Opinion ID: 567908
Heading Depth: 1
Heading Rank: 2

Heading: Issues Raised by Offshore Express' Appeal

Text: 9 It is well settled law that, as in most federal actions, in maritime actions the clearly erroneous rule applies to the review of the factual findings of the trial court. Thus we must accept the district court's findings of fact unless, upon reading the record and examining the exhibits, we are convinced that they are demonstrably incorrect. Fed.R.Civ.P. 52(a); Candies Towing Co., Inc. v. M/V B & C ESERMAN, 673 F.2d 91, 93 (5th Cir.1982). 3 To borrow a phrase from former Chief Judge John R. Brown, the findings of the district court in this case float well above that Plimsoll Line. Candies Towing, 673 F.2d at 93. Each of the trial court's findings are well supported by the evidence.
10 The central thrust of Offshore Express' argument to this Court is that United Gas, by failing to prevent its pipeline from becoming an obstruction to navigation, was at fault for this accident and should be held solely liable for it. Part of Offshore Express' position is undoubtedly correct. It certainly is true that United Gas was at fault. It failed to prevent its pipeline from becoming an obstruction to navigation as required by the blanket permit. The district court so found and held United Gas liable for the allision. United Gas has not appealed from that ruling; this Court need not and cannot reexamine it. 11 It certainly is not true, though, that because United Gas was at fault it must be held solely liable for the allision. For Offshore Express to advance such an argument is to overlook one of the most fundamental precepts of admiralty jurisprudence: in 1975 the Supreme Court held, in United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975), that damages in admiralty cases are to be apportioned on the basis of the comparative fault of the parties. Thus, the question before this Court is not whether United Gas was at fault, but whether the district court correctly held that Offshore Express was also at fault for the accident. If so, then the judgment against Offshore Express must be upheld. With the scope of the inquiry firmly fixed before us, we turn to the issues raised by Offshore Express.
12 Offshore Express first contends that the district court committed clear error in finding that Captain Corey negligently conned the M/V GREEN CANYON EXPRESS. Offshore Express' argument is untenable. There was abundant evidence that Captain Corey had acted imprudently in navigating the canal, as the trial court's Finding of Fact # 19 recites: 13 Captain Corey's conning of the vessel in such a manner as to cause the vessel to veer away from the deep water channel was negligent, in view of the fact that he was proceeding underway with markedly restricted visibility, made no use of the vessel's fathometer and/or spotlight, and proceeded at a speed greater than was prudent under the circumstances. 14 735 F.Supp. at 197. Given that Captain Corey knew of the existence and location of the pipeline, 4 there can be no question that Captain Corey's decision to proceed up the canal in the fog without using his spotlight or fathometer, and without posting a lookout in the bow, constituted negligence. 15 In addition, the district court found that Captain Corey was proceeding at a speed greater than was prudent under the circumstances. It is well settled that the use of radar does not relieve a pilot of the obligation to proceed at a safe speed. Standard Oil Co. of California v. S.S. Rotti, 286 F.Supp. 677, 679 (N.D.Cal.1967), aff'd, 398 F.2d 835 (9th Cir.), cert. denied, 393 U.S. 980, 89 S.Ct. 448, 21 L.Ed.2d 441 (1968). Moreover, it is negligent for a vessel to be underway at all if her minimum speed is greater than that which would permit a complete stop within the limits of visibility. Williamson Leasing Co., Inc. v. American Commercial Lines, Inc., 616 F.Supp. 1330, 1340 (E.D.La.1985). Thus, even though the testimony showed that the speed of the M/V GREEN CANYON EXPRESS was dead slow, the district court could properly have found that this speed was imprudent. That is, there are occasions on which the conditions are difficult or unfavorable enough that the only prudent course is to heave to and wait for safe navigation to again become possible. See Williamson, 616 F.Supp. at 1340 n. 16. See also Barrois Bros., Inc. v. Lake Tankers Corp., 188 F.Supp. 300, 303 (E.D.La.1960), aff'd, 286 F.2d 573 (5th Cir.1961) (The [vessel's] speed was ... immoderate.... If she could not proceed at a slower speed in the fog because of the current, then she should not have been underway in the first place.). Given that the district court found that visibility was markedly restricted on the night of the accident, this Court cannot say that it is clearly erroneous to hold that Captain Corey should have heaved to and waited for conditions to improve. 