August 13, 1992 UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
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No. 91-1183
CONTINENTAL GRAIN COMPANY, ET AL.,
Plaintiffs, Appellants,
v.
PUERTO RICO MARITIME SHIPPING AUTHORITY, ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Selya, Circuit Judge,
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and Young,* District Judge.
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Anthony J. Pruzinsky with whom Hill, Rivkins, Loesberg, O'Brien,
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Mulroy & Hayden, Antonio M. Bird, Jr., and Bird, Bird & Hestres were
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on brief for appellants.
Nicolas Jimenez with whom Patricia Garrity and Jimenez, Grafam &
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Lausell were on brief for appellees.
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AMENDED OPINION
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*Of the District of Massachusetts, sitting by designation.
YOUNG, District Judge. This case, arising under the
YOUNG, District Judge.
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admiralty and maritime jurisdiction of the District Court for the
District of Puerto Rico, comes before this court upon appellants'
appeal from the denial of their motion for summary judgment and
the granting of appellees' cross-motion for summary judgment upon
the counterclaim asserted against them. Unless otherwise noted,
the facts are undisputed.
I. FACTS AND PRIOR PROCEEDINGS
I. FACTS AND PRIOR PROCEEDINGS
A. General Background
A. General Background
"It is . . . a small [merchant marine].
And yet there are those who love it!"1
In 1987, the entire merchant marine of Grenada consisted of
a single, small cargo vessel, the M/V ALBATROS. Built in 1952 at
Alphen Aan Den Rijn, Holland, the ALBATROS was a single screw,
steel cargo vessel of 147.69 registered tons (299.30 gross tons),
with a length of 131 feet, and a beam of 24 feet. She had a
single cargo deck below two main deck hatches arranged fore and
aft, and carried as crew a captain, a mate, an engineer, and
three deck hands. Though designed for the shipment of grain in
bulk, the ALBATROS was not equipped with shifting boards, lashing
gear, or strapping materials to secure such cargo below deck.
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1With apologies to Daniel Webster, Esq., arguing on behalf
of Dartmouth College in Trustees of Dartmouth College v.
_______________________________
Woodward, 17 U.S. (4 Wheat.) 518 (1819). This portion of
________
Webster's argument is quoted by Chauncey Goodrich in a
November 25, 1852 letter to Rufus Choate, and is believed to
be accurate. See John C. Sterling, Daniel Webster and a
___ ______________________
Small College 40-48 (1965).
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2
The Grenada Marketing National Import Board ("the Import Board"),
a public corporation created by the Government of Grenada, owned
the ALBATROS and made her available for charter commercially.
B. The Loss of the ALBATROS
B. The Loss of the ALBATROS
"It was sad,
Oh it was sad,
It was sad when the great ship
Went down . . ."2
In December, 1986, the Import Board entered into an oral
voyage charter contract with Continental Grain Company
("Continental") to carry corn and soybean meal in bulk from
Guanica, Puerto Rico, to the islands of Guadeloupe and
Martinique. Three such voyages followed without incident. On
the fourth and final voyage, Continental directed the ALBATROS to
Guanica, Puerto Rico, to load grain sold to it by its wholly
owned subsidiary, Molinos Nacionales, Inc. ("Molinos"), for
shipment to the other islands. Under its contract with
Continental, Molinos provided the stevedoring services to load
the cargo aboard the ALBATROS, subcontracting a portion of the
job to Luis Ayala Colon Successores, Inc. ("Ayala"), a Ponce
stevedoring contractor.
For this fourth voyage, the cargo of grain was stored aboard
the ALBATROS in the same manner as on the preceding three
voyages. That is, though no loading survey had been made of the
cargo and hold prior to loading, on January 12, 1987, two Molinos
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2Campfire song, The Titanic.
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3
employees operated Molinos' shore-side grain loading equipment to
move the bulk grain from Molinos' silo, along a conveyer belt,
and through a flexible hose into the ALBATROS' single cargo hold.
There it was trimmed by Ayala's men who raked it level. On the
main deck, the ALBATROS' engineer operated her single crane
amidships, apparently to assist in positioning the grain hose.
In this fashion, the ALBATROS took aboard 245.13 metric tons of
corn and 80.36 metric tons of soy bean meal, all in bulk but
separated by plastic sheeting by type of grain. Once the long-
shoremen had closed the hatches on the main deck, 998 bags of
layer and broiler premix were stowed on deck in the following
fashion: Molinos' employees brought the pallets on which the
bags were stowed to the pierside where Ayala's longshoremen
hooked them to the running tackle from the ship's crane. The
ALBATROS' engineer then raised the pallet and swung it aboard
where the Ayala longshoremen secured it on the main deck.
Although he had been absent from the vessel during the
initial stages of loading, the master of the ALBATROS, Captain
Benedict McLawrence, signed a Puerto Rico Maritime Shipping
Authority short form bill of lading as a receipt for the grain
cargo. Inspecting his vessel prior to putting to sea, Captain
McLawrence found her to be riding on an even keel and, from
reading the Plimsol marks, drawing an acceptable 8' forward and
9' aft. He did not, however, perform any stability calculations
nor did he have aboard a stability book or other documentation
from which he could have made such calculations. On the main
4
deck, the crew of the ALBATROS rigged tarpaulins over the deck
cargo and secured them to the hatches. The ALBATROS then cleared
Guanica bound for Fort-de-France, Martinique.
Two days later, the ALBATROS ran into heavy weather some
twenty miles off the coast of the island of Dominique. As the
ship labored in choppy seas and winds of thirty to forty knots,
below decks her cargo of free-flowing grain began to shift to
port. As the ALBATROS developed a portside list, the shifting of
the grain became inexorable. With the list increasing, Captain
McLawrence ordered the ALBATROS' crew to abandon ship and get her
people off. Eventually, the ALBATROS capsized and went down.
Both the cargo of grain -- and the entire merchant marine of
Grenada -- were thus totally lost.
C. Prior Proceedings
C. Prior Proceedings
"Well now they file their libels
And they cite Sir Walter Scott.
And the sailors say the French must pay;
Their counsel argues not."3
Apparently fully insured, Continental recovered the value of
its cargo from its insurer, Eagle Star Insurance Company of
America ("Eagle"). Continental, Molinos, and Eagle (collectively
"the appellants")4 then, inter alia, sued the Import Board as
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3Arthur Sutherland, The Ship Blaireau (1954). See, e.g.,
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Church v. Hubbart, 6 U.S. (2 Cranch) 187 (1804); Mason v.
______ _______ _____
The Ship Blaireau, 6 U.S. (2 Cranch) 240 (1804).
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4Eagle, having paid Continental's loss, is subrogated to its
claim and is thus the real party in interest on the
complaint. Fed. R. Civ. P. 17(a).
