Court Opinion

ID: 195558
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:42:36+00
Date Added: 2024-06-11T09:27:35.601432
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August 23, 1994   UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 94-1059

            IN RE BALLARD SHIPPING COMPANY, ETC.,

                     Plaintiff, Appellee,

                              v.

                   BEACH SHELLFISH, ET AL.,

                    Claimants, Appellants.

                                         

                         ERRATA SHEET

   Block  quote on  page 5:   line  3, change  "tort-feasor" to
"tortfeasor".    On  line 5,  add  a  comma  between "other"  and
"unknown".

   Page 5, 3 lines below block quote:  "MT Fadi B" should be MT
                                                               
FADI B".
    

   Page 8, lines 2  and 3 down:  change cite to  "See R.I. Gen.
                                                     
Laws    46-12.3-2, 46-12.3-3."

   Page 13, 5th line down:  change  cite to "State of Louisiana
                                                               
ex rel.  Guste v. M/V  Testbank, 752  F.2d 1019,  1022 (5th  Cir.
                             
1985) (en banc), cert. denied, 477 U.S. 903 (1986)."
                           

   Page  16, second to last  line of second  paragraph:  change
"Id." to "Id."
           

   Page  18,  footnote 5,  5th line  up:   change  period after
"Fireman's Fund Ins. Co.." to a comma.
                      

   Page  20, footnote 20, second  to last line:   "Rule" should
not be underlined.

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 94-1059

            IN RE BALLARD SHIPPING COMPANY, ETC.,

                     Plaintiff, Appellee,

                              v.

                   BEACH SHELLFISH, ET AL.,

                    Claimants, Appellants.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

               FOR THE DISTRICT OF RHODE ISLAND

        [Hon. Ronald R. Lagueux, U.S. District Judge]
                                                    

                                         

                            Before

                     Selya, Circuit Judge,
                                         

                Bownes, Senior Circuit Judge,
                                            

                  and Boudin, Circuit Judge.
                                           

                                         

Thomas  M. Bond  with whom  David  B.  Kaplan and  The Kaplan/Bond
                                                                  
Group were on brief for appellants.
 
John J. Finn with whom Thomas H. Walsh, Jr., Marianne Meacham and
                                                             
Bingham, Dana & Gould were on brief for appellee.
                 

                                         

                       August 18, 1994
                                         

     BOUDIN,  Circuit  Judge.    This   appeal  presents  the
                            

question  whether federal maritime  law preempts Rhode Island

legislation  affording expanded  state-law  remedies for  oil

pollution  damage.   In an able  opinion, the  district court

held that the remedies were preempted.  Discerning the law in

this area is far from easy;  one might tack a sailboat into a

fog bank  with more  confidence.  Yet  guided in  part by  an

important Supreme Court decision rendered  after the district

court's decision, we are  constrained to reverse in part  and

to remand for further proceedings.

     The basic facts of the case are not in dispute.  On June

23,  1989,  the M/V  World Prodigy,  an  oil tanker  owned by

Ballard Shipping Co., ran  aground in Narragansett Bay, Rhode

Island, spilling over 300,000 gallons of heating oil into the

bay.    The wreck  occurred when  the  ship strayed  from the

designated  shipping channel  and collided  with a  rock near

Brenton Reef, about a  mile south of Newport at the  mouth of

the bay.  The oil slick prompted the State of Rhode Island to

close Narragansett  Bay to all shellfishing  activities for a

period of two weeks during and after cleanup operations.

     State authorities  charged the captain of  the ship with

entering  the bay without a local pilot on board in violation

of  state law.   Both  the captain  and Ballard  also pleaded

guilty to criminal violations  of the Federal Water Pollution

Control Act, see 33 U.S.C.    1319(c).  The captain and owner
                

                             -2-

were fined a total of $30,500 and $500,000, respectively.  In

addition, Ballard agreed to  pay $3.9 million in compensation

for  federal cleanup  costs, $4.7  million for  state cleanup

costs and damage to natural resources, $500,000 of which  was

to be  available to  compensate individuals, and  $550,000 to

settle claims for lost wages by local shellfishermen.

     A  number of  claimants  filed suit  against Ballard  in

Rhode  Island.  Ballard  responded on  December 22,  1989, by

bringing  a   petition   in  admiralty   for  limitation   or

exoneration from liability.   46 U.S.C.   185.   "[T]he court

of  admiralty  in  [a  limitation  of  liability]  proceeding

acquires the right to marshal all claims, whether of strictly

admiralty origin  or not, and to  give effect to  them by the

apportionment of the res and  by judgment in personam against
                                                     

the owner, so far as the court may decree." Just v. Chambers,
                                                            

312  U.S.  383, 386  (1941).   In  the present  case, several

claimants reasserted their claims in the admiralty action.

