Petition for Writ of Certiorari — City of Milwaukee v. Cement Division
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ae, Supreme Court, U.S.
FILED
on -1299
tan FEB 15 1991
so Vin OFFICE OF THE Clans
Supreme Court of the United States
October Term, 1990
CITY OF MILWAUKEE,
Petitioner,
CEMENT DIVISION, NATIONAL GYPSUM
COMPANY, et al.,
Respondents.
_
aA
Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit
a
_
PETITION FOR A WRIT OF CERTIORARI
a
—
GRANT F. LANGLEY
City Attorney
Counsel of Record
RupoitrpH M. Konrap
Deputy City Attorney
THomMaS J. BEAMISH
Assistant City Attorney
800 City Hall
200 East Wells Street
Milwaukee, Wisconsin 53202
(414) 278-2601
Counsel for Petitioner
February 14, 1991
COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831
SSE neath tether cea TTI csc
}
QUESTIONS PRESENTED
1. Does a federal court of appeals, which has found
an apportionment of fault by a district court to be clearly
erroneous under Fed. R. Civ. P. 52(a), have the authority
to make new findings of fact, reweigh the evidence and
reapportion fault?
2. Should the admiralty rule that liability for dam-
ages is to be allocated among the parties proportionately
to the degree of their fault be changed so that the relative
cost of avoiding the casualty becomes a substantial factor
in apportioning fault?
ii
LIST OF PARTIES
The parties to the proceedings below were the peti-
tioner City of Milwaukee and the respondents Cement
Division, National Gypsum Company; Reed & Brown,
Inc.; New York Marine Managers, Inc.; Allstate Insurance
Company, c/o American Marine Underwriters, Inc.;
Highlands Insurance Company; Employers Casualty
Company of Texas, c/o Texas Marine Underwriters
Agency, Inc.; Donald H. Miller, Inc.; U.S. Fidelity and
Guarantee Company; Great Lakes Protective Association;
The Atlantic Companies; Lloyds Underwriters, Institute
Companies, including: Commercial Union Assurance Co.
Ltd., “I” A/o. Andrew Weir Insurance Co. Ltd., English &
American Insurance Co. Ltd., “M” 1 A/o., Orion Insur-
ance Co. Ltd., “T” A/o. Yasuda Fire & Marine Insurance
Co. (U.K.) Ltd., “T” A/o., Atlas Assurance Co. Ltd., “T”
A/o., Phoenix Assurance Co. Ltd., British Law Insurance
Co. Ltd., Road Transport and General Insurance Co. Ltd.,
Insurance Company of North America (U.K.) Ltd., “G”
A/o., Insurance Company of North America (U.K.) Ltd.,
“O” A/o., Home Insurance Co. Ltd., “X” A/o., London &
Hull Maritime Insurance Co. Ltd., Hanover Insurance Co.
Ltd., Sphere Insurance Co. Lid., Drake Insurance Co.
Ltd., Bishopsgate Insurance Co. Ltd., “F” A/o., British
Law Insurance Co. Ltd., No. 2 A/o., Minster Insurance
Co. Ltd., No. 2 A/o., Insurance Corporation of Ireland,
“L” A/o., Folksam International Insurance Co. (U.K.)
Ltd., Terra Nova Insurance Co. Ltd. per Andrew Drysdale
Ltd., Economic Insurance Co. Ltd., “GENERAL” A/o.,
c/o Willis, Faber & Dumas Ltd., Ten Trinity Square, Lon-
don EC3P 3AX England.
iii
LIST OF PARTIES — Continued
Petitioner, City of Milwaukee, has no parent com-
panies, subsidiaries, or affiliates to list pursuant to Rule
28.1.
iv
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ............... eee i
(og REAP eee rae eee eee ee ii
eo EE eee ee ee eee Tere re 1
EC a 0b 6 Whe AGHA w 650.5606 Kee ad te dM 2
ee eee eee ee Te eee eee 3
SEAMS GOP Beem CAI ec ic cc cee eccessicenes 3
REASONS FOR GRANTING THE WRIT ........... 11
I. The Seventh Circuit’s Unauthorized Finding of
Fact and Reapportionment of Fault on Appeal (1)
Conflicts with Decisions of this Court, and (2)
Deprives the Petitioner of an Appeal as a Matter
OE TU Sc cscs ccceevesccvawseecnntccsnassoees 11
A. The Seventh Circuit’s Decision Conflicts
with Decisions of This Court and its Ruling
Exceeds its Appellate Authority ........... 11
B. The Seventh Circuit’s Decision Deprives the
Petitioner of an Appeal as a Matter of Right 23
Il. The “Cost of Avoidance” Standard for Appor-
tioning Fault in an Admiralty Case Formulated
by the Seventh Circuit is Inconsistent with United
States v. Reliable Transfer and with Numerous Cir-
cuit Court Decisions that have Apportioned
Fault Without Reference to the Cost of Avoidance
Terres SEE GARPPAASES SERRA AED CRO Cs SmNeREME NOES OO
ee rere eee eet ee ee eee 30
APPENDIX
Decision of the United States Court of Appeals for
the Seventh Circuit (October 16, 1990)........... la
eS
TABLE OF CONTENTS - Continued
Page
Memorandum of Decision and Order of the
United States District Court for the Eastern Dis-
trict of Wisconsin (June 30, 1989) ................ 15a
Order of the United States Court of Appeals for
the Seventh Circuit Denying Petition for
Rehearing (November 21, 1990)................. 145a
vi
TABLE OF AUTHORITIES
FEDERAL Cases
Afran Transport Co. v. S/T Maria Venizelos, 450
F.Supp. 621 (B.D. Pa. 1976) ..... 6s ccscccseneces
Allied Chemical Corp. v. Hess Tankship Co. of Dela-
ware, 661 F.2d 1044 (5th Cir. 1981).............
Anderson v. Bessemer City, 470 U.S. 564 (1985)
Pins sau nwn dies RODEN RRR ET RS SU eeeee 13, 14, 15,
Boudoin v. ]. Ray McDermott & Co., 281 F.2d 81 (Sth
Ce Wee caved ckecuc cuee ke coke ee
Bremmer v. Shedd, 467 F.Supp. 261 (W.D. Pa. 1979)...
Bunge Co. v. M/V Furness Bridge, 558 F.2d 790 (Sth
Cir.) cert. denied 435 U.S. 924 (1977)............
Canal Barge Inc. v. China Ocean Shipping Co., 770
oe Bk A Be arr re rr rry Tere
Chris-Craft Industries, Inc. v. Piper Aircraft Corp.,
516 F2d 172 (2d Cir. 1975) (en banc), rev'd on
other grounds, 430 U.S. 1, reh’g denied, 430 US.
GEO COUN <4 Saw donc 0ns sun encaeeeulanseeneekees
Complaint of B.F.T. No. Two Corp., 433 FSupp. 854
Rs PTT re ee eee
Complaint of Flota Mercante Grancolombiana, S.A.,
440 FSupp. 704 (S.D. N.Y. 1977) ...............
Complaint of Interstate Towing Co., 717 F.2d 752 (2d
GOR TOE 6 6 diss c<ccdk nen Guede aac enean wee ea nens
Dagnello v. Long Island R.R. Co.. 289 F.2d 797 (2d
Ce WES vc bub dum ue $60044 56580 Dee
vii
TABLE OF AUTHORITIES - Continued
Page
Dale Benz, Inc. Contractors v. American Casualty Co.,
ay fo 8 8 | | Ley Terre reer 22
Ente Nazionala Per L’Energia Electtrica v. Baliwag
Nav. Inc., 774 F.2d 648 (4th Cir. 1985)............. 12
Felder v. United States, 543 F.2d 657 (9th Cir. 1976) .15, 22
Gele v. Wilson, 616 F.2d 146 (5th Cir. 1980).......... 25
Getty Oil Co. (Eastern Operations) Inc. v. SS Ponce
DeLeon, 555 F.2d 328 (2d Cir. 1977) ............ 12, 25
Harbor Tug & Barge, Inc. v. Belcher Towing Co., 733
Pe Ge CUCU GEO s soca canncceanecsavanns 12, 25
Hellenic Lines v. Prudential Lines, Inc., 813 F.2d 634
Gee Sa ND ra 6 ee nek Kha saxa neceakeueeesdadaswn 19
Helvering v. Gowran, 302 U.S. 238 (1937)............. 14
Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709
i ee ery were ee ETO ree er eee 14, 15
In re White Cloud Charter Boat Co., Inc., 813 F.2d
SO CE I I occ ck kb bh yun achesebesdenbebess 12
Inland Oil and Transport Co. v. Ark-White Towing
Co., 696 F2d 321 (5th Cir. 1983) ...... rier rere 25
Landau v. ].D. Barter Const. Co., 657 F.2d 158 (7th
St MED «6a kortin 0 Goh ca vi uaa es Ne kas Ce eRS URES ey
McAllister v. United States, 348 U.S. 19 (1954)..... 11, 12
Mitchell v. Evelyn C. Brown, Inc., 310 F.2d 420 (1st
Le SE Sa choi gsinn spn akeuehwhn Ges ee penn iaeeares
viii
TABLE OF AUTHORITIES —- Continued
Page
Petition of United States Steel Corp., 479 F.2d 489
(6th Cir.), cert. denied, 414 U.S. 859 (1973)...... t.. a0
Phillips Petroleum Co. v. Stokes Oil Co., 863 F.2d
Se IE I a sob deoaC SES OSA sey eeeedeecess 12
Portacci v. Moran Towing & Transport Co., 615 F.2d
ee NE Nok hao be es eneh en ennnn deh accbacks 25
Pullman-Standard v. Swint, 456 U.S. 273 (1982) ..12, 14, 15
Red Star Towing & Transport Co., Inc. v. “Ming
Giant”, 552 F.Supp. 367 (S.D. N.Y. 1983)........... 25
SCNO Barge Lines, Inc. v. Sun Transp. Co., 775 F.2d
ee Se I Sas cc w ib Sanka wk asks n ae Cake soos 12
Securities & Exchange Commission v. Chenery Corp.,
ey: Oe EE vn Oa Vy nannies SMMC UNE eee as 2 14
Simpson v. United States, 322 F.2d 688 (5th Cir.
NCR eT HAA TREMOR CELE Cas PTE Kaka ek es 22
Trade Banner Lines v. Caribbean Steamship Co., 521
Fe Sr TE OE cra hd Nb pea KEKE OS Checee ews 28
United States v. Carroll Towing Co., 159 F.2d 169 (2d
Cir. 1947)
United States v. Johnston, 268 U.S. 220 (1925)......... 23
United States v. Reliable Transfer, 421 U.S. 397 (1975)
NSSA Chane avast eReAd ee eee aes Makes 19, 24, 25, 26, 27
United States Fidelity & Guaranty Co. v. Jadranska
Slobodna Plovidba, 683 F.2d 1022 (7th Cir. 1982) .... 27
Wainwright v. Sykes, 422 U.S. 72 (1977) .............. 13
ix
TABLE OF AUTHORITIES - Continued
Page
Unitep States Cope
ei | RN er err rer eer yr se 2
OP ae PIU Ss 0 04 S45 GN A5A chads 5 ba seeeusan 2, 4
ea SEL aa AS ANA ces keew esas cinch etsientaes 2,4
Be RAs a kor cineencens LUER NNER COREE SENS ONG 15
FEDERAL RULES OF CiviL PROCEDURE
kT er Pe Tree PTT eT ee ee Pe Te ere eye 12
a rr Pann were es at ena Ce se rea tes a! 3
NE aa hens egncelurss cis eaesnueeeeethaaees veer 3
a 8 SE ere ee er a ta, 13, 14, 3, &
gf SPEC TET E TIE TEL ee eA TR Te ee ETS 3
Pe IEE ss 05:6 FA CONUE Ag Cie CORO e he eee hea Rees 12
OTHER AUTHORITIES
Abston and Kunz, Collision Survey 1988: Survey of
Reported Collision Decisions in the Federal Courts,
ED WAM. DUG, Cid. Gee CUS osc cscs cescsssences 19, 26
6 M. Cohen, Benedict on Admiralty, Doc. No. 3-2
Pee Ae Is ceed caves sa caic cc tae sc eeue wes s 26
Brussels Collision Liability Convention of 1910,
oR Perry ny Trae yn ae Pr a errr: 26
11 C. Wright & A. Miller, Federal Practice and Pro-
CRI Te Oy Se PUES bv ay os cides cceseaeca ds 20
No.
La
—
In The
Supreme Court of the United States
October Term, 1990
CITY OF MILWAUKEE,
y, Petitioner,
CEMENT DIVISION, NATIONAL GYPSUM
COMPANY, et al.,
Respondents.
y
—_r
Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit
>
is
PETITION FOR A WRIT OF CERTIORARI
— *
vw
The petitioner, City of Milwaukee, respectfully prays
that a writ of certiorari issue to review the judgment and
opinion of the United States Court of Appeals for the Sev-
enth Circuit entered in the above-entitled proceeding on
October 16, 1990.
OPINIONS BELOW
The opinion of the Court of Appeals for the Seventh
Circuit is reported at 915 F2d 1154 (7th Cir. 1990), and is
reprinted in the appendix hereto. [1a]
1
2 |
The memorandum decision and order of the United |
States District Court for the Eastern District of Wisconsin
(Curran, D.J.) has not been reported. It is reprinted in the
appendix hereto. [15a]
,%
—_
JURISDICTION
Invoking federal jurisdiction under 28 U.S.C. § 1333,
the respondents brought this suit in admiralty in the
Eastern District of Wisconsin. The Eastern District bifur-
cated the trial of liability and damages. On June 30, 1989,
the Eastern District, after the issue of liability was tried to
the court, issued a decision and order which held that
both petitioner and respondents were negligent and con-
tributorily negligent and apportioned fault 96 percent
against the respondents and four percent against the
petitioner. [15a]
Respondents appealed the decision of the Eastern “a;
District to the Seventh Circuit under 28 U.S.C.
§ 1292(a)(3). On October 16, 1990, the Seventh Circuit
entered an opinion and judgment reversing the Eastern
District’s allocation and reapportioned fault two-thirds
against the respondents and one-third against the peti-
tioner. [la] The petitioner filed a petition for rehearing en
banc, which was denied by the Seventh Circuit on
Nevember 21, 1990. [145a]
The jurisdiction of this Court to review the judgment
of the Seventh Circuit is invoked under 28 U.S.C.
§ 1254(1).
.
3
STATUTES INVOLVED
Fed. R. Civ. P. 52(a) Findings by the Court
(a) Effect. In all actions tried upon the facts without
a jury or with an advisory jury, the court shall find the
facts specially and state separately its conclusions of law
thereon, and judgment shall be entered pursuant to Rule
58; and in granting or refusing interlocutory injunctions
the court shall similarly set forth the findings of fact and
conclusions of law which constitute the grounds of its
action. Requests for findings are not necessary for pur-
poses of review. Findings of fact, whether based on oral
or documentary evidence, shall not be set aside unless
cleariy erroneous, and due regard shall be given to the
opportunity of the trial court to judge of the credibility of
the witnesses. The findings of a master, to the extent that
the court adopts them, shall be considered as the findings
of the court. It will be sufficient if the findings of fact and
conclusions of law are stated orally and recorded in open
court following the close of the evidence or appear in an
opinion or memorandum of decision filed by the court.
Findings of fact and conclusions of law are unnecessary
on decisions of motions under Rules 12 or 56 or any other
motion except as provided in Rule 41(b).
y%
vr
STATEMENT OF THE CASE
On December 24, 1979, the SS EM FORD, loaded with
5,700 tons of cement, was moored in a slip in Mil-
waukee’s outer harbor on southern Lake Michigan. In the
course of a severe northeasterly winter storm, the FORD,
over a twelve-hour period, broke loose from its moorings,
4
4
battered_against the headwall of the slip, tore holes in its
hull, took on water and sank to the bottom of the slip.
The owners of the vessel, National Gypsum, and its
insurers brought this suit in admiralty pursuant to 28
U.S.C. § 1333 against the City seeking $6.5 million in
damages. The suit alleged, among other things, that the
City had negligently breached its duty as a wharfinger by
failing to warn National Gypsum of a hidden danger in
the berthing slip. The City denied fault and alleged in its
counterclaim that National Gypsum was negligent in
leaving the FORD moored in an outer harbor slip in
winter virtually unmanned, and with no means of mon-
itoring weather or summoning tugs or a pilot for assis-
tance. The City sought to recover $250,000 for damages
caused by the vessel crashing against the dock walls.
The trial was bifurcated, with the liability portion
tried to the District Court without a jury. The District
Court, in a 140-page opinion, found both National Gyp-
sum and the City negligent and contributorily negligent,
and found National Gypsum 96 percent at fault and the
City 4 percent at fault.
National Gypsum, by means of an interlocutory
appeal pursuant to 28 U.S.C. § 1292(a)(2), appealed that
portion of the District Court’s decision apportioning fault
96/4 as well as a separate issue. The Seventh Circuit, in a
2'/2 page discussion in its eleven-page opinion, held that
the District Court’s apportionment of fault was clearly
erroneous and reapportioned fault two-thirds upon
National Gypsum and one-third upon the City. This
eigl t-fold increase of the City’s fault increased the City’s
potential liability from a range of approximately $0 to
$40,000 to a range of approximately $2 million to $4
5
million, depending upon how the unresolved damages
issues will be decided.
The District Court found the facts to be as follows.
Upon the FORD’s arrival in Milwaukee’s outer harbor on
December 21, 1979, its captain, Captain Patrick Gallagher,
contacted the City’s dock superintendent, Stanley Blawas,
by radio-telephone. Captain Gallagher notified Blawas
that the FORD was instructed to lay up for the winter
beginning on December 23, 1979 at National Gypsum’s
terminal located in the City’s inner harbor. Because
National Gypsum’s terminal was unavailable to the
FORD for the next three days, Blawas offered the captain
a berth at South Slip No. 1 in the outer harbor for a
temporary tie-up. Blawas told the captain that it would
be easier for the FORD to maneuver in and out of that
slip. The captain accepted the slip without making any
inquiry as to its safety and moored the vessel bow in,
starboard side to the dock. [33a-34a]
The next morning, December 22nd, National Gypsum
changed the FORD’s orders and instructed the captain to
leave the vessel berthed in the outer harbor, to discharge
its officers and crew for the holidays, and then to order
their return after Christmas to make one more voyage
before returning to Milwaukee for its winter lay-up. [40a]
Captain Gallagher did not inform the City of this change
in the FORD’s plans. [100a] However, when Blawas hap-
pened to be on the vessel later that day on other business,
the captain did inform Blawas that the FORD would need
to tie up for a number of days and that part of the crew
would be leaving for the holidays. Blawas then told the
captain that the outer harbor could get “heavy” in a
storm; Blawas added that the waves in the slip were
generally one to two feet. [41a] Blawas offered the captain
6
a more sheltered inner harbor berth, which the captain
rejected because the crew had already begun to double
the lines and moving the ship would have cost time and
money. [42a, 101a] Later on the 22nd, the captain dis-
charged the entire crew, but left aboard five crewmen
who agreed to stay as shipkeepers. [42a-43a] Before his
own departure, he also shut down the ship’s radio-tele-
phone as well as the radio which would normally receive
weather reports. [44a-45a]
Although the National Weather Service broadcast
weather forecasts for the port area on December 23rd and
24th, which gave clear warning of the severity and direc-
tion of the approaching storm, no one on the FORD had
been assigned to monitor the weather. At 7:00 A.M. on
December 24th, the United States Coast Guard posted
gale warnings for southern Lake Michigan. None of those
aboard the vessel had heard the forecasts or knew of the
warning. [45a-50a] At approximately 1:00 P.M. on Decem-
ber 24th, a crew member noticed that the FORD was 10 to
15 feet off the dock at the stern and the wind velocity and
wave height had increased markedly; the boarding lad-
der, now off the dock, was then brought on board. After
unsuccessful efforts to tie up the vessel, tugs arrived at
4:00 P.M., but could not help because there was no pilot
aboard the FORD. Tugs returned at 6:00 P.M., but could
not contact the ship by radio. [51a-53a]
A licensed pilot did arrive at 5:30 P.M., saw that the
bow of the ship was pounding against the headwall, and
jumped aboard the FORD, along with three others, to
prepare it to be towed from the slip. At 8:00 P.M., the
pilot successfully summoned tugs, but by that time the
FORD’s rolling actions were too severe and attempts to
remoor the vessel proved unsuccessful. At 11:00 P.M., the
7
pilot found that the ship was taking on water; near mid-
night the ship was abandoned by all hands. That night
the ship sank to the bottom of the slip. [53a-55a]
The District Court found the City negligent in not
adequately warning National Gypsum that wind and
wave conditions could develop in the slip occupied by
the FORD that would endanger the vessel. Moreover,
although the City did not know that the captain planned
to discharge virtually the entire crew, the District Court
found that the City failed to solicit sufficient information
from the captain to decide either to order the vessel to
remain manned while tied up or to move off the berth.
