COMPLAINT OF BALLARD SHIPPING CO., Civ. A. No. 89-0685L.

• Decision Date: 13 January 1993
• Docket Number: Civ. A. No. 89-0685L.
• Citation: 810 F. Supp. 359
• Parties: In the Matter of the Complaint of BALLARD SHIPPING CO. for Exoneration From or Limitation of Liability.
• Court: U.S. District Court — District of Rhode Island

810 F. Supp. 359

In the Matter of the Complaint of BALLARD SHIPPING CO. for Exoneration From or Limitation of Liability.

Civ. A. No. 89-0685L.

United States District Court, D. Rhode Island.

January 13, 1993.

Thomas H. Walsh, Jr., John J. Finn, Bingham, Dana & Gould, Boston, MA, Gordon P. Cleary, Vetter & White, Providence, RI, for Ballard.

Douglas J. Rose, Providence, RI, for John Hobin, d/b/a Happy Hobin's, Roland Lapre, d/b/a Pier 5 Top of the Dock, Inc., Gregory Zeek, d/b/a Zeek's Creek Bait & Tackle Shop.

George F. McDonald, Cranston, RI, for Paiva Shellfish, Inc., Clotilde Paiva, Jose Carlos Nunes, Joaquim S. Prata.

Ralph Kinder, Armstrong & Gibbons, Providence, RI, for Recreation Partners I, d/b/a The Village Inn.

Roland B. Carpenter, North Kingstown, RI, for John P. Rutkevicz, Tiverton Shellfish Co., Inc.

Paul C. Borges, Providence, RI, for B & M Distributing, Inc.

Frederick C. Cass, Providence, RI, for Louis DiManni, d/b/a Admiral Seafood.

David B. Kaplan, Chelsea, MA, and Richard Corley, Lovett, Schefrin, Gallogly & Harnett, Providence, RI, for Robert R. Boisvert, Beach Shellfish, John McCabe II and Michael Robinson, d/b/a Bristol Marketing, Ltd., East Bay Clam & Lobster, Ken Ferrara, d/b/a Ray's Bait & Tackle, Greenwich Bay Clam, Inc., Donald C. Merrill, d/b/a Merrill Commercial Shellfishing Equipment, Antonio Giorgio, d/b/a New England Shellfish, Seven Seas Shellfish, Inc., Wells Metal Fabrication, Inc., P.F.G. Corp., d/b/a Wickford Shellfish, Norman Zwolinski, d/b/a Norman Zwolinski Shellfish Co., Ronald E. Turgeon, d/b/a Turgeon Shellfish.

Bradley L. Carter, pro se.

Michael S. Bestwick, pro se.

William G. DeConte, pro se.

MEMORANDUM AND ORDER

LAGUEUX, Chief Judge.

This matter is before the Court on the motion of Ballard Shipping Co. ("Ballard") for exoneration from and dismissal of certain claims against it pursuant to Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims and Rule 12(b)(6) of the Federal Rules of Civil Procedure. Ballard argues that a number of individuals and entities which have filed claims against it have failed to state a claim upon which relief can be granted.¹

This matter arises out of the grounding in Narragansett Bay of the vessel M/V WORLD PRODIGY, which was owned by Ballard. On June 23, 1989, the ship hit Brenton Reef off the coast of Newport, Rhode Island and spilled a substantial amount of its cargo of heating oil into the Bay. After several suits were filed against Ballard arising out of the incident, Ballard initiated this case by filing a verified complaint for exoneration from or limitation of liability under 46 U.S.C.App. § 183 in December, 1989. A large number of parties (almost 450) responded by filing claims for damages allegedly resulting from the oil spill.²

By its present motion, Ballard addresses the claims of twenty-nine claimants who allege purely economic loss arising out of the oil spill. These claimants include seafood dealers, tackle shop operators, restaurant owners and employees, a scuba equipment and canoe rental shop, and a variety of other shoreline businesses operating in the Narragansett Bay area. Although these individuals and entities do not allege any physical injury to their persons or property, they contend that the oil spill in June 1989 caused them financial harm by preventing, or at a minimum substantially decreasing, their ability to work and conduct their businesses for an extended period of time. Ballard responds that, while these persons or entities may have been harmed financially, such injuries are not cognizable under the law. For the reasons stated below, the Court agrees with Ballard's position and, thus, grants Ballard's motion for exoneration from and dismissal of these claims.

DISCUSSION

I. Standard For 12(b)(6) Motion

The standard guiding the Court's decision on this motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) is clear. Ballard, as the moving party, bears the burden of establishing that the claims of the twenty-nine claimants, the non-moving parties, are insufficient as a matter of law. National Credit Union Admin. Bd. v. Regine, 795 F.Supp. 59, 62 (D.R.I.1992) (citing Harper v. Cserr, 544 F.2d 1121, 1122 (1st Cir.1976)). For the purpose of testing the sufficiency of the claims, the Court must view all facts and inferences in the light most favorable to the non-moving parties and must assume that all of the allegations in the complaints are true. Paradis v. Aetna Casualty & Sur. Co., 796 F.Supp. 59, 61 (D.R.I.1992). The Court may grant the motion to dismiss only if it appears beyond doubt from the pleadings that the parties opposing the motion can prove no possible set of facts that would support the non-moving parties' claims for relief. Lopez v. Bulova Watch Co., 582 F.Supp. 755, 767 (D.R.I.1984).

