen who load and unload ships are employed by independent stevedores, who have contracted with the vessel owners to provide such services. Here, the PL was employed directly by the DF shipowner. Under Section 4 of the LHWCA, a longshoreman who is injured in the course of his employment is entitled to a specified amount of compensation from his employer whether or not the injury was caused by the employer’s negligence. Section 5(a) of the Act appears to make that liability exclusive. DF contends that since he was the PLs employer and paid him benefits pursuant to Section 4, Section 5(a) absolves him of all other responsibility for damages

ii. Supreme Court Although the DF’s claim is supported by the plain language of 5(a), it is undermined by the plain language of 5(b).

The first sentence of 5(b) authorizes a longshoreman whose injury is caused by the negligence of a vessel to bring a separate action against the vessel as a third party. Therefore, in the typical tripartite situation, the longshoreman is not only guaranteed the statutory compensation from his employer; he may also recover tort damages if he can prove negligence by the vessel. The second sentence of 5(b) makes it clear that such a separate action is authorized against the vessel even when there is no independent stevedore and the longshoreman is employed directly by the vessel owner (“If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel”). If 5(a) had been intended to bar all negligence suits against owner-employers, there would have been no need to put an additional sentence in 5(b) barring suits against owner-employers for injuries caused by fellow servants.

The history of the Act further attests to the permissibility of the PLs action. If respondent had been employed by an independent stevedore at the time at the times of the injury, he would have had the right to maintain a tort action against the vessel. Here, he has the same right even though he was employed by the vessel.

D. Offshore Oil and Gas Workers1. Outer Continental Shelf Lands Act 1953 (OCSLA)

i. Geographical Coverage: 1331(a) “All submerged lands lying seaward and outside the areas placed within state boundaries by the Submerged Lands Act.”

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59 Under the Submerged Land Act, Florida’s and Texas’s boundaries extend 9 nautical miles into the Gulf f Mexico,

whereas the seaward boundaries of all other states stop 3 nautical miles from the coast [Note: A nautical mile is 6,076 feet and a normal mile is 5,280 feet].o Everything within 3 nautical miles of the coast is considered territorial waters, whereas everything beyond

it the high seaso Congress claimed for the US all the minerals under the ocean lying anywhere near the US. Congress then

gave the states a mineral interest in the State’s territorial waters and maintained an interest in anything outside of that line – on the high seas - for itself (this interest goes as far out as technology allows companies to explore for gas and oil)

Section 1333(a)(1) The Constitution and laws and civil and political jurisdiction of the US are hereby extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed , which may be erected thereon for the purpose of exploring for, developing or producing resources thereon, or any such installation or other device (other than a ship or vessel) for the purpose of transporting such resources to the same extent as if the outer Continental Shelf were an area of exclusive Federal Jurisdiction located within a State…o State law cannot apply of its own force to areas covered by this sectiono 2nd Most narrow of the provisions Broader than (a)(2)(a) to be more contemporary and take floatable

rigs into accounta. The Amendment by which the coverage of (a)(2)(a) and (a)(1) were severed was the result of

lobbying by the maritime PL’s personal injury bar which was afraid that broadening (a)(2)(a) to include things temporarily attached to the seabed would jeopardize the seaman’s remedies aboard these things

Section 1333(a)(2)(a) To the extent that they are applicable and not inconsistent with this Act or with other Federal laws…the civil and criminal laws of each adjacent State…are declared to be the law of the US States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelfo State law is sometimes adopted as surrogate federal law for subsoil, seabed, fixed platforms and artificial

islands (not for temporarily attached apparatuses, which are mentioned in a1)o State law applies ONLY as surrogate federal law and ONLY when there is no federal law competing with it o Narrowest coverage of the provisionso Compromise – Congressmen from the Gulf Coast states wanted state law coverage and others wanted it to

be completely subsumed under federal admiralty (the admiralty law suggestion was countered by people who said there is nothing in admiralty law to deal with a number of problems that are going to arise out there). The compromise came in the rule that if there is a federal law in place, it will govern and, if not, the law of the adjacent state will be borrowed and made applicable as federal law.

Section 1333(b) With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the Outer Continental Shelf for the purpose of…natural resources…compensation shall be payable under the provisions of the LHWCA…o 3rd Narrowest of the provisions o Except for seaman, workers injured on the OCS arising out of operations are covered by the LHWCA

a. Therefore, sometimes, a worker will have two bases for asserting a LHWCA action: He can be covered by the LHWCA’s own force and by the Lands Act

Section 1349(b)(1) The District Courts of the US shall have jurisdiction over cases and controversies arising out of, or in connection with (A) any operation conducted on the OCS which involves exploration, development, or production of minerals, of the subsoil and seabed of the OCS, or which involves rights to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this Act. Proceedings with respect to any such case or controversy may be instituted in the judicial district in which any DF resides or may be found, or in the judicial district of the State nearest the place the cause of action arose.o Broadest of the Provisionso Basically, federal courts have jurisdiction over all actions arising out of the OCSo Sets forth an “arising under” ground of federal-court jurisdiction that includes tort actions arising from OCS

occurrences

2. Rodrigue v. Aetna Casualty & Surety Co. (1969)i. Facts: Case involves 2 men, Dore and Roderigue, who met their deaths on artificial island drilling rigs located on the outer

Continental Shelf of the LA coast. Each man’s family brought suit for wrongful death in the federal courts both under the Death on the High Seas Act (Seas Act) and under LA law assertedly made applicable by the OCSLA. In both cases, the 5th C. affirmed the District Courts and held that the Seas Act was the exclusive remedy for the deaths. PLs sought cert. claiming that they are entitled to an additional remedy under the state law adopted by the Lands OCSLA (Lands Act). Dore was

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60working on an artificial island with a crane mounted to it being used to unload a barge. As the crane lifted a load from the barge to place it on the artificial island, the crane collapsed and toppled over onto the barge killing the worker. In the Rodrigue case, the worker was performing a test while high on a derrick rising above an artificial island. He fell and died.

ii. Supreme Court The Lands Act makes it clear that federal law, supplemented by the state law of the adjacent state, is to be

applied to these artificial islands as though they were federal enclaves in an upland state. This approach was deliberately taken in lieu if treating these structures as vessels, to which admiralty law supplemented by the law of the jurisdiction of the vessel’s owners would apply. This was done in part because men working on these islands are closely tied to the adjacent State, to which they often commute and on which their families live, unlike transitory seamen to whom a more generalized admiralty law is appropriate. Since the Seas Act does not apply here of its own force under admiralty principles (no vessels), and since the Lands Act deliberately negated the application of admiralty principles to these novel structures, LA law is not ousted by the Seas Act, and under the Lands Act it is made applicable.

Under the Lands Act, the adjacent State’s laws were made “the law of the US for the relevant subsoil and seabed and artificial islands and fixed structures erected thereon,” but only to the extent that they are applicable and not inconsistent with other Federal Laws.o Federal law is exclusive in its regulation of this area and State law is only adopted as surrogate federal law

For Federal law to oust adopted state law, federal law must first apply. The Seas Act does not apply because it redresses only those deaths stemming from wrongful actions or omissions occurring on the high seas and these cases involve a series of events on artificial islands.

The accidents in question involved no collision with a vessel, and the structures were not navigational aids. The structures were artificial islands and the accidents had no more connection with the ordinary stuff of admiralty than do accidents on piers.

In these circumstances, the Seas Act, which provides an action in admiralty, clearly would not apply under conventional admiralty principles. The Lands Act provides an alternative federal remedy through adopted state law.

The legislative history of the Lands Act makes it clear that the structures were to be treated as islands or as federal enclaves within a landlocked state, not as vessels.

Since the inapplicability of the Seas Act removes any obstacle to the application of state law by incorporation as federal law through the Lands Act, the decisions are reversed

iii. NOTES Federal Admiralty law will apply whenever the case falls within the admiralty jurisdiction in the traditional sense Neither PL’s action was against the worker’s employer. The rights of the workers against their employers are

confined to the provisions of the LHWCA made applicable via the OCSLA

3. Herb’s Welding, Inc. v. Gray (1985)i. Facts: PL Gray worked for Herb’s as a welder in an oil and gas field off the LA coast. The field was located partly in LA

territorial waters (within 3 miles of the shore) and partly on the OCS. He ate and slept on a platform in LA waters and spent about ¾ of his working time on platforms in state waters and the rest on platforms on the OCS. He was injured by an explosion when he ran from the area of the blast and injured his knee. He sought benefits under the LHWCA for lost wages, disability and medical expenses. Herb’s workers comp carrier denied the LHWCA benefits and Gray filed a complaint with the Department of Labor. The ALJ judge, relying on the Court’s decision in Roderigue, ruled that since Gray’s work was totally involved in the exploration for, and development and transmition of, oil and gas from submerged lands, it was not relevant to traditional maritime law and lacked any significant maritime connection. Therefore, Gray did not satisfy the LHWCA’s status requirement.

The BRB reversed, concluding that regardless of his employment, Gray could recover by virtue of the OCSLA’s extension of the LHWCA. Although Gray was injured in state waters, the BRB felt that his injury nonetheless could be said to have occurred “as a result of operations on the OCS.”

5th Circuit Affirmed the BRB relying directly on the LHWCA. With respect to the situs requirement, the court Noted that it had compared drilling platforms to wharves in Roderigue and given that the 1972 Amendment extended coverage to accidents occurring on wharves, it must mean that they also reach accidents occurring on platforms. Furthermore, since workers injured on movable barges, on fixed platforms on the OCS, or en route to the fixed platforms are all covered, there would be a “curious hole” in coverage if someone in Gray’s position were not. As for his status, the court differed from the ALJ in concluding that Gray’s work bore a realistically significant relationship to traditional maritime activity involving navigation and commerce on navigable waters because it was an integral part of the offshore drilling process which was itself maritime commerce.

ii. Supreme Court History When extractive operations first moved offshore, all claims for injuries on fixed platforms proceeded

under state worker’s comp schemes. With the passage of the OCSLA, Congress extended LHWCA coverage to oil workers more than 3 miles offshore. Since until 1972, the LHWCA itself extended coverage only to accidents occurring on navigable waters, and because stationary rigs were considered to be islands (Rodrigue), oil rig

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61workers inside the 3 mile limit were left to recover under state schemes [any worker, inside or outside the 3 mile limit, who qualified as a seaman was not covered by the LHWCA, but could sue under the Jones Act and the general maritime law.o The 1972 amendment expressly extends coverage to areas adjoining navigable waters, but the definition of

an employee limited coverage to employees engaged in maritime employment.o The LHWCA, as amended, does not mention offshore drilling rigs or the workers thereon.

a. While amending the Act, a bill was killed that suggested extending coverage to these people. The same committee considered the 1972 amendment and the possible extension of the Land Act’s application of the LHWCA to all offshore oil workers without it ever occurring to anyone that the two acts might be duplicative.

The LHWCA does not define “maritime employment,” but cases and the legislative history bar it from extending to Gray. Rodrigue holds that drilling platforms are not even suggestive of traditional maritime affairs.

The Amendments to the LHWCA were meant to cover those workers on the situs who are involved in the essential elements of loading and unloading. While “maritime employment” is not limited to the occupations mentioned in 2(3), it also cannot be read to eliminate any requirement of a connection with the unloading or construction of ships. We have never read “maritime employment” to extend so far beyond those actually involved in moving cargo between ship and land transportation.

The dissent emphasizes that Gray was generally on or near the water and faced maritime hazards. To the extent that this is so, it is relevant to situs, not status. To hold that Gray was necessarily engaged in maritime employment because he was on a drilling platform would ignore Congress’ admonition that not everyone on a covered situs automatically satisfies the status test.

The dissent objects that denying coverage here will result in exactly the sort of inconsistent, checkered coverage that Congress sought to eliminate in 1972 (it creates a “Curious Hole” in coverage because Gray would have been covered had he been injured on navigable waters OR on the OCS). This is not compelling…o This idea goes far beyond Congress’ desire to treat equally all workers engaged in loading or unloading a

ship, whether they were injured on the ship or on an adjoining pier or docko There will only be a boundary to coverage and there will always be people who cross it during their

employment.o The inconsistent coverage here results primarily from the explicit geographical limitation of the OCSLA’s

incorporation of the LHWCA (it is the OCSLA that is restricting his coverage through its limited incorporation of the LHWCA, not because of the limited coverage the Court is reading into the LHWCA).

Dissento Although Gray routinely travels over water as an essential part of his job and performs the rest of his job

adjacent to and surrounded by water, he is not covered because, in the Court’s view, his occupation is not “maritime employment.” This conclusion is reached even though a worker of the same occupation, working in the same industry, and performing the same tasks on a rig located in the same place, would be covered if that rig were one that was capable of floating. The Court has not identified a reason that Congress would have desired such a distinction. A principle congressional goal of the 1972 amendments to the LHWCA was to rid the Act of such arbitrary distinctions.

a. Here the Court holds that a marine petroleum worker is not covered by the LHWCA when pursuing his occupation on a fixed offshore rig within the 3-mile limit of a state’s territorial waters.

iii. NOTES Fixed vs. Floating There are 2 types of Offshore Oil Rigs: Fixed and Floating. Floating structures have been

treated as vessels so workers on them, unlike those on fixed platforms (Rodrigue), enjoy the same remedies as workers on ships. If the worker is permanently attached to the vessel as a crewmember, he is regarded as a seaman. If not, he is covered by the LHWCA because he is employed on navigable waters.o Gray cannot take advantage of the perks of being on a floating rig because almost all of the rigs at the time

were fixed. o There were two ways for Gray to obtain seaman status as required by the LHWCA: 1) By being within the

definition of maritime employment or 2) By being hurt on navigable water (as per Perini, this automatically supplies status)

On remand, the 5th Circuit held that the OCSLA 1333(b) did not extend coverage of the LHWCA to Gray because his injury was not “the result of operations conducted on the OCS” (the fact that the platform he was injured on might have been indirectly connected to a platform on the shelf by a network of pipelines is unrelated to the accident’s causation).o The Court expressly left open the question of whether 1333(b) can ever apply to an injury that occurs

elsewhere than on the OCS itself. After the 3rd Circuit extended it to a well-logging operator who had a wreck on the Garden State on his way to catch a helicopter to an offshore submersible rig, the 5th Circuit balked. It held that LHWCA coverage as extended under 1333(b) applies only to employees who (1) suffer

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62injury or death on an OCS platform or the waters above the OCS and (2) satisfy the “but for” test applied in Herb’s Welding (on the remand).

Robertsono Agrees with the 5th Circuito Gray shows status by virtue of the fact that he is out there in the middle of the ocean and everyone around

him is covered…It is maritime by virtue of the entire situationo It makes NO SENSE for there to be a “Curious Hole” in coverage

a. The Supreme Court is making the difference rely on: 1) Being inside or outside the 3-mile line and 2) Being on a structure that is a floatable platform or one that is not

o We should not rule coverage out on the basis of a highly restrictive reading of maritime employment as per the LHWCA

o He shows Situs and the Supreme Court does not really argue about this Under the LHWCA, “any adjoining pier customarily used…” is covered so he is as well

o The Amendments to the LHWCA should be liberally interpreted as they were meant to be and people should be swept under its coverage, not out from under it!

iv. Big Picture Ideas The legislative history of an Act of Congress may have been written entirely by lobbyists with the House and

Senate simply signing off (this is what happened with the LHWCA)o Vickery wished to accomplish only a small tort remedy and wipe away Unseaworthiness and Kermarec

actions (succeeded in Howlett). He did not, however, succeed to have the action limited by the Point of Rest criteria.

