Collision and Limitation

Question 1

General rule for who can limit liability and to what amount

Answer 1

• shipowner can limit liability (or demise charterer, or manager under certain circs)
• limit damages to value of vessel and pending freight (money earned during the voyage)
• IF the owner didn’t have privity or knowledge (knew or should have known) of the negligence or unseaworthy condition that caused the loss

Question 2

Claims not subject to limitation

Answer 2

• pollution
• crew wage claims
• wreck removal
• damage to government structures
• owner’s personal contracts
• fire losses to cargo (if cause was w/in owner’s privity or knowledge - cargo interest has burden of proving priv. or know. here)

Question 3

Requirements for a limitation suit (quick run-down)

Answer 3

• independent admiralty jurisdiction (unless raised in an answer in non-admiralty complaint)
• Owner (or demise charterer, manager under some circs)
• Vessel (Lozman, etc.)
• Damage
• a claim subject to limitation

Question 4

Requirements for admiralty jurisdiction

Answer 4

• Don’t need admiralty jd if limitation raised in an answer in non-admiralty complaint
• Some say Limitation Act grants admiralty jd, but prof. thinks not correct, not its own basis for jd

NEED

• Navigable waters OR admiralty extension act
  
  • potential to disrupt maritime commerce
  • signif. relationship to trad. maritime activity
  • so, not on inland lake, no interstate commerce

Question 5

Who can be an “owner” for limitation purposes?

Answer 5

• actual owners - American or foreign
• Demise charterer (not voyage or time charterer)
• Managers? Cts examine the degree to which a party exercises operational & possessory rights over the vessel to the exclusion of other parties.
  
  • If mngmt company provides crew, maintain equipment, could be treated as owner bc they are doing duties of owner. Some cts say yes, others say no. A question of the “degree of possessory, managerial, and operational control.”
  • by case law. Mostly for corporate owners where manager acts like an owner.

Question 6

What is a “vessel” for limitation purposes?

Answer 6

• 1 USC § 3 - every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.
• Jet ski, Deepwater Horizon - vessels, can limit
• Lozman houseboat - can’t limit. Lozman test: not vessel if *reasonable observer, looking to the physical characteristics & activities, would not consider it to be designed to any practical degree for carrying people or things on water. Will probably be limited to facts of case

Question 7

Privity or Knowledge

Answer 7

• If owner has privity or knowledge, it breaks limitation
• An owner cannot limit if he has privity or knowledge of the cause of the incident
• Privity: Fault or neglect in which the owner personally participates (hands-on)
• Knowledge: Actual knowledge or lack of ordinary care to put means in place to acquire actual knowledge (knew or should have known)
• Expansive definition (Amoco Cadiz) - All that is needed to deny limitation is that the SO by action or inaction set in motion a chain of circs which may be a contributing cause even though not the immediate or proximate cause of a casualty
• Burden of proof:
  
  • Party claiming limitation has burden of proving LACK of privity or knowledge
  • Liability claimant has burden of showing causation (negligence or unseaworthiness caused casualty)

Question 8

When can an employee’s privity or knowledge be imputed to the owner for limitation?

Answer 8

• if employee has managerial authority and supervison over the phase of the vessels’s operation that led to the casualty (not simple crew members - only managerial or supervisory employees)

Question 9

When CAN the master’s privity or knowledge be imputed to the owner? When CAN IT NOT?

Answer 9

Master’s privity or knowledge

• IS imputed to owner for personal injury & death claims IF
  
  1. it’s a seagoing vessel; and
  2. the privity or knowledge was present at the time of or before commencement of each voyage
• IS NOT imputed for cargo loss or other property damage
• Pure navigational error on part of master – lookout, safe speed, fog signal – isn’t sufficient to saddle owner w/ privity or knowledge
• BUT a navigational error COULD be turned into unseaworthiness (Sea Pride)
  
  • Found priv/know bc ARPA on board but not used b/c master not properly trained in use
  • navigator incompetence may make ship unseaworthy
  • Rule of Thumb – put a navigational aid on board, you better know how to use it.
  • If equip. onboard, mgr. obviously thinks necessary, so untrained master w/in privity or knowledge

Question 10

Factors relevant to whether a manager has enough authority over operations to be considered an owner for limitation purposes

Answer 10

In re Hellenic

• scope of the agent’s authority over day-to-day activity in the relevant field of operations
• significance of this field of operations to the business of the corporation
• agent’s ability to hire or fire other employees
• power to negotiate and enter into contract on behalf of the company
• authority to set prices
• agent’s authority over the payment of expenses
• whether agent’s salary is fixed or contingent
• duration of authority – full time or during a shift
• *Where a corp. grants its agents significant discretion and autonomy, it is reasonable to deny limitation.

Question 11

Types of Losses where limitation CAN be sought

Answer 11

• Casualties (Collision losses - sinking, grounding, fire*)
• PI & D claims
• Cargo damage*
• Other debts or liabilities not excluded below

Question 12

Personal Contracts and Limitation

Answer 12

• Owner’s personal contracts are not subject to limitation.
• *Think of the owner as always having p. or k. of his personal contracts.
• If there’s a K involved by the owner, it’s prob not subject to limitation
• Think of it as the owner always having priv or knowledge of agreements he made. (e.g., towage agreement. Hire tow, but ship sinks. Tower wants to be paid for 2 days, but owner claims limitation. NOT subject to limitation)
• Owner personally executed K that included a warranty of seaworthiness. This was a very focused – can make arguments on either side, personal or not – ct held personal, no limitation
• One ct - restricts the p. c. doctrine application only to situations where the breach, as well as the execution, could be said to be personal to the VO.

Question 13

Time Period for Claims for Limitation Purposes

Answer 13

• The voyage – the time period within which claims must arise for limitation purposes:
• The fund for all claims is based on the value of the vessel at the end of the voyage.
• For PI&D claims, separate funds are required for distinct occasions (funds for each incident).
• *Limitation fund is required to start the proceedings.
• termination of the voyage when vessel actually “ends the voyage” not immediately after collision (it might continue and then sink).
• Repair stop wasn’t a distinct occasion. An intermediary repair stop, during which additional damages result, are not a distinct occasion – same voyage

Question 14

Concursus definition

Answer 14

• procedure staying actions agst the owner or vessel and requiring claimants to file claims in the federal limitation proceeding.
• No concursus if limitation used as a defense to a single lawsuit. (remember - raised as defense doesn’t toll the 6 month statute of lim for filing limitation suit)

Question 15

Saving to suitors clause

Answer 15

• The District Courts shall have original jurisdiction any civil case of admiralty or maritime jd, saving to suitors in all cases all other remedies to which they are otherwise entitled.
• gives seamen right to proceed for common law trial (jury in state ct). Admiralty cases are always brought before a judge w/o jury.

Question 16

When can claims proceed outside concursus – i.e., when can the stay be lifted?

Answer 16

• Single claimant – adequate or inadequate fund (always lifted – no way to keep it in fed ct)
• Multiple claimants – adequate funds (always lifted)
• Multiple claimants – inadequate fund (ct may lift if all parties agree to stipulations)
• If stay is lifted and they go to state ct, fed ct retains jd over limitation issue (just not liability)
• If you commence a fed lim proceeding, guaranteed to have a fed judge decide priv or knowledge
• Re multiple claimants - Husband and wife assert a single claim. Separate damage elements. Indemnity claims are derivative of the main H&W single claimant case.

