Opinion ID: 10023
Heading Depth: 2
Heading Rank: 2

Heading: Liability of SANTAY for Interest on Damages Attributable to Commission

Text: 15 The SANTAY interests have lodged a cross-appeal in which they advance two arguments as to why they should not be liable for prejudgment interest on that portion of the damages attributable to the Commission: (1) prejudgment interest on those damages is not an element of damages to which the BARO interests are entitled because the Commission's sovereign immunity has not been waived as to prejudgment interest; and (2) the fault attributable to the Commission pilot at the helm of the PROBO BARO is more properly attributed to the PROBO interests than the SANTAY interests under principles of maritime law and equity. 16 The SANTAY interests, relying on authority for the proposition that interest is a separate element of damages for purposes of the sovereign immunity analysis, 4 argue that therefore prejudgment interest is not an element of damages to which the BARO interests are entitled as Congress has not waived the Commission's immunity for such interest. 17 We believe that this argument elides an essential distinction between the elements of the plaintiff's damages and the sovereign's immunity from liability. While the sovereign may not be liable for such interest absent a waiver of sovereign immunity, the interest remains an element of the plaintiff's damages necessary to make the plaintiff whole. See City of Milwaukee, --- U.S. at ----, 115 S.Ct. at 2095 (The essential rationale for awarding prejudgment interest is to ensure that an injured party is fully compensated for its loss.). The argument advanced by the SANTAY interests requires the logical leap from the proposition that the sovereign may not be held liable for prejudgment interest to the proposition that no party, even a joint tortfeasor, can be liable for such interest, an argument rejected by this Court in Transorient Navigators Co., S.A. v. M/S SOUTHWIND, 788 F.2d 288 (5th Cir.1986). 18 In Transorient Navigators, a maritime collision case, 80% of the fault was apportioned to the pilot of the SOUTHWIND and 20% to the United States Army Corps of Engineers, while no fault was assessed against Transorient's vessel, the ASTROS. Although the United States' liability for interest was statutorily limited by the Suits in Admiralty Act, we held that the district court had erred in holding that Transorient could not recover interest on the full amount of damages from the SOUTHWIND as a joint tortfeasor. 19 The SANTAY interests attempt to distinguish Transorient Navigators in certain respects which we find to be lacking in merit. It is first argued that Transorient Navigators is distinguishable because the Suits in Admiralty Act specifically allowed the award of interest against the United States, thereby rendering interest an element of damages, while there is no such waiver of immunity in the present case. The flaw in this argument lies in the fact that in Transorient Navigators we held that while interest recoverable from the United States was statutorily limited to 4% annually, the balance of interest owing on the full amount of damages was recoverable from the SOUTHWIND. Under the argument advanced by the SANTAY interests, the statutory bar against recovering the remaining interest from the United States would mean that such interest was simply not an element of damages, and therefore not recoverable from any party. 20 The second basis offered for distinguishing Transorient Navigators is that no fault was assessed against Transorient while the magistrate judge found the PROBO BARO to be 10% at fault in the present case. Thus it is argued that Transorient Navigators stands only for the proposition that an innocent party is entitled to full recovery. The Supreme Court rejected just such a rationale in City of Milwaukee in response to Milwaukee's argument that it was inequitable to award a large sum in prejudgment interest against the city when the owner of the vessel had been adjudged 96% responsible for the damage noting: 21 [A]ny unfairness is illusory, because the relative fault of the parties has already been taken into consideration in calculating the amount of the loss for which the City is responsible.... Thus, in this case, before prejudgment interest even entered the picture, the total amount of respondents' recovery had already been reduced by two-thirds because of National Gypsum's own negligence.... The City is merely required to compensate the owner for the loss for which the City is responsible. City of Milwaukee, --- U.S. at ----, 115 S.Ct. at 2097. 22 Therefore, the fact that the PROBO BARO was partially at fault in the present case is by itself of no consequence to the award of prejudgment interest. 23 However, another principle of maritime law relied upon in Transorient Navigators provides the relief which the SANTAY interests seek under their second ground of attack on the award of prejudgment interest as to the damages assessed against the Commission. In Transorient Navigators, we endorsed the district court's holding that the negligence attributable to the compulsory pilot at the helm of the vessel at the time of the collision was properly imputed to the vessel. Transorient Navigators, 788 F.2d at 291; see also Avondale Ind. v. Intern. Marine Carriers, 15 F.3d 489, 492-93 (5th Cir.1994). The lineage of this rule in American jurisprudence, often referred to as the compulsory pilot defense, can be traced back to decisions such as The CHINA, 74 U.S. (7 Wall) 53, 64, 19 L.Ed. 67 (1868) and Homer Ramsdell Transp. Co. v. La Compagnie Generale Transatlantique, 182 U.S. 406, 21 S.Ct. 831, 45 L.Ed. 1155 (1901). The rule may be generally stated as being that the vessel itself is liable in rem for a maritime collision caused by the fault of its compulsory pilot; if the pilot alone was at fault, the shipowner will not be liable in personam; however, if the negligence of the master or crew contributed to the collision, then in addition to the vessel's liability in rem the shipowner also will face in personam liability. 5 24 Here, the collision was solely attributable to the two vessels involved, the PROBO BARO and the ISLA SANTAY, and as between them the PROBO BARO was 30%, not 10%, at fault. Given that the 20% of the fault apportioned to the Commission is properly imputable to the PROBO BARO, the SANTAY interests ought not in equity be held accountable for interest on that portion of the damages apportioned to the Commission. 6 See Reeled Tubing, 794 F.2d at 1026 (peculiar circumstances may be found where some equitable doctrine cautions against the award); Pickle v. International Oilfield Divers, Inc., 791 F.2d 1237, 1241 (5th Cir.1986) (same), cert. denied, 479 U.S. 1059, 107 S.Ct. 939, 93 L.Ed.2d 989 (1987).