### REVISED

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-30876

USINAS SIDERUGICAS DE MINAS GERAS, SA - USIMINAS;

USIMINAS IMPORTACAO E EXPORTACAO, SA - USIMPLEX

Plaintiffs-Appellants,

versus

SCINDIA STEAM NAVIGATION COMPANY, LTD., in personam;

JALAVIHAR M/V, in rem

Defendants-Appellees.

Appeal from the United States District Court

For the Eastern District of Louisiana

July 17, 1997

Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

While executing a routine turning maneuver in the Mississippi,

the JALAVIHAR was grounded, destroying her steering mechanism. The

owner of the JALAVIHAR, Scindia Steam Navigation Company, Ltd.,

declared a general average event and filed the pres ent claim

against the cargo owners, Usinas Siderugicas de Minas Geras, SA and

Usiminas Importacao e Ex p ortacao, SA (hereinafter referred to

collectively as Usiminas), for contribution. The district court

found that a general average event occurred and found for Scindia.2

Usiminas brings this appeal claiming that this judgment was in

error. We AFFIRM the judgment of the district court.3 I.

On March 7, 1994, the JALAVIHAR was docked at the Electro-Coal

facility on the east bank Mississippi River, bow into the current

and starboard side against the dock. After loading some coal owned

by Usiminas, she was to depart the Electro-Coal facility, turn, and

proceed to a nearby anchorage to await Usiminas’ instructions

regarding her nex t loading port. At the time that the JALAVIHAR

was ready to depart the Electro-Coal facility, there was a group of

barges moored on the west bank slightly downstream of the ElectroCoal facility. Another ship was moored slightly downstream on the

east bank which had a crane barge alongside it. The pilot

testified that because of this second ship, the turn would have to

occur some distance from the east bank or else the JALAVIHAR would

be pushed downstream into the second ship. At the time the pilot

commenced the maneuver, visibility was limited and had been reduced

to zero by the time the JALAVIHAR was turning.

The turn was to be executed with the assistance of two tugs,

the SANDRA KAY and the BILLY SLATTEN. The pilot testified that he

told the tugs that initially the SANDRA KAY would be attached by a

line to JALAVIHAR’s port bow and would be pushing the vessel

against the dock, and the BILLY SLATTEN would be on her port stern,

without a line, pushing the JALAVIHAR towards the dock. After the

lines attaching the JALAVIHAR to the dock were cast off, the SANDRA

KAY would pull the JALAVIHAR’s bow away from the dock with the

current keeping her parallel to the dock. While the SANDRA KAY was

pulling the JALAVIHAR away from the dock, the BILLY SLATTEN would4

move to the starboard bow. After the JALAVIHAR was about 200 feet

from the dock, the BILLY SLATTEN would move in between the

JALAVIHAR and the dock and push her away from the dock and the

SANDRA KAY would move back to the port stern to push it towards the

dock, turning the JALAVIHAR around. The pilot also testified that

he informed the master of the maneuver, but the master testified

that he was not told of the specifics of the turning procedure.

As visibility was limited and getting worse, the master posted

the chief officer as lookout on the JALAVIHAR’s bow and put the

duty officer in charge of monitoring the radar. The chief officer

was also in c harge of making sure the crewmembers on the bow

unfastened the lines which attached the JALAVIHAR to the dock and

to the SANDRA KAY. The duty officer was in charge of carrying out

engine orders given by the pilot and entering them in the ship’s

log. The master testified that he also was monitoring the radar,

as well as walking around with the pilot.

All went as planned until the JALAVIHAR began to move away

from the dock. At that time, the pilot radioed the BILLY SLATTEN

and asked the tug whether there were an y lines on the bow. The

captain of the BILLY SLATTEN radioed back that he didn’t know

because he was stand by on the port stern. The pilot radioed back

that he should have been stand by on the starboard bow and that he

should move there immediately. The BILLY SLATTEN complied but in

the time it took to move to the starboard bow, the JA LAVIHAR had

drifted further than anticipated toward the west bank and the

barges.5

Despit e the unexpected drift, the JALAVIHAR continued its

maneuver as planned. The pilot testified that he was aware of the

location of the barges on the west bank and that he knew that the

turn was going to be close but that at all times he thought the

JALAVIHAR would clear the barges. The JALAVIHAR did in fact

contact the barges and shortly thereafter ran aground, destroying

her steering mechanism and necessitating the unloading of the

cargo.

Scindia, the owner of the JALAVIHAR declared the grounding a

general average event , and demanded contribution from Usiminas.