Question 17

MINIMUM STIPULATIONS to allow fed ct to retain jd over proc to decide limitation

Answer 17

MINIMUM STIPULATIONS (according to professor) to allow fed ct to retain jd over proc to decide limitation – everyone has to agree

• Fed ct has exclusive jd over limitation proceeding (fund, distribution, right to limit.)
• Fed limitation proceeding will not be bound by results of other proceedings on limitation issues
• Claimants will not seek to enforce damage award greater than fund until limitation decided.
• No right to exoneration – no stipulation needed. (Tidewater pleaded to be exonerated from any fault, in addition to pleading limitation. Ct says all they decide is limitation. No right demand that a fed ct determine exoneration. Other jds are competent to decide liability)

Question 18

Right to trial by jury

Answer 18

• There is no constitutional prohibition regarding trials by jury in admiralty
• Poling: One approach would be to decide the limitation issues first, then lift the stay. As long as the ct can ensure that the SO will not face liability in excess of the limitation fund there is no reason to deny a jury trial. The case was complex enough so that trial would be duplicated if the jury was not there the whole time. The ct granted the motion to empanel the jury for all issues other than whether exoneration or limitation should be granted

Question 19

When (and what) to value the vessel for limitation?

Answer 19

• End of the voyage
• If it sinks, that’s the end of the voyage (even if it is raised and towed back to shore)
• TItanic - lifeboats, passage money, pending freight

Question 20

What does pending freight entail?

Answer 20

• Pending freight means: money paid for transporting cargo. Cargo is not freight.
• It means the earnings on the voyage (have to define what the voyage is). It includes:
o 1. Prepaid freight
o 2. Freight earned but not yet paid
o 3. Passage Money (freight for passengers)
• E.g., Deepwater Horizon. It was a vessel, so someone had to figure out what the voyage was and what the pending freight (earnings on voyage) was.

Question 21

Flotilla Doctrine

Answer 21

Limitation Fund in Multiple Vessel Situations

• Two situations focusing on the relationship btwn the vessel owner seeking limitation and the claimant:
  
  1. Pure Tort (no K relationship btwn offending vessel and claimant): only the value of the offending vessel (dominant mind – vessel that is in control if there are multiple).
  2. Breach of Contractual Obligation: includes value of all vessels engaged in the common enterprise. (So, if there is a tugboat with a bunch of barges.)
• Seaman falls and hurts back on a tug pulling a barge – owner wants to limit. Owner can claim only tug, but seaman has argument for both tug and tow (b/c he had a possible K relationship)
  If seaman injured = contractual relationship
• Common Ownership Rule: the value of all the vessels involved in the completion or performance of a contract must be subject to a limitation fund when those vessels are: subject to common ownership; engaged in a single enterprise; and under a single command

Question 22

Crown Zellerbach Clause

Answer 22

“When a Member for whose account a ship is entered in this Class (means type of P&I/insurance coverage) is entitled to limit his liability, the liability of the Class shall not exceed the amount of such limitation.”

• So if owner can limit liability, the P&I club’s liability shall not exceed that amt.
• *When a SO is entitled to limit its liab., insurer may therefore limit its liab to such sum.
• **Protects against direct action
• No standard language requirement.
• *It should be sufficient to state that the insurance company’s liab. is limited to that of the insured.
• “We will pay all sums you must legally pay as damages.” – so if owner can limit, then insurer doesn’t have to pay more than the limit.
• If policy doesn’t include a CZ clause, an insurer could be liable for more than limitation fund bc no right to limit

Question 23

Is Marine Insurance Part of the Limitation Fund?

Answer 23

• No, insurance proceeds are not part of the limitation fund.

Question 24

Direct Action Statutes

Answer 24

• LA is a direct action state, where claimants can directly sue insurers.
• Insurer cannot limit liability, so some claimants think its better to directly sue insurer .
• Direct Action Statutes: can file claims directly against insurers. Stay (limit.) should include insurers because direct actions allow claimants to circumvent limitation.
• Insurers are not owners and have no statutory right to limit liab.

• LA Direct Action Statute – La. R.S. 22:1269

• Direct action agst liability insurer in 2 instances
  
  1. Ins. policy or K issued (domestic insurer) or delivered (foreign insurer) in LA; or
  2. The accident or injury occurred in LA.
• The insurer alone may be sued ONLY WHEN:
  
  • insured insolvent or bankrupt or BK proc have started.
  • Process can’t be served on the insured.
  • the insured is deceased

Question 25

P&I Club

Answer 25

• P&I club – mutual insurance by and for owners to cover what hull insurance won’t. Have to be a member of club. You pay annual fee. If they run out of money over the year, they may ask owners to put up more.
• P&I - Indemnity agr btn owner and P&I club. Owner supposed to bear loss initially, then get reimbursed. “Pay to be paid.”
• P&I – expert on claims management. If there’s a marine casualty, they will run the whole response on the insurance side, deal with the hull insurer.

Question 26

Rule for Limitation for Personal Injury & Death

Answer 26

• Applies ONLY to seagoing vessels
• Doesn’t apply to yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, canal boats, scows, barges, lighters, or nondescript vessels (not seagoing vessels for purpose of this section)
• if the limitation fund can’t pay all losses in full, then the portion available to pay PI&D claims is $420 times the tonnage of the vessel.
• Claims arising on distinct occasions – separate limist of liability if claims arise on distinct occasions
• Privity or knowledge of the master is imputed to the owner

Question 27

Seagoing vessel test

Answer 27

SEAGOING TEST: whether the vessel does, or is intended to, navigate in the seas beyond the boundary line (12 miles – or 3 miles?) in the regular course of operations. This is not enough, must also consider the usual operations to be expected for a vessel of its design.

Question 28

Apportionment of losses in personal injury and death claims

Answer 28

• PRO RATA DISTRIBUTION – in proportion to the amt of the claim
• If fund insufficient to pay all claims
  
  • all claimants shall be paid in proportion to their respective losses
  • PI&D claimants shall be paid an addl amt in proportion to their respective losses
• SO ASK:
  
  • Combination of everyone – prop damage and PI&D. Pro rata distribution for everyone. Prop. damage ppl are done.
  • Then, look at what the PI&D ppl got and see if it is at least $420 per gross ton. If not, it is bumped up to that amt.
• Gross Tonnage – gross internal volume (whole internal volume of the ship) (capacity, not weight)

• Supplemental Fund

 - For seagoing vessels, the supplemental fund for PI&D claims is $420 per gross ton
 - There is no sup fund for non seagoing vessels

Question 29

Supplemental Fund Overview

Answer 29

• If the basic fund is sufficient to pay all claims, no supp. fund required.
• If it is insufficient, fund is distribute basic fund pro-rata
• Supp. fund so that total available for all PI&D is $420 x gross ton – not each claim
• Portion available to pay PI&D increased to $420 x gt

Question 30

What if a limitation claimant settles?

Answer 30

o If a limit. claimant settles, the limit. fund is reduced on a pro-rata (not on a dollar-for dollar) basis to reflect the settlement.
o Like if a claim is for 10% of the fund, that 10% gets wiped out.