[57a-58a, 102a-103a]
The District Court found the shipowner negligent
because: (1) National Gypsum knew from regulations
published earlier by a marine insurance association that
Milwaukee’s outer harbor was not a safe location to leave
a vessel moored in winter without a crew, [37a-38a, 131a]
(2) it had been specifically warned by a marine surveyor
two weeks before the sinking that Milwaukee’s outer
harbor was subject to heavy surge in northeasterly winds,
[31a-32a] and (3) its captain had been warned by the City
that the weather could get “heavy” in the outer harbor.
[41a] Despite this knowledge, the District Court found
that National Gypsum had failed to follow prudent mar-
itime practices in three significant respects. First,
National Gypsum failed to man the FORD with a captain
or licensed pilot and sufficient crew to operate the vessel;
as a consequence, the FORD could not be moved out of
the slip, either by its own power or with assistance of
tugs once gale warnings were issued early in the day or
later in the day when her lines began to part. [58a,
126a-127a] Second, National Gypsum failed to monitor
8
the weather; as a consequence, no one on the vessel heard
the weather forecasts indicating that gale conditions were
developing on southern Lake Michigan. [59a, 127a-128a]
Third, National Gypsum failed to provide those on board
with ship-to-shore communications; as a consequence,
they did not learn of the i.npending storm until the ship
moved away from the dock, and, once the ship did move
away from the dock, they could not effectively summon
help. [128a]
The District Court held that fault should be appor-
tioned in accordance with the relative culpability of the
parties and found that National Gypsum had to bear a far
greater share of the fault for the casualty than the City.
[135a] National Gypsum, the District Court found, consis-
tently chose a course of action that would save it time
and money, even at the cost of risk to its vessel.
[135a-137a] The District Court found a great disparity in
culpability because: (1) the disparity in tasks and duties
imposed by law on a shipowner is far greater than those
imposed on a wharfinger, (2) the shipowner remained in
complete custody and control of the vessel and, therefore,
bore the ultimate responsibility for ensuring her safety,
and (3) the potential for suffering a large loss was fore-
seeable to the shipowner because of the large cost of the
property — the ship and the cargo — the shipowner had at
risk. [138a-139a]
The Seventh Circuit did not find any particular find-
ing of fact or conclusion of law relied upon by the District
Court in apportioning fault to be erroneous. It described
the District Court’s decision as “thorough and largely
well-reasoned” and “basically correct;” nevertheless, the
Seventh Circuit held that the District Court’s apportion-
ment of fault was clearly erroneous. The Seventh Circuit
9
apparently believed that the District Court might have
apportioned fault in proportion to the alleged value of
the property each party had at risk. The Seventh Circuit
based this conclusion upon a single sentence of the Dis-
trict Court’s 140-page opinion that the potential of the
shipowner incurring a large loss was foreseeable because
of the value of the property it had at risk, and upon its
observation that the District Court’s apportionment of
fault ratio was approximately the same as the ratio of the
amount of damages alleged in the pleadings. The Seventh
Circuit stated that the District Court’s “calculations, how-
ever they were arrived at” left it with a “definite and firm
conviction that a mistake had been committed.” It held
that it could not accept the District Court’s apportion-
ment because either the District Court had considered the
value of the respective property at risk, or the District
Court had failed to adequately explain in its decision how
it had arrived at the apportionment of fault. [10a-11a]
Rather than remand the case to the District Court
either to clarify its opinion or to reapportion fault consis-
tent with the Seventh Circuit’s opinion, the appellate
court decided to reapportion fault based upon the record
before it. In doing so, it focused on isolated facts, while
not accepting the District Court’s evaluation of the entire
record. Rather than accept the District Court’s finding
that the City had inadequately warned the FORD, the
Seventh Circuit found that the City had failed to warn the
FORD or National Gypsum of any possible danger to the
FORD. [4a] The Seventh Circuit also found that the
FORD’s captain had informed Blawas that “most of the
crew would be gone until December 26th or 27th, but that
a skeleton crew would be left aboard the FORD during
the interim.” [4a-5a] This finding charged the City with
10
greater knowledge than that found by the District Court,
which had found that the captain of the FORD told
Blawas only that “part of the crew would go home for the
holiday.” [41a] In addition, the Seventh Circuit appar-
ently afforded other significant findings of the District
Court less weight than the District Court provided in its
decision. [3a-4a]
The Seventh Circuit then applied a new standard of
measure of liability to a maritime case. “The doctrine of
comparative negligence” the court announced “is gener-
ally supposed to be used to assess liability in proportion
to the cost of avoiding the entire accident to each side.”
[1la] The City could have told the captain more about
possible wave conditions in the slip and could also have
asked the captain more searching questions about his lay-
up plans at no cost, and because the captain could have
undertaken some investigation on his own or could have
questioned Blawas more closely at no cost, the Seventh
Circuit concluded that no reasonable trier of fact could
apportion more than two-thirds of liability to National
Gypsum. Although the Seventh Circuit apparently found
the “cost of avoidance” to be equal, it concluded that
National Gypsum must bear a greater share of the fault
than the City because a captain is ultimately responsible
for his ship and, in this case the captain had left the
FORD “a sitting duck.” On this basis the Seventh Circuit
reapportioned fault two-thirds upon National Gypsum
and one-third upon the City. [11a-12a]
La
4
11
REASONS FOR GRANTING THE WRIT
I. The Seventh Circuit’s Unauthorized Finding of Fact
and Reapportionment of Fault on Appeal (1) Con-
flicts with Decisions of this Court, and (2) Deprives
the Petitioner of an Appeal as a Matter of Right.
In violation of a rule this Court has described as
“elementary,” proceeding in a fashion this Court has
described as “incredible,” in direct conflict with three
recent decisions of this Court, without statutory author-
ity, and without hearing the key testimony it relied upon,
the Seventh Circuit appropriated from the District Court
the task of finding the facts in this case. This appropria-
tion has resulted in a decision that was not only rendered
without lawful authority, but also is erroneous and unjust
in result. As a consequence, the City, burdened with a
judgment that will cost it millions of dollars, has in effect
been deprived of the right to appeal an erroneous finding
of fact to a higher court. This unauthorized, drastic and
unjust reordering of the federal judicial process deserves
this Court’s attention.
A. The Seventh Circuit’s Decision Conflicts with
Decisions of This Court and its Ruling Exceeds
its Appellate Authority.
It is not disputed that an apportionment of ‘ault in an
admiralty case is a finding of fact and not a conclusion of
law. This Court held in McAllister v. United States, 348
U.S. 19 (1954), that a finding of negligence in an admi-
ralty case tried to the court is a finding of fact that must
be reviewed under the “clearly erroneous” standard. Id.
12
at 20.1 Accordingly, the “clearly erroneous” standard of
review is applied to an admiralty court’s apportionment
of fault in accordance with comparative negligence prin-
ciples in collision (two or more moving vessels) or alli-
sion (involving fixed objects) cases in all circuits that
have considered the issue.?
In three unequivocal decisions, this Court has held
that federal appellate courts, in reviewing a district
court’s decision pursuant to Rule 52(a), should not make
factual findings on their own. In Pullman-Standard v.
Swint, 456 U.S. 273 (1982), this Court held that findings of
“ultimate fact” - in that case a finding of discrimination -
are subject to review under the “clearly erroneous” stan-
dard of Rule 52(a), and, accordingly, appellate courts are
without authority to make independent findings of “ulti-
mate fact,” even if the “ultimate fact” found is based
upon subsidiary facts found by the district court. Id. at
1 Prior to the decision of this Court in McAllister v. United
States, 348 U.S. 19 (1954), federal appellate courts had the
power to conduct de novo reviews in admiralty cases. In 1966,
the Federal Rules of Civil Procedure were made applicable to
admiralty cases, except for prize proceedings. Fed. R. Civ. P. 1,
81(a)(1).
2 See, e.g, Phillips Petroleum Co. v. Stokes Oil Co., Inc., 863
F.2d 1250 (6th Cir. 1988); In re White Cloud Charter Boat Co., Inc.,
813 F.2d 1513 (9th Cir. 1987); SCNO Barge Lines, Inc. v. Sun
Transp. Co., 775 F.2d 221 (8th Cir. 1985); Ente Nazionala Per
L’Energia Electtrica v. Baliwag Nav. Inc., 774 F.2d 648 (4th Cir.
1985); Canal Barge Inc. v. China Ocean Shipping Co., 770 F.2d
1357 (Sth Cir. 1985); Harbor Tug & Barge, Inc. v. Belcher Towing
Co., 733 F.2d 823 (11th Cir. 1984); Getty Oil Co. (Eastern Opera-
tions) Inc. v. SS Ponce DeLeon, 555 F.2d 328 (2d Cir. 1977). The
Seventh Circuit acknowledged that it was bound by the
“clearly erroneous” standard of review in this case. [10a]
i?
285-87. As a consequence, in cases where a district court
has failed to make a finding because of an erroneous view
of the law, or where the findings are infirm because of an
erroneous view of the law, “a remand is the proper course
unless the record permits only one resolution of the fac-
tual issue.” Id. at 292. All this, the Court noted “is ele-
mentary.” Id. at 293. For an appellate court to proceed to
make its own finding of ultimate fact, as the Seventh
Circuit did in this case by its reapportionment of fault,
was described by this Court as “incredible.” Id. at 293.
The rationale for the limited review permitted under
Rule 52(a) was stated by this Court in Anderson v.
Bessemer City, 470 U.S. 564 (1985):
The rationale for deference to the original
finder of fact is not limited to the superiority of
the trial judge’s position to make determinations
of credibility. The trial judge’s major role is the
determination of fact, and with experience in
fulfilling that role comes expertise. Duplication
of the trial judge’s efforts in the court of appeals
would very likely contribute only negligibly to
the accuracy of fact determination at a huge cost
in diversion of judicial resources. In addition,
the parties to a case on appeal have already
been forced to concentrate their energies and
resources On persuading the triai judge that
their account of the facts is the correct one;
requiring them to persuade three more judges at
the appellate level is requiring too much. As the
Court has stated in a different context, the
trial on the merits should be “the ‘main
event’ .. . rather than a ‘tryout on the road.’ ”
Wainwright v. Sykes, 422 U.S. 72, 90, 53 L.Ed. 2d
594, 97 S.Ct. 2497 (1977).
Id. at 574-75. In Anderson this Court held that the Fourth
Circuit erred when it did not limit its review to a deter-
mination of whether the district court’s findings were
14
clearly erroneous, but instead made findings of fact on its
own by drawing factual conclusions from both the facts
found by the district court and from its own interpreta-
tion of the testimony.
In Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709
(1986), this Court held unequivocally that a federal appel-
late court in reviewing a district court’s decision pur-
suant to Rule 52(a) should not make factual findings on
its own. This Court stated:
If the Court of Appeals believed that the District
Court had failed to make findings of fact essential
to a proper resolution of the legal question, it
should have remanded to the District Court to
make those findings. If it was of the view that the
findings of the District Court were “clearly erro-
neous” within the meaning of Rule 52(a), it could
have set them aside on that basis. If it believed that
the District Court’s factual findings were unassail-
able, but that the proper rule of law was misap-
plied to those findings, it couid have reversed the
District Court’s judgment. But it should not simply
have made factual findings on its own.
Id. at 714.
Had the Seventh Circuit followed the decisions of
this Court in Pullman-Standard, Anderson, and Icicle Sea-
foods, it would have reviewed the record as a whole to
determine if the allocation of fault was clearly erro-
neous.? If it concluded that the apportionment was
3 Review of the whole record is required even if the district
court relied upon a wrong ground in arriving at its decision,
because that alone does not justify reversal. It is a settled rule of
law that in reviewing a decision of a lower court, the appellate
court must affirm if the result is correct, “although the lower court
relied upon a wrong ground or gave a wrong reason.” Securities &
Exchange Commission v. Chenery Corp., 318 U.S. 80, 88 (1943) (quot-
ing, Helvering v. Gowran, 302 U.S. 238, 245 (1937)).
15
clearly erroneous, it should have remanded the case to
the District Court for reapportionment in light of its
decision. If the Seventh Circuit could not determine the
basis of the District Court’s decision, then it should have
remanded the case for clarification. Landau v. ].D. Barter
Const. Co., 657 F.2d 158, 164 n.12 (7th Cir. 1981). Instead,
the Seventh Circuit, after deciding the District Court
might have applied an incorrect legal standard, pro-
ceeded to decide the case itself by engaging in the kind of
fact finding this Court held in Pullman-Standard, Ander-
son, and Icicle Seafoods, that circuit courts are without
authority to do.* The Seventh Circuit reached into the
record to find facts different from those found by the
District Court, placed less weight on certain facts found
by the District Court, weighed all the evidence in accor-
dance with a new standard of measure, and indepen-
dently made the “ultimate finding” in the case: the
apportionment of fault.
In reviewing the conversation that was the basis for
the finding of liability against the City, the Seventh Cir-
cuit, without specifically finding it to be “clearly erro-
neous,” ignored the District Court’s finding that Blawas
“warned that the outer harbor could get ‘heavy’ if a
storm came up.” [41a] Instead, the Seventh Circuit, rely-
ing upon its own interpretation of the transcript, found
4 Title 28 U.S.C. § 2106, empowering the federal appellate
courts to modify judgments, decrees, and orders of the lower
courts does not empower them to exercise authority in the
course of a Rule 52(a) review beyond the limits defined in Rule
52(a). Felder v. United States, 543 F.2d 657, 671 (9th Cir. 1976).
Otherwise, the appellate courts in Pullman-Standard, Anderson,
and Icicle Seafoods would have had free reign to decide the
cases as they did.
16
that “the City failed to warn” the FORD or National
Gypsum of “any possible danger to the FORD.” [4a] In
interpreting Blawas’ testimony, the Seventh Circuit
apparently gave no credence to the testimony of an
impartial witness, Walter Heckl, who described the con-
versation as a warning and whose testimony was found
to be credible and relied upon by the District Court.
[101a] Instead, the Seventh Circuit gave greater weight to
what Blawas might have meant when he told the captain
that waves in the outer harbor could “get a little rough.”
In addition, the Seventh Circuit considered the conversa-
tion in an isolated fashion and, not, as the District Court,
in the context of the record as a whole.> [5a]
The Seventh Circuit found that on the morning of
December 22, 1979, the captain of the FORD informed
Blawas that “most of the crew would be gone until
December 26th or 27th, but that a skeleton crew would be
left aboard the FORD during the interim.” [4a-5a] In
contrast, the District Court found that the captain of the
FORD stated only that “part of the crew would go home
for the holiday.” [41a] The Seventh Circuit’s finding
charged the City with greater knowledge of the make-up
of the remaining crew than found by the District Court,
which specifically found that the City was not fully
informed of the undermanning of the FORD when it
noted that “unbeknownest [sic] to the City - the entire
> The captain did not call Blawas to the ship; Blawas was
on the ship by chance on other business. [41a, 100a] Blawas
testified that the captain called Blawas forward to discuss
access to shore power; the discussion of weather was an aside.
The captain was anxious to go home for the holidays. [40a] He
was unreceptive to the “heavy” weather warning and did not
question Blawas further. [101a]
Ee
17
crew was being discharged and the captain was going on
vacation.” [100a-101a, n.29] Yet the Seventh Circuit did
not find the District Court’s finding on this point to be
clearly erroneous.
In reference to other significant findings of the Dis-
trict Court, the Seventh Circuit did not find any to be
clearly erroneous, but apparently gave them less weight
than did the District Court. The District Court found (1)
that the FORD’s captain “knew or should have known of
any dangers which could have developed due to wind
and wave action” in Milwaukee’s outer harbor and South
Slip No. 1 due to his training and experience as a Great
Lakes ship master and his experience with similar har-
bors [36a], (2) that it was “open and obvious” that the slip
had little breakwall protection from wave action from the
northeast, [37a], (3) that National Gypsum knew that
Milwaukee’s outer harbor was not a safe location to leave
a vessel moored in winter without a crew [37a-38a, 131a],
and (4) that National Gypsum was specifically warned of
the danger in reference to the mooring of the FORD at
that location. [31a-32a] The Seventh Circuit’s watered-
down descriptions of these District Court findings indi-
cate that the Seventh Circuit placed less weight on them
than did the District Court. In describing these findings,
the Seventh Circuit stated that National Gypsum was
“aware” of the regulations that prohibited winter moor-
ing in Milwaukee’s outer harbor because of the dangers
of wave surges from northeasterly winds, that National
Gypsum had been “informed” in December of 1979 that
ships berthed in Milwaukee’s outer harbor were subject
to heavy surges during storms with northeasterly winds,
and that the District Court “thought” that the FORD’s
captain could have predicted the possibility of wave
18
surges based on the construction of the berth and his
experience in general. [3a-4a]
The Seventh Circuit then, in order to apportion fault,
weighed the evidence in accordance with its own pre-
cepts. Rather than apportion fault solely on culpability,
the Seventh Circuit initially apportioned fault based upon
the “cost of avoidance” to each party. It concluded that
the “cost of avoidance” was the same for each party
because both the City and the captain could have avoided
the entire accident by being more fo~thright and asking
more questions. Nevertheless, the Seventh Circuit agreed
with the District Court that National Gypsum must bear
more fault than the City because its captain was ulti-
mately responsible for the ship and he had left it “a
sitting duck.” Based upon these precepts and the facts as
found by the Seventh Circuit, it apportioned fault two-
thirds upon National Gypsum and one-third upon the
City. [11a-12a]
The Seventh Circuit apparently believed that it had
authority to reapportion fault itself rather than remand
the case to the District Court for a redetermination of
fault because (1) “on the facts of this case, no reasonable
trier of fact could apportion more than two-thirds of the
liability to National Gypsum,” (2) “the trier of fact dis-
played a willingness to apportion at least this much of the
award to National Gypsum,” and (3) its decision “merely
confine[d] the decision of the district judge to the upper
limit of his discretion.” [12a-13a]
The rationale stated by the Seventh Circuit does not
withstand either legal or logical scrutiny. Although it
cited no authority in support of its rationale, the Seventh
Circuit’s statements are an apparent reference to cases
where an appellate court appropriately may exercise its
19
authority to reduce or increase damages awarded by a
district court. The Seventh Circuit apparently relied
6 Since this Court adopted the pure comparative negli-
gence rule in admiralty in United States v Reliable Transfer, 421
U.S. 397 (1975), only one other federal circuit court has reap-
portioned fault on appeal, Hellenic Lines Ltd. v. Prudential Lines,
Inc., 813 F.2d 634 (4th Cir. 1987). In all other cases, the appel-
late courts either affirmed the apportionment of fault or, if they
found it to be in error, remanded the case to the district court
to reapportion fault. Abston and Kunz, Collision Survey 1988:
Survey of Reported Collision Decisions in the Federal Courts, 13
Tul. Mar. L.J. 355 (1989).