5
owner of the ALBATROS for the value of the lost cargo.5 In its
turn, the Import Board raised a counterclaim against Continental
and Molinos, alleging that they were liable for the value of the
ALBATROS when lost at sea. The parties having filed cross-
motions for summary judgment on the issues of liability, the
district court, in a thorough opinion, denied the appellants'
motion and dismissed their complaint but granted the Import
Board's cross-motion, thus ruling that Continental and Molinos
were liable to the Import Board for the loss of the ALBATROS.
Continental, Molinos, and Eagle bring this interlocutory appeal6
challenging both the denial of their motion for summary judgment
and the granting of the Import Board's cross-motion.
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5The original defendants also included the Puerto Rico
Maritime Shipping Authority and Puerto Rico Marine
Management, Inc., but the appellants dismissed the case as
to these entities almost at once. Ayala was added as a
defendant in the amended complaint but the district court
dismissed the complaint as to it and no appeal has been
taken therefrom. The remaining defendant, the government of
Grenada, answered the complaint along with its Import Board
and, raising no question of sovereign immunity, has defended
the case in tandem with the Import Board. Since no one
suggests the Import Board is other than a separate entity
capable of suing and being sued in its own right, and since
no ground for relief is advanced against the government of
Grenada itself, the decision of the district court dis-
missing the action against Grenada is affirmed without
further analysis.
6Pursuant to 28 U.S.C. 1292(a)(3) (1988), this Court has
appellate jurisdiction because the order of the district
court determined the rights and liabilities of the parties
to this admiralty case. See, e.g., Martha's Vineyard Scuba
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Headquarters, Inc. v. Unidentified, Wrecked and Abandoned
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Steam Vessel, 833 F.2d 1059, 1063-64 (1st Cir. 1987); St.
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Louis Shipbuilding & Steel Co. v. Petroleum Barge Co., 249
_______________________________ ____________________
F.2d 905, 907 (8th Cir. 1957).
6
II. ANALYSIS
II. ANALYSIS
At the outset, some general observations are in order
concerning the nature of our review of this appeal, and the legal
framework.
First, we note that the cross-motions for summary judgment
from which this appeal is taken were filed at the conclusion of
discovery and each motion is supported by copious evidentiary
material. There is no reason to suppose any of the parties can
adduce any additional evidence. The district judge thus had
reason to believe that, in this jury-waived case, he had before
him a full evidentiary record. His opinion is replete with
numerous "findings" which suggest that the judge drew reasonable
inferences based on the weight and persuasive character of this
evidence.
The parties, however, did not bargain for any such
innovative procedure; rather, they sought a resolution short of
trial based on their individual motions for summary judgment.7
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7As we have previously stated in Boston Five Cents Sav. Bank
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v. Secretary of the Dep't of Housing and Urban Dev., 768
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F.2d 5, 11-12 (1st Cir. 1985), there was a procedural
alternative to the filing of cross-motions for summary
judgment. The parties could have stipulated that the
district judge might decide the case based on the written
record. Unlike filing cross-motions for summary judgment,
stipulating a record for decision allows the judge to decide
any significant issues of material fact that he discovers.
Id. Thus, this procedure can result in the more efficient
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use of judicial resources. Therefore, for future guidance,
we note that a district judge, in the appropriate case, may
wish to draw counsel's attention to the availability of this
alternative procedure and the limitations of the cross-
motions for summary judgment procedure. Id. at 12.
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7
Under this procedure, the trial judge makes rulings of law --
rulings concerning whether, once all reasonable inferences are
drawn against granting summary judgment, there exists any
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"genuine issue of material fact" as to which a trial is
warranted. See, e.g., Blanchard v. Peerless Ins. Co., 958 F.2d
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483, 485 (1st Cir. 1992); Manarite, By and Through Manarite v.
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City of Springfield, 957 F.2d 953, 955 (1st Cir. 1992), petition
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for cert. filed, No. 91-8269 (May 12, 1992); Lousararian v. Royal
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Caribbean Corp., 951 F.2d 7, 10, n.4 (1st Cir. 1991); Space
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Master Int'l., Inc. v. City of Worcester, 940 F.2d 16, 17 (1st
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Cir. 1991); Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st
_______ ________________
Cir. 1990). It is because summary judgment involves rulings of
law alone that our review is plenary. See, e.g., United States
_________ _____________
v. One Parcel of Real Property, 960 F.2d 200, 204 (1st Cir.
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1992); Pedraza v. Shell Oil Co., 942 F.2d 48, 50 (1st Cir.
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1991), cert. denied, 112 S. Ct. 993 (1992). Were it otherwise,
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i.e. had the judge here been engaged in fact finding after trial,
naturally our review would be limited to the usual "clearly
erroneous" standard. See, e.g., McAllister v. United States, 348
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U.S. 19, 20 (1954); Puerto Rico Ports Auth. v. M/V Manhattan
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Prince, 897 F.2d 1, 3 (1st Cir. 1990).
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Second, although appellants claim that the record is
insufficient to determine the cause of the loss of the ALBATROS,
we agree with the district court that on this record there is no
genuine issue of material fact but that the shifting of the free-
flowing grain to port in heavy seas caused first the portside
8
list, then the progressive instability of the vessel, and
ultimately her capsizing and sinking.8
The ultimate legal question may thus be simply posed --who
is here responsible for a stow so unstable that in heavy weather
it would shift so severely as to cause the vessel to capsize?
A. The Loss of the Cargo
A. The Loss of the Cargo
As one might expect, the duty to load, stow, trim, and
ultimately discharge a vessel's cargo generally falls on the
shipowner who also bears the consequences of any failure.
Nichimen Co. v. M.V. Farland, 462 F.2d 319, 330 (2d Cir. 1972).
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The parties are free, however, to alter the general rule by their
private contract. Parties entering into charter contracts for
private carriage of goods at sea9 are free to allocate risks
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8This is fine as far as it goes, but it does not go very far. A
host of questions is suggested by the parties but not
definitively answered by the record. To pose but a few: What
role did the absence of shifting boards, lashing gear, or
strapping materials play in the loss and who, if anyone, should
have procured and used them? What space remained between the
trimmed but free-flowing grain and the deck above once the stow
was finally complete? What role did this open space play in the
loss? Should some of the bags of premix have been stored atop
the grain to have prevented its shifting? See United States v.
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Ultramar Shipping Co., Inc. 685 F. Supp. 887, 891 (S.D.N.Y.
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1987), aff'd, 854 F.2d 1315 (2d Cir. 1988). Would mathematical
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stability calculations made before the ALBATROS broke ground at
Guanica have revealed an unsafe stow? See generally D. Thomas
McCune, For Want of a Nail: Causation in Marine Insurance -- The
_________________________________________________________
Pervasive Determinant, 66 Tul. L. Rev. 393 (1991), for a
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thorough discussion of causation issues.
9The parties here do not challenge the careful analysis of
the district court concluding that the oral charter contract
in question was one for private carriage arising not out of
the bill of lading but from the communications between the
parties themselves interpreted as matter of federal law in
light of their conduct. This Court adopts that same
analysis.
9
contractually either by express contractual provision, see R.
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Glenn Bauer, Responsibilities of Owner and Charterer to Third
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Parties -- Consequences Under Time and Voyage Charters, 49 Tul.
