United States Court of Appeals
For the First Circuit
PAN AMERICAN GRAIN MANUFACTURING CO.,
PUERTO RICO PORTS AUTHORITY; CCC UNDERWRITERS;
PROCESADORA DE GRANOS DE PUERTO RICO,
CONTINENTAL GRAIN COMPANY, INC.; MOLINOS
INDUSTRIAS AVÍCOLAS A/K/A POLLOS
APPEAL FROM THE UNITED STATES DISTRICT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Héctor M. Laffitte, U.S.
Torruella, Selya and Lipez, Circuit
A. Walker, with whom H.
Michael Bush and Chaffe,
McCall, Phillips, Toler & Sarpy, L.L.P. were on brief, for appellant.
P. Carvajal, with whom Manuel
& Carvajal, P.S.C., David
Karcher and Underwood,
Karcher & Karcher, P.A. were on brief, for Puerto Rico Ports
Rivera-Carrasquillo, with whom William
P. Kardaras andDarío
Rivera-Carrasquillo, P.S.C. were on brief, for Procesadora de Granos.
On April 24, 1999 the integrated tug and barge Zorra ("ITB Zorra")
(1) caught fire in the harbor in Guánica, Puerto Rico,
and was substantially destroyed.
owner, Pan American Grain Manufacturing Co. ("Pan American" or "appellant"),
filed an action in admiralty against, inter alia, the Puerto Rico Ports
Authority ("PRPA"), the owner of the Guánica docking facilities,
and Procesadora de Granos, Inc. ("Procesadora"), the lessee of the docking
facilities, alleging their responsibility for this casualty. Pan American
claimed that the fire resulted from a chain of events starting when the
vessel's starboard propeller struck uncharted submerged pilings in the
dockage area, for which both PRPA and Procesadora (jointly "appellees")
were responsible. Appellees rebutted this view of the events, presenting
several alternate theories. One claimed that appellant's own imprudence
in venturing into charted shallow waters outside of the dockage area initiated
the destructive chain of events. (2)
went to trial before the district court, sitting in admiralty, and the
court eventually found appellees' version to be more credible and so ruled. Pan
Am. Grain Mfg. Co. v. P.R.
Ports Auth., 121 F. Supp. 2d 710 (D.P.R. 1999) (hereinafterPan
Am. I). This appeal followed. Appellant additionally appeals from
a separate order which imposes sanctions on the appellant for "abusive"
and "shameful" discovery practices. Pan
Am. Grain Mfg. Co. v. P.R.
Ports Auth., 193 F.R.D. 26 (D.P.R. 2000) (hereinafterPan
Am. II). After fully reviewing the record, we affirm the judgment
of the district court and the imposition of sanctions against appellant.
I. The Facts
22, 1995, the ITB Zorra entered the harbor at Guánica, Puerto Rico,
at the end of a voyage from New Orleans. She carried a cargo of grain which
was to be offloaded at appellees' docking facilities. The ITB Zorra is
656 feet in length, had a beam of 85 feet, a stipulated depth of 22 feet
at the stern, and was powered by twin diesel engines, each driving an 18
foot screw and weighing 16 tons.
docking facilities (3) consist of six large,
concrete breasting moorings or dolphins (4)
aligned parallel to the shore on a north-south axis and 420 feet in length.
A chart introduced at trial and published by the National Oceanic and Atmospheric
Administration shows that the area within these dockage facilities and
its extensions to the north and south, have a depth of 28 to 29 feet. The
chart further shows that the area to the east of the breasting line,
(5) south of dolphin number six, is littered with debris and
pilings. Additionally, in that same area, the sea bottom rises up a sharp
embankment to 18 feet, and it eventually levels out at a depth of 12 feet.
while loading or unloading cargo is for the vessel to rest alongside the
breasting dolphins. To load and unload, the vessel uses two grain elevators,
one forward and one aft, 200 feet apart from each other. For these purposes
the ship's elevators have to be aligned with appellees' elevator on shore.
