Evergreen Intern., S.A. v. Norfolk Dredging Co.

• Decision Date: 25 June 2008
• Docket Number: No. 07-1944.,No. 07-1879.,07-1879.,07-1944.
• Citation: 531 F.3d 302
• Parties: EVERGREEN INTERNATIONAL, S.A., Plaintiff-Appellant, v. NORFOLK DREDGING COMPANY, Defendant-Appellee, and Marinex Construction Company, Defendant. Evergreen International, S.A., Plaintiff-Appellee, v. Norfolk Dredging Company, Defendant-Appellant, and Marinex Construction Company, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

531 F.3d 302

EVERGREEN INTERNATIONAL, S.A., Plaintiff-Appellant, v. NORFOLK DREDGING COMPANY, Defendant-Appellee, and Marinex Construction Company, Defendant.

Evergreen International, S.A., Plaintiff-Appellee, v. Norfolk Dredging Company, Defendant-Appellant, and Marinex Construction Company, Defendant.

No. 07-1879.

No. 07-1944.

United States Court of Appeals, Fourth Circuit.

Argued: May 14, 2008.

Decided: June 25, 2008.

ARGUED:

David Michael Collins, Buist, Moore, Smythe, McGee, PA,

Charleston, South Carolina, for Appellant/Cross-appellee. David Harlen Sump, Crenshaw, Ware & Martin, PLC, Norfolk, Virginia, for Appellee/Cross-appellant.

ON BRIEF:

Gordon D. Schreck, Julius H. Hines, Buist, Moore, Smythe, McGee, PA, Charleston, South Carolina, for Appellant/Cross-appellee.

Before MOTZ, Circuit Judge, HAMILTON, Senior Circuit Judge, and CLAUDE M. HILTON, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.

Affirmed by published opinion. Senior Judge HAMILTON wrote the opinion, in which Judge MOTZ and Senior Judge HILTON joined.

OPINION

HAMILTON, Senior Circuit Judge:

This is a case within the district court's admiralty jurisdiction. The appeal comes to us after a six-day bench trial on cross-claims of negligence under general maritime law. The cross claims stem from an allision¹ between a container ship, the M/V Ever Reach, and a submerged dredge spoil pipeline located outside the federally marked navigational channel of the Cooper River in Charleston, South Carolina.

On appeal, Plaintiff Evergreen International, S.A. (Evergreen), owner of the M/V Ever Reach, challenges as inadequate the district court's final judgment in its favor ordering defendant Norfolk Dredging Company (Norfolk), the owner and operator of the dredge spoil pipeline involved in the allision, to pay it $898,975.42, plus prejudgment interest from March 31, 2003. Evergreen asks that we reject certain findings of the district court as clearly erroneous, vacate the final judgment, and remand to the district court with instructions to reassess the parties' respective fault under a burden-shifting proof scheme more favorable to itself and to raise Norfolk's damages cap under the Oil Pollution Act of 1990 (the OPA), 33 U.S.C. §§ 2701-2761.

On cross-appeal, Norfolk challenges as clearly erroneous the district court's finding that it was ten-percent at fault for the allision. According to Norfolk, it bears absolutely no fault for the allision, and therefore seeks reversal of the judgment in toto. Norfolk also takes issue with the district court's calculation of its damages cap under the OPA. In the event we uphold the district court's finding that it was ten-percent at fault, Norfolk asks that we vacate the judgment and remand with instructions for the district court to lower its damages cap under the OPA to comply with its view of the statutory requirements of the OPA.

For the reasons that follow, we affirm in toto.

I.

On February 14, 2002, the United States Army Corps of Engineers (the Corps) awarded a contract (the Contract) to Marinex Construction Company (Marinex), for "new work and maintenance dredging" in the Cooper River between the stretch of the river charted as Shipyard Creek and the turning basin above the North Charleston Container Terminal ("the Dredging Project"). (J.A. 1267) (internal quotation marks omitted). Two adjacent sections of this stretch of the Cooper River, charted as Daniel Island Bend and Clouter Creek Reach, are relevant to the issues on appeal. Also relevant to the issues on appeal, the Contract required the work to be conducted "in such a manner as to obstruct navigation as little as possible" and in compliance with the Corps' Safety and Health Requirements Manual EM-385-1-1 (the Corps' Manual). (J.A. 1379). Notably, the Contract and the Corps' Manual both provided that the "[s]ubmerged pipeline shall rest on the channel bottom where a pipeline crosses a navigation channel and while submerged;" and "the top of the pipeline . . . shall be no higher than the required project depth for the navigation channel in which the pipe is placed." (J.A. 1381).

Marinex hired Norfolk as a subcontractor on the Dredging Project. The written subcontract between Marinex and Norfolk (the Subcontract) required Norfolk to "perform all work in accordance with U.S. Army Corps of Engineers Plans and Specifications." (J.A. 1267) (internal quotation marks omitted).

