IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
D. C. Docket No. 97-002240-CV-LAC-3
RANGER INSURANCE CO.,
FREEPORT MARINE REPAIR, INC.,
Appeals from the United States District Court
for the Northern District of Florida
(January 30, 2001)
Before DUBINA and HULL, Circuit Judges,
and HODGES*, District Judge.
*Honorable William Terrell Hodges,
U.S. District Judge for the Middle District of Florida, sitting by designation.
DUBINA, Circuit Judge:
This admiralty action concerns the definition
of a "vessel" for purposes of applying burden shifting principles outlined
in maritime case law. The appellant Freeport Marine Repair, Inc. ("Freeport")
appeals the district court's $196,500.00 judgment against it after a ship
owned by Freeport broke free from her moorings and damaged appellee Bunge
Corporation's ("Bunge") grain loading facility. Bunge cross-appeals seeking
a higher damage award. We affirm and remand.
Freeport manufactured and owned a casino vessel
("Hull No. 40") that was in the final stages of construction at Freeport's
facility at Four Mile Creek near Freeport, Florida. By October 3, 1995,
funding for completion of the ship dried up resulting in a "vessel" not
rigged for steering.1
By early evening of the same day, Hurricane Opal was nearing Florida's
panhandle at approximately 10 mph. Freeport was aware of the impending
hurricane, but only made limited preparations because Freeport did not
believe Opal would make landfall until October 5. Opal, however, accelerated
from 10 to 21 mph, causing Freeport to work from 3:00 a.m. until 11:00
a.m. on October 4, in an attempt to secure Hull No. 40 from the on-coming
storm. Both sides dispute the integrity of the preparations conducted by
Freeport in anticipation of Hurricane Opal. The district court was unable
to find, as a matter of fact, exactly how Hull No. 40 was moored because
the cables that broke were not preserved and, thus, not in evidence.2
By 11:00 a.m., the weather worsened, and Freeport
evacuated its employees. The parties dispute the severity of the weather
at the time Hull No. 40 broke free from her moorings. The district court
found that the storm approached the coast line with winds up to 150 mph,
but by the time it reached Freeport, Hull No. 40 was only subjected to
sustained winds between 85 mph and 103.5 mph. By 5:30 p.m., Hull No. 40
broke free from her moorings and drifted to the west bank of Four Mile
Creek. While adrift, Hull No. 40 apparently struck and damaged a grain-loading
conveyor facility owned by Bunge. The following day Hull No. 40 returned
to Freeport's mooring facility under her own power. Bunge brought suit
in federal district court seeking recovery of the damages it sustained
as a result of Freeport's alleged negligence. The district court entered
judgment against Freeport in the amount of $196,500.00.
Freeport appeals the $196,500.00 judgment
against it, while Bunge cross-appeals, seeking an increase in the amount
of damages awarded. The primary issue in this case concerns Freeport's
defense that a ship/object must be a "vessel" in order for the burden shifting
principles announced in The Louisiana, 70 (3 Wall.) U.S. 164, 173
(1866)(the "Louisiana Rule") to apply.
II. STANDARDS OF REVIEW
Whether Hull No. 40 was a "vessel" for purposes
of the Louisiana Rule is a question of law which is reviewed de novo.
Southern Natural Gas Co. v. Land, Cullman County, 197 F.3d 1368 (11th
Cir. 1999); American Dredging Co., v. Lambert, 153 F.3d 1292 (11th
Cir. 1998). The district court's findings regarding the severity of Hurricane
Opal are findings of fact that must stand unless clearly erroneous. It
is settled that the clearly erroneous standard of review applies in admiralty
cases. McAllister v. United States, 348 U.S. 19, 20 (1954); Compania
Anonima Venezolana de Navegaction v. Perez Export Company, 303 F.2d
692, 694 (5th Cir. 1962).3
In reviewing damage awards, this court should reverse only if it finds
the award to be clearly erroneous. Nakajima v. U.S., 965 F.2d 987,
990 (11th Cir. 1992). This court should not reverse the district court's
damage award simply because it may conclude that it would have computed
damages differently. Hiatt v. U.S., 910 F.2d 737, 742 (11th Cir.