This history of how a statute makes its way through Congress may reveal more about a statute than does simply reading the statute itself of its formal legislative history (confined largely to floor debate)o OCSLA permits state law only for matters arising from subsoil, seabed and fixed structures and only if there

is no applicable federal maritime law conflicting with the state law candidate Scindia Steam (the case saying that 5(b) is not much of a tort and imposing three situations when it is available)

was written by the same guy that wrote Herb’s Welding and Rodrigue and Herb’s Welding is inconsistent with Rodrigue (Rodrigue was a locality case, not a maritime in nature case).

E. Fatal Injury Remedies1. Generally There are two types of fatal injury litigation:

i. Wrongful Death Action Generally intended to compensate the decedent’s family for the losses that they have suffered as a result of the decedent’s death.

ii. Survival Actions Assert the decedent’s estate ‘s right to prosecute any claims for personal injury action that the decedent would have had but for his death.

Damages are generally confined to those suffered by the decedent in the interval between the onset of the tort and death and will not be awardable if death was instantaneous.

2. Moragne v. States Marine Lines, Inc.i. Facts: The PL was killed while working aboard a vessel on navigable waters within the State of FL (within the 3-mile limit).

His widow brought this suit in a state court against the owner of the vessel to recover damages for wrongful death and for the pain and suffering experienced by the decedent prior to his death. The claims were predicated upon both negligence and the unseaworthiness of the vessel. The DF removed the case to Federal District Court in FL based on diversity of citizenship. DF sought dismissal of the part of the claim that requested damages for wrongful death on the basis of unseaworthiness arguing that maritime law provided no recovery for wrongful death within a state’s territorial waters, and that the statutory right of action for death under FL law did not encompass unseaworthiness as a basis of liability. The District Court agreed and dismissed the challenged portion of the complaint on these grounds, but allowed an interlocutory appeal to the 5th Circuit.

The 5th Circuit certified the question to the FL Supreme Court of whether the state wrongful death statute allowed recovery for unseaworthiness as the concept is understood in maritime law. The court said NO. The Circuit affirmed the District Court’s order and stated that it was compelled by the Supreme Court’s decision in The Tungus. The SC granted cert. and asked the USA to participate as amicus curiae to reconsider the question of remedies under federal maritime law for tortious deaths on state territorial waters.

ii. Supreme Court History

o The Harrisburg Established the rule of maritime law that in the absence of a statute, there is no action for wrongful death.

a. The Harrisburg decision relied on Brame, in which the Court held that in American Common Law, as in English, no civil action lies for an injury which results in death

o The Tungus All members of the Court agreed that where a death on state territorial waters is left remediless by the general maritime law and by federal statutes, a remedy may be provided under any

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63applicable state law giving a right of action for death by wrongful act. The Court further held that when admiralty adopts a state’s right of action for wrongful death, it must enforce the right as an integrated whole, with whatever conditions and limitations the creating state has attached.

a. 4 Justices dissented to this latter part They would have preferred that federal maritime law could utilize the state law to supply a remedy for breaches of federally imposed duties, without regard to any substantive limitations contained in the state law.

The Harrisburg was never properly decided…o There was no good justification for the Court’s application of the Brame common law rule (which was

never really justified there either). Its rationale was that it knew of no country that had adopted a different rule on the subject for the sea from that which it maintained on land and that it should therefore apply equally to maritime deaths.

o The Felony-Merger doctrine The sole substantial basis for the common law rule an a feature of the early English law that did not survive into this Century.

a. The common law did not allow civil recovery for an act that constituted both a tort and a felony. The tort was treated as less important than the offense against the Crown, and was merged into (or pre-empted by) the felony. The doctrine was justified practically by the fact that the punishment for the felony was the death of he felon AND the forfeiture of his property to the crown. Therefore, after the crime has been punished, nothing remained of the felon or his property on which to base a civil action. Since all intentional or negligent homicide was felonious, there could be no civil suit for wrongful death. In the US, however, the felony punishment did not include forfeiture of property.

Therefore, there was nothing to bar a subsequent civil suit.o The most likely reason the English rule was adopted in the US without much question was simply that it

had the blessing of ageo In the US today, every state has enacted a wrongful-death statute. Congress has done so as well for RR

employees (FELA), merchant seamen (Jones Act), and people on the high seas (Death on the High Seas Act).

a. These numerous and broadly applicable statutes, taken as a whole, make it clear that there is no present public policy against allowing recovery for wrongful death.

From Harrisburg until 1920, there was no remedy for death on the highs seas caused by the breach of one of the duties imposed by federal maritime law. For deaths within state territorial waters, the federal law accommodated the state wrongful death statutes. In 1920, Congress acted to furnish the remedy denied by courts for deaths beyond the jurisdiction of any state by passing the Death on the High Seas Act (DOHSA) and the Jones Act.

US Amicus Curiae contended that that these statutes, if construed to forbid recognition of a general maritime remedy for wrongful death, within territorial waters, would create 3 anomalies.o 1) Within territorial waters, identical conduct violating federal law (here, the furnishing of an unseaworthy

vessel) produces liability if the victim is merely injured, but frequently not if he is killed.o 2) Identical breaches of the duty to provide a seaworthy ship, resulting in death, produce liability outside

the 3-mile limit (since a claim under the DOHSA can be based upon Unseaworthiness), but not within the territorial waters of a state whose local statute excludes Unseaworthiness claims.

o 3) A true seaman (a member of the ship’s crew covered by the Jones Act) is provided no remedy for death caused by Unseaworthiness within territorial waters, while a longshoreman, to whom the duty of seaworthiness was extended only because he performs work traditionally done by seamen, does have such a remedy when allowed by a state statute.

a. Court held in Gillespie that the Jones Act precludes any state remedy for wrongful death of a seaman in territorial waters

Read in light of the state of maritime law in 1920, the legislative history of the DOHSA indicates that Congress intended to ensure the continued availability of a remedy, historically provided by the states, for deaths in territorial waters. Its failure to extend the Act to cover such deaths primarily reflected the lack of necessity for coverage by a federal statute. Congress also did not want it to seem as though the Act pre-empted the state laws covering wrongful death.o The DOHSA does not abrogate available state remedies. Additionally, there is no intention for the Act to

foreclose any nonstatutory federal remedies that may be found appropriate to effectuate the policies of general maritime law.

There are no countervailing factors that dictate adherence to the Harrisburg rule simply as a matter of stare decisis. The rule rests on a dubious foundation and has become increasingly unjustifiable as the law has moved away from the proposition.

Overruling the Harrisburg will not necessitate a long course of decisions to spell out the elements of a new “cause of action.” This decision does not require the fashioning of a whole new body of federal law…It merely removes the bar to access to the existing general maritime law.

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64 In order to determine the beneficiaries that are entitle to recover, we should look at the DOHSA It is the only

Act that applies not just to a class of workers, but to any person, and that bases liability on conduct violative of general maritime law.

iii. NOTES: The issue before the court is the existence of a wrongful death “remedy” that will apply to deaths caused by any

violation of maritime duties, regardless of whether that duty was to avoid unseaworthiness, Jones Act negligence, or general maritime negligence. The Moragne remedy is available regardless of the particular cause of action asserted (there are at least 9 signals throughout the opinion indicating this).o The cause of action in Yamaha, below, is products liability

DOHSA remedies for remedy is confined to pecuniary losses, whereas the most state wrongful death statutes allow recovery for the nonpecuniary item of “loss of society” (companionship and consortium)

With respect to wrongful death, DOHSA was not available to the PL because the injury took place within the 3-mile limit and the Jones Act was not available because he was not a seaman. o All the PL had was the FL statute which not only provided the remedy of wrongful death, but also the

attached cause of action giving rise to it (unseaworthiness was not one of these causes of action).o Why not LHWCA?

Majority asks how we ever came to think that there is something about fatal injury litigation that is so different from personal injury litigation that the former requires a statute before we permit it…o Felony Merger Doctrineo Brame

In order for a PL to establish liability, he will have to prove whatever the underlying cause of action is Whatever the decedent would have to prove had he lived to assert a tort claim

Geographical Coverage – The Court sounds like it is extending this to wherever admiralty goes

3. Miles v. Apex Marine Corp.i. Facts: PL was a seaman aboard a vessel operated by the DF when he was stabbed 62 times and killed by a fellow

crewmember. The PL’s mother brought actions in District Court in LA, alleging negligence under the Jones Act for the failure to prevent the assault on her son and a breach of the warranty of unseaworthiness under general maritime law for hiring a crew member unfit to serve. She sought compensation for 1) Loss of support, services, and society, 2) Punitive damages, 3) Compensation for her son’s pain and suffering prior to his death and 4) His lost future income. The DC granted the DF’s motion to strike the claim for punitive damages and lost future income. The DC also instructed the jury that the PL could not recover for loss of society unless she was financially dependent on her son. The jury found that DF was negligent under the Jones Act, but that she ship was seaworthy. It also found that the PL was not financially dependent on her son and was therefore not entitled to damages for loss of society. PL got damages for loss of support and services and for pain and suffering.

5th Circuit Affirmed the judgment as to Jones Act negligence and held that the ship was unseaworthy as a matter of law due to the crewmember’s extraordinarily violent disposition indicating that he was unfit. This ruling revived the PL’s general maritime claim and the court therefore had to consider two questions concerning the scope of damages under general maritime law: 1) Reaffirmed that a nondependent parent cannot recover for loss of society in a general maritime wrongful-death action and 2) Held that general maritime law does not permit a survival action for the decedent’s future earnings.

ii. Supreme Court Granted cert. on those two issues and affirmed Moragne did not set forth the scope of the damages recoverable in a maritime wrongful death action…Past

cases:o Gaudet Involved the death of a Longshoreman in territorial waters. The Court held that a dependent PL

in a general maritime wrongful death action could recover for the pecuniary losses of support and services (and funeral costs) AND the nonpecuniary loss of society

o Higginbotham General maritime wrongful death action on the high seas. DOHSA explicitly limits recoverable damages to pecuniary losses in wrongful death cases (no loss of society)

a. You can still recover pecuniary damages under DOHSA (but it can be understood as holding that Moragne does not apply beyond the 3-mile limit)

The Jones Act does not explicitly limit damages to any form. FELA only says that an employer shall be liable in damages for the injury or death of someone protected under the Act. The SC has held that the language of FELA’s wrongful death provision is identical to Lord Campbell’s Act, which is the first wrongful death statute. This Act did not explicitly limit damages to be recovered, but the Act and statutes that followed persistently were interpreted as only providing for pecuniary loss. o Incorporating FELA, unaltered, into the Jones Act, Congress must have intended to incorporate the

pecuniary limit on damages as well. There is therefore no recovery for loss of society in a Jones Act wrongful death action.

o General Maritime claim of Unseaworthiness It would be inconsistent with the court’s place in the Constitutional scheme were it to sanction more expansive remedies in a judicially created cause of action

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65in which liability is without fault (strict) than Congress has allowed in cases of death arising from negligence. There is therefore, no recovery for loss of society in a general maritime action for the wrongful death of a Jones Act seaman.

Survival Action (lost future earnings) Under traditional maritime law (as under common law), there is no right of survival; a seaman’s personal cause of action does not survive the seaman’s death. Recovery of lost future income in a survival suit will, in many cases, be duplicative of recovery by dependents for loss of support in a wrongful death action (the support dependents lose as a result of a seaman’s death would have come from the seaman’s future earnings). The majority of American legislatures have concluded that lost future income is not recoverable in a survival action. o Furthermore, and more importantly, recovery of lost future income is not consistent with the general

principles of maritime tort law Maritime tort law is now dominated by federal statutes and the SC is not free to expand remedies at will simply because it might benefit the seaman and his dependents. Congress has places limits on recovery in survival actions that the SC cannot exceed. Since this case involves the death of a seaman, we must look at the Jones Act…

a. Jones Act/FELA survival provision limits recovery to losses suffered during the decedent’s lifetime. As with loss of society in wrongful death actions, this forecloses more expansive remedies in a general maritime action founded in strict liability. Since the PL’s estate cannot recover for lost future income under the Jones Act, it cannot do so under General Maritime Law.

Summary Cognizant of the Constitutional relationship between the courts and Congress, the SC acted in accordance with the uniform plan of maritime tort law Congress created in the DOHSA and Jones Acts. There is a general maritime cause of action for the wrongful death of a seaman. BUT, damages recoverable in such an action do not include loss of society. Also, a general maritime survival action cannot include recovery for the decedent’s lost future earnings.

iii. NOTES: History: Moragne – Miles

o Moragne Creates a new general (nonstatutory) maritime fatal injury remedy, which probably includes both wrongful death and survival features.

o Gaudet Held that the Moragne wrongful death remedy includes damages for loss of society (longshoreman in territorial waters)

o Higginbotham The Moragne wrongful death remedy is unavailable for deaths occurring within the coverage of DOHSA (sharp change of course)…DOHSA precludes any resort to the non-statutory wrongful death remedy

a. Tallentire State wrongful death remedies are also unavailable for deaths occurring within the coverage of DOHSA

o Miles Held that:a. The Jones Act precludes recovery for loss of societyb. Seamen’s families cannot recover for loss of society under the general maritime lawc. Moragne may not have created a general maritime survival remedyd. Any general maritime survival remedy that might exist does not allow recovery for the

decedent’s lost future earnings Robertson O’Connor is wrong when she says that maritime tort law is dominated by federal statutes. It may

be true to say that the general maritime remedy of wrongful death is not going to have a large penumbra, but she turns this upside down by saying that this is really a sphere for the legislature, not the courts. She is exhibiting an extreme example of aggressive deference to Congress.

Who can recover Loss of Society damages?o Nobody can have it on the high seas due to DOHSA, which explicitly rules it out (DOHSA was actually

amended to allow aviation death damages for loss of society on the high seas after a plane with Michigan students crashed outside of the 3 mile line).

o Seamen can never have damages for loss of society due to the Jones Acto Longshoremen can have it within territorial waters due to Gaudet

4. Yamaha Motor Corp., U.S.A. v. Calhouni. Facts: A 12-year-old girl dies in a Jet-Skiing accident (Jet Ski was manufactured by DF Yamaha) while on a family vacation

in the territorial waters of P.R. The parents sued individually and in their capacity as administrators of their daughter’s estate in the Federal DC of PN. Invoking PN’s wrongful death and survival statutes, they asserted several bases of recovery (negligence, strict liability, breach of implied warranties) and sought damages for lost future earnings, loss of society, loss of support and services, funeral costs and punitive damages. DF moved for partial summary judgment, arguing that the federal maritime wrongful death action the court recognized in Moragne provides the exclusive basis for recovery and that is displaces all remedies afforded by state law. DF argued that under Yamaha, the PLs could only recover for funeral expenses. The DC agreed that Moragne’s maritime death action displaced state remedies BUT that

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66loss of society and loss of support and services were compensable under Moragne. The DC certified the following questions to the Circuit for interlocutory appeal: Whether under such a maritime cause of action, a PL can attempt to recover 1) Damages for loss of society, 2) Damages for loss of the child’s future earnings and 3) Punitive damages.