     The  claimants in  the  present appeal  are  a group  of

shellfish dealers who allege  severe economic losses  arising

from the  two-week hiatus  in shellfishing  activities, which

suspended  their operations  during the  busiest time  of the

shellfishing  season.    They  alleged negligence  under  the

general maritime law and  the common law of Rhode  Island, as

well as a  claim for  economic losses pursuant  to the  Rhode

Island  Environmental Injury Compensation Act, R.I. Gen. Laws

                             -3-

ch. 46-12.3 et seq. ("the Compensation Act").
                   

     On June 17, 1992, Ballard moved to dismiss the shellfish

dealers' claims on the basis  of the Supreme Court's decision

in  Robins  Dry Dock  &  Repair Co.  v.  Flint, 275  U.S. 303
                                              

(1927),  which  held  that compensation  for  economic losses

standing  alone  is  unavailable  in admiralty  cases.    The

district  court  granted  the  motion,  holding  that  Robins
                                                             

preempted the contrary provisions of the state's Compensation

Act, which expressly provides for recovery of purely economic

losses arising from an oil spill.  In re Complaint of Ballard
                                                             

Shipping  Co., 810 F. Supp.  359 (D.R.I. 1993).   The dealers
             

now appeal from that dismissal.

     We first  address the  federal claims brought  under the

general maritime  law.   The Constitution grants  the federal

courts authority to hear "all Cases of admiralty and maritime

Jurisdiction."  U.S. Const. Art. III,   2.  The parties agree

that  the  dealers' federal  claims  fall  within this  group

because the  spill occurred on navigable waters and arose out

of  traditional  maritime  activity.     See  Executive   Jet
                                                             

Aviation, Inc.  v. City  of Cleveland, 409  U.S. 249  (1972).
                                     

Admiralty  jurisdiction  brings with  it  a  body of  federal

jurisprudence, largely uncodified,   known  as maritime  law.

See East River  S.S. Corp. v. Transamerica  Delaval, 476 U.S.
                                                   

858, 864 (1985).

     The  dealers assert  that their businesses  were injured

                             -4-

when the  World Prodigy spill prevented  local fishermen from

harvesting   shellfish  in   Narragansett  Bay   and  thereby

precluded  the  dealers  from  purchasing  the  shellfish and

reselling them to restaurants and other buyers.  The dealers'

maritime-law  claims  are  thus purely  for  economic losses,

unaccompanied  by any  physical injury  to their  property or

person.  Those  federal claims, as  the district court  held,

are  squarely foreclosed by Robins  Dry Dock &  Repair Co. v.
                                                          

Flint, 275 U.S. 303 (1927).
     

     In  Robins,  the charterer  of  a vessel  sued  a repair
               

company that negligently  damaged the vessel while it  was in

dry  dock,  alleging  that  the resulting  delay  caused  the

charterer  to  lose  profits  that it  would  have  otherwise

derived from the  use of the ship.  Justice  Holmes wrote for

the Court in holding that the suit could not be maintained:

     [N]o authority  need be  cited to  show that, as  a
     general rule,  at least,  a tort  to the  person or
     property of  one man  does not make  the tortfeasor
     liable to another merely because the injured person
     was under  a contract  with that other,  unknown to
     the doer  of the wrong.  . .  .  The  law does  not
     spread its protection so far.

275 U.S. at 309.

     Justice  Holmes's  pronouncement  could have  been  read

merely  as negating  a claim  of negligent  interference with

contract.  See Getty Refining and Marketing Co. v. MT FADI B,
                                                            

766 F.2d 829,  831-32 (3d  Cir. 1985).   Instead, Robins  has
                                                        

generally  been  taken to  establish  the  broader rule  that

                             -5-

purely economic losses arising from a tort, but unaccompanied

by physical injury to  anything in which the plaintiff  has a

proprietary  interest,  are  not  compensable  under  federal

maritime law.  See, e.g., State of Louisiana ex rel. Guste v.
                                                          

M/V  Testbank, 752 F.2d 1019, 1022 (5th Cir. 1985) (en banc),
             

cert.  denied, 477 U.S. 903 (1986).  Our circuit adopted this
             

broader  reading in Barber Lines  A/S v. M/V  Donau Maru, 764
                                                        

F.2d  50, 51-52  (1st  Cir. 1985),  and,  in any  event,  the

secondary nature  of the economic injury  here--which is akin

to interference  with contract--would likely  bring this case

within even a narrow reading of Robins.
                                      

     Several courts have recognized exceptions to Robins, but
                                                        

none  of  the familiar  examples apply  in  this case.1   The

district court so held, and the dealers do not challenge that

conclusion on appeal.  Accordingly, we agree that plaintiffs'

federal claims  for purely economic losses  under the general

maritime  law are  barred.   The appeal  thus turns  upon the

extent to  which Robins  bars the  states  from permitting  a
                       

different result under state law pursuant  to the exercise of
                            

the state's police powers.