That elevator is located in the center of the line of breasting dolphins.
at Guánica, the ITB Zorra was captained by Gerard Williams ("Captain
Williams"). It took on a pilot, Manuel Dos Santos ("Dos Santos"), who proceeded
to assist in maneuvering the vessel alongside appellees' docking facilities
without incident, as he had done on prior occasions. In fact, the ITB Zorra
had used these docking facilities on seven different occasions without
incident, as far back as August 1994.
the previous occasions when the ITB Zorra had used appellees' dock, the
vessel had unloaded using the ship's forward elevator first and then the
aft elevator. On this occasion, however, the order was reversed. The ITB
Zorra was originally positioned so that its aft elevator could discharge
its cargo. The ship was winched southward (i.e., toward the stern) along
the dolphins until the ship's forward elevator was aligned with appellees'
shore side elevator. When this maneuver was completed, because of the overall
length of the vessel, the stern of the ITB Zorra extended approximately
260 feet beyond the southernmost dolphin.
was in this shifted position when it finished unloading on the morning
of April 24, 1999. It was from this shifted position that Captain Williams
and Dos Santos commenced undocking procedures, rather than having the vessel
winched forward to its original docking position. The district court found
that "this failure to winch the vessel forward prior to departure left
a large portion of the vessel's stern unprotected by the breasting dolphins,
[and thus] this one decision proved to be the critical factor in the events
that followed." Pan Am. I,
121 F. Supp. 2d at 712.
found that the pilot intended to "twist" the vessel's stern out into the
harbor, to allow room for an assisting tug to approach shoreward and help
push the ITB Zorra out into the channel. Id.
at 712. This maneuver was accomplished by turning the rudders hard right
and running the starboard engine aft while the port one was set forward.
testimony of Dos Santos was to the effect that the assisting tug, the Oscar,
was placed at the stern of the ITB Zorra to keep it against the breasting
dolphins while the twisting maneuver was commenced. All of the ship's lines
were then released, except for a spring line running from the bow to the
third breasting dolphin, whose purpose was to aid in the twisting maneuver
and prevent the vessel from going forward while this was taking place.
After the stern was opened up from shore, the ship's engines were stopped
to allow the Oscar safe passage astern of the ITB Zorra and into the space
made shoreward. When the engines were stopped, however, the shoreward breeze,
which was blowing at about 17 knots, caused the ship to drift back to its
original position against the dolphins before the Oscar was able to enter
the gap and push the ITB Zorra's stern seaward.
second attempt at this maneuver, with a similar outcome as the first one,
the ITB Zorra was again carried shoreward by the breeze. This time, however,
the district court found that the ITB Zorra's stern was carried into the
shallow waters east and south of the berthing facility, and it ran aground. Id.
point, Captain Williams and Dos Santos decided to attempt the twisting
maneuver by extending a line from the stern of the ITB Zorra to the Oscar,
and trying to pull the ITB Zorra into the channel while assisting the Oscar
with the ITB Zorra's own engines, which were engaged to this effect. These
efforts came to naught when the line parted. Another line was passed, and
the operation recommenced, but the ITB Zorra became unmaneuverable when
its starboard engine began malfunctioning. Shortly thereafter, the vessel
caught fire, was towed into the channel, and thereafter was lost as a result
of the conflagration.
raises several issues on appeal. First, it contends that the district court's
factual findings are not supported by the evidence and are, thus, clearly
erroneous. Second, appellant argues that the district court misinterpreted
the legal duties of the appellees as wharfingers and improperly found that
neither appellee breached its duty. Third, appellant asserts that the district
court erred when it failed to apply thePennsylvania
rule. The S.S. Pennsylvania
v. Troop, 88 U.S.(19
Wall.) 125, 134 (1873). Finally, appellant contests the imposition of sanctions.
We address each argument in turn.
district court's factual findings are not clearly erroneous
the factual findings of a district court sitting in admiralty for clear
348 U.S. 19, 20 (1954) ("[i]n reviewing a judgment of a trial court, sitting
in admiralty, the Court of Appeals may not set aside the judgment below
unless it is clearly erroneous"). Appellant's challenge to the district
court's factual findings boils down to appellant's unhappiness with the
finding that the ITB Zorra crossed the breasting line and grounded in the
marked shallow water. Appellant attempts to undermine this finding in several
ways, but there is more than sufficient evidence in the record to sustain
the district court's judgment. Therefore, the district court's finding
is not clearly erroneous.
court concluded that the ship's captain and pilot maneuvered the ITB Zorra
in such a way as to allow its stern to be "exposed to the charted dangers
of pilings and shallows south of the dolphins and east of the breasting
line," thus "drift[ing] into the shore when the initial twisting maneuver
was unsuccessful." Pan Am.
I, 121 F. Supp. 2d at 718. This, in turn, caused the starboard propeller
to strike the charted dangers, leading to the malfunction of the clutch
and engine, and eventually to the fire.
court heard testimony from three witnesses, all of whom were on the bridge
at the time of the maneuver. All testified as to whether the ITB Zorra
crossed the breasting line, an incursion which would mean entrance into
an area not contemplated as safe for navigation and so marked in the relevant
v. United States,
684 F.2d 404, 408 (6th Cir. 1884) (holding that as a matter of law a mariner
is charged with knowledge of what is shown on charts). On this point, the
vessel's chief mate, Bernard Malpass, contradicted the testimonies of Captain
Williams and the pilot, Dos Santos, stating that the ITB Zorra's stern
crossed the breasting line, entering the area to the east of that line.