Third Circuit Panel did not answer the questions, but ruled that state-law remedies applied in this case and that they were not displaced by a federal maritime rule of decision

ii. Supreme Court Certiorari was granted to consider whether the federal maritime claim for wrongful death recognized in Moragne

supplies the exclusive remedy in cases involving the deaths of nonseafarers (people who are not seamen covered by the Jones Act or longshoremen covered by the LHWCA) in territorial waters

Yamaha argues that Moragne (despite focusing on maritime duties owed to maritime workers) creates a uniform federal maritime remedy for all deaths occurring in state territorial waters, and ousting all previously available state remedies. Yamaha believes that state remedies can no longer supplement general maritime law (as they did before Moragne).

Yamaha points to the fact that the Court often has held that vindication of maritime policies demanded uniform adherence to a deferral rule of decision without leeway for supplementation by state law. Additionally, they point out that concerns of uniformity governed the decision in Moragne. o However, the uniformity concern in that case related to the availability of Unseaworthiness as a basis of

liability (the Court was concerned that seamen were treated differently than longshoreman in the context of Unseaworthiness). The three anomalies describes in Moragne relate to ships and the workers who serve them and to the distinctly maritime substantive concept of unseaworthiness. The claim here is the need for consistency with respect to damages for the wrongful death remedy.

a. Moragne was focused on the extension of relief, not on the contraction of remedies.b. Furthermore, the court in Moragne notably left in place the negligence claim she had stated

under FL law This is irrelevant and does not bolster the argument (does not say anything different about negligence actions)

When Congress has prescribed a comprehensive tort recovery regime to be uniformly applied, there is no cause for enlargement of the damages statutorily provided (Miles). But Congress has NOT prescribed remedies for the wrongful deaths of nonseafarers in territorial waters. There is, however, a relevant Congressional disposition: DOHSA. The Seas Act provides that “this act does not affect the law of a State regulating the right to recover for death.” This statement, by its terms, simply stops DOHSA from displacing state law in territorial waters. Taking into account what Congress sought to achieve, we preserve the application of state statutes to deaths within territorial waters.

Since this case involves a watercraft collision (the jet ski hit a boat) on navigable waters, it falls within admiralty’s domain. The exercise of admiralty jurisdiction, however, does not result in automatic displacement of state law. Prior to Moragne, federal admiralty courts routinely applied state wrongful death and survival statutes in maritime accident cases. Moragne should not be read to stop that practice.

iii. NOTES On remand, the 3rd Circuit in Yamaha held that federal, not state, law would govern issues of liability even though

under the Tungus, state law had governed that issue. The Tungus’s remaining vitality rests only upon the limited proposition that state law may provide a procedure or a vehicle through which a PL may institute an action to remedy death in territorial waters.o Tungus held that you can use a state statute as a remedy for a maritime death, but that you must take

whatever cause of action is attached along with it. Now, you can take a state remedy and assert a maritime cause of action (this is the teaching of Yamaha, so we have essentially turned the Tungus upside down).

o Harrisburg is completely dead It is accepted that Moragne does apply to nonseafarers in territorial waters. The question is whether it removed

anything (state law) from being a viable option to a claimant. Who can get out of maritime law and into the more accommodating state law? Nonseafarers, but the decision

describes nonseafarers in two ways (both differently):o Neither seamen covered by the Jones Act nor Longshoremen covered by the LHWCA (in this case a

fisherman who is self-employed would be a nonseaman).o Anyone engaged in the maritime trade cannot be considered a nonseafarer

a. There is a dispute as to which definition controls

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Carriage of GoodsA. Introduction

1. Two traditional kinds of Ks for the carriage of goods by seai. Bill of Lading Used in the “liner” trades by “common carriers” that sail on fixed routes following announced schedules

and that are prepared to carry “general cargoes” (whatever is offered for shipment that the ship is capable of carrying). Like FedEx The carrier is traditionally thought to have superior bargaining power justifying a legal regime protecting the cargo

interests The regime that has been enacted in the US is the Carriage of Goods by Sea Act (COGSA)ii. Charterparty Used in “tramp” shipping by “private carriers” that offer the capacity of an entire ship on an ad hoc basis,

typically for the carriage of “bulk cargoes” such as oil, grain, coal, steel, iron ore, or lumber. Like a private moving company Parties are thought to have roughly equal bargaining power so freedom of K has been the governing principle

2. Bill of Lading Considered the K of carriage or at least to be evidence of the K of carriage (to memorialize the contractual terms that the parties concluded when booking the shipment, before the Bill of Lading was issued).i. Operates as a receipt for the goods, providing evidence of the carriers having received the cargo from the shipper and some

evidence of the condition of the cargo at the timeii. Operates as a document of title, enabling the shipper to sell the goods while they are in the carrier’s possession by

transferring the Bill of Lading to a subsequent holdersiii. Historically

Traditionally, it was issued by a carrier to cover the transportation provided by that carrier ALONE. Transshipment with another carrier was considered a serious breach of the K of carriage.

Modern It is common to have a single Bill of Lading for the entire journey. One of the carriers involved may issue the Bill of Lading or it might be issued by a NVOCC (non-vessel operating common carrier) who will in turn make the necessary arrangements with each of the carriers used. This single Bill of Lading is called a “Through” Bill of Lading to distinguish it from the traditional “ocean” or “port-to-port” Bill of Lading.

Before the 19th C., the parties to a K of carriage had a lot of freedom to agree on risk allocation subject to legal rules that were almost entirely judicial in origin. Starting in the mid-19th C., legislatures began to act in the field In 1983, Congress passed the Harter Act, which was the world’s first statute to establish generally applicable principle rules governing a carrier’s liability for cargo loss or damage.

B. The Harter Act1. A compromise between cargo and carrier interests. The heart of the Act lies in the carrier’s liability for the negligence of its

agents and servants.i. Sections 1 and 2 A carrier cannot escape liability for:

Negligence in the care and custody of the cargo The failure to exercise due diligence to furnish a seaworthy vessel

ii. Section 3 If the carrier had used due diligence to furnish a seaworthy vessel, it would not be responsible for damage or loss resulting from faults or errors in navigation or in management of the vessel

iii. There is a fine line between the two provisions giving liability and the one provision protecting the carriers and it is not always an easy question…

The Germanic (1905) Supreme Court established a Primary Purpose Test. The ship at issue sank at its pier during unloading because the removal of the cargo shifted the center of gravity and caused the ship to flood through an open coal port…”We think it plain that a case may occur which, in different aspects, falls within both sections, and if this be true, the question which section is to govern must be determined by the primary purpose and nature of the acts which cause the loss.”

iv. The carrier’s “error in navigation or management” defense (the “nautical fault” defense) was reenacted in the COGSA. However, in recent years, the trend has been decidedly against carriers who seek to rely on the Harter/COGSA exception.

v. Providing a competent crew is part of the carrier’s seaworthiness obligation. Therefore, a carrier who argues that the crew was negligent in the navigation or management of the vessel must be careful not to show that the crew was so prone to negligence that the vessel was unseaworthy at the commencement of the voyage.

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68 If the vessel was unseaworthy as a result of an incompetent crew, the court is likely to hold the carrier liable for the

failure to exercise due diligence.vi. The Nautical Fault provision has been the most criticized section of COGSA and people have had trouble formulating a good

justification for retaining the defense.vii. COGSA has largely superseded the Harter Act, but the latter is still important in at least 3 situations where COGSA does not

apply: Section 12 of COGSA explicitly preserves the Harter Act from implied repeal to the extent that it governs the carrier’s

duties prior to the time when the goods are loaded on the ship and after the time they are discharged from the ship Domestic Carriage (“coastwise trade”) Deck Carriage

C. The Hague Rules, COGSA, and More Recent Regimes1. Generally The Harter Act was influential on the world stage and functioned as the model for an international convention

known as the Hague Rulesi. The treaty was ratified by most of the world’s maritime nations (including the US, which also enacted COGSA in

substantially the same form)ii. COGSA is the central US statute governing liability in the ocean shipping context, but most of the world has moved on to

new conventions The subject is in a state of flux today

2. This History of COGSA and the Hague Rulesi. Compromise between cargo and carrier interests The carrier was required to exercise to diligence to make the ship

seaworthy and was liable for the proper and careful handling, loading, stowage carriage, custody, care, and unloading of the cargo. In return, the carrier was not liable for faults or errors in the navigation or management of the ship.

ii. The most significant topic at The Hague was the package limitation. After long debate, the parties agreed that the carrier could limit his liability to 100 pounds ($500 at the time) per package or unit in the absence of a declaration of higher value – Seen as a major improvement for cargo interests

iii. Outside the British Empire, the response to the Hague Rules was not as enthusiastic and before the US enacted them in 1937, only Belgium and the Netherlands recognized the rules with domestic legislation.

iv. Major Points of the Rules: Extended the SOL for filing a claim Shifted the BOP in the cargo claimant’s favor in most cases Provided a much higher package limitation than was customary under the Harter Act

v. People were not willing to accept COGSA at first because they believed they could change the Harter Act to an even greater extent. The interested parties agreed to some limited amendments and COGSA was enacted in 1936. The US enacted the Hague Rules in 1937 and the remaining maritime powers throughout the world quickly joined.

3. The Development of Cargo Liability Regimesi. The internationally accepted uniform legal regime for cargo liability established by the Hague Rules began to break down

soon after the acceptance of the rules… Changes in technology such as the “container revolution” The changing world political situation by which former colonies became independent and developed their own

agendas Developments in the world economy caused rising and falling exchange rates which left unit limitation values that

varied from $160 to $550 per packageii. The Visby Amendments Sponsored by the CMI; Worked out an elaborate compromise that included weight-based

limitation operating in conjunction with the package limitation, a container clause to clarify the identification of packages when goods are shipped in containers and a provision for the loss of the right to limit liability for intentional or reckless misconduct (only amended the Hague Rules on a few specific issues)

iii. The Hamburg Rules (the UN Convention on the Carriage of Goods by Sea) Replaced the Hague Rules with a completely new regime. It was approved in 1878 and entered into force in 1992 after the required 20 states ratified it.

iv. The United States Although most of the world has moved forward with new cargo regimes, the US has retained the 1936 COGSA almost completely unchanged. Therefore, today, the US has a law governing the carriage of goods by sea that is different from the laws of most of its major trading partners.

Because COGSA applies with the force of law to liner shipments by sea to or from the US, in most cases the US courts are required to apply COGSA even if a foreign court would apply the Hague-Visby or Hamburg Rules to the same shipment. COGSA permits carriers to increase, but not decrease their liability. Since the Hague-Visby Rules often impose greater liability on the carrier, in some cases cargo claimants have successfully argued that the limitation provisions of a foreign statute should apply in preference to COGSA’s when the “clause paramount” (choice of law clause) in the Bill of Lading calls for the application of foreign law.

D. Harter Act and COGSA: Important Provisions (the compromise)1. 30704 Carrier has an obligation to use due care to avoid negligence in the care and custody of the cargo (“care and custody”

cases); The carrier cannot contract out of this obligationi. COGSA 3(2)

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692. 30705 Carrier is also liable for the obligation to use due diligence to sail in seaworthy condition; The carrier cannot contract

out of this obligationi. COGSA 3(1)

3. 30706(a) There is no liability for negligent navigation and management (this is the compromise/tradeoff)i. COGSA 4(2)(a)

4. 30706(b) Grab bag of other defenses: Perils of the sea, Acts of God, Restraint of princes, etc…i. COGSA 4(2)(c)-(p)

E. Burdens of Proof1. Lekas & Drivas, Inc. v. Goulandris

i. Facts: A ship had taken on cargo and docked in Greece in October of 1940, before its intended voyage to the US via Gibraltar (normally takes 25-28 days). Two days later, Italy attacked Greece and the ship was requisitioned by the Greek government for a short military mission under the direction of the UK. While in Aden, the ship had to stop for repairs due to the fact that it was drawing water uncontrollably. While being repaired, much of the cargo (including cheese) had to be removed and stored in lighters where it was covered with tarps. The cheese had not begun to spoil when it was removed, but 35 days later, people noticed it had begun to spoil upon being reloaded. Since it was no longer possible to cross the Mediterranean, the ship, after its military mission, was directed to go to the US via Suez and the Cape of Good Hope. The ship arrived in NY in May and a surveyor found the cheese to be badly melted and worthless. It was therefore sold for a 6th of what its value would have been. Actions were filed by PLs with respect to cargo consisting of tobacco, cheese and olive oil. The tobacco complaint was dismissed and the Cheese and Olive Oil claims were granted.

ii. Second Circuit Court upholds the claim related to the olive oil, but reverse the claim related to the cheese.

o District Court The cheese melted and spoiled due to the high temperatures experienced on the voyage and the “poop” was an improper place to store the cheese. Even if the voyage gad been made as contemplated, these cheese would nevertheless have spoiled. The legal cause of the spoilage was the stowage in the poop and the vessel is therefore liable for the damage, which in fact occurred.

The voyage was affected by “restraint of princes, rulers, or people” under Section 4(2)(g) of COGSA. Even with perfect ventilation in the poop or with stowage elsewhere under adequate ventilation, the cheese would (unless refrigerated) have been subject to extremely high temperatures for a period of time long enough to cause it to spoil (due to the changed journey). Whether stowage of some of the cheese in the poop was improper for the intended voyage is immaterial – If the accident would have happened without DF’s negligent act (potentially stowage in the poop), then such is not the cause of it.

Circumstances may arise when the master of a ship has the duty under 3(2) of COGSA to sell cargo that is at risk of further deterioration (communicating with the owner if possible, but still having the authority and duty if it is not). If the spoilage had been detected earlier while at Aden, the master would have been obligated to try to communicate with the owner and/or try to sell the cheese since, even if the price at Aden were lower than what he would get in NY, it would still be much greater than the price after further spoilage. However, if the spoilage were not detected until reloading, it would be too burdensome to require the master to sell the cheese then. Here, the spoilage was only discovered when the cheese was reloaded.

Burden of Proof:o Clark v. Barnwell When a carrier has discharged the burden of showing the existence of an excepting

cause, the burden is then placed upon the PL to show negligence.a. Schnell When the damage is due to either an excepted peril or the carrier’s negligent care of the

cargo, the carrier must bring himself within the exception or show that he has not been negligent.o The DF has shown that the restraint of princes was a cause in that otherwise the stop in Aden and hot voyage

around Africa would not have taken place. The DF therefore does not still have the burden of negating any other fault or neglect of its agents or servants alleged by the PL (the mere raising of the issue as to the carrier’s duty to sell does not place the burden of persuasion back). Instead, the PL now has the burden of showing circumstances from which a trier of the facts could properly conclude that the master’s failure to dispose of the cheese at Aden was a breach of 3(2). If the PL had done this, the burden would then be placed on the DF to show how much of the damages came from the excepted as distinguished from the unexcepted cause (however PL did not sustain the burden required to bring it to this stage).

iii. NOTES: Once the case moves past state 1 (the PLs prima facie case), each stage entails a full-blown burden of producing

evidence and of persuading the trier of fact. BURDEN of PROOF (summary)

o 1) PL must establish a prima facie case by proving both delivery of goods to the carrier in good condition and outturn by the carrier in damaged condition.

o 2) Carrier bears the burden of showing that the loss or damage falls within one of the COGSA exceptions in 4(2).

o 3) PL must show that the carrier’s negligence contributed to the damage or loss.

