Court Opinion

ID: 2977675
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:12:04.363597+00
Date Added: 2024-06-11T12:10:00.949094
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                          Pursuant to Sixth Circuit Rule 206
                                File Name: 09a0060p.06

              UNITED STATES COURT OF APPEALS
                            FOR THE SIXTH CIRCUIT
                              _________________

                                                  X
                                                   -
 BECKY MATHENY, Individually and as
                                                   -
 Surviving Spouse of Ronald Matheny,
 Deceased,                                         -
                            Plaintiff-Appellee, -
                                                       No. 08-5127

                                                   ,
                                                    >
                                                   -
                                                   -
            v.
                                                   -
                                                   -
 TENNESSEE VALLEY AUTHORITY,
      Defendant/Third-Party Plaintiff/Counter -
                         Defendant-Appellant, -
                                                   -
                                                   -
                                                   -
 JOHNNA LAWRENCE; THOMAS LAWRENCE,
   Third-Party Defendants/Counter Plaintiffs- -
                                     Appellees. -
                                                   -
                                                   -
                                                  N
                    Appeal from the United States District Court
                  for the Middle District of Tennessee at Nashville.
                No. 06-00565—Aleta Arthur Trauger, District Judge.
                             Argued: January 23, 2009
                       Decided and Filed: February 19, 2009
       Before: SUHRHEINRICH, GRIFFIN, and KETHLEDGE; Circuit Judges.

                                _________________

                                    COUNSEL
ARGUED: Edwin Warren Small, OFFICE OF THE GENERAL COUNSEL, TENNESSEE
VALLEY AUTHORITY, Knoxville, Tennessee, for Appellant. Philip N. Elbert, NEAL &
HARWELL, Nashville, Tennessee, Mark McClure Mizell, LAW OFFICE, Franklin,
Tennessee, for Appellee. ON BRIEF: Edwin Warren Small, Jared E. Mitchem, Thomas
A. Robins, OFFICE OF THE GENERAL COUNSEL, TENNESSEE VALLEY
AUTHORITY, Knoxville, Tennessee, for Appellant. Philip N. Elbert, W. David Bridgers,
NEAL & HARWELL, Nashville, Tennessee, Mark McClure Mizell, LAW OFFICE,
Franklin, Tennessee, Jonathan R. Perry, THE PERRY FIRM, Franklin, Tennessee, for
Appellee.

                                          1
No. 08-5127        Matheny v. Tennessee Valley Authority, et al.                       Page 2

                                   _________________

                                          OPINION
                                   _________________

       SUHRHEINRICH, Circuit Judge. This is an admiralty action arising out of a
collision in which the wake of the Defendant-Appellant Tennessee Valley Authority (TVA)
tugboat Patricia H capsized a small fishing boat. Plaintiff Ronald Matheny, a passenger in
the fishing boat, died as a result. After a bench trial, the district court concluded that
Matheny’s death was caused by the negligent operation of the tugboat and that the TVA was
not entitled to limitation of liability under the Limitation of Liability Act, 46 U.S.C.A.
§ 30505 (West 2007), because the captain’s actions were within the privity or knowledge of
TVA. The TVA appeals. We REVERSE in part and REMAND for further proceedings.

                                      I. Background

                                          A. Facts

       The facts, issues, and relevant law are all adequately presented in the district court’s
fifty-seven page opinion and supplemental opinion following a bench trial and are very
briefly summarized here. See Matheny v. TVA, 523 F. Supp. 2d 697 (M.D. Tenn. 2007),
modified in part by Matheny v. TVA, 247 F.R.D. 541 (M.D. Tenn. 2007).

