Petition — University of Texas Medical Branch at Galveston v. United States

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Supreme Court of the United States

October Term, 1977

THE UNIVERSITY OF TEXAS MEDICAL BRANCH

AT GALVESTON, PALISADES GEOPHYSICAL

INSTITUTE, INC., AND FREEPORT

OPERATORS, INC., Petitioners,

Vv.

THE UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CiRCUIT

Of Counsel:

Hinps & MEYER F. E. BrLLINGs

DaN H. HINDS

EASTHAM, WATSON

: , 200 Plaza Level

DaLe & FORNEY LNG Tower

Levy, Levy, COUGHLIN 2919 Allen Parkway

& WITHERS Houston, Texas 77019

SCHIRMEYER & KRATOCHVIL Aftorneys for Petitioner

JouHN HILL

Attorney General of Texas

Les COCHRAN

Al rief Co.,, One Main Piasa, No. 1 Main St., Houston, Texas 77002

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Appendix A (Opinion of Court of Appeals) ............

Appendix B (Judgment of Court Below) ..............

Appendix C (Memorandum and Order of District Court)

(Memorandum Granting Motion & Certifying

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Appendix D (Order of Court Below Denying Petition for

EY ~cEECiRbdeeeasenedesceienadas

Appendix E (Letter of Undertaking of the State of Texas)

TABLE OF AUTHORITIES

CASES

In Re Chinese Maritime Trust, Ltd., 361 F. Supp 1175

(S.D. N.Y. 1972), aff'd 478 F.2d 1357 (2d Cir. 1973),

cert. denied, 414 U.S. 1143 (1974) ...........0505.

Flink v. Paladini, 279 US. 59 ( Pee Sear

Hines v. United States, 551 F.2d 717 (6th Cir. 1977) ...

Maryland Casualty Co. v. Cushing, 347 U.S. 405 (1954)

In Re Midland Enterprises, Inc., 296 F. Supp. 1356 (S.D.

Ge SED Neatdnnducieeeds6u0664.c806occicceceses

In Re Pacific Far East Line, Inc, 314 F. Supp. 1339 (N.D.

Cal. 1970), aff'd, 472 F.2d 1382 (9th Cir. 1973) ....

Wyandotte Transportation Co. v. United States, 389 US.

Se WEED wolkbeden eed esvetoteeeewsciessvoceeess

STATUTES

S.C. § 403 & 409 (1899) 2.0.0... cece ccc cee eee

46 U.S.C. § 181, et seq. (1958) ......0.ccc cece ccc eees

TREATISES

Gilmore & Black, The Law of Admiralty, (2d Ed. 1975) at

BOMD TOO cccccccccccncacceccccccccccccecccccccses

J. Man. L. & Cons. 671, 677 (1974) ....cccccccccceees

Comment, Obstructions in Navigable Waters, 48 N. Car.

ke FR ee eee

Baer, Admiralty Law of the United States, § 10-8 (1976

ED eee sec adauccccuceadtedeeccesece

Comment, 5 Ga. J. Int’t. & Comp. L. 291 (1975) .....

RULES

Supplemental Admiralty Rule F ............ceceeeeees

9,10

NO.

IN THE

Supreme Court of the United States

October Term, 1977

THE UNIVERSITY OF TEXAS MEDICAL BRANCH

AT GALVESTON, PALISADES GEOPHYSICAL

INSTITUTE, INC., AND FREEPORT

OPERATORS, INC., Petitioners,

Vv.

THE UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

The petitioners, The University of Texas Medical

Branch at Galveston, Palisades Geophysical Institute,

Inc., and Freeport Operators, Inc., pray that a writ of

certiorari issue to review the judgment of the United

States Court of Appeals for the Fifth Circuit entered in

the above case on August 12, 1977.

OPINIONS BELOW

Fifth Circuit:

The Court’s opinion below is printed in Appendix A,

and is reported at 557 F.2d 438.

The opinion of the District Court for the Southern

District of Texas is printed in Appendix C. It was not

reported.

JURISDICTION

The judgment of the Court below (Appendix B) was

entered on August 12, 1977. A timely petition for re-

hearing was filed on the 26th day of August, 1977, and

was denied’ on the 25th day of January, 1978. The juris-

diction of this Court is invoked under 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

1. Whether or not the United States’ wreck removal

costs are subject to the provisions of the Limitation of

Liability Act.

2. Did the Court below err in holding that the

protection of the Limitation of Liability Act does not ap-

ply to the United States’ civil suit under § 15 of the

Rivers and Harbors Act for wreck removal and other

expenses against the petitioners who did not own the

wrecked vessel.

3. Did the Court below err in holding that the Rivers

and Harbors Act implicitly limits the scope of the Limita-

tion of Liability Act.

4. Did the Court below err in not overruling the

District Court’s holding that the United States could

bring an in rem action against the M/V IDA GREEN

for wreck removal costs after her owners had already

substituted a stipulation for value in the limitation pro-

ceedings.

STATUTES, FEDERAL RULES AND

REGULATIONS INVOLVED

The Rivers and Harbors Act, 33 U.S.C. § 403 et seq.

(1970); The Limitation of Liability Act, 46 U.S.C. § 181

et seq (1958); Supplemental Admiralty Rule F.

STATEMENT

On April 24, 1974, the M/V IDA GREEN, owned

by the University of Texas Medical Branch at Galveston,

a state owned and supported institution, chartered by

Palisades Geophysical Institute, Inc., a non-profit scien-

tific research corporation, and operated by Freeport

Operators, Inc., was proceeding out the Galveston Chan-

nel when it was in collision with the inbound M/T BOW

ELM. The BOW ELM then struck and sank the Dredge

A. MACKENZIE, a self-propelled hopper dredge owned

and operated by the United States.

The United States engaged a salvor and removed the

wreckage of the dredge at considerable expense. No

demand of any kind was ever made on the owners of the

M/V IDA GREEN to remove the wreckage of the vessel,

nor was any other demand or claim made until after the

plaintiffs filed their Complaint in District Court on Oc-

tober 24, 1974, asking for exoneration from or limitation

of liability arising out of such incident under the pro-

visions of 46 U.S.C. § 181, et seq. (1958).

On December 9, 1974, the United States of America

filed a Motion for Relaxation of Restraining Order which

was granted on April 2, 1975, Appendix C. A timely

appeal was filed by plaintiffs on August 5, 1975, and

the Court of Appeals’ decision was handed down on

August 12, 1977, Appendix A.

On or about January 24, 1978, the United States ad-

vised that the M/V IDA GREEN would be seized unless

her owners provided security to prevent the seizure. The

State of Texas provided a letter of undertaking to prevent

the seizure, Appendix E.

REASONS FOR GRANTING THE WRIT

INTRODUCTION

This Court has left much confusion in the wake of

its decision in Wyandotte Transportation Company v.

United States, 389 U.S. 191 (1967). As a result of that

confusion, the Court below has handed down a decision

which does much harm to the maritime law of this nation.

By going a step further than the other confused Circuit

Courts, the Fifth Circuit has effectively destroyed the

Limitation of Liability Act, a statute which has been a

part of our law since 1851, and has placed the owners of

the M/V IDA GPEEN in the unprecedented position

of first having to file security for the value of the

vessel in uic imitation proceeding and then having to

provide security to avoid seizure of the M/V IDA

GREEN in the separate action filed by the United States

for claims arising from the same incident. Justice cries

for this Court to correct this situation.

II.

By Holding That The Limitation Act Does Not

Apply To The Claim Of The United States Against

The Owners Of The M/V IDA GREEN For Removal

Of A Wreck Which They Did Not Own, The Court Of

Appeals Has Effectively Destroyed The Lim: ‘ation

Of Liability Act. The Destruction Oi A 127 Year Old

Statute Of The United States Is An Important Fed-

eral Question Which Has Not, But Should Be Settled

By This Court.

The Court below has joined with other Courts of Ap-

peal in an attempt to devour the Limitation of Liability

Act, 46 U.S.C. § 181-189, using this Court’s opinion in

Wyandotte Transportation Company v. United States,

supra, as the Court’s mandate that wreck removal ex-

penses are not limitable. See Hines v. United States, 551

F.2d 717 (6th Cir. 1977), In re Pacific Far East Line,

Inc., 314 F. Supp. 1339 (N.D. Cal. 1970), aff'd, 472

F.2d 1382 (9th Cir. 1973); In re Chinese Maritime

Trust Ltd., 361 F. Supp. 1175 (S.D.N.Y. 1972), aff'd

478 F.2d 1357 (2d Cir. 1973), cert. denied, 414 US.

1143 (1974), see also, comment n. 3, Appendix A, page

15.

On the contrary, although this Court specifically did

not pass on that question, it appears that this Court

pointed out the vitality of that Act and suggested its

probable application to Wyandotte when it stated at 389

U.S. 191, 205:

The reading that petitioners would place on the

Rivers and Harbors Act of 1899 would create an

additional right of limitation applicable in the spe-

cial case of a sinking even though the owner is him-

self negligent. (emphasis added)

The Court below pointed out that this Court’s “policy

arguments” in Wyandotte hold the answer to whether or

not the wreck removal costs in this case should be part

of the limitation proceedings. The Fifth Circuit said:

The Court is emphatic that the negligent must not

be allowed to shift the loss arising from a sunken

vessel on to the innocent. (Appendix A, page 26).

In 1851 Congress first passed a statute which provided

limited liability for owners of vessels who were them-

selves free of personal negligence. Since that date, when

an owner has been able to show his lack of privity and

knowledge, he has been able to in effect shift a portion

of the loss to the innocent. If the vessel itself was not

negligent, then the owner did not need the protection of

the Act. If the vessel was negligent, the Limitation of

Liability Act provided the absent owner protection at

the expense of the damaged party.

For 127 years then, our jurisprudence has contained

a law which by its very nature shifts the loss on to the

injured party. If this Court’s opinion in Wyandotte was

a mandate as has been suggested by the Court below, then

the Court was disapproving the whole scheme of the

Limitation Act, which it said it would not do in Mary-

land Casualty Company v. Cushing, 347 U.S. 409, 414

(1954). We hardly think that was the Court’s intent

when it pointed out that it was not passing on the ap-

plicability of the Limitation Act to the facts of the

Wyandotte case. See Wyandotte Transportation Com-

pany v. United States, supra, 389 U.S. 191, 205 n. 17.