A. The Louisiana Rule
We first address whether Hull No. 40 was a
vessel such that it was subject to the Louisiana Rule. When a moving ship
strikes and damages a stationary object, it is presumed that the moving
ship is at fault. The Louisiana, 70 (3 Wall.) U.S. 164, 173 (1866);
The Oregon, 158 U.S. 186, 192-93 (1895); Bunge Corp. v. M/V Furness
Bridge, 558 F.2d 790, 794-95 (5th Cir. 1977). This presumption operates
to shift the burden of persuasion onto the moving ship. Delta Transload,
Inc. v. MV Navios Commander, 818 F.2d 445, 449 (5th Cir. 1987). The
presumption derives from the common-sense observation that moving vessels
do not usually collide with stationary objects unless the moving vessel
is mishandled in some way. Id. It stems also from the observation
that "any evidence of actual negligence, or the lack of it, is likely to
be known only to the persons on board, who are in the best position to
either keep damaging evidence hidden, or bring favorable evidence forward."
United States v. Merchant Mariner's License No. 008075 (Joseph J. O'Connell),
Decision of the Vice- Commandant No. 2465, p. 8 (1981). The presumption
is universally described as "strong," id., and as one that places
a "heavy burden" on the moving ship to overcome. Bunge Corp., 558
F.2d at 795.This presumption of negligence may be rebutted by showing,
by a preponderance of the evidence, either that the allision was the fault
of the stationary object, that the moving vessel acted with reasonable
care, or that the allision was an unavoidable accident. Bunge Corp.,
558 F.2d at 795. The presumption operates not just against the ship,
but against all parties who participated in the management of the vessel.
Woods v. Department of Transp., 681 F.2d 988, 990 (5th Cir. 1982).
Therefore, when the district court determined
that Hull No. 40 fell within the purview of the Louisiana Rule,
Freeport had the burden to overcome the presumption that it was negligent
in causing damage to the Bunge facility. On appeal, Freeport argues that
the Louisiana Rule applies only to vessels, that Hull No. 40 was not a
vessel in admiralty, and that the district court, therefore, erroneously
applied the Louisiana Rule to Freeport. Because we conclude Hull No. 40
constituted a vessel for purposes of admiralty tort jurisdiction, we hold
that the district court correctly applied the Louisiana Rule to Hull No.
40. We need not address whether a ship/object must constitute a vessel
as defined elsewhere in admiralty jurisprudence in order for the Louisiana
Rule to apply.
Our analysis, then, begins with admiralty
jurisdiction. Historically, admiralty tort jurisdiction depended solely
upon the locality of the wrong. Executive Jet Aviation, Inc. v. City
of Cleveland, 409 U.S. 249, 253 (1972) ("If the wrong occurred on navigable
waters, the action [was] within admiralty jurisdiction; if the wrong occurred
on land, it [was] not."). The Supreme Court, however, rejected the "purely
mechanical application of the locality test," concluding that "the wrong
[must also] bear a significant relationship to traditional maritime activity."
Id. at 261, 268. This second prong is commonly termed "the nexus
test." Id. Thus, we must consider the situs of the allision (locality
test) as well as the relationship between the unmooring of a partially
constructed ship and traditional maritime activity (nexus test) in order
to determine admiralty jurisdiction.
We consider first whether Hull No. 40 passes
the locality test. In The Plymouth, 70 U.S. (3 Wall.) 20, 36 (1866),
the Supreme Court stated that "[e]very species of tort, however occurring,
and whether on board a vessel or not, if upon the high seas or navigable
waters, is of admiralty cognizance." To satisfy this test, the tort need
only occur on navigable waters. See id. In this case, Hull No. 40
broke free from her moorings on the east side of Four Mile Creek, drifted
across to the west side of Four Mile Creek where it struck the Bunge grain
loading facility. The injury to Bunge's property clearly occurred on navigable
waters and, thus, satisfies the locality test.