     Although  the Judiciary  Act of  1789 vested  "exclusive

                    

     1The  classic  exceptions   include  claims  brought  by
fishermen as "favorites  of admiralty," see Union  Oil Co. v.
                                                          
Oppen,  501 F.2d 558 (9th Cir. 1974), and claims for economic
     
losses that are intentionally  caused, see Dick Meyers Towing
                                                             
Service, Inc. v. United States, 577 F.2d 1023, 1025 (5th Cir.
                              
1978), cert. denied, 440 U.S. 908 (1979).
                   

                             -6-

original  cognizance of  all  civil causes  of admiralty  and

maritime jurisdiction" in the federal courts, the act added a

provision  "saving to suitors, in  all cases, the  right of a

common  law remedy, where the common law is competent to give

it." 1 Stat.  76-77.  The modern version of the statute saves

"all  other   remedies  to  which  [suitors]   are  otherwise

entitled." 28 U.S.C.    1333.  The upshot  is that an injured

party  may have claims  arising from  a single  accident both

under  federal  maritime law  and  under  state law,  whether

legislation or common law.   See G. Gilmore &  C. Black, Jr.,
                                

The Law  of Admiralty    1-13, at  37 (2d ed.  1975).   State
                     

remedies under the  savings to suitors clause  may be pursued

in  state  court  or, where  there  is  a  basis for  federal

jurisdiction, in federal court.

     Whether a state claim is litigated in a federal court or

a state forum, "the extent to which state law may  be used to

remedy  maritime  injuries  is  constrained  by  a  so-called

`reverse-Erie' doctrine  which requires that  the substantive
             

remedies afforded by the  States conform to governing federal

maritime standards." Offshore Logistics, Inc.  v. Tallentire,
                                                            

477 U.S. 207, 223  (1986) (citations omitted).  How  far this

conformity requirement extends,  and whether it preempts  the

dealers'  state-law claims,  are the  central issues  in this

case.

     On appeal, the dealers  mainly stress their claims under

                             -7-

Rhode  Island's  Compensation  Act.    The  Compensation  Act

provides  generally  that  owners  or  operators of  seagoing

vessels may be held liable  for harms arising from negligence

of the owner,  operator or  agents or from  the violation  of

Rhode Island pilotage and water pollution laws. See R.I. Gen.
                                                   

Laws    46-12.3-2, 46-12.3-3.  The statute also  contains the

following specific provisions regarding economic loss:

     (a)  A  person  shall be  entitled  to  recover for
          economic  loss  .  .   .  if  the  person  can
          demonstrate the  loss of income  or diminution
          of profit to a person  or business as a result
          of  damage to  the  natural resources  of  the
          state of Rhode Island  caused by the violation
          of any  provision [of  the  piloting or  water
          pollution laws] by the owner or operator . . .
          of the  seagoing vessel  and/or caused by  the
          negligence of the owner or  operator . . .  of
          the seagoing vessel.

     (b)  In any  suit brought to recover  economic loss
          it shall  not be  necessary to prove  that the
          loss  was  sustained as  a result  of physical
          injury to the  person or damage to his  or her
          property,  nor shall  it be  a defense  to any
          claim that the defendant  owed no special duty
          to  the plaintiff  or  that the  loss was  the
          result   of   governmental  action   taken  in
          response to the violation and/or negligence of
          the defendant.

     (c)  Without   limiting   the  generality   of  the
          foregoing,   persons  engaged   in  commercial
          fishing or shellfishing and/or  the processors
          of fish or shellfish, who can demonstrate that
          they have sustained a loss of income or profit
          as  a  result  of  damage to  the  environment
          resulting   from   [violations   of   law   or
          negligence] . . . shall have a cause of action
          for economic  loss.   Persons employed  by, or
          who operate  businesses, who have  sustained a
          loss  of income  or profit  as  a result  of a
          decrease in the  volume of business  caused by
          the damage to  the environment  shall also  be

                             -8-

          entitled  to maintain  an action  for economic
          loss.

R.I. Gen. Laws   46-12.3-4.

