Admiralty I 2010

Front 1

Bill of Lading – Multi-Functional Document

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1. Contract of Carriage (or affreightment)
a. “I agree to take your goods from Port A to Port B for X dollars.”
2. Document of Title
a. Person who has the document is presumed to owned the goods.
3. Document of Delivery
a. The carrier is obligated to deliver the goods to the person who produces the bill of lading in the destination port

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Application of Harter Act

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a. Between US ports (including intercoastal/coastal trade) AND Between US and foreign ports
b. From the time carrier RECIEVES CARGO into its custody until proper DELIVERY
i) Delivery—when carrier or its agent discharges cargo
(1) Onto a fit wharf
(2) Gives notification to the consignee, and allows consignee reasonable opportunity to take possession of the cargo
(3) Also when cargo is turned over to a designated authority as stipulated in a regulation or by custom of the port
c. Does not apply to live animals

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Exculpation under Harter

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i. § 1: Carrier may not relieve himself of liability for his negligence.
ii. § 2: Carrier may not relieve himself of the duty to exercise due diligence to make the ship seaworthy.

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Essential Element of Harter

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(1) Outlaws EXCULPATORY clauses
(2) Obligates carrier to issue bills of lading if shipper requests
(3) Provides defenses to the carrier as long as carrier exercises DUE DILIGENCE to make the ship SEAWORHTY (before voyage commenced

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Due Dilligence Under Harter

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b. DUE DILIGENCE—Ship-owner was relived from liability for negligence IN NAVIGATION or in the MANAGEMENT of the vessel if he used DUE DILIGENCE to make his vessel SEAWORTHY at port of loading.
i) Due Diligence means to make the ship seaworthy by properly
(1) Manning
(2) Equipping
(3) Supplying the vessel
ii) If carrier does these three things, then carrier and vessel are not liable for loss or damage arising from ERROR IN NAVIGATION or MANAGEMENT of the vessel

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Where and when due dilligence must be exercised under Harter

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a. Due Diligence of cargo must be show AT THE PORT OF LOADING
i) When ship makes multiple stops, carrier need only show it exercised due diligence for cargo loaded at port 1 at port 1; need not show additional due diligence for that cargo at port 2.

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Limitation of Liability under Harter

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b. Carrier cannot insert provision into bill of lading that relieves it from liability for its own negligence and cannot insert provision that relives it from exercising due diligence to make vessel seaworthy.
c. Carrier may insert into a K a clause that provides that it is liable ONLY for damage caused by its fault; not for damage not caused by its fault
i) May insert clause to limit liability to a specific amount, if that amount is REASONABLE.
ii) Court have held that limited liability in exchange for a reduced freight rate is valid if it is REASONABLE
(1) Reasonable—where bill of lading stipulates value of cargo, gives shipper opportunity to declare higher value for a higher freight rate, but the shipper chooses not to, that stipulated value is usually reasonable.

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Constructive Delivery under Harter

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a. “Constuctive Delivery” – Goods must be off the ship, in a safe place, segregated in a way that the consignee or his agent could readily identify them, notice to consignee.

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Burden under due dilligence in Harter

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a. Due Diligence—Burden of showing due diligence is on the Carrier
i) Must show due diligence exercised PRIOR to the voyage
ii) In order to show Due Diligence, vessel must be Seaworthy

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Seaworthy under Harter

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b. Seaworthy—Fit for its intended voyage (properly manned, equipped, and supplied)
(1) Relative term meaning vessel is REASONABLY FIT to carry the cargo she has undertaken for the given voyage
(2) Factors: cargo materials, construction of ship, equipment, officers and crew for the trade or service for which vessel was employed, route to be traveled, weather likely to be encountered.

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Distinction between Harter Defenses and COGSA

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A carrier may not claim any immunity under Harter unless he exercised due diligence to make the ship seaworthy. Failure to do so results in liability regardless of whether unseaworthiness caused the damage.

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Harter Defenses for Carrier

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(1) Errors of navigation or management of vessel
(2) Perils of the sea
(3) Acts of G-d (vis majeur)
(4) Acts of public enemies
(5) Inherent defects, qualities or vices of the cargo
(6) Insufficient packing
(7) Seizure under process of law (quarantine)
(8) Loss resulting from any act or omission of the shipper or owner of the cargo
(9) Saving or attempting to save life or property at sea or from any subsequent delays encountered in rendering such service.

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COGSA Application as a matter of Law

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b. COGSA applies as a matter of LAW, when there is (three things):
(1) Contract of carriage
(2) Bill of lading issued
(3) Between US and foreign ports (not between US ports)
c. Preempts Harter (expressly stated) when comes to foreign trade
d. All bills of lading or similar document of title in US-foreign trade are subject to COGSA
i) Exception: Charter parties are not statutorily subject to COGSA
(1) Bill of lading issued to the charterer by owner is just a RECEIPT while in possession of charterer. It is NOT a K of carriage, and thus not subject to COGSA.
ii) Third parties—when bill of lading transferred to consignee, bill of lading is subject to COGSA.
(1) If charterer is involved, the charter party controls the legal relations between owner and charterer and COGSA controls legal relations between carrier and consignee.
(a) If charter party wants, it can incorporate COGSA as a K provision

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Time of COGSA Application

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a. TACKLE TO TACKLE
i) Time goods are LOADED ON BOARD the vessel, to time of DISCHARGE
(1) Could be extended by agreement between parties
ii) Harter Act remains in effect before loading and after unloading
(1) Unless parties agree that COGSA will govern the entire period the goods are in custody of the carrier
(a) Harter applies to preloading (receipt) and post-discharge (delivery)
iii) Liability ends when carrier has made PROPER DELIVERY

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COGSA 1301 Carrier:

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Carrier = owner or charterer who enters into a contract of carriage with shipper

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COGSA Contract of Carriage

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Contract of carriage” = a bill of lading or “any similar document of title”

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COGSA § 1303: Due Diligence:

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Carrier must exercise due diligence to make the ship seaworthy before and at the beginning of the voyage.
1. Must exercise due diligence to properly man, equip, and supply the ship.
2. Exercise due diligence to make holds, chambers, refers fit for cargo.
3. 1304: where damage results from unseaworthiness, the burden is on carrier to prove exercise of due diligence.

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COGSA § 1303 (2): Cargo

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Carrier shall be properly load, handle, stow, carry, keep, care for, and discharge the goods.

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COGSA § 1303 (6): Notice of Loss of Damage

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3 days to give notice of loss or damage. Removal of goods into the custody of the person entitled to deliver shall be prima facie evidence of the delivery.
Statute of limitations: one year statute of limitations to bring any claim.

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COGSA § 1303 (8): Liability:

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any clause relieving the carrier of liability for loss or damage arising from negligence, etc. or lessening liability shall be null and void.
Insurance provided by the shipper that cover the carrier are also void.

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COGSA 1304 (4) Deviation

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any deviation in attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement of COGSA or contract of carriage. If the deviation is for the purpose of loading or unloading cargo or passengers it shall be prima facie unreasonable.

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COGSA 1304 (5) Limitation of Liability

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carrier nor ship shall be liable for any loss or damage in an amount exceeding $500 per package or per customary freight unit, unless value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

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Charter Parties and COGSA

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2. Charterer which issues its own bill of lading to a consignee, will be regarded as a COGSA carrier and subject to in personam liability regardless of whether or not he shipowner might also be classified as a COGSA carrier.
3. Generally, charter parties, per se, are excluded from the terms of COGSA. Any dispute between owner and charterer must be resolved according to terms of charter party.
i. Since parties are free to K, they can incorporate terms of COGSA by reference in the charter party, and therefore COGSA would apply
1. They can also modify or exclude certain provisions, as long as COGSA does not apply by operation of law.
4. When a shipowner carries goods for a person who has chartered its vessel for a voyage, the voyage charter party is the K of carriage, which are not subject to COGSA (unless expressly agreed to be incorporated in the charter party).

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Where Owner's and Charterers may both be COGSA carriers for purposes of Liability

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ii. Owner and charterer can both be carriers for purposes of liability
1. Ex: charterer issues bill of lading signed by master or someone authorized to sign for master. Signature of master or someone authorized to sign “for the master” on bill of lading binds the owner b/c when master signs the bill of lading, he is an agent of the owner. Charterer on the hook as well b/c he issued the bill of lading.
a. Pacific Employers (p24)—master signs, K, which means the vessel is bound to COGSA terms unless master does NOT have the AUTHORITY to sing the bill of lading or if the person who SIGNS FOR THE MASTER does NOT have the AUTHORITY.
i. To determine if master had authority, look at TIME CHARTER.
1. If signature of master or someone else on behalf of the master is authorized by the owner, then the owner is implicated.
b. Cactus Pipe—Ct looked at time charter to see what authority was given to the master and delegated to others.
i. Test for whether there was AUTHORITY—MANIFESTATION (act or omission) of principal that cause s the third person to believe that the agent is authorized to act for him or the principle should realize that his conduct is likely to create such a belief.

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Time or Demise Charterer enters into K of carriage with Shipper and issues bill of lading-->

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Charterer is COGSA carrier, Shipowner is not

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Time Charterer enters in to a K of carriage with shipper and issues a bill of lading singed ‘by’ or ‘for the master’--> WITHOUT authority of the shipowner

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Charterer is COGSA carrier/ shipowner is not

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Time Charterer enters in to a K of carriage with shipper and issues a bill of lading singed ‘by’ or ‘for the master’ as is AUTHORIZED by shipowner in the time charter K between the Shipowner and the Charterer

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both Charterer and Shipowner are COGSA carriers.

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When COGSA duty to ecercise due care applies

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Duty to exercise due care is imposed BEFORE and at COMMENCEMENT of the VOYAGE.
1. When vessel pushes out from port, voyage is commenced, and duty to exercise due diligence has come to an end
a. From the time of loading until the voyage commences (vessel leaves port)
2. Latent defect—If not reasonably discoverable upon normal inspection, or if arose after voyage commenced, carrier is not liable from the unseaworthy condition
3. Carrier has burden of proving due diligence when shipper makes out prima facie case
b. Other Duties (ss3)

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Carrier Liability Under COGSA

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Carrier is not liable for loss or damage arising from UNSEAWORTHINESS unless it’s CAUSED (show causation) by the lack of DUE DILIGENCE (negligent) in failing to discover the defective condition responsible for the damage or, if discovered, in failing to remedy it.
1. Carrier is responsible for properly caring for the cargo throughout the voyage.

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Indemnity Under COGSA

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Carrier (charterer) has claim for indemnity against vessel owner when vessel is unseaworthy and the carrier must pay out to a subcharterer (ie like in the practice test).

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COGSA §1304 (6) Flammable, Explosive, or Dangerous Cargo

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goods of flammable, explosive, or dangerous nature to the shipment whereof the carrier has not consented with knowledge of their nature, may at any time discharge such goods at any place or destroy or render them innocuous without compensation, and shipper shall be liable for all damages and expenses.

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COGSA Defenses

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a. act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation of management of the ship
b. fire, unless caused by the actual fault of the carrier (if there is a fire, burden is on automatically on shipper to show carrier was negligent. No need for carrier to prove due diligence to prevent fire)
c. perils, dangers and accidents of the sea or other navigable waters
d. act of god
e. act of war
f. act of public enemies
g. arrest or restraint of princes, rulers, or people, or seizure under legal process
h. quarantine restrictions
i. act or omission of shipper or owner of goods, his agent or rep.
j. Strikes or lockouts
k. riots and civil commotions
l. saving or attempting to save life or property at sea
m. Inherent Vice—wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the good
n. insufficiency of packing
b. (o)insufficiency or inadequacy of marks
c. (p)latent defects not discoverable by due diligence

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COGSA Surrendering of Rights

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a. Carrier can surrender his rights and immunities to increase his liability under COGSA
i. But cannot make himself less liable
b. Charter parties are not subject to COGSA, but, if bills of lading are issued, then it is.
i. If charter party hires another carrier, it is subject to COGSA

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Beyond “tackle to tackle”

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The terms of COGSA may be extended beyond tackle to tackle by agreement.
Today containers are used that are usually sealed when they arrive to the carrier for delivery.
As such, most bills of laden contain terms governing the contract of affreightment that say something to the affect of “container said to contain” when they describe the cargo.
This language lets the reader know that the carrier didn’t actually inspect the goods—he’s taking the words of the shipper.
With such language, the bill of lading is only prima facie evidence of the condition of the container, not its contents.
If such language were not used and some items were missing, the carrier would be liable to the consignee.
The carrier, however, could then seek indemnity from the shipper for misrepresenting the count and quantity of the goods shipped.

