Bessemer & Lake Erie R.R. v. Seaway Marine Trans.

• Decision Date: 25 February 2010
• Docket Number: No. 08-4678.,No. 08-4676.,08-4676.,08-4678.
• Citation: 596 F.3d 357
• Parties: BESSEMER & LAKE ERIE RAILROAD COMPANY and the Pittsburgh and Conneaut Dock Company, Plaintiffs-Appellees/Cross-Appellants, v. SEAWAY MARINE TRANSPORT, Upper Lakes Shipping Ltd., Upper Lakes Shipping Inc., and Upper Lakes Group Inc., a/k/a Jack Leitch Upper Lakes Shipping in Personam, and the Motor Vessel Canadian Enterprise In rem, Defendants-Appellants/Cross-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

596 F.3d 357

BESSEMER & LAKE ERIE RAILROAD COMPANY and the Pittsburgh and Conneaut Dock Company, Plaintiffs-Appellees/Cross-Appellants, v. SEAWAY MARINE TRANSPORT, Upper Lakes Shipping Ltd., Upper Lakes Shipping Inc., and Upper Lakes Group Inc., a/k/a Jack Leitch Upper Lakes Shipping in Personam, and the Motor Vessel Canadian Enterprise In rem, Defendants-Appellants/Cross-Appellees.

No. 08-4676.

No. 08-4678.

United States Court of Appeals, Sixth Circuit.

Argued: November 19, 2009.

Decided and Filed: February 25, 2010.

ARGUED: Brian J. Miles, D'Luge, Miles, Miles & Cameron P.L.C., Mount Clemens, Michigan, for Appellants. Richard A. Dietz, Foster, Meadows & Ballard, P.C., Detroit, Michigan, for Appellees. ON BRIEF: Brian J. Miles, D'Luge, Miles, Miles & Cameron P.L.C., Mount Clemens, Michigan, for Appellants. Richard A. Dietz, Camille A. Raffa Dietz, A. Poppy Goudsmit, Foster, Meadows & Ballard, P.C., Detroit, Michigan, for Appellees.

Before: NORRIS, CLAY and SUTTON, Circuit Judges.

OPINION

SUTTON, Circuit Judge.

When the Enterprise, a large cargo ship, positioned itself to receive a load of coal on the shores of Lake Erie, it struck a land-based coal-loading machine operated by Bessemer & Lake Erie Railroad Company and The Pittsburgh & Conneaut Dock Company. Bessemer and its affiliate filed this admiralty action against the Enterprise and its owners and operators, Seaway Marine Transport, Upper Lakes Shipping Inc. and Upper Lakes Group Inc., seeking recovery of repair costs and lost profits. The district court granted Bessemer summary judgment as to liability, finding Seaway and its affiliates wholly at fault. When it came to damages, the district court awarded $522,000 in cost-of-repair damages to Bessemer but determined that Bessemer did not adequately disclose the basis of its lost-profits claim and thus granted Seaway summary judgment on that claim. We affirm the district court's rejection of Bessemer's lost-profits claim but reverse in part as to liability, finding a genuine dispute of fact over Bessemer's comparative negligence.

I.

The shiploader. Bessemer owns and operates several docks on the coast of Lake Erie in Conneaut, Ohio. Ships arrive at Dock 3 to receive loads of coal from the dock's shiploader, a large, land-based steel structure. Conveyor belts transport coal from silos to the shiploader, and a part of the shiploader known as the boom — a steel, drawbridge-like apparatus — lowers from its upright storage position to extend horizontally across the ship receiving the load. A chute hangs from the boom and deposits coal in the ship's hatches.

Shiploader operators employed by Bessemer control the movement of the boom and the chute. An operator initially lowers the boom from its vertical stowed position using controls in a small compartment in the shiploader. After positioning the boom over the ship, the operator walks out across the boom and enters the operator's cab, which is suspended from the center of the boom. From inside the cab, the operator adjusts the angle of the chute and controls the dispensing of coal into the ship. The operator also has some control over the boom, with in-cab controls that allow the operator to raise the boom by as much as fifteen degrees.

The Enterprise. Seaway operates the Enterprise, a 730-foot cargo ship, which has twenty-two hatches for storing coal. On its deck near the stern, it has a 250-foot-long self-unloading boom, a crane-like device that allows the ship to unload its own cargo. On-deck controls allow the crew to swing the self-unloader to either side of the vessel.

The incident. In October 2005, the Enterprise pulled into Dock 3 to receive a load of coal from the shiploader. Captain Frederick Penney secured the ship and turned control over to First Mate Louis Drolet, who coordinates the loading process. With the boom extended across the ship and shiploader operator James Fertig in the cab, the shiploader emptied coal into hatch five, which is near the bow of the vessel. The loading plan then called for the shiploader to empty coal into hatch fourteen, located midship, which required the ship to move forward 210 feet to align hatch fourteen with the boom and the chute. Because the ship's self-unloader obstructs access to hatch fourteen when it is in a resting position, the crew swung the self-unloader to the side of the ship away from the dock before beginning the shift.