16 Despite the district court's findings, Offshore Express argues that as a matter of maritime law the facts found by the district court do not permit a conclusion that Offshore Express was at fault for the allision. In particular, Offshore Express argues that on a navigable waterway the right to navigation is paramount, and that Captain Corey had a right to use the full width of the canal, including areas outside the dredged channel. Offshore Express contends that by allowing its pipeline to become an obstruction to navigation, United Gas bears sole responsibility for the accident. Once again, Offshore Express is only partly correct. It is certainly true that the right to navigate is paramount, and that those who place objects in, under, or over a waterway must do so in a way that does not interfere with navigation, including navigation outside a dredged channel. E.g., Santa Rosa Island Authority v. F. Rust Smith & Sons, Inc., 303 F.2d 576, 580 (5th Cir.1962) (It is incumbent upon the owner of the bridge that it be so constructed as to readily admit the passage of craft....). Offshore Express is incorrect, however, to assert that this right of navigation is wholly unfettered: when a mariner knows of obstructions to navigation, he must avoid them. E.g., Mid-America Transp. Co. v. Nat'l Marine Serv., Inc., 497 F.2d 776, 779 (8th Cir.1974) (if the object in the channel be known, and nevertheless struck, [the vessel's] negligence may be presumed); AT & T Co. v. Steuart Transp. Co., 1978 A.M.C. 1680, 1690 (D.Md.1977) (where the general location of the [submerged] cables and the navigation channel was known, it was simple negligence to allow the tug and barge to approach so near the shallows). A pilot simply does not have the right to roam at will from bank to bank, running down whatever known hazards may lie in his path. 17 Moreover, when a moving vessel strikes a stationary object outside the channel, she is presumed to be at fault. Delta Transload, Inc. v. M/V NAVIOS COMMANDER, 818 F.2d 445, 449 (5th Cir.1987). As Judge John Minor Wisdom has explained, [t]he presumption of negligence is usually well justified: 18 Such accidents simply do not occur in the ordinary course of things unless the vessel has been mismanaged in some way. It is not sufficient ... to produce witnesses who testify that as soon as the danger became apparent everything possible was done to avoid an accident. The question remains, How then did the collision occur? The answer must be either that, in spite of the testimony of the witnesses, what was done was too little or too late, or if not, then the vessel was at fault for being in a position in which an unavoidable collision would occur. 19 Delta Transload, Inc., 818 F.2d at 449-450 (quoting Patterson Oil Terminals, Inc. v. The Port Covington, 109 F.Supp. 953, 954 (E.D.Pa.1952)). While this presumption generally does not apply to allisions with sunken or hidden objects, knowledge of an otherwise nonvisible object warrants imposition of presumed negligence against those operating the vessel who possessed this knowledge. Id. at 450. Thus, it is appropriate to erect this presumption of fault against Offshore Express, and in light of the facts found by the district court--that Captain Corey was proceeding at an imprudent rate of speed, failed to use his fathometer and spotlight, and negligently caused his vessel to veer away from the ship channel--Offshore Express has not and cannot overcome it. In sum, Offshore Express simply has no room to argue that the district court erred, either on the facts or the law, when it found that Captain Corey negligently conned his vessel. 5
20 Offshore Express next argues that notwithstanding the finding that Captain Corey was negligent, maritime law--in particular, the rule of The Pennsylvania 6 --operates to render United Gas solely responsible for the allision. This argument has no merit. Offshore Express misconstrues the rule of The Pennsylvania; correct application of the rule is in no way inconsistent with the district court's judgment. 