United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

THE CONTINENTAL INSURANCE COMPANY,

Plaintiff,

 v.

JOHN JOSEPH COTA; REGAL STONE

LIMITED, FLEET MANAGEMENT, LTD.;

and the M/V COSCO BUSAN, LR/IMO

Ship No. 9231743, her engines,

apparel, electronics, tackle,

boats, appurtenances, etc., in rem,

Defendants. ___________________________________

REGAL STONE LIMITED and FLEET

MANAGEMENT, LTD.,

Counterclaimants,

v.

THE CONTINENTAL INSURANCE COMPANY,

Counterdefendant.

___________________________________

REGAL STONE LIMITED and FLEET

MANAGEMENT, LTD.,

Cross-Complainants,

v.

JOHN JOSEPH COTA,

Cross-Defendant. ___________________________________ 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 08-2052 SC

Related cases:

07-5800 SC

07-6045 SC

08-2268 SC

08-5096 SC

08-5098 SC

09-1469 SC

ORDER GRANTING

MOTIONS FOR PARTIAL

SUMMARY JUDGMENT

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 1 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 Cota's MPSJ incorporates by reference the authorities and

legal arguments made on the preemption issue in his Motion to

Dismiss filed in Regal Stone, Ltd. v. Cota, Case No. 08-5098,

Docket No. 30 ("Motion to Dismiss"). That case has been related to

and consolidated with this one for pre-trial purposes. See Case

No. 08-2052, Docket No. 83 ("Order Granting Motion to

Consolidate").

2

REGAL STONE LIMITED and FLEET

MANAGEMENT, LTD.,

Third-Party Plaintiffs,

v.

THE SAN FRANCISCO BAR PILOTS and

THE SAN FRANCISCO BAR PILOTS

BENEVOLENT AND PROTECTIVE

ASSOCIATION,

Third-Party Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

I. INTRODUCTION

On August 20, 2009, Plaintiff and Counterdefendant

Continental Insurance Company ("Continental") filed a Motion for

Partial Summary Judgment. Docket No. 90 ("Continental's MPSJ"). 

On August 21, 2009, Defendant and Cross-Defendant John Joseph Cota

("Cota") filed a Motion for Partial Summary Judgment. Docket No.

93 ("Cota's MPSJ").1 Defendants, Counterclaimants, CrossDefendants, and Third-Party Plaintiffs Regal Stone Limited ("Regal

Stone") and Fleet Management, Ltd., ("Fleet") filed an Opposition. 

Docket No. 97. Continental and Cota submitted Replies. Docket

Nos. 102 ("Continental's Reply"), 104 ("Cota's Reply"). ThirdParty Defendants San Francisco Bar Pilots and The San Francisco

Benevolent and Protective Association (collectively, "Bar Pilots")

joined in the motions for partial summary judgment. Docket No.

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 2 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 The term "allision" is used in maritime cases to describe an

accident involving a moving vessel and a stationary object or

vessel. Hochstetler v. Bd. of Pilot Comm'rs for the Bays of San

Francisco, San Pablo and Suisun, 6 Cal. App. 4th 1659, 1661 n.1

(Ct. App. 1992).

3

107 ("Joinder I"). For the following reasons, the Court GRANTS

the motions for partial summary judgment.

II. BACKGROUND

This action stems from the allision of the cargo ship M/V

COSCO BUSAN with the San Francisco-Oakland Bay Bridge on November

7, 2007.2 First Amended Compl. ("FAC"), Docket No. 14, ¶ 22. 

After the allision, a number of civil actions were filed against

Cota, the pilot of the vessel on November 7, 2007. Id. ¶¶ 21, 24. 

Because Continental issued a policy of insurance to the Bar

Pilots, it initially appointed defense counsel for Cota. Id. ¶¶

11, 28. Continental claims to have incurred at least $315,321.31

in legal fees and costs relating to Cota's defense before Regal

Stone, Fleet, and the vessel assumed Cota's defense. Id. ¶¶ 26-

31. Continental filed this lawsuit seeking reimbursement of those

fees and costs. Continental relies primarily on California

Harbors and Navigation Code section 1198, which provides that a

vessel, or its owner or operator, shall either purchase trip

insurance from the pilot, or defend, indemnify and hold harmless

the pilot if an accident occurs due to the pilot's negligence. 