________________________________________________________
L. Rev. 995, 1012 (1975)("Time and Voyage Charters"), or by
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allocating specific duties concerning the cargo and the voyage
with the result that "the responsibility for cargo loss falls on
the [party] who agreed to perform the duty involved." Nissho-
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Iwai Co., Ltd. v. M/T Stolt Lion, 617 F.2d 907, 914 (2d Cir.
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1980).
Here it is undisputed that Molinos and Ayala, the stevedore
it hired, actually stowed and trimmed the cargo of grain aboard
the ALBATROS. What's more, Molinos sold the grain to Continental
under terms which provided "FOB stowed & trimmed Guanica" --
terms which obligated Molinos to see to it that the grain was
stowed and trimmed aboard the ALBATROS at no cost to Continental.
Molinos is not a party to the oral voyage charter between
Continental and the Import Board, however, and the terms of that
contract are undeniably disputed. While Jose Martinez, a general
agent for the Import Board, insists that Continental agreed to
terms which provided "free-in-and-out-stowed-and-trimmed"
("FIOST"), Victor Swierad, Continental's agent in these
negotiations, has a different version. Swierad was asked during
his deposition, "Was anything said about who was to load and who
was to unload?" He responded, "The thing is done on an FIO
basis, free in and out. That means that the vessel owner does
not pay for loading or discharging costs." Appendix for
10
Plaintiffs-Appellants, Swierad Deposition at 26a, 27a. Swierad
backs up this deposition answer with an affidavit stating:
It was my understanding that the terms of this
agreement were, quite simply, 'free in and out'
(FIO). In any event, the entire sense of our
agreement was that all expenses relating to
loading and unloading the cargo would be for the
account of Continental Grain Company as charterer.
. . . Mr. Martinez and I never discussed the
allocation of risk in loading and unloading
operations . . .
Appendix for Plaintiffs-Appellants, Swierad Affidavit, 3-
4.
The legal distinction between these versions is
crucial. Martinez recalls agreement by Continental to FIOST
terms while Swierad recalls only FIO terms, yet all parties
agree with the legal analysis of the district court that,
while both these common commercial voyage charter terms
require the charterer to pay for loading and unloading,
FIOST imposes the responsibility for and risks of stowage
upon the charterer while FIO terms do not. See generally
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Braden Vandeventer, Analysis of Basic Provisions of Voyage
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and Time Charter Parties, 49 Tul. L. Rev. 806, 815 (1975)
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(pointing out that, in grain charters, the charter terms
frequently place the risks of proper trim on the charterer).
As noted, the requisite standard for allowing summary
judgment mirrors that invoked when considering whether to
grant a directed verdict, see Anderson v. Liberty Lobby,
___ ________ ______________
Inc., 477 U.S. 242, 250-51 (1986), and mandates that all
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reasonable inferences be drawn in favor of the party
11
opposing the grant of summary judgment. See, e.g., One
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Parcel of Real Property, 960 F.2d at 204; Blanchard, 958
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F.2d at 491; Manarite, 957 F.2d at 955. Summary judgment is
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proper only if "there can be but one reasonable conclusion
as to the verdict," Liberty Lobby, 477 U.S. at 250, and the
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evidence is "so one-sided that one party must prevail as a
matter of law." Id. at 251-52. Summary judgment is
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improper wherever a "reasonable jury could return a verdict
for the non-moving party." Id. at 248. Such is the case
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here.
Whatever the indications from the surrounding facts and
circumstances that Molinos and the stevedore of its
selection actually loaded, stowed, and trimmed the grain
aboard the ALBATROS pursuant to its contract with
Continental -- and the reasonable if not compelling
inference that FIOST terms were operating as between
Continental and the Import Board -- the evidence from
Swierad and the reasonable inferences that might be drawn
from it bar the entry of summary judgment for the Import
Board on the ground that it was contractually relieved of
its general responsibility for stowage of the cargo. We are
constrained to reverse the district judge on this point.
Having successfully warded off the imposition of
summary judgment against them, the appellants go over to the
offensive, advancing a series of arguments which, they say,
12
mandated judgment on their behalf whatever the resolution of
the FIOST-FIO contractual issue.
Appellants claim that the ALBATROS sailed in violation
of Coast Guard safety regulations and the International
Convention for Safety Of Life At Sea, June 17, 1960, 16
U.S.T. 185, T.I.A.S. No. 5780, reprinted in 6B Benedict on
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Admiralty, doc. 14-1 (Michael M. Cohen et al eds., 7th ed.
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1991) ("SOLAS 1960").10 These alleged violations, they
argue, constitute negligence per se and, under the doctrine
of The Pennsylvania, 86 U.S. (19 Wall.) 125 (1873), shift to
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the Import Board the burden of proving the lack of a causal
connection between the violations and the loss of the
ALBATROS and her cargo. Since the record is devoid of
undisputed evidence establishing such an analytic gap, the
appellants claim summary judgment on their behalf. The
district court rejected these contentions, holding that the
ALBATROS was not subject to the requirements of either SOLAS
or the Coast Guard regulations.
We agree with the district court's holding that the
ALBATROS was not directly bound by the SOLAS Convention.
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Grenada is not a signatory to either the 1960 or 1974 SOLAS
Convention. See 6B Benedict on Admiralty, docs. 14-1 at 14-
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10Appellants' argument does not refer to the more recent Safety
of Life at Sea Convention of 1974, 32 U.S.T. 47, T.I.A.S. No.
9700, reprinted in 6B Benedict on Admiralty, doc. 14-8, which
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supplanted SOLAS 1960. This distinction, however, is of no
import because, with respect to those provisions relevant here,
SOLAS of 1974 is the same as SOLAS of 1960.
13
13 to 14-35, 14-8 at 14-451 to 14-458.1 (listing nations
which have ratified SOLAS of 1960 or SOLAS of 1974).
Article II of SOLAS of 1974 provides:
Application
The present convention shall apply to ships
entitled to fly the flag of States the Governments
of which are Contracting Governments.
Id. doc. 14-8 at 14-50. Courts uniformly interpret the
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SOLAS Convention as applying only to signatories. See,
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e.g., Alkmeon Naviera, S.A. v. M/V Marina L, 633 F.2d 789,
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793-94 (9th Cir. 1980); United States v. Ultramar Shipping
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Co., Inc., 685 F. Supp. 887, 891 (S.D.N.Y. 1987). Cf.
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Complaint of Ta Chi Navigation (Panama) Corp., S.A., 574 F.
___________________________________________________
Supp. 418, 428-29, nn.8-9 (S.D.N.Y 1983). Strictly
speaking, then, the SOLAS Convention does not apply to the
ALBATROS, a vessel flying the flag of Grenada.11
We disagree, however, with the district court's
interpretation of the admittedly complex Coast Guard regula-
tions for bulk grain carriers. We hold that these
regulations do apply to the ALBATROS and hence we reverse
the district court on this issue.