       TVA operates the Cumberland Fossil Plant (CFP), a coal-fired electric power
generating plant, on the south bank of the Cumberland River at river mile 103 in Stewart
County, Tennessee. See TVA Act of 1933, 16 U.S.C. §§ 831-831ee (2000 & Supp. V 2005).
In the 1970s, TVA excavated a second channel and created an island approximately 6,000
feet long between the two channels. TVA has a coal barge unloader and barge mooring cells
along the south side of the old channel. Since the early 1970s, various towing companies
have delivered tows of barges loaded with coal to barge mooring areas in the old channel,
and TVA has used TVA tugboats to move the barges to the unloader and then back to the
mooring areas for pickup by the towing companies.

       The Patricia H is one of the TVA tugboats used to move barges at CFP. At the time
of the accident, it was worth $420,000.
No. 08-5127        Matheny v. Tennessee Valley Authority, et al.                      Page 3

       The TVA is aware that the old channel is used for recreational fishing by various
types and sizes of boats. At approximately 5:30 p.m. on June 5, 2005, Third-Party
Defendant/Counter-Plaintiff-Appellee Thomas Lawrence went fishing with his cousin,
Matheny, in Lawrence’s fourteen foot Phantom fiberglass boat in the old channel of the
Cumberland River near CFP. Lawrence had fished there numerous times before.

       At 7:00 p.m., Captain Ralls and his crew started their shift on the Patricia H. Shortly
after 7:00 p.m., Captain Ralls piloted the Patricia H from the unloader downstream to pick
up a loaded coal barge. As the Patricia H traveled from the unloader downstream “lightboat”
(without a barge), it passed the Phantom boat without incident. As the Patricia H traveled
back upstream to the unloader with a loaded barge, it passed the Phantom boat again without
incident. However, at approximately 7:50 p.m., when the Patricia H came back downstream
again to obtain another loaded barge, its wake swamped the Phantom boat. Both men were
thrown overboard. The crew of the Patricia H were able to save Lawrence, but Matheny
drowned.

       Captain Ralls’s immediate supervisor was David Duke, the coal haul foreman at
CFP. Duke was responsible for ensuring that CFP employees obeyed safety rules. 523 F.
Supp. 2d at 710. Duke testified that TVA has no yearly training program specifically for
tugboat operators, that “TVA does not train the pilots in the ‘Rules of the Road’ except
through informal ‘on river’ training,” and that “there was no specific policy regarding the
speed of tugboats, but that there was an expectation that the tugboats would be operated as
slowly as possible around fishing boats.” Id. Duke also testified that he was not aware of
any prior incidents concerning Captain Ralls. Id. at 711.

       Matheny was 49 years old when he died. Matheny suffered from coronary artery
atherosclerosis and had a heart attack on September 27, 2004. 523 F. Supp. 2d at 728. He
had a life expectancy of eight years. 247 F.R.D. at 543. He was not employed at the time
of his death, but acted as primary caretaker for his granddaughter. He was drawing a
disability pension from the Tennessee Department of Corrections and had applied for
disability benefits from the Social Security Administration.

       Mr. and Mrs. Matheny had been married since 1974 and lived for many years in
middle Tennessee. The couple had three adult children–Elan (31 years old at the time of
No. 08-5127             Matheny v. Tennessee Valley Authority, et al.                                   Page 4

trial), Christina (29 years old at the time of trial), and Stephanie (25 years old at the time of
trial). One of Christina’s children, Chloe, lived with Mr. and Mrs. Matheny, and they
provided for her care. The district court found that Matheny had “a very close relationship
with his children and his wife.” 523 F. Supp. 2d at 730.

                                  B. The District Court’s Ruling

                                                                                                         1
        The district court found that Captain Ralls was an experienced tugboat captain, and
that he “proved himself, up to the time of the accident, to be a perfectly competent
captain.” Id. at 722. However, the district court also found, and TVA concedes, “that
Captain Ralls violated Rules 2(b) and 6 of the Inland Rules of Navigation by operating
the Patricia H at an excessive speed when it passed the fishing boat,” id. at 714, and “that
Captain Ralls’s creation of an excessive wake was 100% responsible for the capsize of
the fishing boat and the death of Mr. Matheny.” Id. at 712.