If, on the other hand, this Court did intend to pull

the teeth of the Limitation Act as the Circuit Courts

have assumed, then this Court should make that clear

to shipowners, and clear up the confusion now prevail-

ing. See, In Re Midland Enterprises, Inc., 296 F. Supp.

1356 (S.D. Ohio 1968), J. Mar. L & Comm. 671, 677

(1974); Comment, Obstructions in Navigable Waters,

48 N. Car.L.Rev. 552 (1970); Baer, ApMiraLty Law

OF THE UNITED STATES, § 10-8 (1976 Supp. Page 103);

Comment, 5 Ga. J. INnt’L. & Comp. L. 291 (1975).

III.

The Court Below Decided That Even Though The

Owners Of The M/V IDA GREEN Had No Statutory

Duty To Remove And Could Not Have Privity And

Knowledge Merely Because Of Their Failure To Re-

move, The Owners Could Be Responsible For The

Removal Costs If Those In Charge Of The Vessel

Were Negligent. By So Doing, The Court Below De-

cided An Important Question Of Federal Law Which

Has Not Been, But Should Be Settled By This Court.

As is evident from a reading of the opinion below,

the question of a non-owner’s liability had not been de-

cided before. Other similar cases all involved owners of

the wreck and the courts based their rulings to a great

extent on a breach of the statutory duty of an owner to

remove the wreck. See Hines v. United States, supra; In

re Pacific Far East Line, Inc., supra; In re Chinese Mari-

time Trust Ltd., supra.

The Circuit Court found that the United States could

recover its removal costs even though there was no

Statutory duty to remove, because (1) otherwise the

United States would have no incentive to exercise its

power to remove, opting instead to go the slower route

of obtaining an injunction and (2) to find otherwise

would not fully effectuate the policies of the Rivers and

Harbors Act, 33 U.S.C. § 403, 409, which, being later

in time, can be construed to have impliedly amended the

earlier Limitation of Liability Act.

The first proposition presupposes that a governmental

agency will do its duty only if the United States can re-

cover its cost and further disregards the fact that an in-

junction might not be appropriate when the injunction

would be addressed to one party to take affirmative

action toward the property of another.

The second proposition is contrary to this Court’s

statement in Maryland Casualty Company v. Cushing,

supra:

The legislation was designed to reduce the heavy

financial commitments the shipping industry requires

by mitigating the threat of a multitude of suits and

the hazards of vast unlimited liability as a result of

maritime disaster. This Court has been faithful to

this ~ultimate purpose and has read the statute’s

words ‘in a broad and popular sense in order not to

defeat the manifest intent.’ Flink v. Paladini, 279

U.S. 59, 63, 73 L.Ed. 613, 614, 49 S.Ct. 257. Par-

ticularly in view of the fact that Congress subjected

the whole limitation scheme to scrutiny in 1935 and

1936 as a result of its application to personal in-

jury and death claims resulting from the sinking of

the MORRO CASTLE, and did not alter those pro-

visions of the legislation involved here, we must

read the statute in the light of its expressed purposes.

It is not for us to sit in judgment on the policy of

Congress in having all claims disposed of in one

proceeding or in apportioning maritime losses.

This Court should therefore review the decision below

and correct the error made.

IV.

The Court Below Has Ignored The Fact That The

District Court Not Only Allowed An in personam

Action Against The Owners Of The IDA GREEN,

But Also Allowed An in rem Action Against The Ves-

sel Despite The Fact That Her Owners Had Substituted

A Bond For The Vessel In The Limitation Proceedings.

This Result Is Wrong, Will Cause Great Confusion

And Can Cause Additional Responsibilities On Our

Already Crowded Courts. This Court Should There-

fore Exercise Its Powers Of Review And Correct The

Situation.

As confused as shipowners are about whether or not

they can limit their liability for wreck removal charges,

that question is simple compared to the confusion con-

cerning in rem responsibility brought about by the Court

below. In this case, as required by Supplemental Admiral-

ty Rule F, the owners of the M/V IDA GREEN deposited

with the District Court security for the value of their

interest in the vessel and pending freight in lieu of sur-

rendering to a trustee their interest in the vessel and

pending freights. Without comment, the Fifth Circuit

approved an additional in rem claim against the vessel,

outside of the limitation proceedings, for the United

States’ costs of removal.

The Fifth Circuit itself characterized its holding as

applying to “an in personam action by the government,”

Appendix A page 39, yet affirmed the District Court

which also allowed an in rem action. After the affirmance,

the United States took full advantage of the absurd

situation and made preparations for seizure of the M/V

IDA GREEN nearly four years after the event. Her own-

er, the University of Texas Medical Branch at Galveston,

prevented the seizure only by substituting security in the

form of a letter of undertaking of the State of Texas,

Appendix E.

Had the owners of the M/V IDA GREEN transferred

the vessel to a trustee in 1974 as allowed under Supple-

mental Admiralty Rule F, there would have been the

added expense to the owners and added burden on the

Court in having the vessel taken in custody and sold, but

her owners could have then purchased the vessel from

the trustee free and clear of all other liens. See G. Gilmore

& C. Black, THe LAW oF ADMIRALTY, (2d Ed. 1975), at

786, and the United States could not have proceeded

against the vessel as it did. Why then should the results be

different when a bond was substituted for the res? Clearly,

they should not.

The Court below cited no authority supporting the

proposition that the United States was entitled to an

in rem as well as an in personam claim outside the limita-

tion proceedings and none of the “policy arguments”

relied on support the additional claim.

This Court should therefore exercise its power of re-

view and correct this situation.

CONCLUSION

The Court of Appeals has improperly decided a number

of questions in this case which have had and will have

great impact on American maritime law. This Court

should therefore, for the reasons stated above, issue a

Writ of Certiorari to review the judgment and opinion

of the Court of Appeals for the Fifth Circuit.

Respectfully submitted,

COPY: ORIGINAL SIGNED

F. E. BILLINGS

Attorney for Petitioners

200 Plaza Level

LNG Tower

2919 Allen Parkway

Houston, Texas 77025

Of Counsel:

DAN H. HINDS

Hinps & MEYER

ALAN §S. DALE

EASTHAM, WATSON,

DALE & FORNEY

JOHN HILL

Attorney General of Texas

L. GLEN KRATOCHVIL

SCHIRMEYER & KRATOCHVIL

ADRIAN: F. LEvy

Levy, Levy, COUGHLIN

& WITHERS

Les COCHRAN

APPENDIX A

Complaint of the University of Texas

Medical Branch at Galveston, et al.

The UNIVERSITY OF TEXAS MEDICAL BRANCH

AT GALVESTON, et al., Plaintiffs-Appellants,

Vv.

UNITED STATES of America,

Defendant-Appellee.

No. 75-2767.

UNITED STATES COURT OF APPEALS

Fifth Circuit.

Aug. 12, 1977.

Owners of oceanographic research ship, which collided

with a Norwegian tanker, which in turn collided with and

caused to sink a dredge belonging to Army Corps of

Engineers, filed a complaint for exoneration from or

limitation of liability. The Government, after it removed

the wreck, moved for order declaring that its claim for

wreck removal costs was not subject to the Limitation

of Liavility Act and for order freeing it to commence an

in personam action against the limitations claimants. The

United States District Court for the Southern District of

Texas, Woodrow B. Seals, J., granted Government’s mo-

tion, and limitations claimants took interlocutory appeal.

The Court of Appeals, Goldberg, Circuit Judge, held that:

(1) Wreck Act prevails over the Limitation of Liability

Act and, hence, potential liability of a negligent party

for wreck removal costs under the former Act is not

limitable and (2) even if the research vessel was at fault

and even if its negligence was without the owner’s “privity

or knowledge,” within meaning of Limitation of Liability

Act, the owners would be required to bear the expense

of removal should they be found negligently to have caused

the sinking of the dredge.

Affirmed.

Appeal from the United States District Court for the

Southern District of Texas.

Before GOLDBERG and HILL, Circuit Judges and

KERR, * District Judge.

GOLDBERG, Circuit Judge:

{1, 2] This case casts us adrift on muddied waters

that lie at the convergence of two desultory streams of

nineteenth century thought. On the one hand, Congress

sought to ensure that navigable waterways remained free

of obstructions, including sunken vessels. Accordingly, it

prohibited the negligent creation of such obstructions by

enacting the Wreck Act, a portion of the Rivers and

Harbors Act of 1899 (1899 Act).' On the other hand,

Congress sought to ensure that American shipping at-

tracted investment capital that the threat of unlimited

* Senior District Judge of the District of Wyoming sitting by

designation.

1. 33 U.S.C. § 401 et seq., (1970) (originally enacted as Act of

Mar. 3, 1889, ch. 425, 30 Stat. 1151 et seq.). Sections 15, 16, 19

and 20, 33 U.S.C. §§ 409, 411, 412, 414 and 415 are collectively

known as the Wreck Act. Sections of the Wreck Act are referred to

herein solely according to their place in the Rivers and Harbors

Act.

economic exposure might divert to England. Accordingly,

it limited the shipowner’s liability for losses caused with-

out his “privity or knowledge” by the operation of his

vessel by enacting the Limitation of Liability Act of

1851 (Limitation Act).* This appeal presents the im-

portant question whether a civil action by the United

States to recover wreck removal expenses against one

who negligently causes another’s vessel to sink, obstruct-

ing a navigable waterway in violation of the 1899 Act,

is subject to the Limitation Act.

The case at bar calls us to the unenviable task of

deciding whether an impossibly obscure law (the 1899

Act) prevails over a hopelessly anachronistic one (the

Limitation Act). The Limitation Act, two distinguished

commentators have remarked, “has been due for a general

overhaul for the past seventy-five years; seventy-five years

from now that statement will be still true, except that the

overhaul will then be one hundred and fifty years over-

due.”* Our opinion today is regrettably only a temporary

drydock..

On the other hand, with respect to the Rivers and

Harbors Act, a distinguished jurist has remarked wryly,

“clarity of draftsmanship is not [its] hallmark.”* We

2. 46 US.C. §$§ 181-89 (1958) (originally enacted as Act of

Mar. 3, 1851, ch. 43, 9 Stat. 635).

3. G. Gilmore & C. Black, The Lew of Admiralty 677 (ist ed.

1957). In the second edition of the treatise, the authors add: “The

developments of the past twenty years suggest that, although the

Limitation Act may never come in for a ‘general overhaul’, its most

likely fate, if it is not repealed outright, is that it will be judicially

nibbled to death.” Jd. at 846 (2d ed 1975) [hereinafter all refer-

ences are to second edition]. Ours is neither the first nor, doubtless,

the last bite.