Cal. Harbors & Navigation Code § 1198(c). 

In their Answer, Regal Stone and Fleet's Second Affirmative

Defense states that "section 1198(c) is invalid as it is preempted

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 3 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 4

by federal maritime law." Docket No. 26 ("Answer") ¶ 64. In

their Counterclaim, Cross-Claim and Third-Party Complaint, Regal

Stone and Fleet seek a determination that federal maritime law

preempts section 1198(c), and that they are not required to

defend, indemnify, and hold harmless Cota or the Bar Pilots. 

Docket No. 27 ("Countercl.") ¶¶ 25-29. 

Continental and Cota move for partial summary judgment on the

question of whether section 1198 is preempted by federal maritime

law. Continental's MPSJ at 1; Cota's MPSJ at 1. On September 21,

2009, the Court ordered supplemental briefing on the question of

whether section 1198 applies to Regal Stone and Fleet because the

time charterer hired the pilot. Docket No. 108 ("Order Requiring

Supplemental Briefing"). Continental and Cota filed supplemental

briefs. Docket Nos. 122 ("Continental's Supplemental Br."), 126

("Cota's Supplemental Br."). The Bar Pilots joined in and adopted

the supplemental briefs of Continental and Cota. Docket No. 127

("Joinder II"). Regal Stone and Fleet filed an Opposition. 

Docket No. 130 ("Opp'n"). Continental and Cota submitted Replies. 

Docket Nos. 139 ("Continental's Reply"), 140 ("Cota's Reply"). On

December 17, 2009, the Court found that the vessel hired the

pilot, and therefore section 1198 applies to the owner and

operator of the vessel, Regal Stone and Fleet. Docket No. 146

("Order re: Applicability of Section 1198").

III. LEGAL STANDARD

Partial summary judgment is appropriate when there is no

genuine issue of material fact and the moving party is entitled to

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 4 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5

a determination of a legal issue as a matter of law. Fed. R. Civ.

P. 56. The party moving for summary judgment bears the initial

burden of identifying the absence of a genuine issue of material

fact. Celotex v. Catrett, 477 U.S. 317, 323 (1986). If the

movant meets this burden, then the burden shifts to the non-moving

party to provide evidence and specific facts which establish the

existence of a genuine issue. Anderson v. Liberty Lobby, 477 U.S.

242, 249 (1986). "The evidence of the non-movant is to be

believed, and all justifiable inferences are to be drawn in his

favor." Id. at 255. The standards and procedures for granting

partial summary judgment, also known as summary adjudication, are

the same as those for summary judgment. See California v.

Campbell, 138 F.3d 772, 780 (9th Cir. 1998). A party can move,

under Rule 56, for partial summary judgment as to an affirmative

defense. See United States v. Union Pac. R.R. Co., 565 F. Supp.

2d 1136, 1149 n. 20 (E.D. Cal. 2008).

IV. DISCUSSION

Having determined that the vessel hired Cota, the issue now

before the Court is a purely legal one; namely, whether section

1198 is preempted by federal maritime law. 

A. Section 1198

Under California law, foreign vessels in the Bay of San

Francisco must use a pilot: "Every foreign vessel . . . [in] the

bay[] of San Francisco . . . shall use a pilot or inland pilot

holding a license issued pursuant to this division . . . ." Cal.

Harbors & Navigation Code § 1127(d). Section 1198 is entitled

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 5 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

"Pilotage services; rates and charges; exclusions; insurance

coverage." Section 1198(c) begins by stating that:

Every vessel, owner, operator, or demise or

bareboat charterer hiring a pilot with a state

license for the Bays of San Francisco, San

Pablo, and Suisun shall either defend,

indemnify, and hold harmless pilots pursuant to

paragraph (1), or alternatively, notify pilots

of an intent to pay for trip insurance pursuant

to paragraph (2). If a vessel or its owner,

operator, or demise or bareboat charterer does

not provide written notice pursuant to paragraph

(2) of an intent to exercise the trip insurance

option, then the vessel and its owner, operator,

and demise or bareboat charterer will be deemed

to have elected the obligation to defend,

indemnify, and hold harmless pilots pursuant to

paragraph (1).