Question 31

Pleadings you need to bring to court to file limitation suit

Answer 31

• Complaint
• Affidavit of Value
• Affidavit of Pending Freight
• Owner’s Stipulation for Value
• Owner’s Stipulation for Costs
• Order Approving Owner’s Stipulation for Value, directing issuance of notice to claimants and restraining suite
• Owner’s Notice to Claimants re Petition for Exoneration and/or Limitation

Question 32

Time to File Limitation Suit

Answer 32

• Rule F requires that a limitation complaint under 46 USC 30511 be filed not later than 6 months after the SO receives notice of a claim in writing.

• This is a jurisdictional reqt – if not met, the complaint will be dismissed. Can never bring it again.
• A limitation complaint mat be filed at any time after the incident occurs. A SO doesn’t need to wait to receive a notice of claim before initiating a limitation proceeding (offensive)

Question 33

Requirements of Limitation Complaint

Answer 33

More than just “notice pleading”

• Facts asserted in support of SO’s right to limit liability. Narrative need not be elaborate, but “should be full and complete”
• Facts necessary for a court to determine the amt to which the SO’s liability shall be limited – what is going to be the limitation fund? Value of the vessel at end of voyage plus pending freight.
• A complaint may also demand exoneration from liability
• The voyage, if any, including date & place of termination of the voyage. Can be difficult. In a collision, sometimes SO’s argue that voyage is longer, so all the post-casualty response costs would be included. Allege voyage termination after the incident.
• Amt of all known demands and pending proceedings
• Whether the vessel was damaged, lost or abandoned, and if so, where and when.
• Value of the vessel at the end of the voyage, or in case of a wreck, the wreckage value.
• Amt of pending freight recovered or recoverable.
• It owner elects to abandon ship to ct, must state any claim that arises from any subsequent voyage prior to day of abandonment – not often used.
• Subsequent creditors must have same rights to the proceedings of the sale (so if SO didn’t pay for bunkers on a subsequent voyage, that supplier needs to be able to take from the proceeds since there is only going to be one sale).
• Vessel is going to be sold only one time

Question 34

Affidavits of Vessel Value & Pending Freight

Answer 34

• Documentary support for values claimed in limitation complaint as making up limitation fund – value of owner’s interest in vessel & pending freight.
• Affidavits can be done separately or combined
• Must be filed simultaneously with complaint
• Affidavit of vessel valuation – executed by ship appraiser or recognized surveyor
• Affidavit with respect to pending freight – executed by SO’s representative or by counsel.

Question 35

Stipulation for Value & Stipulation for Costs

Answer 35

• Rule F(1) requires a SO to deposit or post security, for benefit of claimants, in amt of limitation fund – value of vessel owner’s interest in the vessel and pending freight
• (1) cash, (2) bond, or (3) the vessel itself (surrender vessel’s interest to a trustee)
• Bond – most common practice. Must provide 6% interest per annum from date of givingsecurity
• P&I Club Letter of Undertaking has been allowed (becoming more common). Promise to pay any judgments for members. There is no monetary cost to SO generally (as opposed to bond), but its up to the ct to accept them.
• Must use bonding company approved by fed cts

Stipulation for Costs
- Rule F(1) also requires posting of a bond for court costs - $250

Question 36

Order Approving Stipulation for Value, Directing Issuance of Notice to Claimants and Restraining Suits

Answer 36

• Prepared by atty, asks ct to sign
• Shipowner seeks to get fro the ct this impt order from the court which achieves three things:
  
  1. Preliminary approval by ct to amt of limitation fund (Stip for Value – Security)
     
     • Amt can still be challenged by claimants (Answer)
  2. Direct notice to all claimants that SO has filed limitation proc &, if they have any claim agst SO, they must file it in the lim proc by a specified date
     
     • Date for claimants to file claim is fixed by ct. 45 - 60 days after complaint filed, Rule f(4) – not less than 30)
  3. Restrains prosecution of any other suits already filed, whether at federal or state ct, agst SO or its property arisen out of limitation event. Enjoins filing any new claim agst SO after injunction order issued
     
     • Main advantage of lim suit – pull together all potential claims
     • injunction has no extraterritorial effect – only reached to other US courts
     • The restraining order may not be effective agst:
       
       • Direct actions – underwriters of the ship
       • Oil pollution claims – OPA 90 (can’t limit for oil pollution claims)
       • Govt wreck removal claims

Question 37

Notice to Claimants

Answer 37

drafted by SO counsel

• Rule F(4): court must issue a notice to all persons asserting claims related to limitation event, telling them to file claims in lim proceeding & to serve copy on counsel for P by due date
• SO counsel must mail notice to all claimants
• Publication in designated newspaper once a week for 4 weeks before date fixed for filing claims - Mail copy of notice to all known claimants by day of second publication
• Failure to give notice to all known claimants will cause case to be dismissed

Question 38

Claim and Answer

Answer 38

• Rule F(5) reqs that each claim set forth facts upon which claimant relies to establish his claim
• Purpose of a claim – right to share in SO’s limitation fund (pro rata), in case SO entitled to limit
• Purpose of an answer – challenges SO’s right to gain benefit of limitation statute (lim fund, right to seek limitation, injunction, etc.). Don’t have to file an answer if you don’t want to challenge limitation – you can just file a claim. Have to have specificity.
• Rule F(5) permits the claim and answer to be filed either in a single pleading or separately.

Question 39

Burdens of Proof for Limitation and Exoneration

Answer 39

Burden of proof for exoneration is on the claimant
- The claimant must establish liability of the SO (if not, there is no reason to think about limitation)

The burden of proof for limitation is on the petitioner
- Petitioner must establish that he lacks privity or knowledge of cause of incident (negative burden)

Question 40

List of Claims

Answer 40

• Rule F(6) requires that w/in 30 days after due date in notice, counsel for SO must mail to each claimant (or atty) listing of all claims that have been filed showing
- name of each claimant
- name and address of each atty
- nature of the claims
- the amt of each claim
• This will allow claimants to evaluate their chances of recovery w/ respect to their own claims

Question 41

Motion and Order Noting and Entering Defaults

Answer 41

• The SO may file a motion requesting ct to enter a order defaulting any potential claimant who didn’t file claim & answer within the time fixed by the ct
• General rule – late claims will be allowed (particularly personal injury or death claims), unless there is some prejudice (e.g., no excuse for delay). Burden on late claimants to show why they should be allowed to file a late claim.
• Not required by Rule F of the Supplemental Rules – but good practice.

Late claims have been allowed when
• Claimants didn’t speak the language in which the notice was published; or
• when notice wasn’t published in claimant’s geo area

Question 42

Concluding a Limitation of Liability Proceeding

Answer 42

Amicable resolution:

• Motion and order to cancel bonds (Request from the SO to cancel the limitation bond (stip for value) and cost bond (stip for costs) by means of a final decree in the limitation proceeding)
• Motion & order to strike & withdraw Claim & Answer (When you enter into settlement, you will get a release. But you have to get that claim withdrawn and stricken.)
• Settlements – filed by claimants.

Trial

• Final Decree
  
  • Brings the litigation to a conclusion
  • Will show whether SO was granted limitation (lack of priv or know) – if so, the amt
  • Must be issued by ct after all claims satisfied
  • Bond – cancelled or executed
  • Permanent protection: res judicata (only in US cts - it has no extraterritorial effect)

Question 43

Is a foreign shipowner entitled to limit his liability under US law?