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Through Bill of lading

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a. Carrier obligated to carry cargo through intermediate port to ultimate destination.
b. In order to determine if COGSA would apply to the land part of the route, rather than Harter, need to determine when ‘delivery’ was made.
i. Manesman Case—once goods have been turned over to land-based carrier, ocean carrier has satisfied COGSA obligation to deliver the goods. The terms of the K will then govern liability, and if no terms, then non-maritime transport laws of state.
c. Circuits are split:
i. 11th circuit—if have good transported by water and then land under thru bill of lading and parties incorporate COGSA to land portion, COGSA would apply to land based portion as well. Justifies reasoning based on fact that COGSA allows parties to extend its applicability
ii. 2nd Circuit—Carmack amendment trumps the K term that COGSA applies to land based portion. K term cannot trump federal statutory law.
1. Carmack Amendment—federal statute regulates liability of land carriers.

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Main Harter v. COGSA distinctions

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a. Harter applies before and extends after voyage
b. COGSA more detailed and comprehensive than Harter
c. COGSA imposes POSITIVE DUTY on carrier to exercise due diligence to make ship seaworthy. Harter does not require due diligence, just says must who it in order to escape liability for negligence when accused.
d. Under COGSA, if carrier can show due diligence, can make use of defenses; under Harter, must show seaworthiness first (COGSAcan use a defense even if ship is unseaworthy, as long as used due diligence before and at time of vessel’s departure).
i. A showing of unseaworthiness (in any respect, regardless of causation) takes all defenses off the table under Harter.
e. COGSA allows parties to K out of Harter to the extent that COGSA covers their transaction. To the extent that COGSA does not cover the transaction, Harter applies. But COGSA trumps Harter If expressly incorporated by parties.

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The Himalaya Clause

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1. A clause that seeks to extend to non-carriers partial immunity or other protections afforded to the carrier by the bill of lading.
a. Generally seeks to extend COGSA to those that help, aid, and assist the carrier
i. Stevedors, etc.
2. Parties can extend the limitations of liability to others through a Himalaya clause. (Norfolk Southern v. Kirby)
3. Parties cannot extend the defenses and immunities.
a. Grace Line – Court refused to extend error in navigation and management defense.

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What is a “package” for limigation purposes?

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1. Non-Containerized Cargo: Fully Enclosed Goods
a. General Rule: Enclosed = Package.
b. Something not enclosed is not a package unless parties stipulate to such.
c. Modern Trend: If shipper does anything to facilitate transport.
2. Non-Containerized Cargo: Partially Enclosed Goods
a. Most courts look to the bill of lading to determine what is the package.
3. Containerized Cargo
a. A container is generally not a “package.”
b. Courts look to the bill of lading to see what the parties intended.
i. “Number of Packages” column of the bill of lading is a starting point, unless the significance of that number is plainly contradicted or the number refers to items that could not qualify as packages.
4. Customary Freight Unit
a. The carrier’s liability for goods not shipped in packages is calculated by reference to the customary freight unit .
i. In these cases, the carrier’s liability is $500 per customary freight unit.
b. If the freight charge is computed on a lump sum basis for an entire shipment, the relevant customary freight unit is the entire shipment.
c. If a freight charge is computed on a lump sum basis for each of several pieces of equipment, the relevant customary freight unit is each piece of equipment.

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First stage Ping Pong

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Shipper—makes prima facie case by presenting clean bill of lading (goods were delivered to port not damaged and no limiting language) and showing that goods were delivered by carrier damaged (implying must have been damaged in carrier’s possession), or not delivered at all. If no damages written on bill of lading, it is clean.
i. One year limitation period
ii. Cargo interest can also show that the characteristics of the damage suffered by goods justify conclusion that damage occurred while goods were in D’s custody (i.e. Seawater).

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2nd Stage Ping Pong

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Carrier—burden shifts to carrier to prove that the damage was caused by unseaworthiness despite its due diligence, or that the damage or loss resulted from a cause exempted by section 1304. Bring itself within one of the COGSA immunities.

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3rd Stage Ping Pont

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Shipper—must rebut assertion that carrier did not show due diligence, or the inapplicability of the immunity claimed by the carrier, or must show that the carrier was negligent in some manner, which contributed to a portion of the damage (did not mitigate (cheese case)). Ultimately, the “cargo interest” (plaintiff) will bear the burden of proving that the carrier is liable for that portion of damage/loss.

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4th Stage Ping Pong

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Carrier--
e. If delegate duty to exercise due care to someone who did not exercise due care, vessel owner still liable for unseaworthy condition
i. If carrier contracts out of duty, he will still be liable for any negligence of other part in inspecting via agency law

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Due Diligence in the Handling of the Goods

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1. The carrier’s duty to “properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried” under COGSA § 3(2) is a distinct and distinguished obligation that the law imposes on the carrier.
2. COGSA imposes on the carrier a non-delegable duty to load and stow the goods.
3. This duty does not cease with the commencement of the voyage.
4. The carrier cannot simply say that he is not liable because he did not contract to load, stow or discharge the goods.
5. For instance, if the shipper agrees with the carrier on FIO (Free In and Out) or FIOS (Free In and Out, Stowed) terms, the shipper undertakes to arrange and be responsible for loading and discharging.
6. Regardless, the carrier has a non-delegable duty under COGSA to load and stow (and discharge), and remains responsible for loading and stowing even if those operations are performed by stevedores engaged by the shipper.
7. In order to avoid liability for damage caused during loading or by faulty stowing, the carrier must raise defenses conferred by § 4(2)(i), (q) by PROVING that the damage was caused by the shipper’s fault, or without fault on its own part.

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Due Diligence to Make Ship Seaworthy

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1. Carrier has a duty to exercise due diligence to make the ship seaworthy and provide adequate crew, etc. before the beginning of the voyage.
2. If this care is exercised, the carrier is not liable for un-seaworthiness, even if arises during the voyage.
3. This due diligence is determined at the geographic point when the cargo is loaded on the vessel.
4. If the ship stops at multiple ports along the voyage, there is no duty to re-exercise due diligence.
5. The due diligence standard is based on the time when the cargo was loaded. Later loaded cargo is subject to due diligence of the later time of loading.

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Ping-Pong Game Overview

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a. The plaintiff serves and must establish a prima facie case by proving both delivery of the goods to the carrier in good condition and outturn by the carrier in damaged condition.
b. The ball is now in the carrier’s court: he bears the burden of showing that the loss or damage falls within one of the COGSA exceptions set forth in 46 U.S.C.A. § 1304(2).
c. Once that burden is satisfied, the burden shifts back to the plaintiff to show that the carrier’s negligence contributed to the damage or loss.
d. The burden now shifts for the final time back to the carrier to segregate the portion of the damage due to the excepted cause from that portion resulting from its own negligence.

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Immunites of Carrier: Overwhelming forces with human cause

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a. Acts of war
b. Acts of public enemies
c. Arrest or restraint or princes

d. Quarantines
e. Strikes or lockouts
f. Riots and civil commotions

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Arrest or Restraint of Prince
Lekas v. Drivas: Greek vessel is delayed leaving port because of outbreak of WWII. Also, course must change, forcing ship to go around Africa – long voyage and extreme tempretures – cargo spoils

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ii. Court concludes this led to cargo spoilage, which could not be avoided.
iii. Plaintiff could not show that defendant’s negligence led to the spoilage.
iv. Plaintiff couldn’t show adequate refrigeration was available.

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ENM Example crew does not understand instructions because speak a different language

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i. Not likely to be an error in navigation or management b/c failure to properly man ship. Error in navigation or management is only regarding ship functioning (hiring is not a function of the ship). Likely to go to failure to adequately man shipunseaworthy based on carrier’s lack of due diligence.

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Errors in Navigation and Management

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Neglect of master, mariner, pilot, servants of carrier in navigation or management of ship
i. I.e.: collision because of fault of master or crew
ii. Carrier not absolved of liability for damage caused by own fault; just its employees

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Cargo Interest Rebuttal to Claims of Error in Navigation or Management

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argues not applicable b/c did not meet Due Diligence requirement
i. Shipowner knew master/member of crew was incompetent which caused the damage
ii. Insufficient personnel to sufficiently navigate vessel which caused the damage
iii. Faulty navigation equipment was detectable through exercise of due diligence
iv. Error in navigation is only a defense if carrier places the VESSEL at risk as well as the cargo (Knott v. Botany Worsted Mills)
1. Error in navigation/management primarily put cargo at risk (i.e. loading)  failure to care for the cargo and shipowner is liable; error in navigation/management that put vessel at risk of sustaining damage (risk to cargo is secondary)  shipowner likely not liable.
2. Was not an error in navigation/management, rather, was failure to properly load, stow, care for goods (did not place vessel at risk sufficient to qualify for error in navigation).

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Perils of the Sea 1304(2)(c)

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: “A fortuitous action of the elements at sea, of such force as to overcome the strength of a ¬well-found ship or the usual precautions of good seamanship. Taisho Marine.
b. Burden is Different for Perils of the Sea: “well-found” language works into “seaworthiness.”
c. Burden is placed on the carrier to show (1) sea was perilous and (2) the carrier was free from negligence.

b. Burden is Different for Perils of the Sea: “well-found” language works into “seaworthiness.”
c. Burden is placed on the carrier to show (1) sea was perilous and (2) the carrier was free from negligence.

A simple storm will not suffice; court wants to know was the ship seaworthy for that particular voyage and did it take reasonable precautions to properly stow the cargo for that particular type of voyage

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Factors court considers in applying perils of sea exception

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i. Structural damage to vessel
ii. Reduction in speed
iii. How far vessel blown off course
iv. Extent of damage other vessels in the storm
v. Violence of the winds and tempestuousness of the sea (Taisho Marine)—has become most IMPORTANT factors.

i. Beufort scale: Wind velocity – above 11=perilous; below 9=not perilous.

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Cargo Interest Argument Against PoS

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c. Cargo interest would argue
i. Carrier was still negligent—should have anticipated the weather and taken precautions
1. Vallescura—opened/closed hatches for onions when weather was good
ii. Would argue that the carrier’s negligence was the proximate cause of the damage, even though the storm was the immediate cause of the damage.
1. Carrier has burden of proving that it was not negligent, or how much damage was caused by the perils of the sea. As a practical matter, this is an impossible burden.
iii. Court has held that this additional burden to show DUE CARE is necessary when arguing for PERILS OF THE SEA defense (usually burden shifts to shipper to show concurrent negligence once carrier invokes COGSA exception).
1. The additional burden is necessary b/c the exception must be an UNUSUAL OCCASION (not a common storm)
2. Must show no alternative routes available, cargo properly secured for those waters, at that time of year, and appropriate steps taken to minimize risk to cargo.

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Fire Exception

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1. Majority view (except 9th circ) says that burden of showing negligence is on the SHIPPER that the carrier did not use due diligence to show the vessel was unseaworthy.
a. Shipper must show carrier caused fire or the damage was the result of its failure to fight the fire.
i. If shipper sustains the burden, then it’s on the carrier to show what portion of damage was not attributable to its fault.
b. 9th circuit—puts burden on carrier to show it exercised due diligence to provide seaworthy ship
i. Shipper can argue that what caused the fire was not part of routine inspection, so that it in fact did use due diligence. Thus, there may e an excusable condition of unseaworthiness

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Inherent Vice 1304(2)(m)

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“Any existing defect, disease, decay or the inherent nature of the commodity which would cause it to deteriorate over a lapse of time.”