Id. § 1198(c). Paragraph 1 states, in part, that:

A vessel subject to this paragraph and its

owner, operator, and demise or bareboat

charterer shall defend, indemnify, and hold

harmless the pilot, any organization of pilots

to which the pilot belongs, and their officers

and employees, with respect to liability arising

from any claim, suit, or action, by whomsoever

asserted, resulting in whole, or in part, from

any act, omission, or negligence of the pilot,

any organization of pilots to which the pilot

belongs, and their officers and employees. 

Id. § 1198(c)(1)(B). Paragraph 2 states, in part, that:

In lieu of paragraph (1), a vessel subject to

this subdivision and its owner, operator, demise

or bareboat charterer, and agent may elect to

notify the pilot, or the organization of pilots

to which the pilot belongs, of intent to pay for

trip insurance, as described in subdivision (b).

If notice of this election is received, in

writing, by the pilot, or the organization of

pilots to which the pilot belongs, at least 24

hours prior to the time pilotage services are

requested, the vessel, and its owner, operator,

demise or bareboat charterer, and agent are not

subject to the requirements of paragraph (1). 

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 6 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7

Id. § 1198(c)(2).

B. Preemption

The Supremacy Clause of Article VI of the Constitution

provides Congress with the power to preempt state law. Preemption

occurs when (A) Congress, in enacting a federal statute, expresses

a clear intent to preempt state law; (B) when there is actual

conflict between federal and state law; (C) where compliance with

both federal and state law is physically impossible; (D) where

there is implicit in federal law a barrier to state regulation;

(E) where Congress has legislated comprehensively, thus occupying

an entire field of regulation and leaving no room for the states

to supplement federal law; or (F) where the state law stands as an

obstacle to the accomplishment and execution of the full

objectives of Congress. Louisiana Pub. Serv. Comm'n v. FCC, 476

U.S. 355, 368-69 (1986).

"[T]he purpose of Congress is the ultimate touchstone in

every pre-emption case." Wyeth v. Levine, 129 S.Ct. 1187, 1194

(2009)(quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)). 

In "all pre-emption cases, and particularly in those in which

Congress has 'legislated . . . in a field which the States have

traditionally occupied,' . . . we 'start with the assumption that

the historic police powers of the States were not to be superseded

by the Federal Act unless that was the clear and manifest purpose

of Congress.'" Wyeth, 129 S.Ct. at 1194-95 (quoting Medtronic,

518 U.S. at 485)(ellipses in Wyeth); see also Rice v. Santa Fe

Elevator Corp., 331 U.S. 218, 230 (1947)). Federal admiralty law

preempts state law only if the state law "contravene[s] any acts

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 7 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 8

of Congress, . . . work[s] any prejudice to the characteristic

features of the maritime law, [] or interfere[s] with its proper

harmony and uniformity in its international and interstate

relations." In re Exxon Valdez, 484 F.3d 1098, 1101 (9th Cir.

2007). 

C. Congress Authorized State Regulation of Pilotage

"Pilotage is the art of navigating ships into and out of

ports or along rivers, bays, harbors and other special waters." 

Interport Pilots Agency, Inc. v. Sammis, 14 F.3d 133, 136 (2nd

Cir. 1994). Historically, Congress has left the regulation of

pilotage in the control of the states. In its very first session,

Congress passed the Lighthouse Act of 1789, which provided that

"all pilots in bays, inlets, rivers, harbors, and ports of the

United States shall continue to be regulated in conformity with

the existing laws of the states . . . ." Anderson v. Pac. Coast

S.S. Co., 225 U.S. 187, 195 (1912)(quoting from Act of Aug. 7,

1789, ch. 9, § 4). 

According to the United States Supreme Court, "[t]his was a

clear and authoritative declaration by the first Congress, that

the nature of this subject is such that until Congress should find

it necessary to exercise its power, it should be left to the

legislation of the states." Id. (citation and internal quotation

marks omitted); see also Kotch v. Bd. of River Port Pilot Comm'rs,

330 U.S. 552, 559 (1947) ("The States have had full power to

regulate pilotage of certain kinds of vessels since 1789 when the

first Congress decided that then existing state pilot laws were

satisfactory and made federal regulation unnecessary."); Soriano

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 8 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 9

v. U.S., 494 F.2d 681, 684 (9th Cir. 1974) (describing regulation

of pilotage as "an area specifically reserved by Congress for 185

years for regulation by the states and acknowledged by the Supreme

Court for more than 120 years to be a subject of peculiarly local

concern.").