The United States shipping regulations in force in
January, 1987, are found in Title 46 of the Code of Federal
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11This is not to suggest, however, that some or all of the grain-
carrying provisions of SOLAS may not be rendered applicable to
the ALBATROS by express provision of the Coast Guard regulations.
We believe 46 C.F.R. 93.20-05 (1986) has precisely this effect.
See pages 16 - 24, infra.
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14
Regulations. See 46 C.F.R. 1-587.9 (1986).12 Chapter
___
I thereof sets forth the Coast Guard, Department of
Transportation Safety Regulations. 46 C.F.R. 1-197.488.
Subchapter I in its turn details the safety regulations
applicable to cargo and miscellaneous vessels. 46 C.F.R.
90-106.1101. This subchapter is comprised of twelve parts,
including Part 93, entitled "Stability," which sets forth
regulations governing the stability of cargo and marine
vessels. Most relevant to our inquiry here, subpart 93.20,
entitled "Bulk Grain Cargoes," lays out the provisions
governing vessels carrying bulk grain cargoes.
There are two key provisions within subchapter I which
indicate that subpart 93.20 applies to the ALBATROS. Part
90, the first part of subchapter I, sets forth the general
provisions applicable throughout subchapter I. 46 C.F.R.
90.01-90.35. With certain exceptions not relevant here,
section 90.05-1, entitled "Vessels subject to requirements
of this subchapter," provides that the safety regulations in
subchapter I apply to "all United States flag vessels
indicated in Column 5 of [the accompanying] Table 90-05-1(a)
and to all such foreign vessels which carry 12 or less
passengers from any port in the United States[.]" 46 C.F.R.
90.05-1(a). In addition, with certain exceptions not
relevant here, section 93.20-01, entitled "Application,"
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12The provisions of 46 C.F.R. 1-588.8 (1991), the shipping
regulations now in effect, are in all relevant respects identical
to the regulations effective in January, 1987.
15
provides that all provisions of subpart 93.20 "apply to all
vessels that load grain in bulk after September 19, 1975[.]"
46 C.F.R. 93.20-01.
It is undisputed that the ALBATROS was a foreign vessel
carrying fewer than 12 passengers. Thus, under section
90.05-1, all parts of subchapter I, including Part 93, apply
to the ALBATROS. See Bach v. Trident Shipping Co., 708 F.
___ ____ ____________________
Supp. 776, 779 n.9 (E.D.La. 1989) (pursuant to 46 C.F.R.
90.05-1[a], a regulation in subchapter I applies to a
foreign bulk cargo vessel flying the flag of the Cayman
Islands, a nation not a signatory of SOLAS), aff'd, 920 F.2d
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322 (5th Cir.), vacated on other grounds, 111 S. Ct. 2253
_________________________
(1991). It is also undisputed that the ALBATROS was loading
grain in bulk on its last voyage in January, 1987. Thus,
under section 93.20-01, the provisions in subpart 93.20
governing bulk grain cargoes apply to the ALBATROS.
The Import Board makes two arguments against this
interpretation of the regulations. First, it argues that a
correct reading of the enabling legislation for these regu-
lations indicates that Congress had no intention to subject
small foreign freight vessels like the ALBATROS to these
regulations. Second, it contends that the language in
section 90.05-1(a) was intended to cover foreign vessels
carrying one to twelve passengers, not freight vessels
carrying no passengers. Under this interpretation,
subchapter I would not apply to the ALBATROS which carried
16
no passengers. Brief for Appellees at 20-21. In our view,
however, a careful examination of the enabling legislation
refutes these arguments.
The authority for the regulations in Subchapter I, in-
cluding 46 C.F.R. 90.05-1, is found in Chapter 33 of Title
46 of the U.S. Code, entitled "Inspection Generally," 46
U.S.C. 3301-3318 (1988). These statutory provisions are
in all relevant respects identical to those in effect in
January, 1987. More specifically, 46 U.S.C. 3306(a)
provides that "to secure the safety of individuals and
property on board vessels subject to inspection, the
Secretary [of Transportation] shall prescribe [the]
necessary regulations" governing inter alia the operation of
_____ ____
those vessels subject to inspection. The Import Board con-
tends, however, that an examination of the related statutory
provisions regarding vessel inspection, 46 U.S.C. 3301-
3318, "reveals that nowhere is it expressly provided that a
cargo vessel of foreign registry, such as the ALBATROS is
subject to inspection" (sic). Brief for Appellees at 15.
Therefore, the Import Board argues, the regulations do not
apply to the ALBATROS because the ALBATROS did not
constitute a vessel "subject to inspection." Id.
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It is true that the relevant statutory provisions do
not expressly state that foreign vessels are subject to
_______
inspection. Even so, our reading of the provisions of
Chapter 33 taken as a whole convinces us that Congress
17
intended foreign freight vessels such as the ALBATROS would
be subject to inspection. Section 3301 of Chapter 46 lists
"freight vessels" as one of the twelve categories of vessels
subject to inspection under Chapter 33. Section 3302 sets
forth a number of exemptions from the twelve categories, but
does not exempt foreign vessels. Section 3303, entitled
"Reciprocity for foreign vessels," provides in essence that
a foreign vessel is subject only to a more limited
inspection than the full inspection provided for under
Chapter 33 where the foreign vessel is of a country which is
a signatory of SOLAS, the vessel possesses an unexpired
inspection certificate from that country, and that country's
laws accord the same privilege to vessels of the United
States. 46 U.S.C. 3303(a). In addition, 46 U.S.C.
3303(b) provides that the United States will charge foreign
vessels carrying passengers from the United States the same
amount in inspection fees as the foreign vessel's country
charges United States vessels. If foreign vessels were not
subject to inspection under 46 U.S.C. 3301, it is unclear
why Congress would include the provisions in section 3303.
Furthermore, it should be stressed that the purpose of these
inspection provisions is "to secure the safety of
individuals and property on board vessels subject to
inspection." 46 U.S.C. 3306. The Import Board does not
question the intent of Congress to assure the inspection of
foreign passenger vessels even though 46 U.S.C. 3301
_________
18
expressly provides only for the inspection of "passenger
vessels" with no explicit mention of foreign passenger
vessels. Given the express legislative purpose of
safeguarding property as well as individuals, we conclude
that Congress intended to provide for the inspection of
foreign freight vessels such as the ALBATROS. Therefore, we
read 46 C.F.R 90.05-1 as applying to foreign freight
vessels carrying no passengers, such as the ALBATROS, and
not only to foreign vessels carrying from one to twelve
passengers.
The district court, citing 46 C.F.R. 90.05-10,
entitled "Application to vessels on an international
voyage," held that 46 C.F.R. 93.20 did not apply to the
ALBATROS. Section 90.05-10(a) provides in pertinent part
that "the regulations in this subchapter [I] that apply to a
vessel on an 'international voyage' apply to a vessel that .
. . [i]s mechanically propelled and of at least 500 gross
tons[.]" The district court thus concluded that subchapter
I did not apply to the ALBATROS, a vessel weighing far less
than 500 gross tons.