In Hellenic Lines, the Fourth Circuit reversed the district
court’s allocation of fault and reapportioned fault on appeal.
The decision does not provide well-reasoned precedent for the
Seventh Circuit’s decision because the Fourth Circuit in reap-
portioning fault relied upon its authority to decrease or
increase the amount of damages awarded by the trial court. Id.
at 638. As pointed out in this petition, the appellate authority
to decrease or increase damages does not legally or logically
include the authority to apportion fault on appeal. See infra pp.
20-22. Of particular significance is the Fourth Circuit’s mis-
placed reliance upon Chris-Craft Industries, Inc. v. Piper Aircraft
Corp., 516 F.2d 172 (2d Cir. 1975) (en banc), rev'd on other
grounds, 430 U.S. 1, reh’g denied, 430 U.S. 976 (1976). In that case
the Second Circuit held that it had the authority to modify the
judgment to increase the award of compensatory damages
because (1) the critical evidence was largely documentary, id. at
186, and (2) the court could do so without having to evaluate
the testimony of witnesses. Id. at 186 n.16. Neither justification
cited by the Fourth Circuit applies in this case because (1) Rule
52(a) was amended after Chris-Craft Industries was decided,
thereafter providing that findings of fact based upon documen-
tary evidence must be reviewed in accordance with the same
“clearly erroneous” standard applied to findings of fact based
upon oral testimony, and (2) the Seventh Circuit in this case,
unlike the Fourth Circuit in Chris-Craft Industries, had to evalu-
ate oral testimony, rather than documentary evidence, to
apportion fault.
20
upon that authority, although in this case damages had
not yet been tried.
The authority of federal appellate courts to decrease
the amount of damages awarded below does not include
the authority to apportion fault because apportionment of
fault is a question of fact, whereas the question of
whether damages are excessive is a question of law. Dag-
nello v. Long Island R.R. Co., 289 F.2d 797, 806 (2d Cir.
1961); See generally 11 C. Wright & A. Miller, Federal
Practice and Procedure: Civil § 2820 (1973). Because of this,
an appellate court that concludes that damages awarded
by a trial judge are excessive cannot exercise its indepen-
dent judgment and reduce the award to a level it believes
to be appropriate, but can only reduce the damages to a
level that would not have mandated reversal had the trial
court awarded that amount of damages originally. Peti-
tion of United States Steel Corp., 479 F.2d 489, 501 (6th Cir.),
cert. denied, 414 U.S. 859 (1973). The reduction permitted
is not the result of a reweighing of the evidence, but the
result of the court’s legal conclusion that the awarding of
the “excessive” portion of damages was erroneous. That
portion of the damage award found not to be legally
excessive is a finding of fact of the lower court, not the
appellate court.
In this case, the Seventh Circuit’s finding of 33'/s
percent fault against the City has no basis in the findings
of the District Court. The District Court apportioned fault
96/4 and the appellate court 667/3/33'/3. Although the
District Court displayed a willingness to apportion at
least 667/3 percent against National Gypsum [because 96
is greater than 66?/s], the District Court did not display a
similar willingness to apportion 331/3 percent against the
City. The additional 29 percent of fault attributed to the
21
City by the Seventh Circuit was a finding of fact made by ~
the appellate court alone. The Seventh Circuit’s conclu-
sion that 331/3 percent against the City represents the
upper limit of the court’s discretion is not rooted in, or in
any way supported by, the finding of 4 percent made by
the District Court. Reapportionment of fault on appeal,
unlike the reduction of damages found to be excessive, by
its very nature creates a gap between the degree of fault
found below and the degree of fault found on appeal in
reference to one of the parties, in this case, the City.
In spite of the statement by the Seventh Circuit that
“no reasonable trier of fact could apportion more than
two-thirds of the liability to National Gypsum,” it cannot
be seriously argued that the Seventh Circuit’s allocation
is the only allocation permitted by the record. Had the
District Court apportioned fault 90/10, or 85/15, or
80/20, it is doubtful that the Seventh Circuit would have
found the District Court’s apportionment clearly erro-
neous based upon the reasons the Seventh Circuit stated
in its decision. To state that no reasonable trier of fact
could apportion fault differently than the appellate court
did in this case is simply to find facts under the rubric of
a conclusion of law and to ascribe to the process of
apportioning fault a degree of precision that does not
exist. In certain circumstances, a record does compel one
conclusion only. For example, if an appellate court con-
cludes that a finding of discrimination is clearly erro-
neous, then a finding of no discrimination logically
follows, and it is of little consequence if the judgment is
entered by the appellate court or the district court.
Apparently, it is the Seventh Circuit’s position that 667/3
/33'/3 is the opposite of 96/4 as a matter of law.
22
The rationale employed to permit appellate courts to
increase damages under limited circumstances is equally
inapplicable to the reapportionment of fault. When appel-
late courts have increased damages, they have done so
only when they were certain that they were not under-
mining the integrity of the trial process. For example, in
Simpson v. United States, 322 F.2d 688 (5th Cir. 1963), the
court increased the damages when it found that “there
are firm guidelines establishing the basic elements of the
award and it can be computed with some degree of
certainty as easily by the appellate court as by the trial
judge ...” Id. at 693. In Dale Benz, Inc. Contractors v.
American Casualty Co., 303 F.2d 80 (9th Cir. 1962), the
court increased the damages where it was “in as good a
position to determine the issues involved on the record
before us as would be the trial judge on remand,” and the
“issues arise out of and are concerned with figures and
arithmetical calculations.” Id. at 82. In Felder v. United
States, 543 F.2d 657, 671 (9th Cir. 1976), the court confined
its modification to a recalculation of damages under cir-
cumstances where most of the changes made involved
arithmetic calculations that the appellate court could per-
form as easily as the trial court.
A finding apportioning fault, unlike a damage
award, has no quantifiable component readily subject to
recalculation, but is dependent upon the application of
law to facts which are as rich and diverse as human
experience. This exercise of judgment is more accurately
done by the trier of fact because “[c]old records rarely
reflect the look, the touch or the feel of the witness... . ”
Mitchell v. Evelyn C. Brown, Inc., 310 F.2d 420, 425 (1st Cir.
1962).
23
B. The Seventh Circuit’s Decision Deprives the
Petitioner of an Appeal as a Matter of Right.
The most dire consequence of an appellate court
engaging in fact-finding is that the regular appellate pro-
cess is so reordered as to deprive litigants of their ordi-
nary right to have findings of fact reviewed by an
appellate court. In this case, the City chose not to appeal
the District Court’s findings of four percent fault against
it because of the relatively small cost of the decision. Had
the District Court, however, found the City to be one-
third at fault, the City, facing the specter of a multi-
million dollar judgment, would have appealed the find-
ing of liability and the apportionment to the Seventh
Circuit.
When an appellate court makes an erroneous finding
of fact on appeal, the party against whom the facts are
found is left with no appeal as a matter of right. A party’s
only recourse is to attempt to convince this Court to
accept its petition for a writ of certiorari. A petition,
however, is not a certain remedy because it is not an
appeal as a matter of right. It is a difficult task to per-
suade this Court to accept a petition solely to review facts
found by the appellate court because this Court, the
supreme interpreter of the law and the Constitution, is
not easily fettered to the petty detail of factfinding. “We
do not grant a certiorari to review evidence and discuss
specific facts.” United States v. Johnston, 268 U.S. 220, 227
(1925).
It cannot be argued that no further appeal is needed
because the facts were found in the course of appellate
review. Facts found on appeal are not based upon the
testimony itself, but upon the record of the testimony, a
sterilized version of a trial, cleansed of all nuance and
24
subtlety. This Court has noted that such a record does not
provide an accurate basis for fact finding. Anderson, 470
U.S. at 574-75. The appeal is further limited by the stan-
dard of review — in this case the “clearly erroneous”
standard. Neither party presents the appeal to the court
in the same manner as the case was presented to the trial!
court. Rather, their energies and arguments are directed
to persuading the court that the appeal should be decided
one way or another based upon the standard of review.
Such argument, by its nature, omits the nuanced analysis
of testimony and exhibits that characterizes post-trial
argument and briefing.”
The Seventh Circuit, by appropriating the role of fact
finder from the District Court, has left the City with no
remedy unless this Court grants the petition to review in
this case.
Il. The “Cost of Avoidance” Standard for Apportion-
ing Fault in an Admiralty Case Formulated by the
Seventh Circuit is Inconsistent with United States
v. Reliable Transfer and Numerous Circuit Court
Decisions that have Apportioned Fault Without
Reference to the Cost of Avoidance.
The Seventh Circuit has formulated a new standard
by which to apportion fault in maritime collision and
allision cases. The new standard - cost of avoidance - is
inconsistent with this Court’s decision in United States v.
Reliable Transfer, 421 U.S. 397 (1975), and numerous circuit
court decisions which have apportioned fault without
reference to “cost of avoidance.” Moreover, apportioning
? Requiring litigants to persuade an appellate court in the
same fashion as a trial court has been described by this Court
as “requiring too much.” Anderson, 470 U.S. at 575.
——eEEE=—=—-
25
fault based upon “cost of avoidance” is illogical and will
interject uncertainty into an area of the law that routinely
involves large damages.
In Reliable Transfer, this Court held “that when two or
more parties have contributed by their fault to cause
property damage in a maritime collision or stranding,
liability for such damage is to be allocated among the
parties proportionately to the comparative degree of their
fault... .” Under this standard, fault is apportioned in
accordance with the relative culpability of the parties.
Harbor Tug & Barge, Inc. v. Belcher Towing Co., 733 F.2d 823,
825 (11th Cir. 1984); Gele v. Wilson, 616 F.2d 146, 148 (5th
Cir. 1980).
Numerous federal appellate courts have reviewed
apportionments of fault by district courts without any
reference to or consideration of the cost of avoidance. See,
e.g., Inland Oil and Transport Co. v. Ark-White Towing Co.,
696 F.2d 321 (5th Cir. 1983); Complaint of Interstate Towing
Co., 717 F2d 752 (2d Cir. 1983); Getty Oil Co. (Eastern
Operations), Inc. v. SS Ponce DeLeon, 555 F.2d 328, 335 (2d
Cir. 1977); Portacci v. Moran Towing & Transport Co., 615
F.2d 293 (5th Cir. 1980); Allied Chemical Corp. v. Hess
Tankship Co. of Delaware, 661 F.2d 1044, 1057 (Sth Cir.
1981). In addition, numerous district courts have allo-
cated fault or reviewed allocations of fault by juries in
admiralty cases without reference to or consideration of
the “cost of avoidance.” Red Star Towing & Transport Co.,
Inc. v. “Ming Giant”, 552 FSupp. 367 (S.D. N.Y. 1983);
Complaint of Flota Mercante Grancolombiana, S.A., 440
F.Supp. 704, 726 (S.D. N.Y. 1977); Bremmer v. Shedd, 467
F.Supp. 261, 267 (W.D. Pa. 1979); Afran Transport Co. v. S/T
Maria Venizelos, 450 F.Supp. 621, 623 (E.D. Pa. 1978); Com-
plaint of B.F.T. No. Two Corp., 433 F.Supp. 854, 875 (E.D. Pa.
a
26
1977). No federal court has used the “cost of avoidance”
standard advocated by the Seventh Circuit in apportion-
ing fault in an admiralty case. Abston and Kunz, Collision
Survey 1988: Survey of Reported Collision Decisions in the
Federal Courts, 13 Tul. Mar. L.J. 355 (1989) (compiling
federal collision and allision decisions reported within
the last fifteen years).
In Reliable Transfer, this Court noted that prior to the
decision in that case, the United States was virtually
alone among the world’s major maritime nations not to
adhere to the Brussels Collision Liability Convention of
1910 that provides for the apportionment of damages on
the basis of degree of fault whenever it is possible to do
so.8 This Court noted in deciding Reliable Transfer that the
fact that the United States did not adhere to the conven-
tion rule had encouraged trans-Atlantic forum shopping.
Id. at 404.
“Cost of avoidance” is a standard quite different
from culpability. The former is an economic standard
which can be measured and compared. The latter reflects
the judge or jury’s considered judgment as to the quality
and gravity of each party’s negligence. Adoption of the
“cost of avoidance” standard in the United States would
8 Article 4 of the Brussels Collision Liability Convention of
1910 provides in part: “If two or more vessels are in fault the
liability of each vessel shall be in proportion to the degree of
the faults respectively committed. Provided that if, having
regard to the circumstances, it is not possible to establish the
degree of the respective faults, or if it appears that the faults
are equal, the liability shall be apportioned equally.” United
States v. Reliable Transfer, 421 U.S. 397, 403 n.6; 6 M. Cohen,
Benedict on Admiralty Doc. No. 3-2 (rev. 7th ed. 1990).
27
once again create in the United States a rule for appor-
tioning fault significantly different from the rule
throughout most of the world and would risk the rein-
troduction of the forum shopping this Court sought to
end in Reliable Transfer.
The precept that the burden of precaution or, to
restate it in economic terms as did the Seventh Circuit,
the “cost of avoidance” is to be considered in deciding
whether a party’s conduct was negligent was suggested
by Judge Learned Hand in United States v. Carroll Towing
Co., 159 F2d 169, 173 (2d Cir. 1947). Under the “Hand
formula,” i.e., B < P x L,a party would be negligent if the
burden of precaution (B) were less than the probability of
harm (P), multiplied or discounted by the gravity of the
injury (L). The “Hand formula,” however, was suggested
as a means of assisting courts in determining whether
action or inaction constituted negligence. The Seventh
Circuit, in United States Fidelity & Guaranty Co. v. Jad-
ranska Slobodna Plovidba, 683 F.2d 1022, 1026 (7th Cir.
1982), approved the use of the “Hand formula” to deter-
mine whether conduct was negligent, but, even in that
limited context, did so with the caveat that it was not
holding that courts must use the “Hand formula” to
determine negligence in all maritime cases.
The “cost of avoidance” standard, although a useful
concept in deciding whether or not a party’s conduct was
negligent, cannot logically be applied to apportioning
fault, because in many cases the cost of avoidance has
nothing to do with culpability. Many casualties might
have been avoided had the parties involved been more
alert, in which case the cost of avoidance could have been
equal. The measure of a party’s culpability, however,
depends upon the extent of their legal duty. Bunge Co. v.
28
M/V Furness Bridge, 558 F.2d 790, 799 (5th Cir. 1977), cert.
denied 435 U.S. 924; Trade Banner Lines v. Caribbean Steam-
ship Co., 521 F.2d 229, 230 (5th Cir. 1975); Boudoin v. J. Ray
McDermott & Co., 281 F.2d 81, 84 (5th Cir. 1960). The
contradiction in the two concepts is illustrated in this
case. The Seventh Circuit, one page after it announced the
concept, was compelled to limit its application because of
the disparity between the legal responsibilities of the
captain as compared to the wharfinger for the welfare of
the ship.
When the concept of “cost of avoidance” is used in
conjunction with the “Hand formula” to determine if a
party’s conduct was negligent, the concept provides a
helpful tool because of the comparative relationship
established: B < P x L. No similar comparative relation-
ship is established when the concept is applied to appor-
tioning fault because the “Hand formula” gives no
guidance to comparing one party’s “cost of avoidance”
with another. For example, if the cost of avoidance to one
party is $5,000 and the cost to the other is $15,000, and
P x L is $5,000,000, is the cost of avoidance for both
parties equally low, indicating fault should be appor-
tioned 50/50, or is $15,000 high and $5,000 low, requiring
allocation of 85/15, or should the costs simply be com-
pared with each other, and fault allocated 75/25? Obvi-
ously, none of these considerations resolve the issue of
the culpabilities of the parties.
The introduction of the cost of avoidance standard
raises the question of how this cost is to be measured.
This case does not provide a good illustration of how to
measure the cost because neither party was aware that
this standard would ultimately be applied to apportion
fault in this case, and therefore neither party put into the
29
record evidence concerning the cost of avoidance. The
Seventh Circuit assumed the cost of avoidance to be the
same because it concluded that more forthrightness, both
on the part of the captain and the City’s dock superinten-
dent, might have prevented the casualty. Had the parties
submitted evidence on this issue, the record would not
have supported the Seventh Circuit’s conclusion.9
Everyday in the United States judges and juries
apportion fault on the basis of culpability without any
great difficulty. The concept of culpability, although diffi-
cult to articulate in abstract terms, is not difficult to apply
9 The cost of avoidance from the City’s perspective would
have been much greater than that concluded by the Seventh
Circuit. If the City, to avoid a casualty, is required to direct
captains of vessels where to moor their ship, how to tie it up
and man it, how to monitor the weather and maintain ship-to-
shore communications, the City would have to employ a per-
son who is qualified to make those decisions. The City would
have to hire a port captain who was licensed to navigate and
dock ships on the Great Lakes. The port captain would have to
meet with the captain of the vessel and ascertain the make up
and health of the ship’s crew, the capabilities and mechanical
condition of the ship, the nature of its cargo and its plans. The
port captain would then have to review with the ship’s captain
all of this information and tell the captain, from the port’s
point of view, where and how he should dock his vessel. The
cost of doing this, of course, would be considerably higher
than the cost of the City’s dock superintendent being more
forthright. For National Gypsum, there would be no additional
cost because it has already incurred the cost of employing a
captain to make these decisions. If that were the state of the
record, one must ask, how would the damages be apportioned?
If the cost to the City of employing a port captain were $80,000
per year, and the cost to National Gypsum to maintain the
same level of knowledge was zero, would any fault be attrib-
uted to the City?
30
because it is a concept rooted in the common experience
of human life. To introduce the concept of “cost of avoid-
ance” into allocating fault in maritime cases will once
again place the United States out-of-step with the world’s
major maritime powers. It is not only illogical, because it
is inconsistent with culpability, but also will add needless
confusion to an area of the iaw that is well settled with-
out any assurance that it will result in more just appor-
tionments of fault.
