Oil Spill by Amoco Cadiz Off Coast of France on March 16, 1978, In re

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Citation699 F.2d 909
PartiesIn re OIL SPILL BY the AMOCO CADIZ OFF the COAST OF FRANCE ON
Decision Date16 March 1978

James E. Betke, McDermott, Will & Emery, Chicago, Ill., for appellant.

Frank Cicero, Jr., Kirkland & Ellis, Chicago, Ill., T. Barry Kingham, Curtis, Mallet, Prevost, Colt & Mosle, New York City, for appellee.

Before POSNER and COFFEY, Circuit Judges, and NEAHER, * Senior District Judge.

POSNER, Circuit Judge.

The supertanker Amoco Cadiz, which had been built in Spain by a Spanish company, Astilleros Espanoles, S.A., broke up off the coast of France in 1978, causing an extensive oil spill. French citizens who allege damage from the oil spill are plaintiffs in a suit in federal district court in Chicago under the admiralty jurisdiction, 28 U.S.C. Sec. 1333. The principal defendants are Astilleros and various affiliates of Standard Oil Company (Indiana), including Amoco Transport Company, the owner of the Amoco Cadiz. The plaintiffs argue that Amoco (as we shall refer to Standard and its affiliates) is liable for the damage because of negligent operation of the ship and Astilleros because of negligent or defective design and breach of implied warranty. Amoco filed a cross-claim against Astilleros under Rule 13(g) of the Federal Rules of Civil Procedure and a third-party complaint against Astilleros under Rule 14(c)--pleadings that we shall refer to jointly as the "cross-claim"--alleging that Astilleros was primarily responsible for the accident and should therefore be ordered to reimburse Amoco in whole ("indemnity") or substantial part ("contribution") for any damages that Amoco is ordered to pay the plaintiffs.

Astilleros moved to dismiss the French plaintiffs' complaint and Amoco's cross-claim, urging that the district court lacked subject-matter jurisdiction of both claims and personal jurisdiction over Astilleros, and that Chicago was an inconvenient forum for Astilleros to litigate in. The district court denied the motions, 491 F.Supp. 170 (N.D.Ill.1979), Astilleros defaulted, the court entered judgment against Astilleros on both claims, and Astilleros appeals, 28 U.S.C. Sec. 1292(a)(3).

Although the only ground Astilleros raises on appeal is personal jurisdiction, we shall consider on our own initiative whether a products liability claim against a shipbuilder, arising out of a shipwreck on the high seas, is within the federal admiralty jurisdiction. At a time when the only test of admiralty jurisdiction was whether the wrong complained of had occurred on navigable waters, this question could be, and was, confidently answered "yes." See, e.g., Watz v. Zapata Off-Shore Co., 431 F.2d 100, 110-11 (5th Cir.1970). But the Supreme Court overthrew exclusive reliance on locality in Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 261, 93 S.Ct. 493, 501, 34 L.Ed.2d 454 (1972), and held that "the relationship of the wrong to traditional maritime activity" must also be considered. Although there is considerable post-Executive Jet authority that a products liability claim against a shipbuilder is within the admiralty jurisdiction, see, e.g., White v. Johns-Manville Corp., 662 F.2d 234, 239 (4th Cir.1981), this circuit has not addressed the question.

The admiralty jurisdiction gives the federal courts jurisdiction, to a significant extent exclusive, see Currie, Federal Jurisdiction 122 (1981), over a class of disputes that need not involve a federal question or diversity of citizenship; and we have to ask what is distinctive about those disputes that might explain such a grant of jurisdiction. The answer lies in the mobility and range of ships, which enable them to do physical and financial damage at a great distance from the owners' and victims' domiciles. It would not do to limit jurisdiction to courts in those domiciles (especially since there will often be several victims, not all of whom have the same domicile), or in the place of the wrong, which will often be in international waters and therefore outside any nation's territorial jurisdiction. The solution, hit upon long ago, was to allow suit against the owner of a ship that caused damage to be brought in any port at which the ship called, through the fiction that the ship itself was the offender and therefore a proper party defendant. See Holmes, The Common Law 28-30 (1881). Being thus exposed to suit almost everywhere, maritime venturers demanded that their legal rights and duties be determined by a reasonably uniform international code rather than a myriad of local laws, and maritime nations such as the United States responded by creating a distinctive admiralty jurisdiction, enforced in national rather than local courts and drawing its remedies and doctrines in part at least from an international body of principles rather than from local law alone. See Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 160, 40 S.Ct. 438, 440, 64 L.Ed. 834 (1920).