Section 90.05-10, however, can properly be interpreted
only when read in conjunction and in harmony with other
relevant sections of the regulations. Most important in
this regard is 46 C.F.R. 2.01-8 (1986), entitled "Applica-
tion of regulations to vessels or tankships on an inter-
national voyage." Section 2.01-8 is the general umbrella
19
provision governing the applicability of all Chapter I regu-
lations, including the subchapter I regulations for cargo
_________
and miscellaneous vessels. Section 2.01-8 provides as
follows:
(a) Where, in various places or portions of this
chapter, requirements are stipulated specifically
for "vessels on an international voyage" or
"tankships on an international voyage," it is
intended that these requirements apply only to
vessels or tankships, as applicable, which are
subject to the International Convention for Safety
of Life at Sea, 1960.
(b) For details regarding application of
Convention requirements to tankships, see 30.01-
6 of this chapter; to passenger vessels, see
70.05-10 of this chapter; to cargo ships other
than tankships, see 90.05-10 of this chapter;
and to small passenger vessels, see 176.35-1 of
this chapter.
This section indicates that where other provisions of
Chapter I, including section 90.05-10, refer to "vessels on
an international voyage," these provisions are referring
only to those vessels subject to SOLAS, not to all foreign
vessels making international trips. It is undisputed that
the ALBATROS was not subject to SOLAS. Therefore the
ALBATROS was not a "vessel on an international voyage."
The fact that the words "international voyage" are
placed in quotation marks in 46 C.F.R. 90.05-10 further
underscores that this section only applies to those
individual regulations in subchapter I which specifically
__________
refer to "vessels on an international voyage." In fact, we
count thirty separate provisions within subchapter I which
specifically refer to "vessels on an international voyage."
20
See, e.g., 46 C.F.R. 90.10-29, 91.01-25, 91.60-5, 94.10-
_________
5, 94.10-10, 95.10-15, 95.15-5. None of the provisions in
46 C.F.R. 93.20, however, makes any such express reference
to "vessels on an international voyage." Thus, we are
constrained to reverse the district court's ruling that 46
C.F.R. 90.05-10 rendered the subpart 93.20 bulk grain
loading regulations inapplicable to foreign vessels such as
the ALBATROS which weighed less than 500 gross tons.13
____________________
13We find further support for our interpretation of the
applicability of the regulations in the 1976 edition of General
_______
Information for Grain Loading, a manual prepared by the National
______________________________
Cargo Bureau, Inc. and endorsed by the United States Coast Guard,
reprinted in Appendix for Plaintiffs-Appellants at 299a-306a,
396a-398a. This manual provides guidance to shipowners,
operators, masters, and others "for compliance with the various
national and international regulations relative to the stowage
and carriage of bulk grain." Appendix for Plaintiffs-Appellants
at 299a. This manual is entitled to some weight because of the
Coast Guard's endorsement and because the National Cargo Bureau,
Inc. issues the documents of authorization and certificates of
loading as required by the bulk grain cargo regulations, 46
C.F.R. 93.20-10 and 93.20-15.
The Preface to the 1976 edition of the manual indicates that
46 C.F.R. 93.20-05 applies to foreign vessels not subject to
SOLAS which load grain in bulk:
The acceptance of loading arrangements based
upon the 1960 Convention shall, in the case of
foreign vessels, be limited to vessels belonging
to countries which have formally accepted the 1960
SOLAS Convention . . . with respect to grain
stowage arrangements. Such foreign vessels are
required to be provided with the stability and
grain loading information prescribed by the 1960
Convention . . . and approved by the country of
registry. All foreign vessels not meeting these
_______________________________________
conditions are required to be loaded in compliance
__________________________________________________
with Title 46 CFR 93.20-05. In such cases
__________________________________________________
reference should be made to IMCO Resolution
__________________________________________________
A.264(VIII), Section V, Part C, (Vessels Without
__________________________________________________
Documents of Authorization).
___________________________
21
Having determined that the Subpart 93.20 regulations
apply to the ALBATROS, we now turn to an examination of what
these regulations required and whether it is undisputed that
the ALBATROS violated any of these requirements. The pro-
visions of Subpart 93.20 dealing with documents of
authorization, certificates of loading, and their absence
are germane in the present circumstances.14
____________________
Appendix for Plaintiffs-Appellants at 396a (emphasis added).
14These provisions state:
93.20-05 General.
(a) Each cargo vessel or barge that carries
grain in bulk must comply with the Annex to Inter-
national Maritime Organization (IMO, formerly
Inter-Governmental Maritime Consultative Organi-
zation or IMCO) Resolution A.264 (VIII). . . .
(b) Notwithstanding the provisions of 46 CFR
56.50-50, bilges must be properly prepared and
sounding pipes in place, clear and operable. If
bilges are not present, suctions must be boxed.
(c) When calculating the minimum required
metacentric height (GM), a free surface allowance
must be made for slack liquids. The free surface
allowance used must be equal to or greater than
the free surface allowance for the following
combination of tanks:
(1) The maximum free surface for the pair of
tanks, port and starboard, of each type of consum-
able liquid, having the largest free surface.
(2) The maximum free surface of the fuel oil
settlers.
(3) The free surface at 5 degrees heel for
all fuel tanks assumed 98% full except for the
pair considered in paragraph (c)(1) of this
section.
93.20-10 Document of authorization.
(a) Before it can load grain, each vessel
that carries grain in bulk must have a document of
22
It is undisputed that the ALBATROS did not have and did
not obtain either a document of authorization in accordance
with Regulation 10, Part A of the Annex to International
Maritime Organization Resolution A.264 (VIII) ("the
Annex"),15 as required by section 93.20-10, or a
certificate of loading as required by section 93.20-15.
____________________
authorization issued in accordance with one of the
following:
(1) If the document of authorization is
issued on or after September 19, 1975, Regulation
10, Part A of the Annex to IMO Resolution A.264
(VIII).
(2) If the document of authorization is
issued before September 19, 1975, . . . .
(b) The Commandant recognizes the National
Cargo Bureau, Inc., . . . for the purpose of
issuing documents of authorization in accordance
with paragraph (a)(1) of this section.
93.20-15 Certificate of loading.
.
(a) Before it can sail, each vessel that
carries grain in bulk must have a certificate of
loading issued by an organization recognized by
the Commandant for that purpose. The certificate
of loading may be accepted as prima facie evidence
of compliance with these regulations.
(b) The Commandant recognizes the National
Cargo Bureau, Inc., . . . for the purpose of
issuing certificates of loading.
15See Annex to Resolution A.264 (VIII) of the International
___
Maritime Organization (IMO, formerly Inter-Governmental Maritime
Consultative Organization), Part A, Regulation 10, November 20,
1973, reprinted in U.S. Coast Guard, Navigation and Inspection
_____________ __________________________
Circular No. 3-75 4 (August 20, 1975) ("Circular 3-75").