        The district court held that the Limitation Act did not apply to limit TVA’s
liability to the value of the Patricia H ($420,000) “because TVA had privity or
knowledge of the risks posed by Captain Ralls[’s] negligent operation of the Patricia H
at an excessive speed.” Id. at 721. “As a separate basis for liability” without limitation,
the district court found that TVA negligently supervised Captain Ralls, “by failing to
specifically instruct him to maintain a low speed or a low wake in the presence of small
fishing vessels.” Id. at 725. On the other hand, the district court found that TVA did not
commit negligent entrustment: “Although the court finds that Captain Ralls was
negligent in this specific instance, it finds no basis to question his overall competency

        1
            The district court found that Captain Ralls
        has a first class pilot license as well as a tow-operator license and has had safety training
        in conjunction with obtaining these licenses. In addition, Captain Ralls has earned
        endorsements to his licenses, allowing him to work on the deck of a boat, to use the
        radio, and to observe radar. Captain Ralls has been tested on the “Rules of the Road”
        portion of the Inland Rules of Navigation by the Coast Guard, specifically regarding
        passing, crossing situations, risk of collision, safety, and good seamanship. He has been
        trained in collision avoidance and considers the wake of his boat hitting another boat to
        be a collision. He has worked at several TVA harbors and has no prior citations or
        investigations regarding his performance.
523 F. Supp. 2d at 523.
No. 08-5127          Matheny v. Tennessee Valley Authority, et al.                      Page 5

as a tugboat captain. Accordingly, TVA did not commit negligent entrustment.” Id. at
726.

        The district court awarded Becky Matheny, as surviving spouse of Matheny, a
total of $3,324,352, which represented $124,352 for lost future earnings and household
services, and $3.2 million for consortium losses of Mrs. Matheny and Matheny’s three
adult children. See 247 F.R.D. at 543. The $124,352 figure represented the present
value of Mr. Matheny’s disability pension assuming a life expectancy of eight years, or
$45,861, and the present value of his household services for eight years, or $78,491. Id.
The $3.2 million represented $100,000 a year times eight years for each of his four
family members. Id.

         Thomas Lawrence and his wife were awarded a total of $238,685 based on
Lawrence’s injuries. See 523 F. Supp. 2d at 730.

                                        II. Analysis

        Factual findings from a bench trial are reviewed for clear error. In re Cleveland
Tankers, 67 F.3d 1200, 1205 (6th Cir. 1995); Fed. R. Civ. P. 52(a)(6). Questions of law
are reviewed de novo. Pearce v. United States, 261 F.3d 643, 647 (6th Cir. 2001).

                                A. Limitation of Liability

        The Limitation of Liability Act states in relevant part as follows: “[T]he liability
of the owner of a vessel for any claim . . . or liability described in subsection (b) shall
not exceed the value of the vessel and pending freight.” 46 U.S.C.A. § 30505(a) (West
2007).2 Subsection (b) states in relevant part that “claims . . . and liabilities subject to
limitation under subsection (a) are those arising from . . . any loss, damage, or injury by
collision, or any act . . . done, occasioned, or incurred, without the privity or knowledge
of the owner.” Id. § 30505(b); see Kellogg & Sons, Inc. v. Hicks (The Linseed King),
285 U.S. 502, 510 (1932). The Act “alters the normal rules of vicarious liability” by

        2
          The Limitation Act was amended and codified on October 6, 2006. The amendments made no
substantive change to the law. See 46 App. U.S.C. § 183(a) (2000).
No. 08-5127           Matheny v. Tennessee Valley Authority, et al.                  Page 6

limiting the ship owner’s liability for any injuries caused by the negligence of the captain
or crew to the value of the ship unless the owner himself had “privity or knowledge” of
the negligent acts. In re City of New York, 522 F.3d 279, 283 (2d Cir. 2008) (internal
citations omitted).