II. Maritime Law

Determining which law applies in this case is crucial to testing the sufficiency of the claims. All parties agree that the oil spill occurring in Narraganset Bay constitutes a maritime tort and is within this Court's admiralty jurisdiction. Both the locality and operation of the ship when it went aground dictate this result. See East River Steamship Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 863-64, 106 S.Ct. 2295, 2298, 90 L.Ed.2d 865 (1986). The tort occurred in navigable waters and, since the vessel was engaging in maritime commerce when it spilled the oil, the wrong bears "`a significant relationship to traditional maritime activity.'" Id. (quoting Executive Jet Aviation, Inc. v. Cleveland, 409 U.S. 249, 268, 93 S.Ct. 493, 504, 34 L.Ed.2d 454 (1972)). The Court will thus apply substantive admiralty law, statutory as well as that developed by the judiciary. Id. 476 U.S. at 864, 106 S.Ct. at 2299.

Courts in admiralty have traditionally applied judge-made maritime law to tort claims resulting from oil spills. This general maritime law has barred claims for purely economic losses sounding in tort since Justice Holmes established such rule in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 309, 48 S.Ct. 134, 135, 72 L.Ed. 290 (1927) (although dry dock's negligent damaging of ship's propeller prevented plaintiff, who had chartered the ship, from using the ship for two weeks, plaintiff, who had suffered no physical injury to itself or to its property, had no cause of action for the purely financial injury it sustained).

Claimants concede that such a rule exists, however, they contend that the rule does not apply in this case. First, they argue that their claims fall under an exception to Robins Dry Dock, either because of the nature of the harm or because of the criminal conduct engaged in by the ship's master. Second, they argue that, even if the Court concludes that their claims are not within an exception to the Robins Dry Dock rule, Rhode Island law, rather than general admiralty law, applies, and thus they have a cognizable claim under Rhode Island's Environmental Injury Compensation Act ("Rhode Island Act"), R.I.Gen. Laws § 46-12.3-4 (1991). In support of this theory, they claim that the Rhode Island statute is a valid exercise of the state's police power that does not substantially conflict with federal law. Alternatively, they contend that general maritime law, including the Robins Dry Dock rule, is preempted by the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. § 1251 et seq. (1988), and that this federal Act permits recovery under claims made pursuant to a state statute such as Rhode Island has enacted. As discussed below, the Court finds no merit in either of the arguments advanced by these claimants.

III. The Robins Dry Dock Rule

Federal courts have long recognized the Robins Dry Dock rule denying claims in the absence of physical injury to the claimant's person or property. See, e.g., Getty Refining & Marketing Co. v. MT Fadi B, 766 F.2d 829 (3d Cir.1985) (followed Robins Dry Dock in denying recovery to operator of marine terminal which suffered purely financial damages when defendant's ship was forced to remain at terminal for several days); Louisiana ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th Cir.1985) (en banc) (relied on Robins Dry Dock in granting summary judgment against claimants, excluding commercial fishermen, who sustained no physical damage to property as a result of chemical spill by ships into the Mississippi River), cert. denied sub nom. White v. M/V Testbank, 477 U.S. 903, 106 S.Ct. 3271, 91 L.Ed.2d 562 (1986); Petitions of Kinsman Transit Co., 388 F.2d 821 (2d Cir.1968) (denied recovery for financial injuries suffered by ships that were prevented from moving upstream to unload cargo after defendant's ship crashed into another ship).

The First Circuit recently reconfirmed its commitment to the Robins Dry Dock rule in Barber Lines A/S v. M/V Donau Maru, 764 F.2d 50 (1st Cir.1985). In Barber Lines, the Court affirmed the dismissal of claims by shipowners and charterers for the additional cargo discharging expenditures necessitated by defendant's negligent spilling of fuel oil into Boston Harbor. Not only did the First Circuit conclude that Robins Dry Dock and its progeny had created a legal line precluding recovery for strictly financial injuries, but also, after an extensive examination of the issue, it concluded that the policies underlying the rule were sound. Id. at 53. The Court explained that, from a practical administrative point of view, the Robins Dry Dock rule limiting recovery helps control the increasing costs of the tort action as a device for compensating accident victims. Id. at 54-55. Additionally, the bright line rule decreases both the disproportionality between liability and fault and the potentially perverse incentives that liability for purely financial harm could create. Id. at 55.

Despite Barber Lines, claimants urge this Court to adopt the reasoning espoused by the recent Fifth Circuit en banc dissent in Testbank, 752 F.2d at 1035-53. The Testban...