After thoroughly analyzing these testimonies, including the inherent self
interest and inconsistencies in the statements of Captain Williams and
Dos Santos, the court concluded that the evidence adduced through the chief
mate was "highly persuasive" and thus more credible. Pan
Am. I, 121 F. Supp. 2d at 713. In making this finding, the court
explicitly discounted the testimonies of Captain Williams and Dos Santos,
who both claimed that the ITB Zorra never crossed the breasting line.
court adopted the testimony of the chief mate for several reasons. First,
he testified that during the undocking maneuvers he felt a violent vibration
which caused items in the wheelhouse to fall on the deck. Second, he claimed
that this occurred while the ship was within ten to fifteen feet of the
dock on a compass heading of 340 degrees. Since it is undisputed that the
dolphin line was between 357 and 358 degrees, if the chief mate's testimony
on this point was credited, his statements are compelling evidence that
the stern of the ITB Zorra crossed the dolphin line into the shallows east
and south of the berthing area, and that while there, its propeller struck
an object or objects in an area shown by the chart to be unsafe for navigation
by a vessel with the ITB Zorra's draft. Third, the court looked to the
chief mate's testimony regarding the propeller wash. He testified that
it consisted of a tremendous amount of thick black water, compared to the
normal brownish water created by a floating vessel. All of this evidence
supports the conclusion that the ITB Zorra was aground and that its starboard
propeller was hitting bottom or the bank. This most probably would have
put undue strain on that engine's clutch, causing the fire which resulted
in the eventual casualty suffered by the ITB Zorra.
a doubt, much of the chief mate's testimony contradicts that of Captain
Williams and Dos Santos. However, the balancing of testimonial evidence
and the assessment of credibility are exactly the functions of trial courts. McAllister,
348 U.S. at 20. The court was simply exercising its classical role when
it found that Captain Williams and Dos Santos were both biased. Pan
Am. I., 121 F. Supp. 2d at 713. Furthermore, the court articulated
concrete grounds on which it both discounted the testimonies of Captain
Williams and Dos Santos and adopted the chief mate's version of events.
Therefore, the district court's conclusion is far from clearly erroneous,
and we affirm.
satisfied their duties as wharfingers
claims that the appellees breached their duties as wharfingers because
they failed to warn that the berthing area contained submerged pilings.
(6) The law has long established that a wharfinger is required
to exercise due diligence in maintaining its berths in a safe manner and
in removing any dangerous obstruction therein or warning any vessel using
said facilities of its existence. Smith
v. Burnett, 173 U.S.
430, 435-36 (1899) (citing British cases). This duty, however, only extends
to hidden hazards not reasonably known to the shipowner. Bunge
Corp. v. M/V Furness
Bridge, 558 F.2d 790 (5th Cir. 1977). There is no question, as found
by the district court, Pan
Am. I, 121 F. Supp. 2d at 716, that appellees are wharfingers and,
as such, are responsible for using due care to maintain the Guánica
berthing facilities free of dangerous obstructions or properly warning
of the presence of such obstructions. However, the district court found
that Pan American did not establish that there were old pilings within
the berthing area. Id.
at 714. Furthermore, any pilings which may have been within the berthing
area were so rotten that they did not pose a hazard. Id.
at 715. These findings are not clearly erroneous.
accident, three sets of divers entered the waters in the docking area to
search for obstructions. All of these divers had been employed by the appellant
to investigate the docking area, and appellant called two to testify at
the trial. The first diver, Jack Mixer, testified that he found two sets
of pilings within the berthing area which were high enough to have been
hit by the ITB Zorra's propeller. He further indicated that some of the
pilings showed fresh scars. However, the second diver, Wayne Watson, did
not see any pilings within the dockage area, as claimed by Mixer. Instead,
Watson found some pilings pushed at an angle into the underwater embankment
to the south of the last breasting dolphin. These appeared to him "as if
they had been pushed into the embankment after collision with a ship." Id.