Since a shipwreck on the high seas is quintessentially the kind of incident for which the distinctive doctrines and remedies of admiralty law were designed, the French plaintiffs' action against Amoco, at least, is within the admiralty jurisdiction; any doubt on that score created by the fact that the damage occurred on land, see Askew v. American Waterways Operators, Inc., 411 U.S. 325, 340, 93 S.Ct. 1590, 1599, 36 L.Ed.2d 280 (1973), is removed by the Admiralty Jurisdiction Extension Act, 46 U.S.C. Sec. 740, see American Waterways Operators, Inc. v. Askew, 335 F.Supp. 1241, 1247 and n. 23 (M.D.Fla.1971), rev'd on other grounds, 411 U.S. 325, 93 S.Ct. 1590, 36 L.Ed.2d 280 (1973). If the French plaintiffs' action against Astilleros is also within that jurisdiction, then so is Amoco's Rule 13(g) cross-claim, since such a cross-claim does not need an independent jurisdictional basis. Cenco Inc. v. Seidman & Seidman, 686 F.2d 449, 452 (7th Cir.1982). While there is a question whether admiralty impleader (Rule 14(c)) does, see 6 Wright & Miller, Federal Practice and Procedure Sec. 1465 at pp. 348-50 (1971), Amoco gained nothing by basing its cross-claim on Rule 14(c) as well as Rule 13(g). Rule 14(c) does enable the third-party plaintiff (Amoco) to force the third-party defendant (Astilleros) to defend directly against the main claim, but that is of no consequence when, as in this case, the third-party defendant is already a defendant in the main action.

But to tie jurisdiction over Amoco's Rule 13(g) cross-claim to jurisdiction over the main claim against Astilleros would make it impossible for us to decide the issue of subject-matter jurisdiction over the cross-claim until we resolved the issue of personal jurisdiction over Astilleros on the main claim. A Rule 13(g) cross-claim will lie only against an existing defendant. If Astilleros were dismissed from the main suit, then by analogy to the disposition of pendent claims when the main claim is dismissed before trial, see United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966), jurisdiction over Amoco's cross-claim, if based solely on state law, would almost certainly be declined. Cenco Inc. v. Seidman & Seidman, supra, 686 F.2d at 458; Federman v. Empire Fire & Marine Ins. Co., 597 F.2d 798, 811 (2d Cir.1979).

All this assumes that there is federal subject-matter jurisdiction over the plaintiffs' claim against Astilleros. Since jurisdiction over their claim against Amoco is incontestable, there probably is pendent jurisdiction over their claim against Astilleros arising from the same transaction. Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 811 (2d Cir.1971); Joiner v. Diamond M Drilling Co., 677 F.2d 1035, 1040-41 (5th Cir.1982). Although many recent decisions, including our circuit's decision in Hixon v. Sherwin-Williams Co., 671 F.2d 1005, 1008-09 (7th Cir.1982), reject "pendent parties" jurisdiction as a basis for allowing a diversity plaintiff to bring in an additional defendant against whom the plaintiff has a state law claim that does not satisfy the minimum amount in controversy requirement of the diversity statute, 28 U.S.C. Sec. 1332, the admiralty setting is distinguishable. The tradition of liberal joinder, reflected in Rule 14(c), illustrates the strong admiralty policy in favor of providing efficient procedures for resolving maritime disputes.

But we need not pursue these byways. The allegations in the complaint and cross-claim that Astilleros is a culpable party in a maritime tort bring both claims within the admiralty jurisdiction directly; they need not be tied to the French plaintiffs' claim against Amoco. The builder as well as the owner of a ship can cause great injury at a great distance. The victims of that injury--which both Amoco and the French plaintiffs claim in different ways to be--should have the same generous choice of forums they would have in suing the ship's owner, and the builder in turn should have the security of having his legal duties defined by a more or less uniform system of international rules. In addition, since issues of safety in the operation of a ship and in its design or construction overlap, the experience that the federal courts have obtained as the primary tribunals for deciding issues of the former type gives them a comparative advantage in deciding the latter as well.

Cases such as Thames Towboat Co. v. The Francis McDonald, 254 U.S. 242, 41 S.Ct. 65, 65 L.Ed. 245 (1920), which hold that the breach of a shipbuilding contract is not within the admiralty jurisdiction, are inapposite. They are cases of damage at a fixed locale, that of the buyer or the seller; and most of them--the ship buyer's suit on an executory contract, or the shipbuilder's suit for the price, for example--do not involve safety or other distinctively...

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