IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
In Re: In the Matter of the Complaint
of TRANSPORTER MARINE, INC., as Owner of
M/V Transporter, and GULF TRAN INC., as
Operator of the M/V Transporter, for
Exoneration from or Limitation of Liability.
TRANSPORTER MARINE, INC., as owner of M/V
Transporter; GULF TRAN INC., As Operator of
NEWFIELD EXPLORATION COMPANY; ET AL.,
NEWFIELD EXPLORATION COMPANY; ST. PAUL
SURPLUS LINES INSURANCE COMPANY,
UNITED STATES OF AMERICA, on behalf of the
United States Coast Guard,
NEWFIELD EXPLORATION COMPANY; ST. PAUL
SURPLUS LINES INSURANCE COMPANY,
EROICA HALL also known as RICO HALL,
TRANSPORTER MARINE, INC.; GULF TRAN INC.;
Appeal from the United States District Court
for the Eastern District of Louisiana
July 13, 2000
Before WIENER, BENAVIDES, and PARKER, Circuit
This appeal involves narrow legal issues of
first impression arising from a collateral skirmish in the same district
court that is conducting a marine limitation of liability proceeding. That
proceeding was provoked by Petitioners, the owners and operators of the
M/V Transporter, after Claimant-Appellee Eroica R. Hall, a seaman on the
M/V Transporter, lost both legs in a shipboard accident.(1)
Some time after the incident, the Coast Guard instituted administrative
proceedings against Petitioners for allegedly failing properly to comply
with the Coast Guard's regulations that require marine employers to test
for drugs and alcohol all those on board a vessel who are directly involved
in a serious marine incident.(2) The Coast
Guard's authority to require such testing is derived from a federal statute.(3)
Petitioners, whose rights to invoke court
protection in exoneration or limitation of liability emanate from the Limitation
of Liability Act of 1851 ("the Limitation Act"),(4)
obtained an order from the district court directing all persons with claims
for any losses, damages, injuries, or destruction resulting from or incidental
to Hall's accident to file claims in those proceedings, and restrained
the commencement or continued prosecution of any action or proceeding against
Petitioners. They contended that the district court's orders require the
Coast Guard to assert its claims for fines and penalties under its drug
and alcohol testing regulations in the exoneration and limitation action.
The Coast Guard countered by insisting that its drug testing regulations
and all proceedings thereunder are subject to the Administrative Procedures
Act ("APA"), do not arise from and are not in connection with the maritime
action underlying the Limitation Act proceedings in the district court,
are temporally remote from Hall's accident, and are regulatory in nature
and thus not subject to the otherwise broad sweep of the Limitation Act.
The district court agreed with the Coast Guard
and denied the requests of Petitioners on two separate grounds: (1) The
regulatory proceedings of the Coast Guard are not subject to limitations
under the Act, and (2) those regulatory proceedings arose from a failure
to act (inadequate compliance with the drug testing requirements) that
occurred after Hall's accident and, as such, were not "done, occasioned,
or incurred" as part and parcel of the accident. Dissatisfied with the
rulings of the district court, Petitioners instituted this appeal.
Petitioners proffer at least four issues on
1. Whether federal sovereign immunity exempts
the Coast Guard administrative hearing from proceedings conducted in the
district court under the Limitation Act;
2. Whether, as a matter of statutory interpretation
or otherwise, the Coast Guard administrative proceedings are exempt from
the Limitation Act;
3. Whether, as a matter of statutory interpretation,
the facts of this case demand that these particular Coast Guard administrative
proceedings come within the statutory ambit of the Limitation Act, assuming
it is found applicable in the first place; and
4. Whether, and to what extent, a determination
that Gulf Tran had "privity and knowledge" of the violations that give
rise to the Coast Guard administrative proceedings, might be relevant,
thereby removing such proceedings from the protections afforded by the
As we shall proceed to analyze issues 2 and
3 and to dispose of this appeal in alternative rulings on those two issues,
we need not and therefore do not address issues 1 and 4.
A. Exemption of Coast Guard Administrative
Proceedings from the Limitation Act
The Coast Guard requires marine employers
to test for drug and alcohol abuse all persons on board a vessel who are
directly involved in a serious marine incident.(5)
Petitioners do not contest the authority of the Coast Guard to require
such testing and to require submission of the results of such testing to
the Coast Guard. Petitioners focus instead on the determination of the
proper forum in which these administrative requirements can and should
be enforced: (1) a Limitation Act proceeding in district court, or (2)
an administrative hearing in accordance with Coast Guard procedures under
the aegis of the Administrative Procedures Act. Petitioners insist that
the broad language of the Limitation Act and the protection it affords
apply to enjoin all other proceedings in any other forum. They argue that
this is the only way to protect an owner who is personally free from blame
from damages that arise out of a marine incident. In diametric opposition,
the Coast Guard insists that its proceedings are exempt from the Limitation
There is a dearth of jurisprudence on this
point. We find some guidance in the opinion of this court in University
of Texas Medical Branch at Galveston v. United States.(6)
In that case, the United States spent some three million dollars to remove
a wrecked vessel from the sea bottom. The vessel owner filed a limitation
action and the United States sought exclusion. We determined that the Wreck
Act, part of the Rivers and Harbors Act of 1899,(7)
which governs allocation of costs incurred in removing a wrecked vessel,
creates a statutory duty to remove the vessel. This in turn results in
the owner's bearing the cost of removal, regardless of limitation. Reasoning
that the government should not be penalized for promptly removing the wreck,
we allowed the government to recover its costs unfettered by the constraints
of a limitation proceeding.
We find the implications of that case instructive.