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70o 4) Carrier bears the burden of segregating the portion of the damage due to the excepted cause from the

portion resulting from its own negligence.a. If both parties are negligent, the damages will be split between them

In Lekas, the trial judge made a terrible mistake. He said that the cause of the damages was the storing of the cheese in the poop. However, when he corrected the wrongful conduct (in the most narrow way possible before pressing play to see if the injury still occurs), he did not simply move the cheese somewhere else, but had the ship take the proper voyage to its destination in NY! If he had done this properly, he would have seen that the cheese would still have spoiled due to the route the ship was forced to take regardless of where it had been stored.

F. Negligent Third Parties1. Generally

i. COGSA 4(5) extends the benefit of the package limitation to the carrier and the ship. COGSA 3(6) protects the carrier and the ship from suits filed more than on year after the delivery of the goods. The terms “carrier” and “ship” are not limited. COGSA 1(a) says that the term carrier includes the owner of the vessel or the charterer that enters into a contract of carriage with a shipper. The act is therefore ambiguous as to whether exculpatory provisions protect or can protect anyone other than the vessel owner or charterer.

Most carriers contract with independent stevedores to load and unload vessels. Therefore, a third party performs the carrier’s duties when the cargo is most likely to be damaged. Also, with the growth of multimodal transport, the carrier may perform only part of the transportation. An independent contractor typically performs the road or rail segment of an international carriage that goes primarily by sea.o Can a cargo claimant avoid 4(5) or 3(6) by bringing suit directly against the negligent stevedore or railroad

that in fact caused the damage?o A.M. Collins & Co. v. Panama R. Co. Third parties performing carrier’s duties are automatically entitled to

the benefits of the carrier’s exculpatory rights. The carrier’s bill of lading governed every step of the transportation, including unloading. Since the carrier itself would have been entitled to the benefit of the package limitation if it had damaged cargo during unloading, the stevedore who actually unloaded the cargo for the carrier is also entitled to the benefit of the package limitation.

o Robert C. Herd & Co. v. Krawill Machinery Corp SC rejected the Collins analysis and held that Congress had not intended the benefits of COGSA 4(5) to extend to the negligent stevedore. The decision, however, favored third parties in that it suggested that a properly drawn Bill of Lading could limit an agent’s liability. Carriers responded to this decision by including what came to be known as a “Himalaya Clause” in their Bills of Lading to protect their employees, agents, and independent contractors.

2. Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd.i. Facts: Kirby (PL) and ICC made a K for the carriage of machinery from Sydney to Huntsville and agreed to limit the liability of

ICC and other parties who would participate in transporting the machinery. The Himalaya Clause stated, “These conditions for limitations on liability apply whenever claims relating to the performance of the K evidenced by this Bill of Lading are made against any servant, agent or other person (including any independent contractor) whose services have been used in order to perform the K.” Does the liability limitation in Kirby’s and ICC’s K extend to Norfolk, which is a RR and ICC’s sub-contractor? The K at issue has already been determined to be maritime and that the general maritime law governs.

ii. Supreme Court This is a question of K interpretation and depends upon whether the 11th Circuit correctly applied the SC’s decision in

Herd. The court holds that it DID NOT.o The 11th Circuit concluded that the language in the ICC bill’s Himalaya Clause was too vague to clearly include

Norfolk. They interpreted Herd to require privity between the carrier (RR) and the party seeking shelter under the Himalaya Clause. However, nothing in Herd requires the linguistic specificity or privity alleged. The decision simply states that Ks for the carriage of goods by sea must be construed like any other Ks: By their terms and consistent with the intent of the parties (there is to be no special rule of K interpretation for a Himalaya Clause).

o The 11th Circuit’s ruling is not true to the language or the intent of the parties. The plain language indicates and intent to extend the liability limitation broadly to “any servant, agent or other person (including any independent contractor)” whose services contribute to performing the K. There is no reason to go against the clause’s obvious meaning. This language contemplates the fact that there would be various modes of interpretation involved in the transport since the shipment was going from Australia to inland America. Therefore, the parties must have anticipated that a land carriers services would be necessary for the performance of the K.

o A RR like Norfolk was an intended beneficiary of the ICC bill’s broadly written Himalaya Clause. Therefore Norfolk’s liability is limited by the terms of that clause.

ICC and Hamburg Sud agreed that the latter would transport the machinery from Sidney to Huntsville and agreed to the COGSA package limitation of liability on Hamburg, its agents, and its independent contractors. Does this liability limitation, which ICC negotiated, prevent Kirby from suing Norfolk (Hamburg’s independent contractor) for more.

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71NOTE: The liability limitation in the original K with ICC sets liability for a land accident higher than the Hamburg K does (so Kirby would get less if he were forced to sue on the second Hamburg/ICC K).o When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the

carrier is limited by the liability limitation to which the intermediary and carrier agreed. When it comes to liability limitations for negligence resulting in damage, and intermediary can negotiate reliable and enforceable agreements with the carriers it engages.

o The 11th Circuit claims that Kirby cannot be bound by the Bill of Lading that ICC negotiated with Hamburg unless ICC was acting as Kirby’s agent (application of agency law). It is true that effective control of the Principle (Kirby) over the agent (ICC) did not exist here, but that is irrelevant. Case law does not require treating ICC as Kirby’s agent in the classic sense. It only requires treating ICC as Kirby’s agent for a single, limited purpose: When ICC contracts with subsequent carriers for limitation on liability. In holding that an intermediary binds a cargo owner to the liability limitations it negotiates with downstream carriers, the SC is not infringing on traditional agency principles. It is simply enduring the reliability of those downstream Ks for liability limitations (otherwise we would be holding the RR to a much greater level of liability than it contracted for).

PL alleges that a decision binding Kirby to the Hamburg bill’s liability limitation will be disastrous for the shipping industry...o A limited agency rule tracks industry practice: In intercontinental shipping, carriers may not know if they are

dealing with an intermediary or a cargo owner. If the 11th Circuit’s rule prevailed, carriers would have to seek out info to assure that their liability limitations were valid and not superseded by a previous bill (costly or impossible).

o Carriers would otherwise want to charge the intermediary a higher rateo This decision produces an equitable result: Kirby retains the option to sue ICC for any loss that exceeds the

liability limitation to which they agreed. It seems logical that ICC, the only party that knew about and was party to both bills of lading at issue, should bear responsibility for any gap between the liability limitations in the bills. Norfolk enjoys the benefit if the Hamburg bill’s liability limitation.

iii. NOTES: The Kirby decision lays out an efficient default rule and future parties are free to contract around it Simplified 2 aspect of Cargo Law:

o Demonstrated the limited use of Agency Lawo Demonstrated that Himalaya Clauses are Ks and that they should be read as a K normally is (no special

readings)Collision

A. Generally For collisions on the high seas, the current applicable rules are known as COLREGS. A similar set of rules, the Inland Rules, covers navigation in US waterways not covered by COLREGS. COLREGS was adopted in 1977 (Inland Rules in 1981) replaced a more complicated scheme under which the US had 4 sets of navigation rules applicable to different waters.

B. The Pennsylvania (1874)1. Facts: The Mary Troop, a UK ship made of bark, was on its way from Scotland to NY on the high seas in a dense fog one morning.

The fog was so thick that a vessel could not even be seen 50 feet away. The bark was only moving at a mile an hour and rang its bell 15-20 times a minute (the ship also had a foghorn). The whistle of a nearby UK steamer going extremely fast was heard but it was too late for any maneuver and the teamer struck the bark, cutting it in half and causing it to sink (6 people drowned). The US Rules Governing Fog Signals are as follows: Whenever there is a fog, whether by day or night, the fog signals described below shall be carried and used: 1) Steamships under way shall use a steam whistle, 2) Sailing ships under way shall use a foghorn and 3) Steamships and sailing ships when not under way shall use a bell. Britain has essentially the same statute (The Merchants’ Shipping Act of 1862) so the Court will apply the US one. There was nothing in the evidence beyond the evidence of the steamer’s speed to show any lack of precaution in the navigation and management of the vessel up to the first sign of the bark’s proximity. When the steamer reached NY, the owners of the bark sued in the Southern District of NY, where the ship was condemned for the whole loss. The Circuit Court affirmed.

2. Supreme Courti. There is no excuse for the high rate of speed with which the steamer was moving in such a dense fog.

ii. The bark’s fault is beyond controversy since it was in plain violation of the rules of navigation requiring it to blow a foghorn (Negligence Per Se)

The British statute declares that if in any case of collision it appears to the court that it was caused by the non-observance of a regulation, the ship which infringed the regulation shall be deemed at fault unless it is shown that the circumstances of the case made a departure from the regulation necessary. The US statute does not contain this provision, but its meaning is the same.

iii. If the fault appears to have had nothing to do with the collision, it may be dismissed from consideration. But when there is evidence of negligence per se, there is a reasonable presumption that the fault, if not the sole cause, was at least a contributory cause of the accident. In such a case, the burden rests on the on the violating ship to show not merely that its fault might not have been one of the causes, but that is could not have been one of the causes.

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72 In the present case, it is unclear whether the accident would have been averted if the foghorn had been blown by the

bark as it should have been. While the presumption is that this negligence per se was a contributory cause of the collision and while the burden of showing that this negligence in no way resulted in the collision is on the bark, it would be impossible for the bark to rebut to rebut the presumption.

iv. Since both vessels are at fault, the damages shall be divided Fault of bark – Negligence per se Fault of steamer – High speed

3. NOTES: i. The Pennsylvania Rule Creates a strong presumption that the statutory violation (negligence per se) was a cause in fact of

the accident [heavy burden for the PL to then show that the violation simply could not have been one of the causes of the fault)

ii. Over the year the jurisprudence has broadened the sphere of application of the Pennsylvania Rule so that generally any vessel operator who violates a statutory rule aimed at preventing the type of injury caused by the PL – whether by collision or some other manner of operating a ship – falls under the presumption. The lower courts are divided, however, on whether a Jones Act PL may assert the Pennsylvania presumption.

iii. The Oregon Rule A vessel under power that strikes a stationary object is presumed to be negligent. iv. The Louisiana Rule A presumption of fault against a vessel that drifts into a stationary object.v. The In Extremis Rule Courts will not excuse conduct that they view as plainly unreasonable even under exigent

circumstances (despite this, courts are lenient when judging a vessel’s behavior when it is placed in sudden danger). This has survived the Court’s adoption of pure comparative fault in Reliable Transfer.

C. United States v. Reliable Transfer Co. (1975)1. Facts: A tanker owned by Reliable left NJ for NY with a load of fuel oil. The voyage ended with the vessel stranded on a sand bar

outside of NY harbor. The inlet the ship crossed is usually marked by a flashing light manned by the Coast Guard. The light, however, was not operating that night and the ship ran aground on the sand. The PL brought this action in the Eastern District of NY to recover damages to the ship caused by the stranding. The district court found that the fault of the vessel (75%) was more egregious than the fault of the Coast Guard (25%). However, the curt held that under the settled admiralty rule of divided damages, the US was liable for 50% of the damages and the Second Circuit affirmed.

2. Supreme Courti. The US is not virtually alone among the world’s major maritime nations in not adhering to the Brussels Collision Liability

Convention of 1910 and its rule of proportionate fault (this encourages transoceanic forum shopping). ii. An equal division of damages is a satisfactory result only where each vessel’s fault is approximately equal and each vessel

therefore assumes a share of the collision damages in proportion to its share of the blame OR where proportionate degrees of fault cannot be measured and determined on a rational basis.

iii. The rule’s unfairness is magnified by the application of the Pennsylvania Rule, whereby a ship’s relatively minor statutory violation will require it to bear half of the collision damage unless it can bear the heavy burden of showing “not merely that its fault might not have been one of the causes, or that it probably was not, but that it could not have been.”

iv. Other nations appear to apply comparative negligence without a problem and in the law of the US, its application has not been problematic with respect to personal injury actions.

3. NOTES: i. Reliable Transfer does not abolish the in extremis rule

ii. There is no basis for holding that Reliable Transfer has abolished or weakened the Pennsylvania Ruleiii. A footNote in Reliable Transfer suggests that it does not change the long-standing maritime rule of joint and several liability.

AmClyde makes this clear. iv. In Sofec, the PL made a broad argument that Reliable abolished the doctrine of proximate causation and the court

unanimously rejected this. A narrower argument that might have succeeded is that the pure comparative fault regime instituted by Reliable makes it inappropriate to invoke the PL’s fault as a superseding cause.

D. Otal Investments Ltd. V. M.V. Clary (2007)1. Facts: Three were three ships in the English Channel [in “Traffic Separation Scheme” – TSS] navigating in dense fog. Two ships

initiated evasive maneuvers to avoid The Clary when one (The Kariba) hit the other (The Tricolor), sinking the ship and all of its cargo (no ship attempted to sound a horn). After a bench trial, the District Court ruled for the Clary and Tricolor, finding the Kariba to be the sole cause of the collision.

2. Second Circuiti. Originally, the rule in The Pennsylvania stated a harsh presumption, requiring the party against whom the presumption

operated to show their wrongdoing could not have been the cause of the accident. The Circuit has lessened the burden an it now holds that a party could not have been the cause “within the bounds of reasonable probability.” Appellants argue that the rule should apply and that it only creates a presumption as to causation (not as to fault/negligence).

The District Court found that the rule in The Pennsylvania does not apply in this case because the US generally applies the 1910 Collision Convention to a collision occurring in international waters with vessels bearing the flags of signatory states (the navigational duties are contained in the COLREGS). Article 6 of the convention states that “all legal presumptions of fault in regard to liability for collision are abolished.” Since the rule in the Pennsylvania is outcome

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73determinative, it is substantive and cannot be applied to a case where the Convention governs Here, the District Court made the right choice.

ii. Was the DC right in finding that the Kariba was solely responsible for the collision? NO… Kariba – Finding Affirmed

o Cautious Navigationo Avoiding Action

Tricolor – Violated COLREGSo Overtaking An overtaking vessel has a duty to maintain such a distance from the overtaken vessel so as to

allow the overtaken vessel to conduct reasonably predictable adjustments. A vessel must choose a safe place to attempt to overtake a vessel.

a. The Tricolor did not slow down when it first noticed the Kariba, but instead tried to overtake it in a dense fog, going extremely fast in a heavily trafficked channel, with the knowledge that the Kariba was on a collision course with the Clary.

o Safe Speed Takes into account various conditions and the Tricolor failed this. Clary – Finding on Proper Lookout affirmed and Violated COLREGS

o Proper Lookout Only staffed the bridge with a lone mariner.o Avoiding Action Changing course at an earlier time would not have automatically meant a collision with

another vessel. It could have either slowed down or made a specific kind of turn. Although it was wise to make a dramatic turn so that the ship registered on radar, it was not wise to do so facing a larger potential of collision. The ship could have left the TSS if necessary.

o Unexplained Alteration of Ships’ Records Must have some affect on the allocation of liability for damages since it gives rise to the presumption that the logbook contained adverse entries.

iii. Causation – Did these violations of the COLREGS cause the collision? Kariba

o Cause in Fact AND Proximate Cause (the turn resulted in the damage that the COLREGS intend to prevent by prohibiting such turns)

Tricoloro Overtaking The decision to overtake the Kariba was a Cause in Fact. The actions of the Kariba and Clary were

foreseeable under the circumstances and therefore do not supersede the Tricolor’s actions. The Tricolor was a Cause in Fact AND Proximate Cause.

o Safe Speed Was a Cause in Fact but NOT a Proximate Causea. DC must determine whether the risk of the accident was increased by the vessels behavior. If the vessel

had not been going at an unsafe speed, would it have been able to stop soon enough to avoid the collision?