     For the  purposes of this appeal  only, Ballard concedes

that the dealers  would have  a valid cause  of action  under

this  statute, and  that the  Compensation Act,  which became

effective on September 30, 1990, may be applied retroactively

to cover  the 1989 M/V World  Prodigy spill.2   We think that

the  statutory claims  effectively subsume  state  common law

claims  since the Compensation Act  appears to go  as far and

further than common law  in departing from Robins.   Thus, we
                                                 

focus upon the statute.

     The shipowner and captain insist, and the district court

agreed,  that  the  state  claims  are  preempted  under  the

doctrine  of  Southern Pacific  Co. v.  Jensen, 244  U.S. 205
                                              

(1917).  Jensen,  in a  now famous passage,  held that  state
               

legislation  affecting maritime  commerce is  invalid "if  it

contravenes  the essential  purpose  expressed by  an act  of

Congress, or works  material prejudice to the  characteristic

features of the general maritime law, or interferes  with the

proper harmony  and uniformity  of that  law in its  interna-

tional and interstate relations."  Id. at 216.
                                      

                    

     2See  1990 R.I. Pub. Laws  ch. 198,    2 (providing that
         
the  Compensation Act  shall apply  to all  causes of  action
pending on or  after September 30,  1990, regardless of  when
the  violation and/or act of negligence  occurred, as long as
suit  was   commenced  within  the   applicable  statute   of
limitations).

                             -9-

     Jensen,  however, was  by its  own terms  something less
           

than  a rule  of automatic  and  mechanical preemption.   "It

would be difficult,  if not impossible," said  the Court, "to

define with  exactness just how far the  general maritime law

may be  changed, modified, or affected  by state legislation.

That this may be done to  some extent cannot be denied."  244
                                                       

U.S. at 216 (emphasis added).   What is even  more telling is

that the Supreme Court after Jensen, without ever repudiating
                                   

its language, 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.

     This  saga is  recounted in  Professor  Currie's classic

article,  aptly titled  "Federalism and  the Admiralty:  `The

Devil's  Own  Mess,'" 1960  Sup. Ct.  Rev.  158.   A familiar

example is Just v.  Chambers, 312 U.S. 383 (1941),  where the
                            

Court  permitted  a  state  law  claim  for  personal  injury

occurring  on board a ship against the estate of the vessel's

owner, despite  a contrary  maritime rule that  a shipowner's

liability does not survive his death.  This year, in American
                                                             

Dredging  Co. v.  Miller, 114  S. Ct.  981 (1994),  the Court
                        

upheld a  Louisiana 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.

     American Dredging assertedly  reaffirms Jensen's  three-
                                                   

                             -10-

prong  test for  preemption quoted  above.   Since no  act of

Congress   directly  governs  our   case,  the   first  prong

(contravention) is irrelevant  to our case.   The third prong

("proper    harmony   and   uniformity")   we   reserve   for

consideration below.   What  is of  immediate concern  is the

second  ("material  prejudice")  prong;  and  here,  American
                                                             

Dredging  gave the  famous language  a twist  that  could not
        

easily have been anticipated by the litigants in this case or

by the district court.

     Judged by the bare  language of Jensen, the Compensation
                                           

Act might  easily  seem  to  do  "material  prejudice"  to  a

"characteristic feature" of maritime law, since Robins is the
                                                      

governing  maritime rule  and  the  Compensation Act  rejects

Robins in everything but name.  But the word "characteristic"
      

has different  shadings, and American Dredging,  in its first
                                              

and  most  important   holding,  gives  the   "characteristic

feature" language a definitive meaning:  it  reads the phrase

to  apply--and apparently  only to  apply--to a  federal rule

that  either "originated  in  admiralty"  or  "has  exclusive

application there."  114 S. Ct. at 987.  

     Indeed, Justice Scalia goes on  to say that the doctrine

at issue  in American  Dredging,  the doctrine  of forum  non
                                                             

conveniens,  "is   and  has   been  a  doctrine   of  general
          

application" and that "therefore" its disregard by  Louisiana

does  not prejudice "[a} characteristic featur[e]" of general

                             -11-

maritime law."  114 S. Ct. at 987.  Further, only so narrow a

reading of the characteristic  feature test comports with the

result in American Dredging.   Since the forum non conveniens
                                                             

doctrine had  long and  widespread  application in  admiralty

cases,  id. at  986, a  broad reading  of the  characteristic
           

feature test would have resulted in preemption.

     Although  it  is easier  to  identify the  origins  of a

doctrine recognizing  liability than one denying  it, we have

found no  evidence that Robins' denial of recovery for purely
                              

economic losses  originated in admiralty.   Justice  Holmes's

opinion in Robins presents  the rule as a virtual  truism for
                 

which  "no authority  need be  cited," 275  U.S. at  309, and

refers  the reader to three other opinions in which "[a] good

statement [of  the rule] will  be found." Id.  (citing Elliot
                                                             

Steam Tug Co., Ltd.  v. The Shipping Controller, 1  K.B. 127,
                                               

139, 140 (1922);  Byrd v. English, 117  Ga. 192, 43  S.E. 419
                                 

(1903); and The Federal  No. 2, 21 F.2d 313 (2d  Cir. 1927)).
                              