_________________ _____________
For citation purposes, when referring to specific provisions
of the Annex, we will cite directly to U.S. Coast Guard, Circular
________
No. 3-75. We note, however, that the Annex has been adopted in
________
all relevant respects by the International Convention for Safety
of Life at Sea [SOLAS] 1974, November 1, 1974, 32 U.S.T. 47,
T.I.A.S. No. 9700, which is reprinted in 6B Benedict on Admiralty
_____________________
at doc. 14-18.
23
More importantly for our purposes, it also is undisputed
that, contrary to section 93.20-05(a), the vessel did not
comply with Part B, section V(C) of the Annex, entitled
"Ships Without Documents of Authorization," U.S. Coast
Guard, Circular No. 3-75 at 13. Part B, section V(C) sets
__________________
forth the requirements with which a vessel must comply in
order to load bulk grain if, like the ALBATROS, it does not
have documents of authorization issued in accordance with
Regulations 4 and 10 of Part A of the Annex. Pursuant to
section V(C), the ALBATROS was required to secure the grain
by use of strapping, lashing, or other cargo laid on top of
the grain.16 Therefore, we hold that, at a minimum, the
Import Board violated the requirements of 46 C.F.R.
93.20-05, -10, and -15.17
____________________
16More precisely, section V(C)(c) of Part B provides that "[a]ll
free grain surfaces in 'partly filled compartments' shall be
trimmed level and secured in accordance with Section II of Part
C." U.S. Coast Guard, Circular No. 3-75 at 13. Section II of
_________________
Part C, entitled "Securing of Partly Filled Compartments,"
details three ways of securing grain in partly filled
compartments: by the use of strapping or lashing; by the use of
bagged grain or other suitable cargo placed on a separation cloth
or a suitable platform on top of the grain; or by bagging the
grain itself. Id. at 19-20. It is undisputed that the free-
___
flowing grain did not entirely fill the hold and that none of the
three permitted techniques were used to secure the grain. See
___
McLawrence Deposition, reprinted in Appendix for Plaintiffs-
_____________
Appellants at 118a-119a; Stewe Deposition, reprinted in Appendix
____________
for Plaintiffs-Appellants at 211a.
17Appellants also claim that the Import Board violated the regu-
lations in numerous other ways. Having ruled that the shipping
regulations are applicable, however, we need not extend this
opinion inasmuch as there must be further proceedings in the
district court.
24
We next must consider the legal implications of these
regulatory violations. Appellants assert that such
violations of federal regulations in admiralty constitute
negligence per se and trigger the application of the so-
called Pennsylvania Rule. This rule, as first established
by the Supreme Court in The Pennsylvania, 86 U.S. (19 Wall.)
________________
125 (1873), holds that:
The liability for damages is upon the ship or
ships whose fault caused the injury. But when, as
in this case, a ship at the time of a collision is
in actual violation of a statutory rule intended
to prevent collisions, it is no more than a
reasonable presumption that the fault, if not the
sole cause, was at least a contributory cause of
the disaster. In such a case the burden rests
upon the ship of showing not merely that her fault
might not have been one of the causes, or that it
probably was not, but that it could not have been.
Such a rule is necessary to enforce obedience to
the mandate of the statute.
Id. at 136. This rule does not establish fault. It serves
___
solely to shift the burden of proof on the issue of
causation once a claimant has established that a vessel has
violated a statute or regulation. See Thomas J. Schoenbaum,
___
Admiralty and Maritime Law 13-2, at 452 (1987); Grant
___________________________
Gilmore & Charles L. Black, Jr., The Law of Admiralty 7-5,
____________________
at 494 (2d ed. 1975). Furthermore, it does not shield the
claimant from liability for contributory fault. See
___
Schoenbaum, Admiralty and Maritime Law 13-2, at 453.
__________________________
While the Pennsylvania Rule was created in a collision
case and is applied most commonly in such cases, courts also
have applied it in cases involving allisions, collisions
25
between a vessel and a stationary object, and vessel
strandings. See id.; see also Commonwealth of Puerto Rico
___ ___ ________ ____________________________
v. SS Zoe Colocotroni, 456 F. Supp. 1327, 1335 n.20 (D.P.R.
__________________
1978) ("The Pennsylvania Rule, although originally developed
in connection with collision law, is applicable to
strandings."), aff'd in relevant part, 628 F.2d 652 (1st
_______________________
Cir. 1980), cert. denied, 450 U.S. 912 (1981). Thus, in SS
____________ __
Zoe Colocotroni, where an oil tanker which ran aground was
_______________
in violation of regulations governing navigational
equipment, the court, applying the Pennsylvania Rule,
employed "a presumption . . . that these violations were a
contributory cause of the disaster." SS Zoe Colocotroni,
___________________
456 F. Supp. at 1335. Given the policy underlying the rule,
that is to assure strict compliance with rules pertaining to
the safe operation of ships, we see no reason why the rule
should not apply to the capsizing and sinking of a vessel as
well as to a stranding.
Applying the Pennsylvania Rule, the Import Board has
the burden of proving that its regulatory violations -- most
importantly its failure to comply with 46 C.F.R. 93.20-05
which was intended inter alia to assure that bulk grain
_____ ____
stored in partially filled compartments is held securely --
could not have been one of the causes of the sinking of the
ALBATROS. Given the undisputed fact that it was the
shifting of the free-flowing grain which caused the ALBATROS
to sink, see pages 8-9, supra, the Import Board fails on the
___ _____
26
record before us to meet its burden of proving the lack of a
causal connection.
Whether the Import Board is liable because of the
application of the Pennsylvania Rule, and, if so, to what
extent, hinges on the resolution of the FIO-FIOST issue. If
it is determined that the charter party contract establishes
FIOST terms, then Continental may have assumed all of the
responsibility for and risk of stowage, thereby precluding
any recovery from the ALBATROS for its statutory fault.
Thus, if on remand FIOST terms are found to apply, the
district court must then determine whether cargo damages
should be apportioned based on relative fault or borne
solely by Continental. On the other hand, if FIO terms are
found to apply, then the Import Board is fully liable for
the cargo loss, because of its regulatory violations.
Even without the aid of the burden-shifting rule of The
___
Pennsylvania, however, the appellants argue that the un-
____________
disputed record here so overwhelmingly indicates that the
ALBATROS was unseaworthy at the time she set sail that, con-
trary to the ruling of the district judge, Eagle is entitled
as matter of law to summary judgment against the Import
Board for the value of the lost cargo. At first blush, this
is a somewhat surprising argument since Eagle is subrogated
to the rights of Continental and Continental -- should FIOST
terms ultimately be found to control -- has undoubtedly
breached its contract with the Import Board.
27
It may well be, however, that wholly apart from the
terms of the charter party contract, the ALBATROS, loaded as
she was and in violation of the bulk grain regulations, was
unseaworthy when she broke ground at Guanica. See, e.g.,
__________
Oxford Paper Co. v. The Nidarholm, 282 U.S. 681, 684
_________________ ______________
(1931); Olsen v. United States Shipping Co., 213 F. 18, 20-
_____ __________________________
21 (2d Cir. 1914). Even if she were unseaworthy, however, a
trial remains necessary in order to ascertain the terms of
the charter party contract. If FIOST terms controlled and
obligated Continental to stow and trim, but its breach in
that regard went uncorrected, and the ALBATROS sailed from
Guanica in an unseaworthy condition, then the district court
may see fit to apportion the damages.