Usiminas refused, and Scindia instituted the present suit. The

district court found that the cause of the accident was a

miscommunication between the pilot of the JALAVIHAR and the captain

of the BILLY SLATTEN. The district court also found that the

voyage of the JALAVIHAR had commenced at the time it left the dock

and therefore any subsequent events did not render it unseaworthy

and that Scindia exercised due diligence to render the JA LAVIHAR

se aworthy before beginning its voyage. The district court also

rejected Usiminas’ assertion that the accident was caused by

Scindia’s fai lure to require the master to discuss the maneuver

with the pilot, post an adequate lookout, monitor the radar

sufficiently, and maintain the anchor in a condition of readiness.

II.

The principle of general average provides that losses for the

common benefit of participants in a maritime venture be shared1 The parties have stipulated that if the accident is declared

a general average event, Usiminas will pay $185,659.67 plus costs

and interest, and if Usiminas prevails, Scindia will pay $208,754

plus costs and interest.

2 The JALAVIHAR was ch artered by Vale do Rio Doce Navegacao

S.A. Docenave and subchartered to Usiminas. The “New Jason Clause”

was included in the charter agreement between Docenave and Scindia

and incorporated into the subcharter between Docenave and Usiminas.

The clause reads in part:

In the event of accident, danger, damage or disaster before or

after commencement of the voyage, resulting from any cause

whatsoever whether due to negligence or not, for which or for

the consequence of which, the Owner is not responsible by

statute, contract, or otherwise, the goods, shippers,

c onsignees or owners of the goods shall contribute with the

carrier in general average to the payment of any sacrifices,

losses or expenses of a general average nature that may be

made or incurred in respect of the goods.

6 ratably by all who participate in the venture. 1 P acific Employers

Insurance Coverage v. M/V Capt. W.D. Cargill

, 751 F.2d 801, 803

(5th Cir.), cert. denied , 474 U.S. 909 (1985). A vessel owner at

fault is not able to collect a general average contribution from

the cargo owner. Gilmore & Black, The Law of Admiralty 266 (2d ed.

1977).

The contract between Usiminas and Scindia, however, included

a “New Jason Clause,” which requires general average contribution

even if the carrier is negligent unless the carrier is found liable

under the Carriage of Goods by Sea Act

. 2 COGSA provides immunity

to a carrier where the damage was caused by an error in navigation

or management, but not for damage caused by unseaworthiness unless

the carrier exercised due diligence to prepare the vessel for its

voyage. Once a carrier has shown that the accident was caused by

an error in navigation or management, it is entitled to general7

average unless the cargo owner shows that the vessel was

unseaworthy and that the unseaworthy con dition was a concurrent

cause of the a ccident. Once unseaworthiness and causation have

been established, the burden shifts back to the carrier to

demonstrate the exercise of due diligence in preparing the vessel

for departure. D eutsche Shell Tanker Gesellschaft v. Placid

Refining Co. , 993 F.2d 466 (5th Cir. 1993).

Usiminas challenges th e district court’s holding on three

grounds. First, Usiminas claims that the district court applied

the wrong burden of proof structure and instead it should have

applied the rule of The Pennsylvania

, 86 U.S. 125 (1873). Second,

Usiminas claims that any error in navigation that causes damage to

a vessel prior to the commencement of a voyage should be considered

a lack of due diligence and therefore the vessel owner is not

entitled to general average. Third, Usiminas claims that the

district court erred in finding that none of the alleged

unseaworthy conditions caused the grounding of the JALAVIHAR. We

consider these arguments in turn.

A.

Under the rule of The Pennsylvania , a vessel in violation of

a statute bears the burden of showing not only that the violation

did not cause the damage, it could not have. We decline to apply

the rule of The Pennsylvania in this case, where COGSA clearly

provides the burden of proof structure.

The Pennsylv ania provides a burden of proof structure for

c ausation in maritime incidents. In C alifornia & Hawaiian Su gar8

Co. v. Columbia S.S. Co., Inc. , 391 F.Supp. 894 (E.D. La. 1972),

affd.

, 510 F.2d 542 (5th Cir. 1975), however, the district court

held that the rule of The Pennsylvania does not apply where COGSA

pro vides the burden of proof structure. I d. at 898; see also

Director General of India Supply Mission v. The S.S. Maru

, 459 F.2d

1370, 1375 (2d Cir. 1972)(rejecting the rule of T he Pennsylvania

where COGSA provides the burden of proof), cert. denied , 409 U.S.

1115 (1973). We affirmed that decision under the burden of proof

in COGSA. We decline to deviate from the holding in California &

Hawaiian Sugar Co. in this case and allocate the burdens of proof

in this case according to the scheme set out in COGSA.