Answer 43

Yes

Question 44

What is the applicable substantive law in a maritime incident that occurs outside the territorial waters of the US?

Answer 44

• Collision in territorial waters of a foreign country
  
  • The law of the site – lex loci delicti
  • FYI - US is 3 nautical miles
• Collision on the high seas btwn 2 vessels of diff flags & diff body of laws
  
  • the law of the forum (US LAW)
• Collision on high seas btwn 2 vessels of same flag
  
  • the common body of law
• Collision on high seas btwn 2 vessels of diff flags and same body of laws (e.g., Brussels Collision Convention of 1910)
  
  • common body of law adopted by both flag states

Question 45

What is the applicable limitation of liability law to determine limitation issues, including the amt of the limitation fund?

Answer 45

• The US considers its Limitation law to be procedural, the courts will always apply US limitation law as the procedural law of the country.
  • GENERAL PRINCIPLE: Limit. in the US is viewed as a procedural device, and the forum ct always will apply its own procedural law, including the remedy available.
• Exception: Is the foreign limitation law substantive or procedural? If the foreign limitation law is substantive, then it will apply (not US limitation law)
• *Substantive: when foreign limitation law attaches to the rights of the parties.
• *Procedural: when foreign limitation law attaches to the remedy available to the parties.
• Cts. must apply foreign limit law only if foreign substantive law governs underlying liab. of parties & foreign limit. law attaches to foreign subst.law.
• In all other cases, Cts. must apply US limitation law to limitation proceedings brought in the US Cts.
• **There is no need to go further to see whether foreign limit. law attaches to law of substantive liab when there is no substantive foreign law to which foreign limit. law could attach.
  • Ony look further if foreign subst law will apply in US cts. Then question of whether foreign limitation law is part of substantive law of that country

Question 46

Differences in procedure if limitation raised as a defense in an answer

Answer 46

• *If P sues in fed. Ct. = no risk of losing right to limit. Even if 6 months have passed SO has right to urge limitation in an answer in the fed ct case.
• *If raised as defense, SO doesn’t have to file a security.
• *If raised as defense, SO doesn’t have a right to concursus (enjoin)
• *If several claims, different fund for every claim (no concursus) 8 claims = 8 x l.fund.

Question 47

The Morania exception to the six month time limit rule

Answer 47

When it is clear that the total damages claimed are substantially less than the value of the fund, a VO is not obligated to institute a limitation proceeding w/in 6 months after receiving notice of a claim.

• A SO is not on notice of potential claims in excess of the limitation fund
• The 6 month period will not begin to run until the claimant states an amount in excess of the l.fund.
• BUT: If the amount of a claim is uncertain (reasonable concern by owner) = 6 month period is running.
• *Notice of one claim is notice (triggers) for all claims and triggers the 6 month period for all of them. YOU HAVE TO ACT after receipt of the first, even if no notice of the others yet.
• Best practice - go ahead and file for limitation, then move to stay it.

Question 48

Does state court have jurisdiction to decide limitation when raised as a defense?

Answer 48

• In Oregon, no - Supreme Ct of Oregon held that a state ct. had no jurisdiction to decide the question of limitation
• Other courts have said yes, as long as no limitation action pending in fed ct - A st ct is empowered to decide the applicability and merits of 46 USC 30505 limitation defense when it is raised by way of an answer in state ct, provided there is no 46 USC 30511 proceeding pending in fed ct.
• In LA state court - question of limitation was also allowed to go to the jury

Question 49

Distinct occasions

Answer 49

• Exxon Shipping - Barge exploded and sunk (pi&d) – 2 days later, a tow collided with the sunken barge wreck (collision)
• The explosion & subsequent collision w/wreck were considered “distinct occasions” for purposes of filing limit. petition.
• written notice of collision claim didn’t trigger the 6 month period for the explosion claim.
• Section 183(d) didn’t apply b/c it only applies to seagoing vessels – a barge is an inland vessel. Judicial creation of distinct occasion – wouldn’t really apply.
• The SO must establish a fund for each distinct occasion.
• *If there is time and opportunity after the first collision to take action which would avoid the second collision, each is a distinct occasion.

Question 50

What constituted written notice of claim?

Answer 50

• A letter must make clear intentions to seek damages from SO and contain details of the incident in question.
• *In general, notice of a claim must provide details of the situation giving rise to the claim = cause, type, and severity of the injuries; and set forth that the VO may or will be held responsible.
• *A claimant must make his intentions clear in order to trigger the 6 month period.
  • Oral communications don’t meet requirement.

Question 51

Where in the US must you file a limitation suit?

Answer 51

1. If a vessel is arrested (in rem action) or attached (in personam action) in a particular district, that is the only jd to institute a limitation proceeding.
2. If the vessel is not arrested or attached, but suits have been filed in different districts, a limit. proceeding can only be brought in one of the jurisdictions where a suit is pending. (geographical district, not just court district)
   - limit. proceeding can be filed in any jd in the US where a suit has been filed.
   - *Ct. has discretion to transfer the case to the most convenient forum (convenience to parties and witnesses, in the interest of justice)
3. If there is no arrest or attachment; no suit has been filed, but a vsl is present w/in a particular district, limitation proceeding must be filed in the district where the vessel is located. (Historically 3 miles of the territorial sea, now probably 12 miles)
   - creates opportunity for SO to move vessel to place where he wants to file limitation if he hasn’t yet been sued.
4. If there is no arrest or attachment, no suit has been filed, and the vessel is not located in any jd in the US, complaint may be filed in any district

Question 52

Can a shipowner use limitation solely to get an injunction?

Answer 52

• No, S. Ct. precedent says you have to intend the fund to pay pay claims, not simply to enjoin the prosecution of other cases

Question 53

Claimants burden of proof

Answer 53

• Claimants must prove liab. on part of the SO. If they fail to meet his initial burden by a preponderance of the evidence, the case is over.
• BOP as to exoneration is on the claimant
  
  • When claimant & SO go to trial, the initial BOP is on the claimant to prove liability of SO
  • If it fails to meet this initial burden by a prep of evid, the case is over
• Claimant must also prove the extent of damages in an amt that exceeds the limitation fund
  
  • if it fails to prove damages in excess of fund, no reason to determine right to limitation (case ends)

Question 54

Petitioner (shipowner) burden of proof

Answer 54

• The BoP as to limitation is on the SO.
  
  • After claimant has proven liability on SO & extent of damages in excess of fund, issue of whether SO liability should be limited is triggered.
• Negative Burden:
  
  • SO must prove lack of privity or knowledge of the cause of liability, either solely caused or contributed to causing damages alleged by claimants.
  • If SO fails to prove his negative burden by a preponderance of evidence, limit. is denied and claimants recover their claims in full.

Question 55

What kind of privity or knowledge must the SO have?

Answer 55

knowledge or priv of any fact or act causing the accident isn’t enough; the owner must have knowledge or priv with regard to the negligent act or unseaworthy condition proximately causing the accident.