In 1983, Congress enacted 46 U.S.C. § 8501, which provides,

in part, that "pilots in the bays, rivers, harbors, and ports of

the United States shall be regulated only in conformity with the

laws of the States." 46 U.S.C. § 8501(a). "Any regulation or

provision violating this section is void." Id. § 8501(e). The

House of Representatives Report emphasized the importance of the

word "only": "Section 8501 establishes the general proposition

that the states regulate pilots in the bays, rivers, harbors, and

ports of the United States, unless otherwise specifically provided

by law. Subsection (a) . . . uses the word 'only' for emphasis on

this point." H.R. Rep. No. 98-338, at 184 (1983), reprinted in

1983 U.S.C.C.A.N. 924, 996. 

Courts have interpreted this statute as an expression of

Congress's intent not to limit the states' power to regulate

pilotage unless otherwise provided by Congress. See Gillis v.

Louisiana, 294 F.3d 755, 761 (5th Cir. 2002). Congress has

preempted state regulation of pilotage only with respect to

vessels on the Great Lakes, 46 U.S.C. § 9302, and American flag

vessels sailing between American ports, 46 U.S.C. § 8502. Sammis,

14 F.3d at 136. Thus, the states have authority over the pilotage

of all American vessels engaged in foreign trade, and all foreign

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 9 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 There is no dispute that the M/V COSCO BUSAN is a foreign

flag vessel. 

10

flag vessels.3 Id. Pursuant to 46 U.S.C. § 8501, California has

the authority to regulate pilotage in the Bay of San Francisco. 

The California legislature exercised that authority when it

enacted section 1198.

D. Section 1198 Is Not Preempted by Federal Maritime Law

Under federal maritime law, the owner of a vessel is not

personally liable for the negligence of a compulsory pilot. 

Homer Ramsdell Transp. Co. v. La Compagnie Generale

Transatlantique, 182 U.S. 406, 416-17 (1901); see also Davenport

v. M/V New Horizon, No. 01-933, 2002 WL 32098289, at *5 (N.D. Cal.

Dec. 18, 2002). The owner of a vessel is not personally liable

because the element of compulsion eliminates the respondeat

superior nexus which would normally serve as a basis for imputing

a pilot's negligence to the shipowner. California v. Italian

Motorship Ilice, 534 F.2d 836, 841 (9th Cir. 1976). However, the

vessel is liable for the tort of a pilot, whether or not the

pilotage is compulsory. The China, 74 U.S. 53, 61-69 (1868).

The Court finds that this limitation on a shipowner's

liability does not preempt section 1198. Generally, in an

admiralty case, "[a]bsent a relevant statute, the general maritime

law, as developed by the judiciary, applies." East River S.S.

Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 864 (1986). 

Here, however, there is a relevant statute, which provides that

pilots "shall be regulated only in conformity with the laws of the

States." 46 U.S.C. § 8501(a)(emphasis added). This Court must

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 10 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 11

"keep strictly within the limits imposed by Congress. Congress

retains superior authority in these matters, and an admiralty

court must be vigilant not to overstep the well-considered

boundaries imposed by federal legislation." Miles v. Apex Marine

Corp., 498 U.S. 19, 27 (1990). Since Congress requires pilotage

to be regulated only in conformity with the laws of the states,

this Court must not overstep that boundary. 

The Court notes that there is some tension between the

general maritime principle that shipowners cannot be held

personally liable for the negligence of compulsory pilots, and

section 1198, which requires shipowners who do not purchase trip

insurance to defend, indemnify, and hold harmless compulsory

pilots. This tension is mitigated somewhat by the fact that

section 1198 provides shipowners with a choice: even though pilots

are compulsory in the Bay of San Francisco, shipowners do not have

to defend, indemnify and hold harmless pilots if they purchase

trip insurance. More importantly, however, federal legislation

provides that pilots shall be regulated only in conformity with

the laws of the states. Therefore, this Court finds that the

general maritime principle at issue here does not preempt section

1198. 