4. United States v. Moran Towing & Transportation Co., 374

F.2d 656, 670 (4th Cir. 1967) (Sobeloff, J., dissenting).

daresay the Act will not qualify for the hall of fame

even after our attempt at exegesis.°

Nevertheless, we decide today that the purposes of the

1899 Act prevail, the Limitation Act is inapplicable,

and the potential liability of a negligent party for wreck

removal costs under the 1899 Act is not limitable.

Appellants’ vessel, the M/V Ida Green, an oceano-

graphic research ship, collided with a Norwegian tanker,

the M/T Bow Elm, in Galveston Bay Channel on April

24, 1974. A moment later the M/T Bow Elm collided

with the A. MacKenzie, a dredge belonging to the Army

Corps of Engineers.

The collision caused the A. MacKenzie to sink in

midchannel. The ship was a total loss. Worse, the wreck

posed a danger to shipping in one of the busiest water-

ways on the Gulf Coast.

The United States acted immediately. It removed the

wreck at a total cost of $3,000,000. On October 24,

1974, the appellants filed a complaint for exoneration

from or limitation of liability. Appellants claimed $240,-

000 as the value of the M/V Ida Green. They sought to

limit their total liability to that sum pursuant to § 183

(a) of the Limitation Act of 1851, 46 U.S.C. § 183(a).°

5. It might be said of portions of the 1899 Act, as two com-

mentators have said of a portion of the 1851 Act: “No doubt when

more obscure statutes are drafted, the Congress will draft them.

...’ G. Gilmore & C. Black, supra note 3, at 845.

6. Section 183(a) of the Limitation Act provides in pertinent

rt:

The liability of the owner of any vessel, whether American or

foreign, for any . . . loss, damage or injury by collision, or for

The district court thereupon began, as a matter of course,

the limitation proceeding by which all successful claimants

against the appellants would share in the $240,000 fund.

Faced with $3,000,00 in wreck removal costs alone

and a maximum $240,000 recovery within the limitation

proceeding, the government's course was clear. On De-

cember 9, 1974, it moved for an order declaring that its

claim for wreck removal costs was not subject to the

restraining order filed in the limitation proceeding and

freeing the government to commence an in personam

action against the appellants outside the limitation pro-

ceeding. On May 9, 1975, the district court granted the

government’s motion.

The owners of the M/V Ida Green have taken this

interlocutory appeal from that order. Because the govern-

ment claims only that its recovery will not be subject

to limitation in the event the court finds the M/V Ida

Green at fault, for purposes of this interlocutory appeal

we take as true the government’s allegation that the

Ida Green's negligence proximately caused the wreck of

the A. MacKenzie. Similarly, because the government

concedes for this appeal that the Ida Green’s negligence

was without appellants’ “privity or knowledge”, we shall

assume that appellants have satisfied that condition

precedent to invoking the Act. See note 6, supra.’

any act, matter, or thing, loss, damage, or forfeiture, done,

occasioned, or incurred, without the privity or knowledge of

such owner or owners, shall not [except in cases of personal

injury] . . . exceed the amount of value of the interest of such

owner in such vessel, and her freight then pending.

7. It might be, of course, that although a ship-owner’s negli-

gently causing its own ship to sink was without its privity or

knowledge because the actual negligence was that of a crew on

the high seas, the shipowner’s failing to remove the vessel once

The district court offered no reasons for its decision

that the United States’ claim for wreck removal costs

was not limitable other than that “the great weight of

authority” supported it. In fact, however, none of the

decisions cited involved the government’s claim against

a negligent third party; all involved the government's

claims against owners of the wreck that the government

removed.

[3] None of the appellants in the case at bar was an

owner of the sunken dredge, the A. MacKenzie. This

appeal turns on whether that fact is decisive. In order

to assess its significance, we need carefully to examine

§§ 10 and 15 of the Rivers and Harbors Act, 33 U.S.C.

§§ 403, 409. We shall then show that negligent owners

and negligent non-owners have been treated similarly for

purposes of affording the government civil remedies under

§§ 10 and 15 for wreck removal; that the government’s

implied civil remedy under § 15 for wreck removal costs

against owners has uniformly been held to be non-limit-

able; and that the policies underlying the non-limitability

of the government’s recovery against an owner are

equally applicable to its recovery against a negligent

non-owner of the wreck.

Section 10 of the Rivers and Harbors Act, 33 U.S.C.

§ 403, prohibits “[t]he creation of any obstructions not

wrecked is within its privity or knowledge as a violation of its duty

under § 15 of the 1899 Act. We are not concerned with this pos-

sibility in the case at bar for reasons explained, infra.

affirmatively authorized by Congress.”* Section 12 of the

1899 Act both provides the criminal penalty for a viola-

tion of § 10 and authorizes the United States to enforce

by injunction “the removal of any structures” erected in

violation of § 10.°

Although the 1899 Act specifically addresses the prob-

lem of sunken vessels only in § 15, 33 U.S.C. § 409,

8. 33 U.S.C. § 403 (Section 10) provides in pertinent part:

The creation of any obstruction not affirmatively authorized

by Congress, to the navigable capacity of any of the waters of

the United States is prohibited; and it shall not be lawful to

build or commence the building of any wharf, pier, dolphin,

boom, weir, breakwater, bulkhead, jetty, or other structures in

any port, roadstead, haven, harbor, canal, navigable river, or

other water of the United States, outside established harbor

lines, or where no harbor lines have been established, except

on plans recommended by the Chief of Engineers and authorized

by the Secretary of the Army.

9. Section 12, 33 U.S.C. § 406, provides:

Every person and every corporation tha. shall violate any of

the provisions of sections 401, 403, and 404 of this title or any

rule or regulation made by the Secretary of the Army in pur-

suance of the provisions of section 404 of this title shall be

deemed guilty of a misdemeanor, and on conviction thereof shall

be punished by a fine not exceeding $2,500 nor less than $500,

or by imprisonment (in the case of a natural person) not ex-

ceeding one year, or by both such punishments, in the discretion

of the court. And further, the removal of any structures or

parts of structures erected in violation of the provisions of the

said sections may be enforced by the injunction of any district

court exercising jurisdiction in any district in which such struc-

tures may exist, and proper proceedings to this end may be

instituted under the direction of the Attorney General of the

United States.

Section 12 thus makes the creation of an “obstruction” a criminal

offense, while apparently reserving the injunctive power only for the

removal of “structures.” The Supreme Court filled in this lacuna

by reading the grant of injunctive authority broadly, to cover all

§ 10 offenses, in United States v. Republic Steel Corp., 362 U.S. 482,

80 S.Ct. 884, 4 L.Ed.2d 903 (1960) (injunction would lie to compel

removal of industrial waste obstructing waterway).

this court has held that § 10's prohibition of “obstruc-

tions” includes sunken vessels. United States v. Cargill,

Inc., 367 F.2d 971, 975 (Sth Cir. 1966), aff'd on other

grounds sub nom. ‘Vyandotte Transportation Co. v.

United States, 389 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d

407 (1967); United States v. Raven, 500 F.2d 728, 731

(Sth Cir. 1974).*°

[4] Section 15 of the Rivers and Harbors Act, 33

U.S.C. § 409, part of the “Wreck Act” proper, specifically

addresses the problem of obstructions caused by sunken

vessels. Pari of the difficulty in construing § 15 arises

from its division into three operative clauses. The first

clause prohibits the intentional or negligent sinking of

a vessel in navigable waters.'’ The second clause applies

10. This court’s reading of § 10 has not been universally shared,

as we recognized in Cargill:

Several cases, Loud v. United States, 286 F. 56 (6 Cir. 1923);

The Manhatten, 10 F.Supp. 45 (D.C. Pa. 1935), aff'd 85 F.2d

427 (3 Cir. 1935), cert. denied, sub nom United States v. The

Bessemer, 300 U.S. 654, 57 S.Ct. 432, 81 L.Ed. 864 (1937);

In re Eastern Transportation Co., 102 F.Supp. 913 (D.C. Md.),

afi'd sub nom Ottenheimer v. Whitaker, 198 F.2d 289 (4 Cir.

1952); United States v. Bethlehem Steel Corp. (The Texmar),

319 F.2d 512 (9 Cir. 1963), have concluded that the Sections

10 and 12 are not applicable to sunken vessels.

367 F.2d at 976. See also United States v. Moran Towing & Trans-

portation Co., supra, 374 F.2d at 662. Furthermore, our approach

to § 10 presents certain problems. As we shall see, § 15 makes un-

lawful only the negligent sinking of a vessel, thereby obstructing

navigable waters. By its terms, § 10 would prohibit even the innocent

creation of such an obstruction. Our cases have not addressed the

anomaly caused by construing a genera] statute, § 10, as apparently

creating a strict liability offense for conduct that a specific statute,

§ 15, proscribes only if it is negligent.

11. Section 15, 33 U.S.C. § 409, provides:

It shall not be lawful to tie up or anchor vessels or other

craft in navigable channels in such a mauner as to prevent or

obstruct the passage of other vessels or craft; or to voluntarily

to all sinkings, whether negligent or accidental. It pro-

vides that the owner of the wreck must mark it with a

buoy or beacon. The third clause, which also applies

to all sinkings, whether innocent or negligent, prescribes

that the owner of the wreck shall remove it on pain of

being considered to have abandoned the vessel, subjecting

it to removal and sale by the government.

Although § 12 of the Act specifically makes violations

of § 10 remediable by injunction, the Act provides only

a limited remedy for violations of § 15. Section 16,

33 U.S.C. § 411, provides criminal penalties, including

fine or imprisonment, for violating § 15. Sections 19 and

20, 33 U.S.C. §§ 414, 415, authorize the government to

sell a wreck deemed abandoned by the owner and accord

it rights to the proceeds.

This curious statutory structure has given rise to a

multitude of questions. What is the relation between § 10

or carelessly sink, or permit or cause to be sunk, vessels or

other craft in navigable channels; or to float loose timber and

logs, or to float what is known as “sack rafts of timber and

logs” in streams or channels actually navigated by steamboats

in such manner as to obstruct, impede, or endanger navigation.

And whenever a vessel, raft, or other craft is wrecked and sunk

in a navigable channel; accidentally or otherwise, it shall be the

duty of the owner of such sunken craft to immediately mark

it with a buoy or beacon during the day and a lighted lantern

at night, and to maintain such marks until the sunken craft is

removed or abandoned, and the neglect or failure of the said

owner so *s “o shall be unlawful; and it shall be the duty of

the owne © such sunken craft to commence the immediate

removal ot .we same, and prosecute such removal diligently, and

failure to do so shall be considered as an abandonment of such

craft, and subject the same to removal by the United States as

provided for in sections 411 to 416, 418, and 502 of this title.