Question 56

Effect of Limitation Injunctions

Answer 56

• An injunction issued ex parte by a US court does not have extraterritorial effect
• The injunction reaches every court in the US with the exception of certain claims:
- Oil Pollution (oil pollution claims are outside of limitation – OPA 90 says limitation act N/A)
- Governmental Wreck Removal cases - always outside of SO limitation. If govt removed wreck & wants to recover expenses, not subject to limitation
• Vice versa – an injunction issued in a foreign country will not have effect inside the US
- What if a party appears in both proceedings? It will subject itself to an injunction that was issued in the first court, therefore, cannot have a claim in a different country

• The injunction is not reaching the other court, but is reaching the party that is within the JN of the court. The ability of the court is to control what a party does in a foreign jd, not what a foreign court does

Question 57

Foreign proceedings and res judicata

Answer 57

• Issues: whether the decision held by the English court determining liability on both vessels, has res judicata effect in the proceedings brought in the US
• Holding: Yes. Court has discretion to bar re-litigation of the issue of liability already decided by a foreign country
• When two LOL proceedings arising from the same incident are concurrently running – the proceeding that decides first is likely to have effect on the other proceeding
• No Extra-territorial effect; however res judicata and collateral estoppel: could be applied through the international law doctrine of comity
• Domestic court has the discretion to recognize or not recognize a decree of a foreign tribunal
• Court will review the jurisdictional & procedural regularity of the foreign tribunal
• If the court is not satisfied – it may ignore any decree entered in a foreign proceeding
• So, an American ct can give res judicata to determinations made in a foreign proceeding. But it is totally discretionary.

Question 58

OPA 90

Answer 58

• LOL is not available for oil pollution (limitation may be set according to OPA)
• • Procedure Rule F (concursus) is not available
• Claims arising under OPA 90 are not subject to the substantive or procedural law of limitation act or to concursus of claims under Admiralty Rule F.
• OPA repealed the Limitation Act with respect to damages and removal costs – the procedural rules are inapplicable as well
• The deadline for claims and venue provisions under OPA are inconsistent with the limitation act (Rule F: within 6 months of written notice, OPA: 3 years in general, up to 6 years in some cases)
• Creates its own LOL, based upon tonnage of the vessel
• 4 ways in which LOL could be lost – unlimited liability
• gross neg. or willful misconduct;
• violation of a federal safety, construction, or operating regulation
• Failure to report the spill
• failure to cooperate with the appropriate govt authority during the clean up

Question 59

Wreck Act

Answer 59

• Unlawful to tie up or anchor vessels in navigable channels to obstruct the passage of other vessels; or to voluntarily or carelessly sink, or permit or cause to be sunk, vessels in navigable channels.
• Whenever a vessel or other craft is wrecked & sunk in a navigable channel, duty of owner, lessee, or operator to immediately mark it with a buoy or beacon during the day & a light at night, & to maintain such marks until sunken craft is removed or abandoned
- neglect or failure of owner is unlawful
- duty of owner to commence immediate removal -, failure considered as an abandonment & subject to removal by the United States.
• There is a duty to report it to the CG
• First, must mark it. If you don’t, you can be liable if someone runs into it.
• You can abandon it to the govt.
• Insurance can cover cost of wreck removal.
• *No limitation for wreck removal - Owner has privity or knowledge as a matter of law as to whether the wreck has been marked; Voyage ends with sinking - Obligation to mark and remove wreck begins after voyage ends.
- full liab. w/o fault (strict liability).

Question 60

Wreck removal vs. salvage

Answer 60

• Salvage comes under hull policy, wreck removal comes under the P&I coverage. Wreck removal will be scrapped.

Question 61

Damage to a Government Structure

Answer 61

• It is unlawful. Strict liability criminal statute.
• Damage, taking possession or use of harbor or river improvements
• Not lawful to take possession or make use, build upon, alter, deface, destroy, move, injure, obstruct by fastening vessels thereto or otherwise, or in any manner impair the usefulness of any sea wall, bulkhead, jetty, dike, levee, wharf, pier, or other work built by the US or any piece of plant, floating or otherwise, used in the construction of such work.
- There is no liability if govt solely at fault – failure of causation by the vessel (vessel itself didn’t cause it, the govt’s burr sticking out did)
- Even though this is a strict liability, if vessel owner can prove 0% fault, then he can get away.
- Comparative fault principles apply in allocation govt. liab. for barge damage, but not to govt. structure damage. (Govt 50% at fault, barge 50%. Govt. liable for 50% of barge damages; barge liable for 100% of lock damage bc strict liability for damage to govt structure).
- *Even if VO is only liab for a certain percentage, he is liable 100% for govt structure damages.
• You can limit liability for damage to govt structure to the value of the vessel (because it is an in rem, not in personam, claim)
• BOP: Govt has burden of proving liab. and damages// SO has bop to show sole fault of govt.

Question 62

Cargo Damaged by Fire

Answer 62

• Neither carrier nor ship responsible for loss or damage resulting from fire, unless caused by actual fault or privity of the carrier.
Fire Statute (part of Limitation Act):
• VO not liable for loss or damage to merchandise on vessel caused by a fire on vessel, unless fire resulted from the design or neglect of the VO. (held by ct to be same as priv or knowledge)
• Fire statute puts BOP on claimant to prove design or neglect (not owner’s BOP to prove lack of priv or knowledge)
• *Cargo interest has burden of proving that owner had p. or k. (design or neglect) of the fire.
• So, owner will want Fire Statute to apply; if you are a claimant, you want to fire statute not to apply.
- Crew negligence isn’t necessarily equal to owner neglect that would defeat Fire Statute. Owner’s breach of non-delegable duty isn’t necessarily neglect warranting denial of Fire St. exoneration.
- 9th Circuit: VO must first prove that it exercised due diligence to make the vessel seaworthy before Fire Statue applies. Don’t even get to talk about firs statute unless you show due diligence.
- 2nd and 5th Circuits: Fire Statute applies if there is a loss by fire:
- P: pf case; D: fire caused damage; P: negligence; D: which part of cargo was damaged by its fault

Question 63

Improper stowage of cargo - limitation?

Answer 63

Moore-McCormack

• 1. Cargo loss: owner has no priv or k that cargo was improperly stowed by crew = limit allowed
• 2. Personal injury & death: master’s priv or k of improper stowage imputed to owner = limit denied

Question 64

Cargo loss and limitation

Answer 64

Limitation standards different from COGSA
• Under COGSA: the lack of DD of any employee which occurs before or at the beginning of a voyage and results in unseaworthiness is sufficient to preclude exoneration-limitation
• Under Limitation Act: VO is permitted to limit only if he can prove that the lack of seaworthiness was not within its priv and knowledge.
- Limit. can be denied because owners should have checked and not allowed ship to sail in unseaworthy condition.
- What if personal injury or death? Seagoing vessel? *If PID in a seagoing vessel: master’s p or k imputable to VO.
- Re cargo cases – you use limitation when the claims start approaching the value of the vessel.

Question 65

Liability Regimes for Collision

Answer 65

• In personam liability – owner or bareboat charterer may be personally liable for crew negligence, statutory violations, or vessel unseaworthiness (may need limitation – to limit to value of the vessel)
• In rem liability – the offending vessel may be liable in rem as though it was one of the wrongdoers – maritime lien created (self-limiting – automatically gives you the value of the vessel)
• In most jurisdictions, a VO is liable in personam for collision torts committed by his vessel.
• Under U.S. law, collision gives rise to a maritime lien that immediately attaches to offending vessel. Can be enforced by proceeding agst vessel in rem in a federal district court admiralty proceeding.
• When you don’t know who the owner is or where to serve, just arrest the vessel at the port.
• You can bring an in rem claim only in federal court, not in state court. You can attach a ship in state courts pursuant to applicable state law.