The third diver, Gordon Welch, who was employed by Mixer and the only diver
called by the appellees, testified that there was a large trench cut into
the embankment east of the breasting line.
exercising its classical functions of determining the credibility of witnesses,
weighing the various pieces of evidence, and making the reasonable inferences
that arise from the evidence, the district court credited the testimony
of Watson and concluded that "[t]he ship's stern crossed the breasting
line, ran aground on the bank and its propellers were stopped or slowed
by coming into contact with the bank itself or the pilings embedded in
it." Id. at 715.
one independent corroborating fact, undisputed but ignored by almost everyone
involved, is that the ITB Zorra had used, without mishap, the same facilities
on seven prior occasions. The relevant chart also shows no obstructions
within the berthing area but does indicate them in the area to the south
and east of the berthing line.
the district court's finding that there were no obstructions in the berthing
area is not clearly erroneous. Since there were no obstructions, appellees'
duties as wharfingers are not implicated.
red herring is loose in Guánica Bay: The Pennsylvania
Rule is not applicable
appellant's contention that the district court erred by not applying the Pennsylvania
rule fails. Since the district court found that there were no obstructions
in the berthing area, the Pennsylvania
rule is not implicated.
venerable decision The S.S.
Pennsylvania v. Troop,
88 U.S.(19 Wall.) 125, 134 (1873), the Supreme Court established a burden
shifting regime for maritime cases. If a plaintiff can establish both that
the defendant breached a statutory duty and that the breach is relevant
to the casualty in question, the defendant assumes the burden of proving
that its breach could not have caused plaintiff's damages. Id.; see
alsoAm. Dredging Co.
v.Lambert, 81 F.3d 127,
130 (11th Cir. 1996); Havinga
v. Crowley Towing & Transp.
Co., 24 F.3d 1480, 1483 (1st Cir. 1994). The problem here is that
appellant has failed to prove that appellees violated any statutory duty.
a statutory violation, appellant points to 33 U.S.C. § 403, which
in essence prohibits the creation of unauthorized obstructions in the navigable
waters of the United States. (7) However,
appellant presented no credible evidence that there were any
obstructions in the appellees' berthing areas, much less evidence that
prohibited obstacles to navigation.
even if there were credible evidence of a statutory violation by the appellees,
any such violation was not sufficiently related to the casualty in question.
The district court found that the casualty in question was a direct result
of the fact that the ITB Zorra struck obstructions outside of its proper
area of navigation. Additionally, the obstructions which the ITB Zorra
struck were properly marked on the charts and known to the master and pilot.
Thus, appellant has only its own imprudence to blame for the predictable
result, and the district court properly refused to apply the Pennsylvania
district court did not abuse its discretion when it imposed sanctions on
district court ruled on the merits of appellant's claim, appellees moved
for the imposition of attorney's fees and costs upon appellant. Appellees
also wanted the court to require appellant to post a bond on appeal. In
their motion for attorney's fees, appellees claimed that the underlying
action by appellant had been filed in bad faith. The district court denied
appellees' request for imposition of full attorney's fees, but instead
imposed sanctions against appellant for "actions in the course of discovery
[that] were disruptive of the orderly course of litigation, insulting to
the dignity of the Court, and, most importantly, utterly lacking in civility." Pan
Am. II, 193 F.R.D. at 30. Specifically, the court awarded attorney's
fees to PRPA in relation to several motions to compel which had been granted
during the course of discovery and for which the court found that Pan American's
earlier failure to comply was "clearly without justification." Id.; see
also Fed. R. Civ. P. 37(a)(4) (providing that attorney's fees shall
be awarded if the court grants a motion to compel unless the opposing party's
behavior was "substantially justified"). The court also imposed sanctions
under its inherent powers in response to Pan American's "bad-faith litigation
tactics." Pan Am. II,
193 F.R.D. at 31; see alsoChambers
v.NASCO, 501 U.S. 32, 44
(1991) (recognizing the inherent power of courts to impose sanctions).
Pan American now challenges both awards of sanctions.
an award of sanctions, under both a court's inherent powers and Federal
Rule of Civil Procedure 37(a)(4), for an abuse of discretion. Chambers,
501 U.S. at 55 ("We review a court's imposition of sanctions under its
inherent power for abuse of discretion."); Thibeault
v. Square D Co., 960
F.2d 239, 243 (1st Cir. 1992) ("In reviewing a trial court's sanction order
concerning a discovery-related matter, an abuse-of-discretion standard
controls."). Here, we find that the district court did not misuse its powers
when imposing either sanction award. Therefore, we affirm both.