Courts have held that "[w]here the charterer has as-
sumed responsibility for stowage, however, and cargo damage
is caused equally by unseaworthiness and bad stowage, the
loss is divided." 2B Benedict on Admiralty 4, at 1-29 to
_____________________
1-30; see also, Oxford Paper Co., 282 U.S. 681 (dividing
_________ _________________
damage to cargo between charterer and shipowner); Coca Cola
_________
Co. v. S.S. Norholt, 333 F. Supp. 946, 950-51 (S.D.N.Y.
___ _____________
1971) (same); Gator Marine Serv. Towing, Inc. v. J. Ray
__________________________________ ______
McDermott & Co., 651 F.2d 1096, 1100 (5th Cir. 1981)
_________________
(apportioning damages to cargo between stevedore and
shipowner based on comparative negligence); Selcamerica,
____________
Inc. v. S.S. Barberbrook, 390 F. Supp. 462, 467-69 (S.D.N.Y.
____ ________________
1975) (apportioning damage to cargo between charterer and
28
shipowner based on comparative negligence); Schoenbaum,
Admiralty and Maritime Law 10-12, at 403-04 ("In an
____________________________
appropriate case, damages may be apportioned between the
parties."). But see Olsen, 213 F. 18, 20-21 (where
________ _____
charterer improperly stowed lumber on ship's deck rendering
ship unstable and ship's master permitted vessel to sail in
that condition thereby necessitating the subsequent jettison
of some of the lumber, shipowner was held liable for the
cargo loss without consideration of apportionment); see also
Bauer, Time and Voyage Charters, at 1010, which concludes
__________________________
that "it is by no means clear that [these apportionment]
cases . . . are correct." Bauer argues that in a dispute
between a charterer and a shipowner, the duty of the
charterer is contractual and ought not be conflated with the
tort doctrine applicable to joint tortfeasors. Bauer
suggests that, in charterer-shipowner disputes, the claimant
must show how much of the damages was caused otherwise than
by the breach of contract before any apportionment is
appropriate. Id. (citing Government of Ceylon v. Chandris,
___ ____________________ ________
2 Lloyd's List L. Rep. 204 [Q.B.] [1965]).
We draw out this analysis no further, however, since
the district court must first determine whether, as a con-
tractual matter, Continental had any duty whatsoever to stow
the grain aboard the ALBATROS and, even if it did, whether,
and to what extent, the seaworthiness vel non of the
___ ___
29
ALBATROS ought figure in any apportionment of the damages
for the loss of the cargo.
B. The Loss of the ALBATROS
B. The Loss of the ALBATROS
Balked at obtaining summary judgment on their claim for
reimbursement for the loss of the cargo, the appellants
nevertheless press their contention that, in any event,
Continental and Molinos cannot be considered liable for the
loss of the ALBATROS. In this, they fare somewhat better.
1. The contract claim against Continental. Continental
1. The contract claim against Continental.
_________________________________________
argues that even if the factual dispute over the nature of
the terms of the oral charter party contract were to be
resolved against it and the terms were held to be FIOST,
nevertheless Continental's breach of that contract, if any,
forms no legal basis for the imposition of liability upon
Continental for the loss of the ALBATROS. We agree.
Contract liability is a species of liability without
fault and we have been cited no case -- nor have we found
any -- where the mere failure to perform under the terms of
a standard FIOST commercial shipping contract has exposed
the shipper to contractual liability for the loss of the
vessel. Nor is this surprising. Grain has been shipped at
sea for thousands of years.18 It is not an inherently
____________________
18The carriage of grain by ship was central to the political
economy and military strategy of ancient Rome. See, e.g.,
_________
Arthur D. Kahn, The Education of Julius Caesar: A Biography, A
________________________________________________
Reconstruction 26, 82, 116, 238 (1986); Colin Thubron, The
______________ ___
Ancient Mariners 138, 149, 152-53 (1981); Julius Caesar, The
_________________ ___
Battle for Gaul 84 (Anne Wiseman & Peter Wiseman trans., 1980);
_______________
Henry B. Culver & Gordon Grant, The Book of Old Ships 48-50
_______________________
(1924). See also Emil Ludwig, Cleopatra: The Story of a Queen 53
________ _______________________________
30
dangerous cargo and its characteristics are well known.
While a shipper and shipowner may theoretically have the
freedom to contract that the shipper bears all the perils of
the sea and a fortiori the more limited risks to the ship
_ ________
that stem from a shift in the stow, this risk is
traditionally that of the shipowner who sends the vessel to
sea. We rule that the standard FIOST grain shipment con-
tract does not impose upon the shipper any contractual lia-
bility for the loss of the vessel, even when that loss
results from a shift in the stow. A contrary rule would
strikingly dilute the general obligation of the shipowner to
provide a seaworthy ship -- an obligation which, at least as
to the charterer, cannot be delegated save by express
provision. See Schoenbaum, Admiralty and Maritime Law 4-5
___ __________________________
at 134; Gilmore & Black, The Law of Admiralty 4-5 at 209;
_____________________
see also Oxford Paper Co., 282 U.S. at 684.
________ ________________
2. The claimed breach of warranty by Molinos. Under Ryan
2. The claimed breach of warranty by Molinos.
___________________________________________ ____
Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350
_____________________ _____________________________
U.S. 124, 132-34 (1956), a stevedore owes to a shipowner a
warranty of workmanlike service comparable to a manu-
facturer's warranty of workmanlike service that is of the
essence of the stevedoring contract. Ruling that Molinos
had breached this warranty by improperly stowing grain
aboard the ALBATROS, the district court held Molinos liable
____________________
(1937) ("Ninety Egyptian ships were burned at the foot of the
Pharos, grain-ships among them.").
31
for her loss. Molinos, supported by somewhat more recent
authority in other circuits, argues that breach of the
stevedore's warranty only creates liability for personal
injury and not for damage to property such as the sinking of
the ALBATROS.19 See, e.g., Phillips Petroleum Co. v.
__________ ________________________
Stokes Oil Co. Inc., 863 F.2d 1250, 1255-57 (6th Cir.
_______________________
1988); Bosnor, S.A. de C.V. v. Tug L.A. Barrios, 796 F.2d
____________________ _________________
776, 784-86 (5th Cir. 1986).
We agree with the circuits which have most recently
considered the issue. A shipowner owes a nondelegable duty
of providing a seaworthy ship to her crew. Like a contract
duty, this duty gives rise to liability wholly without
fault. See Usner v. Luckenbach Overseas Corp., 400 U.S.