Congress has granted authority to the Coast Guard to enforce mandated drug
and alcohol regulations. Even though the government filed a civil suit
under the Wreck Act in University of Texas Medical Branch and, in
contrast, instituted administrative proceedings for fines and penalties
in the instant case, both claims arose from statutory authority creating
an independent statutory duty on the part of the shipowner. To subject
either claim to limitation would thwart the expressed intent of Congress
---- removal of sunken vessels that are hazards to navigation in the one
instance and promotion of safety on the high seas in the other. To allow
shipowners to limit their liability in such cases could reduce their incentive
to comply with important regulations.
We find inapposite the cases cited by Petitioners
to support their argument that the term "forfeiture" used in the Limitation
Act encompasses penalties that result from the Coast Guard proceedings.
We do not read the Limitation Act to embody an intention to protect against
fines and forfeitures in the form of civil regulatory penalties. The history
of application of the Limitation Act reflects the limiting of liabilities
arising out of damage to cargo or goods, injuries or damages resulting
from collision, salvage claims, fires, personal injury suits by seamen,
and damages to structures or persons on land.(8)
The Limitation Act applies for the most part to limit tort ability, so
penalties of the nature the Coast Guard seeks to recover in this case do
not appear to be among the kinds of maritime misfortune that are subject
to the Limitation Act. We agree with the district court's analysis and
holding on this issue.
B. Limitation Act Protections under the
As an alternative basis for affirming the
district court, we address, on an "as applied" basis, the interaction of
the Limitation Act and the Coast Guard's statutory authority for the instant
drug testing in the context of the particular facts of this case. Even
if we were to assume arguendo that the regulatory duties imposed
on the Coast Guard by Congress in connection with drug testing somehow
come within the ambit of the Limitation Act, we would still have to determine
the statutory scope of the express language of the Limitation Act in this
The Limitation Act works only to limit the
liability of a shipowner for "loss, damage, or injury by collision, or
for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned,
or incurred without the privity or knowledge of such owner[.]"(9)
Thus, we must decide whether the regulatory proceedings complained of by
Petitioners here are the result of their acts that were "done, occasioned,
or incurred" as part of the Hall accident that provoked the underlying
limitation litigation. Stated differently, if we assume for the sake of
argument that Petitioners actually failed to perform the required drug
and alcohol testing and reporting, we would then have to determine whether
such failure was part and parcel of the Hall accident or was instead a
separate incident, distinct from the accident and the voyage. Not surprisingly,
Petitioners contend that the regulatory penalties are forfeitures "done,
occasioned, or incurred" as a result of the accident and are thus subject
to limitation; and, no less surprisingly, the Coast Guard insists they
are not. As this presents a mixed question of fact and law, our review
is de novo.
We again find no jurisprudence directly on
point. The parties invite us to consider, for guidance, the "voyage test"(10)
and our own precedent establishing the "distinct occurrence test."(11)
Although we find neither test dispositive, we do note that the latter "requires
a factual inquiry into whether the vessel owner had the 'time and opportunity'
to take the necessary action to avoid subsequent liability that is distinct
from the initial liability imposing event."(12)
Although Petitioners argue that further proceedings are needed to determine
what, if anything, they could have done to prevent additional liability
in the form of violations, we do not see it that way. The record before
us is sufficient to establish definitively that, after Hall was injured,
Petitioners had ample opportunity to comply with the Coast Guard requirements.
We view the alleged failure to comply under this construction to be a distinct
occurrence giving rise to an independent liability. Petitioners urge impossibility
of compliance in light of the extremely traumatic nature of the Hall's
injuries and the difficulty in obtaining blood samples given the massive
transfusions that were necessitated; however, those parties will have ample
opportunity to raise impossibility as a defense in the regulatory proceedings.
This assertion simply has no bearing on the question of distinct occurrence.
Although both the facts and the timing make
this a relatively close call, the more accurate characterization of the
circumstances is that the administrative violations alleged to have occurred
were distinct from, and subsequent to, the incident in which Hall was injured.
They thus give rise to a liability, if any, that is not properly subject
to the Limitation Act.
We affirm the judgment of the district court
that the regulatory duties of the Coast Guard and the administrative proceedings
to adjudicate charges arising from the enforcement of its drug and alcohol
testing regulations are exempt from exoneration or limitation proceedings
under the Limitation of Liability Act. In the alternative, we affirm the
ruling of the district court to the extent it determined that, under the
particular facts of this case, the regulatory enforcement action by the
Coast Guard would not fall within the ambit of the Limitation of Liability
Act even if it were applicable because that regulatory action relates to
a distinct occurrence.(13)
1. Hall has settled, and
this appeal has been dismissed as to his interests in it.
2. See 46 C.F.R. §
3. See 46 U.S.C. §
4. 46 U.S.C. §§
5. See 46 C.F.R. §
6. 557 F.2d 438 (5th Cir.
7. 33 U.S.C. § 401
et seq. (Originally enacted as Act of Mar. 3, 1899, Ch. 425,
30 Stat. 115 et seq.). Sections 13, 16, 19, and 20 of the
Wreck Act are codified at 33 U.S.C. §§ 409, 411, 412, 414 and
8. See Thomas J.
Schoenbaum, Admiralty and Maritime Law
§ 15-8 at 317 (2d ed. 1994).
9. 46 U.S.C. § 83(a).
10. See Place
v. Norwich & New York Transp. Co., 118 U.S. 468, 491 (1886).
11. See Exxon
Shipping Co. v. Cailliteau, 869 F.2d 843 (5th Cir. 1989).
12. Id. at 847-48.
13. Appellants' motion
for leave to file supplemental record excerpts, previously ordered carried
with this case, is denied.