        Limitation of liability involves two inquiries: (1) negligence or unseaworthiness,
and (2) knowledge or privity of the vessel owner. See In re Muer, 146 F.3d 410, 415
(6th Cir. 1998); Cleveland Tankers, 67 F.3d at 1203. The burden of proving negligence
is on the claimant; the burden of proving lack of privity or knowledge of the negligence
is on the owner. Muer, 146 F.3d at 416; Cleveland Tankers, 67 F.3d at 1203.

        TVA concedes on appeal that it is liable for Captain Ralls’s negligence, but
claims that it is entitled to limitation of liability because it had no privity or knowledge
of Ralls’s negligent act. Thus, the only issue is whether TVA had privity or knowledge
of Ralls’s negligent act. In answering this question, we are mindful that “[t]he
shipowner’s privity or knowledge is not measured against every fact or act regarding the
accident; rather, privity or knowledge is measured against the specific negligent acts or
unseaworthy conditions that actually caused or contributed to the accident.” Suzuki of
Orange Park, Inc. v. Shubert, 86 F.3d 1060, 1064 (11th Cir. 1996). Further, when the
owner of a vessel is a corporation or government entity, the owner is charged with
privity or knowledge of an officer, manager, or superintendent who has authority over
the scope of activities out of which the liability occurred. Coryell v. Phipps, 317 U.S.
406, 410 (1943); In re City of New York, 522 F.3d at 293; In re Kristie Leigh Enters., 72
F.3d 479, 481 (5th Cir. 1996).

        The district court held that the Limitation Act did not apply “because TVA had
knowledge of the risks posed by Captain Ralls’s negligent operation of the Patricia H at
an excessive speed.” 523 F. Supp. 2d at 721 (emphasis added); see also id. at 722
(framing the “the relevant inquiry [as] whether the defendant had privity or knowledge
of the risks posed by tugboats being operated too fast, creating potentially dangerous
wakes for nearby fishing boats”). Thus, according to the district court, because TVA
was aware of the fact that if a tugboat operates at an excessive speed it may create a
No. 08-5127          Matheny v. Tennessee Valley Authority, et al.                 Page 7

dangerous wake for nearby recreational boats, and TVA did not tell Captain Ralls that,
TVA is fully liable.

       The district court misreads the Limitation of Liability Act, which speaks in terms
of acts, not risks. As TVA points out, it is indisputable that all vessel owners know that
if a competent captain commits a negligent act, there is a risk of harm. Instead, the
Limitation of Liability Act focuses on “the specific negligent acts or unseaworthy
conditions that actually caused or contributed to the accident,” Suzuki, 86 F.3d at 1064,
and limits liability unless the owner has privity or knowledge of the specific act.

       There is no evidence in this record to justify imputing knowledge to TVA about
the specific conditions that led to the accident. TVA barges and fishing boats have
peacefully coexisted for years in the area in which the drowning occurred. Lawrence
and his friend James Stanley testified that the harbor is considered a safe place in which
to fish, that they have fished there on hundreds of occasions without incident, and that
they have continued to fish in the same area were the accident occurred even after
Matheny’s death. Although Stanley mentioned that on two occasions he saw wakes
cause spillovers into fishing boats, two isolated incidents involving wakes causing
spillovers into fishing boats do not impart knowledge to TVA about a dangerous
condition. Thus, TVA was justified in assuming that the area was safe for both barges
and fishing boats.