Although  Elliot Steam  Tug and  The Federal  No. 2  are both
                                                   

maritime cases, Byrd involved a suit  against a defendant who
                    

had  negligently   damaged  the  lines  supplying   power  to

plaintiff's  printing company.    Justice  Holmes also  cited

another  case, National  Savings Bank v.  Ward, 100  U.S. 195
                                              

(1879), which involved a  suit by a plaintiff who  had relied

upon  a  certificate  of  title  prepared  by  the  defendant

attorney for a third party.

                             -12-

     The rule applied in  Robins is also sometimes  traced to
                                

Cattle  v. Stockton Waterworks Co., 10 Q.B. 453 (1875), which
                                  

concerned  liability  for   delays  suffered  by  plaintiff's

construction company caused by water leaking from defendant's

pipes.   The admiralty cases  thus reflect a  traditional, if

not  invariable,  "general  principle denying  liability  for

purely  economic loss  in the  law of  negligence."   Atiyah,

"Negligence  and Economic  Loss,"  83 L.Q.  Rev. 248,  248-51

(1967).   In  sum, "Robins  broke no  new ground  but instead
                          

applied a principle, then  settled both in the  United States

and   England,   which   refused   recovery   for   negligent

interference with  `contractual rights.'"  Testbank, 752 F.2d
                                                   

at 1022.

     Nor has the doctrine  forbidding recovery of such losses

had "exclusive" application in admiralty.  State of Louisiana
                                                             

ex rel. Guste v. M/V Testbank, 752 F.2nd 1019, 1022 (5th Cir.
                             

1985)  (en banc), cert. denied, 477 U.S. 903 (1986).  Rather,
                              

courts have  denied liability for  purely economic harm  in a

variety  of  land-based  contexts.3   Such  cases  rest on  a

                    

     3See, e.g.,  Dundee Cement Co. v. Chemical Laboratories,
                                                             
Inc., 712  F.2d 1166  (7th Cir.  1983) (denying recovery  for
    
lost  profits from  owner of  tanker truck  which overturned,
blocking  the only  entrance  to  plaintiff's cement  plant);
Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345
                                                        
N.W.2d  124  (Iowa 1984)  (holding that  businesses adversely
affected by closing of bridge in which cracks developed could
not recover for  economic losses against  the builder of  the
bridge);  Stevenson v. East Ohio Gas Co., 73 N.E.2d 200 (Ohio
                                        
Ct. App. 1946) (holding that plaintiff could not recover lost
wages   against  defendant,   whose  negligence   in  storing

                             -13-

concern about  extending the  scope of tort  liability beyond

the  generally  limited  class  of  individuals   who  suffer

physical  damage to  person or  property.   See Rabin,  "Tort
                                               

Recovery   for   Negligently  Inflicted   Economic   Loss:  A

Reassessment,"  37 Stan.  L. Rev.  1513, 1528  (1985).   This

concern  stretches landward quite as much  as seaward.  Thus,

we hold that  Rhode Island's decision  to depart from  Robins
                                                             

does not materially prejudice a rule that originated in or is

exclusive to general maritime law.

     Even  absent prejudice  to  a characteristic  feature of

admiralty,  state legislation is preempted if (under Jensen's
                                                           

third  test)  it  "interferes  with the  proper  harmony  and

uniformity" of maritime  law. Jensen,  244 U.S. at  216.   As
                                    

Justice Scalia  observed in considering this  question, "[i]t

would be idle to pretend that the line separating permissible

from impermissible state regulation is readily discernible in

our  admiralty  jurisprudence,  or  indeed  is  even entirely

consistent  within  our  admiralty  jurisprudence."  American
                                                             

Dredging, 114 S. Ct. at 987.  He did not, however, articulate
        

a  definitive test  of harmony  and uniformity,  holding only

that there is no  preemption where the relevant state  law is

procedural rather than substantive. Id. at 988.  In our case,
                                       

the Rhode Island statute is indisputably substantive.

                    

explosives caused destruction of  plaintiff's nearby place of
employment);  Hart Eng'g Co. v. FMC Corp., 593 F. Supp. 1471,
                                         
1481-84 (D.R.I. 1984) (Selya, J.). 