B.

The district court found that Scindia had established that the

accident was caused by navigational or managemental error, an

excepted cause under COGSA, which therefore created a general

average event. The district court then turned to Usiminas’

argument that the accident was also caused by the unseaworthiness

of the JALAVIHA R. Because a vessel owner’s duty to provide a

seaworthy vessel only applies prior to the commencement of the

voyage, the district court addressed the question of whether the

voyage had begun. The district court found that the voyage had

commenced at the time the vessel left the dock. Further, the

d istrict court held that even if the unseaworthy conditions

proffered by Usiminas caused the accident, that Scindia carried its

burden of showing due diligence prior to the voyage.9

Usiminas asserts that the district court erred in finding that

Scindia had proven navigation al or managemental error. Usiminas

claims that the voyage had not commenced and that navigational or

managemental errors that occur before the commencem ent are best

viewed as a failure of the carrier to exercise due diligence.

Under this vi ew, COGSA would only except navigational or

managemental errors that occur after the voyage has commenced.

We see no reason to restrict the navigational error exception

to errors occurring after the commencement of a voyage. We

therefore agree with Scindia that COGSA excepts navigational errors

regardless of whether they occur before or after a voyage commences

and do not reach the question of whether a voyage had commenced in

this case. Usiminas’ argument against this proposition relies upon

language from this court’s opinion in Louis Dreyfus Corp. v. 27,946

Long Tons of Corn

, 830 F.2d 1321 (5th Cir. 1987). The shipbuilder

who constructed the Louis Dreyfus improperly installed a valve

position indicator system. The system had two devices to indicate

whether the valve was open or closed: a light and a mark on the

shaft that actually opens and closes the valve. Incorrect readings

from this faulty system caused an engineer to flood the engine room

which caused damage while the vessel was still docked. The

district court found that the improper indica tor system rendered

the Louis Dreyfus unseaworthy and that the ship owner had not

exercised due diligence to discover the problem by detecting it

during construction, docking, or at the time the engineer flooded

the engine room. On appeal, the ship’s owner claimed that the3 Similarly, the o ther case relied upon by Usiminas for the

propositi on that error that occurs before the commencement of a

voyage is unexcepted error considered an error in management, not

an error in navigation. S ee Amer ican Mail Line Ltd. v. United

States , 377 F.Supp. 657 (W.D. Wash. 1974).

10 eng ineer’s negligence in flooding the engine room resulted from

managemental error and was therefore excepted under COGSA.

The Louis Dreyfus court rejected this argument, citing

International Navigation Co. v. Farr & Bailey Mfg. Co.

, 181 U.S.

218, 226 (1901), and determined that “[t]he word ‘management’ is

not used without limitation, and is not, therefore applicable in a

general sense as well before as after sailing.” Based on this

principle, the Louis Dreyfus court held that “[b]ecause the

critical error of the engineer in this case occurred before the

commencement of the voyage, [the ship owner] is not shielded from

liability by § 1304(2)(a).” I d. at 1328. Usiminas urges that this

language in Louis Dreyfus means that any error in management or

navigation that occurs before the commencement of a voyage is not

excepted error under COGSA.

We interpret Louis Dreyfus to stand for the proposition that

a failure of the ship ow ner and its employees to detect a

manufacturing flaw, if it occurs befo re the commencement of a

voyage, is best viewed as a failure to exercise due diligence, and

n ot an error in management. There is a fine line between actions

that constitute errors in management and inaction that constitutes

a lack of due diligence and the Louis Dreyfus court found that the

timing of the engineer’s action best qualified it as a lack of due

diligence. 3 Indeed, the Supreme Court case relied upon by the11

Louis Dreyfus court only considered managemental error oc curring

prior to the commencement of a voyage. I nternational Navigation

Co.

, 181 U.S. at 226. In contrast, this case presents the question

of whether an error in navigation which occurs when a vessel is

shifting from a dock to a temporary anchorage is an excepted cause

under COGSA.

Scindia claims that this court should look to the prior case

of Mississippi Shipping Co. v. Zander

, 270 F.2d 345 (5th Cir.

1959), vacated as moot , 273 F.2d 618 (5th Cir. 1960), in deciding

whether the district court could find navigational error occurred

prior to the commencement of the voyage. The vessel in M ississippi

Shipping

, while departing, hit the dock it was attached to and

developed a hole in its hull. The hole was not discovered until

two ports later, when the crew found that water had destroyed some

of the vessel’s cargo. The cargo owners in M ississippi Shipping

conceded that the hole in the vessel was caused by negligent

navigation of the vessel, an excepted cause. However, they argued

that a concurrent cause of th e cargo damage was the ship owner’s

failure to exercise due diligence to discover and repair the hole

before commencing the voyage. The ship owner’s duty to exercise

due diligence only applies prior to the commencement of a voyage.