Question 66

Personification of vessel

Answer 66

• The offending ship is considered as herself the wrongdoer, and as herself bound to make compensation for the wrong done = personification of the vessel
• The collision, as soon as it takes place, creates, as security for the damages, a maritime lien or privilege, a proprietary interest in the offending ship

Question 67

Exceptions to owner’s personal liability for collision

Answer 67

• Bareboat charter – actual owner probably not at fault
• compulsory pilot SOLELY at fault
• Can go agst the vessel owner, the bareboat charterer, the insurance company, the vessel, etc. You can go just agst the vessel in rem, OR you can go agst many parties in rem & in personam.

Question 68

Unmanned barges and collision liability

Answer 68

• Like flotilla doctrine. Tug responsible for the navigation of both tug & unmanned tow & was solely liable for damages sustained by a third party
• Dominant mind idea - MISS SUE’s captain, who was in sole control of the operation, was the “dominant mind” of the whole flotilla.
  • Dominant mind tug, unmanned barge, and a helper tug that is following orders of the dominant mind tug. Dominant mind tug is the only one liable in rem.
• But if the tow is unseaworthy (e.g., its lights don’t work and someone hits it) it can be liable in rem, even though unmanned.
• PRESUMPTION that a tug towing her tow into collision, especially with a stationary object, is at fault. One of the responsibilities of a tug is to make sure tow is properly prepared to be towed.

Question 69

When is a pilot compulsory?

Answer 69

• When state or federal law required to take pilot on board

- If you have a choice – ship liable in rem

Question 70

When is owner liable in personam for collision?

Answer 70

• Vessel is liable in rem for collision damage caused exclusively by negligence of a compulsory pilot, even though VO has no in personam liability, because the vessel itself is at fault - If ship’s crew messed up 1%, the SO is liable.
• Owner is personally liable (in personam) if any crew negligence or unseaworthiness is a cause.
• If Owner is liable in personam then Vessel liable in rem
- Vessel owner is not liable in personam, but the vessel is liable in rem, for damage brought about exclusively by the neg of a compulsory pilot who was in actual control of vessel at time of casualty
- VO may be absolved of personal liability only if the compulsory pilot was in actual control of the vessel and his negligence was the exclusive cause of the casualty. If the pilot wasn’t exclusively at fault, doesn’t mean that the master or crew wasn’t partially at fault.
- Compulsory pilot sole fault: vessel liable in rem only

Question 71

Requirements for Arrest of Vessel

Answer 71

• Rule C
• a maritime lien
• maritime lien – “secret” lien, recording not required - must be perfected through arrest or equivalent

Question 72

Requirements for Attachment of Vessel

Answer 72

• Rule B
• in personam claim against the owner
• owner not within the federal judicial district
• owner’s property within the district

Question 73

Elements of Collision Liability

Answer 73

• Liability = fault + causation
• Fault: negligence or unseaworthiness, statutory violation
• Causation = Proximate Cause
- A party whose fault did not proximately cause the injury is not liable at all
• Unseaworthiness: not reasonably fit for its intended purpose

Question 74

Unseaworthiness definition

Answer 74

not reasonably fit for its intended purpose

• T.J. Hooper - Reason the barges sank was b/c taken to sea in bad weather, & wouldn’t have gone if you knew it would be bad, & if you had the radio you would know. So vessel rendered not reas fit for its intended purpose.
• Afran Transport - Failure to use radar that was on board was negligent (1960) & hence fault on such vessel. It was there to avoid collision. Turning it off is negligent.

Question 75

Proportional/comparative fault

Answer 75

• Trial/judgment (no jury in collision case) - Remember joint and several liability applies – while judge & jury may apportion fault, injured party may recover from any (then could get contribution)
• Settling joint co-tortfeasor
- Proportional/comparative fault applies
- No contribution or indemnity from settling D
- Whatever they paid to settle the case doesn’t matter. But they have removed their proportionate share of fault from the whole. An empty chair. If a party settles, their $ amt is irrelevant.
• One party settles plaintiff’s entire claim & seeks contribution from other parties
- No assignment of plaintiff’s rights - one D can’t settle whole claim then seek contribution based on an assignment of rights. No assignments!
- D would have to settle on behalf of everyone. Then, because he paid more than his percentage of fault, he would have a right of contribution from all the other Ds.
- * If party A is 40% at fault, it will always have 40% fault regardless of whether party B settled or went to trial.

Question 76

Collision Damage Calculation

Answer 76

Ship A damages: $ 750,000
Ship B damages: $ 250,000
Total $ 1,000,000
• Determine Ship A liability. Multiply total damages by fault percentage. Ship A = 25%.
- 0.25 x $1,000,000 = $250,000 (proportionate liability amt, the amt that A is responsible for)
- But A had $750,000 in damage, so B owes A some money
• Compare Ship A damages to liability
- $750,000 - $250,000 = $500,000 (B owes A)
* But the maximum the ship will pay is the limited liability amount and other ships may be stuck with some additional costs.

Question 77

Settling Defendants

Answer 77

• Trial judge must determine liability of all settling and nonsettling parties
• No claims for contribution against the settling defendant (even if his percentage of fault is found to be higher than what he settled for)
• Settling D’s fault is determined during trial and not at moment of settlement.

Question 78

Superseding Cause

Answer 78

• Superseding cause: applies when D’s negligence in fact substantially contributed to Ps injury, but injury was actually brought about by a later cause of independent origin that was not foreseeable.
• Exxon v. Sofec: Reason ship ran aground wasn’t failure of mooring system, it was bad navigation for 2 hours after breaking loose of mooring. Superseding/intervening cause: negligent navigation superseded system failure

Question 79

Inevitable Accident

Answer 79

• *Inevitable accident: (test) when an accident occurs & there was no possible way to prevent it by exercise of due care, causation, caution, & nautical skill. Generally attributed to an act of God.
• Usually occur when safe navigation is rendered impossible from causes which no human foresight can prevent.
• The loss or damage must be borne by the party on whom it falls. (each responsible for own damages)
- If Cts cant figure out what went wrong, Ct uses divided damages, but in these days, everyone’s going to have some experts claiming the cause
- if can’t determine fault – need fault for liability

Question 80

Force Majeure

Answer 80

• Issue: who is responsible for this damage?
• SO has to show that the damage was (1) caused by overwhelming force and (2) all reasonable precautions must be taken to be freed from fault

Question 81

Error in Extremis

Answer 81

• The OREGON – the judgment of a competent sailor in extremis cannot be impugned (questioned or criticized). Can’t fault them for the mistake.

• In extremis: where one ship has, by wrong maneuvers, placed another ship in a position of extreme danger, that other ship will not be held to blame if she has done something wrong, & has not maneuvered with perfect skill & presence of mind.
• *The party must be free of fault until the emergency arose.

Question 82

Rights of cargo against non-carrying vessel

Answer 82

• J&S liability allows cargo to recover from the non-carrying vessel
• The non-carrying vessel seeks contribution from the carrying vessel
• • If ship A (carrying vessel) made error in navigation (complete defense in COGSA) - Cargo interest would go after ship B. If there was no J&S liability, B would only be liable for his proportionate fault. But since there is J&S, B is responsible for the entire cargo damage.