The phrase “voluntarily or carelessly” has been interpreted to mean

“intentionally or negligently.” Wyandotte Transportation Co. v.

United States, supra, 389 U.S. at 207, 88 S.Ct. at 388; United States

v. Ohio Valley Co., Inc., 510 F.2d 1184, 1188 n. 7 (7th Cir. 1975).

and § 15? Does § 15 exclusively govern the problem of

wrecked vessels, or does it share the field with § 10? As

we have seen, in Cargill this court answered that § 10's

prohibition of “obstructions” included in its scope ~" .ked

vessels. Does a negligent owner who fails to perform his

duty to remove a wreck suffer only the consequences of

abandonment pursuant to the third clause, thereby in-

sulating himself from any further liability? Do §§ 16,

19 and 20, which provide the criminal penalty and the

government’s entitlement to the proceeds of selling an

abandoned wreck, comprise the government’s exclusive

remedy for violations of § 15? As we shall see next, the

Supreme Court held in Wyandotte Transportation Co. v.

United States, supra, that the government has available

against negligent parties other “implied” remedies, in-

cluding injunctive relief and an action for reimbursement

of wreck removal expenses when the government removes

the wreck.

Once it is recognized that the government can sue for

removal expenses under the 1899 Act, are the purposes

of that Act and the potential recovery by the government

constrained by the Limitation Act? Does the answer to

this question depend on which of the three clauses of

§ 15 apply? Is there a difference in the limitability of the

government's recovery when it invokes only the first clause,

which is applicable to negligent parties, than when it

invokes the second or third clauses, which are applicable

only to owners?

These and related questions simply could not have

arisen prior to the Supreme Court’s decision in Wyandotte.

Prior to Wyandotte, indeed, a sunken vessel’s owner rarely

had occasion to invoke the Limitation Act against the

government since the owner could rely on his primary

right of abandonment under § 15. That is, the language

of the third clause of § 15 suggests that an owner may

either remove his vessel or abandon it to the government.

If he abandons the vessel, § 19 prescribes that the gov-

ernment may proceed in rem against the wreck itself.

Since the Limitation Act would in any event merely

restrict the government to an in rem recovery, abandon-

ment usually made invocation of the Limitation Act

superfluous. In another sense, the notion of an in rem

limit to the shipowner’s liability, obtainable under either

the Limitation Act or the Rivers and Harbors Act, seemed

to suggest that the two statutes were complementary, or

at the least not inconsistent.

With Wyandotte, this happily coincident scheme of

statutory protection for shipowners disintegrated.

In Wyandotte Transportation Co. v. United States,

supra, 389 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d 407, the

Court held that the Rivers and Harbors Act impliedly

accorded the government civil remedies to secure the

removal of a wreck or regain the expenses of removal

against parties responsible for negligently sinking a vessel

in violation of § 15. By recognizing that the government

was not limited to an in rem recovery against an aban-

doned vessel, but could sue in personam the parties neg-

ligently responsible for the wreck, Wyandotte opened a

wide breach between the Limitation Act and the newly-

construed Rivers and Harbors Act.

Two consolidated cases were involved. In the first, the

government sought a declaratory judgment that the al-

legedly negligent owners, managers, charterers, and in-

surers of two sunken barges were responsible for removing

the barges from a navigable river. In the second, the

government had itself removed a barge that obstructed

the river. The government sued in rem against the barge

and her cargo and in personam against the barge’s owner

and negligent non-owners of the barge—specifically, the

owner of the tug that had been pushing the barge when

it sank and the owner of the cargo—for the costs of

removing the wreck. The district court had granted sum-

mary judgment against the government’s in personam

suits and held that the United States was limited to an

in rem recovery against the sunken vessels and their

cargoes. United States v. Cargill, Inc. 1964 A.M.C. 1742

(E.D. La.). This court reversed, holding that § 15’s

abandonment alternative to removal applied only to in-

nocent owners of wrecks and that §$ 10 and 12 au-

thorized an injunction or suit for reimbursement. United

States v. Cargill, Inc., supra, 367 F.2d 971. The Supreme

Court did not reach the question whether §§$ 10 and 12

applied, but found the requested remedies implied by

§ 15 as against all negligent defendants.

In making available to the government the power to

seek an injunction mandating the removal of a wreck

or to pursue an action for reimbursement of wreck

removal expenses, the Court thus drew no distinctions

between negligent owners of the wreck and negligent

non-owners. Indeed it rejected the claim that negligent

owners of the wreck should be treated differently—i.e.,

exonerated from in personam liability—because of their

right to abandon the vessel. But because the case stood

only at the stage of an in personam action by the govern-

ment answered by defendant’s motion for summary judg-

ment, the Court did not have occasion to determine

whether any negligent shipowner, whether an owner or

non-owner of the wreck, could again return its potential

liability to an in rem level by invoking the Limitation

Act.’* The Court specifically reserved the question whether

the Limitation Act applies to a civil action under § 15

of the Rivers and Harbors Act. Wyandotte, supra, 389

U.S. at 205 n. 17, 88 S.Ct. at 388.

Although the holding of the Court in Wyandotte leaves

the applicability of the Limitation Act an open question,

the policy arguments by which the Court reached its

holding help answer that question. Accordingly, at least

in cases involving owners of wrecks, courts have uniformly

read Wyandotte as implying that in personam liability

could not be limited in a Wreck Act case. See Hines,

Inc. v. United States, 551 F.2d 717 (6th Cir. 1977);

In re Pentzien, Inc., 1974 A.M.C. 1201 (D. Neb. 1974);

In re Scranton Industries, Inc., 358 F.Supp. 7 (S.D.

N.Y. 1972); In re Pacific Far East Line, Inc., 314 F.

Supp. 1339 (N.D. Cal. 1970), aff'd on separate issue,

472 F.2d 1382 (9th Cir. 1973). See also In re Chinese

Maritime Trust, Ltd., 361 F.Supp. 1175 (S.D.N.Y.

1972), aff'd, 478 F.2d 1357 (2d Cir. 1973), cert. denied,

414 US. 1143, 94 S.Ct. 894, 39 L.Ed.2d 98 (1974).

In order to see why Wyandotte has universally been

read to oust the Limitation Act from a suit for wreck

removal costs against an owner who violates § 15, and

in order to discern whether the Limitation Act is similarly

inapplicable in a suit for wreck removal costs against a

violator of § 15 who does not own the sunken vessel,

we need carefully to examine the policy arguments de-

ployed by the Court.

12. For example, the owner of the tug might have attempted to

invoke the Limitation Act with respect to the tug’s share of wreck

removal costs in Wyandotte.

To be sure, the Court relies on these policy arguments

only for its recognition that the government is entitled to

implied civil remedies. It does not relate those policies

directly to the possible application of the Limitation Act.

Nevertheless two themes emerge that underlie both in-

quiries. First, the critical distinction is not between owners

of the wreck and non-owners, but between negligent and

innocent parties. The Court is emphatic that the negligent

must not be allowed to shift the loss arising from a sunken

vessel onto the innocent. Second, the Court stressed that

once having recognized that the government could in

principle obtain an injunction against the responsible

parties to remove a wreck, it follows that when the

government removes first it must be able to recover its

expenses directly; mere in rem recovery pursuant to

$$ 19 and 20 plus any criminal fines authorized vy § 16

usually will not cover those expenses and will thus

penalize the government for promptly removing a wreck.

We shall first illustrate those themes in the Wyandotte

context and then apply them to the question of limitation.

The Wyandotte Court was powerfully moved by the

equities of that case. “There is no indication anywhere

. that Congress might have intended that a party

who negligently sinks a vessel should be shielded from

personal responsibility.” 389 U.S. at 200, 88 S.Ct. at

385. Following its earlier admonition in United States

v. Republic Steel Corp., supra, 326 U.S. at 491, 80

S.Ct. at 890, to interpret the Wreck Act “charitably in

light of the purpose to be served,” the Court painted with

a broad brush to ensure that the wrongdoer would not

escape responsibility.

The Court reasoned that the United States was entitled to

implied civil remedies because in many cases the combina-

tion of the “meager monetary penalties” of § 16 “and the

Government's in rem rights [after abandonment and sale

pursuant to § 19] would not serve to reimburse the United

States for removal expenses.” Wyandotte Transportation

Co. v. United States, supra, 389 U.S. at 202, 88 S.Ct. at

386. Thus, the government could seek an injunction order-

ing the negligent owner in one case to remove the vessel be-

cause “[dJenial of such a remedy . . . would permit the re-

sult,etraordinary in our jurisprudence, of a wrongdoer shift-

ing responsibility for the consequences of his negligence

onto his victim.” Id. at 204, 88 S.Ct. at 387. Similarly,

the government could seek reimbursement of wreck re-

moval costs against the responsible parties in the other

case because “[hJaving properly chosen to remove such

a vessel, the United States should not lose the right to

place responsibility for removal upon those who negligent-

ly sank the vessel.” Jd. at 204, 88 S.Ct. at 387.

It is critical that, although reserving the question of the

applicability of the Limitation Act, Wyandotte appears

to stand for the proposition that the United States must

be afforded complete relief against the parties responsible

for the sinking. Expressing doubt that Congress intended

that “the Government’s commendable performance of

Wyandotte’s duty [to remove the vessel] must be at

Government expense,” the Court sought by providing im-

plied civil remedies to ensure that “the Government

would [not] be subject to a financial penalty for the

correct performance of its duty to prevent impediments

in inland waterways.” /d. at 205, 88 S.Ct. at 387 (foot-

note omitted).

[5] In light of these policy arguments, it is not sur-

prising that Wy.dotte has been interpreted as impliedly

ousting the Limitation Act from application to the gov-

ernment’s recovery of wreck removal expense. The first

policy theme is that the critical distinction is between

negligent and innocent parties. “[I]n any case in which

the [1899] Act provides a right of removal in the United

States, the exercise of that right should not relieve negli-

gent parties of the responsibility for removal.” 389 U.S.

at 205, 88 S.Ct. at 387. To be sure, in order to invoke

the Limitation Act a shipowner must not have been

personally negligent, i. e., the negligence of his ship’s

master or crew must not have been within his “privity

or knowledge.” See note 6, supra. Nonetheless the ap-

plication of the Limitation Act would create “the anoma-

lous situation . . . of a shipowner whose vessel had negli-

gently obstructed navigation liable under the Rivers and

Harbors Act limiting its liability under the Limitation

Act because he was personally uninvolved in the casualty.”