        Furthermore, it is well-settled that under the Limitation of Liability Act, “an
owner may rely on the navigational expertise of a competent ship’s master.” Kristie
Leigh, 72 F.3d at 482. Here, the district court found that “Captain Ralls had proved
himself, up to the time of the accident, to be a perfectly competent captain.” 523 F.
Supp. 2d at 722. The district court also found Captain Ralls had been tested on the
“Rules of the Road” aspect of the Inland Rules of Navigation by the Coast Guard, had
been trained in collision avoidance and considered the wake of his boat hitting another
No. 08-5127             Matheny v. Tennessee Valley Authority, et al.                                Page 8

boat a collision. Id. at 710.3 Captain Ralls had no prior citations. Id. The court went
so far as to add that “at the time of the accident, Captain Ralls appears to have been the
most qualified tugboat captain that TVA employed.” Id. at 726. A competent captain
conversant in the Inland Rules of Navigation did not need to be told that an excessive
wake would be dangerous to small fishing boats. TVA was entitled to rely on a
competent captain’s navigational knowledge and cannot be deemed negligent because
it failed to inform Captain Ralls or any of its other captains not to be negligent by
creating excessive wakes near recreational boats.

         A Sixth Circuit case, The Longfellow, 104 F. 360 (6th Cir. 1900), is dispositive.
The Longfellow was a passenger boat on the Ohio River. While departing the port of
Cincinnati, the pilot allowed the Longfellow to become positioned in the river such that
she was headed for the center pier of a railroad bridge, despite the assistance of a
tugboat, the Hercules Carroll. Id. at 362. The pilot and captain were unable to avoid a
collision, and the Longfellow struck the center pier of the railroad bridge. The boat
immediately sank, and several lives and most of the cargo were lost. Id. The district
court found liability in the amount of $60,000, but held that Longfellow’s corporate
owners were not liable beyond the value of the wrecked vessel, appraised at $250. Id.
This Court affirmed the district court’s finding that the collision was “due to faults of
navigation” which “were without the knowledge or privity of the owners, who were

         3
           The Inland Navigational Rules are statutory rules that “apply to all vessels upon the inland
waters of the United States.” 33 U.S.C.A. § 2001 (West 2001 and 2008 Supp.). Inland Rule 2
(“Responsibility”) is codified at 33 U.S.C.A. § 2002 and provides in relevant part that “[i]n construing and
complying with these Rules due regard shall be had to all dangers of navigation and collision and to any
special circumstances, including the limitations of the vessels involved.” Inland Rule 6, codified at
33 U.S.C.A. § 2006, provides in pertinent part that “[e]very vessel shall at all times proceed at a safe speed
so that she can take proper and effective action to avoid collision and be stopped within a distance
appropriate to the prevailing circumstances and conditions.” Rule 6 further provides that “[i]n determining
a safe speed,” factors to be considered include “the state of visibility” and “the traffic density including
concentration of fishing vessels or any other vessels.” 33 U.S.C.A. § 2006(a)(i), (ii). The term “collision”
is used in a broad sense under the Inland Navigational Rules to include a vessel’s wake striking another
vessel. Bernert Towboat Co. v. USS Chandler, 666 F. Supp. 1454, 1457 (D. Or. 1987). Captain Ralls had
been trained in these rules and considered the wake of his boat hitting another boat a collision. 523 F.
Supp. 2d at 710.
          These Inland Rules of Navigation supply the “Rules of the Road” governing navigation on inland
waters. See Turecamo Maritime, Inc. v. Weeks Dredge No. 516, 872 F. Supp. 1215, 1229 (S.D. N.Y. 1994)
(“The Inland Navigation Rules encompass long-standing steering and sailing rules and principles,
otherwise known as ‘Rules of the Road’, which govern navigation on inland waters.”)
No. 08-5127        Matheny v. Tennessee Valley Authority, et al.                      Page 9

therefore exonerated from liability beyond the value of the wreck and freight.” Id. at
364.