We next determine whether Hull No. 40's allision
with the Bunge facility bears a significant relationship to traditional
maritime activity. The nexus test presents two queries: (1) Did the incident
have a "potentially disruptive impact" on maritime commerce? Sisson
v. Ruby, 497 U.S. 358, 363 (1990); and (2) does a "substantial relationship"
exist "between the activity giving rise to the incident and traditional
maritime activity?" Id. at 364. As to the first query, "a court
must assess the general features of the type of incident involved to determine
whether such an incident is likely to disrupt commercial activity." Id.
at 363; Sea Vessel v. Reyes, 23 F.3d 345, 350 (11th Cir. 1994).
No actual disruption of maritime commerce need occur in order to satisfy
this query, rather the law requires that we examine the "general features"
of this type of incident. Id. Here, a partially constructed vessel
broke free from her moorings and drifted unattended down Four Mile Creek,
damaging property along side the waterway. Clearly, Hull No. 40 was not
only a potential disruption to commercial activity, it was an actual disruption.
As to the second query of the nexus test,
we must determine whether there was "a substantial relationship between
the activity giving rise to the incident and traditional maritime activity."
Sisson, 497 U.S. at 364.4
The relevant activity in the instant case was the construction of Hull
No. 40 and the mooring of Hull No. 40 on the navigable waterway of Four
Mile Creek. Therefore, we must determine whether the construction and mooring
of Hull No. 40 on Four Mile Creek had "a substantial relationship to traditional
maritime activity." Id. at 365. Certainly, some case law suggests
that a vessel under construction may not be subject to admiralty jurisdiction.
Thames Towboat Co. v. The Francis McDonald, 254 U.S. 242, 244 (1920)
(holding that contracts to construct entirely new vessels are non-maritime);
Hatteras of Lauderdale Inc. v. Gemini Lady, 853 F.2d 848, 849-50
(11th Cir. 1988) ("Until a vessel is completed and launched it does not
become a ship in the legal sense, and therefore admiralty jurisdiction
does not exist."); Certificate No. 14880 v. Avondale Shipyards Inc.,
866 F.2d 752, 759 n.3 (5th Cir. 1989) (construction contracts for new vessels
are not within admiralty, but "tort claims for negligent construction or
design of a vessel will be in admiralty if the negligence constitutes a
maritime tort."). Such cases, however, have little effect on the present
case because they involve jurisdiction based in contract, whereas this
case involves jurisdiction based in tort.
Although a pre-nexus case, the Supreme Court
in Tucker v. Alexandroff, 183 U.S. 424, 438-39 (1901), addressed
whether a vessel under construction may be subject to admiralty jurisdiction.
In essence, the Court held that a vessel in its stocks could not be made
liable in admiralty, either in rem or in personam. The Court
did state, however, that "[i]n the baptism of launching she receives her
name, and from the moment her keel touches the water she is transformed,
and becomes a subject of admiralty jurisdiction." Id. at 438.5
Like the vessel in Tucker, Hull No. 40 was launched and floating
in a navigable water way. Moreover, in Bender Shipping & Repair
Co., Inc. v. Brasileiro, this court held that a partially constructed
drydock that broke its moorings during a sudden storm and collided with
a vessel was subject to maritime jurisdiction. Bender, 874 F.2d
1551, 1555-56 (11th Cir. 1989). While a drydock is generally not considered
a vessel,6 "the
drydock arguably became a 'vessel' when it entered the navigable waters
of the Mobile River." Id. at 1555. The Bender court determined
that jurisdiction properly vested through the tort branch of admiralty.
Such is the case here. Since the allision occurred in navigable waters
due to the imperfect mooring of a nearly complete vessel, the incident
bore a substantial relationship to traditional maritime activity and was
properly within admiralty jurisdiction.
