U.S. v. Ohio Valley Co., Inc.

• Decision Date: 10 February 1975
• Docket Number: No. 74--1539,74--1539
• Citation: 510 F.2d 1184
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. OHIO VALLEY COMPANY, INC., in personam, and M/V JOHN FITZGERALD, her engines, tackle, appurtenances, etc., in rem, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1184

510 F.2d 1184

UNITED STATES of America, Plaintiff-Appellee, v. OHIO VALLEY COMPANY, INC., in personam, and M/V JOHN

FITZGERALD, her engines, tackle, appurtenances,

etc., in rem, Defendants-Appellants.

No. 74--1539.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 8, 1975.

Decided Feb. 10, 1975.

William P. Kardaras, New York City, Richard C. O'Connor, New Albany, Ind., for defendants-appellants.

Harry R. Silver, Atty., Appellate Section, Civ. Div., Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Before SWYGERT, Chief Judge, and CUMMINGS and SPRECHER, Circuit Judges.

SPRECHER, Circuit Judge.

The primary issue on appeal is whether the defendant-vessel is strictly liable for all of the damage it caused to property of the United States pursuant to sections 14 and 16, Rivers and Harbors Act of 1899, 33 U.S.C. §§ 408, 412, ¹ and is thereby precluded from limiting liability by showing that the damages were incurred 'without the privity or knowledge of (the) owner . . ..' Section 3, Limited Liability Act of 1851, 46 U.S.C. § 183(a). ²

I

It is uncontroverted that on October 28, 1970, the M/V John Fitzgerald, with two barges in tow, collided with the land leaf of the lower gate of Ohio River Lock No. 47 causing damage to the gate. Lock 47 is located near Evansville, Indiana and is a work built by the United States for the preservation and improvement of navigable waters. The collision occurred while the vessel was traversing the lock and was caused when her reverse gear failed to operate.

Subsequent to the collision, employees of the U.S. Army Corps of Engineers commenced repairs. These repairs consisted of the removal of the damaged gate and the substitution of a spare temporary gate. The damaged gate was transported to the Louisville, Kentucky district repair facility where it was repaired over the course of several months. On June 1, 1971, the repaired gate was transported back to Lock 47 and reinstalled.

The United States brought this action in two counts. Count I for negligence against the defendant-owner and the defendant-vessel and Count II against the vessel under the Rivers and Harbors Act, 33 U.S.C. §§ 408, 412 (sections 14 and 16). The government in consideration for not actually seizing the defendantvessel accepted a commitment from the Home Indemnity Company to pay and satisfy any judgment up to $80,623.27. The district court determined that the defendants were at fault and that plaintiff's total damages were $70,358.90. ³ In addition the M/V John Fitzgerald was fined the additional sum of $500 pursuant to section 16, Rivers and Harbors Act of 1899, 33 U.S.C. § 411. ⁴

Defendants appeal from the awarding of damages. They contest the trial court's finding of negligence on Count I and they rely on 46 U.S.C. § 183(a) to limit their liability to the value of the vessel and her freight at the time of the accident under both counts. Because of our disposition of Count II, it is unnecessary to decide whether the plaintiff sufficiently established its negligence case.

II

Section 14 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 408 provides that it is unlawful 'for any person or persons to . . . injure . . . or in any manner whatever impair the usefulness of any . . . work built by the United States . . . for the preservation and improvement of any of its navigable waters . . ..' It is uncontested that the defendant-owner violated this provision. In addition, the relevant portion of section 16 of the same Act provides that any vessel used or employed in violating section 14 is liable for the civil fines of 33 U.S.C. § 411 and for the amount of damage done by the vessel. 33 U.S.C. § 412.

It has been consistently held that in actions brought by the United States pursuant to 33 U.S.C. §§ 408, 412 there is no requirement that negligence be shown and that a defendant-vessel is liable if it has been the cause of a violation of 33 U.S.C. § 408. United States v. The M/V Martin,313 F.2d 851 (7th Cir. 1963); United States v. The Terry E. Buchanan, 138 F.Supp. 754 (S.D.N.Y.1956); United States v. The Republic No. 2, 64 F.Supp. 373 (S.D.Tex.1946); The Gansfjord, 25 F.2d 736 (E.D.La.1928), aff'd sub nom. Aktieselskabet Dampskib Gansfjord v. United States, 32 F.2d 236 (5th Cir.), cert. denied, 280 U.S. 578, 50 S.Ct. 32, 74 L.Ed. 629 (1929). Thus, the only question that remains is whether the Limited Liability Act of 1851,46 U.S.C. § 183(a), may be asserted as a defense by the defendant-vessel. Section 183(a) provides that the liability of the owner of any vessel for damage caused by a collision incurred without the privity or knowledge of the owner shall not exceed the value of the vessel plus freight at the time of the collision. The government takes the position that section 183(a) is irrelevant to its claim under the Rivers and Harbors Act of 1899. We agree.

