U.S. v. Nassau Marine Corp.

• Citation: 778 F.2d 1111
• Decision Date: 19 December 1985
• Docket Number: No. 84-3551,84-3551
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. NASSAU MARINE CORP., Central Marine Service and Canal Barge Company, et al., Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1111

778 F.2d 1111

UNITED STATES of America, Plaintiff-Appellee, v. NASSAU MARINE CORP., Central Marine Service and Canal Barge

Company, et al., Defendants-Appellants.

No. 84-3551.

United States Court of Appeals, Fifth Circuit.

Dec. 19, 1985.

Jones, Walker, Waechter, Poitevent, Carrere & Denegre, Edward J. Koehl, Jr., Robert T. Lemon, II, New Orleans, La., for defendants-appellants.

John P. Volz, U.S. Atty., William F. Baity, Asst. U.S. Atty., New Orleans, La., Thomas W. Osborne, Atty., Torts Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WISDOM, POLITZ, and TATE, Circuit Judges.

WISDOM, Circuit Judge.

The owners ¹ of a sunken barge appeal from a judgment holding them responsible for removing the wreck under the Rivers and Harbors Act of 1899, ch. 425, 30 Stat. 1152 (codified as amended at 33 U.S.C. Secs. 401 et seq.). We affirm the judgment of the district court.

I.

The M/V CLARKE BERRY left Pensacola, Florida for Port Sulphur, Louisiana on the morning of March 23, 1979. It was pushing a single barge, the CBC-21, loaded with about 2,500 tons of molten sulphur. At about eight o'clock that evening, tow boat and barge were heading due west across lower Mobile Bay in fair weather. About two-thirds of the way across the Bay, the barge suddenly began to buckle amidship. The captain continued pushing the barge westward to clear the main north-south ship channel. Barge CBC-21 sank about 500 yards west of the north-south channel in twelve feet of water, with its mid-section resting on the bottom and its bow and stern out of the water. Investigations by the Navy, the Coast Guard, and the defendants failed to determine conclusively the cause of the buckling.

The defendants kept the wreck marked and lighted for four days and then abandoned it. The Coast Guard marked the wreck with a temporary buoy, and later erected a permanent marker with a flashing light. ²

Barge CBC-21, built in 1960, was a steel-welded tank barge 280 feet long, 50 feet wide, and 12 1/2 feet deep. About two weeks before it sank, the Avondale Shipyards repaired some cracks in the bow and stern sections of the barge. The district court found that the defendants failed to comply with a regulation requiring notification (which may be informal) of the repairs to the Coast Guard and Coast Guard inspection of the completed repairs.

The United States sued the defendants to recover the costs of marking the wreck. The government also sought an injunction requiring the owners to remove the wreck and a declaration that the defendants are liable for the costs of removal. The district court found the defendants liable under Sec. 15.33 U.S.C. Sec. 409, for negligently causing the barge to sink, and granted the injunction. United States v. Nassau Marine Corp., E.D.La.1984, 577 F.Supp. 1475. The defendants appeal.

II.

The United States presses the argument that vessel owners are strictly liable for the costs of removing sunken vessels from navigable waters under Section 10 of the Rivers and Harbors Act, 33 U.S.C. Sec. 403. ³ As a matter of public policy, so the argument runs, the shipping industry should pay for any sinking creating an obstruction, even a non-negligent sinking; the industry is in the best position to decide how much to invest in efforts to prevent sinkings; the industry can insure itself almost as cheaply as can the government. Moreover, a strict liability rule would reduce the expense of litigation by eliminating the issue of negligence.

Our Court has held that a sunken vessel is an "obstruction" within the meaning of Sec. 10 of the Act. United States v. Raven, 5 Cir.1974, 500 F.2d 728, 731, cert. denied, 1975, 419 U.S. 1124, 95 S.Ct. 809, 42 L.Ed.2d 824; United States v. Cargill, Inc., 5 Cir.1966, 367 F.2d 971, 975, aff'd sub. nom. Wyandotte Transportation Co. v. United States, 1967, 389 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d 407. ⁴ Other circuits disagree reasoning that Congress intended sunken vessels to be governed solely by Sec. 15. See, e.g., United States v. Bethlehem Steel Corp., 9 Cir.1963, 319 F.2d 512, cert. denied, 1964, 375 U.S. 966, 84 S.Ct. 484, 11 L.Ed.2d 415.

Our Court has not decided whether Sec. 10 imposes strict liability on those who create obstructions to the navigable capacity of United States waters. The language of the statute suggests liability without fault. In University of Texas Medical Branch at Galveston v. United States, 5 Cir.1977, 557 F.2d 438, 444, cert. denied, 1978, 439 U.S. 820, 99 S.Ct. 84, 58 L.Ed.2d 111, the Court assumed that liability under Sec. 10 is strict. "By its terms Sec. 10 would prohibit even the innocent creation of such an obstruction." Id. at 444 n. 10. ⁵ The Eleventh Circuit has concluded that Sec. 10 is a strict liability statute. United States v. Baycon Industries, 11 Cir.1984, 744 F.2d 1505, 1507. ⁶ The Third Circuit has reached the opposite result. United States v. Ohio Barge Lines, Inc., 3 Cir.1979, 607 F.2d 624, 627-30.