Burden on shipper to ensure precautions taken when goods have natural tendency to degrade.
1. If shipper fails to freeze adequately, add inhibitor, etc, loss is on him.
2. If good require special handling by carrier (i.e. refrigeration), shipper bears burden of making carrier aware of the special need to care for the goods during the voyage.
a. Unless: carrier KNOWS or SHOULD KNOW the cargo requires special care (i.e. vegetables need ventilation to prevent degradation).
b. If carrier fails to care for goods, it is liable.
ii. Ex: fruit, vegetables, meat, some metals that rust, chemicals that lose potency (things that spoil through passage of time unless specially treated

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Circuit Split on Burden in Inherent vice cases

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2nd Circuit—Shipper has burden of showing that it took appropriate measures to guard against inherent vice of the good and that it was properly prepared (US Steel International (SDNY)—level of inhibitor placed in the chemicals)
1. 2nd Circuit—if show the court that this type of product degrades, burden is on shipper to show the good did not degrade on its own
ii. 5th Circuit—burden of proof is on carrier because under the ‘q’ clause, the carrier can exonerate himself from any cause by proving that the damage occurred without the actual fault and privity of the carrier (Quaker Oats—layer of nitrogen to protect oxygen from getting in, so carrier must have done something wrong; carrier says it was ordinary voyage, and nitrogen level was managed).
1. 5th Circuit—no enough for carrier to say we did nothing wrong, must show what in fact did go wrong—what the external cause was that proves the carrier is not responsible for the damage. Carrier in best position since goods went bad at sea.

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Q Clause—Omnibus Exception 1304(2)(q)

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Any other cause arising without the actual fault and privity of the carrier and without the fault or negligence of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage

b. damage.
i. Carrier must show there was no wrongdoing on the part of the carrier, servants, or agents
ii. It is not enough to show carrier did not do anything wrong, he must show who what did cause the damage. (Quaker Oats)
1. Ship is in the best place to know/control the situation.

b. damage.
i. Carrier must show there was no wrongdoing on the part of the carrier, servants, or agents
ii. It is not enough to show carrier did not do anything wrong, he must show who what did cause the damage. (Quaker Oats)
1. Ship is in the best place to know/control the situation.

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Concurrent Causes--when two factors are present and one is an enumerated exculpatory factor

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a. Burden on the CARRIER to show damaged portion occurred from the CAUSE for which the carrier is exculpated
i. This burden is almost impossible to meet
b. Collision—carrier must show all or some of cargo would have been damaged by collision, even where carrier was shown to be negligent (if goods had been properly stowed).

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What is a “package” for limigation purposes?

Back 59

1. Non-Containerized Cargo: Fully Enclosed Goods
a. General Rule: Enclosed = Package.
b. Something not enclosed is not a package unless parties stipulate to such.
c. Modern Trend: If shipper does anything to facilitate transport.
2. Non-Containerized Cargo: Partially Enclosed Goods
a. Most courts look to the bill of lading to determine what is the package.
3. Containerized Cargo
a. A container is generally not a “package.”
b. Courts look to the bill of lading to see what the parties intended.
i. “Number of Packages” column of the bill of lading is a starting point, unless the significance of that number is plainly contradicted or the number refers to items that could not qualify as packages.
4. Customary Freight Unit
a. The carrier’s liability for goods not shipped in packages is calculated by reference to the customary freight unit .
i. In these cases, the carrier’s liability is $500 per customary freight unit.
b. If the freight charge is computed on a lump sum basis for an entire shipment, the relevant customary freight unit is the entire shipment.
c. If a freight charge is computed on a lump sum basis for each of several pieces of equipment, the relevant customary freight unit is each piece of equipment

Front 60

Package Analysis

Back 60

i. If ambiguous, look at the INTENT of the parties in the BILL OF LADING
ii. Container is not a COGSA package unless it is clearly apparent that the parties intended for it to be a package
1. Monica Textile—76 bales of cotton. In “no. of packages” column it was written “1” but under “description of goods section” it was written 76
a. RULE: based on INTENT of parties, where bill of lading discloses on its face what is INSIDE the containers and those containers may reasonably be considered COGSA PACKAGES, they should be treated as such
2. Vistar—machine packaged and loaded in a crate. Court held that it constituted a single package within the meaning of COGSA, so shipper could only recover $500.
a. Court said that varnishing machine was encased in a single encased in a wooden box, so it’s a package and because shipper has not declared a higher value, the $500 limit of liability applies

Front 61

Fair Opportunity Doctrine

Back 61

carrier cannot invoke COGSA limitation provision unless carrier has provided shipper with a FAIR OPPORTUNITY to declare the ACTUAL VALUE of the goods, or at least, a value in excess of $500/package
1. If carrier has can show it offered fair opportunity by pointing to bill of lading wording, carrier has made prima facie case. Onus shifts to shipper to show that fair opportunity did not exist.
a. Bargaining power comes into play (id of shipper)i.e. big shipping co v. small time shipper.
b. Carrier limited to $500 unless shipper declared higher value and freight rate increased (3rd circuit rejects this)

Front 62

Test for Deviation

Back 62

v. Test for deviation
1. Was there a deviation?
2. Did the deviation expose the cargo to additional perils?
3. Was the deviation a proximate cause of the additional peril?
4. Was the deviation unreasonable?
5. Do the COGSA defenses apply?

Front 63

Deviation-Consequences, Basis for Liability, and Requirement of Casual Relationship

Back 63

Consequences of Deviation
1. If the shipper can prove an unreasonable deviation, the carrier will be deprived of all COGSA defenses and limitations of liability.
ii. Basis for Liability
1. This is because the contract has been fundamentally breached.
2. The carrier shall become the insurer of the goods because the insurance is for a particular circumstance that no longer applies.
iii. Causal Relationship
1. There must be some causal relationship between the deviation and the loss.
a. For instance, if there is a deviation and a crew member causes a fire by smoking, there will be no causal relationship.

Front 64

Exoneration Clauses

Back 64

Carrier is not able to contract out of the duty to load and stow cargo properly. Assocated Metals.
1. Shipper contracted under FIOS (Free In and Out, Stowed) clause with carrier, under which, the shipper agreed to pay for, take responsibility for, and stow cargo.
2. The court ruled that the duty to properly stow may not be delegated

Front 65

Delivery

Back 65

i. COGSA does not define delivery.
ii. Understood under general maritime law that delivery takes place when carrier unloads the cargo onto a dock, segregates it by bill of lading and count, puts in a place of rest on the pier so that it is accessible to the consignee and affords the consignee reasonable opportunity to get it.
iii. If goods lost, cargo interest has 12 months to file suite
1. Harter Act does not provide a statutory limitation on filing suite.

Front 66

Liberties clause

Back 66

term in bill of lading that gives carrier carte blanche in making changes to advertised or customary route.
i. Majority of courts say this clause does not authorize carrier to engage in conduct that is an UNREASONABLE deviation.

Front 67

Deviation
General Electrice--vessel deviates because could get bunkers cheaper in CA than its scheduled route

Back 67

Court held that it was an unreasonable deviation because it was made in order to maximize carrier’s profits.

Front 68

Forum Selection Clauses

Back 68

i. Forum selection and arbitration clauses are generally enforced.
ii. If, however, COGSA is applicable by force of law and there is a foreign choice of law, but it is contrary to the COGSA rules, U.S. Courts will not honor the clause.

Front 69

Forum Selection Clauses-Indussa

Back 69

1. Court refused to enforce foreign forum selection clause in a COGSA case because it would undermined the protection/minimum recovery because the expense of litigating abroad and uncertainty of the law the foreign tribunal would apply.

Front 70

Forum Selection Clauses Sky Reefer

Back 70

1. Supreme Court distinguished Indussa because the arbitration clause is a species of foreign forum selection clause and, notwithstanding, costs alone don’t diminish liability. Further, there was no question about the applicable law because the arbitration clause specified the law that would apply.

Front 71

General Principles of Charter Parties

Back 71

b. Unlike K for carriage (subject to COGSA), charterers are not chartering for carriage
c. Subject to rules and requirements of K law. Terms of charter party rule
d. Courts focus on the contractual terms and what has/has not been negotiated for—freedom to K is the touchstone of charter party disputes between owner and charterer
i. Public policy concerns are not given much weight; K terms carry the day b/c usually are between business people negotiated at arm’s length.

Front 72

Voyage Charter

Back 72

1. Invariably a contract for affreightment
2. Charter defined by a specific voyage
3. Charterer does not bear any of the ship’s running costs directly
4. Owner shill using the vessel for his own profit

Front 73

Time Charter

Back 73

1. Contract for the right to use the vessel for a specified period of time
2. Charterer allowed to use carrying capacity of the vessel for a specific amount of time.
3. Charterer acts similar to a shipping company because, economically, it makes the most sense to hire someone’s else’s vessel.
4. Owner trades payment of hire with the right to explote the earning capacity of the vessel.

Front 74

Demise Charter (Bareboat charter)

Back 74

i. Leases carrying capacity of a vessel (like voyage and time charters), but also gives charterer more control over the MANAGEMENT and NAVIGATION of the vessel. Takes over possession of vessel in a LEGAL sense.
1. Charterer becomes owner of the vessel pr hac vice for the period of hire
ii. TEST for whether charter part is a demise or time: WHETHER OWNER TURNED OVER TO CHARTERER ‘POSSESSION, COMMAND, AND NAVIGATION” of the vessel in the K. Court looks at partie’s INTENT to TRANSFER possession, command and control
1. If master and crew of owner are already on vessel, they can remain for the charterer if in agreement, but re subject to orders of the charterer and its agents.
iii. Charterer responsible for maintenance, repairs, or damage caused by third parties by crew’s negligent navigation because the owner has transferred possession AND CONTROL of the vessel to the CHARTERER.
1. Owner will not be liable in personam for the fault of its crew, which is now subject to the Charterer’s orders; Charterer will be liable.
iv. Demise charterer (also known as “disponent owner”) usually responsible for vessel’s operational expenses

Front 75

Slot Charter

Back 75

1. The most recent device in shipping used for sharing the carrying capacity of a ship.
2. Slot charter is a contract that governs the relationship on each voyage between the owner (alliance member who is performing the voyage) and slot charterer (alliance member who is chartering space from the owner).

Front 76

Demise Charters Dant & Russel v. Dillingham
1. Pacific/Dillingham (Owner)  demise  Hvide  voyage  D&R.
2. Pacific and Hvide knew of a defective bilge pump and decided to defer repairs until after the voyage charter.
3. Trial court found Pacific liable for negligence and breach of warranty of seaworthiness.

Back 76

4. Reversed.
a. Hvide waived Pacific’s liability by agreeing to defer repairs based on negligence that predated the charter timer: “There is nothing…which precludes one from waiving another’s liability for negligence after the allegedly negligence acts have occurred.”
b. Warrant of seaworthiness is waived ‘where full inspection was made by those seeking to charter the vessels…and the alleged defects or weaknesses were either patent or were especially called to such charterers’ attention by the vessel owners.

Front 77

Time and Voyage Charters – Distinguished

Back 77

Under a voyage charter, it is reasonable that the vessel must take control over cargo before a charterer may assert a lien because the owner is obligated to provide a vessel for carriage of a cargo to a destination.
ii. Under a time charter, the loading of cargo is insignificant. The charter is not executory until the loading of cargo because the charter itself provides a time when it commences.

Front 78

Doctrine of Frustration Generally

Back 78

a. Something unexpected must occur
b. There must be no contractual remedy for this occurrence
c. Occurrence must render performance commercially impractical.
d. Frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.
e. Frustration depends on the probable length of delay in proportion to the time the charter period has left to run.
i. Must be of sufficient duration to deprive the parties of the commercial benefit of their original bargain

Front 79

Warranties of Size and Speed

Back 79

The language of the contract will determine if these are warranties or mere representations.

Front 80

Warranties
The Atlanta-Charter party terms stipulated carrying capacity and warranty of speed and fuel, but ship could not carry that much. Owner argued was because cargo loaded improperly.