5 J. Mar. L. & Comm. 671, 678 (1974). The other

side of this “anomalous situation” is, of course, that if

the owner of the wreck limits his liability, the bulk of

the expense of removing the wreck will be borne by an

innocent party—the government.

The second theme stresses this latter point. The govern-

ment is entitled to compel the responsible parties to re-

move the wreck. If the government itself removes, it

should not be penalized for its prompt action and should

be able to recover the expenses of removal. Just as the

Court thought § 16’s criminal fine and the in rem re-

covery authorized by § 19 insufficient to reimburse the

government, so limiting the government to an in rem re-

covery in a civil suit subject to the Limitation Act would

in most cases preclude the government from securing full

reimbursement. The government’s victory in Wyandotte

would be virtually meaningless if, having cleared one

hurdle to full reimbursement, the Limitation Act should

merely reinstate that obstacle at another procedural

juncture.

Although it is thus not surprising that courts should

rely on Wyandotte to oust the Limitation Act in suits

for wreck removal expenses against owners, the ground

relied on at least in part by such courts is not as broad

as the policy arguments of Wyandotte might suggest. Ad-

herence to that narrow ground of decision would allow

the non-owner defendants in the case at bar to invoke the

Limitation Act and would prevent the United States from

being made whole.

Cc.

When the government seeks to recover wreck re-

moval expenses from the owner who negligently causes

his own vessel to sink, it may bring to bear both the

first and third clauses of § 15. That is, the owner has

violated the first clause by negligently sinking the vessel

and the third clause by failing to perform his personal

statutory duty to remove the wreck. Assuming as we do

in the case at bar that the owner’s violation of the first

clause is without | ‘s “privity or knowledge” because the

negligent acts were committed by the master or crew of

the vessel rather than by the owner personally, the

owner is free to invoke the Limitation Act for liability

arising from the sinking. But the owner’s violation of the

third clause may be different. Faced with an explicit statu-

tory duty to remove the wreck, the owner has elected

to abdicate his duty and face the consequences of aban-

donment.

Courts that have denied limitation in this situation

have characterized the latter statutory breach as within

the owner’s “privity or knowledge.” See e. g., In re

Chinese Maritime Trust, Ltd., 361 F. Supp. 1175, 1177

(S.D.N.Y. 1972), aff'd 478 F.2d 1357 (2nd Cir. 1973);

In re Scranton Industries, Inc., 358 F. Supp. 7, 8 (S.D.

N.Y. 1972); In re Pacific Far East Line, Inc., 314 F.

Supp. 1339, 1349 (N.D. Cal. 1970)."* It follows that

the owner cannot invoke the Limitation Act with respect

to liability arising from his failure to remove the wreck.

Courts have sometimes seized on this argument to steer

clear of a collision between the Limitation Act and the

Rivers and Harbors Act. For if the statutory removal

provision is always within the owner's “privity or knowl-

edge”, then an owner can never invoke the Limitation

Act in a suit by the government for wreck removal ex-

13. These decisions have been criticized in the literature for

relying on “privity or knowledge” rather than W yandotte’s distinction

between negligent and innocent parties. Thus, one commentator has

written of Chinese Maritime:

[OJne may ask how the shipowner has breached its duty [by

failing to remove its wreck] if it is merely asserting a right of

limitation protected by statute. The Court would have been on

sounder ground had it held that removal expenses were not

limitable when the loss occurred negligently. This would have

resolved the policy issue left open in Wyandotte in a straight-

forward fashion without making major incursions into the well-

established Limitation Act principle of “privity or knowledge”.

.. . The concept of privity has traditionally been based on the

owner's personal involvement in the cause of the loss of the

vessel. In Chinese Maritime Trust the concept becomes an a/fter-

the-loss presumption of fact. The cause of the vessel's loss and

the owner's participation as distinguished from his employee's

participation in the casualty are irrelevant for purposes of over-

coming the factual presumption. Indeed, by focusing on a re-

definition of “privity or knowledge”, instead of on the scope

and weight of the remedies provided by the removal statute,

the courts in Chinese Maritime Trust are no longer under the

constraints of Wyandotte.

5 J. Mar. L. & Comm. 671, 679-80 (1974) [emphasis added).

penses. The argument obviates the need to choose be-

tween the two Acts in suits against owners of the wreck.

This ground of decision is narrow in the sense that it

would not foreclose the Limitation Act to non-owners of

the wreck, who have no equivalent statutory duty to re-

move. The ground of decision is broad, however, in the

sense that it would preclude even an innocent owner

from invoking the Limitation Act. It must be remembered

that the statutory duty to remove the wreck applies to

owners even if the wreck was not negligently sunk. A

fortiori, it also applies to owners of a negligently sunk

vessel who are not themselves negligent.

By eschewing a principle of decision that would cleave

more closely to the policy arguments adduced in Wyan-

dotte by differentiating between innocent and negligent

parties, a court that relies solely on this argument will

place negligent non-owners in a better position than in-

nocent owners. A court that relies solely on “privity or

knowledge” to determine whether the government's civil

suit is subject to the Limitation Act will thus inevitably

reach results that squarely conflict with the policies un-

derlying Wyandotte. By urging us to hold that the pre-

sence of “privity or knowledge” is the sole ground for

denying limitation, appellants would have us reach such

a result in the case at bar.

In the normal situation, of course, the owner of a

negligently sunken vessel will not be the government but

a private party. Suppose that vessel A’s crew negligently

causes vessel B to sink. The owner, pilot, and crew of

vessel B are entirely innocent. The innocent owner of

vessel B nevertheless has a statutory duty to remove the

wreck. Indeed, according to the third clause of § 15 he

would have such a duty even were the vessel acci-

dentally wrecked."* The faultless owner’s presumed

knowledge of his duty to remove would prevent him

from limiting his liability for the wreck, however, if we

accept this kind of “privity or knowledge” as precluding

invocation of the Limitation Act.’* Once the owner of

B removes the wreck, he will sue the owner of vessel A,

14. The owner of vessel B also has a duty to locate and mark

the wreck, as prescribed by the second clause of § 15.

15. If the owner of vessel B refuses to remove the wreck, he is

then in privity or knowledge of his statutory breach. Can the United

States recover the cost of removing the wreck from the owner of B?

It is in the government's interest to sue the owner of B, who cannot

limit his liability, if any, because the government's recovery from the

owner of A would be, under this hypothetical, limited.

Certainly nothing in Wyandotte would suggest that the United

States has a cause of action for wreck removal expenses against an

innocent owner either when the owner's vessel was negligently sunk

by another or when the vessel was accidentally or non-negligently

sunk. See Wyandotte, supra, 389 U.S. at 197 n. 6, 88 S.Ct. at 384.

This suggests that the owner of vessel B in our hypothetical would

be wise to breach its statutory duty to remove.

This court faced a related question in /m re Marine Leasing Ser-

vices, Imc., 471 F.2d 255 (Sth Cir. 1973). The lewer court had

found that a barge, chartered and operated by the defendants and

removed by the United States after it sunk. was caused to sink

by a hurricane, not by any act of negligence. The United States

sought to recover for the expenses of locating, marking, and removing

the barge. This court held that the United States could not recover

removal expenses. The court reasoned that because § 15 refers only

to voluntarily or carelessly sunken vessels, the United States had

no right to recover removal costs with respect to an innocent or

non-negligent sinking. The court also held, however, that the govern-

ment could recover the expenses of locating and marking the barge

“since the statute casts a duty on the owner to make a vessel even

when it is ‘accidentally’ sunk.” Jd. at 257.

The obvious difficulty with this result is that both the second and

third clauses of § 15 provide that their respective duties of marking

and removing the wreck shall devolve on owners even when the

owner's vessel was accidentally or non-negligently sunk. The court's

basis for distinguishing between the duty to remove and the duty to

mark remains unclear.

which caused the wreck, to recover his expenses. At this

point, however, the owner of B, who by hypothesis was

not in “privity or knowledge” of his § 15 violation, will

invoke the Limitation Act. The results will likely be that

the innocent owner of A will be unable fully to recover

the costs of wreck removal. This “would permit the re-

sult, extraordinary in our jurisprudence, of a wrongdoer

shifting responsibility for the consequences of his negli-

gence onto his victim,” Wyandotte Transportation Co. v.

United States, supra, 389 U.S. at 204, 88 S.Ct. at 387,

by forcing the innocent party to bear the entire cost of

removal with but a limited right of recovery. Accepting

the appellants’ argument that limitation can be avoided

only if the limitation claimant has “privity or knowledge”

would entail reaching this inequitable result.

The point can be made another way, albeit with

slightly less moral force. Suppose the same hypothetical

as before, with the sole difference that the crews of ves-

sels A and B are jointly and equally negligent causes of

B’s sinking. The owner of B fails to remove the wreck.

In order promptly to clear the channel of a dangerous

obstruction, the United States removes the wreck. The

government then sues the owners of A and B respectively

for wreck removal expenses.

There is no doubt that the government can recover

from the owner of B. The latter’s failure to remove placed

him “in privity or knowledge.” Consequently B’s liability

is unlimited. But what of the equally negligent owner of

A? Having no statutory duty to remove, he is not in

“privity or knowledge.” On appellants’ argument, then,

the owner of A can successfully invoke the Limitation

Act and limit his liability. Although equally negligent,

the parties share unequal burdens.’* Once again, the al-

location of the burden of wreck removal expenses is in-

consistent with the relative fault of the parties. Once

again, a negligent party has shifted part of the loss at-

tributable to his negligence onto his “victim,” though the

victim is now himself equally negligent.

The case at bar differs from the normal situation in

that the owner of the wreck was the United States.’’ If

we accept appellants’ argument that the only ground for

denying limitation is that appellants were in “privity or

knowledge”, then we would be compelled to reverse the

district court and hold that appellants are entitled to

limit their liability. Unlike owners of wrecks, who have

a statutory duty to remove, the appellants, as non-owners,

had no such duty under the third clause of § 15.

[6] The government argues that even if we accept

appellants’ argument that denial of limitation is contin-

gent on a finding of “privity or knowledge,” the appel-

lants are not entitled to limitation here because, as the

negligent parties, they had a duty to remove. The govern-

ment concedes, as it must, that § 15 does not specify

such a duty. But the government contends that because

it could have obtained an injunction forcing appellants

to remove, it may be said that appellants had a duty to

remove. This conclusion is mistaken. The government

16. This is true assuming that the government's in rem recovery

against A is less than half the cost of removing the wreck. As the

case at bar indicates, the assumption will often be correct.