The Court's decision is consistent with the Ninth Circuit's

reasoning in Guangco v. Edward Shipping & Mercantile, S.A., 705

F.2d 360 (9th Cir. 1983). The Ninth Circuit took note of the

general maritime principle that shipowners are not personally

liable for the negligence of compulsory pilots. Id. at 362. 

Despite its awareness of this principle, the Ninth Circuit held

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 11 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 12

that "even where pilotage is compulsory . . . an exculpatory

clause [requiring the shipowner to indemnify the pilot's employer]

is not unconscionable. . . . The clause is fair and reasonable in

the light of the customary business practices of pilotage

companies in Guam and elsewhere throughout the United States." 

Id. at 362-63.

This Court's decision is also supported by the Ninth

Circuit's reasoning in United States v. S.S. President Van Buren,

490 F.2d 504 (9th Cir. 1973). While that case concerned a

noncompulsory pilot, see id. at 507, it also concerned a situation

where vessels had the option of purchasing trip insurance, id. at

509. The Ninth Circuit relied in part on the availability of trip

insurance in determining that tariff provisions exculpating the

pilot from liability were valid and enforceable. Id. Quoting

from a Supreme Court decision enforcing a contractual clause

exculpating tug owners from liability, the Ninth Circuit stated

"[i]t would be unconscionable for petitioner upon occurrence of a

mishap to repudiate the agreement upon which it obtained the

service." Id. (quoting Sun Oil Co. v. Dalzell Towing Co., 287

U.S. 291, 295 (1932)). In S.S. President Van Buren, the Ninth

Circuit found the exculpatory provision valid and enforceable

despite its awareness of the maritime principle that shipowners

are not personally liable for the negligence of a compulsory

pilot. See id. at 506.

In 1983, the District Court of Oregon rejected a challenge to

Oregon's dual-rate pilotage system similar to the challenge

presently before this Court. Olympia Sauna Compania Naviera, S.A.

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 12 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4 Steven M. Crane, attorney for Continental, filed a

Declaration in Support of Continental's MPSJ. Docket No. 92. The

District of Oregon opinion is attached as Exhibit F. Regal Stone

and Fleet filed an evidentiary objection to this opinion. Docket

No. 96 ("Evidentiary Objections") at 3. Citation of an unpublished

district court opinion is not improper, unless the opinion has been

designated as "not for citation." Civ. L. R. 3-4(e). The

objection is OVERRULED. 

13

v. United States, No. 80-699, slip op. (D. Or. 1983) ("Olympia

Sauna").4 In Oregon, by electing not to request trip insurance,

vessels agree not to sue pilots, and they agree to defend,

indemnify and hold them harmless. See Or. Rev. Stat. §§ 776.510-

776.540. District Judge Leavy took note of the maritime rule that

a vessel owner is not personally liable for the negligence of

compulsory pilots, but went on to determine that the shipowner

could not assert any liability against the pilot. Olympia Sauna

at 4-6. Judge Leavy relied, in part, on the Ninth Circuit's

Guangco decision. Id. at 6. These decisions support this Court's

determination that the maritime rule limiting a vessel owner's

personal liability does not preempt section 1198.

California is not alone in limiting the liability of licensed

pilots or providing them indemnity. As noted above, Oregon has a

dual-rate tariff similar to section 1198, which requires vessels

without trip insurance to defend, indemnify and hold pilots

harmless. See Or. Rev. Stat. §§ 776.510-776.540. Other states go

further, by imposing strict limits on a pilot's liability, even

though vessels are not offered trip insurance. In Washington, a

pilot's liability for negligence is limited to $5000 per incident. 

Wash. Rev. Code §88.16.118(1)(a). The same is true in Maine. 38

Me. Rev. Stat. Ann. § 99-A. In Texas, a pilot's liability is

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 13 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5 Kishore Rajvanshy, Managing Director for Fleet, filed a

Declaration in Opposition to the Motions for Partial Summary

Judgment. Docket No. 98.

14

limited to $1000 per incident. Tex. Transp. Code Ann. 

§ 66.083(a)(Houston Pilots), § 67.083(a)(Galveston Pilots), 

§ 69.083(a)(Jefferson and Orange County Pilots), § 70.083(a)(Port

of Corpus Christi Pilots). This Court is not aware of any

decision finding that federal maritime law preempts these

statutes. 