21 Named for the case in which it was laid down, The Pennsylvania rule states that when, at the time of a collision, a ship 22 is in actual violation of a statutory rule intended to prevent collisions, it is no more than a reasonable presumption that the fault, if not the sole cause, was at least a contributory cause of the disaster. In such a case, the burden rests upon the ship of showing not merely that her fault might not have been one of the causes, or that it probably was not, but that it could not have been. 23 86 U.S. at 136 (emphasis added). The rule allocates the burden of proof, transfering it to the party in violation of a statute or regulation. If that party is to escape liability for the loss, it must prove not just that its violation probably was not, but in fact could not have been a cause of the collision. See Candies Towing Co., Inc. v. M/V B & C ESERMAN, 673 F.2d 91, 93 (5th Cir.1982) (the rule of The Pennsylvania constitutes an evidentiary rule reversing the burden of proof); Grant Gilmore & Charles L. Black, The Law of Admiralty § 7-5 (2d ed. 1975). 24 Although application of the rule imposes a heavy burden of proof, that is all that it does. It does not determine a party's ultimate share of liability for a loss. Otto Candies, Inc. v. M/V MADELINE D, 721 F.2d 1034, 1036 (5th Cir.1983). Accordingly, this Court has repeatedly held that The Pennsylvania rule has survived the Supreme Court's adoption of a comparative fault scheme for maritime matters. As former Chief Judge Brown has put it, [the] rule still floats, in the wake of U.S. v. Reliable Transfer, which only overruled The Pennsylvania on the point of allocating comparative fault. Allied Chem. Corp. v. Hess Tankship Co., 661 F.2d 1044, 1052 (5th Cir.1981) (citation omitted). See also United States v. Nassau Marine Corp., 778 F.2d 1111, 1116 (5th Cir.1985) (the Rule was not altered by the advent of comparative negligence in admiralty). 25 Although in its original form the rule of The Pennsylvania applied only to collisions between ships, it has been extended in this Circuit to apply to a variety of maritime accidents and to parties other than vessels. E.g., Nassau Marine Corp., 778 F.2d at 1116 (The [Pennsylvania ] Rule does not apply only to collisions.); Candies Towing, 673 F.2d at 93-94. Thus, the rule has been reformulated to apply to any statutory violator who is a party to a maritime accident. Sheridan Transp. Co. v. United States, 834 F.2d 467, 476 (5th Cir.1987) (Sheridan I ), appeal after remand, 897 F.2d 795, 799 (5th Cir.1990) (Sheridan II ). In particular, the rule has been applied not only to ships, but also to those who do not properly mark an object in navigable waters. Gele v. Chevron Oil Co., 574 F.2d 243, 247 (5th Cir.1978). 26 Offshore Express complains on appeal that the district court erred in failing to apply the rule of The Pennsylvania to United Gas. Offshore Express points out that United Gas violated its pipeline permit by failing to prevent the pipeline from becoming an obstruction to navigation and that the district court found that United Gas' failure to keep its pipeline from becoming an obstruction to navigation had contributed to the accident. Thus, Offshore Express concludes that United Gas necessarily could not have carried its burden to prove that its pipeline could not have been a cause of the accident, and therefore must be held 100% liable for the loss. 27 The rule of The Pennsylvania does not produce such a result. As noted above, the rule merely allocates a burden of proof; it does not fix liability. If a party fails to carry the burden imposed on it by the rule, the rule does not require that party to bear 100% of the responsibility for the allision. Liability still must be apportioned according to the comparative fault of the parties, as mandated by the Supreme Court's landmark ruling in United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). The rule of The Pennsylvania concerns only the burden of proof for showing causation; it does not determine ultimate liability for damages. Sheridan I, 834 F.2d at 478. Accordingly, even if it was error for the district court to fail to apply The Pennsylvania rule to United Gas, the error was harmless, as the district court went on to find that United Gas and Offshore Express were equally responsible for the allision and to apportion damages accordingly. See Florida E. Coast Ry. Co. v. Revilo Corp., 637 F.2d 1060, 1067 (5th Cir. Unit B 1981) (affirming judgment in which trial court found statutory violation and applied The Pennsylvania rule, concluding that the violator had not carried its burden and should be held liable for 80% of the damages sustained). 28