       The Court explained:

                The faults which the trial judge found were clearly faults in the
       navigation of the Longfellow, and cannot be imputed to her owners, as
       having occurred through their “privity or knowledge.” If we assume that
       there was no positive prearrangement between the officers of the
       Longfellow and the Hercules Carrol as would secure the best co-
       operative results, it was the fault of those navigating those boats, and not
       of the owners of the Longfellow. . . . The navigation of the Longfellow
       was under the sole control and direction of her pilot, who was a licensed
       pilot of unquestionable reputation and skill. It was for him to direct how
       the Hercules Carrol should assist, and the latter was subject to his orders
       and direction so far as the actual navigation of the Longfellow was
       affected. . . . The navigation of the towboat when lashed alongside of the
       Longfellow was necessarily to be governed by the navigation of the
       latter, and it was for the pilot to give such special orders as his judgment
       and the circumstances dictated. Neither was it the personal fault of the
       owners that the navigators of the Longfellow did not stop and back [up]
       when smoke first obscured her pilot’s view. If there was fault, it was a
       fault of those controlling her navigation, and was without the knowledge
       or privity of the owners.
Id. Similarly, in this case, Captain Ralls was a skilled pilot, who should have exercised
his judgment to slow down while passing the fishing boat in the channel. The accident
was caused by Captain Ralls’s navigational decisions.

       Other cases support the conclusion that Ralls’s errors were mistakes of
navigation, which do not justify denying limitation of liability. For example, in In re
Omega Protein, Inc., 548 F.3d 361 (5th Cir. 2008), a 396-ton fishing vessel struck an oil
platform at night. The captain, acting as a helmsman, had turned the wheelhouse lights
on to examine a broken refrigerator part, and the mirror effect of the wheelhouse lights
prevented him from seeing out the windows or using the radar. Id. at 373. The Fifth
Circuit affirmed the lower court’s ruling that the captain’s errors were mistakes of
navigation by a competent captain not within the privity or knowledge of the vessel
owner for limitation purposes. Id. at 374. The court pointed out that there was no
pattern of improper or unsafe behavior by the captain, a twenty-year veteran with a
No. 08-5127         Matheny v. Tennessee Valley Authority, et al.                    Page 10

“spotless” record. Id. at 373. The Fifth Circuit rejected the argument that the owner did
not provide sufficient training and supervision of the captain as to when he should use
the radar’s anti-collision alarm system because mistakes in navigation caused the
accident. Id. Significantly, the Fifth Circuit concluded that while the plaintiff had
demonstrated that the corporate owner did not do everything it could have done to ensure
that the pilot knew the full capabilities of the boat’s radar, or have a protocol in place,
“the privity or knowledge standard does not require a vessel owner to take every possible
precaution; it only obliges the owner to select a competent master and remedy
deficiencies which he can discover through reasonable diligence.” Id. at 374.

        Also illustrative is United States v. Sandra & Dennis Fishing Corp., 372 F.2d
189 (1st Cir. 1967). There, five lives on the fishing vessel B&G were lost when a Coast
Guard patrol boat (the “95”) towed the B&G onto a shoal in bad weather. Id. at 191.
The district court had denied limitation because it found both negligent navigation by
the 95’s commanding officer, Lieutenant Junior Grade McManus, and deficiencies in the
95’s equipment, which were known to Commander Waters, the officer in charge of the
Coast Guard Rescue Coordination Center that dispatched the 95, and a managing officer
of the government for limitation of liability purposes. Id. at 191-92, 198-99. The First
Circuit reversed the limitation holding, finding that the equipment deficiencies were not
the cause of the loss, id. at 198, but that the loss was caused by “the impropriety of the
conduct of McManus, as captain, in navigating the vessel.” Id. at 199. The court further
concluded that “[i]t is against this very liability that the right to limit exists.” Id.

        The district court’s reliance on The Linseed King, 285 U.S. 502, is misplaced.
The Linseed King was a ferry boat used to ferry workers from the foot of Ninety-Sixth
Street in New York City across the Hudson River to the owner’s linseed oil factory on
the west shore of the river at Edgewater, New Jersey. Id. at 506. On an early morning
trip across the river, the ferry struck an ice floe and sank in two minutes. Id. at 507.
Over thirty-five people died. Id. The Supreme Court found privity or knowledge and
denied limitation of liability because “[t]he Linseed King was admittedly unfit to run
through ice.” Id. at 510. More importantly, this fact was known to the owner’s executive
No. 08-5127        Matheny v. Tennessee Valley Authority, et al.                  Page 11

officers, who had instructed the Edgewater plant manager, Stover, “that the boat should
never be run through ice, and that as soon as ice showed itself in the river she was to be
laid up for the winter.” Id. Stover had also been “directed that whenever there was a
likelihood of the presence of ice all trips were to be made only in broad daylight, and
even these were to be discontinued when ice definitely appeared.” Id. “The decision as
to when the ferry should be withdrawn for the winter rested with him,” and ice had been
observed in the river some days prior to the accident. Id.