CONCLUSION
For these reasons, the petitioner respectfully requests
the Court to grant the petition.
Respectfully submitted,
Grant F. LANGLEY
Milwaukee City Attorney
Counsel of Record
RupDoLreH M. Konrap
Deputy City Attorney
THomas J. BEAMISH
Assistant City Attorney
800 City Hall
200 East Wells Street
Milwaukee, Wisconsin 53202
(414) 278-2601
Counsel for Petitioner
February 14, 1991
APPENDIX
IN THE
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
No. 89-2631
CreMENT Division, NaTioNAL Gypsum Company, REED &
BROWN, INCORPORATED, NEw YORK MARINE MANAGERS, INCOR-
PORATED, et al.,
Plaintiffs-Appellants,
City oF MILWAUKEE,
Defendant-Appellee.
-
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 80 C 1001 - Tuomas J. Curran, Judge.
ARGUED ApriL 13, 1990 — Decipep Octoser 16, 1990
Before Cupany, Posner and Fiaum, Circuit Judges.
Cupany, Circuit Judge. In a heavy storm on Christmas
Eve of 1979, the SS EM FORD, a self-unloading bulk
cement carrier loaded with 5,700 tons of bulk cement,
tore loose from its moorings, battered against the head-
wall of its berth and eventually sank to the bottom of the
Milwaukee Harbor. Following this disaster, the FORD’s
owner, the Cement Division of the National Gypsum
Company, along with the hull and cargo insurers of the
ship, [referred to collectively as “National Gypsum’”]
sued the City of Milwaukee in admiralty. National Gyp-
sum claimed that the City had breached its obligations as
a wharfinger by assigning the FORD to a slip it knew to
2a
be unsafe in heavy winds and by negligently failing to
warn National Gypsum of the hidden dangers in the
berthing slip it assigned to the FORD. National Gypsum
sought over $6,500,000 in compensatory damages. The
City of Milwaukee denied fault and alleged contributory
negligence on the part of National Gypsum, seeking to
recover $250,000 for damage caused to its dockwall and
other property by the FORD’s battering during the
Christmas Eve storm.
After a motion by the City, the district court disqual-
ified National Gypsum’s original attorney and his law
firm because of potential conflicts. At a bifurcated trial on
the issue of liability, the district court found National
Gypsum to be 96% negligent and the City to be 4%
negligent. This interlocutory appeal in admiralty fol-
lowed under 28 U.S.C. section 1292(a)(3). Damages are to
be determined later. We reverse the district court’s alloca-
tion of fault and find that we lack jurisdiction, at this
time, to review the district court’s disqualification order.
I. Facts
Our tale begins on November 15, 1979, when
National Gypsum’s Fleet Captain, Eugene P. Stafford,
telephoned Stanley Blawas, an Assistant Dock Superin-
tendent of the Milwaukee Harbor, requesting a winter
lay-up berth for the FORD. Assistant Dock Superinten-
dent Blawas offered the FORD a berth at Terminal No. 4
in South Slip No. 3 in Milwaukee’s outer harbor. Captain
Stafford inquired about the safety of the slip before
accepting the berth, but was assured by Blawas that the
berth was safe.
3a
Before it had a chance to berth at Terminal No. 4,
National Gypsum changed the FORD’s winter mooring
orders. Instead of mooring at Terminal No. 4 in the outer
harbor, the FORD was ordered to wait in the harbor for
its sister ship and then dock at National Gypsum’s own
terminal in Milwaukee’s inner harbor. After being
apprised of the change in the FORD’s plans, Assistant
Dock Superintendent Blawas offered to let the FORD tie
up temporarily at Terminal Pier No. 1 in South Slip No. 1
in the outer harbor while the FORD was waiting for its
sister ship. Before accepting the offer of South Slip No. 1,
Patrick Gallagher, captain of the FORD, asked Blawas
about the depth of the water in the slip and about the
availability of electric power. He did not ask about the
safety of South Slip No. 1.
After accepting the berth, Captain Gallagher consul-
ted the 1979 United States Coast Pilot to see what it had to
say about the harbor. This maritime source contained no
warnings of hazardous wave surges in Milwaukee’s outer
harbor, but did note that the breakwater in the harbor
could be obscured during heavy waves. From 1912 to
1966 (some 13 years before the sinking of the FORD), one
of the appellants, the Great Lakes Protective Association,
published the winter mooring regulations of the United
States Salvage Association in its annual reports. These
regulations provided that winter mooring would not be
appreved in Milwaukee’s outer harbor Lecause of the
danger of wave surges from northeasterly winds. The
district court found that National Gypsum was aware of
these mooring regulations. In addition, Marine surveyor
William Wade testified that he had informed National
EE ——————
4a
Gypsum in December of 1979 that ships berthed in Mil-
waukee’s outer harbor were subject to heavy surges dur-
ing storms with strong northeasterly winds. National
Gypsum denies that it received this warning. The district
court found otherwise.
The FORD ’s captain, although quite experienced, had
never seen or apparently heard of dangerous wave surges
in Milwaukee’s outer harbor. The district court thought
that the possibility of wave surges could have been pre-
dicted from the construction of the berth and from the
captain’s previous experience mooring in other harbors.
It is clear from previous claims and from records of wave
heights kept by the City, however, that the City had
actual knowledge that mooring in the outer harbor -
especially in South Slip No. 1 - was unsafe during heavy
storms. Despite this knowledge, the City failed to warn
either the crew of the FORD or National Gypsum of any
possible danger to the FORD.
Before long, National Gypsum was to change the
FORD’s orders for the last time. National Gypsum com-
manded the FORD, which was already berthed in South
Slip No. 1, to remain in Milwaukee over the Christmas
holiday and then make one more cement delivery before
mooring at Milwaukee for the winter. The FORD’s winter
mooring lines were put out to secure the ship while the
crew was on vacation.
At a meeting on the FORD on the morning of Decem-
ber 22, 1979, Captain Gallagher informed Assistant Dock
Superintendent Blawas that the ship would be laying up
for the holiday and that most of the crew would be gone
until December 26th or 27th, but that a skeleton crew
5a
would be left aboard the FORD during the interim.
Blawas warned Captain Gallagher that waves in the outer
harbor could “get a little rough” if a storm came up. By
“rough,” Blawas testified that he meant waves of two to
four feet. (Blawas conceded, however, that it was possible
he had actually undercut this warning by specifying
waves of one to two feet. Appellant’s Appendix at
152-53.) Later that same day, Captain Gallagher dis-
charged all but five of the crew for the holidays. In
accordance with National Gypsum’s practice while in
port and with the City’s practice on holidays, no one was
assigned to watch the weather. And no one had the key to
the ship’s radio or telephone. Captain Gallagher expected
the remaining crew to use a nearby pay phone in case of
an emergency. An independent company was retained on
call to provide extra manpower and materials as needed.
By December 24, 1979, a heavy storm had developed.
Waves of up to 15 feet crashed into South Slip No. 1. At
approximately 1 p.m. on that day, one of the FORD’s
remaining crew members realized that the FORD was
from 10 to 15 feet off the dock at the stern and that the
FORD was in danger. The crew called for help. The Coast
Guard was contacted (but no one was available to render
assistance because of the holiday). In addition, tugboats
came out to assist the FORD on three different occasions,
to no avail. The tugboats were unable to help the FORD
because they could not communicate with it and because
it had no pilot on board. Because of the severe waves, the
FORD tore lose [sic] from its moorings, started pounding
against the Meadwall of the dock, became dangerous to
those trying to save it and was eventually abandoned.
The FORD ultimately sank.
6a
National Gypsum brought suit against the City of
Milwaukee, claiming that the City had breached its obli-
gations as a wharfinger by assigning the FORD to a slip it
knew to be unsafe in heavy winds and by negligently
failing to warn National Gypsum of the hidden dangers
in the berthing slip it assigned to the FORD. National
Gypsum asked for over $6,500,000 in compensatory dam-
ages. The City of Milwaukee denied fault and alleged
contributory negligence on the part of National Gypsum,
seeking to recover $250,000 for damage caused to its
dockwall and other property by the FORD’s battering
during the Christmas Eve storm.
After a motion by the City, the district court disqual-
ified National Gypsum’s original attorney and his law
firm because of potential conflicts. After the liability
phase of a bifurcated trial, the district court found that
National Gypsum was negligent and at fault: for laying
up the FORD at South Slip No. 1, for failing to employ or
retain a standby master or pilot and crew members
aboard who could navigate the vessel, for failing to main-
tain ship-to-shore radio-telephone communications and
for failing to monitor the weather. The district court
found the City negligent and at fault: for allowing the
vessel to temporarily lay up at South Slip No. 1, for
failing to warn the ship that wind and wave conditions
could develop which would endanger the vessel and the
City’s dockwall and for failing to order that the ship
remain manned or move off the berth. The district court
also found that the City had breached a wharfinger’s
implied warranty of offering safe berths. The court
apportioned 96% of the fault to National Gypsum and 4%
7a
to the City, a ruling which essentially left both parties to
bear their own losses.
On appeal, National Gypsum argues essentially that:
(1) the district court erred in not finding the City 50% at
fault because the City’s actions constituted either wanton
negligence or negligence greater than 4%; and (2) that the
district court’s ruling disqualifying National Gypsum’s
original attorney and his law firm was clearly erroneous.
The City has not cross-appealed. We find that we do not
have jurisdiction to review the district court’s disqual-
ification order, but reverse the district court’s allocation
of fault.
II. Discussion
A. Pendent Appellate Jurisdiction over the Disqualification
Order
The first issue before us is whether this court has
jurisdiction to hear an appeal from the district court’s
disqualification order. Normally, interlocutory orders are
not appealable. 28 U.S.C. section 1292(a)(3), however,
empowers us to hear “[i]nterlocutory decrees of [] district
courts or the judges thereof determining the rights and
liabilities of the parties to admiralty cases in which
appeals from final decrees are allowed.”
National Gypsum contends that we have statutory
jurisdiction to review the merits of the district court’s
disqualification order (1) because the disqualification
order is a final order with respect to the issue of liability
and apportionment of fault between the parties or (2)
because the disqualification order is an adverse deter-
mination on the substantive right of National Gypsum to
8a
be represented by the counsel of its choice. Despite
National Gypsum’s arguments to the contrary, it is clear
that this court does not have statutory jurisdiction to hear
an appeal from the district court’s disqualification order.
The order does not “determin[e] the rights and liabilities
of the parties.” (emphasis supplied) Rather, it merely dis-
- qualifies National Gypsum’s original lawyer and his law
firm. The district court’s order apportioning liability
between National Gypsum and the City of Milwaukee, on
the other hand, is an appealable interlocutory order in
admiralty.
This court does have the ability to review some inter-
locutory orders — even though it may lack the statutory
jurisdiction to do so - under the doctrine of pendent
appellate jurisdiction. Under this doctrine, “an order not
itself appealable, but closely connected to an order that is
appealable, may be reviewed as a pendant [sic] to the
latter order.” Patterson v. Portch, 853 F.2d 1399, 1403 (7th
Cir. 1988). The doctrine is very limited in scope since an
expansive application of the pendent appellate jurisdic-
tion doctrine would severely undercut the purposes
behind the final judgment rule. Id. Hence, we have held
that “[w]hen an ordinarily unappealable interlocutory
order is inextricably entwined with an appealable [] order,
the former may be reviewed at the same time if, but only
if, there are compelling reasons for not deferring the appeal
of the former order to the end of the lawsuit, at which
time all previous orders are appealable together with the
final judgment.” Illinois ex rel. Hartigan v. Peters, 861 F.2d
164, 166 (7th Cir. 1988) (emphasis supplied).
We find that the requisite “compelling reasons” are
absent in this case. The district court’s disqualification
9a
order is not “inextricably entwined” with the district
court’s allocation of fault. Indeed, the two issues are
actually unrelated (although the court’s ruling on the
former may have had some effect upon the latter).
National Gypsum contends, however, that it is in the
“best interests of justice” to review the district court’s
disqualification order now, at the conclusion of the lia-
bility phase. (If the disqualification order were reversed
after the damages phase is completed and a final judg-
ment entered, the whole case would presumably have to
be retried.) We do not find National Gypsum’s judicial
economy argument, in this context, to be persuasive. An
erroneous evidentiary ruling may persuade a litigant to
waive a (fundamental) constitutional right, but the evi-
dentiary ruling cannot normally be appealed until there
has been a final judgment. If the ruling were erroneous
and the error prejudicial, much judicial effort would
probably have been wasted. But, the final judgment rule
prevails, nevertheless. In short, we see no special reason
why we should. depart from the normal final judgment
rule or expand the doctrine of pendent appellate jurisdic-
tion (and undercut the final judgment rule) to fit this
situation.
B. The Allocation of Fault
In United States v. Reliable Transfer Co., 421 U.S. 397,
411 (1975), the Supreme Court held that “when two or
more parties have contributed by their fault to cause
property damage ina maritime collision . . . , liability for
such damages is to be allocated among the parties pro-
portionately to the comparative degree of their fault, and
10a
that liability for such damages is to be allocated equally
only when the parties are equally at fault or when it is
not possible fairly to measure the comparative degree of
their fault.” This rule provides the backdrop we must use
to analyze this case.
Our standard of review is well settled. This court
may not set aside the judgment of a district court sitting
in admiralty unless that judgment is found to be clearly
erroneous. McAllister v. United States, 348 U.S. 19, 20
(1954). The clearly erroneous standard of review applies
to an admiralty court’s apportionment of fault in accor-
dance with comparative negligence principles in collision
cases. See, e.g., Barnett v. Sea Land Services, Inc., 875 F.2d
741, 745 (9th Cir. 1989). “A finding is ‘clearly erroneous’
when although there is evidence to support it, the review-
ing court on the entire record is left with the definite and
firm conviction that a mistake has been committed.”
United States v. Gypsum Co., 333 U.S. 364, 395 (1948).
We think that the district court’s thorough and
largely well reasoned opinion in this case is basically
correct. Our review of the record leads us to the conclu-
sion that the district court was right when it found both
National Gypsum and the City of Milwaukee to be at
fault in the sinking of the FORD on that fateful Christmas
Eve. Moreover, we think it clear, as did the district court,
that the fault of National Gypsum was more egregious
than the fault of the City. We must, however, take issue
with the district court’s allocation of fault in this case.
The district court held Cement Division to be 96% at
fault and the City to be 4% at fault. These numbers are
’
lla
odd. It appears that the district court apportioned lia-
bility according to the amount of property each side had
at risk. Memorandum Opinion and Order of June 30,
1989, at 134 (“The plaintiffs also had the costlier property
at risk with the foreseeable result being that the damages
claimed by the plaintiff are twenty-six times as great as
those claimed by the defendant.”). Hence, the 96% and
4% figures (25/26=.9615). These calculations, however
they were arrived at, have left us with a “definite and
firm conviction that a mistake has been committed.”
Under the doctrine of comparative negligence, a
party’s share of liability should not depend upon how
valuable his property at risk was. But, this is what the
district court appears to have done in this case. Instead,
the doctrine of comparative negligence is generally sup-
posed to be used to assess liability in proportion to the
cost of avoiding the entire accident to each side. Because
the district court’s allocation of fault was based upon an
incorrect application of comparative negligence princi-
ples or because the district court failed to adequately
explain how it arrived at its result, we cannot accept its
apportionment of liability.
Although we could remand the case for a redeter-
mination of fault, we need not d: so. We believe that, on
the facts of this case, no reasonable trier of fact could
apportion more than two-thirds of the liability to
National Gypsum.
With respect to information about the danger to the
FORD, it seems clear that Assistant Dock Superintendent
Blawas had more detailed and specific information about
12a
the wave conditions in the harbor than did Captain Gal-
lagher. It would have been relatively costless for Blawas
to have been more forthright about the wave conditions
in the slip. It would also have been relatively costless for
Blawas to ask more searching questions regarding Cap-
tain Gallagher’s lay-up plans for the FORD. On the other
hand, it would have been relatively costless for Captain
Gallagher to have undertaken at least some investigation
on his own or to have more closely questioned Blawas’s
assurances.
Once the FORD was berthed and laid-up, however,
National Gypsum was really the only party that could
have undertaken some effort to keep the FORD from
danger. Captain Gallagher could, for example, have left
the radio-telephone in operation or he could have left a
competent master aboard to move the vessel in case
danger arose. Neither of these precautions would have
been very costly. (The City could have ordered the FORD
to move once the storm came up, but without adequate
manpower, such a directive would have rung hollow.) We
think that there is great wisdom in the view that a captain
is ultimately responsible for the welfare of his ship.
Because Captain Gallagher’s actions essentially left the
FORD a sitting duck, National Gypsum must bear more
of the ultimate fault for the FORD’s demise than the City.
See Boudoin v. J. Ray McDermott & Company, 281 F.2d 81,
84-85 (5th Cir. 1960). Because of the distribution of the
cost of avoidance in this case, no reasonable trier of fact
could apportion more than two-thirds of the liability to
National Gypsum. Through the judgment below, the trier
of fact displayed a willingness to apportion at least this
much of the award to National Gypsum. In deciding the
13a
case as we do, we therefore merely confine the decision of
the district judge to the upper limit of his discretion and
apportion liability two-thirds to National Gypsum and
one-third to the City of Milwaukee.
III. CoNcLUSION
For all the foregoing reasons, the appeal from the
district court’s disqualification order is Dismissep for lack
of jurisdiction. The district court’s allocation of fault is
ReverseD. National Gypsum is adjudged to be two-thirds
at fault while the City of Milwaukee is adjudged to be
one-third at fault for the damage to the City’s property
and for the sinking of the SS EM FORD. May she rest in
peace.
A true Copy:
Teste:
Clerk of the United
States Court of Appeals
for the Seventh Circuit
14a
UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
JUDGMENT - WITH ORAL ARGUMENT
Date: October 16, 1990
BEFORE: Honorable Richard D. Cudahy,
Circuit Judge
Honorable Richard A. Posner,
Circuit Judge
Honorable Joel M. Flaum,
Circuit Judge
No. 89-2631
CEMENT DIVISON [sic], NATIONAL GYPSUM COM-
PANY,
REED & BROWN, INCORPORATED, et al.,
Plaintiffs-Appellants
V.
CITY OF MILWAUKEE,
Defendant-Appellee
Appeal from the United States District Court for the
Eastern District of Wisconsin
No. 80 C 1001, Judge Thomas J. Curran
This cause was heard on the record from the above
mentioned district court, and was argued by counsel.
On consideration whereof, IT IS ORDERED AND
ADJUDGED by this Court that the judgment of the Dis-
trict Court is hereby, REVERSED, with costs, as to the
allocation of fault, and DISMISSED, as to the district
court’s disqualification order as this Court lacks jursidic-
tion [sic], in accordance with the opinion of this Court
filed this date.
15a
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CEMENT DIVISION, NATIONAL
GYPSUM COMPANY; REED &
BROWN, INC., NEW YORK
MARINE MANAGERS, INC.,
ALLSTATE INSURANCE
COMPANY, c/o American Marine
Underwriters, Inc., HIGHLANDS
INSURANCE COMPANY,
EMPLOYERS CASUALTY
COMPANY OF TEXAS, c/o Texas
Marine Underwriters Agency, Inc.,
DONALD H. MILLER, INC., U.S.
