Justia Admiralty & Maritime Law Opinion SummariesArticles Posted in US Supreme Court
CITGO Asphalt Refining Co. v. Frescati Shipping Co.
CARCO sub-chartered an oil tanker from tanker operator Star, which had chartered it from Frescati. During the tanker’s journey, an abandoned ship anchor punctured the tanker’s hull, causing 264,000 gallons of heavy crude oil to spill into the Delaware River. The 1990 Oil Pollution Act, 33 U.S.C. 2702(a), required Frescati, the vessel’s owner, to cover the cleanup costs. Frescati’s liability was limited to $45 million. The federal Oil Spill Liability Trust Fund reimbursed Frescati for an additional $88 million in cleanup costs.Frescati and the government sued, claiming that CARCO had breached a clause in the subcharter agreement that obligated CARCO to select a berth that would allow the vessel to come and go “always safely afloat,” and that obligation amounted to a warranty regarding the safety of the selected berth. Finding that Frescati was an implied third-party beneficiary of the safe-berth clause, the Third Circuit held that the clause embodied an express warranty of safety.The Supreme Court affirmed. The safe-berth clause's unqualified plain language establishes an absolute warranty of safety. That the clause does not expressly invoke the term “warranty” does not alter the charterer’s duty, which is not subject to qualifications or conditions. Under contract law, an obligor is strictly liable for a breach of contract, regardless of fault or diligence. While parties are free to contract for limitations on liability, these parties did not. A limitation on the charterer’s liability for losses due to “perils of the seas,” does not apply nor does a clause requiring Star to obtain oil-pollution insurance relieve CARCO of liability. View "CITGO Asphalt Refining Co. v. Frescati Shipping Co." on Justia Law
Posted in: Admiralty & Maritime Law, Contracts, Transportation Law, US Supreme Court
Dutra Group v. Batterton
Batterton was working on a Dutra vessel when a hatch blew open and injured his hand. Batterton sued Dutra, asserting various claims, including unseaworthiness, and seeking general and punitive damages. The Ninth Circuit affirmed the denial of Dutra’s motion to dismiss the claim for punitive damages: The Supreme Court reversed. A plaintiff may not recover punitive damages on a claim of unseaworthiness. Precedent establishes that the Court “should look primarily to . . . legislative enactments for policy guidance” when exercising its inherent common-law authority over maritime and admiralty cases. Overwhelming historical evidence suggests that punitive damages are not available for unseaworthiness claims. The Merchant Marine Act of 1920 (Jones Act) codified the rights of injured mariners by incorporating the rights provided to railway workers under the Federal Employers’ Liability Act (FELA); FELA damages were strictly compensatory. The Court noted that unseaworthiness in its current strict-liability form is the Court’s own invention, coming after enactment of the Jones Act. A claim of unseaworthiness is a duplicate and substitute for a Jones Act claim. It would exceed the objectives of pursuing policies found in congressional enactments and promoting uniformity between maritime statutory law and maritime common law to introduce novel remedies contradictory to those provided by Congress in similar areas. Allowing punitive damages on unseaworthiness claims would also create bizarre disparities in the law and would place American shippers at a significant competitive disadvantage and discourage foreign-owned vessels from employing American seamen. View "Dutra Group v. Batterton" on Justia Law
Air & Liquid Systems Corp. v. DeVries
Manufacturers produced equipment for three Navy ships. The equipment required asbestos insulation or asbestos parts to function as intended, but the manufacturers did not always incorporate the asbestos into their products, so the Navy later added the asbestos. Two Navy veterans, exposed to asbestos on the ships, developed cancer. They sued the manufacturers. The manufacturers argued that they should not be liable for harms caused by later-added third-party parts.The Supreme Court affirmed the Third Circuit in rejecting summary judgment for the manufacturers. The Court adopted a rule between the “foreseeability” approach and the “bare-metal defense,” that is "especially appropriate in the context of maritime law, which has always recognized a ‘special solicitude for the welfare’ of sailors." Requiring a warning in these circumstances will not impose a significant burden on manufacturers, who already have a duty to warn of the dangers of their own products. A manufacturer must provide a warning only when it knows or has reason to know that the integrated product is likely to be dangerous for its intended uses and has no reason to believe that the product’s users will realize that danger. The rule applies only if the manufacturer directs that the part be incorporated; the manufacturer makes the product with a part that the manufacturer knows will require replacement with a similar part; or a product would be useless without the part. View "Air & Liquid Systems Corp. v. DeVries" on Justia Law