Claryo Cause in Fact and Proximate Cause

iv. Conclusion All vessels committed violations of the COLREGS that caused the collision.

v. Allocation of Liability for Damages Comparative Fault is the rule, but it is important to Note that damages in American Courts, based upon interpretations

of Reliable Transfer, are understood to be by fault (culpability), not physical causation. However, the 1910 Collision Convention has been understood by UK courts to allocate fault by physical causation AND

fault. o This is what the court must consider on remand and in its consideration of fault, the court should consider the

alteration of The Clary’s logbook3. NOTES:

i. The appellants argued vigorously that the Pennsylvania Rule should be applied It does not make sense to say that the Pennsylvania Rule also creates a presumption as to legal cause. The rule cannot

serve to make an injury, which is not related to the rationale for labeling a DF’s conduct wrongful, come closer to the reasons the DF acted wrongly.

Some courts hold that prior to invoking the Pennsylvania Rule, a PL must make an initial showing of plausibility The Pennsylvania rule does not apply in this case. The Collision Convention of 1910 does, and that Convention holds

that all legal presumptions of fault with respect to collisions are abolished. ii. The US did not ratify the Collision Convention

iii. Whether a US court will apply the 1910 Collision Convention depends on its choice of law analysis (and the flags of the vessels are an important factor)

iv. On remand, the DC held the Kariba 63% liable (40% culpable; 86% causation), the Clary 20% liable (36% culpable; 4% causation) and the Tricolor 17% liable (24% culpable; 10% causation). The liability percentages were the averages of the culpability and causation percentages.

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74 There is then another appeal by the Kariba, who claims that Reliable based its percentages strictly on Breach

(fault/culpability), not on Causation and that this is the US rule. Second Circuit is about to determine whether or not the district did it right.

v. The way to succeed in a case like this is to just allege numerous violations of the COLREGS.vi. Does the complexity of the percentage allocation system make Reliable seem like an awful mistake?

SalvageA. Markakis v. S/S Volendam (1980)

1. Facts: PL (master of a ship) sued on behalf of himself and his crew to recover a salvage award for services rendered to another ship. Both ships were Panamanian cruise ships from Miami to the Caribbean and back. The stranded ship suffered a complete power failure and the PL’s ship was told to go help The PL took on passengers and cargo and one crewman was slightly injured in the process. The PL then towed the stranded ship away from the Cuban coast to a safer place until the owners of the stranded ship sent a tugboat from Miami to finish the job. The PL’s vessel then resumed its journey, stopping at ports on its own route as well as the route of the stranded vessel. Both vessels had a common owner. i. In order to prevail on a claim for a salvage award, the PL must prove three essential elements: (1) A marine peril, (2) Service

voluntarily rendered when not required as an existing duty or from special K and (3) Success in whole or in part, or that the service rendered contributed to the success.

There is no dispute that the 3rd element was satisfied, but the DF disputes the first two.2. Southern District of New York

i. Marine Peril The court must decide not whether the peril is imminent, but whether “it is reasonably to be apprehended.” The PL

must only establish that at the time the assistance was rendered, the ship had encountered any damage or misfortune which might expose her to destruction if the service were not rendered.

In this case, the facts demonstrate that the stranded ship was exposed to peril reasonably to be apprehended. The ship was not only restricted from pursuing its intended voyage or from dealing effectively with an emergency, it was also left to drift in times of total darkness and without adequate power to communicate by radio. The ship was drifting back towards Cuba and may have hit the coast had it not been salvaged.o Additionally, the ship was dangerously close to Cuban waters where two gunships were stationed. If it had gotten

any close, it may have faced the possibility of interception or reprisal.o “Although the danger to the stranded ship was less than compelling and the rescue operation short of heroic, the

ship was sufficiently imperiled to justify a salvage reward.”ii. Voluntary Act

The DF argues that the PL was compelled to go to the stranded vessel’s aid by its owners. The DF also argues that the common ownership of the vessels precludes a salvage reward. Furthermore, DF argues that the crew had no option but to obey the duties of the vessel’s owner.

When an individual performs a salvage service outside the normal scope of his employment, the rule is that nothing short of a K between the owners of the two vessels to pay a given sum for the services to be rendered or a binding agreement to pay at all events (Whether successful or unsuccessful) will operate as a bar to a valid claim for salvage.

If the PL’s claim could be defeated simply because the owner had ordered them to perform the salvage, Congress’ purpose in fostering salvage service by eliminating common ownership as an impediment to an awarded would be defeated.

iii. The court holds the owners of the stranded ship liable to the captain and crew of the saving vessel for salvage services performed.

3. NOTES:i. The Salvage Act (1912) Most of the law of salvage is court made. This Act merely codifies a few general principles and has a

2-year SOL.ii. Seamen are generally not entitled to the salvage of their own vessel. Crewmembers have a pre-existing duty to save their own

ship.iii. No Cure, No Pay If nothing is saved, there is no reward (but partial success is sufficient).iv. Salvage vs. Towage There is a very clear distinction. When a tug is called or used by a viable vessel as a mere means of

saving time or considerations of convenience, this is a tow. However, when the vessel is disabled and in need of assistance, that is salvage.

If a fee is not agreed to, salvage commands a higher reward. Under a salvage K, not only the vessel but also the cargo is liable for payment. A salvage K also creates a preferred maritime lien, which has a higher priority than a maritime lien created by a towage K. The crew of the salvage vessel has additional rights under a salvage K.o Pure Salvage: o Salvage K: Some peril is involvedo Towage K: Ks are valid and if the K does not control, it is tort

v. The Court is very relaxed about all three required prongs because it is really dangerous on the high seas and we want people to be eager to go help each other out.

vi. The Captain proceeded in Rem, but he could have proceeded in Personem.

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75B. Margate Shipping Co v. M/V JA Orgeron (1998)

1. Facts: During a tropical storm off the FL coast, an oil tanker rescued a barge containing a valuable fuel tank for NASA’s space shuttle. The district court awarded the owner of the oil tanker $6.4 million in Salvage. The US appeals as to the amount of the award. Based on the District Court’s mistaken valuation of the fuel tank, the Circuit reduced the award to $4.125 million No K (like quantum meruit recovery in K law); Yields large returns because of the perils of the sea and tradition; Presumes heroic service; The lien that the salvor gets on the rescued vessel is high ranking (high risk=high lien). The Posiedon was being escorted by the Orgeron, both of which needed assistance. The Orgeron’s distress calls were picked up by the Cherry Valley, an oil tanker that came to help. The Cherry Valley risked a massive oil spill if it helped. The Cherry Valley pulled the ships to safety and remained anchored overnight until other ships could come and relieve it. The PL (owner of Cherry Valley) filed an action for salvage against the J.A. Orgeron in a DC of LA. The Orgeron’s operator then filed for a limitation of liability. The U.S. fearing a salvage action against itself, filed a claim in the limitation action seeking indemnification from the Orgeron. PL then filed a claim for salvage against the US. Everything settled except for the claim for salvage by the PL against the US. The DC, after a bench trial, ruled that PL was entitled to a salvage reward equal to 12.5% if the value of the salved property. With respect to the NASA thing, the judge held that it was specialized property without market value and that it therefore was appropriately appraised at its “replacement cost” ($51+ Million). Adding this to the $2 Million value of the Posideon and multiplying it by 12.5%, the court got $6,406,440. The US appeals the amount of this award.

2. Fifth Circuiti. The Court typically determines the amount of a salvage award with reference to the 6 Blackwall factors. The US alleges that

the DC placed too much emphasis on the value of the salved property, mistakenly counted the potential for environmental liability as a risk to the salvors, and mistakenly used a percentage of the salved value to fix the reward. The US also says that the DC made a mistake as to the value of the NASA part. US claims that the DC abused its discretion by picking such a high percentage and making such a large reward in this case.

ii. Voluntary negotiation in the salvage context includes two paramount considerations: (1) The cost to potential salvors of performing the service and (2) The benefit to the salvee of it being performed. The Blackwall factors are an explicit guide for the court in measuring these considerations:

Measures of cost to the Salvor:o Labor expended by the salvors (1) o Their promptitude and skill (2)o Value of the salving property (3) o Risk to the salvors (4)

a. Potential for an oil spillo Risk to the salved property (6)

Measures of the benefit that the salvage has conferred on the salvee:o Value of the salved property (5)

a. Principle measure of the benefit of the salvage to the salvee. The US is wrong to argue that the court places too much emphasis on this.

o Risk of the salved property (6)iii. To the extent that the district court attempted to evade the 5th factor by tying the percentage to a fixed dollar amount, the

Circuit reverses that portion of the holding.iv. Generally, the value of property for salvage purposes is its market value as salved. Here, there is no marker value for the

NASA thing. The most appropriate measure is not its “replacement cost,” but the $19 million because the manufacturer had offered the government 4 additional tanks at this price/per in 36 months. The Court then estimates the cost of avoiding the waiting period for its delivery at $12 million. The correct value is therefore $31 million. With the $2 Million for the Posiedon, the result is $33 million. When this is multiplied by the 12.5% salvage percentage, the total award is $4.125 million.

v. The court compiles a list of the 9 largest federal salvage awards since the advent of the Blackwall rule. In this context, it is hard to say that 12.5%/$4.125 million is wrong, let alone an abuse of discretion.

Although the dollar amount here may be the highest ever, it makes sense when considering the high level of skill, risk and the high value of the salving property. It is not so excessive to constitute an abuse of discretion.

3. NOTES: i. Blackwall Factors The value of the property saved sets an upper limit on the amount of salvage and the value of the service

sets the bottom. The degree of risk would determine how much to multiply the value of the service. Blackwall does not say that the factors are arranged in a hierarchy or that the 6 factors are exhaustive For this

reason, they are not really all that useful, but simply a place to start out the analysis (the Judge here did not think that they were simply a vague and lazy list of factors, but a great way of assuming what the parties would have thought about had they had the opportunity to bargain in the scenario).

ii. A salvor’s misconduct may reduce or eliminate an award. Looting is an obvious kind of misconduct, but courts allow salvors to make reasonable use of items found on board the salved vessel. A salvor’s negligence will reduce the reward, but they are often given wide latitude – The reasonable care requirement is adjusted by virtue of the emergency.

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76iii. Ordinarily the salvage award will be divided between the owners and crew of the salving vessel (with the relative amounts

being within the discretion of the court). Typically the owner will receive 2/3. iv. The Right to Refuse Salvage A vessel can decline the assistance of others as long as only the owner’s property interests are

at stake. However, salvage may be awarded if the owner acquiesces to the rescue efforts.v. Main Suit was the Salvage claim by the Tanker vs. The US…This suit was in admiralty because all of the sovereign immunity

statutes say it must bevi. Captain Strong ran the talk show circuit and there was a dispute as to whether he was a hero or a moron – There could have

been a terrible environmental disaster and he risked the lives of his crew (some people believe that salvage law lags behind the potential risks of environmental disaster)

Robertson thinks that Jolly got this right and that we must incentivize salvors

Limitation of LiabilityA. Generally Limitation of Liability Act (1851) is implemented by Supplemental Rule F of the FRCP. There are two areas of

disagreement among US Courts:1. Many strongly believe that pleasure boat owners should not be entitled to the benefit of the Act. The great weight of authority

is to the contrary. By virtue of the face of the act, the majority viewpoint is unavoidable: The act grants its protection to owners of all kinds of seagoing vessels and inland vessels and it indicates that pleasure yachts are included except when explicitly excluded.

2. There are situations where a shipowner chooses not to take advantage of the rules and instead waits to be sued in state court where he pleads the substantive right granted by the rules as an affirmative defense. It is clear that only an admiralty court can hear a petition for limitation of liability, but it has long been thought that the affirmative defense of limitation is maritime substantive law of the sort that state courts regularly apply under the savings clause. Some modern dicta have challenged this view by indicating that state courts lack jurisdiction to consider the merits of an affirmative defense based on the rule (these courts take the view that limitation of liability involves a pure admiralty issue that is beyond state court competence). This seems inconsistent with the usual interpretation of the savings clause.

B. Full Limitation of Liability Proceeding1. Phase 1 Exoneration Phase

i. Normal case whereby claimants make the argument that they have the right to recover against the shipowner (in Empresa this is the “Collision Litigation”); This phase pits the Natural PL against the Shipowner and it is confusing to call it the “exoneration phase.”

2. Phase 2 Limitation Phasei. The Shipowner must negate his privity or knowledge with respect to which the PL showed in Phase 1 was the cause of the loss.

The shipowner would demonstrate that nobody he was in privity with has such knowledge: He can us the “Managing Agent Test” whereby you must ask if the agent had supervision over the action causing the accident.

Ordinary master have been customarily deemed to be outside of such a relationship (they are not managing agents themselves). To hold that they are high enough ranking to impute actual privity or knowledge would gut the statute of its purpose to help shipowners escape liability (the expectation with respect to the statute was that masters would not be high enough ranking). o NOTE: Limitation Act 30506(e) – For the purposes of this provision, the privity or knowledge of the master at the

beginning of the voyage is imputed to the owner (See Below). The NEGATIVE IMPLICATION is that this does not apply to the other provisions

o In Empresa, the shipowner (US) had to make it all the master’s fault by saying that he neglected his own health. Problem: There were other (higher) officers who were aware of the situation and whose knowledge could easily be imputed to the shipowner.

C. Empresa Lineas Maritimas Argentinas S.A. v. United States (1984)1. Facts: An Argentinean freighter was in the Chesapeake Bay when it collided with a US Coast Guard ship (which sank rapidly with

11 crewmembers dying). The owner of the freighter filed a complaint against the US seeking recovery for damages to his ship. The US denied liability and asserted, in the event that it is found liable, its liability should be limited to the value of the Cost Guard ship, which is nothing. The District Judge found that the numerous errors by the captain of the freighter were the sole cause of the collision. Therefore, the US was 100% liable. The court also found that the government was entitled to limit its liability because the US did not have privity or knowledge of the cause of the collision. The judge died and, after another trial with additional evidence, the new judge determined that the US was solely responsible, but that it could not limit its liability – One or more people in the chain of command over the captain had knowledge or was charged with knowledge of the existence of the captains physical problems and loss of sleep, which were responsible for his bad judgment and the cause of the collision. The US Appeals.

2. Fourth Circuiti. Under the Limitation of Liability Act, the liability of a shipowner for any loss, damage, or injury by collision may not exceed the

amount or value of the interest of the owner in the vessel of the loss is occasioned without the privity or knowledge of the owner. Two step process: (1) The Court must consider what acts of negligence or conditions of unseaworthiness caused the

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77accident, and (2) The Court must consider whether the shipowner had knowledge of the events that caused the loss (the US does not contest the first element).

To preclude limitation, the shipowners knowledge does not need to be actual. He is charged with knowledge of acts or events or conditions of unseaworthiness that could have been discovered through reasonable diligence.

ii. The question is whether the US had sufficient knowledge of the captain’s medical conditions (which caused his errors in judgment) so that limitation of liability should be denied (same standards apply to the US as a private actor). Liability may not be limited when the negligence is that of an executive officer, manager or superintendent, whose scope of authority includes supervision over the phase of the business out of which the injury occurred. There were 3 such officers in this case whose knowledge can be imputed to the US.

