United States v. Reliable Transfer Co Inc 8212 363

• Decision Date: 19 May 1975
• Docket Number: No. 74,74
• Parties: UNITED STATES, Petitioner, v. RELIABLE TRANSFER CO., INC. —363
• Court: U.S. Supreme Court

421 U.S. 397

95 S.Ct. 1708

44 L.Ed.2d 251

UNITED STATES, Petitioner,

v RELIABLE TRANSFER CO., INC.

No. 74—363.

Argued March 19, 1975.

Decided May 19, 1975.

Syllabus

The admiralty rule of divided damages, whereby the property damage in a maritime collision or stranding is equally divided whenever two or more parties involved are found to be guilty of contributory fault, regardless of the relative degree of their fault, held replaced by a rule requiring liability for such damage to be allocated among the parties proportionately to the comparative degree of their fault, and to be allocated equally only when the parties are equally at fault or when it is not possible fairly to measure the comparative degree of their fault. Pp. 401-411.

2 Cir., 497 F.2d 1036, vacated and remanded.

John P. Rupp, Asst. to Sol. Gen., Dept. of Justice, Washington, D.C., for petitioner, pro hac vice, by special leave of Court.

Copal Mintz, New York City, for respondent.

Mr. Justice STEWART delivered the opinion of the Court.

More than a century ago, in The Schooner Catharine v. Dickinson, 17 How. 170, 15 L.Ed. 233, this Court established in our admiralty law the rule of divided damages. That rule, most commonly applied in cases of collision between two vessels, requires the equal division of property damage whenever both parties are found to be guilty of contributing fault, whatever the relative degree of their fault may have been. The courts of every major maritime nation except ours have long since abandoned that rule, and now assess damages in such cases on the basis of proportionate fault when such an allocation can reasonably be made. In the present case we are called upon to decide whether this country's admiralty rule of divided damages should be replaced by a rule requiring, when possible, the allocation of liability for damages in proportion to the relative fault of each party.

I

On a clear but windy December night in 1968, the Mary A. Whalen, a coastal tanker owned by the respondent Reliable Transfer Co., embarked from Constable Hook, N.J., for Island Park, N.Y., with a load of fuel oil. The voyage ended, instead, with the vessel stranded on a sand bar off Rockaway Point outside New York Harbor.

The Whalen's course led across the mouth of Rockaway Inlet, a narrow body of water that lies between a breakwater to the southeast and the shoreline of Coney Island to the northwest. The breakwater is ordinarily marked at its southernmost point by a flashing light maintained by the Coast Guard. As, however, the Whalen's captain and a deckhand observed while the vessel was proceeding southwardly across the inlet, the light was not operating that night. As the Whalen approached Rockaway Point about half an hour later, her captain attempted to pass a tug with a barge in tow ahead, but, after determining that he could not overtake them, decided to make a 180 turn to pass astern of the barge. At this time the tide was at flood, and the waves, whipped by northwest winds of gale force, were eight to ten feet high. After making the 180 turn and passing astern of the barge, the captain headed the Whalen eastwardly, believing that the vessel was then south of the breakwater and that he was heading her for the open sea. He was wrong. About a minute later the light structure on the southern point of the breakwater came into view. Turning to avoid rocks visible ahead, the Whalen ran aground in the sand.

The respondent brought this action against the United States in Federal District Court, under the Suits in Admiralty Act, 41 Stat. 525, 46 U.S.C. § 741 et seq., and the Federal Tort Claims Act, 28 U.S.C. § 1346 et seq., seeking to recover for damages to the Whalen caused by the stranding. The District Court found that the vessel's grounding was caused 25% by the failure of the Coast Guard to maintain the breakwater light and 75% by the fault of the Whalen. In so finding on the issue of comparative fault, the court stated:

'The fault of the vessel was more egregious than the fault of the Coast Guard. Attempting to negotiate a turn to the east, in the narrow space between the bell buoy No. 4 and the shoals off Rockaway Point, the Captain set his course without knowing where he was. Obviously, he would not have found the breakwater light looming directly ahead of him within a minute after his change of course, if he had not been north of the point where he believed he was.

'Equipped with look-out, chart, searchlight, radio-telephone, and radar, he made use of nothing except his own guesswork judgment. After . . . turning in a loop toward the north so as to pass astern of the tow, he should have made sure of his position before setting his new 73 course. The fact that a northwest gale blowing at 45 knots with eight to ten foot seas made it difficult to see, emphasizes the need for caution rather than excusing a turn into the unknown. . . .'

