Eklof Marine Corp. v. U.S.

• Decision Date: 14 May 1985
• Docket Number: No. 976,D,976
• Citation: Eklof Marine Corp. v. U.S., 762 F.2d 200 (2nd Cir. 1985)
• Parties: EKLOF MARINE CORP. and Eklof Transportation Co., Inc., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. ocket 85-6016.
• Court: U.S. Court of Appeals — Second Circuit

Page 200

762 F.2d 200

1985 A.M.C. 2141

EKLOF MARINE CORP. and Eklof Transportation Co., Inc.Plaintiffs-Appellants, v.UNITED STATES of America, Defendant-Appellee.

No. 976, Docket 85-6016.

United States Court of Appeals Second Circuit.

Argued April 3, 1985.

Decided May 14, 1985.

Herbert B. Halberg, New York City(Beck, Halberg & Williamson, New York City, on the brief), for plaintiffs-appellants.

Thomas F. Murphy, Jr., U.S. Dept. of Justice, New York City(Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Raymond J. Dearie, U.S. Atty., Brooklyn, N.Y., and Janis G. Schulmeisters, U.S. Dept. of Justice, New York City, on the brief), for defendant-appellee.

Before KAUFMAN, TIMBERS and NEWMAN, Circuit Judges.

TIMBERS, Circuit Judge:

Eklof Marine Corp. and Eklof Transportation Co., Inc. appeal from a judgment entered December 28, 1984 in the Eastern District of New York, Mark A. Costantino, District Judge, granting the motion by appellee United States of America to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief could be granted.Appellants commenced this action under the Suits in Admiralty Act, 46 U.S.C. Secs. 741-752(1982), and the Public Vessels Act, 46 U.S.C. Secs. 781-790(1982), to recover $382,000 damages sustained by appellants' vessel, the M/V RELIABLE, as the result of the alleged negligence of the Coast Guard which, by improperly marking a reef, had caused the grounding of the tanker at Diamond Reef in the Hudson River on June 14, 1983.The district court held that the placement of a buoy by the Coast Guard as an aid to navigation is a discretionary act and that the complaint failed to state a claim upon which relief could be granted.

For the reasons stated below, we reverse and remand.

I.

We summarize only those facts believed necessary to an understanding of our rulings on the legal issues raised on appeal.

Eklof Marine Corp. was the operator, and Eklof Transportation Co., Inc. the owner, of the tanker M/V RELIABLE.On June 14, 1983, the RELIABLE was proceeding north on the Hudson River toward Albany, which was its destination.The tanker ran aground on the hard river bottom at the southwest portion of an area known as Diamond Reef, which is situated at the mouth of Wappinger Creek in the vicinity of New Hamberg, New York.

The reef was marked at its south end by a single red and black buoy which had been positioned by the United States Coast Guard some years before the grounding.The Coast Guard continued to maintain the buoy.It is the only aid to navigation in the vicinity of Diamond Reef.There is no claim that the buoy was off-station.The complaint alleged, rather, that numerous other groundings had occurred in the same area in recent years and that the groundings, including that of the RELIABLE, were caused by the improper positioning of the buoy.It was further alleged that the single buoy was "wholly inadequate" to mark the southern extremity of the reef and completely "failed to mark" its western extremity.

II.

Before turning to the legal issues raised on appeal, we note that, although appellee moved under Rule 12(b)(6) to dismiss the complaint, the district court accepted affidavits and documentary evidence from both sides.Furthermore, in its opinion the court specifically referred to facts regarding the depiction of the reef on navigational charts.Such facts are not alleged in the complaint.Rule 12(b)(6) requires that, when "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56", even if the sole issue to be resolved on the motion is the legal sufficiency of the claim.SeeClipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240, 1250 & n. 14(9 Cir.1982), cert. denied, 459 U.S. 1227(1983).The Advisory Committee Notes to the 1946Amendment to Rule 12(b)(6) also state that, in such a situation, "when the case reaches the court of appeals, that court should treat the motion in the same way."SeeBoro Hall Corp. v. General Motors Corp., 124 F.2d 822, 823(2 Cir.1942), cert. denied, 317 U.S. 695(1943).In light of the provisions of Rule 12(b)(6) and because both parties were afforded the opportunity to present extraneous matter, we treat appellee's motion as one for summary judgment and the judgment from which the instant appeal was taken as a summary judgment dismissing the complaint.

III.

The district court stated that "[e]ssentially, plaintiffs claim that the buoy either should have been placed in a different location or that additional markers were necessary."The court held, however, that the Coast Guard, as a matter of law, cannot be liable for failing to act in placing additional aids to navigation in the vicinity of Diamond Reef and that, absent an abuse of discretion, the decision to place the Diamond Reef buoy at its present location is unreviewable.We disagree.