Back 80

Where a steamer described as being ‘capable of steaming about 11 knots to 12 knots an hour in good weather in smooth water on a consumption fo about 32 to 34 tons best Welsh coal’ a warranty results rather than representation, even though the statement is not expressly designated as a warranty.”
1. Implied warranties are valid.
1. Charterer has two option once vessel determined not to have carrying capacity
a. RESCIND—charterer can rescind and look for another vessel
b. DAMAGES—charterer can go ahead and ship cargo and get damages based on breach of warranty for carrying capacity


1. Charterer has two option once vessel determined not to have carrying capacity
a. RESCIND—charterer can rescind and look for another vessel
b. DAMAGES—charterer can go ahead and ship cargo and get damages based on breach of warranty for carrying capacity
b. Seaworthiness

Front 81

Warranty of Seaworthiness in TCs

Back 81

i. Ship-owner has general duty to ensure vessel is seaworthy for the purposes for which it has been chartered (can transport the given cargo)
ii. The following statements give rise to a warranty of seaworthiness
1. “with hull, machinery, and equipment in a thoroughly efficient state”
2. “that on delivery the ship be tight, staunch, strong and in every way fitted for the service”
iii. Unless parties otherwise agree by K term, a warranty of seaworthiness is implied by law
1. The right to a seaworthy vessel can be disclaimed (Charterer takes vessel ‘as is’) and there is no guarantee of seaworthiness (but only between charterer and owner)
iv. Parties can stipulate no warranty of seaworthiness, but courts do not favor unless it is CLEARLY communicated that the RISK will FALL ON THE CHARTERER.

Front 82

Warranties-West India Fruit Company

Back 82

i. The failure to use the word ‘warrant’ in a statement is really unimportant.
ii. What is important is “whether the statement was positively and unequivocally made as a statement of fact and whether the natural tendency of its making was to induce the chartering of the ship.”

Front 83

Repudiation and Rescension for Violation of Warrant of Seaworthiness

Back 83

d. Rescinding— if unseaworthiness condition can be easily repaired and still eave sufficient amount of time so that the charter party is a commercially reasonable K, it will not allow charterer to rescind.
i. Courts are more lenient when rescinding occurs before delivery and acceptance of the vessel (for a legitimate reason) rather than once the charterer has accepted. Once accepted, charterer will only be able to rescind when unseaworthiness condition is a MAJOR condition (ie cannot be repaired in a reasonable time)
1. 3 month repair in 12 month time charter gives grounds to rescind; losing vessel for 1 week due to repairs in 12 month K does not deprive charterer of benefit of his bargain.

Front 84

US v. Marilena—crew goes on strike, and charterer not able to sail, sues owner for breach of unseaworthiness in not providing a competent crew

Back 84

i. Holding: Ship owner exercised Due Diligence to make ship seaworthy; he had no reason crew would refuse to sail, but tried to remedy by offering them double pay.
ii. Since he was in good faith and exercised Due diligence, he was not liable….look to charter party terms to see if the risk of this contingency has been allocated.
1. Counter—K was frustrated, carrier should have been relieved from K.

Front 85

Off hire” (“Breakdown”) Clause

Back 85

charterer’s duty to pay hire ends when he is deprived of the use of the vessel (in whole or in pat) because of some deficiency in the vessel, its equipment, or the crew

Front 86

Unseaworthiness – Off-hire or Repudiation

Back 86

a. If the charter party provides that a vessel which has become unseaworthy will merely go off-hire, then the charterer may not repudiate unless there is frustration.

Front 87

Mechanical breakdown (Woods Hole Oceanographic)—parties had contracted that if there was a loss of time beyond acts of government, payment of fire shall cease (off hire clause). Owner argued that they could use the vessel while coming back into port

Back 87

Holding—once master decided to bring vessel back to port, regardless of the fact they would have to return at some later time to port, the charter could not use the vessel at their discretion, so it went off hire.
2. Rule—Off hire when charterer has NO POWER TO DIRECT OR CONTROL VESSEL’S MOVEMENT.

Front 88

“Preventing the Working of the Vessel” S/S/ Knutsford
i. There was a fire aboard a ship, and extinguishing the fire caused flooding
ii. The cargo was all removed and subsequently had to be re-stowed.

Back 88

iii. If the cargo was removed and re-stowed to give access to repairs, the owner is responsible.
iv. If the cargo was removed and re-stowed merely for the charterer’s inspection, the charterer bears responsibility.

Front 89

Mutual Exceptions Clause

Back 89

1. Both parties have a valid reason for not being held liable to the charter party.
2. Some exceptions only apply to owner, some only to charterer.
3. These clauses are set up by the charter party.
4. When two clauses appear to govern a single occurrence, however, the one that is most specific to the situation will be enforced.

Front 90

Restraint of Princes – Frustration

Back 90

Sometimes the government will seize a vessel for military service or other government business.
2. The question of whether government interference constitutes restraint of princes is one of degree.
a. Was the contract totally frustrated?

Front 91

The Clavaresk—ship requisitioned by British government during WWI because needed it the vessel for war. Carrier did not want owner relieved

Back 91

Ct. said need not have physical interference with vessel to have restraint of princes, thus, vessel owner is relieved.

Front 92

Overlap and Underlap Generally

Back 92

is difficult to foresee the exact date on which a ship will be returned, oftentimes years in advance.
b. Where the charter party states that a ship will be returned on a certain date, a court will infer a “reasonable” time for redelivery.
i. If a ship is poised to return early, but it could take one more voyage, the souct will compare the length of time “under” if the ship was to return vs. the length of time “over” the whip was to take the voyage.
ii. The shorter time frame would be the “reasonable” decision.

Front 93

Reasonable v. Unreasonable Overlap

Back 93

i. If the charterer takes a “reasonable overlap,” he will continue to pay charter hire until ship is redelivered.

e. Unreasonable Overlap
i. If the charterer takes an “unreasonable overlap,” he will usually have to pay market rate

e. Unreasonable Overlap
i. If the charterer takes an “unreasonable overlap,” he will usually have to pay market rate

Front 94

Reasonable v. Unreasonable Underlap

Back 94

i. If the charterer takes the “reasonable underlap,” he will cease paying hire upon redelivery

f. Unreasonable Underlap
i. If the charterer takes an “unreasonable underlap,” he will continue to pay charter hire until he could have reasonably returned the ship.

f. Unreasonable Underlap
i. If the charterer takes an “unreasonable underlap,” he will continue to pay charter hire until he could have reasonably returned the ship.

Front 95

Safe Port – Safe Berth

Back 95

i. A safe berth clause is a clause that requires the charter to provide a safe port/berth to the ship.
ii. Fifth Circuit
1. Interprets this as a “due diligence standard.”
iii. Second Circuit
1. Interprets this as a warranty.
a. Allows a master to direct a ship out of a port that is unsafe without breaching charter.
b. Allows strict liability offensive remedy to owner if ship is damaged in port.
iv. A port must not only be prospectively safe.
1. The duty of safe berth is continuing.
2. If the port becomes unsafe, and in the exercise of due care you can leave, you must leave.

Front 96

Withdrawal

Back 96

a. Charter party clause permitting owner to withdraw vessel when hire payments are not made in accordance with the terms of the K or for other fundamental breaches of the charter. But most common is nonpayment of hire
i. Ship-owner can insist on strict compliance with requirements in the K, and when they are not complied with, courts are likely to uphold owner’s right to withdraw its vessel
ii. RULES: Owner cannot withdraw a vessel while cargo is on board. If owner gives notice of withdrawal, it will not become effective unless the vessel has no cargo on board, or until the cargo is unloaded.
1. If vessel is at sea, notice of withdrawal will only become effective (lien on cargo will become effective) when ship is at port and the cargo is unloaded.

Front 97

Diana Maritima Case
1. Charterer defaulted on payment en route to SA. Owner sent telegram to charterer that he was withdrawing vessel under withdrawal clause in the charter party for nonpayment of hire. Ship owner put lien on property until he was paid by carrier. But cargo interest wanted their goods.
a. Freight—shipper owes to carrier
b. Subfreight—claim by owner against the freights owned to the charterer. Owner notifies the cargo interest and says don’t pay the charterer b/c the charterer has not paid hire and I am asserting a lien against sub freighter.

Back 97

2. As long as owner gives notice to cargo interest saying “don’t pay b/c I have a lien against subfreighter” the cargo interest pays the freight to the charterer at his own peril
a. Best thing for cargo interest to do (since they owe thousands to charterer and owner has notified them that charter is in default and if pay charterer you pay at own peril,) is to pay money into the court and the court determines who gets the money (because the freight owner does not know the owner or if he has a legal lien in the first place just because he says so).
b. If owner does not notify cargo interest that he has a lien on the cargo, and the cargo interest pays the charterer and the owner comes along and says “I really own subfreight”, the ship owner will not have a successful claim. He must give notice to cargo interest b/c once the cargo has been paid, there is o subfreight. If owner fails to inform cargo interest, there is no lien and owner’s claim fails.

Front 98

Late Delivery – Cancellation

Back 98

“Arrived” Ship
a. Language in the charter party or custom of the port will define this.
b. Usually, if a port has refused permission for the ship to enter port, she has not yet arrived.
c. Usually, the charter party will handle when the owner is late on delivery.
i. Typically, the owner must notify the charterer and they can renegotiate an extension or the charterer may rescind.

Front 99

Laytime

Back 99

period of time agreed between the parties during which owner will make and keep the vessel available for loading/discharging without any additional charges.

Front 100

Demurrage:

Back 100

agreed amount payable to owner in respect of delay to vessel beyond the laytime for which owner is not responsible.

Front 101

Detention: damages

Back 101

if the owner loses another charter because of delay.
i. Penalty for wrongful/unreasonable delay.

Front 102

Dispatch

Back 102

when charterer completes loading/unloading in lime less than allotted laytime, charterer has conferred benefit on the owner and is entitled to this financial allowance

Front 103

Laytime and Demurrage Analysis

Back 103

i. Language of the charter party controls, so look at the terms.
ii. How much laytime is given?
iii. When does it begin?
iv. Under what circumstances, according to the charter, does running of laytime stop?
v. Has all the available laytime been used?
1. Nono issue of demurrage yet
2. Yesis there some other term that would suspend laytime such that the carrier could argue it does not have to pay demurrage yet
3. Yesif no arguments to toll laytime, look at demurrage time that has been contracted for (so as to avoid having ship revoked by owner due to frustration).

Front 104

Sun Oil

Back 104

a. Generally, once on demurrage, always on demurrage.
b. Three instances when a charterer is not liable for demurrage
i. Specific exonerating clauses in the charter party
ii. Delay attributed to fault of the shipowner or those for whom he is responsible
iii. Vis Major amounting to a sudden or unforeseen interruption or prevention of the act itself of loading/discharging, not occurring through the connivance or fault of the charterers.
c. Caution: It’s doubtful this case was decided correctly.
i. It’s unorthodox to apply exceptions to laytime to exceptions to demurrage (especially when charter party specifically enumerates demurrage exceptions).

Front 105

Vis Major

Back 105

i. Charterer claims vis major to stop running of laytime or demurrage when there is an extraordinary or unforeseeable force not caused by charterer which prevents movement of the cargo.

Front 106

Ejusdem Generis

Back 106

—“of the same kind,” used to toll lay time when there is a list of contingencies stipulated in the charter party that tolls the laytime (ex: war, blockade, revolution, strikes…) and at the end says “by other causes that are beyond the Charter’s control” or “for similar reasons stated above” but this specific contingency is not enumerated.
i. Charterer can argue that the exception clause relives the charterer from liability for the non-enumerated contingency under the doctrine of ejusdem generis because it is of the same kind as the enumerated contingencies
1. Ie: there is a delay. The K says that charter is excused for x, y, z, or any other reason “beyond the charterer’s control.” Charterer argues that this was out of his control, so he should be relieved form liability for the delay and not have to pay demurrage.