       The Supreme Court agreed with the lower courts that “Stover’s position as the
works manager of the Edgewater plant and the scope of his authority render his privity
or knowledge that of the company,” and that “[t]he owner was therefore chargeable with
negligence in not taking measures for the safety of the passengers which the weather
conditions required.” Id. at 511. The Supreme Court rejected an argument that the
owner was not liable because he had a competent master who had been instructed not to
run through ice, and that once he encountered it, it became his duty to abandon the trip
such that the owner did not have privity. Id.

       But there is a vast difference between the cases relied on and the instant
       one. The launch was used for ferriage over a distance of about a mile
       and a third. She was known to be unseaworthy and unfit if there was ice
       in the river. There is no analogy between such a situation and that
       presented in the cited cases where the emergency must be met by the
       master alone. In these there is no opportunity for consultation or
       cooperation or of bringing the proposed action of the master to the
       owner’s knowledge. The latter must rely upon the master’s obeying the
       rules and using reasonable judgment. The conditions on the morning in
       question could have been ascertained by Stover, if he had used
       reasonable diligence, and we think the evidence is adequate to support
       the finding that the negligence which caused the disaster was his, and
       therefore with the owner’s privity or knowledge.
Id. at 511-512 (emphasis added).

       The Linseed King is not analogous because the Patricia H was not unseaworthy
and there were no weather conditions to alert Duke or anyone else that special care
needed to be taken. Rather, the accident here occurred because Ralls did not obey the
rules of navigation or use reasonable judgment, let alone common sense, during a fairly
No. 08-5127           Matheny v. Tennessee Valley Authority, et al.                           Page 12

routine occurrence in the harbor–the presence of small fishing boats. Duke had no way
of anticipating that Ralls would not do so in this instance.4

         Also distinguishable are cases where the owners knew of unseaworthiness or
crew incompetence prior to the accident at issue. See, e.g. Trico Marine Assets, Inc. v.
Diamond B Marine Servs., Inc., 332 F.3d 779, 790 (5th Cir. 2003) (finding no limitation
of liability where captain misread his radar and attempted to conduct an improper
passing maneuver leading to a collision because the captain had no training in how to
use the radar and had not otherwise received safety training, and the vessel owner had
not evaluated the vessel’s seaworthiness or the captain’s qualifications, and knew that
the captain had previously operated the vessel in the fog but did nothing about it);
Hercules Carriers, Inc. v. Claimant of State of Fla., 768 F.2d 1558, 1576-77 (11th Cir.
1985) (limitation did not apply where the evidence showed that the collision occurred
because the company had unwritten policies of putting the pilot rather than the master
in command and of instructing its crews not to countermand the actions of the pilot,
demonstrating the owner’s knowledge and privity as to the crew’s negligence and
unseaworthiness; further, the owner should have known that the crew was not properly
licensed).

         In short, the accident was caused by Captain Ralls’s navigational decisions as
captain of his ship and his acts cannot be imputed to TVA because there is no evidence
that TVA had privity or knowledge of the acts that led to the injuries here.