Norfolk owns and operates various types of dredging equipment, including a hydraulic dredge named the Charleston (the Dredge Charleston), which is 250 feet long and fifty feet wide. The Dredge Charleston operated by swinging a rotating cutter-head along the river bottom through the use of swing anchors positioned several hundred feet to either side of the Dredge Charleston. The dredge spoil created by operation of the Dredge Charleston would then be pumped by the Dredge Charleston to a designated disposal area through a series of floating and submerged pipelines.

On September 19, 2002, upon Norfolk's completion of dredging the Daniel Island Bend and Clouter Creek Reach to approximately two feet below the depth required by the Subcontract, Norfolk laid a submerged dredge spoil pipeline across the dredged bottom of the federally marked navigational channel of the Cooper River, beginning in the vicinity of Navy Pier "U". Navy Pier "U" lies approximately where the Daniel Island Bend transitions to Clouter Creek Reach on the western edge of the west side of the Cooper River, which side in admiralty parlance is referred to as the green side.² Each of the submerged dredge spoil pipeline sections consisted of a 120-foot length of 24-inch diameter steel pipe with mating ball and socket joints welded on each end. The submerged dredge spoil pipeline emerged from the red side of the federally marked navigational channel in the vicinity of the transition between the dredged channel and the undredged channel, followed the channel slope up to the river flats and connected to the supply line at a location known as "cable tight."³ Notably, the channel slope was outside the red side of the federally marked navigational channel. Every morning, Norfolk issued daily position reports indicating the area in which the Dredge Charleston and its attendant equipment were operating.

During the period from September 19, 2002 to September 30, 2002, Norfolk's submerged dredge spoil pipeline operated without incident across the federally marked navigational channel and up the channel slope outside the red side of the federally marked navigational channel in the Daniel Island Bend. Indeed, at least twenty-three vessels, with drafts at or deeper than the thirty-six foot, eleven inch draft of the M/V Ever Reach, navigated over this submerged dredge spoil pipeline without incident.

On the morning of September 30, 2002, the Dredge Charleston conducted dredging operations in the green side of the Daniel Island Bend. An attached anchor to the Dredge Charleston was deployed at approximately two-thirds of the distance across the red side of the federally marked navigational channel in the Daniel Island Bend. Attached to the anchor was an anchor buoy lit by a flashing yellow light, and attached to the anchor buoy was a small crane barge named the Didapper. The Didapper measured approximately twenty-five feet by forty-five feet and had a flashing yellow light attached to it as well.

At approximately 3:00 a.m. on September 30, 2002, the M/V Ever Reach, which is 965 feet long and 106 feet wide, approached the entrance to Charleston Harbor bound for the North Terminal in North Charleston. Forty-five minutes later, Charleston Branch Pilot Stephen Swan, Jr. (Pilot Swan) boarded the M/V Ever Reach to assist its crew, headed by Captain Liu, in making the transit up the Cooper River to the North Terminal. An assist tug also tethered to the M/V Ever Reach at its stern.

At approximately 4:00 a.m., Pilot Swan contacted the Dredge Charleston to determine its current location and set-up. Dredge Charleston Leverman Jan Hewitt (Leverman Hewitt) responded that the Dredge Charleston had moved up river some since the previous day, and that there was a "swinging anchor across the ranges into the red side. It's pretty well out there, out of the way." (J.A. 1272) (internal quotation marks omitted). At trial, Leverman "Hewitt testified that `across the ranges' meant on the opposite side of the channel centerline, i.e., in the `red' side of the federal channel." Id. In response to Pilot Swan's query as to whether he should proceed between the Dredge Charleston and the marker buoy for the swinging anchor, Leverman Hewitt answered in the affirmative. Leverman Hewitt then requested that Pilot Swan give him fifteen minutes notice in order that he could "move the stern over and give [Pilot Swan] a wide hole." (J.A. 1273) (internal quotation marks omitted). Pilot Swan responded that his vessel was "fairly deep and pretty large," and that "all the room you can give us we would sure appreciate." Id. (internal quotation marks omitted).

Shortly after 5:00 a.m., Pilot Swan again contacted the Dredge Charleston and stated that he would reach it in about twenty-five minutes. Leverman Hewitt answered that he would "get the stern over." Id. (internal quotation marks omitted). At about 5:20 a.m., Leverman Hewitt reported that he had "moved out of the way" and would see the M/V Ever Reach "on one whistle." Id. (internal quotation marks omitted).

Based upon Leverman Hewitt's descriptions, Pilot Swan expected the Didapper to be well out of the way on the red side. However, once the M/V Ever Reach got within one-half mile of the Dredge Charleston and its attendant equipment, Pilot Swan could see that the Didapper was located closer to the middle of the red side of the federally marked navigational channel than he had expected based upon Leverman Hewitt's descriptions. Pilot Swan estimated that the...