In re Midland Enterprises, Inc.

Decision Date18 December 1968
Docket NumberCiv. A. No. 6515.
Citation296 F. Supp. 1356
PartiesIn the Matter of the Complaint of MIDLAND ENTERPRISES, INC., as owner, and the Ohio River Company, as Demise Charterer and Bailee in Possession of Open Hopper BARGES OR 40, OR 44, OR 215, OR 248, OR 270, OR 280 AND OR 438, for Exoneration from or Limitation of Liability.
CourtU.S. District Court — Southern District of Ohio

COPYRIGHT MATERIAL OMITTED

Lucian Y. Ray, Cleveland, Ohio, Milton M. Bloom, Gordon C. Greene, Cincinnati, Ohio, for plaintiff.

George C. Allen, Cincinnati, Ohio, E. Winther McCroom, 1st Asst. U. S. Atty., Cincinnati, Ohio, Terrence R. Murphy, Dept. of Justice, Washington, D. C., for defendant.

FACTS

HOGAN, District Judge.

The Motor Vessel "Orco" is a towboat owned by Midland Enterprises, Inc. In May, 1967 the Ohio River Company was the demise charterer and bailee in possession of the Orco and thirteen barges, each of which were likewise owned by Midland. The barges were each about 200 feet in length and are used for the transportation of cargo. Whereas an ocean going vessel or Great Lakes going vessel has her cargo facilities within one unitary structure, the cargo facilities of an Ohio River towboat consist of barges. These barges are customarily unmanned and they were in this case.

On May 16, 1967, the Orco was pushing her tow up river. The tow consisted of the thirteen barges owned by Midland and chartered to The Ohio River Company. Also in tow was one barge otherwise owned. Twelve of the barges were loaded. Two were empty. One of the loaded barges contained molasses. The other eleven were loaded with coal. The Cincinnati Gas & Electric Company and The Ohio River Company had a transportation agreement under which The Ohio River Company was to transport coal and deliver it to the Cincinnati Gas & Electric Company—presumably here at Cincinnati or New Richmond, Ohio. Of course, a barge cannot propel itself— at the outset we note a singleness of contractual purpose in law and in fact between the Orco and eleven of her barges—they were united in carrying out a contractual obligation of The Ohio River Company which is a subsidiary of Midland.

Of recent years the United States Corps of Engineers has been constructing large and modern dams and locks at various intervals in the Ohio River for flood control, navigation, and other reasons. One of these dams is about thirty (30) miles east of Cincinnati and is named Meldahl. Another is some ten (10) or fifteen (15) miles west and is named Markland. Each has elaborate lockage facilities. Each is capable of and does hold back enormous quantities of water—maintaining a relative (with respect to natural, /at least in summer time/) high water level. The maintenance is at different levels. In other words, generally speaking, the river on the lower side of a dam is substantially lower than the level on the up-river side.

On May 16, 1967 when the Orco and her tow reached a point six (6) or seven (7) miles above or east of the Markland Dam, her pilot received a radiotelephone call from the motor vessel Tibolt. The Tibolt was a sister ship of the Orco. With its crew of twelve (12) and tow of thirteen (13) barges, the Tibolt was north bound on the Ohio River ten (10) miles below the Markland Dam. The Tibolt was in distress having sustained some damage to one of her propellers. The Ohio River at the time was at or near flood stage with a heavy flow of drift and a swift current of high water. The Tibolt requested immediate help from her sister. Her sister Orco sought mooring facilities for the purpose of tying off her tow so that she could go to her sister's assistance. The tow of the Orco, the fourteen (14) barges, was tied up or secured in some fashion—supposedly—on the Kentucky bank. We emphasize again that whatever was done or not done to the barges had to be done and was done by the Orco and her crew. A barge has neither motor nor men. It is important to note at this point that a number of the claimants in this case state and charge that the Orco personnel moored the barges and in so doing negligently failed to moor them. Among other things, the Orco is specifically charged with failing to take the steps necessary to avoid its flotilla from colliding with the Markland Dam. The Orco then left and went down stream to aid her sister. It is also important to note that the Orco did not detach itself from its tow "for keeps". The detachment was for a purely temporary purpose. It had a clear intention to return and resume its voyage with its tow. Compare the Tug Olive L. Moore, 278 F.Supp. 260 (E.D.Mich., 1968).