FIDELITY AND GUARANTEE
COMPANY, GREAT LAKES
PROTECTIVE ASSOCIATION, THE
ATLANTIC COMPANIES, LLOYDS
UNDERWRITERS, INSTITUTE
COMPANIES, including:
COMMERCIAL UNION
ASSURANCE CO. LTD. “I: A/o
ANDREW WEIR INSURANCE CO.
LTD., ENGLISH & AMERICAN
INSURANCE CO. LTD. “M” 1
A/o., ORION INSURANCE CO.
LTD. “T” A/o., YASUDA FIRE &
MARINE INSURANCE CO. (U.K.)
LTD. “T” A/o., ATLAS
ASSURANCE CO. LTD., “T” A/o.,
PHOENIX ASSURANCE CO. LTD.,
BRITISH LAW INSURANCE CO.
LTD., ROAD TRANSPORT AND
GENERAL INSURANCE CO. LTD.,
INSURANCE COMPANY OF
NORTH AMERICA (U.K.) LTD.
“G” A/o., INSURANCE
COMPANY OF NORTH AMERICA
(U.K.) LTD. “O” A/o., HOME
l6a
INSURANCE CO. LTD. “X” A/o.,
LONDON & HULL MARITIME
INSURANCE CO. LTD.,
HANOVER INSURANCE CO.
LTD., SPHERE INSURANCE CO.
LTD., DRAKE INSURANCE CO.
LTD., BISHOPSGATE INSURANCE
CO. LTD. “F” A/o., BRITISH LAW
INSURANCE CO. LTD. NO. 2
A/o., MINSTER INSURANCE CO.
LTD. NO. 2 A/o., INSURANCE
CORPORATION OF IRELAND “L”
A/o., FOLKSAM
INTERNATIONAL INSURANCE
CO. (U.K.) LTD., TERRA NOVA
INSURANCE CO. LTD. per
ANDREW DRYSDALE LTD.,
ECONOMIC INSURANCE CO.
LTD. “GENERAL” A/o., c/o
Willis, Faber & Dumas Ltd., Ten
Trinity Square, London EC3P 3AX
England,
Plaintiffs, Case No.
80-C-1001
V.
CITY OF MILWAUKEE,
Defendant and
Third-Party Plaintiff,
V.
EDWARD E. GILLEN COMPANY,
a corporation, and GREAT
LAKES TOWING COMPANY,
a corporation,
Third-Party Defendants.
’
17a
MEMORANDUM OF DECISION AND ORDER
On Christmas Eve in 1979, the S.S. E.M. FORD,
loaded with 5,700 tons of bulk cement, tore loose from
her moorings, battered against the headwall of the dock
in the Milwaukee (Wisconsin) Harbor, and began to take
on water through the breaks in her hull. The next morn-
ing the vessel sank to the bottom of the slip. Following
this disaster the shipowner, the Cement Division of the
National Gypsum Company, Inc., along with thirty-two
of its insurers and marine underwriters, commenced this
action in admiralty, see Federal Rule of Civil Procedure
9(h), claiming that the City of Milwaukee, while acting as
a wharfinger, breached express and implied warranties to
provide a safe berth and negligently failed to warn of
hidden dangers in the berthing slip. In its Amended
Complaint Cement Division seeks $6,500,000.00 in com-
pensatory damages for raising and refloating the vessel,
for removing the hardened cement cargo from its holds,
for loss of the cargo, and for repairing and refurbishing
the E.M. FORD.
The City of Milwaukee answered, denying liability
and asserting a counterclaim against the plaintiff. The
City alleges that the collision’ between the E.M. FORD
1 In this case the vessel struck the dock, so the impact is
properly called an “allision” rather than a “collision.” See
Weyerhaeuser Company v. ATROPOS ISLAND, 777 F.2d 1344,
1346 n.1 (9th Cir. 1985) (“An allision is a collision between a
moving vessel and a stationary object.”). However, under
admiralty jurisdiction, the term “collision” is used in its broad-
est sense to encompass every case where a vessel strikes
(Continued on following page)
18a
and Milwaukee’s dock wall was caused by the negligence
of the plaintiff in leaving the S.S. EM. FORD improperly
moored and improperly supervised, manned and
equipped. The City is demanding $250,000.00 for damage
to its dock and other property. The City also filed a third-
party complaint in admiralty against the Edward E.
Gillen Company, a marine contracting corporation, and
against the Great Lakes Towing Company, a corporation
engaged in the business of providing tugboat services in
the Milwaukee Harbor. See Federal Rule of Civil Pro-
cedure 14(c).2 The third-party complaint alleges that
(Continued from previous page)
another vessel or some object afloat or not. See Admiralty
Jurisdiction Extension Act, 46 U.S.C. § 740. See also People’s
Natural Gas Company v. Ashland Oil, Inc., 604 F. Supp. 1517,
1523 (W.D. Pa. 1985). Therefore, the term “collision” can apply
to the allision at issue in this case.
2 Federal Rule of Civil Procedure 14(c) provides as fol-
lows:
When a plaintiff asserts an admiralty or mar-
itime claim within the meaning of Rule 9(h), the
defendant or claimant, as a third-party plaintiff, may
bring in a third-party defendant who may be wholly
or partly liable, either to the plaintiff or to the third-
party defendant, by way of remedy over, contribu-
tion, or otherwise on account of the same transac-
tion, Occurrence, or series of transactions or
occurrences. In such a case the third-party plaintiff
may also demand judgment against the third-party
defendant in favor of the plaintiff, in which event the
third-party defendant shall make any defenses to the
claim of the plaintiff as well as to that of the third-
party plaintiff in the manner provided in Rule 12 and
the action shall proceed as if the plaintiff had com-
menced it against the third-party defendant as well
as the third-party plaintiff.
19a
Gillen is wholly or partly liable for the damage to the
E.M. FORD because it failed to provide safe mooring for
the vessel and that Great Lakes Towing Company is
wholly or partly liable because it failed to provide towing
services necessary to remove the E.M. FORD from its
perilous position in its slip to a safe and secure location.
Gillen answered denying all liability. But on the third day
of trial Gillen and the plaintiffs entered into a settlement
which was later approved by the court.? Great Lakes
Towing did not file a responsive pleading and the City
voluntarily dismissed its third-party claims against Great
Lakes Towing pursuant to Federal Rule of Civil Pro-
cedure 41(a).4 See Notice of Dismissal of the Great Lakes
Towing Company (filed March 16, 1982).
After the completion of extensive discovery and an
attempt by the plaintiffs to appeal a collateral order dis-
qualifying one of their counsel, a trial to the court com-
menced. By agreement of the parties the trial was
bifurcated and only the liability issues were heard during
this first phase. See Federal Rule of Civil Procedure 42(b).
3 Under the terms of this settlement the plaintiffs were to
give to Gillen and its insurer a release and indemnification
agreement. See Order of Dismissal as to Third-Party Defendant,
Edward E. Gillen Company, Nunc Pro Tunc (filed February 12,
1986).
4 At trial, the parties presented no evidence establishing
that the Great Lakes Towing Company is liable for any of the
damage caused to the vessel or the City’s property. Therefore,
the court has not included Great Lakes Towing in the compari-
son of fault.
20a
The first phase of the trial proceeded for fourteen
trial days during which twenty-eight witnesses were
called. In order of appearance they were:
1.
ROBERT BRISSETTE:
called by plaintiffs; employee of Cement Divi-
sion; First Mate on E.M. FORD in 1979
RICHARD G. BURR:
called by defendant (out of order); Cement Divi-
sion’s Milwaukee plant superintendent in 1979
EUGENE P. STAFFORD:
called by plaintiffs; employee of Cement Divi-
sion; fleet captain in 1979
NORMAN MARTINSON:
called by plaintiffs; employee of Cement Divi-
sion; fleet engineer in 1979
JAMES W. GASKELL:
called by plaintiffs; employee of Cement Divi-
sion; vessel superintendent in 1979
PATRICK J. GALLAGHER:
called by plaintiffs; former employee of Cement
Division; captain of E.M. FORD in 1979
JOSEPH J. ZOLNIEREK:
called by plaintiffs; employee of Cement Divi-
sion; First Assistant Engineer on the E.M. FORD
in 1979 ;
ANDREW LaBORDE:
called by plaintiffs; customer service manager at
MCP Company; amateur photographer
10.
11.
12.
13.
14.
15.
2la
ROBERT M. SORENSON:
called by plaintiffs as expert witness; Professor
of Civil Engineering at Lehigh University; Chief,
Coastal Processes and Structures Branch, Corps
of Engineers Coastal Research Center; certified
to testify regarding coastal engineering, specifi-
cally wave action
WRIGHT GARVEY:
called by plaintiffs; former Deputy Harbor Mas-
ter of the Port of Milwaukee
ROBERT MacLAREN:
called by plaintiffs; attorney; Great Lakes cap-
tain; tug captain
THOMAS A. PARKS:
called by plaintiffs; retired ship captain; assis-
tant superintendent in a melathane factory at
time of trial
REAR ADMIRAL ROY
HOFFMAN, RETIRED:
called by plaintiffs; Port Director of the Port of
Milwaukee in 1979
STANLEY BLAWAS:
called by plaintiffs; Harbor Operations Super-
visor III, Port of Milwaukee (dock superinten-
dent); second in command of port operations in
Milwaukee in 1979
JAMES C. SHERMAN:
called by plaintiffs; employee of Great Lakes
Protective Association; marine surveyor
16.
17.
18.
19.
20.
21.
y
24.
22a
WALTER C. HECKL:
called by defendant (out of crder); former man-
ager of Advance Boiler & Tank Company
WILLIAM WADE:
called by defendant; marine consultant, engi-
neer and surveyor who had worked for Edward
E. Gillen Company and Cement Division
LOUIS E. CARTER:
called by defendant as expert witnesses; ship-
master on Great Lakes
PAUL WIENING:
called by defendant; photographer
DEAN HONADEL:
called by defendant; field engineer, Milwaukee
Port Authority; third in command of engineer-
ing department of Milwaukee Harbor in 1979
BEVERLY J. STRIKE:
called by defendant; Port of Milwaukee Admin-
istrative Manager; Secretary to Board of Harbor
Commissioners
THOMAS E. DOYLE:
called by defendant as expert witness; shipmas-
ter on Great Lakes
STANLEY CATAROZOLI:
called by defendant; employee of Edward E.
Gillen Company; winter carpenter; pile driver
KEITH IVERSON:
called by defendant; employee of Edward E.
Gillen Company; crane operator
25.
26.
27.
28.
23a
SALVATORE A. GUMINA:
called by defendant; employee of Edward E.
Gillen Company; foreman; supervisor of pile
driving and winter boat repair
FLOYD BROWN:
called by defendant; assistant vice president of
American Steamship; in charge of engineering;
marine superintendent
JOHN HANNINEN:
called by defendant; attorney; Chairman and
Attorney-in-Fact of Great Lakes Protective Asso-
ciation 1966-80
VICTOR H. ANDERSON:
called by plaintiffs; shipmaster; United States
Registered Pilot; employee of Lakes Pilots Asso-
ciation, Inc. at time of trial
In addition to these witnesses, the parties designated
portions of the depositions of the following witnesses for
inclusion in the record:
7
JAMES SHERIDAN:
employee of Cement Division; Third Assistant
Engineer on E.M. FORD in 1979
ROBERT MALASKI:
employee of Cement Division; oiler on E.M.
FORD in 1979
LIEUTENANT RANDALL PARMANTIER:
lieutenant commander in United States Coast
Guard in 1979; stationed at United States Coast
Guard Marine Safety Office in Milwaukee, Wis-
consin in 1979; investigated sinking of E.M.
FORD
peal a ii
24a
4. RALPH W. BIGGS, JR.:
employee of Litton Great Lakes Corporation;
vice president of Erie Marine Division; in charge
of winter mooring of the ITS PRESQUE ISLE in
Milwaukee
5. MARK PRESPER:
shop foreman for Milwaukee Recharging Service
at time of trial; Port Captain for United States
Steel until winter of 1979-80
6. CHARLES O. ARNOLD:
retired employee of Litton Great Lakes Corpora-
tion, Erie Marine Division; machinery super-
visor
7. JAMES HASKELL:
former Deputy Municipal Port Director of the
Port of Milwaukee
8. JOHN T. BURKE:
designated as expert witness by plaintiffs;
expertise in moorings; retired United States Reg-
istered Pilot, District 2
9. ROBERT FRANCIS BOWES:
designated as expert witness by plaintiffs;
weatherman; former employee of United States
Department of Commerce, National Weather
Service; expertise in forecasting
10. RICHARD JENNE:
employee of Cement Division; able seaman;
wheelsman; watchman; operated winches on
E.M. FORD
11. THOMAS GOEDEWAAGAN:
marine surveyor; former resident surveyor for
winter mooring approvals for United States Sal-
vage Association, Inc.
ee
25a
12. TRUE LeMON:
ship surveyor; formerly resident surveyor for
Great Lakes area for United States Salvage Asso-
ciation, Inc.
13. LIEUTENANT E. SCOTT VARNEY:
employed by National Oceanic and Atmospheric
Administration
Following the conclusion of the liability phase of this
trial, the parties filed their final arguments and posttrial
briefs. Having reviewed these submissions as well as the
testimony, depositions, and exhibits received at trial, the
cov -t now sets forth its Findings of Fact separately from
its Conclusions of Law pursuant to Federal Rule of Civil
Procedure 52.
I. FINDINGS OF FACT
Prior to trial the parties submitted a Statement of
Uncontested Facts. See Supplemental Pretrial Report
(filed December 23, 1985). These facts have been adopted
by the court, as modified,5 and incorporated into the
court’s own findings of facts which were established by a
preponderance of the evidence at trial.
A. PARTIES
1. Plaintiff, Cement Division, National Gypsum
Company (formerly known as Huron Cement Company)
° Although parties are entitled to require a fact finder to
accept stipulations, modifications may be effected by the court
if the parties present evidence on these issues at trial. See Frank
Music Corporation v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505,
515 n.9 (9th Cir. 1985).
26a
is, and at all times relevant to this matter was, a corpora-
tion and the owner and operator of the S.S. E. M. FORD, a
vessel of the United States engaged in maritime com-
merce and navigation on the Great Lakes, their harbors,
tributaries and connecting waters. See Statement of
Uncontested Facts at J 1; Amended Complaint in Admi-
ralty at II.
2. The remaining plaintiffs were, at all times rele-
vant to this matter, insurers and marine underwriters of
the S.S. E. M. FORD under policies and contracts of
insurance covering loss to the hull and machinery of said
vessel or its cargo. These remaining plaintiffs are: Reed &
Brown, Inc., New York Marine Managers, Inc., Allstate
Insurance Company, Highlands Insurance Company,
Employers Casualty Company of Texas, Donald H. Miller,
Inc., U.S. Fidelity and Guarantee Company, Great Lakes
Protective Association, The Atlantic Companies, Lloyds
Underwriters, Institute Companies, including: Commer-
cial Union Assurance Co. Ltd. “I” A/o., Andrew Weir
Insurance Co. Ltd., English & American Insurance Co.
Ltd. “M” 1 A/o., Orion Insurance Co. Ltd. “T” A/o.,
Yasuda Fire & Marine Insurance Co. (U.K.) Ltd. “T” A/o.,
Atlas Assurance Co. Ltd. “T” A/o., Phoenix Assurance
Co. Ltd., British Law Insurance Co. Ltd., Road Transport
and General Insurance Co. Ltd., Insurance Company of
North America (U.K.) Ltd. “G” A/o, Insurance Company
of North America (U.K.) Ltd. “O” A/o., Home Insurance
Co. Ltd. “X” A/o., London & Hull Maritime Insurance
Co. Ltd., Hanover Insurance Co. Ltd., Sphere Insurance
Co. Ltd., Drake Insurance Co. Ltd., Bishopsgate Insurance
Co. Ltd. “F” A/o., British Law Insurance Co. Ltd. No. 2
A/o., Minster Insurance Co. Ltd. No. 2 A/o., Insurance
27a
Corporation of Ireland “L” A/o., Folksam International
Insurance Co. (U.K.) Ltd., Terra Nova Insurance Co. Ltd.
per Andrew Drysdale Ltd., Economic Insurance Co. Ltd.
“General” A/o.. See Statement of Uncontested Facts at
{ 1; Amended Complaint in Admiralty at II.
3. At all material times the S.S. E. M. FORD was a
self-unloading bulk cement carrier having a molded
length of 413.67 feet, a molded beam of 50 feet and a
reciprocating steam engine of 1500 h.p. for propulsion.
See Statement of Uncontested Facts at 7 4.
4. The defendant, City of Milwaukee, is a municipal
corporation organized under the laws of the State of
Wisconsin and, at all times relevant to this matter, it
owned and operated a number of docks, wharves, piers
and vessel berths in the harbor of Milwaukee through a
Board of Harbor Commissioners under the Laws of Wis-
consin and the Milwaukee City Charter and Code of
Ordinances. The City, through its Board of Harbor Com-
missioners, employed a Port Director and other munici-
pal employees through which it acted as a wharfinger,
offering to vessel operators and shipowners a number of
docks, wharves, piers and vessel berths for use by vessels
in return for payment of money. The wharves and docks
furnished for hire by the City included Terminals No. 1,
No. 2, No. 3, No. 4 and the piers adjacent to Slips 1, 2 and
3 in the Milwaukee Outer Harbor and the City Heavy Lift
Dock and the Municipal Mooring Basin in the Milwaukee
Inner Harbor. See Statement of Uncontested Facts at { 2;
Amended Complaint in Admiralty at III; Amended
Answer and Counterclaim in Admiralty at 7 3; Third
Party Complaint in Admiralty at ] 2.
Iisintiiiaiieetietnele
28a
5. The main entrance channel of Milwaukee Harbor
has a basin composed of breakwaters which widens from
358 feet at the outer end to 552 feet at the inner end
where the sides of the entrance walls connect to the main
breakwaters north and south of the channel. See Stipula-
tion of Uncontested Facts at ¥ 5.
6. Roy Hoffman was appointed Port Director of the
Port of Milwaukee effective October 2, 1978. See Stipula-
tion of Uncontested Facts at ¥ 25; Transcript at 1044
(Testimony of Roy Hoffman).
7. James Haskell was employed as Deputy Port
Director by the City from June 1970 to July 1978, as
Acting Port Director from July 1978 to October 1978, and
as Deputy Port Director from October 1978 up to and
including December 21-25, 1979. See Stipulation of
Uncontested Facts at 4 24; Exhibit 209 (Deposition of
James Haskell at 3-5).
8. The third-party defendant, Edward E. Gillen
Company, is a Wisconsin corporation with offices, equip-
ment, employees and facilities located at 218 West Becher
Street, Milwaukee, Wisconsin, and at all times relevant to
this matter was engaged in the business of construction
and pile driving, including construction of pilings, cais-
sons, earth retention, dockwalls and dredging, and in the
business of making ship repairs. Under ship supervision,
Gillen Company also furnished labor and equipment to
moor vessels and handled the anchors and anchor chains
of vessels while placing them in winter moorings. Under
the supervision of the ship owner, Gillen would also
assist in shifting laid up vessels from one location to
another and remooring them, and performing related
29a
services for shipowners and the owners and operators of
docks and other marine structures at the Port of Mil-
waukee, Wisconsin. At times Gillen Company performed
such work on oral agreements with shipowners and their
representatives. Gillen did not employ licensed naviga-
tion personnel qualified to navigate the E. M. FORD. See
Statement of Uncontested Facts at J 3; Third-Party Com-
plaint in Admiralty at J 3; Transcript at 1207-08 (Testi-
mony of Stanley Blawas); Exhibit 206 (Deposition of
Ralph Biggs at 12-21, 28-39).