The Captain had a terrible cough that was affecting his sleep and he saw doctor about it. The government relies on the doctor’s testimony that, had he thought the captain was too ill for duty, he would have insisted that he stay home in a not-fit-for-duty status. The captain’s superiors considered senior officials (such as the captain) listed on the daily medical report fit-for-duty unless medical personnel or the individual recommended otherwise. Therefore, they did not independently suggest the captain may non be fit-for-duty. This unclear policy does not absolve the US. o The measure in such cases is not what the owner knows, but what he is charged with finding out. The superiors’

limited questioning of the doctor did not meet this standard. The US may therefore not limit its liability (past problems with the captain should also have caused the US to investigate more thoroughly).

iii. The US may not limit its liability because it had privity and knowledge of the conditions that caused the collision between the Coast Guard ship and the freighter.

3. In all of the following statutes, the highlighted terms mean the SAME thing (they Courts have deemed them to be synonyms). They are rules that limit the responsibility of corporate shipowners. Fault (negligence) does not count unless it is the fault of someone high up in the corporation (i.e. a managing agent or higher) and it certainly does not include a ship’s captain.i. The Limitation Act

30505 – General Limit of Liabilityo (a) In General – Except as provided in section 30506, the liability of the owner of a vessel for any claim, debt or

liability described in subsection (b) shall not exceed the value of the vessel and pending freight. If the vessel has more than one owner, the proportionate share of the liability of any one owner shall not exceed that owner’s proportionate interest in the vessel and pending freight

o (b) Claims Subject to Limitation – Unless otherwise excluded by law, claims, debts, and liabilities subject to limitation under subsection (a) are those arising from any embezzlement, loss, or destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss, damage, or injury caused by collision, or any act, matter or thing, loss, damage, or forfeiture done, occasioned, or incurred, without the privity or knowledge of the owner.

30504 – Loss by Fireo The owner of a vessel is not liable for loss or damage to merchandise on the vessel caused by a fire on the vessel

unless the fire resulted from the design or neglect of the owner. 30506(e) – Privity or Knowledge

o In a claim for personal injury or death, the privity or knowledge of the master or the owner’s superintendent or managing agent, at or before the beginning of the voyage, is imputed to the owner.

ii. COGSA 4(2)(b) – A carrier is not liable to the cargo for fire damages unless caused by the actual fault or privity of the carrier

iii. There are a rage of situations in which such knowledge can be attributed to the owner (closest to farthest): Band 1 (Bulls-Eye) Privity or Knowledge; People who have enough authority to be sensibly deemed the corporation

itself not generally, but with respect to whatever conduct is involved in this litigation.o The easiest way to prove privity or knowledge is to show that Band 1 exists or something close to it.

Band 2 Ordinary Vicarious Liability; Anyone is liable for the negligence of their employees (like the captain in this case).

Band 3 Expanded Vicarious Liability; For agents as well as employees, including at least some independent contractors.o Ordinarily, you are not liable for the negligence of your independent contractors, but in some admiralty cases you

are. Band 4 Non-Delegable Duty (i.e. duty not to leave port in an unseaworthy condition); This would imply that it does

not matter whether this was the fault of the corporation’s President or a lowly crew-member or even a 3rd party contractor…fault can still be attributable to the owner).

Band 5 Warranty; It is completely irrelevant where the bad condition came from; If the vessel owes someone a warranty, the owner must avoid the condition.

4. NOTES:i. The Collision Suit was in admiralty because it was against the US and the sovereign immunity statutes say it must be

ii. The Limitation Fund The main measure of the limitation fund is the value of the ship at the end of the voyage on which the incident occurred (this peculiar rule demonstrates why the US would have owed nothing). The limitation fund includes the value of the vessel and “impending freight” (money earned by the vessel for carrying goods on the voyage in question).

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78 When personal injury or death claims are made against the owner of the vessel seeking limitation, the Limitation of

Liability Act may raise the limitation fund to $420 times the tonnage of the vessel. When multiple claimants end up having to share in a limitation fund that is inadequate to satisfy their claims,

Supplemental Rule F(8) comes into play and practically leaves the distribution of the fund largely to the judge’s discretion.

Having the limitation fund measured by the vessel and tonnage after the incident is completely different than any other country, where it is simply measured by the tonnage.o Thus leads to forum shopping, whereby an unhurt vessel in the US will bring a much higher cap than elsewhere…

PLs suing will want to be in the US if the vessel is in tact.iii. Seamen’s Claims Jones Act and Unseaworthiness claims by seamen are subject to limitation of liability. Seamen’s wage

claims are not (some courts have held that maintenance and cure is not).iv. A ship’s captain or master is ordinarily not high-ranking enough to assume the privity of knowledge of the owner of the ship. v. Limitation of Liability Proceeding

Phase 1 Claimants have the burden of proof. They must make out an ordinary tort case for the negligence of the captain and the corporation via vicarious liability.

Phase 2 Government proves a lack of privity or knowledge regarding the cause of the fault. The cap is the ship + cargo (effectively $0 here).o The US says that it did not know of the Captain’s illness due to the lack of privity or knowledge of the 3

commanding officers. The Court says that the US had too many signals that the Captain was quite sick and it was therefore wrong for just standing by and not doing anything.

o The Court implies that the DF (USA) does not have to defeat privity and knowledge for everything that went wrong…just for the situation the PL descries in phase 1.

D. Lewis v. Lewis & Clark Marine, Inc. (2001)1. Facts: PL was injured while working as a deckhand on DF’s ship. PL sued in State Circuit Court claiming negligence under the

Jones Act, Unseaworthiness, and Maintenance and Cure. PL did not demand a jury trial in state court. In anticipation of PL’s suit, DF filed a complaint for exoneration from, or limitation of, liability in the US DC in LA under the Limitation of Liability Act (the Court followed the procedure in Supplemental Rule F) and the court entered an order approving a “surety bond” for 450K, representing the DF’s interest in the vessel. The DC ordered that anyone with a claim relating to the event file a claim in a specified period. PL answered with a claim for damages for injury and a motion to dissolve the restraining order. The DC then dissolved the restraining order it had issued which prevented PL from proceeding with his cause of action in State Court. i. The DC recognized that federal courts have exclusive jurisdiction to determine whether a vessel owner is entitled to limitation

of liability, but that this conflicts with the Savings Clause. The DC therefore found 2 exceptions whereby a PL is allowed to litigate his claim in state court: (1) When the value of the limitation fund exceeds the total value of all claims asserted against the vessel owner, and (2) When a single claimant brings an action against the vessel owner seeking damages in excess of the value of the vessel. DC concluded that it should dissolve the injunction because the petitioner met the limit fund exception and probably met the single claimant exception as well (court retained jurisdiction over the limitation action to protect the vessel owner’s right to limitation in the event that the state proceedings necessitated further proceedings in federal court).

ii. 8th Circuit Held that the DC had abused its discretion in dissolving the injunction. The Circuit recognized the potential tension between the Savings Clause in the jurisdictional statute and the Limitation Act. However, they did not see such a conflict in the present case. Concluded that the DF had a right to seek exoneration from liability, not merely limitation of liability, in federal court. Also, since the PL did not request a trial by jury, he was not seeking a remedy saved in state court. There is therefore no basis for dissolving the injunction.

2. Supreme Courti. PROCEDURE The Limitation of Liability Act allows a vessel owner to limit liability for damage or injury, occasioned without

the owner’s privity or knowledge, to the value of the vessel or the owner’s interest in the vessel. The Act was passed in 1851 to encourage ship-building and to induce capitalists to invest money in this branch of industry.

Supplemental Rule F sets forth the process for filing a complaint seeking exoneration from, or limitation of, liability The DC secures the value of the vessel or owner’s interest, marshals claims, and enjoins the prosecution of other actions with respect to the claims. The court sits without a jury and adjudicates the claims, determines whether the vessel owner is liable and if it should limit this liability. The court then determines the validity of the claims, and if liability is limited, distributes the limited fund among the claimants.

ii. Tension with the Savings Clause One statute gives suitors the right to a choice of remedies and the other gives vessel owners the right to seek limitation of liability in federal court.

iii. In examining the Limitation Act and its history, it is crystal clear that the operation of the Act is directed at misfortunes at sea where the losses incurred exceed the value of the vessel and the pending freight. Where the value of the vessel and pending freight exceed the claims, however, there is no necessity for the maintenance of the action in federal court.

To expand the scope of exclusive jurisdiction to prevent the state court actions would transform the Act from a protective instrument to an offensive weapon by which the shipowner can deprive suitors of their common-law rights, even where the limitation fund is known to be more than adequate to satisfy all demands upon it. Congress not only created the limitation procedure for the primary purpose of apportioning the limitation fund among the claimants where that fund was inadequate to pay the claims in full, but it reserves to such suitors their common-law remedies.

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79iv. Courts of Appeals have generally permitted a PL to precede in state court when there is only a single claimant and when the

total claims do not exceed the value of the limitation fund. The DC properly dissolved the injunction against the state court proceedings in the present case when it concluded that

the DF’s right to seek limitation of liability would be adequately protected. v. The Circuit Court wrongly concluded that the DC should not have dissolved the injunction without first finding actual statutory

conflict between the Limitation Act and the Saving to Suitors clause in the case at bar. They held that since the DF had a right to seek exoneration from limitation of liability in federal court and PL did NOT have a saved remedy under the savings clause, there was NO conflict. This argument relies on 2 flawed principles:

o (1) The Limitation Act grants vessel owners a right to obtain exoneration from liability in federal court where limitation of liability is not at issue.

a. A vessel owner does not need to confess liability to seek limitation under the Act (Supplemental Rule F(2)). However, the Act and the rules do not create a freestanding right to exoneration from liability in circumstances where limitation of liability is not at issue.

o (2) The Savings Clause reserves to claimants only the right to a jury triala. This is simply not the exclusive remedy available to suitors in state courtb. Circuit says if PL had requested a jury trial, it would have been OK in state court

vi. PL stipulated that his claim for damages would not exceed the value of the vessel and waived any claim of res judicata from the state court action concerning issues bearing on the limitation of liability. The DC concluded that these stipulations would protect the DF’s (vessel owner’s) right to seek limited liability in federal court. Then, “out of an abundance of caution,” the court stayed the limitation proceedings so that it could act if the state court proceedings jeopardize the vessel owner’s rights under the Act. Nothing more was required to protect the DF’s right to receive limitation of liability.

vii. The DC’s have jurisdiction over actions arising under the Act and they have discretion to stay or dismiss Limitation Act proceedings to allow a suitor to pursue his claim in state court. If the DC concludes that the vessel owner’s right to limitation will not be adequately protected (i.e. uncertainty over the adequacy of the fund and number of claims), the court may proceed to adjudicate the merits, deciding the issues of liability and limitation. But where, as her, the DC is satisfied that a vessel owner’s right to seek limitation will be protected, the decision to dissolve the injunction is within the court’s discretion.

3. NOTES:i. Both the Limitation Act and Supplemental Rule F(3) provide that when a shipowner files a timely and procedurally proper

petition for limitation of liability, all related actions against the shipowner in other forums shall “cease.” It is therefore not surprising that prior to this case, some lower courts had adopted demanding criteria for the stipulations required if claimants seeking to litigate outside the limitations proceeding.

ii. After this case, all the PL has to do to get out of a federal court limitation proceeding is to promise (stipulate) that he will not attempt to get more out of the DF, use res judicata or collateral estoppel to supersede the limitation.

iii. After this case, we are not talking about what the DCs may be able to do (in terms of letting the PLs go)…Instead, we are talking about what the DCs are required to do

If there are numerous PLs who all get together and promise not to fight the cap, the DC must let them go (however, very often it is not possible to get all of the PLs together to agree to this).

E. In re Bethlehem Steel Corp. (1980)1. Facts: A ship collided with a bridge that spanned a Canal located wholly in Canada. This owner of the ship filed a claim in the

Federal Court of Canada for limitation of liability under Canadian Law (it named as DFs the owner of he bridge and all other persons having claims against the PL, its ship, or the fund hereby to be created). The court entered an order limiting liability to $671K Canadian plus interest to date of deposit. The PL deposited the amount with the court and the Canadian court stayed all further proceedings arising out of the collision and entered a notice with a provision for publication, requiring all persons who claimed damages from the collision to file their claims with that court. A number of claims against the ship owner were filed in DC in Ohio and ship owner responded by filing this action in that court petitioning for limitation of liability, while claiming the benefit of the lesser limitation provided by the Canada Shipping Act. The DC ordered all people having claims against the ship owner to file then in that court and enjoined the prosecution of other actions arising from the proceeding except in the case in its court or in Canada. The total claims from both actions were far in excess of the amount available for their satisfaction under the limitation provisions of either the US Act or Canadian Law. i. The Ohio DC determined that the right to recover in tort is determined by the place where the tort occurred, but that the law

of the forum determines procedural matters. It therefore held a hearing to determine whether Canadian limitation law is substantive or procedural (the Ship Owner wanted it to be substantive and the claimants wanted it to be procedural). The DC (after much expert testimony) concluded that the limitation of liability provisions of the Canada la were procedural and therefore do not attach to the rights created by that Act. Therefore, the law of the Limitation of Liability Act (the law of the forum) determines the maximum limitation of the fund created in the action (850K).

2. Supreme Courti. This Court accepts the DC’s conclusion that the Canadian limitation statute is procedural. This conclusion is supported by

competent testimony. It also represents a desirable choice-of-law decision. The ship is American and the parties who will be affected by this limitation decision chose to sue the owner of the ship in a US court rather than a Canadian one. Although the collision occurred in Canadian waters, insofar as the limitation is concerned, the interest of the US in applying its own legislatively determined concept of limitation is stronger than that of Canada.

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803. NOTES

i. Neither proceeding had a transnational effect. The shipowner had to file for limitation and post bond in each country (the bond frees the ship and replaces it with the limitation amount).

ii. US Quirk The US Limitation Law measures the limitation fund by the value of the vessel after the accident. Most maritime countries (and the 1996 LLMC Convention) measure the fund by the vessel’s tonnage rather than its value. This means that the US limit will generally be higher than the competing foreign limit if the ship was not damaged in the accident (owners of undamaged ships often do not seek limitation under US law) and lower when the ship has been seriously damaged or lost.

iii. Substance vs. Procedure The procedural label (in the choice of law context) is shorthand for “apply the law of the forum.” In the general field of horizontal choice of law, the substance-procedure distinction is notoriously manipulable, so that a court is often free to classify as procedural any matter that it strongly believes should be controlled by forum law (which it often does).

iv. No recovery in negligence for Pure Economic Loss (Testbank Rule)Marine Insurance

A. Generally1. First-Party insurance protects the insured against harms and losses to itself and its property (health and accident insurance).

Third-Party insurance protects the insured against potential liabilities to others (automobile liability insurance). An insurance policy is a formal manifestation of the K between the insured and insurer (the policy can include both first and third-party protection).

2. Marine Insurance Principle types of policies are Hull Insurance (provides vessel owners with first-party protection against some harms to the ship and includes some third-party protection); Cargo Insurance (affords first-party protection and sometimes third-party protection to shippers and buyers of goods); and Protection and Indemnity (P&I) Insurance (third-party insurance protecting the insured marine operator against some of its potential liabilities).