Question 83

Both-to-Blame Clause

Answer 83

• in contract of carriage
• seeks to make cargo indemnify the carrying vessel for what it pays the non-carrying vessel
• Common carriers – unenforceable (carrying more than one cargo) - improperly shifts liability away from the carrier
• Private carriers – enforceable (probably charter parties; tankers, etc.)

Question 84

Pennsylvania Rule

Answer 84

• causation presumption - shifting the BOP as to causation
• When a vessel violates a statute or regulation designed to prevent collisions, a presumption arises that the breach was cause of collision - only rebutted by showing that the fault could not have been a contributing cause of collision (negative)
• Showing that the breach might not have been a cause of casualty isn’t sufficient to rebut presump.
• Failing to rebut PA rule presumption doesn’t impose 100% liability on party – comparative fault principles still apply. A party may still show its opponent’s fault & benefit from comparative fault
• If both parties are guilty of statutory fault – burden falls on both parties to rebut the presumption
• The rule is not limited to collision cases

Question 85

Powered vessels colliding with non-moving objects

Answer 85

• fault presumption
• A vessel under its own power that collides w/ anchored vessel or fixed structure has burden of proving absence of fault or force majeure: presumption that they are at fault.
• The stationary object or vessel might be at fault and the Pennsylvania rule might apply.
• defense: force majeure

Question 86

Drifting vessels causing damage

Answer 86

• fault presumption
• When a drifting vessel causes damage, the custodian (master for ships, barge for barges/operator for barge fleet) is presumed to be at fault & bears the burden of disproving fault by a preponderance of the evidence
• So, they have the burden of proof that the vessel was properly moored.
• defense - force majeure

Question 87

Dragging anchor

Answer 87

• fault presumption
• a vessel that drags anchor & collides w/another vessel is presumed at fault. It has BOP to show that it was w/o fault including force majuere (must be of overwhelming force as to render reasonable precaution futile)
• Prudently anchored vessel must be ready to operate engine in case a vessel drifts into you. You are partly at fault.
• Other vessels exonerated under the in extremis doctrine: through no fault of the anchored vsl (you did everything you should), made mistake due to emergency situation.
• A defense is force majeure (to all of these presumptions)

Question 88

Damage caused by passing vessels

Answer 88

• fault presumption
• a passing vessel that causes damage to a properly moored vessel is presumed at fault.
• A ship passing moored vessels must proceed carefully to avoid creating unusual swells or suction that would damage craft properly moored or installations along the shore.
• Piers & docks must be kept in proper condition & vessels must be seaworthy & properly moored (or anchored) to resist forces of current, wind, & ordinary swell & suction in narrow waters where heavy traffic may be expected (i.e. Mississippi River).

Question 89

Sheering or veering

Answer 89

• fault presumption
• a vessel that sheers or veers into another one or a fixed object is presumed at fault
• Sheering or veering occurs when a vessel deviates from its expected course.
• Common causes include:
  
  • Hydrodynamic action btwn ship and the bottom, bank or another ship;
  • Equipment malfunction;
  • most commonly, poor helmsmanship or navigational error

Question 90

Logbooks as evidence

Answer 90

• logbook alterations or the failure to produce logs creates a presumption that the original or missing entry was adverse
• The proper way for a person to correct an entry is to draw a single line through it, write the correction so both can be seen, and initial it
• The presumption may be rebutted by an adequate explanation.

Question 91

Failure to call a material witness

Answer 91

• Failure to call a material witness (e.g., the captain, watch officer, etc.) creates presumption that the testimony would have been adverse
• Presumption may be rebutted by an adequate explanation.
• good to take depositions right after the collision

Question 92

Government Agency Reports

Answer 92

• CG & NTSB Reports Inadmissible!!
  
  • No part of a report of a marine casualty investigation, including findings of fact, opinions, recommendations, deliberations, or conclusions, shall be admissible as evidence or subject to discovery in any civil proceedings . . .
  • Any member of the CG, investigating a marine casualty, shall not be subject to deposition or other discovery, or otherwise testify in such proceedings relevant to a marine casualty investigation, w/o permission of Secretary [of Homeland Security]
  • Before this rule, CG people were deposed all the time. Now they cannot be; inadmissible.
• No part of any report of the NTSB, relating to any accident or investigation thereof, shall be admitted as evidence or used in any suit or action for damages growing out of any matter mentioned in such report or reports
• • These reports are not admissible b/c purpose of the NTSB & CG reports are to prevent collisions so they discuss cause-in-fact that may not be legal cause.

Question 93

Risk of Collision Concepts

Answer 93

• No risk
• Risk
• Close quarters
• In extremis (in the “red” section)
• Point of Rules of the Road is to keep away from Close quarters situation.

Question 94

Navigation Rules - purpose and effect

Answer 94

• Rules for preventing collisions
• Not designed as liability rules
• Violation triggers PA Rule under US law

Question 95

Factors considered in avoiding collision

Answer 95

• Controllable collision avoidance factors: Lookout, Radar/AIS, Speed (slowing down is often the best way to avoid collision), Human factors (how much sleep did you get?)
• Non-controllable factors: Visibility, Traffic, Geography (narrow channel, shallow water), Other vessel / human factors

Question 96

Legal Consequences for violating navigation rules and regulations

Answer 96

• Binding – rigorously enforced
• Masters are bound to obey the rules and entitled to assume that the other vessel will also follow the rules
• A vessel is not at fault for assuming that the other vessel is going to do its part
• All courts (federal and state) are bound to enforce the Navigation Rules

Question 97

COLREGS demarcation lines

Answer 97

• Sets forth boundary lines between the COLREGS and the inland rules around the entire coast of the U.S. (Whether Intl or Inland Rules apply)

Question 98

Vessel Bridge-to-Bridge Radiotelephone Act

Answer 98

• Requires specific vessels to carry Radiotelephone on board
• Purpose is to provide means whereby the approaching vessels can communicate their intentions to one another through voice radio (specific frequency)
• Master or person in charge will be subject to civil penalty if failed to comply with the Act
• Pennsylvania rule applies

Question 99

Navigation Safety Regulations (26 CFR)

Answer 99

• Applies to US vessels & foreign vessels when operating in US navigable waters. Does not apply to foreign vessels engaged in innocent passage
• Person in charge of vessel underway must ensure wheelhouse is manned by a person to “fix” vessel’s position (determine your exact longitude and latitude), someone who is trained
• Vessel anchored, must maintain an anchor watch
• Requires vessel’s equipment to be tested before entering US waters & before getting underway from a berth in the US
• Vessel must have updated charts of area to be transited
• Vessel must have a marine radar system
• Vessels of 10,000 gross tons or more must have a second marine radar system – they must operate independently of each other (different frequency). One of the radars has to be equipped with an Automatic Radar Plotting Aids (ARPA) – the computer will do the plotting.
• Any of these violations is a PA rule violation

Question 100

Marine Casualty Definitions

Answer 100

• Marine Casualty – any accident or casualty involving a vessel other than public vessel in the US navigable waters
• Serious marine incident – any marine casualty or accident that must be reported under § 4.05-1 and which results in:
  
  • Death
  • Injury that requires professional medical attn
  • property damage in excess of $100,000
  • actual or constructive loss of a vsl
• What incidents must be reported? Unintended grounding or allision w/ a bridge; intended grounding or allision with a bridge that creates a hazard to navigation, the environment or the safety of the vessel; machinery loss (propulsion or steering) that reduces maneuverability of the vessel; An occurrence adversely affecting the seaworthiness of the vessel, including fire, flooding, loss of life, harm to environment

Question 101

Who must report casualties to the USCG?