                                    B. Negligent Supervision

         TVA also challenges the district court’s conclusion that it is not entitled to
limitation of liability because of “negligent supervision” of Captain Ralls. Although the
Inland Navigation Rules 2(b) and 6 impose a legal duty to maintain an appropriate speed,
there is no legal duty on a vessel owner to specifically instruct a licensed captain to
follow them prior to a voyage. See In re MO Barge Lines, Inc., 360 F.3d 885, 891 (8th

         4
           Although Matheny alleged that the Patricia H was deficiently equipped and thus unseaworthy,
the district court found that the accident was not caused by any equipment deficiencies. 523 F. Supp. 2d
at 713 n.4.
No. 08-5127           Matheny v. Tennessee Valley Authority, et al.                  Page 13

Cir. 2004) (holding that owner was entitled to limitation even though the owner “failed
to explicitly advise [the pilot] that he was required to follow the [Inland Navigational]
Rules” where the record established that pilot was a licensed, competent operator, who
had been accident free for seven years and had complied with the Rules). Rather, “[t]he
owner’s duty is essentially satisfied when he properly equips the vessel and selects
competent crew to operate it.” Id. In other words, “for limitation purposes, an owner
may rely on the navigational expertise of a competent ship master.” Kristie Leigh,
72 F.3d at 482. See also Omega Protein, 548 F.3d at 374 (stating that the “privity or
knowledge” rule “does not require a vessel owner to take every possible precaution; it
only obliges the owner to select a competent master and remedy deficiencies which he
can discover through reasonable diligence”); In re Am. Milling Co., 409 F.3d 1005, 1020
(8th Cir. 2005) (affirming limitation of liability against argument that owner failed to
adequately train the captain and to educate him about currents in the river, noting that
the “argument rest[ed] entirely on the presumption that [the pilot] was incompetent and
that the pilot did not, as the district court found, commit a spontaneous navigational
error”).

           Here, TVA did just that: it relied on the navigational expertise of an experienced
competent operator with knowledge of the “Rules of the Road.” There was no duty on
TVA to remind Captain Ralls to follow those rules. Therefore, the district court erred
in holding that TVA negligently supervised Ralls by failing to instruct him not to operate
the Patricia H at an excessive speed around small fishing boats.

           TVA also asserts that the discretionary function doctrine precludes liability based
on the alleged negligent supervision of federal employees. Because TVA is a “‘wholly-
owned corporate agency and instrumentality of the United States, ’” Edwards v. Tenn.
Valley Auth., 255 F.3d 318, 322-23 (6th Cir. 2001) (quoting Hill v. U.S. Dep’t of Labor,
65 F.3d 1331, 1333 (6th Cir.1995)), the doctrine potentially applies here. See id.
However, given our conclusion that the facts do not support a negligent supervision
claim in this case, we need not address this question.
No. 08-5127            Matheny v. Tennessee Valley Authority, et al.                               Page 14

                                     C. Consortium Damages

         Both parties agree that damages based on loss of consortium are permissible in
this admiralty case because Tennessee’s wrongful death statute, Tenn. Code Ann. § 20-
5-113 (1994 & Supp. 2006), allows for recovery of the pecuniary value of the decedent’s
life, which includes not only lost earning capacity but also the value of tangible
household services lost and the value of intangible consortium losses sustained by a
decedent’s spouse and children. See Jordan v. Baptist Three Rivers Hosp., 984 S.W.2d
593, 601-02 (Tenn. 1999).5 TVA does not contest the district court’s findings and
awards regarding the value of Mr. Matheny’s lost future earnings and tangible household
services but takes issue with the loss of consortium award. Because we are reversing
and remanding with instructions to the district court to apply the limitation of liability
under 46 U.S.C. § 30505, we leave it to the district court to apportion liability between
the Lawrences and Becky Matheny.

                                               III. Conclusion

         For the foregoing reasons, the judgment of the district court is REVERSED in
part and the case REMANDED for further proceedings consistent with this opinion.

         5
          The Tennessee Supreme Court also held that “consortium-type damages may be considered
when calculating the pecuniary value of a deceased’s life . . . [and do] not create a new cause of action but
merely refines the term ‘pecuniary value.’” Jordan, 984 S.W.2d at 601.