                             -14-

     Where  substantive law  is involved,  we think  that the

Supreme Court's past decisions yield no single, comprehensive

test as to where harmony is required and when uniformity must

be maintained.  Rather, the decisions however couched reflect

a balancing of the  state and federal interests in  any given

case. See, e.g., Kossick  v. United Fruit Co., 365  U.S. 731,
                                             

738-42 (1961); Huron  Portland Cement Co. v. City of Detroit,
                                                            

362  U.S. 440, 442-48  (1960).  Our  circuit has acknowledged

that  "the  Supreme  Court .  .  .  no  longer construes  the

Admiralty Clause  as requiring `rigid  national uniformity in

maritime legislation,'"  Carey v.  Bahama  Cruise Lines,  864
                                                       

F.2d  201, 207 (1st Cir. 1988), and that the preemption issue

"ordinarily requires a delicate  accommodation of federal and

state  interests." Id.   As  Professor Currie  summed up  the
                      

matter:

     The  maritime  nature  of  an  occurrence does  not
     deprive  a state  of  its  legitimate concern  over
     matters affecting  its residents or  the conduct of
     persons  within  its  borders;    but  the  federal
     admiralty  powers were  granted to  protect certain
     federal  interests  in   maritime  and   commercial
     affairs.  An  issue created by  such a conflict  of
     interests can  be  resolved only  by  reference  to
     those interests  and by an attempt  to maximize the
     effectuation of  the proper concerns  of both state
     and nation.

1960 Sup. Ct. Rev. at 169.

     In balancing the state  interest in regulation against a

potential overriding federal need for harmony or  uniformity,

we  start with  Rhode Island's  interest in  implementing its

                             -15-

Compensation Act.  No one can doubt that the state's interest

in  avoiding pollution  in its  navigable  waters and  on its

shores, and  in redressing injury  to its citizens  from such

pollution, is a weighty  one.  In Huron Portland  Cement, the
                                                        

Supreme Court described state air pollution laws as a classic

example  of police power, and continued:  "In the exercise of

that power,  the states  .  . .  may act,  in  many areas  of

interstate  commerce  and  maritime activities,  concurrently
                                              

with the  federal government."   342  U.S.  at 442  (emphasis

added).

     In Askew v. American Waterways Operators, Inc., 411 U.S.
                                                   

325  (1973), the  Court  sustained,  against  a  maritime-law

preemption challenge, a Florida statute that imposed no-fault

liability  on  vessel owners  and  operators  for damages  to

private parties  caused by oil spills  in territorial waters.

Justice Douglas described oil  spillage as "an insidious form

of  pollution of vast concern  to every coastal  city or port

and to all  the estuaries on which the life  of the ocean and

lives of the coastal  people are greatly dependent."   Id. at
                                                          

328-29.  See also id. at 332-43.
                     

     Claimants in this case  argue flatly that Askew, without
                                                    

more, sustains the Rhode Island statute; and perhaps it does.

The difficulty is that  Justice Douglas rejected the maritime

law preemption claim on the ground that Jensen had nothing to
                                              

do with "shoreside injury by ships on navigable waters."  411

                             -16-

U.S. at 344.   "Historically," said Justice Douglas, "damages

to  the shore or to  shore facilities were  not cognizable in

admiralty."   Id. at 240.   Although Congress  had by statute
                 

extended  admiralty jurisdiction shoreword in 1948, the Court

said that this extension did not  carry Jensen with it.   Id.
                                                             

at 341.

     If  Justice  Douglas  meant   to  avoid  preemption  for

physical damage  to  the shore  or shore  facilities, as  his

words seem to suggest,  this might easily not embrace  damage

to bay  waters or the  beds beneath them.   If instead  Askew
                                                             

meant  to allow a state  remedy for any  intangible impact or

loss  ultimately felt on shore, it  is hard to see what would

be  left  of  preemptive  federal authority  since  the  most

traditional   of  admiralty   events--for  example,   a  ship

collision or  a seaman's death-- has  such intangible effects

ashore.  However the riddle of  Askew is solved, we think  it
                                     

safest to take it here merely to  show, as it assuredly does,

the importance of the  state's interest in providing remedies

for vessel-caused oil pollution damage.