B. JURISDICTIONAL FACTS
9. The damage to the S.S. E. M. FORD occurred on
navigable water in the Milwaukee Harbor located on
| Lake Michigan. See Statement of Uncontested Facts at
QV 28 & 45.
10. The City of Milwaukee’s dock at Terminal Pier
No. 1 in South Slip No. 1 was damaged by the S.S. E. M.
FORD, a vessel which was on the navigable water of Lake
Michigan when the damage occurred. See Statement of
Uncontested Facts at J] 36 & 44.
C. THE FINAL 1979 VOYAGE, LAYUP AND SINK-
ING OF THE S.S. E. M. FORD
Contract for Winter Mooring Berth
11. On November 15, 1979, Captain Eugene P.
Stafford, employed as Fleet Captain by Cement Division,
telephoned Stanley M. Blawas, employed as Dock Super-
intendent by the City’s Board of Harbor Commissioners,
and requested a winter layup berth for the S.S. E. M.
30a
FORD. Stanley Blawas offered Terminal No. 4 at Slip No.
2, located in Milwaukee’s outer harbo1, as a winter layup
berth for the vessel from about December 23, 1979, to
March 1, 1980, at a dockage fee of $.70 per lineal foot per
month plus metered charges for electricity and water
furnished to the vessel. Stafford inquired about securing
an inner berth, but Blawas told him that all the inner
berths were reserved. Stafford also inquired about the
safety of Terminal No. 4 and Blawas assured him it was
safe. Stafford then accepted the offer of Terminal No. 4
and confirmed the reservation in a letter of the same date
to Stanley M. Blawas. See Statement of Uncontested Facts
at ¥ 8; Transcript at 1189-96, 1165-68, (Testimony of Stan-
ley Blawas), 916 (Testimony of Wright Garvey), 390 (Testi-
mony of James Gaskell), 231, 227, 196-202 (Testimony of
Eugene Stafford); Exhibits 106 & 130.
12. The November 15, 1979, letter from Captain
Eugene P. Stafford to Dock Superintendent Stanley
Blawas stated:
As per our conversation on November 15, 1979,
we will be berthing the Steamer E. M. FORD for
the winter months in Milwaukee at the South
Pier #2, Terminal #4.
The winter mooring time will be approximately
from 12/23/79 to 3/1/80.
Exhibit 106.
13. Dock Superintendent Stanley Blawas had
authority at all relevant times from the Port Director and
Assistant Port Director to offer berths to vessels at any of
defendant’s docks in the Port of Milwaukee, without
being required to obtain approval from the Port Director,
Deputy Port Director, or any other representative or
3la
employee of the City. See Statement of Uncontested Facts
at { 20; Answers to Plaintiff's Requests for Admissions of
Facts and Genuineness of Documents at { 27; Transcript
at 1167-68 (Testimony of Stanley Blawas), 1045 (Testi-
mony of Roy Hoffman); Exhibit 209 (Deposition of James
Haskell at 7-8).
14. Under the 1977 Public Port Tariff published by
the Board of Harbor Commissioners of the City of Mil-
waukee which was in effect during all times relevant to
this lawsuit, the Board reserved the right to make berth
assignments and to order vessels off berths. See Tran-
script at 1186 (Testimony of Stanley Blawas), 1126-37,
1073-79 (Testimony of Roy Hoffman), 906-11 (Testimony
of Wright Garvey); Exhibits 150 at Items 6, 10, 11 & 25;
207 (Deposition of Mark Presper at 55); 209 (Deposition of
James Haskell at 20-21).
15. In 1979, the City of Milwaukee had no regula-
tions in effect governing winter moorings or temporary
tie ups of vessels at the Port of Milwaukee. See Transcript
at 1130-31 (Testimony of Roy Hoffman).
Warning
16. Early in December of 1979, William Wade, a
marine surveyor who had done work as an independent
contractor for the Edward E. Gillen Company and for
Cement Division, called Cement Division and, in the
course of his conversation with Vessel Superintendent
James Gaskell, warned the company that ships tied up in
slips in the outer harbor at Milwaukee were subject to
32a
heavy surge® during strong northeasterly winds. See
Transcript at 1493-94, 1488-89, 1454, 1447-49 & 1434 (Testi-
mony of William Wade).
Departure and Voyage
17. The E.M. FORD departed from Alpena, Michi-
gan for Milwaukee on December 19, 1979, at 1704 hours
Eastern Standard Time. At all material times the E.M.
FORD had a cargo of bulk cement which had been loaded
at Alpena for delivery to Milwaukee. See Statement of
Uncontested Facts at J] 7; Transcript at 437-39 (Testimony
of Patrick Gallagher), 82-83 (Testimony of Robert Bris-
sette); Exhibit 101.
18. On this voyage the master of the E.M. FORD
was Captain Patrick Gallagher. Captain Gallagher had
been master of the FORD since 1975. See Transcript at 433
(Testimony of Patrick Gallagher).
Change in Orders
19. On the afternoon of December 21, 1979, before
the E.M. FORD reached Milwaukee, Captain Callagher’s
winter mooring orders were changed.
(a) Cement Division’s Fleet Captain,
Eugene Stafford, called Captain Gallagher and
6 Captain Louis Carter explained that a surge occurs
“when you get these waves coming in and coming up against a
shore or a nonmovable object and it can only move, go that
way as far and so long and it has to return. So consequently
you get an incoming action and an outgoing action.” Transcript
at 1548 (Testimony of Louis Carter).
33a
told him that the E.M. FORD would not be
mooring for the winter at Terminal No. 4.
Instead, the vessel was to proceed to Milwaukee
and wait for its sister ship, the S.S. S.T. CRAPO,
to unload, then the FORD was to proceed to
Cement Division’s terminal in Milwaukee’s
inner harbor where it would be moored for the
winter. See Transcript at 546, 439-40 (Testimony
of Patrick Gallagher); 206-07 (Testimony of
Eugene Stafford).
(b) Later that day, during a second call,
Stafford told Gallagher that the FORD could
wait for the CRAPO at Terminal No. 4 or at the
Wisconsin Electric Power Company slip in the
inner harbor. See Transcript at 546-49, 442-44
(Testimony of Patrick Gallagher), 208-10 (Testi-
mony of Eugene Stafford).
(c) After consulting with his first mate,
Gallagher decided not to use the Wisconsin
Electric Power Company slip because there was
mud in that slip which might get into the ship’s
boilers. See Transcript at 548, 444 (Testimony of
Patrick Gallagher). In addition, not traveling to
the Power Company slip would save two hours
of travel in the river. See Transcript at 208 (Testi-
mony of Eugene Stafford).
Agreement to Use Terminal No. 1
20. On December 21, as the E.M. FORD approached
Milwaukee, Captain Gallagher made a security call by
radiotelephone to dock superintendent Stanley Biawas.
See Statement of Uncontested Facts at 7 8. Gallagher
informed Blawas of the change in his orders and told
Blawas that the FORD would be waiting for the CRAPO
until December 23. Blawas then offered to let the FORD
tie up temporarily at Terminal Pier No. 1 in South Slip
——————x
34a
No. 1 in the outer harbor. Blawas explained that it would
be easier for the FORD to maneuver in and out of that
slip. See Answers to Plaintiff's Requests for Admissions
of Facts and Genuineness of Documents at { 4; Transcript
at 1169-70 (Testimony of Stanley Blawas), 917 (Testimony
of Wright Garvey), 494 & 446-49 (Testimony of Patrick
Gallagher). Before accepting the offer of South Slip No. 1,
Gallagher asked Blawas about the depth of the water and
the availability of power. He did not ask about the safety
of the berth. See Transcript at 1196 (Testimony of Stanley
Blawas), 448-49 (Testimony of Patrick Gallagher).
21. After accepting the berth at Terminal Pier No. 1
in South Siip No. 1, Captain Gallagher consulted the 1979
| United States Coast Pilot. This publication contains no
warning that hazardous surge conditions can develop in
slips in the outer harbor at the Port of Milwaukee when
there is a strong wind from the northeast. See Transcript
at 540-42, 532-37, 518-24, 449 (Testimony of Patrick Gal-
lagher), 255, 230-31, 225, 202-06 (Testimony of Eugene
Stafford); Exhibits 187 & 584. However, the Coast Pilot
does state that: “During rough weather the entire break-
water system [at the Port of Milwaukee] may be obscured
by wave action.” Exhibit 187. See also Transcript at
1693-94, 1690 (Testimony of Louis Carter), 255 (Testimony
of Eugene Stafford).
Arrival and Tie Up
22. The E. M. FORD arrived at Terminal Pier No. 1
in Slip No. 1, Milwaukee Outer Harbor at 1631 hours on
December 21, 1979, and thereafter was tied up starboard
side to the dock and with the bow facing in. See Statement
35a
of Uncontested Facts at ¥ 9; Transcript at 450-53 (Testi-
mony of Patrick J. Gallagher), 83-85 (Testimony of Robert
Brissette); Exhibits 101 & 121.
23. The officers and crew of the E.M. FORD tied up
the ship with fiber lines and cables. See Statement of
Uncontested Facts at ¥ 13.
(a) Initially, the E.M. FORD was tied up
with six lines - a standard mooring for a vessel
with a crew on board. See Transcript at 549-51
(Testimony of Patrick Gallagher), 84-85 (Testi-
mony of Robert Brissette); Exhibit 554.
(b) Hours after the initial mooring, Cap-
tain Gallagher ordered the crew to double the
lines at the bow line, at the four abreast lines
and at the stern. See Transcript at 552-53, 453-54
(Testimony of Patrick Gallagher), 129-31, 85-86
(Testimony of Robert Brissette); Exhibits 1217 &
657 (Deposition of Richard Jenne at 15).
24. The City’s Terminal No. 1 dock in Slip No. 1,
Milwaukee Outer Harbor, was constructed in 1932. Cleats
made of steel, 30 inches long, spaced approximately 60
feet apart and secured along the outboard edge of said
dock with four bolts 1-1/4 inches in diameter and about
three feet long, set in concrete, were installed for use by
vessels as mooring devices, and such mooring cleats were
there for use by the E. M. FORD at all relevant times. See
Statement of Uncontested Facts at ¥ 22.
? First Mate Robert Brissette explained two inaccuracies in
the mooring diagram which is Exhibit 121. Two lines shown on
the diagram as doubled were, in fact, single. See Transcript at
103-14 (Testimony of Robert Brissette).
36a
25. In 1979, Terminal No. 1, South Slip No. 1 was
about 950 feeet long and 250 feet wide. See Statement of
Uncontested Facts at J 23; Answers to Plaintiff’s Requests
for Admissions of Facts and Genuineness of Documents
at ¥ 48.
26. Although Captain Patrick Gallagher, master of
the E. M. FORD, had been aboard vessels entering the
Port of Milwaukee thirty to forty times during his career,
he had never moored a vessei during the winter in the
outer harbor at Milwaukee pricr to December of 1979,
and had never witnessed dangerous surges in the outer
harbor. See Transcript at 2222-24, 663, 584-87, 542, 525,
434-36 (Testimony of Patrick Gallagher).
Knowledge of Cement Division and of the City
27. Cement Division’s Captain Patrick Gallagher
knew or should have known of any dangers which could
have developed due to wind and wave action in the outer
harbor and South Slip No. 1 from experience in similar
harbors; from experience in harbors with similar break-
waters; and from his training and experience as a Great
Lakes ship master which requires a general knowledge of
water levels, breakwalls, wind and wave action and
charts. See Transcript at 2241-49 (Testimony of Victor
Anderson), 1850-58, 1844, 1838, 1830-31 (Testimony of
Thomas Doyle), 1686-1700, 1624-56, 1604-21, 1545-66,
1518-19 (Testimony of Louis Carter), 1369-72 (Testimony
of James Sherman), 624, 518-43 (Testimony of Patrick
Gallagher), 239-40 (Testimony of Eugene Stafford);
Exhibits 649, 649A, 649B & 649C. See also 42 C.F.R.
§§ 10.05-43 & 10.05-47.
cin eeceeeieaeeeea
37a
28. The Port of Milwaukee’s breakwater structures
have three openings. One 500-foot breakwater gap opens
into the harbor directly northeast (at an angle of 65 to
67-1/2 degrees) of South Slip No. 1. Therefore, it is open
and obvious that this slip has very little breakwall protec-
tion from wave action coming from the northeast. See
Transcript at 1686-93, 1678-82, 1550-56 (Testimony of
Louis Carter), 1095-96 (Testimony of Roy Hoffman);
Exhibits 103, 104, 144, 160, 182, 182A & 209A (Deposition
of James Haskell at 24).
29. From 1912 through 1966, with the exception of
several World War II years, one of the plaintiffs, Great
Lakes Protective Association (GLPA),® published the win-
ter mooring? regulations of the United States Salvage
Association in its annual reports. Cement Division and its
predecessor, Huron Cement Company, were members of
the GLPA for years including 1966 — the last year the
8 The GLPA is a voluntary association of shipowners who
subscribe to the Association’s program of sharing risks and
losses to their vessels. The members are all underwriters,
licensed by the State of Ohio as reciprocal insurers operating
on a nonprofit basis. See Transcript at 2113 (Testimony of John
Hanninen).
9 In a winter mooring or layup the ship’s machinery is laid
up, the boilers are drained, the seacocks and seachests are
filled, shutters are put over the portholes and fire extin-
guishers are moved to a central location; no crew member
remains on board except a shipkeeper and the vessel is
anchored and secured to the dock with wires, deadwires and
chains. In sum, the vessel is idle and cold. This is also called a
“dry” layup. See Transcript at 1571-73 (Testimony of Louis
Carter), 1255-56 (Testimony of James Sherman), 949-50 (Testi-
mony of Wright Garvey), 224-25 (Testimony of Eugene
Stafford).
38a
winter mooring regulations were published by the GLPA.
See Statement of Uncontested Facts at 46; Transcript at
2103-2209 (Testimony of John Hanninen), 1386-90, 1379
(Testimony of James Sherman), 232-36 (Testimony of
Eugene Stafford); Exhibits 213 & 213A (Deposition of
True LeMon), 593, 614 & 647.
(a) Cement Division had knowledge of the
United States Salvage Association’s winter moor-
ing regulation which provided that winter mooring
would not be approved in the outer harbor at the
Port of Milwaukee. See Transcript at 2103-2209
(Testimony of John Hanninen), 2070-90, 2051-66
(Testimony of Floyd Brown), 1377-90 (Testimony of
James Sherman), 338-42 (Testimony of Norman
Martinson); Exhibits 134, 213 & 213A (Deposition
of True LeMon), 581, 586, 586A, 592, 593, 594, 603,
604, 605, 608, 614 & 647.
(b) The United States Salvage Associa-
tion’s winter mooring regulations were used for
insurance purposes and were not applied and
enforced by marine surveyor inspections to tem-
porary tie ups! such as that of the E.M. FORD
in December of 1979.
See Transcript at 1571-73 (Testimony of Louis
Carter), 1491 (Testimony of William Wade),
1419, 1412, 1398, 1255-59 (Testimony of James
Sherman), 949-50, 915, 893 (Testimony of Wright
Garvey), 224-26 (Testimony of Patrick Gal-
lagher).
10 During a temporary tie up, layup or mooring the ves-
sel’s machinery is not drained, most of the crew is kept on
board and the boilers are kept going. This is also called a “wet”
layup. See Transcript at 1522 (Testimony of Louis Carter), 1398,
1258-59 (Testimony of James Sherman), 949-50, 915 (Testimony
of Wright Garvey).
39a
30. The City of Milwaukee had actual knowledge
that a hazardous surge action could develop in South Slip
No. 1 in the outer harbor of the Port of Milwaukee and
that this surgifg could pose a danger to vessels tied up
there and to the dock itself. This knowledge was based on
prior claims;'! records of prior observations of wind and
wave levels at the Port of Milwaukee; and past studies,
investigations, proposals and reports dealing with the
surge problem. See Statement of Uncontested Facts at 7]
18 & 19; Answers to Plaintiff’s Requests for Admissions
of Facts and Genuineness of Documents (Second Set) at
77 1, 2 & 5; Answers to Plaintiff’s Requests for Admis-
sions of Facts and Genuineness of Documents at {J 10,
12, 13, 14, 15, 17, 18 & 20; Transcript at 1340-43 (Testi-
mony of James Sherman), 1221, 1218, 1154-56, 1151 (Testi-
mony of Stanley Blawas), 1100-10, 1055-72, (Testimony of
Roy Hoffman), 993 (Testimony of Robert MacLaren),
843-65 (Testimony of Wright Garvey); Exhibits 143, 144,
‘1 The court admitted records of prior damage claims as
evidence of notice to the city of Milwaukee of the possibility of
surge developing within Terminal Pier No. 1 in South Slip No.
1. See Transcript at 1055-75 (Testimony of Roy Hoffman);
Exhibits 156, 159 & 164; Requests for Admissions of Facts and
Genuineness of Documents and Answers to Plaintiff’s
Requests for Admissions of Facts and Genuineness of Docu-
ments at 7] 10, 12, 13, 14 & 15. However, the records of these
claims have little probative value. There was no demonstration
that the conditions of the prior accidents were substantially
similar to the conditions of the disaster at issue. See McAllister
Brothers, Inc. v. United States, No. 85-CIV-0098 (CHT) (S.D.N.Y.
March 20, 1989); Tug Ocean Prince, Inc. v. United States, 436 F.
Supp. 907, 921 (S.D.N.Y. 1977), aff'd in part, rev'd in part on other
grounds, 584 F.2d 1151 (2d Cir. 1978).
40a
147, 156, 159, 164, 174, 209 (Deposition of James Haskell
at 12, 17-19), 652.
Second Change in Orders
31. On December 22, 1979, Cement Division’s Fleet
Engineer, Norman Martinson, informed Captain Gal-
lagher that the E.M. FORD’s orders had been changed.
The vessel was to lay up temporarily in Milwaukee to
permit officers and crew members to be discharged dur-
ing the Christmas holiday from December 22 until
December 26 or 27. After the holiday the FORD was
scheduled to make one more delivery trip before being
moored for the winter. When issuing this change in
orders Martinson was not aware that the ELM. FORD was
not tied up at Terminal No. 4 —- the berth for which
Cement Division had contracted. See Transcript at 566-68,
455-56 (Testimony of Patrick Gallagher), 375-77, 315 &
295-300 (Testimony of Norman Martinson).
32. Captain Gallagher protested the change in
orders to Norman Martinson. He pointed out that he and
the crew had had a long and arduous season. Gallagher
was anxious to go home for the holiday and did not want
to return to the E.M. FORD for another trip. See Tran-
script at 568-69, 456-57 (Testimony of Patrick Gallagher),
298 (Testimony of Norman Martinson).