It was Congress's intent to allow the states to regulate

pilotage, and there is no danger that state regulation of pilotage

interferes with federal maritime law's proper harmony and

uniformity. See Cooley v. Bd. of Wardens, 53 U.S. 299, 320

(1851)("[T]he nature of the subject [pilotage] when examined, is

such as to leave no doubt of the superior fitness and propriety,

not to say the absolute necessity, of different systems of

regulation, drawn from local knowledge and experience, and

conformed to local wants."). Accordingly, this Court would appear

to be sailing in safe waters by finding, as a matter of law, that

federal maritime law does not preempt section 1198.

Finally, the Court notes that the insurance commonly carried

by sea-going vessels covers accidents under pilotage. See Kane v.

Hawaiian Indep. Refinery, Inc., 690 F.2d 722, 725 (9th Cir. 1982). 

Here, Fleet is entered with the Steamship Mutual Underwriting

Association (Bermuda) Limited, for protection and indemnity risks

relating to the M/V COSCO BUSAN. Rajvanshy Decl. ¶ 4.5

 Hence,

even though the M/V COSCO BUSAN did not have trip insurance at the

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 14 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 15

time of the November 7, 2007 allision, the vessel still had this

other form of insurance coverage. This coverage further lessens

any tension between section 1198 and the maritime principle that

vessel owners should not be held personally liable for the

negligence of a compulsory pilot. 

E. Section 1198 Is Not Preempted by the Oil Pollution Act

Regal Stone and Fleet contend that section 1198 conflicts

with the Oil Pollution Act ("OPA"), 33 U.S.C. § 2701 et seq.

Opp'n at 21-24. While OPA imposes strict liability for pollution

removal costs and damages on parties responsible for vessels that

discharge oil, see id. § 2702, it also allows those parties to

bring an action for contribution against other parties who are

liable or potentially liable, see id. § 2709. Regal Stone and

Fleet imply that section 1198 is preempted by this law to the

extent that it would immunize Cota and the Bar Pilots from a

contribution claim. Opp'n at 23. However, the OPA contains a

savings clause, which provides that nothing in the act shall

"affect, or be construed or interpreted to affect or modify in any

way the obligations or liabilities of any person under . . . State

law, including common law." 33 U.S.C.A. § 2718(a). Accordingly,

the OPA does not affect or modify section 1198's requirement that

vessel owners and operators who fail to purchase trip insurance

must defend, indemnify and hold harmless pilots. The OPA also

provides that indemnification agreements are not prohibited. 33

U.S.C. § 2710. Furthermore, the OPA concerns pollution removal

costs and damages, while section 1198 concerns the regulation of

pilotage. The Court finds no conflict between the two such that

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 15 of 16
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 In the section of their Opposition discussing the OPA, Regal

Stone and Fleet also suggest that the Comprehensive Environmental

Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§

9601-9675, might preempt section 1198. Opp'n at 23. Plaintiffs

have not met their burden of showing how CERCLA preempts section

1198. The Court notes that CERCLA focuses on hazardous waste

disposal and the costs of cleanup, and, like OPA, CERCLA consists

of a number of savings clauses. See, e.g., Fireman's Fund Ins. Co.

v. City of Lodi, California, 302 F.3d 928, 941 (9th Cir. 2002).

16

the OPA preempts section 1198.6

V. CONCLUSION

For the foregoing reasons, the Court finds that section 1198

is not preempted by federal maritime law. Based on this finding,

the Court grants partial summary judgment in favor of Continental

Insurance Company and against Regal Stone Limited and Fleet

Management Limited on the Second Affirmative Defense in the Answer

filed by Regal Stone Limited and Fleet Management Limited. The

Court also grants partial summary judgment in favor of Continental

Insurance Company, John Joseph Cota, the San Francisco Bar Pilots,

and the San Francisco Bar Pilots Benevolent and Protective

Association, and against Regal Stone Limited and Fleet Management

Limited, on the first claim for relief in the Counterclaim, CrossClaim and Third-Party Complaint filed by Regal Stone Limited and

Fleet Management Limited.

IT IS SO ORDERED.

Dated: January 27, 2010

 

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-02268-SC Document 70 Filed 01/27/10 Page 16 of 16