Front 107

Arrived Vessel-Dean H

Back 107

i. Where by the terms of a charter party the charterer is to name the berth for discharging, he should be ready to receive the cargo when the vessel is ready to deliver, even if she cannot do so either because he has failed to name the berth or because he has named a berth to which she cannot get, or to which she is prevented through no fault of hers.
ii. An arrived ship begins laytime either at a safe port or so near the port of discharge as she may safely get.

Front 108

Arrived Vessel
Yone Suzuki

Back 108

i. Vessel doesn’t have to be at berth so long as she is within the jurisdiction of the port.
ii. Laytime begins once vessel ready to receive cargo, even if prevented from doing so through no fault of her own.

Front 109

Cesser Clause

Back 109

a. Not used to much anymore.
b. Ceases liability of charterer under charter party once cargo is on the ship.
c. Carrier is generally okay with this, because he will have a lien against the cargo.
d. Cesser clauses only apply where the owner is protected with another remedy.
i. Cesser clause does not cut out charterer’s primary liability where the owner has no alternative remedy

Front 110

Seamands Remedies

Back 110

1. Maintenance and cure (Maritime Law)
2. Jones Act Claim (Employer’s Negligence)
3. Unseaworthiness of a vessel
a. If owner of vessel is also employer, no need for this action, but if it is a different party to employer, then could be another action for unseaworthiness.
b. Can bring suit against
i. Vessel owner—in personam
ii. Vessel itself—in rem and in personam
1. Jones Act cannot be brought in rem

Front 111

MAINTENANCE AND CURE

Back 111

i. No fault of employer needed.
ii. Maintenance and Cure due eve if seaman caused his own injuries, unless:
1. Gross negligence
2. Willful misconduct
b. Encompasses three distinct remedies
1. Maintenance (room and board)
2. Cure (medical care)
3. Wages (until conclusion of period of employment)
c. Employer is liable for maintenance and cure (usually vessel owner)
i. Demise charterer could be liable for M&C since he assumes full control of vessel and owners responsibility for M&C
ii. Vessel owner may be liable under agency law when an employee of a contractor is injured on vessel owner’s ship

b. Encompasses three distinct remedies
1. Maintenance (room and board)
2. Cure (medical care)
3. Wages (until conclusion of period of employment)
c. Employer is liable for maintenance and cure (usually vessel owner)
i. Demise charterer could be liable for M&C since he assumes full control of vessel and owners responsibility for M&C
ii. Vessel owner may be liable under agency law when an employee of a contractor is injured on vessel owner’s ship

Front 112

Requirements for Maintenance and Cure

Back 112

1. Seaman
2. In service of the ship

Front 113

M&C when seaman not aboard

Back 113

board vessel or on land
1. Warren v. US—Seaman at foreign port, fell off balcony when on shore leave. Entitled to M&C b/c since ship could call in aback at a moment’s notice, he was in the service of the ship.
2. Archer—Voyage hasn’t started, worked for catering company contracted with cruise ship. Told to report to Miami offices a few days early and injured in car accident. Entitled to M&C b/c if his employer wanted to come in, he could be called to come into work. Thus, he was in the service of the ship and was therefore entitled to M&C from both employer and shipowner.
a. Agency—although caterer was an independent contractor, it was acting for the ship, thus shipowner liable.
b. Policy—if shipowner could contract for all services and not have any employees of his own, will never be liable for M&C, so cts hold shipowner liable as well as employer. Ship owner could include indemnity clause in it s K with contractor.

Front 114

Commuter Seamen

Back 114

1. Was the seaman on authorized shore leave when he was injured?
2. Was he answerable to the call of duty? Is the employee replaced by another?
a. An employee who works a rotating shift may not be answerable to the call of duty.

Front 115

Maintenance

Back 115

a. Maintenance—the amount of money seaman is entitled to for daily living expenses while in recovery (room and board). Includes actual living expenses, as long as they are reasonable under the circumstances. (idea of living expenses while on the ship has been rejected).
i. Begins when seaman leaves vessel
ii. Includes expenses to seaman himself, not to family members (save for rent)
iii. Burden on seaman to show actual expense. Seaman makes prima facie case for an award of maintenance when he gives proof of costs relating to his room and board
1. Amount of maintenance must be reasonable
2. Cannot be his family’s expenses (ie only his food), but cts won’t apportion rent for apt/home/mortgage.
iv. Employer can rebut the evidence, stating that they are excessive

Front 116

Standard Provision in K regarding maintenace

Back 116

i. Every ct of appeals has held that standard provisions for M&C in a K shat stipulate a set amount are enforceable
1. Can trust union representatives to protect their employees. Even if a M&C term is ridiculously low ( ex: $8/hr), assume it has been sued as a bargaining chip for other benefits (ie health and disability insurance).
2. Must specify in the K that these benefits are an acceptable substitute for M&C as far as the employees are concerned. A clear intent must be shown and spelled out in the K!

Front 117

Preexisting Condition and Maintenance

Back 117

i. Last ship rule—doesn’t make any difference whether the injury was sustained/arose on prior ship, the present employer has a duty to pay maintenance and cure
1. Gauthier v. Crosby—court said it was a unique situation b/c there were already two employers before the court, so out of equity, court held both ships liable.
ii. Causal relationship—if employee misrepresents or conceals a preexisting condition and there is a causal relationship between the injury claimed and the M&C, court will deny his claim
1. Inquiry into whether seaman has back problems prior to employment is different from asking whether ever suffered a back injury. Answering no to one is different from answer no to the other. Why?

Front 118

Employer Indemnification for M&C

Back 118

i. Employer wants to be indemnified by third party found to be liable for M&C due to third parties negligence because employer had already paid employee some maintenance and cure (Black v. Red Star)
1. Ct said there was no K relationship between third party and employer, but based on equity, it was fair for employer to be compensated by the third party. Why was third party liable for M&C. Isn’t the employer liable for M&C always?

Front 119

Attorney's Fee for M&C

Back 119

f. Attorney fees
i. Policy—want maintenance and cure to be an automatic remedy, not complicated such that seamen have to go to court to get his rent paid.
1. Seaman can recover when shipowner’s actions are callous or recalcitrant
2. Raises problem for employer who wants to withhold M&C but fears having to pay seaman’s attny fees if he withholds paying M&C but has good reason to withhold paying (ie person is already cured).
a. Employer should go to court and get a Declaration from court stating his grounds for withholding to demonstrate that his position is non callous/recalcitrant.

Front 120

Cure

Back 120

b. Principles
i. Employer’s obligation to pay cure (seaman’s treatment) as long as it is reasonable and legit.
1. Seaman has duty to mitigate costs associated with cure
2. Employer not required to pay for unnecessary or unreasonably expensive treatment, but seaman is free to see any physician of his choice
ii. Health Insurance
1. Employer’s health insurance program to pay medical expenses satisfies employer’s obligation to pay cure
2. Availability of free medical treatment such as Medicare or Medicaid (gov’t sponsored health insurance program) satisfies employer’s obligation to pay cure [p222]

Front 121

Duration of Cure

Back 121

1. Employer’s duty to pay maintenance and cure ends when the seaman reaches the point of maximum medical cure
a. Obligation exists only to IMPROVE seaman’s condition, not to alleviate the condition
b. No obligation to pay M&C to alleviate seaman’s pain once seaman has reached point of total disability and maximum medical cure has been reached.
c. If, after payment for M&C has ceased, and subsequent curative medical treatment becomes available, seaman can refile for M&C

Front 122

RE: Duration of Cure Farrel and Vella

Back 122

2. Farrell—man on shore leave and seriously injured in Sicily. Maximum cure has been reached, but if stop providing medical treatment, he may deteriorate
a. This is a shame, but that’s not within the scope of M&C—not intended to be a lifetime benefit.
3. Vella v. Ford Motor Co**—seaman injured when slipped on oily floor and head hit electrical box, causing hi damage to inner ear and balance.
a. Issue: is a seaman entitled to M&C when there is no cure?
b. Holding: Has he reached Maximum Degree of Cure?
i. Nothing else to improve his conditionYes

Front 123

Testimony Establishing Cure

Back 123

1. If Dr says the person has either been cured or reached point of maximum cure, and employee accepts Dr’s prognosis that there is nothing else to be done to improve the condition, then employer can stop paying
2. If employee seeks second opinion, and there is conflicting info, it is up to the court to determine which testimony to accept.

Front 124

Wages Component of M&C

Back 124

employer must pay seaman wages that would have been earned during the remainder of the voyage
i. Principles
1. When employment K FIXES a specific term of employment, employer must pay for that amount of time
a. Farrel v. US—Court said based on CUSTOM of the industry and condition of the times, the 12 month period was a limitation on the duration of voyage; not a stated period of employment. So he is entitled to 3 months, which is how long the vessel was at sea, because when it returned, he may not have to serve on a second voyage (it was not a fixed term of employment)
2. If seaman has been cured and can go back to work, whatever he makes will be set off against what is owed to him
a. If he takes lesser paying job, difference will be paid to him.

Front 125

Penalty for nonpayment of Wages

Back 125

1. Double wages—employer must pay double wages when he fails to pay seaman’s wages that are due w/out sufficient reason.
a. It is statutorily mandated under 46 USC ss10504(c) (2000)
b. Must pay penalty for each day payment is withheld in violation of the statute.
c. Includes all wages due to seamen, not just those that arise because of his claim for M&C.
d. Has 3 year statute of limitations passed? If yes, may be barred. Cts disagree.

Front 126

Griffin v. Oceanic Contractors—seaman injured while working as pipeline welder. Employer refused to pay M&C. District court awarded penalties for withholding wages up until time he was reemployed (double per day came to approx $23K).

Back 126

SC spoke with clear voice and said that he was actually entitled to double pay until time the payment was made, which came to over $300K (more than three years after stopped working)
a. Nothing in language of statute vests court with discretion to limit employee’s recovery based on unemployment time rather than entire period during which employment was delayed.
b. Court trying to DETER withholding maintenance.

Front 127

Jones Act

Back 127

95. Issues to determine for Jones Act Recovery:
1. Seaman (employment related to vessel)
2. Vessel (is it a vessel)
3. Vessel in Navigation
4. Employer’s negligence
96. Principles
a. Remedial in nature and liberally construed in favor of injured seaman
b. Allows for recovery for seaman’s’ injury or death in course of his employment
c. Allows for malpractice recovery if employer sent employee to that Dr.

Front 128

Chandris Test for Seaman

Back 128

1. Rejects snapshot approach from Wilander.
2. Test:
a. Total employment history
b. Employment related connection to vessel in navigation (or identifiable fleet of vessel) that is substantial in both duration and nature.
c. Contribute to the function or “mission” of vessel

Front 129

Borrowed Servant Doctrine

Back 129

1. A person may be a member of the crew of a vessel, and, therefore, a Jones Act seaman even though he is employed by an independent contractor rather than a shipowner.

Front 130

What is substantial for Chandris Purposes

Back 130

1. Time component rule of thumb is 30%.
2. Employment history with THIS employer, not entire work history.
3. No snapshots.
4. But compare reassignment scenario: worker solely in office for 10 years, but gets permanently reassigned to a ship.
a. Injured on day 1.
b. He has a substantial connection to the ship now.