___ _____ __________________________
494, 498 (1971); see also Schoenbaum, Admiralty and Maritime
________ ______________________
Law 4-5 at 134. Even though unseaworthiness may arise
___
from a "temporary and unforeseeable malfunction or failure
____________________
19On the undisputed facts of record here, it requires
drawing some factual inferences to conclude that Molinos --
and not solely Ayala, the stevedoring contractor -- held
itself out as an expert and professional stevedore and had
that degree of control over the loading operation which
gives rise to the warranty. See, e.g., Italia Societa per
_________ ___________________
Azioni di Navigazione v. Oregon Stevedoring Co., Inc., 376
______________________ _____________________________
U.S. 315, 322-24 (1964); Drago v. A/S Inger, 194 F. Supp.
_____ _________
398, 410-11 (E.D.N.Y. 1961), aff'd, 305 F.2d 139 (2d Cir.),
_____
cert. denied, 371 U.S. 925 (1962). Since, in the summary
_____________
judgment context, the inferences must be drawn against each
of the moving parties in turn, see Space Master Int'l., Inc.
___ _________________________
v. City of Worcester, 940 F.2d 16, 17 (1st Cir. 1991),
__________________
granting summary judgment on this ground would appear
improper. In light of our view of the legal limitations on
the reach of the stevedore's warranty of workmanlike
service, however, it is immaterial what conclusions are
drawn as to Molinos' status and we do not pursue the point.
32
of . . . equipment," a shipowner is nevertheless liable.
Hubbard v. Faros Fisheries, Inc., 626 F.2d 196, 199 (1st
_______ ______________________
Cir. 1980) (citing Usner, 400 U.S. at 499). In 1956, when
_____
the Supreme Court decided Ryan, this nondelegable duty to
____
provide a seaworthy ship extended to the longshoremen
working aboard her. See Ryan, 350 U.S. at 127 n.2. Ryan
___ ____ ____
itself, of course, imposed warranty liability on a stevedore
contractor to indemnify a shipowner against liability for
causing personal injury to a longshoreman. Thus, where the
shipowner was rendered liable to a longshoreman not because
of some failure of the ship or its tackle but rather because
the incompetence of the stevedore contractor rendered the
ship unseaworthy, the Ryan rule insured substantial justice
____
by requiring the stevedoring contractor to indemnify the
shipowner for the liability it had caused that shipowner.
See Hobart v. Sohio Petroleum Co., Inc., 445 F.2d 435, 439
___ ______ __________________________
(5th Cir.) (citing Italia Societa, 376 U.S. 315), cert.
_______________ _____
denied, 404 U.S. 942 (1971).
______
The Longshore and Harbor Workers' Compensation Act
Amendments of 1972, Pub. L. No. 92-576, 86 Stat. 1251
(codified as amended at 33 U.S.C 901-50 [1986]), changed
this arrangement, legislatively limiting the liability of
the shipowner to responsibility for its own negligence. See
___
Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1212 (5th
________ ___________________
Cir. 1986). The earlier tripartite scheme of compensation
without fault, viz. the longshoreman sues the shipowner for
33
providing an unseaworthy ship and the shipowner in its turn
impleads the stevedoring contractor for breach of the
warranty of workmanlike service -- and likewise the Ryan
____
decision, the centerpiece of this arrangement -- became
outmoded and the Ryan decision is today little cited. See
____ ___
id. (referring to Ryan doctrine as "withered" doctrine); see
___ ____ ___
also Gator Marine Serv., 651 F.2d at 1100.
____ __________________
Against this background, we deem it improvident to
apply the warranty liability created by Ryan to property
____
damage claims against stevedoring contractors, at least in
the undisputed circumstances of this case where the parties
are sophisticated corporate entities whose very business
purpose is to interact in these very seafaring premises.
Such parties can best allocate risks as between themselves
either by private contract or by the custom and usage of the
trade. Cf. Hanover Ins. Co. v. Puerto Rico Lighterage Co.,
___ ________________ __________________________
553 F.2d 728, 730 & n.3 (1st Cir. 1977) (declining to apply
strict liability warranty doctrine to towage accidents
because, unlike in personal injury cases, neither party
resembles "the poor friendless sailor who is the traditional
ward of the admiralty court"). Accordingly, we rule that
Molinos is not liable to the Import Board on a breach of
warranty theory, and reverse the decision of the district
court on this point.
3. Liability for the loss of the ALBATROS grounded on the
3. Liability for the loss of the ALBATROS grounded on the
_______________________________________________________
negligence of Continental or Molinos. The record here is
negligence of Continental or Molinos.
______________________________________
34
wholly devoid of any basis for resort to a negligence theory
to impose liability on Continental for the loss of the
ALBATROS. Continental had no direct role in stowing the
grain aboard the ALBATROS and there is not the slightest
suggestion that it was negligent in contracting with Molinos
to perform those stevedoring services. The district court
decision properly is not based on this ground. Since the
Import Board bears the burden of proving the negligence of
Continental, its failure in this regard requires the entry
of at least partial summary judgment for Continental on this
ground. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
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(1986). Accordingly, as there is no basis to hold
Continental liable for the loss of the ALBATROS -- as
opposed to shouldering the risk of loss of its cargo of
grain should FIOST terms be found to have been in effect
here -- Continental is ultimately to have judgment upon the
counterclaim of the Import Board against it.
Molinos, however, may well have been negligent in the
circumstances. Indeed, the facts from which its negligence
can be inferred are largely if not entirely undisputed. We
have already ruled, however, that the master of the ALBATROS
was negligent for failing to comply with federal bulk grain
cargo regulations, and that his negligence, imputed to the
Import Board, was a contributory cause of the sinking of the
ALBATROS. See pages 24-27, supra. What is required, there-
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fore, is a trial regarding the alleged negligence of
35
Molinos, and, should Molinos and McLawrence ultimately be
found negligent, an analysis of what role that negligence
ultimately played in causing the loss of the ALBATROS and
her cargo. Since a trial is in the offing, we do not
presume to anticipate the outcome and refrain from
expressing any opinion thereon. It is for the district
court in the first instance to fashion a rule of maritime
law appropriate to these circumstances, recognizing that
either or both the Import Board and Molinos may ultimately
be found negligent.
36
III. CONCLUSION
III. CONCLUSION
The ruling of the district court dismissing the
complaint as to Grenada is affirmed, albeit on grounds
different from those advanced below. The decision of the
district court is otherwise reversed and the case is
remanded for trial of Eagle's contract, negligence, and
unseaworthiness claims against the Import Board for the loss
of the cargo of grain20 and the Import Board's negligence
counterclaim against Molinos for the loss of the ALBATROS.
When the case is ultimately ripe for judgment -- or earlier
pursuant to Fed. R. Civ. P. 54(b) should the District Judge
so determine -- Continental is to have judgment dismissing
the Import Board's counterclaims against it.
Affirmed in part and reversed in part and remanded for
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further proceedings in accordance with this opinion. Each
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party shall bear its own costs.
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20It is also open to the district court, should it deem it
appropriate, to make further findings on the extent of the Import
Board's negligence. See supra note 17.
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37