B. Two Troublesome Terms1. “Average” = Loss

i. A “Particular Average” means a partial loss to a single interest and a “general average” means a loss to the whole venture. 2. “Warranty” has many meanings. In marine insurance, 3 can be identified:

i. In the strictest sense, a warranty is a promise that, if broken, voids the entire K. ii. In a more relaxed sense, a warranty is a promise to try one’s best.

Some cases say that under the “American Rule,” the insured under a time hull policy (covering multiple voyages) owes a strict warranty of seaworthiness at the point when the insurance attaches and therefore a watered-down “warranty” to use due diligence to correct unseaworthy conditions as they arise. A breach of this watered-down warranty will not oust the policy, but it will defeat coverage for any loss flowing from an unseaworthy condition that the insured should have corrected.

iii. The word “warranty” is also used to signal particular exclusions from coverage. A clause providing that an identified type of cargo is “warranted free of average.” This means that the insurer will not

pay for partial losses to this type of cargo.3. History

i. The Lloyd’s S.G. (ship and goods) Policy Developed by London insurance underwriters (an underwriter is a person who agrees to share some portion of the loss if a shipping venture fails). The Policy is worded broadly enough to provide third-party protection. The underwriters, in response to a case, were unwilling to add collision liability to the Policy’s coverage in the far that full coverage would lead to laxity on the part of the ship’s masters. They agreed to take on no more than ¾ of the collision liability risk. Shipowners formed Protection and Indemnity Clubs to cover the other ¼. Gradually, the coverage of the P&I Policy was broadened to include other third-party risks and other risks not covered by hull policies.

Today, the P&I Policy is the basic third-party coverage for marine operators. However, modern cases still frequently reflect the view that P&I coverage is derivative of and supplementary to the more basic hull coverage.

C. Standard Oil Co. v. United States (1950)1. Facts: The US government issued a policy of war risk insurance to a steam tanker against “all consequences of hostilities or

warlike operations.” In 1942 there was a collision between the ship and a navy minesweeper, clearing the channel approaches to NY harbor. Both ships were at fault for failing to comply with the applicable rules of good seamanship under the circumstances. The question is whether the insurance provision covered the collision. The intent of the contracting parties would control this decision, but as is often the case, that intention is not readily ascertainable. Losses from collisions are standard perils of the sea that are covered by standard marine risk policies. To take this loss out of the marine policy and bring it within “all consequences of warlike operations,” there must be some causal relationship between the warlike operation and the collision. To do this, the concept of proximate cause must be applied. Proximate Cause in the insurance field generally means the cause closest to the loss. The Court of Appeals held that the mine weeping, a warlike operation, was the “predominate and determining cause of the collision.” The policy therefore covered the loss.

2. Supreme Courti. The courts below properly considered the case as depending on the resolution of factual questions.

ii. The Proximate Cause method of determining on the facts of each case whether a loss was the “consequence” of warlike operations may not achieve, perfect results because nobody can be sure what the trier of fact might determine to be the predominant cause of loss. This is the best method available and the Court of Appeals got it right.

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81 Petitioner contends that (1) The Court is bound by certain decisions in the House of Lords and (2) These opinions have

announced a rule-of-thumb construction of the phrase “all consequences of warlike operations” under which the facts in this case result in war risk liability as a matter of law. o The US must do not more than accord respect to established doctrines of English maritime law. Furthermore,

there is no real way to predict with certainty what particular state of facts might cause a court to find liability as a “matter of law.”

iii. Dissent (Frankfurter) It is partly the law’s endeavor to shield the insurer from liability for a loss on the basis of a factor too remote, and

therefore too tenuous, in the combination of elements that converged toward the loss (and usually there is more than one factor, especially in maritime law).

If the matter is viewed simply, one can hardly escape the conclusion of the DC. The fact that English courts have reached the same conclusion in similar cases does not weaken its force.

The unusual formation of the 3 mine sweepers approaching the ship in NY harbor had the affect of closing lanes of navigation affording possible escape, which would have ordinarily been open to the ship.

iv. Dissent (Douglas) The accidents which had been held to be covered by this insurance clause prior to 1942, when the K was made, are the

reliable standard for interpretation: A case dealing with this precise situation held that where a ship engaged in a warlike operation collided with another vessel partly or wholly due to faulty navigation on its part, the war insurer was liable.

3. NOTES:i. Goes into the nitty gritty of proximate cause issues in insurance cases

In a normal negligence case, you are asking whether the negligence of the DF was a proximate cause of the injury (it is not an either/or situation)

In these cases, it is an either/or situation The categories of coverage must be mutually exclusive, but it is VERY difficult to determine which category this case falls into

Early Proximate Cause connotations maintained notions of “closest in time” (here, there is no clear time sequence) or “most important” (here, there is no cause that is clearly the most important)

ii. Justice Black (majority) only says that both lower courts were correct to treat this as a question of fact The Policy in operation covered “warlike operations,” but not “perils of the sea”

D. Wilburn Boat Co. v. Fireman’s Fund Insurance Co. (1954)1. Facts: Three men bought a houseboat to use for commercial carriage of passengers on an artificial inland lake between TX and

OK. Fireman’s insured the boat against loss from fires and other perils. While moored on the lake, the boat was destroyed by a fire and following refusal by the insurance company to pay, the suit was brought in TX state court by the men and their corporation to which the boat’s legal title had been transferred (Willburn Boat Company). The Insurer removed to federal DC because of diversity and answered, admitting that it had issued the policy, that premiums had been paid and that the boat was destroyed. Nonetheless, they denied liability because of alleged breaches of printed policy terms (warranties) providing that, without written consent of the company, the boat could not be sold, transferred, etc. and must be used solely for private pleasure purposes. The PL urged that TX law applied because the policy was made there (if so, the policy provision may be invalid). Under TX law, no breach by the insured of the provisions of a fire insurance policy is a defense to any suit (against the insurer) under TX law unless the breach contributes to the loss. i. The court held that since a marine insurance policy is a maritime K federal admiralty law, not state law, governed. Court held

that there is an established admiralty rule, which requires literal fulfillment of every policy warranty so that any breach bars recovery (even if a loss still would have occurred had the warranty been carried out to the letter). Judgment was entered for the Insurance Company.

ii. The Court of Appeals affirmed and approved the DC’s methodology.2. Supreme Court

i. The insurance policy is a maritime K so the Admiralty Clause of the Constitution brings it within federal jurisdiction. However, it is not true that every term in every maritime K can only be controlled by some federally defined admiralty rule. In the field on maritime Ks, as in maritime torts, the National Government has left much regulatory power to the states. Congress has not regulated marine insurance Ks and has not dealt with the effect of marine insurance warranties at all. Therefore, there is no possible question here of conflict between state law and any federal statute. However, states cannot override the general federal common law created by the Court.

The questions therefore are: (1) Is there a judicially established federal admiralty rule governing these warranties (i.e. strict fulfillment of warranties)? And (2) If not, should the Court make one?

ii. Through the years, the common law doctrine holding that it is immaterial whether the breach of a warranty contributed to the specific loss (strict breach of warranty rule), when accepted, has been treated not as an admiralty rule, but as a general warranty rule applicable to many types of Ks. There are few federal cases on marine insurance in which the strict breach of warranty rule has ever been considered. It has not been judicially established as part of the body of federal admiralty law in the US. This case can therefore only be decided by state law, unless the Court makes a federal one.

iii. The control of all types of insurance companies and Ks has been primarily a state function since the States came into being. The McCarran Act (1945) was designed to assure that existing state power to regulate insurance would continue. Only

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82Congress would be empowered and skilled to make a nation-wide law if it so desired, not the Court in a piece-meal fashion. Diverse state regulations should remain the rule of the US.

3. Concurring Opinion (Frankfurter)i. The court’s opinion goes beyond the needs of the problem before it. It seems to be directed with equal force at ocean-going

vessels in international maritime trade, as well as coastal, intercoastal and river commerce. The decision assumes that a ship on a pleasure cruise going to different ports in the US covered by a Lloyd’s Policy would be subjected to the varying insurance laws of each state. This would not hold if such a decision were necessary.

ii. The business of marine insurance often may be so related to the success of many manifestations of commercial maritime endeavors as to demand application of a uniform rule of law designed to eliminate the vagaries of state law and keep harmony with the maritime insurance laws of other great maritime powers

iii. It cannot be that by this decision the Court means suddenly to reject the whole past of the Admiralty provision in Article III and to renounce requirements for nationwide maritime uniformity, except insofar as Congress has specifically enacted them, in the field of marine insurance.

iv. He concurs on the grounds that the houseboat should be treated as if it were confined to such a body of water (manmade lake) where the interests concerned with shipping in its national and international aspects are substantially unconcerned with the rules of law to be applied to such limited situations. His opinion is restricted in this respect.

4. NOTESi. For many, this decision is the SC’s most disappointing maritime-law decision. Many lower courts have had difficulty in

determining the content, if any, of the federal maritime law of marine insurance and in deciding when to resort to state law in marine insurance cases.

ii. Robertson – We have been saying, for a while, that state courts must follow the federal courts on admiralty matters (or did we leave it to the states and hope they determine it is better to follow the logic of the federal reasoning)

Black’s decision seems picky (especially in light of the route the courts have gone since Jensen and Erie) Rules such as these are federal admiralty rules and are the uniform rules throughout the country. This specific area should be at least as federalized as other court-made admiralty rules have become (very).

E. Albany Insurance Co. v. Anh Thi Kieu (1991)1. Facts: A Vietnamese immigrant who lives in TX tried to get hull insurance coverage on a shrimping vessel. She filled out Albany’s

insurance application (even though it was in English), which was approved with the policy sent back to the immigrant. Her application contained several inaccurate statements: (1) She claimed she regularly operated the ship as its captain, (2) That the vessel had sustained no damages in the lat 5 years, and (3) That she purchased the vessel for $110K. In reality, she purchased the ship in 1984 for $30K and assembled an independent crew to guide the vessel in fishing and shrimping off the coast of TX. Late in 1984, the ship collided with a repair boat and sustained damage that was repaired by a shipyard in TX. Albany had plenty of opportunity to discover these facts and cancel coverage. Instead, Albany continued to receive premiums from the immigrant and to extend coverage to her ship. In 1988, the ship hit an unmarked offshore department of energy platform and it suffered very bad damage. After being helped by the Coast Guard, the immigrant secured the services of Sabine Offshore, who agreed to place the ship in dry storage in its dockyard. She secured this help in an effort to “save and preserve” the ship. Albany surveyed the damage and filed a declaratory judgment action in federal district court requesting a declaration of the immigrant’s rights in the policy. The court said that she should recover the insured value of the ship ($90K) minus the salvage value of the vessel’s hull ($15K). In addition, the court said that she should get $15K in “sue and labor” charged to cover the storage fees.

2. Fifth Circuiti. Albany argues that the TX court should not have applied TX insurance law and, instead, should have applied the federal law of

“uberrimae fidei” (all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal; otherwise the policy can be invalidated). In the alternative, they argue that LA insurance law and not TX insurance law should apply.

ii. Maritime Preemption Does Federal Maritime Law or State Insurance Regulation determine the effect of an assureds’ misrepresentations? State law governs the interpretation of marine insurance policies unless an available federal maritime rule controls the

disputed issue. There are 3 factors to determine this [factors are merely instructive and not dispositive]: o (1) Whether the federal maritime rule constitutes “entrenched federal precedent

a. State insurance law generally should not govern marine insurance disputes if an existing federal maritime rule constitutes “entrenched federal precedent” The application of unfamiliar federal maritime rules engenders undesirable uncertainty among

maritime actors. This can easily be avoided by the application of already well-developed state laws. The entrenchment of “uberrimae fidei” is uncertain. Even though federal courts have said that the

doctrine is well recognized in federal law, this was merely in dicta. None of the opinions of this Circuit have authoritatively concluded that it applies to the exclusion of state law. It is a rule this Court has recognized, but never applied. Court concluded, with some hesitation, that it is not entrenched federal precedent.

o (2) Whether the state has a substantial and legitimate interest in the application of its lawa. State insurance law generally should not govern marine insurance disputes if the state does not have a

substantial and legitimate interest in the application of its law

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83 Regulation of marine insurance relationships (all insurance relationships) has historically been a

matter of state concern. States are better equipped to balance the interests of each party to these policies and TX has concluded that the burden of unintentional misrepresentations should fall upon the insurer.

o (3) Whether the state’s rule is materially different from the federal maritime rule a. State insurance law generally should not govern marine insurance disputes if it is materially different from

federal maritime law Under the federal rule of uberrimae fidei, material representations by the insured party invalidate

the policy from the beginning. Under TX law, the misrepresentations can invalidate the policy only if meant to deceive. Both laws share the concern that an assured should not profit from material misrepresentations.

iii. Choice of State Law Since Federal Maritime Law, does not govern, the court must determine whether TX or LA insurance law applies.

Although a federal court generally applies the choice of law rules of the forum in which it is located, court in maritime cases must apply general federal maritime choice of law rules. In this case, the court must consider the choice of law rules, which specifically govern maritime marine insurance disputes.

The K was formed in LA, issued in LA, delivered in TX and TX appears to have the greatest interest in the application of its law (lots of inconsistency). o Modern choice of law analysis, whether maritime or not, generally requires the application of the law of the state

with the most significant relationship to the substantive issue in question. Rule:

o To determine the eligible states:a. State in which the insurance K was formedb. State in which the insurance K was issued and delivered

o To determine which law should be applied:a. State with the greatest interest

TX has a greater interest in the application of its laws – Interest in the protection of its citizens against the overbearing tactics of insurance underwriters and LA’s interest in the protection of citizens of foreign states is not as great.

iv. The purpose of the “sue and labor” clause in an insurance K is to reimburse the insured for those expenditures, which are made primarily for the benefit of the insurer to reduce or eliminate a covered loss. The immigrant was entitled to reimbursement for her effort to mitigate damages by storing the ship in dry dock.

3. NOTESi. The Circuit’s decision is completely at odds with dozens of other cases that have implemented the uberrimae fidei doctrine.

Courts have held that this doctrine is sufficiently entrenched to satisfy the Wilburn Boat requirements.ii. Uberrimae Fidei A long-standing federal maritime doctrine that applies to marine insurance Ks. It imposes a duty of utmost

good faith so an applicant for a marine insurance policy is bound to reveal every fact within his knowledge that is material to the risk. If an insured fails to do so, the insurer may rescind the policy, even if the material misrepresentation wasn’t intentional. It is a well-entrenched doctrine that protects not only the insurer, but also the integrity of the risk pool.

iii.Forum Shopping

Forum Selection and Arbitration Clauses in Maritime ContractsA. Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer (1995)

1. Facts: A NY business bought Moroccan oranges and lemons and arranged for shipping aboard a refrigerated cargo ship owned by a Panamanian company and chartered by Japanese Company. The Bill of Lading included Clause 3, “Governing Law and Arbitration,” providing: (1) The K evidenced by or contracted in this BOL shall be governed by Japanese law, and (2) Any dispute arising from this BOL shall be referred to arbitration in Tokyo by the Tokyo Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange, Inc., in accordance with the rules of TOMAC and any amendment there to, and the award given by the arbitrators shall be final and binding on both parties.i. Fruit sustained over $1 Million in damages and the NY companies’ cargo insurer paid part of the loss and became

“subrogated” to the NY companies’ rights. NY Company and its insurer (PL) filed in US DC in Mass. in rem against the ship and in personem against the Panamanian owners. The owners moved to compel arbitration in Tokyo pursuant to Clause 3, but the PLs argued that the clause was unenforceable by virtue of a line of cases (Indusa) holding that foreign forum selection clauses are void under COGSA 3(8) - Which holds clauses relieving the carrier or ship of liability arising from negligence other than provided in the chapter. Foreign forum selection clauses, as per some courts, are invalid as per COGSA because they put a high hurdle in the way of enforcing liability (they are therefore a way for carriers to secure settlements lower than if cargo owners could sue in a convenient forum).

ii. The DC held that the arbitration clause was enforceable and certified a question for interlocutory appeal: “Does COGSA 3(8) nullify an arbitration clause in a BOL governed by COGSA?” The 1st Circuit said that it does not. Even if it were invalid under COGSA, the FAA is more recent and specific and alone governs arbitration clauses (foreign and domestic), thereby removing them from COGSA. Even if COGSA invalidates a suit in Japan, it does not invalidate arbitration there…So Indusa has not disappeared (it would be strange to say that after Zapata and Carnival Cruise), it is just not applicable for arbitration.