Front 131

Test for Vessel

Back 131

(Stewart v. Dutra-p61):
i. ANY WATERCRAFT PRACTICALLY CAPABLE OF MARITIME TRANSPORTATION REGARLESS OF ITS PRIMARY PURPOSE OR STATE OF TRANSIT AT A PARTICULAR MOMENT
1. If the ship is USED or CAPABLE OF BEING USED for maritime transportation, it may be a vessel. EVEN if the ship has NEVER transported anything, but it could THEORETICALLY CARRY PEOPLE, it may not be good enough if vessel is in a condition in which it can’t move (ie does not have the CAPACITY to move b/c it is permanently moored)
a. Vessel loses status if removed from water for extended period
b. No requirement of being on high seas or in transporting people; ferries are vessels under this definition
c. Vessels under this logic do not move in and out of navigation in much the same way that seamen don’t’ move in and out of seaman status under the Jones act
2. If vessel is not being used, should ask WAS IT EVER USED and WHY IS IT NOT BEING USED NOW? (unloading, stopped for quarantine)

Front 132

Vessel in Navigation

Back 132

f. When vessel not being used, must ask whether it has been taken OUT OF NAVIGATION.
The mere fact that a vessel is docked, being loaded/unloaded or repaired, does not mean it is taken out of navigation (Chandris).
Must look at the LENGTH OF TIME that it has been taken out of commission.
Vessels undergoing repairs or spending short time in dry dock ar still considered to be ‘in navigation’; ships that are having major overhauls or renovations are not (Chandris)
g. Desper—Fire extinguisher exploded and injured seaman. Vessel had been “laid up for the winter.” SC held that it was not a vessel in navigation since it was undergoing SEASONAL repairs, even though it may be a vessel in the near future.
h. Wixom—ship’s master and crew vacated ship for MAJOR STRUCTURAL CHANGES (almost rebuilding the ship). The SC held that the vessel was not in navigation as a matter of law
i. Rule: to determine whether a ship under repair is still in navigation, the court should look at the extent and nature of the repair operations and who controls them. The mere fact a vessel is being repaired does not take it out of navigation.

Front 133

Standard of care and Causation in JA claims

Back 133

a. The employer’s duty is to act as a reasonable and prudent employer under the circumstances.
b. “Negligence is Negligence”
i. Qualified by the fact that:
1. Employer is required to provide safe place to work.
2. Seaman is under strict duty to obey orders.
ii. Contributory Negligence
1. A heavy duty is on the employer to account for the fact that seaman are bound to follow orders.
2. If employer gives seamen improper tool and seaman things it’s the wrong tool, but uses it anyway, there is no assumption of the risk.
3. There is no contributory negligence unless the order leaves employee discretion to decide how to perform.
c. Causation
i. The burden to prove causation is “featherweight.” Ferguson.

Front 134

Statutory Violation and Jones Act

Back 134

where employer violates a statutory duty, and a seamen is injured, employer is liable under Jones Act regardless of the employer’s degree of negligence (violation is negligence per se).
1. It is irrelevant whether or not seaman is within class of persons the statute is designed to protect, or that the harm caused is of the type that the statute was created to prevent (unlike the land based tort meaning of negligence per se).
2. Kernan—seaman killed on tug when it caught fire b/c kerosene lamp was hanging lower than should have been. Vapos on water caught light and led to seaman’s death. Injury that occurred did not need to be of the kind that the statute intended to protect. In maritime cases

Front 135

A P in an unseaworthiness action must show

Back 135

a. Injured is a seaman
b. Vessel was unseaworthy
c. The unseaworthy condition was the PROXIMATE CAUSE of the seaman’s injury/death.
i. Proximate cause—injury/death was a direct result of the unseaworthy condition, or a reasonably probable consequence of the condition.
1. Unseaworthiness condition may be the product of employer negligence, or it may come about despite the exercise of due care. Jones Act requires showing of NEGLIGENCE, Unseaworhtiness requires a showing of UNSEAWORTHINESS, regardless of how it came about. Burden is on the employer to show that it acted as a reasonably prudent employer

Front 136

Test for Unseaworthingess

Back 136

a. SEAWORTHINESS—THE VESSEL AND HER EQUIPMENT ARE REASONABLY FIT FOR THE INTENDED USE.
i. No need to provide a perfect vessel, just one of reasonable fitness.
ii. No need to find negligence in order to find unseaworhtiness. But negligence can create an unseaworthy condition
iii. When a vessel is unseaworthy, due diligence is not an excuse.
iv. Operational negligence—isolated act of negligence by an otherwise qualified worker that injures the seaman will not render the vessel unseaworthy, unless that act of negligence is pervasive.

Front 137

Action for Unseaworthiness

Back 137

a. Only seamen have a cause of action for unseaworhtiness
b. Includes equipment on the ship, which is under the vessel’s CONTROL, otherwise no action for unseaworhtiness
c. Where cargo is improperly loaded or stowed  unseaworhtiness
d. Statutory violation  unseaworhtiness per se (there is no defense of due diligence in strict liability claims
e. Incompetent master or crew may render vessel unseaworthy
f. Crew member of savage disposition who harms another seaman, may constitute unseaworhtiness.

Front 138

Mitchess v. Trawler (fish guts)
Employee slips on fish guts stepping onto wharf from fishing vessel.

Back 138

i.
1. Ct. said it did not matter how unsafe the condition was or for how long, because that has to do with negligence and is relevant for Jones Act purposes. For seaworthiness, look to whether the OWNER met his DUTY to FURNISH a VESSEL that was REASONABLY FIT for its INTENDED USE. The standard is NOT PERFECTION, but reasonable fitness.

Front 139

b. Martinez (plastic cups)
Man injured carrying plastic cusps when plastic sleeve came loose; fell and twisted his back.

Back 139

i. Man injured carrying plastic cusps when plastic sleeve came loose; fell and twisted his back.
1. Holding: having supplies on the ship for the crew that are not reasonably suited, can render the ship unseaworthy. Ct. says “fitness for duty” extends to MATERIAL in which the ship STORES are WRAPPED. Demonstrates how far the Ct. is willing to go

Front 140

Southwest Marine v. Gizoni
1. Rigger foreman working on floating platforms.
2. Ship repair is enumerated under the LHWCA.
3. Received voluntary benefits under LHWCA, then proceeded on Jones Act action.

Back 140

4. A worker may be a seamen, even if enumerated under the LHWCA.
5. “LHWCA preserves the Jones Act remedy for vessel crewmen, even if they are employed by a shipyard,” because he may have employment-related connection to vessel sufficient to qualify as a seaman.

Front 141

LHWCA generally

Back 141

a. Largely a compensation scheme, not fault based, set up for maritime workers who are not seamen.
i. However acts of occasioned intoxication or willful intent to injure oneself or another will bar your recovery.
b. Covers injuries “arising out of and in the course of employment”
c. Not pre-emptive of state compensation scheme—concurrent jurisdiction
i. Employee may chose between state and federal.
ii. If state is larger than federal, may recover under federal and then recover difference under state.
iii. No double-dipping however.

Front 142

LWHCA status tes

Back 142

i. Defines employee as “any person engaged in maritime employment, including any longshoreman or other persons engaged in long shoring operations, and any harbor worker including a ship repairman, shipbuilder, and shipbreaker…”

Front 143

Exclusions for LWHCA

Back 143

1. If state compensation applies:
a. Clerical workers, security
b. Recreational operations, restaurants, museums
c. Marina workers
d. Aquaculture workers
e. Builders, breakers, repairs of recreational vessels under 65’ in length
2. Excluded regardless of whether or not state compensation applies:
a. Master or member of any vessel
b. Person loading, unloading, or repairing any small vessel under 18 tons net

Front 144

Test for Maritime Employment

Back 144

1. Whether employee’s activities have a substantially significant relationship to traditional maritime activities.
a. Nature of activity. PC Pfeiffer.
i. No point of rest theory.
b. Drilling platform
i. The amendments were not meant to cover employees who are not engaged in loading, unloading, repairing, or building a vessel, just because they are injured in an area adjoining navigable waters used for such activities.

Front 145

When is “unloading?”

Back 145

1. If cargo goes through multiple interveneing parties before reaching its final destination are all included under LHWCA?
a. No.
b. Once unloading reaches domestic transportation (where it gets on train or truck) unloading is finished.

Front 146

LHWCA situs stest

Back 146

i. Covers disability or death that results from injury upon navigable waters (about 24 miles offshore) of the United States, “including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area…used for loading, unloading, repairing, dismantling, or building a vessel.”

Front 147

Fixed Platforms and LWHCA

Back 147

a. Treated as artificial islands and do not satisfy the situs requirement unless outside the 3 mile state territorial limit where no state scheme would be available.
i. This is because the Outer Continental Shelf Lands Act will apply LHWCA to artificial islands outside state waters.

Front 148

Where situs is on navigable waters, status will usually be met automatically.

Back 148

a. Perini
i. Supreme Court said that the amendments were intended to expand coverage, and that the construction workers met the status test not simply because they were injured in a historically maritime locale, but because they were required to perform their duties upon navigable waters.
b. The Fifth Circuit
i. The Fifth Circuit qualifies this and does not allow for “transient or fortuitous” presence on the water.
ii. But a worker who spent 8.3% of his tim eon the water has spent enough time on the water to fall into LHWCA.

Front 149

iExclusive Liability of the Employer

Back 149

1. Under § 905(a) a covered employee may not receive benefits other than compensation.
a. Grantham
i. §905(a) remedy is mandatory and if employer fails to pay, the employee may bring suit in tort in which employer defenses are stripped.

Front 150

Suits Against Shipowners

Back 150

a. No liability of the employer to vessel.
b. The liability of the vessel is not based on warranty of seaworthiness.
c. Remedy under § 905(b) is exclusive of all other remedies against the vessel except remedies available under LHWCA
i. Longshoremen cannot sue under negligence.
d. If employee a longshoreman injured in course of employment caused by someone engaged in stevedoring services, no recovery against the vessel.
e. If such person employed to provide shipbuilding, repairing, or breaking services and employer is owner, not action permitted against employer.
i. Action reserved for longshoremen.

Front 151

When the Employer is Shipowner

Back 151

a. Typically, longshoreman has right to statutory compensation from employer and can assert tort claim against vessel for negligence
i. Two restrictions
1. Longshoremen injured as result of loading/unloading process
a. No right of recovery against vessel because injury is a direct result of employer’s negligence.
2. Specifically enumerated employees
a. No recovery against vessel owner

Front 152

Turnover Duties

Back 152

1. When should the ship be responsible for exercising due care (negligence) in respect to the stevedore?
a. Turnover Duty
i. If the owner is aware of a defect at the time of turnover, he has a duty to warn of hidden dangers and defects.
b. Control Duty
i. Owner has duty of reasonable care to prevent injuries to longshoremen in areas that remain under the “active control of the vessel.”
c. Duty to Intervene
i. If stevedore operating under unsafe condition, owner has a duty to intervene.
1. Must prove that owner knew of dangerous practice.

Front 153

Unseaworthiness for pseudo-seamen

Back 153

1. Someone covered under LHWCA may not sue the vessel owner for unseaworthiness.
2. However, Sieraki seamen, those maritime workers who do not fall under the Jones Act or LHWCA are entitled to a warranty of seaworthiness. Blancq v. Hapag-Lloyd.

Front 154

Contribution and Indeminity

Back 154

1. Contribution is allowed.
a. Joint & several liability and proportionate fault.
2. Edmonds
a. Longshoremen 10% negligent
b. Vessel 40% negligent
c. Employer 50% negligent
d. Vessel pays 90% because of joint/several liability and employee is barred against the employer.

Front 155

ix. Stevedore’s Lien and Assignment of the Employee’s Action

Back 155

a. Stevedore’s Lien
i. Can’t sue employer and rights against vessel limited.
ii. LHWCA doesn’t bar actions against the 3rd party.
b. Assignment
i. §933(b) acceptance of compensation shall operate as an assignment to the employer of all rights to recover damages against third person unless the employee commences an action within 6 months after acceptance of compensation.
1. Once the action is assigned, the employer will only have 90 days to bring his action or else the action shall revert to the employee.
2. (g) Employee cannot settle with third party for less than the compensation without written permission from the employer.
3. (e) Employer may only recover expenses incurred in bringing the proceedings, cost of benefits furnished, amount paid as compensation, all future compensation owed.
a. Any excess recoverd is paid to the employee.