complains that the court ignored substantial justifications when awarding
PRPA costs incurred in presenting several motions to compel. A substantial
justification is one that "could satisfy a reasonable person." Pierce
v. Underwood, 487
U.S. 552, 565 (1988). Here, while Pan American advanced various rationales
for its failures to comply with PRPA's discovery requests, the district
court found that "Pan American's failure to cooperate with PRPA's discovery
requests was clearly without justification and served only to impede the
discovery process and to make life as difficult as possible for PRPA." Pan
Am. II, 193 F.R.D. at 30. After reviewing the record, we cannot
say that this finding was an abuse of discretion. In fact, there is ample
support for the district court's determination. (8)
also complains that the district court ignored crucial evidence when it
found that Pan American had acted in bad faith and awarded sanctions under
its inherent powers. "It is beyond serious dispute that a district court
may use its inherent powers to assess attorneys' fees against a party that
has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Whitney
Bros. Co. v. Sprafkin,
60 F.3d 8, 13 (1st Cir. 1995) (internal quotation marks omitted) (quoting Chambers,
501 U.S. at 45-46). However, a district court ordinarily must provide a
sufficiently detailed explanation of its rationale in awarding sanctions
under its inherent powers. Id.
Here, the district court detailed a whole pattern of behavior which it
relied upon when awarding attorney's fees to appellees. The court concluded
that appellant engaged in various acts of bad faith in connection with
the discovery of evidence, all of which required appellees to expend unnecessary
time, efforts, and resources. These acts included: (1) attempting to hide
the identities of two divers who inspected the ITB Zorra after the accident;
(2) attempting to hide the identity of Roger Rosaldes, a crew member of
the ITB Zorra; (3) installing a hidden camera and microphone aboard the
ITB Zorra in an attempt to record the conversations of appellees' counsel
during an inspection of the vessel; (4) removing the vessel's fuel delivery
system prior to the first inspection of the ship; and (5) physically violent
behavior by appellant's president, José González, during
his deposition when he pulled cables from a video camera, assaulted the
video operator, and threw a cup of hot coffee at appellees' counsel. Pan
American offers no compelling explanations to justify its behavior; it
simply cries about the fact that the district court chose to discount Pan
American's version of events. This simply will not carry the day.
It is clear
after reviewing the record and the district court's opinion that awarding
attorney's fees to the appellees was far from an abuse of discretion. The
pattern of behavior identified by the court is both egregious and troubling.
foregoing reasons, we affirm the district court's judgment and order.
ITB, although technically two vessels, a barge and a tug, operates mostly
as a single unit: the tug inserts itself into the stern section of the
barge, is secured thereto, and becomes the barge's method of propulsion
and steerage. Therefore, for purposes of this opinion the ITB Zorra will
be referred to as a single ship or vessel.
2. Appellees also argued
that the fire started as a result of a malfunction in the ship's fuel lines
or clutch. The district court rejected both these theories, finding that
the fire was indeed caused by "an allision of the starboard propeller." Pan
Am. Grain Mfg. Co. v. P.R.
Ports Auth., 121 F. Supp. 2d 710, 711 (D.P.R. 1999). Appellees do
not challenge this finding of the district court. Therefore, the only dispute
before us is whether the starboard propeller struck uncharted pilings in
the berthing area, as claimed by the appellant, or grounded in the shallow
water, as argued by the appellees and found by the district court. Seeid. at
3. The docks in question
are owned by PRPA but are leased to Procesadora. For purposes of this opinion,
we make no distinction between the two.
4. Dolphins are essentially
pilings against which a ship is moored. The dolphins in question are numbered
one to six, in a north-to-south orientation, so that dolphin number six
is the southernmost dolphin.
5. The breasting line is
an imaginary line drawn across the seaward side of the breasting dolphins
and extending out from the outside dolphins, ad
6. At trial, Pan American
also claimed that appellees violated their duties as wharfingers by granting
the ITB Zorra leave to dock at a facility which was too small for the vessel.
The district court rejected this argument, finding that it was not a hidden
danger. Pan Am. I,
121 F. Supp. 2d at 717. Pan American does not renew this contention on
7. The act states, in relevant
part, that "[t]he creation of any obstruction not affirmatively authorized
by Congress, to the navigable capacity of any of the waters of the United
States is prohibited. . . ." 33 U.S.C. § 403.
8. Pan American also complains
that the district court erred by awarding PRPA all fees incurred "in connection
with" the motions to compel. Pan
Am. II, 193 F.R.D. at 31. This, Pan American claims, impermissibly
broadens the scope of allowable recovery. We, however, do not need to reach
that claim because Pan American's complaint is a manufactured argument,
created by lifting words from their proper context. Throughout its discussion,
the district court is quite clear that it was awarding "reasonable expenses
incurred in making the motions." Id.
at 30. This is the exact standard contained in Federal Rule of Civil Procedure
37(a)(4). Therefore, there is no substance to Pan American's complaint.