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84iii. The SC grants Cert. to determine whether COGSA or the FAA governs. There is no conflict unless COGSA nullifies a foreign

arbitration clause.2. Supreme Court

i. PL argues that a foreign arbitration clause lessens COGSA liability by increasing the transaction costs of obtaining relief. Leading Case: Indusa 2nd Circuit invalidates foreign forum selection (and arbitration) clauses without exception under

COGSA 3(8). BAD LOGIC. COGSA 3(8) holds that liability may not be lessened when it is “liability for loss or damage arising from negligence, fault,

or failure in the duties and obligations provided by this section.” The statute addresses the lessening of the specific liability imposed by the Act without addressing the separate question of the means and costs of enforcing that liability. The Act establishes certain duties and obligations (seaworthiness, a BOL with specified content, due diligence, etc) for which a person cannot lessen his liability, separate and apart from their mechanism of enforcement.

Even if it were reasonable to read 3(8) to make a distinction base on travel time, airfare, and hotel bills, these factors are not susceptible to a simple and enforceable distinction between domestic and foreign forums (we cannot and should not require courts to do this on a case by case basis).

It would be against the objects of the Hague Rules for US Courts to interpret COGSA to disparage the authority or competence of international forums for dispute resolution.

ii. There is a risk foreign arbitrators will not apply COGSA. PL is concerned that the substantive law applied will reduce the carriers’ obligations to the cargo owner below what

COGSA guarantees. PL argues the arbitrators will follow the Japanese Hague Rules, which he believes lessen the DF’s responsibility. This argument is premature. The CS has retained jurisdiction over the case and will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of the laws has been addressed.

iii. The foreign arbitration clauses in bills of lading are not invalid under COGSA in all circumstances and both the FAA and COGSA may be given full effect.

iv. The Indusa line of cases is dead for both foreign forum suits and arbitrations.v. O’Connor (concurrence)

She does not believe the Indusa is completely dead…She does not reject the reasoning of the Indusa completely insofar as it holds that true foreign forum selection clauses do not divest domestic courts of jurisdiction. She believes the foreign forum arbitration clauses do not divest domestic courts (along with the majority). ???

vi. Stevens (dissent) The Harter Act (for which COGSA is a later enacted supplement) prohibits relieving carriers from liability and the SC (in

1900) held that a choice-of-law clause was invalid based solely on this. Since then the Federal Courts have consistently interpreted COGSA in this way (i.e. in the Indusa).

The foreign-arbitration clause imposes potentially prohibitive costs on the shipper who must travel to a distant country to seek redress. The shipper will therefore be inclined to settle at a discount or forego bringing the claim at all.

3. NOTES:i. Most courts have held that the case validates not only foreign arbitration clauses, but also foreign forum selection clauses in

bills of lading subject to COGSA.ii. Most lower courts now hold that forum selection and arbitration clauses in seamen’s employment Ks are valid if bargained for

and not otherwise unconscionable.iii. For most of maritime history, courts were hostile to foreign selection clauses. It was OK for the court to send the case

elsewhere via forum non-conveniens, but not for the parties to insist upon it. In Zapata, Berger confronted a towage K with a London forum selection clause if a dispute arises and he held that we must allow the advanced parties to include such a carefully negotiated clause and utilize it if they so choose. In Carnival Cruise (20 years later), Blackmun concludes that if Zapata is OK, a cruise ship can validly select a domestic forum if it is sued and impose this on the passenger.

Other Important Forum Shopping ToolsA. Sinochem Int’l Co. Ltd. V Malaysia Int’l Shipping Corp. (2007)

1. Facts: Sinochem (a Chinese, state-owned importer) contracted with a domestic US corporation to purchase steel coils by which they would receive payment under a letter of credit by producing a valid BOL certifying the coils had been loaded for shipment to China on or before a date. The US Company sub-chartered a vessel owned by Malaysia. Sinochem petitioned a Chinese Admiralty Court for interim relied (preservation of a claim against Malaysia and arrest of the vessel) alleging that Malaysia had falsely backdated the BOL (the order was granted). Sinochem then filed a complaint against Malaysia in the Chinese Court on the same grounds arguing that it resulted in unwarranted payment. Malaysia contested the jurisdiction of the Chinese Tribunal (this was rejected). After the vessel’s arrest, Malaysia filed this case in US DC in PN. They plead that Sinochem negligently misrepresented the “vessel’s fitness and suitability to load its cargo” in their preservation petition in China. Malaysia sought relief resulting from the delay caused by their ship’s arrest. Sinochem moved to dismiss the suit on lack of subject-matter and personal jurisdiction grounds, on forum non conveniens grounds and on international comity grounds. i. DC determined it had jurisdiction under 1333 and that it lacked personal jurisdiction over Sinochem under PN’s long-arm

statute. Still, limited discovery may demonstrate that Sinochem’s national contacts sufficed for personal jurisdiction under 4(k)(2). No discovery was permitted because the court determined that the case could be better and more conveniently adjudicated in China (no significant interests of the US were involved; while the cargo was loaded in Philly, the dispute

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85centered on the arrest of a foreign ship in a foreign waters pursuant to the order of a foreign court). The DC therefore granted the motion to dismiss under forum non conveniens.

ii. The Third Circuit – There was subject matter jurisdiction under 1333 and the matter of personal jurisdiction could not be resolved without discovery. The DC could not dismiss the case under forum non conveniens until it determined that it also had personal jurisdiction over the DF.

Dissent: Requiring the DC court to conduct discovery on a jurisdictional question when it rightly regard the forum as inappropriate subverts a primary purpose of the forum non conveniens doctrine protecting a DF from substantial and unnecessary effort and expense.

iii. SC grants cert to resolve the controversy among the circuits as to whether forum non conveniens can be decided prior to matters of jurisdiction.

2. Supreme Courti. Forum Non Conveniens A federal court has the discretion to dismiss on the ground when an alternative forum has

jurisdiction to hear the case, and trial in the chosen forum would oppressiveness and vexation to a DF out of all proportion to a PL’s convenience, or the chosen forum is inappropriate because of considerations affecting the court’s own administrative and legal problems.”

It has continuing application in federal courts only in cases where the alternative forum is abroad (and maybe in rare instances when a state or territorial court serves litigational convenience best). Transfer is the appropriate solution when another federal court is best suited to hear the case.

A DF invoking the doctrine ordinarily bears a heavy burden in opposing the PL’s chosen forum. When the forum is not the PL’s home forum, the presumption in the PL’s favor applies with less force because the assumption that the forum is appropriate is less reasonable.

ii. Jurisdiction in a case is vital only if the Court intends to issue a judgment on the merits in the case. A forum non conveniens dismissal denies audience to a case on the merits – It is a determination that the merits should be adjudicated somewhere else. A DC therefore may dispose of an action by forum non conveniens dismissal, bypassing questions of subject-matter and personal jurisdiction, when considerations of convenience, fairness and judicial economy so warrant.

iii. If jurisdiction is lacking, a court cannot proceed any further and must dismiss the case on that very principle (forum non conveniens can never apply).

iv. Here, Malaysia faces no genuine risk that the more convenient forum will not take up the case since proceedings are already underway in China. Jurisdiction of the Chinese Admiralty Court was found to be appropriate.

v. If a court can readily determine that it lacks jurisdiction over the cause or the DF, the proper course would be to dismiss on that ground - Normally, jurisdiction over a case will not involve an arduous inquiry and both judicial economy and the consideration normally accorded to the PL’s choice of forum will impel the federal court to dispose of those issues first. However, when subject-matter or personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh heavily in favor of dismissal, the court would properly take this less burdensome course.

3. NOTES:i. Forum non Conveniens is used by federal district courts to guard against congestion of their dockets by foreign litigants. SC

gave a broad authorization for this in Piper Aircraft: The determination is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion; where the court has considered all relevant public and private interest factors, and where balancing of these factors is reasonable, its decision deserves substantial deference.

B. Liaw Su Teng v. Skaarup Shipping Corp. (1984)1. Facts: A Liberian and Greek ship collided in the Mediterranean Sea off the coast of Algeria. The Liberian ship sank and 32 of its

crew members drowned. Seven suits were filed in the DC for the Eastern District of LA by representatives of Taiwanese crew members. The PLs asserted Jones Act and DOHSA claims against the owner and operator of the Liberian ship and general maritime negligence and DOHSA claims against the owner and operator of the Greek ship. Personal jurisdiction over the Liberian shipowner was doubtful (it is a Liberian corporation that is 95% beneficially owned by US citizens; it has no agents, office, or employees in LA; it has its offices in CT and conducts business in NY). Personal jurisdiction over the Liberian ship operator wad doubtful (DF Skaarup was a NY corporation with officer in CT and no agents, offices or employees in LA). The Shipowner filed a limitation action in DC in NY. Initially, in the LA action, the Feddy shipowner and DF operator sought dismissal for lack of personal jurisdiction, but later sought and obtained a transfer to NY. The Greek vessel has never entered LA waters. It is owned an operated buy Summit (a Panamanian corporation whose stock is owned by Greeks; its only known contact with the US is that it owes a mortgage on its ship to NY bank). Initially, Summit resisted personal jurisdiction, but while the motion was pending, an in rem action was filed against their ship in Chicago and, to avoid arrest of the ship, they agreed to provide a bond and acquiesce to personal jurisdiction in LA. The DC then granted Summit’s motion to dismiss under forum non conveniens. i. Prior to dismissing a case under forum non conveniens, a DC should determine if American or foreign law is applicable. If US

law applied, hen the court should retain jurisdiction. If foreign law applies, the court will consider certain forum non conveniens factors to determine whether to retain jurisdiction. Application of US law is found only when there are substantial or significant contacts between the transaction and the US: (1) The place of the wrongful act, (2) The law of the flag, (3) The allegiance or domicile of he injured, (4) The allegiance of the DF shipowner, (5) The place of contract, (6) The inaccessibility of a foreign forum, and (7) The law of the forum. Application of these factors indicate a total lack of contact between the US and Summit. Therefore, US law does not apply in the wrongful death claims against summit, and the court must consider the

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86factors used in determining whether forum non conveniens should be used to dismiss the case. These factors indicate that Taiwan is the proper forum.

ii. PLs appeal from the order of dismissal.2. Fifth Circuit

i. The approach of the DC confuses the choice-of-law analysis applicable to a Jones Act or Unseaworthiness claim by a seaman against the vessel aboard which he was employed with that applicable to a claim by a person injured on the high seas against a vessel with which he had no employment connection.

The Jones Act/Unseaworthiness claim against the owner of the employer vessel turns not only on the crew members’ connection with the vessel, but also on other factors that are essential to determining that US law bases for liability may exist. This decision is based on the (7) factors above, which determine whether US or foreign law is applicable (The Lauritzen-Rhoditis Factors)

The preliminary analysis for claims by a seaman against a third-party vessel for injuries sustained as a result of an alleged tort on the high seas is different. This claim must be decided by principles of US law, interpreting the communis juris, the common law of the seas (The Belgenland).o The laws of the forum, as that forum interprets the general maritime law are controlling.o A federal court is to retain jurisdiction of such cases unless doing so will result in an injustice. The court must

begin with the assumption that it will exercise jurisdiction unless it is established by the DF that an injustice will follow.

o In cases involving the communis juris, federal courts may decline jurisdiction to prevent misuse of a litigant’s ability to seek a favorable forum. Many factors must be considered and, unless the balance is strongly in favor of the DF, the PL’s choice of forum shall not be disturbed.

o These factors weigh against dismissal here. There has been no showing that another forum is available and no showing that the courts in Taiwan would even entertain his action. An essential predicate for dismissal is the existence of another forum.

o Dismissal of the case was improper. Summit’s alternative motion for transfer to the Southern District of NY should be granted.

ii. When foreign nationals injured by a collision on the high seas between two vessels flying flags of different countries seek redress from the owners of both vessels in a US court, such a suit obviously ought not to be divided into separate suits absent compelling reasons. Requiring the PLs to proceed separately against each owner in the forums of different nations creates not only the necessity of two separate trials to determine responsibility for a single event, but also the possibility of inconsistent results.

3. NOTES:i. District Court’s Analysis

Step 1 Choice of law determination must precede the forum non conveniens analysis because the applicability of US law would preclude forum non conveniens dismissal. o Circuit says this is correct only for seamen’s cases against employers and employer-related shipowners. o Even in seamen’s actions, the applicability of US law does not necessarily preclude forum non conveniens

dismissal, so a court is free to dispose of a case on forum no conveniens grounds without deciding what law would apply if jurisdiction over the case were retained.

a. In some Circuits, it is still the rule that actions asserting Jones Acts rights cannot be dismissed for forum non conveniens unless the court first determines that the Lauritzen-Rhoditis factors preclude the applicability of US law.

Step 2 Whether US law should apply in the action against the third-party ship’s owner/operator is controlled by the choice of law factors in Lauritzen-Rhoditis.o Circuit says that the governing authority in the PL’s suit against the non-employer tortfeasor (a high seas collision

action) is The Belgenland. Step 3 Lauritzen-Rhoditis choice of law approach precludes the applicability of US law to the action against the Greek

DF.o Circuit agreed.

Step 4 Gulf Oil forum non conveniens factors dictate dismissal of the case against the Greek shippers so that it can be maintained in Taiwan.o Circuit reversed on this point, holding that Taiwan had not been shown to be an available forum and that in any

event the case against the Greek DF belonged in the same court with the case against the Liberian DFs.ii. Piper Aircraft applies the forum non conveniens doctrine to favor US litigants over foreigners.

iii. Most of the successful defensive invocations of the Lauritzen-Rhoditis choice of law framework have been against foreign PLs. iv. When application of the Lauritzen-Rhoditis factors (or another choice of law analysis) calls for the application of foreign law,

the proper ruling is to dismiss on the merits the portion of the PL’s complaint that relies on US law. Often this means dismissing the entire complaint.

v. International Comity In forum non conveniens disputes in which foreign governmental interests are implicated, DFs seeking forum non conveniens dismissal have lately been urging a “rule of international comity” as a separate argument (standing

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87alongside the forum non conveniens analysis) for dismissal. It is not clear whether “international comity” is legitimately a separate argument or merely a repackaging of the “public factors” segment of the forum non conveniens doctrine.

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