On appeal, therefore, the issue had been distilled to whether the

voyage had commenced at the time the ship hit the dock. The court

found that the voyage had commenced and that therefore any failure

to discover and fix the hole could not be characterized as a lack

of due diligence.12

Prior to its discussion of the commencement of the voyage, the

Mississippi Shipping court noted that both parties had agreed that

the hole was caused by negligence in the navigation of the vessel.

The parties had both conceded that, “unlike the former days of the

Harter Act when its Section 3 error in management exception was

confined to events occurring after the commencement of the voyage,

Cogsa’s Section 4(2)(a) is now unconditional both as to due

diligence and point in time.” Id. at 348 (citations

omitted)(citing Isbrandts en Co. v. Federal Insurance Co. , 113 F.

Supp. 357 (S.D.N.Y. 1952), affd. per curiam

, 205 F.2d 679 (2d Cir.

1953), cert. denied

, 346 U.S. 866 (1953)). The M ississippi

Shipping court then went on to consider the result of the case if

the cargo had been immediately damaged by the inrush of water, and

noted that “the Section 4 defense would have been absolute whether

the ship was deemed to be on her voyage, making ready for her

voyage, or simply undocking preparatory to commencing her voyage.”

In other words, the Mississippi Shipping court expressed an opinion

on the resolution of the issue presently before this court.

Mississippi Shipping ’s consideration of the issues presented

here is dicta, however, we find its reasoning persuasive and adopt

its approach and resolution to the present issue. Usiminas seeks

to have this court declare that any navigational error that occurs

prior to the comm encement of a voyage results from a lack of due

diligence to make a ship seaworth y. COGSA’s exception for

navigational or managemental error, however, is not restricted to

navigational errors occurring after the commencement of a voyage.13

The plain language of the statute excepts the carrier for liability

from damage caused by “[a]ct, neglect, or default of the master,

mariner, pilot, or the servants of the carrier in the navigation or

in the management of the ship.” 46 U.S.C. § 1304(2)(a).

The Mississippi Shipping court used the example of immediate

damage from navigational error to contrast the problem that arises

when a vessel has a latent defect prior to the commencement of a

voyage. That court was faced with the latter question, which it

addressed by finding that the voyage had commenced at the time the

defect was incurred and therefore the failure to detect and repair

the defect could not be attributed to a lack of due diligence. The

court in Louis Dreyfus directly faced the issue of whether a

failure to detect a latent defect is an e rror in management or a

failure to exercise due diligence. The Louis Dreyfus court found

that failure to detect a latent defect is best characterized as a

lack of due diligence. This is not the situation we are faced with

here. Damage from the navigational error was immediate and no time

for discovery lapsed. Therefore, the damage to the vessel was not

c aused by a failure to detect the damage but by the navigational

error itself.

The only court to have ruled on the issue of whether

navigational error prior to the commencement of a voyage is

excepted error was the court in Isbrandtsen Co. v. Federal Ins.

Co.

, 113 F.Supp. 357 (S.D.N.Y. 1952), affd. per curiam

, 205 F.2d

679 (2d Cir. 1953 )

, cert. denied

, 346 U.S. 866 (1953). In

Isbrandtsen , the vessel had fully loaded and moved to a temporary14

anchorage before departing the port. While moving, the vessel

stranded and had to be refloa ted and repaired. The cargo owners

a dmitted that the stranding was caused by navigational error but

argued that the voyage had not commenced and therefore the vessel

owner could not take advantage of the navigational error exception

to COGSA. The I sbrandtsen court rejected thi s argument, stating

that “[t]he excep tion of the carrier and ship for loss or damage

arising from negligence or default of the master, mariner, pilot,

or servant of the carrier in the navigation or management of the

ship is unconditional in [COGSA].” I sbrandtsen

, 113 F.Supp. at

358.

We agree with Isbrandtsen an d M ississippi Shipping that

nav igational error that occurs prior to the commencement of a

voyage is excepted under 46 U.S.C. § 1304(2)(a). Any error by the

pilot, therefore, was properly construed by the district court as

navigational error. This court has noted that responsibilities of

a pilot are broad and encompass, “the command and navigation of the

ship.” A vondale Ind. v. International Marine Carriers

, 15 F.3d 489

(5th Cir. 1994). We therefore find that the district court in this

c ase did not err in finding that Scindia bore its burde n of

establishing navigational error.

