Collision and Limitation Flashcards

Question

P&I Club

Answer 1

* 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.

Answer 2

- 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

Answer 3

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.

Answer 4

- 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

Answer 5

* 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

Answer 6

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.

Answer 7

- 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

Answer 8

• 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)

Answer 9

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

Answer 10

- 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.

Answer 11

- 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

Answer 12

- 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

Answer 13

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

Answer 14

* 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.

Answer 15

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)

Answer 16

• 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

Answer 17

* 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

Answer 18

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)

Answer 19

- 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

Answer 20

- 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

Answer 21

* *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.

Answer 22

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.

Answer 23

- 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

Answer 24

- 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.

Answer 25

- 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.

Answer 26

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

Answer 27

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

Answer 28

- 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)

Answer 29

- 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.

Answer 30

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.

Answer 31

• 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

Answer 32

- 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.

Answer 33

* 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

Answer 34

• 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).

Answer 35

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

Answer 36

• 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.

Answer 37

• 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

Answer 38

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

Answer 39

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.

Answer 40

* 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.

Answer 41

* 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

Answer 42

* 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.

Answer 43

- 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.

Answer 44

- When state or federal law required to take pilot on board | - If you have a choice – ship liable in rem

Answer 45

• 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

Answer 46

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

Answer 47

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

Answer 48

• 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

Answer 49

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.

Answer 50

• 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.

Answer 51

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.

Answer 52

* 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.

Answer 53

- 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

Answer 54

• *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

Answer 55

- 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

Answer 56

• 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.

Answer 57

- 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.

Answer 58

- 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.)

Answer 59

- 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

Answer 60

- 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

Answer 61

- 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

Answer 62

- 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)

Answer 63

- 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).

Answer 64

- 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

Answer 65

- 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.

Answer 66

- 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

Answer 67

- 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.

Answer 68

- 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.

Answer 69

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

Answer 70

- 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

Answer 71

- 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

Answer 72

- 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)

Answer 73

- 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

Answer 74

- 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

Answer 75

- 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

Answer 76

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

Answer 77

- 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

Answer 78

- 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.

Answer 79

- 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

Answer 80

- 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)

Answer 81

- 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.

Answer 82

- 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

Answer 83

- 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.

Answer 84

when you see or should have seen the other vessel

Answer 85

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

Answer 86

(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

Answer 87

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)

Answer 88

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)

Answer 89

- 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)

Answer 90

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