Answer 101

VO, master, agent, operator or person in charge must report verbally right away & also submit a written report w/in 5 days of any marine casualty

Question 102

What incidents must be reported to USCG?

Answer 102

• Unintended grounding or allision w/ a bridge
• intended grounding or allision w/ a bridge that creates a hazard to navigation, environment or the safety of the vessel
• machinery loss (propulsion or steering) that reduces maneuverability of the vessel
• An occurrence adversely affecting the seaworthiness of the vessel, including fire, flooding, loss of life, harm to environment

Question 103

National Transportation Safety Board Marine Casualty Investigations

Answer 103

• Major marine casualty – property damage estimated at $500,000 or more
• NTSB has the discretion to come in and investigate any casualty – almost always when there is a major marine casualty
• NTSB – “significant marine casualties” (i.e. passenger vessels such as cruise ships – passenger ships)
• NTSB conducts its own investigation & waits to have NTSB hearing (no lawyer allowed to speak), usually 6 mos - 1 yr later.

Question 104

When can you depart from the Navigation Rules requirements and what is your burden?

Answer 104

• Rule 2(b) authorizes departure of the rules where necessary to avoid immediate danger
• A vessel that departs from the Navigation Rules has the burden of showing:
  1. That the departure from the Rules was necessary to avoid immediate danger; and
  2. The course of action adopted was reasonably calculated to avoid that danger

Question 105

Exception to the rule re moving vessels required to avoid anchored vessels

Answer 105

• In traffic congestion & heavy fog, the anchored vessel had burden to exercise greater precautions than normal for an anchored vessel (closely follow the radar, issue additional security calls and to keep her engines on “Standby” to permit instant movement)

Question 106

When might failure to post a proper lookout be excused?

Answer 106

• The S. Ct. has said that the absence of a special lookout is not evidence of negligence.Vessels will not be held liable for failure to post a lookout where the casualty could not have been avoided by the use of a lookout; or where the lack of a lookout had nothing to do with the casualty.
• BUT, in the Ariadne, S. Ct. said opposite - “The duty of the lookout is of the highest importance”
• “In the performance of this duty the law requires indefatigable care and sleepless vigilance”
• Rule 5 one of most basic and failure to comply rarely excused. Automatic pilot equipment can’t replace lookout.
• An ineffective lookout is just as bad as no lookout at all.

Question 107

Half-Distance Rule

Answer 107

• Judicial tule, came into being before radar and COLREGS
• Vessel should not exceed the speed that allows a vessel to stop within half of its visibility range.
• Applies under conditions of restricted visibility
• A rate of speed which would enable a vessel to stop w/in one half of its range of visibility forward from her bow
• Whether COLREGS & Inland Rules have abrogated rule unclear-some cts use it occasionally

Question 108

Point - Bend Custom

Answer 108

• long governed the meeting of vessels on the lower Mississippi River.
• the northbound vessel navigates upriver by going “over the points,” that is, by navigating close to the points, while the southbound vessel “runs the bends,” that is, adheres as closely to the bends as safe navigation allows.
• This practice permits traffic proceeding upriver to avoid the strong current by taking advantage of the slack water beneath the point and allows the less maneuverable traffic proceeding downriver to run with the current into the bends.

Question 109

Inception point

Answer 109

when you see or should have seen the other vessel

Question 110

Basic principle for collision damages

Answer 110

Restitution: Place injured party in same financial position as if the wrong had not occurred

i) BoP on party claiming damages (prove by prep of evid what are the damages from casualty)
- Injured party must provide suff evid to distinguish repairs proximately caused by an accident from those due to normal maintenance
ii) Standard of Review (on appeal): Clearly Erroneous (so, hard to reduce the amt of damages on appeal)
iii) Duty to mitigate damages: repair costs & expenses
iv) Most cases on damages do not go to trial bc cts will put the party claiming the damages to its proof, and the party will rarely get their full measure of damages recognized by the court

Question 111

What is recoverable in total loss?

Answer 111

(a) Actual total loss → vsl is destroyed or lost
(b) Constructive total loss - recovery/repair & related incidental expenses exceed vessel’s pre-casualty market value (economically lost). Entitled to the market value of the vessel on the day of the loss (usually expert testimony, comparable vessels).
- Loss of vessel (physical damage) - market value on date of loss
- Loss of earnings - limited to net freight pending at the time of the casualty. Assumes vessel will be immediately replaced, so loss of earnings very limited when there’s a total loss
- Economic (detention) losses not recoverable

Additional losses recoverable in total loss:

(a) Expenses directly arising from loss → Salvage, wreck removal
(b) Incidental losses indirectly related to the loss → Pollution damages (oil spill), unsuccessful salvage, crew repatriation, marking of wreck
(c) Cant recover lost earnings (loss of use): assumes replacement vessel is readily available

(4)Scrap value credit - tortfeasor gets a credit for salved value

Question 112

Damages claim in constructive total loss should include

Answer 112

1. Pre-incident market-value
2. Pending freight
3. Incidental
4. Salvage or wreck removal expenses
5. Interest: usually from date of loss
6. Less salvage value if any (scrap sold)

Question 113

Measure of damages in partial loss situations

Answer 113

Restore to pre-collision situation

(1) The difference in market value of vsl prior to accident vs. its damaged condition
- repair costs usually used as approximation
- repairs are not required - even if vessel sold or scrapped without repairs.
- Limitation on how much you can recover from tortfeasor: repair costs plus loss of use cannot exceed exceeding pre-collision market value (if not it is a CTL)
(b) New For Old Rule (no new for old deduction - e.g., no depreciation deduction, even if steel on hull was 15 yrs old, you put new steel on it): No deduction in loss of value as determined by repair costs for the fact that old is being replaced for new for vessel; differs for fixed structures (ie. docks)

Question 114

Determination of amount for loss of use in partial loss

Answer 114

• 3 voyages rule - average the profits of the voyage preceding, voyage of, and voyage scheduled.
• if chartered, no 3 voyages rule, jut look at off hire amt lost
• if owner was going to be out of service for repairs anyway in drydock, then no loss of use (unless repairs take extra time)

Question 115

Rules for Purely Economic Loss (lost profits) Recovery

Answer 115

Must have proprietary interest in the damaged good
- Charterers cannot recover economic loss
- P must suffer physical damage to a proprietary interest.
- Demise charterer has sufficient prop. interest to recover lost profits b/c it must return the vessel in good condition at the end of the CHP.
-Both the owner and DC may have lost profit claims
• Bright line rule: physical damage to property or a prop interest. - “must have a “proprietary interest” in the prop. To recover economic damages, you have to have a proprietary interest in the damaged prop. (ownership) - could be a windfall for a tortfeasor, who has to pay for damages but might not have to pay economic losses if damages leased property.
- 2nd Cir. allows if foreseeable
- you can get pure economic loss under OPA. Cts. and fund have imposed foreseeability limit