Pursuant to 14 U.S.C. Sec. 81(1982), the Coast Guard "may establish, maintain, and operate" aids to maritime navigation "to prevent disasters, collisions, and wrecks of vessels and aircraft".(emphasis added).It has long been established that the Coast Guard has no statutory mandate to ensure the safety of all navigable waterways in the United States and thus it has no duty to mark all obstructions.E.g., Indian Towing Co. v. United States, 350 U.S. 61, 69(1955)(dicta);Transorient Navigators Co. v. M/S Southwind, 714 F.2d 1358, 1367(5 Cir.1983)(same).As the district court in the instant case correctly observed, "there is no liability for failing to act."Eklof Marine Corp. v. United States, CV-84-2495(E.D.N.Y.1984).Thus, for example, the Coast Guard could not be held to be negligent, as a matter of law, for failing to mark the end of a submerged breakwater.Bearce v. United States, 614 F.2d 556, 560-61(7 Cir.), cert. denied, 449 U.S. 837(1980).In Bearce, the court distinguished cases involving the negligent positioning or maintenance of maritime aids and held that "the decision to establish the aid in the first instance was discretionary", id. at 560, and hence unreviewable.

We agree that, if the Coast Guard had left Diamond Reef completely unmarked, there would be no basis for liability in this case.In such a situation, mariners would be expected to rely upon navigation charts.Assuming the charts are accurate, any grounding would be entirely the fault of the navigator.But where, as here, the Coast Guard has acted to mark an obstruction or maritime danger, a duty arises to do so in a way that does not create a new hazard.We held just last term that "Reliance is an essential element in a case for damages against the Coast Guard."Whitney S.S. Co. v. United States, 747 F.2d 69, 72(2 Cir.1984).It is reliance that gives rise to the Coast Guard's duty.Indian Towing, supra, 350 U.S. at 69;Magno v. Corros, 630 F.2d 224, 228-29(4 Cir.1980), cert. denied, 451 U.S. 970(1981).

The Supreme Court held in Indian Towing that, once the Coast Guard exercised its discretion to operate a lighthouse in a particular location, "and engendered reliance on the guidance afforded by the light, it was obligated to use due care to make certain that the light was kept in good working order" and, if the light failed, to discover this fact and repair it or give warning.350 U.S. at 69.Similarly, in Whitney S.S., we held that the Coast Guard could be held liable for failing properly to maintain a traffic buoy in Buffalo Harbor which had slipped its moorings and drifted off-station.747 F.2d at 74.We reached this conclusion over the argument of the United States that sole reliance on the buoy was unjustified because mariners had been warned to use other navigational aids, including charts, in addition to buoys.Id. at 73.In rejecting that argument, we held that the failure of the mariner to use other methods of navigation served only to reduce the Coast Guard's proportion of fault in assessing damages.Id.

While the instant case does not present the situation of a malfunctioning lighthouse or an off-station buoy, the duty of the Coast Guard here is essentially the same: once the Coast Guard acts, and causes others justifiably to rely on such action, a duty arises to act reasonably and with due care to prevent a navigational aid from becoming "a trap for the ignorant or unwary rather than a warning of danger."Somerset Seafood Co. v. United States, 193 F.2d 631, 635(4 Cir.1951).This is particularly true where, as demonstrated by an internal Coast Guard report which was submitted by appellants to the district court in the instant case, the Coast Guard was aware of the practice of "buoy hopping", where mariners "are accustomed to having good water close aboard when passing buoys on the 'right' side", or, as a nautical maven would put it, when leaving buoys to port.The Coast Guard was under a duty to place the buoy in such a position that mariners who follow normal practice would not be enticed to enter upon a danger that otherwise might have been avoided.

Appellee seeks solace in the holding in Bearce, supra, and the dicta in Indian Towing, supra, by characterizing appellants' claim as one requiring the placement of more than one buoy adequately to mark Diamond Reef.Appellee views the complaint as alleging that the Coast Guard, in effect, "failed to act" by not placing more buoys in that location and therefore no claim is stated.We have concluded that the complaint can be read as stating a claim for mispositioning the buoy.We also are persuaded that the Coast Guard, having undertaken to mark a hazard, is equally duty-bound to provide sufficient aids to mark the obstruction adequately and that the failure to do so also may result in liability.It is the marine obstruction that creates the initial danger.That danger defines the scope of the Coast Guard's duty once the Coast Guard acts to mark...