In conclusion, we hold that Hull No. 40 constituted
a "vessel" for purposes of admiralty tort jurisdiction, and that she is
therefore subject to the burden shifting principles articulated in The
B. Act of God
Freeport also argues that it was not negligent
in maintaining or securely mooring Hull No. 40 because Hurricane Opal was
a vis major, an Act of God, that caused Hull No. 40 to break her
moorings in spite of Freeport's reasonable diligence. A drifting vessel
is presumptively liable for damages "unless it can show affirmatively that
the drifting was the result of an inevitable accident, or a vis major,
which human skill and precaution and a proper display of nautical skill
could not have prevented." The Louisiana, 70 U.S. at 173. The burden
of proving an inevitable accident or an Act of God rests heavily upon the
vessel asserting such defense. Boudin v. J. Ray McDermott & Company,
281 F.2d 81, 88 (5th Cir. 1960).
Although Freeport avers that Hurricane Opal
was a vis major, the district court determined that the winds buffeting
Hull No. 40 were not of such force that no reasonable preparations would
have prevented her from breaking free from her moorings. Although hotly
contested, the district court concluded that Hull No. 40 was subjected
to sustained winds between 85 mph and 103.5 mph. There is abundant evidence
in the record supporting the district court's findings with respect to
the severity of the weather, and we do not believe the district court was
clearly erroneous in finding that Hurricane Opal did not absolve Freeport
C. The Pennsylvania Rule
Finally, Freeport contends that it is not
liable because Bunge was unlawfully obstructing Four Mile Creek. It is
well established in admiralty law that when a plaintiff violates a federal
statute, that plaintiff will be barred from recovering damages from a defendant
unless that plaintiff can carry the burden of proving that its own violation
could not have caused the loss of which it complains (the "Pennsylvania
Rule"). The Steamship Pennsylvania v. Troop, 86 U.S. (19 Wall.)
125 (1874). In other words, if Freeport could show that Bunge was violating
a federal law at the time of the allision, Bunge would be precluded from
recovering damages against Freeport, unless Bunge could prove that its
own violation did not cause the damage to its grain conveyor.
In an effort to invoke the Pennsylvania Rule,
Freeport claimed that the Bunge grain-loading facility violated 33 U.S.C.
§ 403 by partially obstructing Four Mile Creek without a proper permit.
Despite the fact that Freeport established that Bunge did not have the
proper permit, the district court found that 33 C.F.R. § 330.3(b)
(the "Grandfather Clause") absolved Bunge of such a requirement as long
as the structure was (1) completed before December 18, 1968, and (2) did
not interfere with navigation.
Bunge's facility was completed before December
18, 1968, and did not interfere with navigation. Because Bunge was within
the purview of the Grandfather Clause, it was not in violation of 33 U.S.C.
§ 403 and, therefore, not subject to the Pennsylvania Rule.
Bunge argues that the district court abused
its discretion by awarding as damages $196,500.00 rather than $210,200.00.
The differing amounts represent two bids proposed by a contractor to repair
the conveyor facility. The contractor averred that if the main truss and
conveyor system was spliced and the unbent portion was salvaged, then the
lower price would sufficiently cover the cost of repair. Conversely, if
the entire truss assembly had to be replaced, the higher price would be
required to cover the cost of repair. The record fully supports the district
court's award of the lower bid amount, and in light of the deference an
appellate court must afford a district court's ruling on damages, we affirm
the $196,500.00 judgment.
The district court's failure to include in
its calculation the cost of the damage survey and repair estimate fees,
however, constitutes clear error. The cost of the services to survey the
damages to the Bunge facility, specify repairs, and obtain bids totaled
$5,852.50. The invoices were received into evidence without objection and
Bunge timely demanded the costs before the district court. Not only are
these costs ordinarily included in the damages of the case in chief,8
Freeport graciously conceded in its own brief the probability of the district
court's error. Accordingly, we hold the district court erred by omitting
the surveying costs from Bunge's recovery.
In conclusion, we affirm the $196,500.00 judgment
in favor of Bunge. We must, however, remand this case to the district court
for its failure to include in its judgment the cost of the damage survey
and repair estimate fees totaling $5,852.50. On remand, the district court
should correct its judgment to include this amount.
AFFIRMED and REMANDED.
Freeport argues that Hull No.40 was
an "object" not a "vessel" because she had not been subject to sea trials,
she was not an instrument of commerce in navigation, or she was not capable
of navigation in the water.