33. After Captain Gallagher received this change in
orders, he told the crew to put out the winter mooring
lines. With the additional lines, the number of lines then
totalled twenty-two. See 455-60 (Testimony of Patrick Gal-
lagher); Transcript at 160, 132, 91-92 (Testimony of Robert
Brissette); Exhibit 121. Putting out these additional iines
4la
exhausted the supply of lines stored on the E.M. FORD.
See Exhibit 657 (Deposition of Richard Jenne at 24).
December 22 Meeting
34. On the morning of December 22, 1979, Salvatore
Gumina, a foreman for the Edward E. Gillen Company,
- and Dock Superintendent Stanley Blawas, who happened
to be aboard the E.M. FORD on other business, met with
Captain Gallagher.
(a) Captain Gallagher told Blawas and
Gumina that his orders had changed and that
the FORD would lay up temporarily in Mil-
waukee and that part of the crew would go
home for the holiday and would not return until
December 26 or 27.
(b) Blawas said that the FORD could
remain at Terminal No. 1,12 but warned that the
outer harbor could get “heavy” if a storm came
up. At the same time Blawas told Captain Gal-
lagher that the waves in Terminal No. 1 were
generally 1-2 feet.
12 The dock at Terminal No. 1, Slip No. 1, was used as a
berth for the E.M. FORD at the wharfage rate set forth in the
City of Milwaukee Public Tariff effective April 25, 1977, as
amended. See Statement of Uncontested Facts at ¥ 12. The City
billed Cement Division for dockage at Terminal No. 1, South
Slip No. 1, for the E. M. FORD from 1530 hours Central
Standard Time on December 21, 1979, to 1400 hours Central
Standard Time on December 24, 1979, in the amount of $156.54,
which was fully paid by Cement Division to the City. See
Statement of Uncontested Facts at ¥ 21.
The winter mooring rate is cheaper than the City’s regular
mooring rate. See Transcript at 1191-93, 1150 (Testimony of
Stanley Blawas).
42a
(c) Blawas suggested that Captain Gal-
lagher tie up the FORD at the City of Mil-
waukee’s heavy lift dock in the inner harbor
because it had electric power. Captain Gallagher
rejected this proposal because the FORD crew
had already started to put out the extra lines.
(d) Captain Gallagher and Gumina agreed
that Gumina would check the FORD’s moorings
and provide lines and fenders as needed.
Although Captain Gallagher had had no prior
dealings with Gumina or with the Gillen Com-
pany, he did not ask Gumina what services,
equipment or personnel the Gillen Company
could provide in an emergency.
(e) Before Blawas and Gumina disem-
barked, they gave Captain Gallagher their tele-
phone numbers.
See Statement of Uncontested Facts at 49 11 & 14; Tran-
script at 2223-30 (Testimony of Patrick Gallagher),
2005-10, 1974-76 (Testimony of Salvatore Gumina),
1294-96 (Testimony of Walter Heckl), 1234-35, 1227-29,
1235-37, 1214, 1196-1209 (Testimony of Stanley Blawas),
699-701, 681-82 (Testimony of Joseph Zolnierek), 580-84,
493-94, 461-72 (Testimony of Patrick Gallagher), 174,
154-55, 135, 92-101 (Testimony of Robert Brissette);
Exhibits 132 & 657 (Deposition of Richard Jenne at 18-20).
Discharge of Crew and Departure of Captain
35. On the afternoon of December 22, 1979, Captain
Gallagher signed United States Coast Guard certificates
discharging the entire crew.
(a) All but five crew members then left the
ship.
43a
(b) Five crew members (none of them from
the deck crew) volunteered or were designated!
to remain on board. They were:
James Sheridan, third assistant engineer
Robert Malaski, oiler
James Simpson, night porter and acting
steward
Hussain Bubakr, wiper
Mohamed Ghazaly, porter
(c) James Sheridan was left in charge as
the de facto shipkeeper.'* These five were to
make sure that one boiler was running and to
keep the plant and generator running. No one
was assigned to watch the the weather. Sheridan
was told that the Edward E. Gillen Company
would help with the lines and provide any man-
power needed.
(d) Before leaving the ship, Captain Gal-
lagher sent the telephone number of Salvatore
Gumina to First Assistant Engineer Joseph
Zolnierek who gave it to James Sheridan. Tele-
phone numbers of Cement Division personnel
were also available aboard ship.
13 Captain Gallagher testified that fleet engineer Norman
Martinson selected the crew members who would remain
aboard, while Martinson testified that it was Gallagher. A
resolution of this conflict is immaterial to this action; however,
it is interesting to note that in Martinson’s opinion, “It
wouldn’t have mattered too much [which crew members were
left aboard] because we had some pretty good competent peo-
ple in there.” Transcript at 334 (Testimony of Norman Martin-
son) This assessment proved to be overly optimistic.
14 Cement Division had no policy or procedure setting
forth the duties expected of a shipkeeper during a temporary
layup. See Transcript at 256 (Testimony of Eugene Stafford).
44a
See Statement of Uncontested Facts at {J 16 & 17;
Answers to Plaintiff’s Requests for Admissions of Facts
and Genuineness of Documents at 4 8; Transcript at
678-83 (Testimony of Joseph Zolnierek), 637, 611-22, 517,
472-80, 459 (Testimony of Patrick Gallagher), 154, 101
(Testimony of Robert Brissette); Exhibits 132, 202 & 202A
(Deposition of James Sheridan at 46-47, 50-54, 56, 60, 63,
109), 203 & 203A (Deposition of Robert Malaski at 25-26,
62-63, 66), 509 & 513.
36. It was the practice of Cement Division to sign
the entire crew off the ship’s articles and off the payroll at
any time the ship was temporarily or permanently laid
up. Implementation of this practice saved money for
Cement Division. The union contract with the ship’s
unlicensed personnel required a winter sailing bonus for
days worked after December 20. The company was also
obligated to pay a premium for work over a holiday
weekend. See Transcript at 1256-59 (Testimony of James
Sherman), 517, 459 (Testimony of Patrick Gallagher), 154
(Testimony of Robert Brissette); Exhibits 527 & 528.
37. Before leaving the E.M. FORD, Captain Gal-
lagher shut down all the radios and radiotelephone. The
radiotelephone was locked in the radiotelephone cabinet
which was locked in the pilot house. James Sheridan had
keys for the entire ship, but he did not have a license
to operate the radiotelephone and did not know how
to operate the equipment.'> There was no other
15 Robert Malaski, the oiler left aboard the E.M. FORD,
had been a radioman first class in the United States Coast
Guard. See Exhibit 203 (Deposition of Robert J. Malaski at 5-6).
Malaski made no attempt to operate the E.M. FORD’s equip-
ment on December 24, 1979.
45a
ship-to-shore telephone aboard the E.M. FORD during
December 22-25, 1979. Captain Gallagher expected the
crew to use a pay telephone on shore in case of emer-
gency. See Statement of Uncontested Facts at ¥ 15; Tran-
script at 670, 617-18 (Testimony of Patrick Gallagher).
38. When its ships were temporarily laid up,
Cement Division’s practice was not to require them to
maintain any type of radio contact. See Transcript at
654-55 (Testimony of Patrick Gallagher), 248 (Testimony
of Eugene Stafford). See also Transcript at 1661 (Testimony
of Louis Carter).
Weather
39. The E.M. FORD was a ship which reported
actual weather and water conditions to the United States
Coast Guard. However, its practice was not to monitor or
report weather conditions while in port. See Transcript at
634, 630-31, 552-65 (Testimony of Patrick Gallagher),
247-48 (Testimony of Eugene Stafford), 145-49 (Testimony
of Robert Brissette); Exhibits 643, 641 & 526. See also
Transcript at 1661 (Testimony of Louis Carter).
40. The National Weather Service at Chicago, Illi-
nois broadcasts periodic weather forecasts for the area
which includes the Port of Milwaukee. From the evening
of December 21, 1979, when the E.M. FORD tied up at the
Port of Milwaukee, through December 24, 1979, when
attempts to rescue the FORD ceased, these forecasts
included:
(a) 9:39 p.m., Central Standard Time, Friday,
December 21, 1979: south-to-southeast winds 15
46a
to 25 knots the remainder of the night, diminish-
ing to 10 to 20 knots Saturday, with waves 2 to 5
feet, decreasing Saturday. This forecast was
broadcast to mariners as a marine forecast
(MAFOR)'¢ at midnight, Central Standard Time,
on that date.
(b) 9:34 a.m., Central Standard Time, Satur-
day, December 22, 1979: southerly winds 12 to 22
knots in the afternoon, becoming southeasterly
15 to 25 knots later that night and continuing
Sunday, with waves 1 to 3 feet. This MAFOR
was broadcast at noon, Central Standard Time,
on that date.
(c) 3:39 p.m., Central Standard Time, Satur-
day, December 22, 1979: southeast-to-south winds
10 to 20 knots that night, increasing to 15 to 25
knots Sunday, with waves 1 to 3 feet. This
MAFOR was broadcast at 6:00 p.m., Central
Standard Time, on that date.
(d) 9:39 p.m., Central Standard Time, Satur-
day, December 22, 1979: southeast-to-south winds
10 to 18 knots the remainder of the night,
becoming southwesterly 10 to 20 knots. This
MAFOR was broadcast at midnight, Central
Standard Time, on that date.
16 MAFORs are weather forecasts and synopses broadcast
by the National Weather Service four times a day. MAFORs
give the predicted weather for each of the Great Lakes for a
twenty-four hour period. They also give the position of pres-
sure areas and their predicted movements.
Great Lakes mariners also receive LAWEBs twice a day.
These reports give the actual weather at shore installations like
Milwaukee. They also give wind direction, the height of the
water and barometer readings. See Transcript at 1700-01,
1565-58, 1520-21 (Testimony of Louis Carter), 630-39 (Testi-
mony of Patrick Gallagher).
47a
(e) 3:39 .a.m., Central Standard Time, Sunday,
December 23, 1979: south-to-southeast winds 12
to 22 knots that day, becoming northeasterly
that night, with waves 1 to 3 feet. This MAFOR
was broadcast at 6:00 a.m., Central Standard
Time, on that date.
(f) 9:34 a.m., Central Standard Time, Sunday,
December 23, 1979: southeast winds 12 to 22
knots that afternoon and early that night,
becoming northeasterly 12 to 22 knots later that
night and northerly winds 18 to 28 knots Mon-
day, with waves 1 to 3 feet. This MAFOR was
broadcast at noon, Central Standard Time, on
that date.
(g) 3:39 p.m., Central Standard Time, Sunday,
December 23, 1979: southerly winds 10 to 17
knots early that night, becoming east-to-north-
easterly 12 to 22 knots later that night and
northeast-to-north winds increasing to 20 to 30
knots Monday, with waves 1 to 3 feet increasing
to 4 to 7 feet by morning. This MAFOR was
broadcast at 6:00. p.m., Central Standard Time,
on that date.
(h) 9:39 p.m., Central Standard Time, Sun-
day, December 23, 1979: southerly winds 10 to 17
knots early that night, becoming east-to-north-
easterly 12 to 22 knots later that night and
northeast-to-north winds increasing to 20 to 30
knots Monday, with waves 1 to 3 feet increasing
to 4 to 7 feet by morning. This MAFOR was
broadcast at 6:00 p.m., Central Standard Time,
on that date.
(i) 3:39 a.m., Central Standard Time, Mon-
day, December 24, 1979: east-to-northeast winds
15 to 25 knots, becoming northeasterly 25 to 35
knots that afternoon and northeast-to-north 30
to 40 knots that night, with waves 2 to 4 feet,
increasing to 6 to 12 feet that night. This
48a
MAFOR was broadcast at 6:00 a.m., Central
Standard Time, on that date.!7
(j) 9:34 a.m., Central Standard Time, Monday,
December 24, 1979: northeast-to north winds 30
to 40 knots that afternoon and early that night
and northerly 25 to 35 knots later that night and
north-to-northwesterly 15 to 25 knots Tuesday,
with waves 6 to 12 feet. This MAFOR was
broadcast at noon Central Standard Time, on
that date.
(k) 3:39 p.m., Central Standard Time, Mon-
day, December 24, 1979: northeast-to-north winds
40 to 55 knots early that night and northerly 35
to 45 knots later that night and north-to-north-
westerly 20 to 30 knots and gradually diminish-
ing during Tuesday, with waves 6 to 12 feet.
This MAFOR was broadcast at 6:00 p.m., Central
Standard Time, on that date.
(1) 9:39 p.m., Central Standard Time, Monday,
December 24, 1979: northeast-to-north winds 35
to 45 knots with gusts to 50 knots the remainder
of that night, becoming north-to-northwest 28 to
40 knots Tuesday morning, diminishing to 22 to
32 knots Tuesday afternoon, with waves 6 to 12
feet. This MAFOR was broadcast at midnight,
Central Standard Time, on that date.
See Answers to Plaintiff's Requests for Admissions of
Facts and Genuineness of Documents at 7] 31-42; Tran-
script at 1659-60, 1520-46 (Testimony of Louis Carter),
654-59, 592-602 (Testimony of Patrick Gallagher); Exhibits
211 (Deposition of Robert Francis Bowes at 26-33), 515.
17 At 7:00 A.M., on December 24, 1979, the United States
Coast Guard posted gale warnings for southern Lake Michi-
gan.
49a
41. On December 24, 1979, the actual wind veloc-
ities recorded for Milwaukee were:
6:00 A.M. 20 knots-per-hour
8:00 A.M. 22 knots-per-hour
10:00 A.M. 24 knots-per-hour
12:00 P.M. 35 knots-per-hour
2:00 P.M. 30 knots-per-hour
4:00 P.M. 40 knots-per-hour
6:00 P.M. 35 knots-per-hour
8:00 P.M. 30 knots-per-hour
12:00 A.M. 24 knots-per-hour
See Exhibits 138, 211 (Deposition of Robert Francis Bowes
at 33-40), 516.
42. The significant wave heights'® measured by the
United States Coast Guard at the entrance to Milwaukee’s
harbor at periodic intervals on December 24, 1979, were:
6:00 A.M. 3.4 feet
12:00 P.M. 7.4 feet
6:00 P.M. 13.6 feet
43. Had he been aboard the E. M. FORD, Captain
Gallagher, using his training and experience as a ship’s
master, could have monitored and evaluated the weather
data which was available on December 23 and 24 to
anticipate that gale-force winds from the northeast were
developing on southern Lake Michigan which could pose
18 A wave’s height is the vertical distance between its
trough and its crest as measured by reference to the mean
water level. The “significant wave height” is the average of the
highest one third of the waves. See Transcript at 816-17 (Testi-
mony of Robert Sorenson).
eee
50a 7
as a danger to the ship. See Transcript at 1832-33 (Testi-
mony of Thomas Doyle), 1541, 1545-46 (Testimony of
Louis Carter); Exhibits 641, 642 & 643.
44. Although the City of Milwaukee Board of Har-
bor Commissioners maintains a courtesy weather watch
during regular business hours, it does not offer weather
watch services to users of its facilities. The City’s custom
and practice is to notify users of its harbor facilities if
winds arise in excess of 30-knots-per-hour. Regular busi-
ness hours do not include weekends and holidays. At
those times no one is on duty at the Port of Milwaukee
except a security watchman. See Transcript at 1195-96,
1158-59 (Testimony of Stanley Blawas), 1133, 1128 (Testi-
mony of Roy Hoffman), 941 (Testimony of Wright Gar-
vey).
45. Cement Division did not plan to rely on the
City’s courtesy weather watch when it agreed to tie up
the E.M. FORD at Terminal Pier No. 1 in South Slip No. 1.
46. Cement Division’s ship, the S.T. CRAPO arrived,
unloaded and departed from Cement Division’s dock on
December 23, 1979. The CRAPO’s log shows that it expe-
rienced 32-38 knots-per-hour winds on the eastern side of
Lake Michigan at noon on December 24. Even though it is
a standard custom or practice for ships in a shipowner’s
fleet to communicate with each other regarding weather,
see Transcript at 1594 (Testimony of Louis Carter), the
CRAPO made no attempt to warn the E.M. FORD of these
conditions. See Transcript at 1594-97 (Testimony of Louis
Carter); Exhibit 644.
5la
Breakaway and Sinking of the E.M. FORD
47. The E. M. FORD remained tied up to the dock at
Terminal Pier No. 1 in South Slip No. 1, Milwaukee Outer
Harbor, until about noon Central Standard Time on
December 24, 1979. See Statement of Uncontested Facts at
q 29.
See Transcript at 815-19 (Testimony of Robert Sorenson);
Exhibit 138.
48. At approximately 1:00 P.M. on December 24,
1979, Third Assistant Engineer James Sheridan, who was
aboard the E.M. FORD, noticed that the ship was 10-15
feet off the dock at the stern and that the wind velocity
and wave height had increased markedly. Sheridan and
another crew member brought the boarding ladder
aboard and Sheridan assigned one of the crew to go on
deck and call for help. See Exhibit 202 (Deposition of
James Sheridan at 120-32, 162-68).
49. At approximately the same time Salvatore Gum-
ina, a foreman with the Edward E. Gillen Company,
decided to drive around Jones Island in the outer harbor
where he had been renovating Gillen offices. Gumina had
not seen the FORD since his meeting with Captain Gal-
'agher on December 22. When Gumina stopped his vehi-
cle on the dock, he heard a crewman aboard the E.M.
FORD calling for help and saw that the FORD had moved
away from the dock. See Statement of Uncontested Facts
at 4 30; Transcript at 2040-43, 2027-37, 2011-12, 1976-79
(Testimony of Salvatore Gumina), 1875-76 (Testimony of
Stanley Catarozoli).
52a
50. Gumina then drove to the United States Coast
Guard station where the duty officer and junior officer of
the day informed him that there was nothing the Coast
Guard could do because it was a holiday and no one was
available to render assistance. See Statement of Uncon-
tested Facts at J 31; Transcript at 1988-89, 1978 (Testi-
mony of Salvatore Gumina).
51. Gumina returned to the Gillen office where he
obtained manilla lines ana attempted to contact other
Gillen employees. He was able to reach five men who
agreed to return to work to assist the EM. FORD. Gum-
ina also informed Don Jackson, an officer of the Gillen
Company, and Stanley Blawas of the FORD’s plight. After
spending at least two hours at the Gillen office, Gumina
and the other employees returned to the dock at approx-
imately 3:30 P.M. and attempted to throw lines aboard the
E.M. FORD. See Statement of Uncontested Facts at 7 32,
33 & 35; Transcript at 2040-45, 2030-37, 1976-2002 (Testi-
mony of Salvatore Gumina), 783 (Testimony of Andrew
LaBorde).
52. Staniey Blawas drove to the dock where some-
one on board the E.M. FORD called out the telephone
number of first assistant engineer Joseph Zolnierek who
was at home in Alpena, Michigan. Blawas called
Zolnierek for authority to call for the services of tug
boats. Zolnierek, in turn, called Captain Gallagher, who
was also in Alpena. Later Blawas called Captain Gal-
lagher to tell him that a licensed pilot was needed and
suggested some names, including that of Captain Thomas
53a
Parks, a resident of Milwaukee. See Statement of Uncon-
tested Facts at {YJ 38 & 39; Transcript at 1209-13 (Testi-
mony of Stanley Blawas), 684-85 (Testimony of Joseph
Zolnierek), 481-88 (Testimony of Patrick Gallagher).