     The federal interest in limiting remedies is more subtle

but also not  without importance.  The  Compensation Act does

not regulate the out-of-court  behavior of ships or sailors--

what is sometimes called "primary conduct"; rather the act is

concerned  with the  liability  imposed for  conduct that  is

already unlawful.  State regulation of primary conduct in the

                             -17-

maritime realm  is not automatically forbidden,  e.g., Ray v.
                                                          

Atlantic Richfield Co., 435 U.S. 151, 179-80 (1978), but such
                      

regulation presents the most  direct risk of conflict between

federal and  state  commands,  or  of  inconsistency  between

various  state  regimes  to  which the  same  vessel  may  be

subject.4

     Instead,  the  question  here  is the  familiar  one  of

burden.  At some point, a regime of liability, or a diversity

of regimes,  could impose or  threaten such heavy  costs that

maritime  commerce may  itself be  impaired.   Initially such

costs  are borne  by shipowners  but in  the end  they affect

every business that  uses ships or receives  raw materials by

ship  and every citizen who, as a worker or consumer, depends

upon such  commerce.  A  regime may  also be so  difficult to

administer  as  to  prevent  the  efficient  and  predictable

resolution of maritime  disputes.  These  are not trivial  or

irrelevant concerns,  for  "the fundamental  interest  giving

rise to  maritime jurisdiction is the  protection of maritime

commerce."5 

                    

     4O'Melveny & Myers v. Federal Deposit Ins. Corp., 114 S.
                                                     
Ct.  2048, 2055  (1994) (suggesting  that uniformity  is most
important where  the rule at  issue is one  governing primary
conduct);  American Dredging,  114 S.  Ct. at  988-89 (noting
                            
that "forum non conveniens does not bear upon the substantive
                          
right  to  recover, and  is not  a  rule upon  which maritime
actors rely in making decisions about primary conduct").

     5Exxon Corp.  v. Central Gulf  Lines, Inc.,  111 S.  Ct.
                                               
2071, 2074 (1991) (internal quotations omitted).  The Supreme
Court  has regularly  considered  such  burdens in  admiralty

                             -18-

     Indeed,   these  very   concerns--with  the   burden  of

liability and  of  administration--underpin the  Robins  rule
                                                       

itself  and are discussed at length in Barber Lines, 754 F.2d
                                                   

at 54-55.  But  it is one thing to say that  a federal court,

largely responsible for shaping  the common law of admiralty,

should  follow  a longstanding  liability  rule  to govern  a

federal  cause of action.  It is  quite another to say that a

state remedy, presumptively  preserved under  the savings  to

suitors  clause,  is  potentially  so  disruptive  as  to  be

unconstitutional.  Where as here the state remedy is aimed at

a  matter of great and legitimate state concern, a court must

act with caution.

     The question,  then, is  whether absent the  Robins rule
                                                        

there remain limitations  on the scope of  recovery under the

Compensation  Act adequate to limit the  burden it imposes on

maritime commerce.    The  Compensation Act  has  yet  to  be

construed by the Rhode Island courts.  We nevertheless assume

that  its extension of liability to cover all "loss of income

or diminution of profit  . . . as  a result of damage  to the
                                              

                    

preemption cases,  see, e.g., Ray v.  Atlantic Richfield Co.,
                                                            
435 U.S. 151, 179-80 (1978);  Huron Portland Cement, 362 U.S.
                                                   
at 443-44, and has drawn explicit parallels between admiralty
preemption  and  Commerce  Clause  analysis.   See  Davis  v.
                                                         
Department of  Labor and  Industries of Washington,  317 U.S.
                                                  
249, 257 (1942); Wilburn Boat Co. v. Fireman's Fund Ins. Co.,
                                                            
348 U.S.  310, 323-24 (1955) (Frankfurter,  J., concurring in
the result).  This does not, however, mean that the admiralty
clause  simply duplicates  a commerce  clause analysis.   See
                                                             
American Dredging, 114 S. Ct. at 988 n.3.  
                 

                             -19-

natural  resources of the state of Rhode Island caused by the
                                                      

violation of [Rhode Island pilotage or pollution laws]," R.I.

Gen. Laws    46-12.3-4 (emphasis  supplied), incorporates the

familiar  tort  limitations of  foreseeability  and proximate

cause.   These principles do in some measure limit the burden

imposed on maritime shipping.

     Foreseeability  may extend  some  distance,  cf.  Barber
                                                             

Lines, 764 F.2d at 52, and "remoteness" is scarcely a sharply
     

defined concept.   Compare Petitions of  Kinsman Transit Co.,
                                                            

388 F.2d 821 (2d  Cir. 1968) (rejecting Robins  but excluding
                                              

economic losses suffered  by the owner of a  vessel prevented

from unloading its cargo  above a bridge that collapsed  as a

result  of defendant's  negligence  as too  remote to  permit

recovery).   We cannot be  sure how Rhode  Island courts will

develop these concepts in the context of oil pollution cases.

Depending on Rhode Island's solutions, the burdens imposed by

the Compensation  Act, financial and  administrative, may  be

substantial  but they may also  be tolerable.   One might say

that the case for  preemption at this stage is subject to the

Scotch verdict--not proven.  