With the self-unloader off to the ship's side, Drolet radioed Fertig and asked for permission to shift the ship, which Fertig granted. The crew began to move the boat slowly, with Drolet using controls at the bow, Wheelsman Jim Donnelly using controls at the stern and two deck hands handling the ship's wires from the dock. Drolet could not see the self-unloader from his location, and Donnelly acknowledges that he was looking at the controls, not the self-unloader. Fertig watched the ship move beneath him from his cab suspended over the deck of the ship. He faced forward with the shiploader behind him, and he had windows in front of and behind him but watched the ship only from the front windows. Throughout the maneuver, Fertig counted off the distance the ship needed to travel and radioed the distances to Drolet.

With about 45 feet to go, the ship's self-unloader struck the shiploader's boom, causing damage to the boom, which took five weeks to repair. Bessemer sued, alleging that the ship's crew negligently failed to swing the self-unloader out far enough to clear the shiploader's boom. Relying on the rule of The Oregon, 158 U.S. 186, 15 S.Ct. 804, 39 L.Ed. 943 (1895) — a rebuttable presumption that, when a moving object strikes a stationary object, the moving object is at fault — the district court granted summary judgment on liability, holding Seaway solely responsible for the incident and entitling Bessemer to $522,605.73 in cost-of-repair damages. At the same time, however, the district court found that Bessemer had failed to comply with Civil Rule 26's requirement that it produce documents supporting its claim for lost profits damages. In view of Bessemer's noncompliance with Rule 26, the court excluded evidence of lost profits under Civil Rule 37(c)(1) and granted summary judgment on the lost-profits claim to Seaway. Seaway appeals the liability ruling, and Bessmer appeals the lost-profits ruling.

II.

As to liability, Seaway concedes that it bears some fault for what happened, but it argues that it should not be held solely to account for the accident. Seaway principally claims that the district court misapplied the Oregon Rule's presumption of fault and failed to account for genuine issues of fact concerning Bessemer's comparative negligence.

A.

Admiralty law draws a distinction between allisions and collisions. An allision occurs when a moving vessel strikes a stationary object, and a collision occurs when two moving vessels strike each other. See Fischer v. S/Y NERAIDA, 508 F.3d 586, 589 n. 1 (11th Cir.2007). (An elision occurs when lawyers mistakenly lump the two concepts together.) The Oregon Rule applies to allisions, establishing a rebuttable presumption that, when a moving object hits a stationary object, the moving object is at fault. See The Oregon, 158 U.S. at 197, 15 S.Ct. 804; see also Superior Constr. Co. v. Brock, 445 F.3d 1334, 1339 (11th Cir.2006). In their appellate papers, the parties primarily square off over whether the Oregon Rule applies — Seaway claiming that the rule does not apply because Bessemer's movable boom is not a stationary object and Bessemer insisting that simply because the boom can move does not show whether it was stationary at the time of the incident.

But the outcome of this case does not turn on this distinction or for that matter on whether the Oregon Rule applies. Not unlike the doctrine of res ispa loquitur, the Oregon Rule creates a prima facie case of negligence, not a final case of sole negligence. See In re Mid-South Towing Co., 418 F.3d 526, 532 n. 6 (5th Cir.2005); see also Thomas J. Schoenbaum, 2 Admiralty and Maritime Law § 14-3, 104-05 (4th ed.2004). Based on "the common-sense observation that moving vessels do not usually [a]llide with stationary objects unless the vessel is mishandled in some way," the rule presumptively allocates fault when the circumstances of an allision are unknown — requiring the party most likely to know what happened (the moving vessel) to present evidence to rebut the presumption of fault. City of Chicago v. M/V Morgan, 375 F.3d 563, 572 (7th Cir.2004). But when "the parties have introduced evidence to dispel the mysteries that gave rise to the presumption," the Oregon Rule has no factual void to fill. In re Mid-South Towing, 418 F.3d at 531.

That is true here, as Seaway has admitted some negligence, but not full responsibility, for the accident. What matters then is not whether the vessel bears some responsibility for the accident. It admits that it does. The question is whether, even if the vessel was negligent, may it still shift some responsibility for the accident to the dock owner due to its alleged comparative fault? The answer to that question does not turn on the Oregon Rule. Cf. id.

Perhaps as a result of the way the parties briefed the case, the district court took the view that, once it determined that the Oregon Rule's presumption of fault applied to this case, Seaway had to "rebut the presumption" of fault before it could consider Seaway's comparative negligence defense. R.45 at 16. When Seaway could not do so, the court found Seaway solely liable for the accident.

That is not how the Oregon Rule works. It is a burden-shifting doctrine, "not a rule of ultimate liability." City of Chicago, 375 F.3d at 572. While it may be the case that a moving vessel must rebut the presumption to absolve itself of all liability, id. at 573, we know of no case law to the effect that the vessel must rebut the presumption to relieve itself of some liability — that is, to raise a...