54. Captain Gallagher contacted the Great Lakes
Towing Company to ask for assistance.
(a) At approximately 4:00 P.M. on Decem-
ber 24, after receiving Cement Division’s call for
help, the Great Lakes Towing Company dis-
patched its harbor tug WASHINGTON to assist
the E.M. FORD. But, because there was no pilot
aboard, Captain Robert MacLaren could not ren-
der assistance, so he returned to the dock with
the WASHINGTON.
(b) At approximately 6:00 P.M. on Decem-
ber 24, Great Lakes Towing Company dis-
patched its harbor tugs TEXAS and
WASHINGTON to the E.M. FORD for a second
time. The tugs could not communicate with the
ship, so they returned to their dock.
See Statement of Uncontested Facts at 43; Transcript at
963-93 (Testimony of Robert MacLaren); 481-88 (Testi-
mony of Patrick Gallagher); Exhibits 202 (Deposition of
James Sheridan at 179), 127 & 128.
55. Captain Gallagher also contacted Captain Parks
who agreed to join in the efforts to rescue the E.M. FORD.
Captain Parks arrived at the dock at approximately 5:30
P.M. on December 24. He observed that the bow of the
ship had broken loose from the dock on the north side of
the slip and had swung to the south side of the slip
against the wallhead where it was pounding against the
dock. He noted that there was damage to the FORD’s port
side, including a hole, and that there was a hole in the
54a
stern. He estimated the waves to be 12-15 feet and the
wind velocity to be 30 knots-per-hour. Captain Parks and
Captain Gallagher remained in contact throughout the
evening by means of a shore telephone. See Statement of
Uncontested Facts at {9 35 & 41; Transcript at 1006-19
(Testimony of Thomas Parks), 481-88 (Testimony of
Patrick Gallagher).
56. Captain Parks and three Gillen employees
jumped aboard the E.M. FORD and attempted to prepare
the vessel to be towed from the slip. See Statement of
Uncontested Facts at 77 35 & 42; Transcript at 2035
(Testimony of Salvatore Gumina), 1006-19 (Testimony of
Thomas Parks), 806-10 (Testimony of Andrew LaBorde).
57. At approximately 8:00 P.M. on December 24,
after being summoned by Captain Parks who had acti-
vated the radiotelephone aboard the FORD, the harbor
tugs TEXAS and WASHINGTON were again dispatched
to the E.M. FORD. The tugs remained in the area until
9:30 P.M. when they were released by Captain Parks who
had decided that the tugs should not attempt to tie on to
the ship because the rolling action of the FORD might
endanger the lives of those aboard both vessels. See State-
ment of Uncontested Facts at J 43; Transcript at 1012-17
(Testimony of Thomas Parks), 963-93 (Testimony of
Robert MacLaren); Exhibits 202 (Deposition of James
Sheridan at 179), 127 & 128.
58. While Captain Parks and Gillen employees
manned the power winches and attempted to remoor the
E.M. FORD, members of the FORD crew brought up the
steam on the boilers, put power on the winches, operated
the engine and pumps and took soundings. The cook
55a
proceeded with the preparation of the crew’s turkey din-
ner. See Statement of Uncontested Facts at 47 35, 37 & 42;
Transcript at 2035, 1995-2001 (Testimony of Salvatore
Gumina), 1902-20 (Testimony of Keith Iverson), 1021-36,
1008-18 (Testimony of Thomas Parks); Exhibits 202
(Deposition of James Sheridan at 133, 138-43, 148-50,
169-87), 203 & 203A (Deposition of Robert Malaski at 6-7,
9, 34-44, 62, 63, 66).
59. Although Captain Parks was able to move the
E.M. FORD about 100 feet back into the slip, he and the
Gillen men were not able to remoor the ship for any
length of time. Lines continued to part. At approximately
11:00 P.M. on December 24, Captain Parks found that the
ship was taking on water and was failing to return from
her starboard rolls. Near midnight Captain Parks ordered
the crew to shut down the boilers and generator. The
Captain then ordered everyone off the ship. See Statement
of Uncontested Facts at J] 37 & 44; 1999-2003 (Testimony
of Salvatore Gumina), Transcript at 1028-30, 1016-20 (Tes-
timony of Thomas Parks); Exhibits 202 (Deposition of
James Sheridan at 184-87), 203 (Deposition of Robert Mal-
aski at 44-45).
60. After the persons on board went ashore, the
E. M. FORD settled to the bottom of the slip on December
25, 1979. See Statement of Uncontested Facts at { 45;
Transcript at 1180 (Testimony of Stanley Blawas), 1019-20
(Testimony of Thomas Parks), 936 (Testimony of Wright
Garvey), 786-87 (Testimony of Andrew LaBorde), 686-87
(Testimony of Joseph Zolnierek), 490 (Testimony of
Patrick Gallagher), 311-12 (Testimony of Norman Martin-
son); Exhibits 165 & 180.
56a
61. The City of Milwaukee’s pier and surrounding
property at Terminal Pier No. 1 in South Slip No. 1 was
injured by the E.M. FORD’s repeated pounding against
the dock and its headwall on December 24, 1979. See
Statement of Uncontested Facts at 4 36; Transcript at
1793-1804, 1785-86, 1733-77 (Testimony of Dean Honadel);
Exhibit 552. ‘
62. The City of Milwaukee’s dock structure at Term-
inal Pier No. 1 in Slip No. 1 and its cleats and bollards did
not fail and was not a cause of the damage to the £.M.
FORD or the property of the City of Milwaukee on
December 24, 1979. See Transcript at 1793-1804, 1785-86,
1733-77 (Testimony of Dean Honadel); Exhibit 552.
63. Once the violent surging began to develop in
South Slip No. 1, there were no measures which could
have been taken, short of immediately removing the E.M.
FORD from the slip, which would have prevented or
substantially lessened the injuries which were sustained
by the E.M. FORD and the City’s dock on December 24
and 25, 1979. The FORD could not be removed because
Cement Division failed to retain a master and adequate
crew. See Transcript at 1574-90 (Testimony of Louis Car-
ter), 659-60 (Testimony of Patrick Gallagher), 164-65, 151
(Testimony of Robert Brissette); Exhibit 213 (Deposition
of True LeMon at 97).
64. The complete reliance which Cement Division
purported to place on the City of Milwaukee and the
Edward E. Gillen Company to warn, rescue and protect
the safety of the E.M. FORD was unreasonable under the
following circumstances:
’
57a
(a) When entering into the agreements at
issue with the City of Milwaukee and the
Edward E. Gillen Company, Cement Division
failed to divulge that the S.S. EM. FORD would
be laid up for a period of days without a pilot,
without a crew, without ship-to-shore communi-
cations and without a weather watch.
(b) Without any prior course of dealing,
Cement Division, in the person of Captain
Patrick Gallagher, failed to apprise the Edward
E. Gillen Company of the services it would need
and, at the same time, failed to ascertain
whether Gillen had the equipment and man-
power needed to render these services.
(c) Crew members remained aboard the
S.S. E.M. FORD at all times and should have
been in the best position to observe any weather
conditions which might affect the vessel and to
notify Cement Division personnel in case of an
emergency. See Transcript at 1850, 1834-35 (Testi-
mony of Thomas Doyle), 1695-98, 1581-87 (Testi-
mony of Louis Carter), 1408-09, 1401-02, 1348-49
(Testimony of James Sherman), 1127-28 (Testi-
mony of Roy Hoffman), 1037-41 (Testimony of
Thomas Parks), 588-91 (Testimony of Patrick
Gallagher); Exhibits 207 (Deposition of Mark
Presper at 57-59), 209 (Deposition of James
Haskell at 14 & 17), 210 (Deposition of John
Burke at 109).
D. LIABILITY —
1. Negligence
65. The City of Milwaukee, acting through its
employees and agents, breached its duty of due care for
the safety of its own dock and other property and for the
safety of the plaintiff’s vessel, the S.S. E. M. FORD, by
58a
allowing the E. M. FORD to remain tied up at Terminal
Pier No. 1 in South Slip No. 1 for a period of days
without adequately warning Cement Division that wind
and wave conditions could develop which would endan-
ger the vessel and the City’s property with which it
would come into contact. Despite its superior knowledge
of this hazard, the City failed to exercise its power to
order the vessel to remain manned or move off berth.
66. The defendant's breach of its duty of due care,
as described in Finding of Fact No. 65, above, was a
cause-in-fact of the injury to the S.S. E.M. FORD and of
the injury to its own property which occurred on Decem-
ber 24 and 25, 1979.
67. Cement Division, acting through its employees
and agents, breached its duty of due care for the safety of
its own vessel, the S.S. E.M. FORD, and for the safety of
the property of the City of Milwaukee by choosing to tie
up the S.S. E.M. FORD for a period of days at Terminal
Pier No. 1 in South Slip No. 1 in the outer harbor at the
Port of Milwaukee during the month of December despite
warnings and knowledge that wind and wave conditions
could develop which would endanger the vessel and any
property with which it would come into contact. The
plaintiff further breached its duty of due care by its
captain’s failure to take reasonable precautions to ensure
the safety of the vessel before departing for a vacation.
Captain Gallagher failed to employ a standby master or
pilot and crew members who would be capable of remov-
ing the vessel or taking any other measures necessary
should an emergency arise, failed to employ a crew mem-
ber to remain aboard who would be capable of operating
’ |
59a
ship-to-shore communications facilities, and failed to
assign a crew member to monitor the weather.
68. The plaintiff’s breach of its duty of due care, as
described in Finding of Fact No. 67, above, was a cause-
in-fact of the injury to the S.S. E. M. FORD and of the
injury to the dock and other property of the City of
Milwaukee which occurred on December 24 and 25, 1979.
69. The plaintiffs and the defendant failed to show
by a preponderance of the evidence that the acts or
omissions of defendant Edward E. Gillen Company were
a cause-in-fact of the injury to the S.S. E.M. FORD.
70. Assuming the total fault which caused the injury
to the E. M. FORD to be one hundred percent (100%), the
court attributes ninety-six percent (96%) of the total fault
to the plaintiff Cement Division and four percent (4%) of
the total fault to the defendant City of Milwaukee.
71. Assuming the total fault which caused the injury
to the City of Milwaukee’s dock and other property at
Terminal No. 1, South Slip No. 1 to be one hundred
percent (100%), the court attributes ninety-six percent
(96%) of the total fault to the plaintiff Cement Division
and four percent (4%) of the total fault to the defendant
City of Milwaukee.
2. Warranty
72. By the acts described in Finding of Fact No. 65,
above, the defendant City of Milwaukee breached a
wharfinger’s implied warranty to provide a safe berth for
plaintiff Cement Division’s vessel the S.S. E.M. FORD.
60a .
73. The plaintiff Cement Division, National Gypsum
Company, did not establish by a preponderance of the
evidence that the defendant City of Milwaukee expressly
warranted Terminal Pier No. 1 in South Slip No. 1 to be a
safe berth for a vessel temporarily laid up with no deck
crew aboard capable of moving the ship in an emergency.
74. The defendant City of Milwaukee did not breach
any express warranties to provide a safe berth at Termi-
nal No. 1, South Slip No. 1 in the Milwaukee Harbor for
the plaintiff Cement Division’s vessel, the S.S. E.M.
FORD.
II. CONCLUSIONS OF LAW
A. JURISDICTION AND JOINDER
1. The district courts have original jurisdiction,
exclusive of the courts of the States, of any civil case of
admiralty or maritime jurisdiction, saving to suitors, in
all cases all other remedies to which they are otherwise
entitled. See 28 U.S.C. § 1333(1).
2. When torts have occurred on navigable waters
within the United States and the alleged wrongs bear a
significant relationship to traditional maritime activity,
the claims fall within a federal court’s admiralty jurisdic-
tion. See East River Steamship Corporation v. Transamerica
DeLeval, Inc., 476 U.S. 858, 863-64 (1986); Complaint of
SISSON, 867 F.2d 341, 343 (7th Cir. 1989).
3. The admiralty and maritime jurisdiction of the
United States extends to and includes all cases of damage
or injury, to person or property, caused by a vessel on
navigable water, notwithstanding that such damage or
61a
injury be done or consummated on land, including ship-
caused injuries to a pier. See 46 U.S.C. § 740. See also
Nacierma Operating Company, Inc. v. Johnson, 396 U.S. 212,
222 (1969); Gutierrez v. Waterman Steamship Corporation,
373 U.S. 206, 209-10 (1963); S.C. Loveland, Inc. v. East West
Towing, Inc., 608 F.2d°160, 165 (5th Cir. 1979), cert. denied
sub nom. St. Paul Mercury Insurance Company v. East West
Towing, Inc., 446 U.S. 918 (1980).
4. Third-party defendant Edward E. Gillen Com-
pany, Inc. has properly been made a party pursuant to
Federal Rule of Civil Procedure 14(c), which provides
that: 7
When a plaintiff asserts an admiralty or
maritime claim within the meaning of Rule 9(h),
the defendant or claimant, as a third-party
plaintiff, may bring in a third-party defendant
who may be wholly or partly liable, either to the
plaintiff or to the third-party plaintiff, by way of
remedy over, contribution, or otherwise on
account of the same transaction, occurrence, or
series of transactions or occurrences. In such a
case the third-party plaintiff may also demand
judgment against the third-party defendant in
favor of the plaintiff, in which event the third-
party defendant shall make any defenses to the
claim of the plaintiff as well as to that of the
third-party plaintiff in the manner provided in
Rule 12 and the action shall proceed as if the
plaintiff had commenced it against the third-
party defendant as well as the third-party plain-
tiff.
Federal Rule of Civil Procedure 14(c). See also Seal Off-
shore, Inc. v. American Standard, Inc., 777 F.2d 1042, 1045
(Sth Cir. 1985); Riverway Company v. Trumbull River Ser-
vices, Inc., 674 F.2d 1146, 1154-55 (7th Cir. 1982); United
62a
States v. Isco, Inc., 463 F. Supp. 1293, 1294-95 (E.D. Wis.
1979); Ohio River Company v. Continental Grain Company,
352 F. Supp. 505, 511-13 (N.D. Ill. 1972).
5. This court has admiralty subject matter jurisdic-
tion over the claims made by the plaintiff in the Amended
Complaint and by the defendant in its Counterclaim and
in its Third-Party Complaint.
B. CAPACITY OF THE CITY OF MILWAUKEE TO
SUE AND BE SUED
6. Where a municipality is engaged in a proprietary
function, as distinguished from a governmental function,
it is answerable for its negligent acts, or those of its
agents, just as would an individual or a private corpora-
tion. See Bagrowski v. American Export Isbrandtsen Lines,
Inc., 440 F.2d 502, 509 (7th Cir. 1971); Leemon v. South
Jersey Port Commission, 145 F. Supp. 828, 831 (D.N.J. 1956).
7. Operations of a pier by a port district established
under state law for the loading and unloading of com-
modities is a “proprietary function” and makes a public
corporation responsible for any negligence committed by
its employees in the course of corporate work. See
Bagrowski v. American Export Isbrandtsen Lines, Inc., 440
F.2d 502, 509 (7th Cir. 1971); Leemon v. South Jersey Port
Commission, 145 F. Supp. 828, 831 (D.N.J. 1956).
8. The City of Milwaukee, in operating harbor and
dock facilities, functions as a general wharfinger. In oper-
ating its municipal port, the City of Milwaukee engages
in a proprietary function. In the exercise of these func-
tions the City is regarded as having the capacities of a
63a
private corporation which can sue and be sued. See
Bagrowski v. American Export Isbrandtsen Lines, Inc., 440
F.2d 502, 509 (7th Cir. 1971); Paper Makers Importing Com-
pany v. City of Milwaukee, 165 F. Supp. 491, 503 (E.D. Wis.
1958).
C. APPLICABLE LAW
9. In federal maritime actions, federal courts sit as
“pure” federal courts, governed by federal procedural
rules and federal substantive law. See Daughtry v. Dia-
mond M Company, 693 F. Supp. 856, 861 (C.D. Cal. 1988).
10. When admiralty jurisdiction is invoked, sub-
stantive admiralty law must be applied. Absent a relevant
statute, the general maritime law, as developed by the
judiciary, applies. Drawn from state and federal sources,
ce general maritime law is an amalgam of traditional
common-law rules, modifications of those rules, and
newly created rules. See East River Steamship Corporation v.
Transamerica DeLaval, Inc., 476 U.S. 858, 864-65 (1986);
Kermarac v. Compagnie Generale Transatlantique, 358 U.S.
625, 628 (1959).
11. If admiralty law fails to provide a standard,
marine collision liability turns on traditional tort law
principles. See East River Steamship Corporation v. Trans-
america DeLaval, Inc., 476 U.S. 858, 864-65 (1986); Floyd v.
Lykes Bros. Steamship Company, Inc., 844 F.2d 1044, 1046-47
(3d Cir. 1988); Daigle v. Point Landing, Inc., 616 F.2d 825,
827 (Sth Cir. 1980); S.C. Loveland, Inc. v. East West Towing,
Inc., 608 F.2d 160, 165 (5th Cir. 1979), cert. denied sub nom.
St. Paul Mercury Insurance Company v. East West Towing,
64a
Inc., 446 U.S. 918 (1980); People’s Natural Gas Company v.
Ashland Oil, Inc., 604 F. Supp. 1517, 1524 (W.D. Pa. 1985).
12. Allisions between a moving ship and a station-
ary or fixed object are governed by the same rules as
admiralty collision cases. See People’s Natural Gas Company
v. Ashland Oil, Inc., 604 F. Supp. 1517, 1523 (W.D.Pa. 1985).
D. MARITIME TORT LAW
13. Negligent conduct on the navigable waters that
causes loss to another constitutes a maritime tort. See
United States v. M/V BIG SAM, 681 F.2d 432, 443 (5th Cir.
1982), cert. denied, 462 U.S. 1132 (1983).
14. Negligence traditionally has four elements:
1. A duty or obligation recognized by the law
requiring the actor to conform to a certain
standard of conduct for the protection of
others against unreasonable risks;
2. A failure on the actor’s part to conform to
the standard required;
3. A reasonably close causal connection
between the conduct and the resulting injury
(proximate, cause);
4. Actual loss or damage resulting to the inter-
ests of another.
United States v. M/V BIG SAM, 454 F. Supp. 1144, 1148
(E.D. La. 1978) (citing W. Prosser, Law of Torts § 30 (4th ed.
1971)) rev’d on reconsideration on other grounds, 480 F.
Supp. 290 (E.D. La. 1979), aff'd in part, rev'd in part on other
grounds, and remanded, 681 F.2d 432 (5th Cir. 1982), cert.
denied, 462 U.S. 1132 (1983).
65a
14. A useful framework for determining negligence
in a maritime case has been formulated by designating by
“B” the burden of the precautions necessary to avert an
accident, by “L” the magnitude of the loss of the accident
occurred, and by “P” the probability that if the precau-
tions were not taken the accident would occur. An alleged
tortfeasor is negligent if B < PL, that is, if the burden of
precautions was less than the harm if the accident
occurred discounted (i.e., multiplied) by the probability
that it would occur. The higher P and L are, an
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