17. Although theoretically free to sue qua owner in tort, the

United States seeks relief in the case at bar gua sovereign, under the

authority of the Rivers and Harbors Act. We thus treat the govern-

ment’s removal of its vessel, the A. MacKenzie, as having been

effected in its sovereign capacity. See Jn re Sincere Navigation Corp.,

327 F.Supp. 1024 (E.D. La. 1971).

did not seek or obtain an injunction. Unlike owners, who

know that they must remove the wreck whatever their

innocence or negligence, the appellants could not have

known in advance of litigation that they would be held

responsible for removing the wreck. Hence it is both

misleading and unfair to say that appellants’ failure to

remove placed them in privity or knowledge of a breach

of the duty to remove.

Consequently, accepting appellants’ notion that privity

or knowledge is the sole ground for denying limitation

would compel a result that directly conflicts with the

policy objectives Wyandotte sought to realize. The in-

nocent party—here the United States—would bear the

full burden of removing the wreck with only a limited

right to recover against the parties that negligently

caused the wreck. The result is thus discordant with the

first theme of Wyandotte inasmuch as a negligent party

shifts responsibility for the consequences of his negligence.

The result clashes with the second theme of Wyandotte

as well. Limiting the United States to an in rem recovery

against appellants would subject the government “to a

financial penalty for the correct performance of its duty

to prevent impediments in inland waterways.” Wyandotte

Transportation Co. v. United States, supra, 389 US.

at 205, 88 S.Ct. at 387.

[7,8] Wyandotte and Cargill establish that the United

States could in principle have obtained complete relief

against appellants by injunction.** Had the government

18. This court held in Cargill that §$10 and 12 of the 1899

Act authorize the United States to obtain an injunction against the

negligent owners of a wreck to remove that obstruction. Our reason-

ing was that a sunken vessel was an “obstruction” within the terms

of § 10, and that § 12 specifically authorizes injunctive relief against

obtained an injunction, appellants would have borne the

full cost of removing the wreck. It follows that we

should not penalize the government for removing the

wreck itself instead of proceeding via the slower route

of obtaining an injunction. Had the government obtained

an injunction, appellants would have removed the wreck

at no direct costs to the public. The public, however,

would necessarily have borne the indirect cost stemming

from the continued obstruction of a navigable waterway.

To deny the United States full reimbursement for

properly exercising its power to remove a wreck would con-

stitute a severe disincentive to its choosing this more

efficient course of action. One would expect that in

cases where the cost of removal exceeds the government’s

potential recovery within a limitation proceeding, the

United States would simply decline to remove the wreck

itself and seek an injunction compelling the negligent

violations of § 10. Because § 12 makes subject to injunctive relief

“[e]very person and every corporation”’ that violates § 10, there can

be no argument that injunctive relief is limited to owners of the

wreck as opposed to negligent non-owners. Hence the United States

could have sought injunctive relief under $§ 10 and 12 against the

appellants in the case at bar.

Similarly, Wyandotte is authority for the proposition that § 15

authorizes the government to seek an injunction against even a

non-owner of the wreck. The language of that opinion is broad.

The Court does not refer to owners or non-owners, but to negligent

parties:

The Government may, in our view, seek an order that a negli-

gent party is responsible for rectifying the wrong done to mari-

time commerce by a § 15 violation.

389 U.S. at 204, 88 S.Ct. at 387 (emphasis added). More important.

in the case to which this language pertains, the government sought

declaratory relief not merely against the owners but also against

the managers, charterers, and insurers of the two sunken barges.

Id. at 194, 88 S.Ct. at 382. Therefore Wyandotte’s holding is not,

as the appellants would have it, limited to owners of the wreck

sought to be removed.

parties to remove. Maritime commerce and the public

would then suffer the delays inherent in this injunctive

process.*®

It is bromidic to say that equity follows the law. But

if there be any chemistry left in this maxim then the

government’s recovery of wreck removal expenses should

represent a remedy as complete in the relief it affords as

the equitable injunctive remedy. The coin thus has two

faces, but in either case, Wyandotte tells us, that coin

should be paid by the negligent party.

[9-12] In order fully to effectuate the policies of the

Rivers and Harbors Act as interpreted by the Supreme

Court in Wyandotte, then, it is impossible to give full

effect to the Limitation Act. It was possible to find those

Acts consistent and, indeed, complementary as long as

the shipowner was able effectively to limit his liability

merely by abandoning his vessel. Once the Court an-

nounced in Wyandotte that the United States could sue

the negligent owner personally for wreck removal ex-

penses even though the latter had abandoned his vessel,

it had opened a breach between the two Acts. As long as

courts were faced only with a suit against a negligent

owner, they could indulge in a broad reading of the

“privity or knowledge” exception to deny limitation.*

They thus appeared to repair the breach.

19. The Second Circuit has said:.“We can think of no sensible

reason why Congress should have desired that if the executive

branch chooses to effect immediate removal of an obstruction .. .

rather than resort to the slower injunctive process of the courts, the

offender should thereby escape his due . . .” United States v. Perma

Paving Co., 332 F.2d 754, 757 (2d Cir. 1964).

20. Professors Gilmore and Black are characteristically insightful

in appraising the fate of the phrase, “privity or knowledge.” Linking

this phrase with one from § 182 of the Limitation Act (the “fire

statute”), they observe:

The Court also announced in Wyandotte, however,

that the United States could sue for reimbursement of

wreck removal expenses against a party negligently re-

sponsible for the wreck. In cases involving a negligent

party who does not own the wreck, the “privity or knowl-

edge” exception is not available merely from evidence

that the non-owner has failed to remove. The choice is

thus whether to opt for another expedient or, rather, to

recognize the full extent of the conflict between these two

Statutes. We choose the latter course.

We hold that the Limitation Act does not apply to

the government’s civil suits under § 15 of the Rivers

and Harbors Act for wreck removal expenses against

parties negligently responsible for the wreck.”

“Privity or knowledge” and “design or neglect” are phrases

devoid of meaning. They are empty containers into which the

courts are free to put whatever content they will. The statutes

might quite as well say that the owner is entitled to exoneration

from liability or to limitation of liability if, on all the equities

of the case, the court feels that that result is desirable; other-

wise not. Since, in the infinite range of factual situations no

two cases will ever precisely duplicate each other, no judge

with the slightest flair for the lawyer’s craft of distinguishing

cases need ever be bound by precedent: “privity like knowledge,”

the Supreme Court has remarked, “turns on the facts of par-

ticular cases.”

Judicial attitudes shape the meaning of such catchword phrases

for successive generations. In the heyday of the Limitation Act

it seemed as hard to pin “‘privity or knowledge” on the petition-

ing shipowner as it is thought to be for the camel to pass

through the needle’s eye. To the extent that in our own or a

subsequent generation the philosophy of the Limitation Act is

found less appealing, that attitude will be implemented by a

relaxed attitude toward what constitutes “privity or knowledge,”

“design or neglect.’ The Act, like an accordion, can be stretched

out or narrowed at will.

G. Gilmore and C. Black, supra, note 5, at 877 (citation omitted).

21. We do not limit “negligent parties” to mean only those who

are personally involved in the § 15 violation and thus have “privity

or knowledge.”

Il.

Our conclusion that the Limitation Act does not shield

the appellants, should they be found negligent, from

an in personam action by the government for wreck re-

moval expenses finds support in recent caselaw and is not

controverted by the relevant legislative history. At the

same time, appellants have cited no case in which the

government has sued for wreck removal expenses and a

negligent party has successfully invoked the Limitation

Act. Because a holding that appellants can limit their

liability in this situation would be without precedent,

appellants call upon us to extend the Limitation Act into

an area of liability it has not heretofore touched. We

decline appellants’ invitation to find the Limitation Act

applicable to the government’s suit for wreck removal

expenses. We think the Rivers and Harbors Act implicitly

limits the scope of the Limitation Act.

In Hines, Inc. v. United States, 551 F.2d 717 (6th

Cir. 1977), modified on rehearing, the court declined a

similar invitation to subordinate the purposes of the

Rivers and Harbors Act to the Limitation Act. The court

announced: “[Wl]e hold that the statute later in time

(The Rivers and Harbors Act) served to amend the

unlimited language of the 1851 Limitation of Liability

Act.” 551 F.2d at 718. Although Hines did not involve

the precise question facing this court today, that decision

lends support to our result.

In Hines, the owner of two barges that struck a dam

and locks, then caught fire and sank, sought to limit its

liability for damages to the dam and locks and for the

expenses of removing the barges from the river. Noting

that Wyandotte “establishes that the government has a

right to-in personam relief against the owner of a vessel

for the negligent sinking of such vessel in the navigable

waterways,” the court denied limitation for both wreck

removal expenses and damage to the locks and dam.

551 F.2d at 720. The court observed that although

Wyandotte had expressly reserved decision on the effect

of the Limitation Act, “courts and commentators have

read it as implying that in personam liability could not

be so limited in a Wreck Act case.” The court cited

for this proposition, among other authority, the district

court’s decision in the case at bar. 551 F.2d at 723.

With respect to the claim for wreck removal expenses,

however, because the limitation claimant was the owner

of the wreck, the Sixth Circuit was able to rely on privr

decisions holding that a negligent owner lacks “privity

or knowledge.” The Hines court thus did not have to

face the more difficult question whether a negligent ship-

owner who did not own the wreck was similarly pre-

cluded from limiting its liability.

Another apparent ground of decision in Hines does by

implication speak to this latter question. The court noted

that “[p]Jublic policy forbids that a person liable to a

fine or penalty under the criminal laws should be per-

mitted to limit or reduce his liability by claiming the

benefit of the shipowner’s limitation statutes.” 551 F.2d

at 724, quoting 3 Benedict on Admiralty § 32, at 4-7

(7th ed. 1975).