     Having said  all this, we think  one final consideration

tips the scales in favor of the Compensation Act's  validity.

Congress  has  recently enacted  the  Oil  Pollution Act,  33

U.S.C.    2701 et seq.,  which almost certainly  provides for
                      

                             -20-

recovery  of purely  economic  damages in  oil spill  cases.6

Section 2702(b)(2)(E)  of  the act  provides that  "[d]amages

equal  to  the  loss  of profits  or  impairment  of  earning

capacity due  to the  injury,  destruction, or  loss of  real

property,  personal property,  or  natural resources,  . .  .

shall be recoverable by any claimant."  The  House Conference

Report makes clear that,  under section 2702(b)(2)(E), "[t]he

claimant need not  be the  owner of the  damaged property  or

resources to recover for lost profits or income".  H.R. Conf.

Rep.  No. 101-653, 101st Cong., 2d Sess. 103 (1990).  The act

also  expressly  provides  that  it does  not  preempt  state

imposition of additional liability requirements.  33 U.S.C.  

2718(a).

     The  statute  contains  another  substantial   piece  of

evidence that  Congress means  to allow recovery  of economic

losses  from  injury to  natural  resources  even though  the

claimant's  own  property  was   not  damaged.    In  another

subsection  of the  damage  provision, there  is an  explicit

provision  for recovery  of "economic  losses  resulting from

destruction  of real or personal property" by a claimant "who

                    

     6We  say "almost" only because one court has held to the
contrary. See In re Petition of Cleveland  Tankers, Inc., 791
                                                        
F. Supp.  669, 678-79 (E.D. Mich. 1992).   Most commentators,
by contrast, have read  the new statute--as its language  and
legislative history  suggest--to override the Robins Dry Dock
                                                             
rule,  see  McCurdy,  "An  Overview  of   OPA  1990  and  Its
          
Relationship  to Other Laws," 5 U.S.F.  Mar. L.J. 423 (1993);
Gonynor, "The Robins  Dry Dock  Rule:  Is  the `Bright  Line'
                              
Fading?" 4 U.S.F. Mar. L.J. 85 (1992).

                             -21-

owns or leases  that property."   33 U.S.C.    2707(b)(2)(B).

If the "natural resources" injury provision in subsection (E)

were limited  to those  owned by  the claimant,  the recovery

thus provided would be already covered by subsection (B)  and

subsection (E)  would be  redundant.   United States  v. Ven-
                                                             

Fuel, Inc.,  758 F.2d 741,  751-52 (1st Cir.  1985) (readings
          

that create redundancies are not favored). 

     The new federal statute  does not apply retroactively to

govern  the present case.   See Pub.  L. No.  101-380,   1020
                               

(providing  that  the statute  "shall  apply  to an  incident

occurring  after the date  the enactment of  this Act [August

18,  1990].").  But we  think that the  statute is compelling

evidence  that Congress  does  not view  either expansion  of

liability  to cover  purely economic  losses or  enactment of

comparable state oil pollution regimes as an excessive burden

on maritime  commerce.  Given the  Congress' superior ability

to weigh the very practical considerations relating to such a

judgment,  we give  Congress' conclusion  substantial weight.

For  this purpose,  the non-retroactivity  of the  statute is

irrelevant.

     We hold, then, that  the Rhode Island's Compensation Act

as reasonably  construed and applied is not  preempted by the

admiralty clause of the Constitution.  We express no judgment

on  whether claimants'  particular  injuries were  reasonably

foreseeable or proximately caused by the grounding of the M/V

                             -22-

World  Prodigy,  or whether  claimants' claims  are otherwise

viable under the Rhode Island statute.  That determination is

for the district court in the first instance or for the state

courts.  Robins Dry Dock remains the rule in this circuit for
                        

federal claims;   we simply hold that Rhode Island is free to

chart a different course.

     Because  of the Oil Pollution  Act, it may  well be that

the immediate problem with which  we have wrestled at  length

in  this case is  a transient one;  the legal  regime for oil

pollution accidents after August 18, 1990,  will largely be a

creature of  the new statute.   But the case before  us, like

all cases, is  important to the litigants,  and the governing

legal  standards have  application  elsewhere.   Applying  an

imprecise federal  preemption standard to a  little construed

state statute is  no easy  task.  For  the present,  assuming

that the  Rhode Island  statute is providently  construed and

applied, we think that it is not unconstitutional.

     The   decision   of   the  district   court   dismissing

plaintiffs'  federal claims  is affirmed;   the  dismissal of
                                        

plaintiffs' state claims is reversed and the case is remanded
                                                             

for further proceedings consistent with this opinion.

                             -23-