Bunge contended that Freeport's actions
constituted spoliation of evidence. The district court disagreed, finding
that the cables were disposed of in the process of cleaning up the grounds
following the hurricane. On appeal, Bunge argues that spoliation of evidence
is an alternative ground upon which this court may affirm the result reached
by the district court.
We have adopted as binding precedent
all decisions of the former Fifth Circuit, decided prior to October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981)
While the former Fifth Circuit in Kelly
v. Smith, 485 F.2d 520, 525 (5th Cir. 1973), utilized a four factor
test in order to determine whether an activity bears a substantial relationship
to a traditional maritime activity, we note that such an approach is permissive,
not mandatory. The Supreme Court in Sisson recognized that the Kelly
test was only one approach to judging admiralty nexus, 497 U.S. at 365
n.4, as did this court in Penton v. Pompano Constr. Co., Inc., 976
F.2d 636 (11th Cir. 1992).
Further, the Court explained that upon
launching, "[s]he is capable of committing a tort and is responsible in
damages therefor." Id. Finally, the court theorized that "if in
taking the water during the process of launching, she escapes from the
control of those about her, shoots across the stream and injures another
vessel, she is liable in a suit in rem for damages." Id.
Courts have consistently found that
a floating drydock is not a "vessel" within the meaning of admiralty jurisdiction
when the drydock is moored and in use as a drydock. Keller v. Dravo
Corp., 441 F.2d 1239, 1244 (5th Cir. 1971); Bernardo v. Bethlehem
Steel Co., 314 F.2d 604, 608 (2nd Cir. 1963).
In arguing that Hull No. 40 does not
constitute a vessel for purposes of admiralty jurisdiction and that the
Louisiana Rule should therefore not apply to Hull No. 40, Freeport cites
cases invoking maritime jurisdiction under the Longshoreman and Harbor
Workers' Compensation Act and the Jones Act. See Rosetti v. Avondale
Shipyards Inc., 821 F.2d 1083 (5th Cir. 1987); Williams v. Avondale
Shipyards 452 F.2d 955 (5th Cir. 1971). We note, as the First Circuit
noted in DiGiovanni v. Taylor Bros., Inc., 959 F.2d 1119 (1st Cir.
1992), that at least twenty-four maritime cases or maritime related statutes
suggest slightly different wordings for the definition of vessel. We refuse
to adopt the definition of vessel that Freeport urges, as it is based on
unrelated statutes. Instead, we adhere to the example set in Mink v.
Genmar Industries, Inc., 29 F.3d 1543, 1546 n.3 (11th Cir. 1994): "[a]bsent
applicability of a specific legislative scheme, the general definition
of vessel applies." Congress articulated such a general definition. Pursuant
to 1 U.S.C. § 3, "'vessel' includes every description of watercraft
or other artificial contrivance used, or capable of being used, as a means
of transportation on water." 1 U.S.C. § 3. This definition is consonant
with the meaning attributed to the term "vessel" by the general maritime
law. 1 Benedict on Admiralty § 165 at 10-13 (7th ed. rev. 1994).
Finally, the Ninth Circuit in Hood v. Knappton Corp. 986 F.2d 329,
1993 AMC 928 (9th Cir. 1993), applied the Louisiana Rule to the
owner of a log raft when the raft became untied, drifted into the channel,
and collided with two fishing boats. See id. at 332. Having determined
that maritime jurisdiction existed, the court applied the Louisiana Rule
without further inquiry as to whether the log raft constituted a "vessel"
under any other definition of the term.
Pilot Transp. v. Chicago & N.W.
Transp., 912 F.2d 967, 971 (8th Cir. 1990); In re Ta Chi Navigation
(Panama) Corp., 513 F.Supp. 148, 155 (E.D. La 1981), aff'd, 728 F.2d
699 (5th Cir. 1984); see also Zanzibar Shipping, S.A. v. Railroad Locomotive
Engine No. 2199, 533 F. Supp. 392, 398 (S.D. Tex 1982) (court allowed
survey costs that estimate the damages or repair costs).