The court held, however, that the settled admiralty rule of divided damages required each party to bear one-half of the damages to the vessel.¹

The Court of Appeals for the Second Circuit affirmed this judgment. 2 Cir., 497 F.2d 1036. It held that the trial court 'was not clearly erroneous in finding that the negligence of both parties, in the proportions stated, caused the stranding.' Id., at 1037—1038. And, although 'mindful of the criticism of the equal division of damages rule and . . . recogniz(ing) the force of the argument that in this type of case division of damages in proportion to the degree of fault may be more equitable,' id., at 1038, the appellate court felt constrained to adhere to the established rule and 'to leave doctrinal development to the Supreme Court or to await appropriate action by Congress.' Ibid.

We granted certiorari, 419 U.S. 1018, 95 S.Ct. 491, 42 L.Ed.2d 291, to consider the continued validity of the divided damages rule.²

II

The precise origins of the divided damages rule are shrouded in the mists of history.³ In any event it was not until early in the 19th century that the divided damages rule as we know it emerged clearly in British admiralty law. In 1815, in The Woodrop-Sims, 2 Dods. 83, 165 Eng.Rep. 1422, Sir William Scott, later Lord Stowell, considered the various circumstances under which maritime collisions could occur and stated that division of damages was appropriate in those cases 'where both parties are to blame.' Id., at 85, 165 Eng.Rep., at 1423. In such cases the total damages were to be 'apportioned between' the parties 'as having been occasioned by the fault of both of them.' Ibid. Nine years later the divided damages rule became settled in English admiralty law when the House of Lords in a maritime collision case where both ships were at fault reversed a decision of a Scottish court that had apportioned damages by degree of blame, and, relying on The Woodrop-Sims, ordered that the damages be divided equally. Hay v. Le Neve, 2 Shaw H.L. 395.

It was against this background that in 1855 this Court adopted the rule of equal division of damages in The Schooner Catharine v. Dickinson, 17 How. 170, 15 L.Ed. 233. The rule was adopted because it was then the prevailing rule in England, because it had become the majority rule in the lower federal courts, and because it seemed the 'most just and equitable, and . . . best (tended) to in- duce care and vigilance on both sides, in the navigation.' Id., at 177—178. There can be no question that subsequent history and experience have conspicuously eroded the rule's foundations.⁴

It was true at the time of The Catharine that the divided damages rule was well entrenched in English law. The rule was an ancient form of rough justice, a means of apportioning damages where it was difficult to measure which party was more at fault. See 4 R. Marsden, British Shipping Laws, Collisions at Sea §§ 119 147 (11th ed. 1961); Staring, Contribution and Division of Damages in Admiralty and Maritime Cases, 45 Calif.L.Rev. 304, 305—310 (1957). But England has long since abandoned the rule⁵ and now follows the Brussels Collision Liability Convention of 1910 that provides for the apportionment of damages on the basis of 'degree' of fault whenever it is possible to do so. ⁶ Indeed, the United States is now virtually alone among the world's major maritime nations in not adhering to the Convention with its rule of pro- portional fault⁷—a fact that encourages transoceanic forum shopping. See G. Gilmore & C. Black, The Law of Admiralty 529 (2d ed. 1975) (hereinafter Gilmore & Black).

While the lower federal courts originally adhered to the divided damages rule, they have more recently followed it only grudgingly, terming it 'unfair,'⁸ 'illogical,'⁹ 'arbitrary,' 'archaic and frequently unjust.'¹⁰ Judge Learned Hand was a particularly stern critic of the rule. Dissenting in National Bulk Carriers v. United States, 183 F.2d 405, 410 (CA2), he wrote: 'An equal division (of damages) in this case would be plainly unjust; they ought to be divided in some such proportion as five to one. And so they could be but for our obstinate cleaving to the ancient rule which has been abrogated by nearly all civilized nations.' And Judge Hand had all but invited this Court to overturn the rule when in an earlier opinion for the Court of Appeals for the Second Circuit, he stated that 'we have no power to divest ourselves of this vestigial relic; we can only go so far as to close our eyes to doubtful delinquencies.' Oriental Trading & Transport Co. v. Gulf Oil Corp., 173 F.2d 108, 111. Some courts, even bolder, have simply ignored the rule. See J. Griffin, The American Law of Collision 564 (1949); Staring, supra, at 341—342. Cf. The Margaret, 30 F.2d 923 (CA3).

It is no longer apparent, if it ever was, that this Solomonic division of damages serves to achieve even rough justice.¹¹ An equal division of damages is a reasonably satisfactory result only where each vessel's fault is approximately equal and each vessel thus assumes a share of the collision...