We find it unnecessary to decide the applicability of Sec. 10 to this case, because we agree with the district court's finding of liability under Sec. 15. We are confirmed in this course by our recognition that the question raised by applying Sec. 10 to wrecks are serious. First, a strict liability rule might subject innocent owners to prosecution and imprisonment under Sec. 16 of the Act, 33 U.S.C. Sec. 411. Second, a Corps of Engineers' regulation provides that "the owner of a vessel which is sunk without fault on his part may abandon the wreck, in which case he cannot be held liable for removing it." 33 C.F.R. Sec. 209.170(b). The government has made no effort to modify this regulation, although its position in this case is inconsistent with the regulation. Third, non-negligent shipowners may be entitled to limit their liability under 46 U.S.C. Secs. 181-89. We have held that shipowners may not limit their liability if the vessel sank because of their negligence. University of Texas Medical Branch at Galveston v. United States, 557 F.2d at 452. If no one was negligent, however, a fortiori the owner was not in privity with a negligent party, nor did it have knowledge of any negligent act. ⁷

III.

The district judge held the defendants to have been negligent and therefore liable under Sec. 15 of the Rivers and Harbors Act, 33 U.S.C. Sec. 409. Section 15, part of the Wreck Act, makes shipowners liable for "voluntarily or carelessly" causing their vessels to sink in navigable channels. ⁸ "Carelessness" under Sec. 15 is equivalent to negligence. Nunley v. M/V Dauntless Colocotronis, 5 Cir.1984, 727 F.2d 455, 458-60 (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 120, 83 L.Ed.2d 63; University of Texas Medical Branch at Galveston v. United States, 577 F.2d at 444 n. 11.

Section 15 requires all owners, whether negligent or not, to warn other vessels by marking the wreck. Innocent shipowners may then abandon the wreck. If they do so, they have no obligation under Sec. 15 to remove the wreck or to continue marking it as a hazard to navigation. ⁹ Agri-Trans Corp. v. Gladders Barge Line, Inc., 5 Cir.1983, 721 F.2d 1005; Tennessee Valley Sand & Gravel Co. v. M/V Delta, 5 Cir.1979, 598 F.2d 930, 934, modified, 604 F.2d 13. If the government then raises the wreck, it is entitled to sell the vessel and its cargo. 33 U.S.C. Secs. 414-15. The cost of removing the wreck nearly always exceeds its salvage value; otherwise the owner would not abandon it. At one time, shipowners' proctors argued that their clients were entitled to abandon a wreck under Sec. 15 even if the owners were at fault. The Supreme Court held to the contrary in Wyandotte Transportation Co. v. United States, 1967, 389 U.S. 191, 206-07, 88 S.Ct. 379, 388, 19 L.Ed.2d 407.

The crucial issue under Sec. 15, therefore, is whether the vessel owner's negligence caused the vessel to sink. The district court found that the defendants were negligent on the basis of the doctrine of res ipsa loquitur and the Rule of The Pennsylvania, 1874, 86 U.S. (19 Wall.) 125, 22 L.Ed. 148, 577 F.Supp. at 1481. We review questions of negligence in admiralty cases under the clearly erroneous standard. Canal Barge Co. v. China Ocean Shipping Co., 5 Cir.1985, 770 F.2d 1357. We conclude that the evidence supports a finding of negligence.

A.

We have held that Sec. 15 requires removal only if the wreck is an obstacle to navigation. Agri-Trans Corp. v. Gladders Barge Line, Inc., 5 Cir.1983, 721 F.2d 1005, 1009-10. There is ample evidence to support the district court's finding that Barge CBC-21 is such an obstacle. Although the wreck does not threaten ships in the north-south deep draft ship channel, it does obstruct traffic on the east-west Gulf Intracoastal Waterway. One witness testified that the wreck lies at the maritime equivalent of "the intersection of 42nd Street and Fifth Avenue". Indeed, the buoys and markers erected by the Coast Guard were several times damaged or destroyed by passing vessels.

B.

When a vessel sinks in calm weather, absent evidence that the crew was negligent, the vessel may be presumed to have been unseaworthy. ¹⁰ See Commercial Molasses Corp. v. New York Tank Barge Corp., 1941, 314 U.S. 104, 62 S.Ct. 156, 86 L.Ed. 89; Walker v. Harris, 5 Cir.1964, 335 F.2d 185, cert. denied, 379 U.S. 930, 85 S.Ct. 326, 13 L.Ed.2d 342. The district court concluded that, on the facts of this case, such an event also raises an inference that the owner was negligent.

Unseaworthiness alone does not necessarily imply negligence. ¹¹ The Supreme Court has held that liability for unseaworthiness "is essentially a species of liability without fault." Seas Shipping Co. v. Sieracki, 1946, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099. A vessel may become unseaworthy even though the owner, and indeed every person involved with the ship, was reasonably careful. See G. Gilmore & C. Black, The Law of...