[13, 14) Appellants in the case at bar, should they

be found negligently to have caused the sinking of the

A. MacKenzie, will have been in violation of the first

clause of § 15, which makes unlawful “voluntarily or

carelessly . . . caus[ing] to be sunk, vessels . . . in navi-

—

gable channels.” Consequently appellants would be crimi-

nally liable under § 16, 33 U.S.C. $411. The policy

rule cited by Hines would therefore foreclose to appel-

lants any hope of limited liability. This principle of “public

policy” thus directly supports our conclusion that parties

who negligently cause a wreck may not limit their liability

in a civil suit under § 15 of the Rivers and Harbors Act.**

With respect to the claim for damages to the locks and

dam, the Hines court directly addressed the conflict be-

tween the Rivers and Harbors Act and the Limitation

Act. Finding the government's right to recover for such

damage pursuant to § 16 of the 1899 Act apparently

limited by the Limitation Act, the court held that the

1899 Act amended the 1851 Act. The court adduced

two reasons applicable to the case at bar. First, it said

that when the purposes of two statutes conflict, there

are no cross-references, and the legislative history is silent

21. That this public policy is not limited to cases in which the

limitation claimant is in “privity or knowledge” of the criminal

violation, cf. The Snug Harbor, 53 F.2d 407, 411 (E.D.N.Y. 1931),

aff'd United States v. Eastern Transp., 59 F.2d 984 (2d Cir. 1932);

Eastern S.S. Corp. v. Great Lakes Dredge and Dock Co., 256 F.

497 (ist Cir. 1919), is apparent from the Himes court’s applying

it to the owner’s limitation claim regarding damage to the locks and

dam. 551 F.2d at 724-25. Unlike § 15, the section of the Rivers and

Harbors Act that makes causing such damage unlawful does not

impose a subsequent statutory obligation such as the duty to remove

the wreck, which the owner could be said to have breached. Section

14, Rivers and Harbors Act of 1899, 33 U.S.C. § 408 (1970).

We nevertheless disclaim any reliance on a per se rule that would

preclude limitation upon any statutory violation that leads to penalty

or fine. It may be, though we do not decide, that public policy does

not foreclose limitation for some violations of a statute leading to

criminal penalties or fines. It is sufficient for our purposes that

public policy is well-served by precluding limitation for liability

arising from criminal violations of § 15 of the Rivers and Harbors

Act. In any event appellants’ fears that we preclude limitability

for statutory violations leading only to civil fines are entirely un-

warranted.

regarding the possible conflict, the later statute amends

the earlier.** See 2 A. Sutherland, Statutory Construction

§§ 51.02, 51.05 (4th ed. 1973). Second, the court ad-

verted to the broad policy grounds that undergird the

Wyandotte decision. Fairness dictated that the negligent

party bear the loss. Allowing appellant to invoke the

Limitation Act would merely reinstate at another level

the limitation on a negligent party’s liability that Wyan-

dotte had removed by authorizing an in personam suit.

The result would be that which Wyandotte sought to

avoid—a party’s shifting the loss arising from its negli-

gence onto its victim:

In this case it is obvious that if the Limitation of

Liability statute be so construed as to terminate

in personam liability on the part of appellant Hines,

there would be no possibility for the government

to recover the bulk of its damages. .. .

Hines, Inc. v. United States, supra, 551 F.2d at 726.

Similarly, in United States v. Ohio Valley Co., Inc.,

510 F.2d 1184 (7th Cir. 1975), the court held a claim

under § 14 of the Wreck Act non-limitable even though

no one argued that the responsible parties had “privity

or knowledge.” The court canvassed previous decisions,

including Chinese Maritime, that were premised in part

on the notion that failure to remove was per se within the

knowledge and privity of the wreck’s owner. The court

nevertheless found “considerable language in those cases

finding the application of the Limited Liability Act to the

22. But see Charles Nelson Co. v. Curtis, 1 F.2d 774 (9th Cir.

1924), (Limitation Act was not repealed insofar as it applied to

right of action given seaman under Merchant Marine Act of June

5, 1920, ch. 250, § 33, 41 Stat. 1007, 46 U.S.C. § 688, popularly

known as the Jones Act).

Rivers and Harbors Act unwarranted.” 510 F.2d at

1187.** Like the court in Hines, the court in Ohio Valley

stressed that to apply the limitation provisions to the

wreck statute would be “inconsistent with the purpose

of the [Wreck Act] to protect, preserve and make safe

the nation’s navigable waterways.” Id. at 1188.

[15] Finally, we note that the legislative history of

the Limitation Act is consistent with the limitation we

place on that Act today. Congress passed the Limitation

Act in an era before the corporation, with its limited

shareholder liability, had become the standard form of

business organization and before the present range of

insurance protection was available. There is serious ques-

tion whether the Act retains vitality within the sphere

in which it has traditionally applied; that is, of course,

a matter for the legislature, not the courts.** Whether

to extend the Limitation Act to a class of cases to which

it has never applied is, however, a judicial question; we

answer it today.*® No court has subjected the government's

23. For example, the court quoted from the district court’s opin-

ion in Chinese Maritime Trust, supra, 361 F.Supp. at 1178, regard-

ing Wyandotte’s lending “renewed vigor” to the Wreck Act and the

corresponding “disfavor” with which courts viewed the Limitation

Act. United States v. Ohio Valley Co., Inc., supra, 510 F.2d at 1187.

24. Professors Gilmore and Black write:

During the [past] twenty years the limitation principle has been

attacked by many and defended by almost none . . . The hold-

ings in the limitation cases which have been decided since the

mid-1950’s have, with a few exceptions, been adverse to the

petitioning shipowner. In the low review [sic?] literature the

argument that the Limitation of Liability Act has served its

time and should be repealed has become a commonplace.

G. Gilmore & C. Black, note 5 supra, at 822.

25. In 1954 Justice Black, speaking for four members of the

Court in a case that impaired the authority of an early case that

had granted limitation, observed:

recovery of wreck removal expenses to the Limitation

Act. We decline to do so today.”*

The stated purpose of the Limitation Act was to place

this country’s “mercantile marine upon the same footing

as that of Great Britain.” 23 Cong. Globe, 31st Cong.,

2d Sess. 714 (Remarks of Sen. Davis, February 26, 1851).

Senator Hamling of Maine, who introduced the bill,

presented it as merely an adoption of English legislation:

“Why not give to those who navigate the ocean as many

inducements to do so as England has done? . . . That is

what this bill seeks to do, and it asks no more.” Jd. at

715. Senator Hamling consistently reminded his colleagues

that “this bill conforms to what is the law of England.”

Id. at 332 (January 25, 1851), 715 (February 26, 1851).

It is therefore significant that throughout the nineteenth

century and, indeed, until recently, the law of Great

Britain has been that the limitation of liability afforded

shipowners does not extend to shipowner’s liability for

wreck removal expenses.** See The Stonedale No. ] [1954]

Judicial expansion of the Limited Liability Act at this date

seems especially inappropriate. Many of the conditions in the

shipping industry which induced the 1851 Congress to pass the

Act no longer prevail.

Maryland Casualty Co. v. Cushing, 347 U.S. 409, 437, 74 S.Ct.

608, 623, 98 L.Ed. 806, (1954) (dissenting opinion).

26. Compare the language of the court in Jn re Petition of the

Dodge, Inc., 282 F.2d 86, 89 (2d Cir. 1960):

[W]e think that ambiguous language in statutory provisions

relating to limitation of liability should be resolved in favor

of interpretations increasing the instances where full recoveries

from the limiting vessel are possible.

27. Te state of British law changed when in 1957 Britain

signed the = .ssels Convention on Limitation of Liability, October

10, 1957, which specifically made wreck claims subject to limitation.

Britain brought its own statutory law into conformity by enacting

2 All E.R. 170, aff'd by the House of I ords [1955| 2 All

E.R. 689; The Brabo [1947] 2 All E.R. 363, 370; aff'd

sub nom. by House of Lords, Tyne Improvement Comm'rs

v. Armement Anversois S/A [1949] 1 All E.R. 294;

The Millie [1939] Li. L. Rep. 318.*° Hence it is doubtful

that Congress, in 1851 or in 1899, specifically intended

the Limitation Act to apply where its English counter-

part did not.

IV.

[16] Statutes can be read complementarily or contra-

dictorily, but always with a gloss of contemporary time

and clime. These statutory relics have always been on

display but we must now look at them from a point of

the British Merchant Shipping (Liability of Shipowners and Others)

Act, August 1, 1958. See 6A Benedict on Admiralty 623-51. The

United States was not a signatory to the Brussels Convention.

28. In The Brabo, supra, [1947] 2 All E.R. at 370, Scott, L. J.

made clear that the English tradition, as opposed to that on the

Continent, was to exclude from limitation statutory causes of action

for the recovery of wreck removal expenses:

There is a further principle of legislative policy regarding

maritime commerce, to which also this appeal invites public

attention, that of limitation of shipowner’s liability. That prin-

ciple has been applied in the western world for two centuries

or more, the basic rule on the continent making the value of

the ship at the end of the voyage the limit of her owner's

liability, whereas the United Kingdom in the middle of las*

century converted that measure into a stirling limit per ton of

registered tonnage, based on the then average value of ships.

On the continent the cost of wreck-removal, when recoverable

from the owner of the ship, has always been treated as one

of the marine liabilities of the voyage and, as such, has been

brought within the continental system of limitation of ship-

owners’ liability. In the United Kingdom that has never been

the case.

For a general summary of applicable pre-1851 limitation law, see

“The Main” v. Williams, 152 U.S. 122, 14 S.Ct. 486, 38 L.Ed. 381

(1894).

view not heretofore clearly examined. Although we ju-

ridically transport ourselves to the nineteenth century—

no mean navigational feat—we must not lose our con-

temporary compass. The shifting sands of time demand

innovative interpretative analysis lest we come to rest on

a shoal that did not threaten our grandfathers, but is

only newly formed.

As the Supreme Court noted in Wyandotte, it would

be surprising indeed if Congress intended to penalize the

government for having performed its duty to keep a

navigable channel clear, 389 U.S. at 205, 88 S.Ct. at

387, by limiting it to in rem rights that would not re-

imburse the United States for removal expenses, 389

U.S. at 202, 88 S.Ct. at 386. Our decision today merely

effectuates the policies of the Rivers and Harbors Act

as enunciated in Wyandotte.

To accord full effect to the Limitation Act by limiting

the United States to an in rem recovery is merely to pour

an old wine into a new bottle. That wine had already

turned by 1967, in Wyandotte, and pouring it into a new

vessel can have no felicitous effect on its potability.

This is not to say that the Limitation Act no longer

has any vitality. It is rather to say that its force suc-

cumbs to that of a later statutory enactment which, when

still later construed by the Supreme Court in a manner

that wars with the policies of the Limitation Act, must

prevail over the earlier Act.