Front 156

Death on the High Seas Act

Back 156

b. Who recovers?
i. Beneficiaries under § 761(a)
1. Wife
2. Husband
3. Child
4. Dependent relative
c. Where does it apply?
i. Beyond a marine league from the U.S. Shore (3 Miles)
ii. Look at the location of the accident, not the death.
d. What do you recover?
i. Pecuniary losses ONLY
1. Look at what decedent was spending on the family, funeral costs, etc.
2. No pain & suffering (survival action), loss of society/consortium.
3. Can recover loss of services (law mowing), guidance, education for children

Front 157

State Remedies and Wrongful death

Back 157

a. Under Offshore Logistics, if DOSHA applies, you may not recover under state statute.
i. DOSHA is the exclusive remedy here.
b. DOSHA actions can be brought in state court, but still only for pecuniary loss.
c. No punitive damages.
d. No survival action (except for aviation carveout).
e. Contributory negligence will not bar the action, but it will reduce recovery.

Front 158

Wrongful Death Actions Under General Maritime Law (Within State Territorial Waters)

Back 158

a. Two types
i. Wrongful death
1. Statutory action for beneficiaries under the Jones Act/DOSHA
ii. Survival action
1. Statutory as well.
2. DOSHA has no survival action
3. Jones Act does allow survival action

Front 159

Moragne

Back 159

i. Longshoreman killed on a vessel in navigable waters.
ii. Not all state recognized a cause of action for unseaworthiness
iii. Court created wrongful death action under the General Maritime Law for the beneficiaries of those killed in territorial waters for unseaworthiness or negligence.

Front 160

Extent of Moragne

Back 160

1. Higginbotham
a. For deaths occurring on the high seas, DOSHA is the exclusive remedy and not supplemented by the general maritime law.
b. Survivors could not recover damages for loss of society under the general maritime law.
2. Yamaha
a. Parents sought recovery under state wrongful death statutes for the death of their 12 year old in a jet ski accident.
i. Court:
ii. Grant extension of state law remedies for “nonseafarers” because history of state remedies being allowed
iii. DOSHA § 7 bars the act from affecting state law in navigable waters.

Front 161

Survival Actions

Back 161

i. DOSHA does not allow for recovery for decedent’s own losses, nor non-pecuniary losses.
ii. Survival action under the general maritime law can’t include lost future earnings.

Front 162

Restrictions on Damages

Back 162

a. No recovery for nondependent parent for loss of society under the general maritime law action for wrongful death.
b. Also, the general maritime law does not permit a survival action for loss of future earnings.

Front 163

Duty and Standard of Care Generally for nonmaritime persons

Back 163

1. Shipowner owes a duty of reasonable care under the circumstances towards person lawfully aboard.
2. Shipowner only liable for willful or wanton misconduct towards stowaways.
3. Dependent wife of longshoreman killed on navigable waters can recover for loss of society.

Front 164

Products Liability

Back 164

i. Recognized in East River.
1. You may not recover where damage is only to the product itself.
a. There the relief has to be found in contract law.
b. However, there can be recovery where the product installed damages the ship.
2. Personal injury can be brought based on products liability.

Front 165

Collisions Inevitable Accident
The Jumma

Back 165

a. Establishes a fault based cause of action.
b. “If no negligence can be imputed to either vessel there is a presumption that they are navigating in a lawful manner and where no fault can be show the accident may be said to be inevitable.”
c. “Inevitable accident” – there was not fault, the accident was impossible to prevent.
d. Test:
i. Could the collision have been prevented by the exercise of ordinary care, caution, and maritime skill?
ii. If not, parties pay for their own damages.

Front 166

Collisions Inevitable Accident
The Louisiana

Back 166

a. The weather changed, the master made no corrective action, and the ship broke free from its mooring.
b. Even though the weather was a stimulus to the accident, there is no Act of God defense because negligence of officers allowed the situation to occur.
c. Oregon Rule:
i. When a vessel strikes a stationary object (an allision), there is a rebuttable presumption that the vessel is at fault

Front 167

Error in Extremis
Puerto Rico Port Authority

Back 167

a. Docking nightmare—the pilot couldn’t communicate with other members of the crew, he had never docked a vessel of that size, the master had never been to San Juan. Suffice it say, crazy shit was bound to happen.
b. When one ship has, by wrong maneuvers, placed another ship in a position of extreme danger, that other ship will not be held to blame if she has done something wrong, and has not been maneuvered with perfect skill and presence of mind.
c. To apply the In Extremis Doctrine:
i. You were in peril.
ii. Your actions did not contribute to the peril.
iii. Reasonable response to the danger thrust upon the unoffending ship?

Front 168

Collision and Liability for Pilots

Back 168

1. Compulsory: Shipowner has no choice but to take on a local pilot.
a. If collision/allision solely the fault of the pilot, shipowner is not liable in personam, but the vessel is liable in rem.
2. Voluntary: Pilot is not different than an ordinary crew member.
a. In a collision/allision, the ship owner is liable in personam and the vessel is liable in rem.

Front 169

Allocation of Fault – The Modern Rule

Back 169

Comparative Fault
a. Fault will be apportioned to each party where there has been a finding of comparative negligence. Reliable Transfer.
b. Where specific finding of fault is not done, can’t be determined, or the ships were equally liable, damages will be split 50/50.

Front 170

Collision Proximate cause

Back 170

1. Negligence has to the be the proximate cause f the damage to recovery for a collision.
a. Three elements:
i. Breach of duty
ii. Breach was proximate cause of the injury
iii. Liability allows for subsequent apportionment

Front 171

Collision Proximate Cause
Exxon

Back 171

a. The ship broke free of its mooring system, but the captain didn’t plot its drift, and had no clue where it was and grounded it on a reef.
b. Proximate cause (and superseding doctrine) still apply in admiralty in order to ascertain liability.
i. Comparative fault only applies after liability is established.

Front 172

Violation of Safety Standards: The Pennsylvania Rule

Back 172

a. When a vessel is in violation of a statute designed to prevent collisions, a presumption of fault is created on the violating party that the violation was at least a contributory cause if not the sole cause of the collision.
b. Akin to negligence per se.

Front 173

Violation of Safety Standards-Candies Towing

Back 173

a. Two legs of the voyage:
i. Grounding on a sandbar
1. Fault, but no damage.
2. Violation of regulations results in grounding on a sandbar, but there was no damage to the cargo or the barge.
ii. Bad weather causes the barge to sink.
1. Damage, but no fault.
2. There was no evidence that the prior grounding caused the sinking of the barge.
b. No recovery.
c. The Pennsylvania Rule does not delete the requirement of causation.

Front 174

Violation of Safety Standards-Otto Candies

Back 174

a. If both vessels are in violation of a statute, does the Pennsylvania rule still apply?
b. Yes.
c. If both parties are in violation of safety rules, they can both invoke the Pennsylvania Rule against one another.
i. The mere fact that a party is in violation of a statute doesn’t prevent him from bringing the Pennsylvania Rule against another party.
ii. Both can be found liable and then apportion liability accordingly.

Front 175

If the collision results in a total loss, actual and constructive:

Back 175

a. Recovery of the market value of the vessel at the time of loss, plus pending freight (freight owed on voyage at time of loss)
b. Recovery for pollution clean-up, salvage, wreck removal, and other incidental costs proximately resulting from the casualty.
c. No recovery for loss of earnings and detention.
d. Judicial interest is recoverable

Front 176

Allocation of Damages in Collision Case

Back 176

Each vessel’s damages are added together to make a grand total, the apportioned in accordance with fault

Front 177

Economic Loss-
Esso Camden
b. The Halstead was laid up for 17 days, resumed trip to Baltic, and then took a subsequent trip to South America.
i. Halstead now wants Baltic rate of hire for 17 days.
ii. He also wants Camden’s daily expenses subtracted because the charterer already paid that.
c. Camden was detained for 15 days, which resulted in refunding charterer for a rate of hire.
i. He wants Halstead’s rate to be the South America rate.

Back 177

d. The court rules that the damages should be calculated by general average damages for Halstead
i. Averaged trips.
e. The court allows Camden to recover its daily expenses.

Front 178

Robins Dry Dock
a. Time chartered vessel went into the yard for routine maintenance and the yard negligent damaged the propeller, so the vessel went out of service.

Back 178

b. The court refused to allow for tort recovery for pure pecuniary loss for damage to someone else’s property without a proprietary interest.

Front 179

M/V Struma

Back 179

a. A time chartered ship goes off hire without an off-hire clause excusing charterer’s duty to pay charter hire.
b. Either the owner or the charterer is entitled to recover, but not both.
c. Distinguished from Robins because the plaintiff is seeking charter hire he is required to pay, not lost profits.

Front 180

M/V Testbank
a. A ship discharged chemicals in the Mississippi river, which forces the Coast Guard to close the river for a period of time.

Back 180

a. A ship discharged chemicals in the Mississippi river, which forces the Coast Guard to close the river for a period of time.
b. Court affirms Robins.
i. Remote liability is limited, even if the results lead to isolated unfairness.
ii. Promotes predictability.
c. “Claims for economic loss unaccompanied by physical damage to a proprietary interest are not recoverable in a maritime tort.

Front 181

Total Loss-Tug Fajardo

Back 181

a. Insurance company declared the barge under bareboat charter a total loss.
b. No loss of profits when a total loss.
c. Even though the charterer is standing in the owners shoes, he gets nothing because the owner already recovered from the insurer.

Front 182

Cargo Losses
Amoco v. S/S Mason Lykes Mason Lykes failed to deliver cargo and freight was prepaid.
i. Freight earned when the cargo was loaded on the vessel.
b. The owner of the cargo carried on Lykes sued Amoco

Back 182

c. Recovery permissible: Cargo interest allowed to step into owner’s shoes, but not double recovery is allowed.
d. Cargo interest can bring suit against either vessel.

Front 183

Cargo Loss
US v. Atlantic Mutual
Both to blame collision.
b. Cargo owners chooses to sue the non-carrying vessel, because that vessel isn’t protected by COGSA.

Back 183

c. Court says that the non-carrying vessel who pays cargo interest may list costs as an item of damage, thus, the carrying vessel has the potential to be liable for more then the $500 limitation.
d. Practical note: Insert a both-to-blame clause
e. Note: International Rule
i. Under the Collision Convention, no joint & several liability, so if cargo sues a non-carrier, the non-carrier only has to pay the percentage of fault & non-carrier will not list the amount paid on the list of damages.

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Cargo Loss
Allied Chemical v. Hess Tankshipa
. Both to blame accident.
b. Does Reliable Transfer apply to undermine joint and several liability?

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d. Court refused to adopt Collision Convention.
i. The Non carrying vessel is not restricted to its proportionate share.
e. “Reliable Transfer merely changed the apportionatement from equal division to division on the basis of relative fault. But we did not upset the rule that the plaintiff may recover from one of the colliding vessels the damage concurrently caused by the negligence of both.”
f. Proportionate fault only adjusts claims between two vessels—it has no function with a third party.

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Pre-Judgment Interest

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General rule that prejudgment interest should be awarded in maritime collision cases, subject to limited exceptions.

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Towage and Affreightment Contracts Distinguished
1. Agrico v. Logicon
a. Parties:
i. Agrico – Cargo owner
ii. Brent – Owns two barges
iii. Logicon – Owns tug and one barge
b. The Logicon barge capsizes, and Agrico sues Logicon, who impleades Brent.
c. Is the contract one of towage or one of affreightment?

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i. Contract of affreignment – Damages apportioned:
1. Brent was negligent in loading, which violated workmanlike performance.
2. Logicon negligent in accepting the tow, in unhitching the tow from the dock, and perhaps for supplying the barge.
d. The difference between the two:
i. Towage: Contract to move a barge.
1. “If, however, the tug is engaged to do more than merely tow another’s vessel, the contract is considered for the movement of tow and its contents, it’s a contract of affreightment.”
e. Because barges lack power and usually a crew, a contract for the mere use of a barge is bareboat.
i. But if the owner retains control, he remains liable for all damages arising out of its operation.

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Factors to determine if a charter is bareboat:

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i. Bareboat charterer typically required to carry insurance on the vessel, indemnity insurance, and crew insurance.
ii. Typically, survey of the vessel conducted when delivered and redelivered.
iii. Compensation for use of the boat bare.
iv. Term of charter usually more than a single, short voyage.