C.

Once the carrier has established navigational or managemental

error as a cause of the accident, the burden shifts t o the cargo

owner to prove that a concurrent cause of th e accident was an

unseaworthy c ondition. The carrier will then be afforded an4 On appeal, Usiminas has dropped its contention th at the

JALAVIHAR was unseaworthy because her anchor was not ready to be

dropped. The district court found that the order to drop anchor

occurred after the ship had grounded and Usiminas has not

challenged this factual finding.

15 opportunity to show that it exercised due diligence in pr eparing

the vessel for its voyage. In this case, the district court found

that the ship was seaworthy when it left the dock and that even if

there was an unseaworthy condition, it was not a concurrent cause

of the grounding and Scindia exercised due diligence in preparing

the ship for its journey. Therefore, Usiminas may only prevail on

appeal by proving that the district court erred in finding that

Scindia exercised due diligence to make the JALAVIHAR seaworthy and

that an unseaworthy condition was a concurrent cause of the

grounding.

The district court determined that no unseaworthy conditions

exist ed because the voyage had commenced, however, it also found

that none of the conditions asserted by Usiminas as evidence of

unseaworthiness were causally related to the grounding. Because we

uphold the district court’s finding that the alle ged unseaworthy

conditions did not contribute to the grounding, we decline to reach

the issue of whether the voyage had commenced. Usiminas claims

that the JALAVIHAR was unseaworthy in three respects: 1) the

posted lookout had duties in addition to lookout and therefore was

not a competent lookout; 2) there was not a dedicated radar

monitor; and 3) Scindia company policy does not require the master

to discuss routine turning maneuvers with the pilot. 416

Usiminas initially argued that the master’s failure to discuss

the maneuver with the pilot was an unseaworthy condition which

caused the grounding. Scindia, however, correctly states that in

Avondale Ind. v. International Marine Carriers , 15 F.3d 489 (5th

Cir. 1994), a panel of this court found that the master’s failure

to adequately discuss the maneuver constitute d negligence on the

part of the maste r. Any negligence of the master concerning the

movement of t he vessel would be considered a navigational or

managemental error, not an unseaworthy condition. Usiminas’

response to this argument is that Scindia’s lack of a company

policy requiring the master to discuss routine maneuvers with the

pilot constitutes an unseaworthy condition. First, however,

Usiminas must show that the district court was incorrect in

rejecting a failure to discuss as a cause of the grounding of the

JALAVIHAR.

The distr ict court found that in the time it took the BILLY

SLATTEN to sh ift its position, the JALAVIHAR drifted too far

towards the west bank to facilitate the turn and therefore the

accident was caused by a miscommunication between the pilot and the

BILLY SLATTEN. Usiminas claims that the master was aware of the

actual po sition of the BILLY SLATTEN at all times and that if he

was aware of the intended position of the BILLY SLATTEN, he would

have been able to inform the pilot that it was out of position.

The pilot testified that he discussed the position of the tugs with

the master. The master testified that he did not discuss the

position of the tugs with the pilot before the maneuver, however,17

he did testify that at the time of the maneuver he was aware that

the BILLY SLATTEN should have been stand by at the starboard bow.

Under these circumstances, the district court did not err in

finding that Scindia’s lack of a policy requiring the master to

discuss routine maneuvers with the pilot caused the accident. At

the critical moment, the master was aware of the intended position

of the tugs and that the BILLY SLATTEN was improperly positioned.

Prior discussion would have given him no more information than he

had at the crucial moment.

Usiminas has also not shown that the district court erred in

finding that the lack of a dedicated lookout and radar monitor were

concurrent causes of the accident. The district court found that

at all times the pilot was aware of the position of the barges and

that he thought the turn was going to be successful. His opinion

was seconded by the captain of the BILLY SLATTEN. Radar and visual

observation would have given him no more useful information than he

already had. As we uphold the district court’s findings that none

of the conditions that allegedly rendered the JALAVIHAR unseaworthy

were concurrent causes of the gro unding, we need not address

Usiminas’ contention that the district court erred in finding that

Scindia exercised due diligence in preparing the JALAVIHAR for her

voyage.

III.

For the foregoing reasons, we fin d that the district court

correctly found that the damage to the JALAVIHAR was caused by an

excepted COGSA error. Scindia may therefore recover in general18

average pursuant to the New Jason clause in its contract with

Usiminas. The judgment of the district court is affirmed.

AFFIRMED.