By enacting the Rivers and Harbors Act, Congress

sought to keep our navigable streams navigable by au-

thorizing the removal of obstructions placed thereon;

in construing that statute in Wyandotte, the Court sought

to ensure that the Act would cast the cost for removal

on those who did the obstructing. To be sure, the S. >reme

Court did not make clear whether the negligent parties

to bear the cost of removal could limit their liability for

damages caused without their “privity or knowledge.” We

think it implied in the policy arguments deployed by the

Court that such negligent parties cannot shift the losses

caused by their negligence to the United States and,

ultimately, its taxpayers. We think appellants’ broad con-

struction of the Limitation Act would impair the effective-

ness of the Wreck Act. We think the latter Act more

in the mainstream of modern jurisprudence. Having deter-

mined that the Limitation Act does not wreck the Wreck

Act and the Wreck Act is not limited by the Limitation

Act, we affirm.

We think the district court properly placed the loss

on the negligent party for consequences of its negligence

and correctly declined to penalize the United States for

having eschewed the slower injunctive process in favor

of promptly removing the wreck. The judgment of the

district court is

AFFIRMED.

APPENDIX B

UNITED STATES COURT OF APPEALS

For The Fifth Circuit

No. 75-2767

D. C. Docket Nos. CA 74-H-1438 & 75-H-38

In the Matter of the

Complaint of the University of Texas

Medical Branch at Galveston, et al.

The UNIVERSITY OF TEXAS MEDICAL

BRANCH AT GALVESTON et al.,

Plaintiffs-Appellants,

Vv.

UNITED STATES of America,

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of Texas

Before GOLDBERG and HILL, Circuit Judges, and

KERR, * District Judge.

JUDGMENT

This cause came on to be heard on the transcript of

* Senior District Judge of the District of Wyoming, sitting by

designation.

the record from the United States District Court for the

Southern District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment

of the said District Court in this cause be, and the same

is hereby, affirmed;

It is further ordered that plaintiffs-appellants pay to

defendant-appellee, the costs on appeal to be taxed by

the Clerk of this Court.

August 12, 1977

Issued as Mandate: February 2, 1978.

APPENDIX C

In The

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

C. A. NO. 74-H-1438

IN THE MATTER OF THE COMPLAINT OF

THE UNIVERSITY OF TEXAS, ETC., ET AL

MEMORANDUM AND ORDER

The Court has considered the United States’ Motion

For Relaxation of Restraining Order, and Pilaintifis’

Motion For Order Noting Default. The Motions will be

dealt with separately as follows:

PLAINTIFFS’ MOTION FOR ORDER

NOTING DEFAULT

An Order Directing the Issuance of a Monition, and

Restraining Suits was signed and entered by this Court

on October 24, 1974, requiring that claims in this cause

of action be filed on or before the 9th day of December,

1974 at ten o’clock a.m., and that public notice was to

be provided. The date specified in the Order having

passed, and it appearing that proper public notice was

provided, it is hereby ordered as follows:

All persons not having properly filed claims in the

above styled and numbered cause of action by the date

and time specified in the Order of October 24, 1974,

should be and hereby are defaulted in accordance with

said Order.

UNITED STATES’ MOTION FOR RELAXA7ION

OF RESTRAINING ORDER

The United States is seeking to have the Restraining

Order referred to above relaxed so that the United

States’ claim for wreck removal costs not be limitable in

the event that proper proof of negligence is adduced at

the trial of this cause of action. The Court is of the

opinion that the great weight of authority supports the

United States’ position so that a claim for wreck removal

charges should not be limited so long as the United

States meets its burden of proof as to negligence of the

party or parties sought to be charged. Wyandotte Trans-

portation Co. v. United States, 389 U.S. 191 (1967);

In re Chinese Maritime Trust, Ltd., 361 F.Supp. 1175

(S.D. N.Y. 1972), aff'd, 478 F.2d 1357 (2d Cir. 1973),

cert. denied, 414 U.S. 1143 (1974); In re Scranton In-

dustries, Inc., 358 F.Supp. 7 (S.D. N.Y. 1972); In re

Pacific Far East Line, Inc., 314 F.Supp. 1339 (N.D. Cal.

1970), affd, 472 F.2d 1382 (9th Cir. 1973). There-

fore, it is hereby ordered as follows:

1. The United States’ Motion is GRANTED.

2. The Restraining Order is hereby relaxed so as to

permit the United States to maintain an action for

wreckage removal;

3. Any new cause of action to be instituted by the

United States seeking recovery of the costs of wreckage

removal shall be consolidated with the instant cause of

action.

The Clerk shall file this Memorandum and Order

and provide all parties with a true copy.

Done at Houston, Texas, the 2nd day of April, 1975.

WOODROW SEALS

United States District Judge

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CIVIL ACTION NO. 74-H-1438

IN THE MATTER OF THE COMPLAINT OF THE

UNIVERSITY OF TEXAS, ETC., ET AL.,

Petitioners

Vv.

UNITED STATES OF AMERICA,

Respondent

MEMORANDUM AND ORDER

Petitioners have made a Motion For Rehearing, For

Oral Argument and/or For Stay Pending Appeal which

has been opposed by the United States. Petitioners urge

that this Court erred in granting the United States’ Mo-

tion For Relaxation of Restraining Order in a Memoran-

dum and Order of April 2, 1975.

This cause of action is composed of three consolidated

actions, and it would be possible to stay proceedings in

one of those actions pending an interlocutory appeal,

however, it does not seem warranted at this time. Even

if the Court of Appeals should entertain the appeal and

reverse this Court’s decision to permit the United States

to file a separate action for wreck removal charges out-

side of the limitation proceeding, the probable result

would be that the United States’ claim would continue

but within the limitation proceeding. Therefore, Petitioners

would still have to defend such action. However, the

Court is of the opinion that an interlocutory appeal with-

out a stay of proceedings would not adversely affect the

course of this litigation and could, if fact, be of benefit.

Therefore, it is hereby ORDERED as follows:

1. This Court hereby certifies that this Court’s Order

of April 2, 1975 permitting the relaxation of the Re-

straining Order of October 24, 1974, and permitting the

prosecution by the United States of an action for wreckage

removal costs outside of the limitation proceeding, pre-

sents a controlling question of law as to which there is

substantial ground for difference of opinion, and that an

immediate appeal from the Order may materially advance

the ultimate termination of the litigation pursuant to

28 U.S.C. § 1292(b);

2. Petitioners’ Motion For Rehearing and For Oral

Argument is DENIED;

3. Petitioners’ Motion For Stay Pending Appeal is

DENIED.

The Clerk shall file this Memorandum and Order, and

provide all parties with a true copy.

Done at Houston, Texas, the 9th day of May, 1975.

/s/ WOODROW SEALS

United States District Judge

APPENDIX D

UNITED STATES COURT OF APPEALS

Fifth Circuit

Office of the Clerk

Tel. 504-589-6514

F tward W. Wadsworth 600 Camp Street

Clerk New Orleans, La. 70130

January 25, 1978

TO ALL PARTIES LISTED BELOW:

NO. 75-2767—The University of Texas Medical Branch

At Galveston, Et Al. v. U.S.A.

Dear Counsel:

This is to advise that an order has this day been entered

denying the petition (_ ) for rehearing,** and the Court

having been polled at the request of one of the members

of the Court and a majority of the Circuit Judges who are

in regular active service not having voted in favor of it,

(Rule 35, Federal Rules of Appellate Procedure; Local

Fifth Circuit Rule 12) the petition ( ) for rehearing en

banc has also been denied.

See Rule 41, Federal Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

EDWARD W. WADSWORTH,

Clerk

By /s/ BRENDA M. HAUCK

Deputy Clerk

**on behalf of appellants, The University of Texas

Medical Branch at Galveston, et al.,

bmh

cc: ALL COUNSEL

APPENDIX E

THE ATTORNEY GENERAL OF TEXAS

(SEAL)

JOHN L. HILL

Attorney General

Mr. Emmett B. Lewis

Admiralty and Shipping Section

Department of Justice

Washington, D.C. 20530

January 27, 1978

Re: United States of America v. The University

of Texas Medical Branch at Galveston, et al;

C.A. No. 75-H-543 in the United States

— Court for the Southern District of

exas

Dear Mr. Lewis:

In consideration of your not arresting the M/V IDA

GREEN, or attaching any funds or other property of

the owners of the said vessel, pursuant to process issued

in the captioned action, the undersigned hereby agrecs:

1. To file, or cause to be filed, upon your demand

an appearance on behalf of the owners of the M/V

IDA GREEN in the captioned action; and also to

file, or cause to be filed upon your demand, a claim

by the proper claimant of the M/V IDA GREEN

in such action, irrespective of her absence from

the jurisdiction of said Court, and without regard to

her whereabouts.

2. Upon demand, to cause to be filed in such action

a bond, in form and sufficiency of surety satisfactory

to you, or to the Court, in an amount to be agreed

upon between us, or failing agreement, to be fixed

It is

by the Court, but in no event to exceed the value

of said vessel as of January 27, 1978.

3. In the event of a final decree (after appeal if

any) being entered against the M/V IDA GREEN

and/or her owners in said action, the undersigned

agrees to pay and satisfy up to and not exceeding

the value of said vessel as of January 27, 1978, the

said final decree, or any lesser amount decreed by

the Court, or settled between the parties without

final decree being entered, subject to specific legisla-

tive appropriation for this purpose.

4. In the event the bond referred to under sub-

division 2 is filed the undersigned shall have no

further obligation under subdivision 3 supra.

5. It is the intent of this undertaking and guarantee

that the rights of the parties shall be precisely the

same as they would have been had the M/V IDA

GREEN been arrested under process issued, and

released upon the filing of a surety bond in the

foregoing amount reserving on behalf of the said

vessel and owners all other defenses including the

denial of all liability for the subject damage.

further understood and agreed that:

1. This agreement is to be binding and enforceable

whether the M/V IDA GREEN be lost or not lost,

in port or not in port.

2. This agreement is without prejudice to any and

all rights and defenses which may be available

to the owners and/or underwriters of the M/V IDA

GREEN under general maritime or statutory law,

and is not to be construed in any sense as an ad-

mission that the United States Government is en-

titled to an in rem seizure of said vessel.

Very truly yours,

THE STATE OF TEXAS

By:

RICHARD ARNETT

Assistant Attorney General

THE UNIVERSITY OF TEXAS

MEDICAL BRANCH AT

GALVESTON

By:

JAMES T. FITZPATRICK

General Counsel, The University

of Texas System

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.