Thereafter the tow of the Orco came loose from its mooring. The barges drifted down river. One of them—we know not which on this record—is accused of striking another tow near the dam and seriously injuring one of the individual claimants. A number of them collided with the lock wall of the Markland Dam and were caused to be scattered against the piers and gates. Eight barges sank. Seven were owned by Midland and chartered to Ohio. The eighth was the un-owned barge.

Our recitation of facts throughout is, of course, not a fact finding. The matter is before this Court on preliminary motions. The recitation of the facts is a correlation of them (in accord with established methods) as they appear on the present record when viewed preliminarily.

The collision damaged the dam to the claimed tune of $126,000.00. The dam is, of course, the property of the United States. The United States also claims to have expended approximately $182,000.00 to dislodge the sunken barges from the dam gates. The removal of the dislodged barges is claimed to have cost the government approximately $240,000.00.

As a result of the collision and sinking, some of the dam gates were jammed open and disabled the dam from performing one of its purposes and as a result of the water rushing through the open gates, the Ohio River fell below its critical elevation before the gates could be cleared. Due to the emergency, the government chose to remove the sunken barges itself. There was no time for such a proceeding as United States v. Republic Steel Corp., 362 U.S. 482, 80 S. Ct. 884, 4 L.Ed.2d 903 (1962). The quick change in the water level of the river is claimed to have caused considerable damage to boat harbors, manufacturing plants depending on water intake, and even to structures along the river. The structure damage is claimed to have resulted from slippage of ground at and below the usually maintained water level. The claims of such claimants amount to an excess of $600,000.00. The claims as filed therefore exceed a million. It was stated in an oral argument that the value of the "Orco"—vis-a-vis the amount of claims is substantial.

The petitioners, Midland and Ohio, having been sued in a number of courts by some claimants—one of the cases was filed in this district and division—filed in this Court a petition under 46 U.S.C. § 183 and following, seeking exoneration from liability and—(or) limitation.

The procedural steps required by the admiralty rules and the statute were properly taken. In its asserted compliance with 46 U.S.C. §§ 183(a) and 185, the position of the petitioner was and is that the "vessel" included only the sunken barges (which have no value) and the pending freight amounting, on a pro rata basis, to approximately $11,000.00. The ad interim stipulation in the amount of approximately $11,000.00 was approved ex parte, the deposit was made, a monition was issued as well as the customary injunction.

The United States has filed two motions. The first is a Motion To Dismiss on the grounds that the "vessel" (as the term is used in 46 U.S.C. § 185) includes the motor vessel Orco and all fourteen (14) barges; the United States therefore claims that the petitioner has failed to surrender the "vessel" as required by the statutes and that, therefore, this Court has no jurisdiction. The motion to dismiss is in the alternative—the alternative motion being for an amendment of the injunction to permit the United States to proceed outside this action against the excluded vessels in rem to recover the damage to the Lock and Dam (33 U.S.C. § 408).

The United States has moved independently that the injunction be amended to permit the United States to bring an action, in personam against the petitioners to recover the costs of removing the barges, this motion being based on 33 U.S.C. § 409 and the Wyandott Case Wyandotte Transp. Co. v. United States 389 U.S. 191, 88 S.Ct. 379, 19 L. Ed.2d 407 (1967).

The questions posed by these motions are as follows and will be dealt with in this order:

FIRST: What is "the vessel"?
SECOND: If there has been a lack of compliance with the requirements under 46 U.S.C. § 185, in that less than the "vessel" was "deposited"—is the defect jurisdictional?
THIRD: Is a claim of the United States based on a violation of 33 U.S.C. § 408 subject to limitation; similarly is a claim of the government under 33 U.S.C. § 409 subject to limitiation?
FOURTH: Should this last question "Third" be determined at this stage of the proceeding?

On the facts of this case the question "What is the vessel?" is janus. One face poses it in the context of "limitation"46 U.S.C. §§ 183-185. This "face" is dealt with in First below. The other "face" poses the question in the context of "damage to Government works"33 U.S.C. §§ 408-412. This face is dealt with in Fourth below. As is not unusual in the legalistic, the answers differ.

I

What Is "The Vessel"

In a limitation proceeding the petitioner must, of course, surrender his "interest" in the "vessel and freight, etc." (46 U.S.C. § 185) or deposit a "sum equal to the value" at the end of the voyage during which the incident occurred. "The liability of the owner of any vessel * * for any loss, damage, or injury by collision or for any act, matter or thing, loss, damage * * * done, occasioned or incurred, without the privity or knowledge of such owner or owners,...

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