Although the question of the applicability of section 183(a) in actions by the United States pursuant to sections 14 and 16 of the Rivers and Harbors Act of 1899 has never been squarely answered, In re Midland Enterprises, Inc., 296 F.Supp. 1356, 1364--65 (S.D.Ohio 1968), we are guided to our result by somewhat analogous precedent and reason.

The cases insofar as they deal with the application of the limitation of liability provisions of section 183(a) to the liability provisions of the Rivers and Harbors Act of 1899 deal specifically with the liability of owners for removal of wrecked or sunken vessels.

In Wyandotte Transportation Co. v. United States, 389 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d 407 (1967), the Supreme Court held that pursuant to section 15 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 409 (wreck statute), ⁵ when a ship is intentionally or negligently wrecked or sunk, the owner is responsible for either removing the obstruction or for the cost of removal. In rejecting the shipowner's argument that the government's remedy, if the government removed the vessel, was limited to the right to sell the vessel and retain the proceeds the Court stated:

The reading that petitioners (shipowners) would place on the Rivers and Harbors Act of 1899 would create an additional right of limitation, applicable in the special case of a sinking even though the owner is himself negligent. Yet Congress gave no indication, in passing the Rivers and Harbors Act, that it intended to alter or qualify the 1851 Act (section 183(a)). In the congressional failure to connect these two statutes, we find at least some evidence that petitioners' discovery of a limitation of liability in the Rivers and Harbors Act is unwarranted.

Id. at 205--06, 88 S.Ct. at 388 (emphasis added).

The Court in a footnote, however, indicated that it was not passing judgment on whether the Limited Liability Act applied to an action under the Rivers and Harbors Act. Id. at 205 n. 17, 88 S.Ct. 379.

If Wyandotte seemingly left the question unresolved, there are other cases that have held the limitation of liability provisions of section 183(a) inapplicable to the wreck statute of the Rivers and Harbors Act. As early as 1931 the court in The Snug Harbor, 53 F.2d 407 (E.D.N.Y.1931), although not reaching the precise Wyandotte question, held that 'liability arising from (violation of the wreck statute, 33 U.S.C. § 409) does not come within the scope of the limitation of Liability Act.' Id. at 409. More recently and subsequent to the Wyandotte decision a number of courts have held that the limitation provisions of section 183(a) are inapplicable to the wreck statute. In re Chinese Maritime Trust, Ltd., 361 F.Supp. 1175 (S.D.N.Y.1972), aff'd, 478 F.2d 1357 (2d Cir. 1973), cert. denied, 414 U.S. 1143, 94 S.Ct. 894, 39 L.Ed.2d 98 (1974); In re Harbor Towing Corp., 335 F.Supp. 1150 (D.Md.1971) (dicta); In re Pacific Far East Line, Inc., 314 F.Supp. 1339 (N.D.Cal.1970), aff'd, 472 F.2d 1382 (9th Cir. 1973). While it is true that these decisions were premised in part on the reasoning that since the wreck statute imposed on the owner an affirmative duty to mark and then remove the vessel and that any failure to do so would per se be within the 'knowledge and privity' of the owner and therefore the limitation provisions could not apply, there is considerable language in those cases finding the application of the Limited Liability Act to the Rivers and Harbors Act unwarranted. Thus, in Chinese Maritime Trust the district court said:

There is no indication in the Limitation of Liability Statute, first enacted in 1851, that the costs to the owner of removing the wreck of his vessel were to be limited. Nor does the background of the Rivers and Harbors Act, now construed to require shipowners to pay for removal, suggest an answer to this question.

Two policies expressed in recent court rulings, however, point in the direction of our conclusion. First is the renewed vigor which the Supreme Court has read into the Rivers and Harbors Act, one of whose aims is to insure the prompt elimination of obstructions to navigation. . . . Second is the disfavor with which expansion of the limitation of liability statute is viewed.

361 F.Supp. at 1178 (citations omitted). ⁶

Our decision not to allow the application of section 183(a) limitations to actions brought by the United States pursuant to sections 14 and 16 of the Rivers and Harbors Act is in some respects easier than and in other respects is supported by similar considerations as the decision not to apply it to actions under the wreck statute. While the cases under the wreck statute do not specifically answer the question of whether section 183(a) applies to actions under 33 U.S.C. §§ 408, 412, we know of no cases which have applied it to actions under these particular provisions of the Rivers and Harbors Act, and the wreck statute cases do indicate the recent trend against applying the limitation of liability provisions to actions brought by the United States under the Rivers and Harbors Act.

One of the primary reasons...