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Standard of care for tugs

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i. Implied warranty of workmanlike services in contract of towage.
ii. Due care: “the tug is obliged to use such reasonable care and maritime skill as prudent navigators employed for the performance of similar service.

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Consolidated Grain
a. Barge buckles and sinks.

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b. General rule:
i. Presumption of unseaworthiness if no apparent reason can be articulated as to why the ship sank.
c. “The owner of the barge is responsible for the unseaworthiness of his vessel, while those responsible for the handling of the barge are obligated to perform these tasks using such care as

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Ryan Walsh Stevedoring
a. Barge carrying a crane hits the Huey P. Long Bridge, causing the crane to fall off the barge into the Mississippi River. There’s damage to the bridge. The barge sues the tug.

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b. The barge owner has a duty to present a seaworthy barge and duty to make reasonable inspection before undertaking the voyage.
c. However, the tug is responsible if the alleged unseaworthiness is so apparent that it would be negligent for the tug to attempt to proceed—creates a duty to inspect on the part of the tug.
3. Duty to save the tow:
a. Even if the owner presents a vessel that is unseaworthy, the tow company has a duty to prevent the barge from sinking.

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Exculpatory Clauses

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1Bisso
a. Exculpatory clauses are generally held invalid, because the Supreme Court wanted to:
i. Discourage negligence by making wrongdoers pay for damage they cause.
ii. Protect consumers from towage monopolies.
2. The general rule invalidating exculpatory clauses may be circumvented by insuyrance clauses where the barge owner agrees to include the tower as beneficiary of the policy.
a. In these instances, the exchange must be bargained for. Dillingham.
3. Bisso only invalidates exculpatory clauses in contracts for domestic towage contracts. It does not apply to international contracts. Bremen v. Zapata

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Duty of a Pilot

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a. Pilot: Expert on local water and conditions.
i. Set’s the expertise of a pilot very high.
b. Pilot: Charged with actual and constructive knowledge (reasonable pilot under the circumstances)

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Pilotage-Who do you sue?

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1. Who do you sue? You need respondeat superior to sue.
a. Most pilots belong to an assocation which acts as a secretariat.
i. There is no respondeat superior because the assocaiation is not the master of the pilot: they have no authority to discipline or control the pilots.
b. State & local agencies: States license pilots for vessels involved in international trade, while the federal government licenses those who participate in inland/coastal trade)
i. The agencies have the ability to discipline, grant, withhold or suspend a license, but there is still no standing because the state has no control over the pilot’s job performance.
ii. Pilots are independent contractors.
c. Sue government agencies for vicarious liability.
i. Long Beach: Suit brought against pilot and pilot makes a claim to the city.
ii. The court held that pilots are employees of the city and the city compelled the vessel to use its employees.

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Compulsory Pilot

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a. In the United States, when failure to take a pilot results in criminal sanctions (not just a monetary penalty) it’s a “compulsory pilot.”
b. Such a compulsory pilot is not an employee of the vessel owner.
c. There is no in personam liability if the pilot is solely at fault.
d. If the crew and the pilot are both a fault (concurrent negligence) then there is in personam liability.
i. In such cases, the owner can seek contribution from the pilot unless there is an exculpatory clause.

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Voluntary Pilot

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a. Treated like an ordinary crew member of the vessel and the owner is liable for the pilot’s negligence in personam while the vessel is also liable in rem.

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United States v. Van Buren
a. In Long Beach, if a vessel subject to payment of pilotage chooses not to take aboard a municipal pilot, the vessel is assessed ¾ of the applicable charge. The charge also included insurance.

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i. The court held that the pilot in such instances was voluntary.
ii. The court further held that the availability of cheap insurance makes the exculpatory provisions valid.
1. Pilots exculpatory clauses are valid, but require the existence of a contract.
2. This differs from towage exculpatory clauses because pilots are not paid enough to carry insurance to protect themselves and pilots using vessel’s equipment.

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Salvage

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a. “Reward given for perilous services, voluntarily rendered, and as an inducement to seamen and others to embark in such undertaking to save life and property.”
b. Not remuneration; cargo interest may also have to contribute.

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Elements of Pure Salvage

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3 Elements for a Pure Salvage Claim
i. Marine Peril
ii. Voluntary Service
iii. Success, in whole or in part, or that services rendered contributed to such success.

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Contract Salvage

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: Must be an agreement for specific compensation in specific terms.
i. Generally, the amount of compensation must be fixed to defeat and award for salvage (unless use hybrid Lloyd’s Open Form).
ii. The United States allows for oral contracts for salvage.

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Merrit & Chapman v. U.S.
i. Fire on Pier V, with a vessel on Pier IV.
ii. The plaintiff argued that but for his putting out of the fire, the vessel would have been damaged.

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1. In order for service to be salvage, the service must be directed at property against whom claim is brought, not incidental/indirect.
2. In this case, the plaintiff was merely spraying water on the dock, not acting to save the vessel so much.

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Marine Peril
Markakis Ii
The defendant argued that he should not have to pay salvage, because tThe peril was not imminent, only hypothetical.

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ii. The court held that the award of salvage was proper.
1. The peril need not be imminent, but instead must be “reasonably believed to be apprehended.”
2. “So long as the ship is in peril, any voluntary act which contributes to her ultimate safety may rank as an act of salvage

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Voluntariness: who qualifies as a salvor?
Markakis II
i. The defendant argued that both vessels were under common ownership, therefore, the salvor was merely acting under orders.

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ii. The court held that the common ownership was immaterial.
iii. The test is whether or not salvage service was outside of the normal scope of employment, which it was.

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Fort Myers Shell
i. Plaintiff had a contract to take barges from X to Y.
ii. Upon arriving at X, the plaintiff found the barges beached.
1. Plaintiff unbeached the barges and delivered them as contracted.
iii. Plaintiff subsequently requested a salvage award.

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iv. The court granted a salvage award above and beyond towage fee because of the exceptional service beyond the agreement made.

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Lack of Request
Lambros Seaplane

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ii. The court held that an award was proper for unrequested service: “if an offer of service had been made, any prudent mane would have accepted it.”
iii. The cap on the award is the value of the property, since a remedy is a lien against the property.
iv. In this case, the deliver to another port was okay, if the deliver was made in good faith.

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Property Subject to Salvage
Provost-Driving the house over a frozen lake superior

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a. The court refused to grant a salvage award.
b. Cited Maritime Adventure, which limits salvage awards to maritime property.
i. No salvage for just any old thing saved from the sea.
ii. Suggests that buildings/piers washed out to sea would not support a salvage award.

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Salvage Awards
The Blackwall:
The fire department is alerted to a fire. When they arrive, a tug carries the trucks out to the burning vessel.
a. The master of the tug files suit on behalf of the owner of the vessel and his crew.
b. The defendant argues that the fire department was responsible for extinguishing the blaze, not the tug.

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c. The court said that salvage awards were available for useful service of any kind.
d. The appropriate method of determining a salvage award:
i. The court will make award taking into account all actors, then apportion.
ii. If the firemen don’t make a claim (which they won’t because they were operating under a duty to extinguish the fire) their portion of the award is retained by the salved-vessel owner, not the fellow salvors.

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Blackwall Factors:

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i. 1.) Labor expended by the salvors.
ii. 2.) Promptness, skill, and energy displayed by the salvors.
iii. 3.) Value of the property employed by the salvors.
iv. 4.) Risk incurred by the salvors.
v. 5.) Value of the saved property.
vi. 6.) Degree of danger from which property rescued.

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Margate
A NASA fuel tank was saved by a fully laden oil tanker.
b. The trial court awarded the tanker $6.4 million based on 12.5% of total under the Blackwall factors.
i. They wrongly stated, however, that they like that number and would have adjusted the percentage accordingly to keep the same $6.4 million figure.
c. The issue focused on how to assess the value of the tank, replacement cost or market value.

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d. The court held that the most important of the Blackwall factors is the value of the saved property.
e. Once that is determined, the court should award a percentage of the cost based on the remaining factors.
f. The 12.5% here was okay, so the appellate court just awarded that percentage with the newly calculated value of the fuel tank.
g. The trial court was wrong to take into account all of the special factors when valuing the tank.

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Misconduct of Salvor's
Basic Boats v. United States
a. A sailboat was dismasted and had her cabin top damaged when she laid alongside a Navy vessel and ground-swell breaks the dock lines.
b. Issue: Was there misconduct on the part of the salvors? What is the standard of care?

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c. The court held that the duty of care by salvors is ordinary negligence: “reasonable skill and prudent seamanship.”
d. The court refused to granted damages as the plaintiff failed to establish the Navy ship fell below the standard of care.

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Two Ways to Adjust for Salvor's Misconduct

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i. Adjust the amount of a salvage award (skill/care of salvors is a Blackwall factor) for failure to perform duties with due diligence.
ii. Award affirmative damages.
1. Ordinary negligence only supports affirmative damages if the injury occurred as a result of a “different peril.”
a. Factors of space/time.
b. You need gross negligence to support affirmative damages during a salvage operation.

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Noah’s Ark
a. A vessel loses power, is towed into harbor and let go before secured to a dock or another vessel. The vessel is blown into a seawall by the story she was originally saved from and is a total loss.

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c. The appellate court remanded the case with the mandate that the trial court assess damages to the defendant with regard to the second, distinct peril.
d. The court held that it was incongruous to have two negligent parties without an award.
i. There were two separate perils—the damages for salvage in Part I should be offset by damages caused by salvor’s negligence in Part II.

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Jackson Marine I
a. Pure salvage claim, following the captain’s misrepresentation of a contract with the distressed vessel.
i. The distressed vessel thought he was signing a limitation of liability.

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b. The court denied the plaintiffs claim for both contractual and pure salvage, holding that fraud not only undermined recover under contract, but also barred any award for pure salvage.
c. Policy: The court wanted to dissuade salvor misconduct.
d. Scope: The master and owner are barred from recovery for master’s misconduct (respondeat superior), but the crew may recover provided they didn’t participate in the fraud.

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Contract Salvage
The Elfrida-The captain made a bad bargain—both parties thought the salvage effort would be much more difficult than it actually was.

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a.
b. The court upheld the contract.
c. “Such contracts will not be set aside unless corruptly entered into, or made under fraudulent misrepresentations, a clear mistake or suppression of important facts, in immediate danger to the ship, or under other circumstances amounting to compulsion, or when their enforcement would be contrary to equity and good conscience.”

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Factors of Intent to Deceive

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b. Factors discussed in intent to deceive:
i. Deceiving party makes material misrepresentation/nondisclosure.
ii. Representation was false.
iii. Deceiving party knew representation was false.
iv. Deceiving party intended deceived party to rely on misrepresentations.
v. Detrimental reliance by deceived party.

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Life Salvage-

Back 215

a. The court didn’t want to encourage salvors to save property over people.
b. Therefore, the court held that if some crew are saving the vessel and others are saving people, a certain portion of the award will go to the life savers.
c. Requirements:
i. Property was in peril.
ii. Property was saved.
iii. A salvage award for saving property was merited.
iv. Some who participated gave up saving property to save life.
d. Life Salvage Act:
i. “Only allows salvors of life who have participated in the services rendered on the occasion of the accident giving rise to salvage, a fair share of the property salvage award.”

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Life Salvage Peninsulara. Engineer has a hear attack aboard an oil tanker that had no doctor on board.
b. A passenger vessel changes course, picks up the engineer, administers medical treatment and transports him to the hospital.
c. The plaintiff seeks reimbursement for its expenses: Doctor and fuel expenses.

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e. The court held that the plaintiff was entitled to its expenses.
i. Equitable rule: The owner of the vessel was under a duty to provide medical care for the crew. When they were unable to do so, the plaintiff undertook the duty, and therefore was entitled to reimbursement. They were not seeking a reward.

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Salvage Remedies

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1. Owner allowed to abandon saved property.
a. If the owner abandons the property, the salvor has he right to collect a salvage award is in rem, not in personam.
2. If the owner reclaims the property (i.e. accepts the benefits of salvage), the right to collect switches to in personam, but the amount of the award can’t exceed the value of the property.
6.