29 In Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 309, 48 S.Ct. 134, 135, 72 L.Ed. 290 (1927), Mr. Justice Holmes wrote for the Court that 30 as a general rule, ... a tort to the person or property of one man does not make the tort-feasor liable to another merely because the injured person was under a contract with that other unknown to the doer of the wrong. 31 Despite stiff criticism and several potent challenges, the principal announced by Justice Holmes survives to this day; it is the law in this Circuit that a plaintiff in an admiralty case cannot recover negligently inflicted economic losses where there is no physical damage to any property in which the plaintiff has a proprietary interest. State of Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019, 1020 (5th Cir.1985) (en banc ), cert. denied, 477 U.S. 903, 106 S.Ct. 3271, 91 L.Ed.2d 562 (1986). Offshore Express urged the district court and urges this Court to apply the Fifth Circuit's version of Robins Dry Dock to the facts of this case. Offshore Express argues that Pennzoil had no proprietary interest in the damaged pipeline and that there was no physical damage to the Voisin well. Thus, Offshore Express concludes that Pennzoil's only losses are economic and unrecoverable. 32 Offshore Express' argument has no merit. The rule of Robins Dry Dock was never intended to apply to cases in which the plaintiff has suffered some physical damage to property in which he has a proprietary interest, and M/V TESTBANK did not extend the rule to such cases. Indeed, almost immediately after the Fifth Circuit reaffirmed the rule of Robins Dry Dock in M/V TESTBANK, the Court plainly held that in those cases in which a plaintiff suffers physical damage to some property in which it has a proprietary interest, the rules of Robins Dry Dock and M/V TESTBANK do not apply. Consolidated Aluminum Corp. v. C.F. Bean Corp., 772 F.2d 1217, 1222 (5th Cir.1985), cert. denied, 486 U.S. 1055, 108 S.Ct. 2821, 100 L.Ed.2d 922 (1988). That is, if a plaintiff has a claim for more than simple loss of use of some facility due to the tort of some third party, its claim is not barred by Robins Dry Dock. Id. 33 There is no question here that Pennzoil suffered physical damage to property in which it had a proprietary interest. The district court correctly found that the structural changes in the Voisin well caused by the allision and rupture of the pipeline constituted physical damage to the well. Accordingly, the district court correctly held that Robins Dry Dock did not apply to this case and correctly allowed Pennzoil to recover for the physical damage to the Voisin well. 7 34
35 Offshore Express next contends that it should have been entitled to limit its liability under the maritime Limitation of Liability Act, which allows the owner of a vessel to limit its liability for any loss or injury involving the vessel to the value of the vessel and its freight. 46 U.S.C. § 183(a). 8 As the statute indicates, a party is entitled to limitation only if it is without privity or knowledge of the cause of the loss. Id.; see also Patton-Tully Trans. Co. v. Ratliff, 797 F.2d 206 (5th Cir.1986). In this context, a shipowner has privity if he personally participated in the negligent conduct or brought about the unseaworthy condition. In the Matter of Texaco, Inc., 570 F.Supp. 1272, 1278 (E.D.La.1983). Knowledge, when the shipowner is a corporation, is judged not only by what the corporation's managing officers actually knew, but also by what they should have known with respect to conditions or actions likely to cause the loss. Verdin v. C & B Boat Co., 860 F.2d 150, 156 (5th Cir.1988); Patton-Tully, 797 F.2d at 211. Finally, the burden is on the party seeking limitation to establish that it did not have knowledge or privity of the negligent activity or unseaworthy condition that caused the accident. Patton-Tully, 797 F.2d at 211. 36 Offshore Express has not met that burden here. There was substantial evidence before the district court to show that one Gerald Hoffman, Vice President and General Manager of Offshore Express, knew that masters of Offshore Express vessels operated those vessels in fog and that on occasion accidents had resulted. Hoffman's knowledge of this history of operation in conditions of reduced visibility is precisely the sort of knowledge of shore-based managing officials that vitiates the right to limit. See Tittle v. Aldacosta, 544 F.2d 752, 756 (5th Cir.1977). The district court correctly denied Offshore Express' petition to limit its liability. 37 On the whole, Offshore Express has identified no infirmity in the district court's judgment. The district court properly found 1) that Offshore Express was partially responsible for the allision, due to Captain Corey's negligence, 2) that the rule of Robins Dry Dock did not bar recovery by Pennzoil, and 3) that Offshore Express was not entitled to limit its liability. There is no basis on which to reverse any of these findings or conclusions, and the judgment against Offshore Express must be affirmed. The only remaining questions are those raised by Pennzoil's cross appeal.