Rodi Yachts, Inc. v. National Marine, Inc.
984 F.2d 880, 1993 WL 20212 (1993)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
In admiralty tort law, the allocation of fault between joint tortfeasors is determined by their relative culpability, which is in inverse ratio to the cost each party would have incurred to prevent the accident, taking into account industry customs that inform the parties' duties.
Facts:
- National Marine, Inc., which owns a fleet of barges, made a contract to transport lumber to a dock operated by Transport Distributors, Inc. (TDI).
- TDI was primarily a rail-based transloading business that received barge shipments only about once a year and had no maritime crew or inspection capabilities.
- On April 22, 1988, a tugboat crew from National Marine moored a barge at TDI's dock using several thick hawsers and then departed.
- It was understood that TDI would notify National Marine to retrieve the barge after it was unloaded.
- Due to TDI's delay in hiring a crane and crew, the barge remained moored at the dock for nearly five days.
- During this five-day period, neither National Marine nor TDI inspected the mooring lines to ensure they were secure.
- In the early morning of April 27, the hawsers broke, causing the barge to cast adrift and collide with another dock and two boats.
Procedural Posture:
- The owners of damaged property sued National Marine, Inc. in an admiralty action in a federal district court (the court of first instance).
- National Marine impleaded Transport Distributors, Inc. (TDI) as a third-party defendant, seeking contribution or indemnification.
- Following a bench trial, the district court judge ruled that both National Marine and TDI had been negligent.
- The district court assessed National Marine's fault at two-thirds and TDI's fault at one-third of the total damages.
- National Marine (appellant) appealed the judgment to the U.S. Court of Appeals for the Seventh Circuit, arguing TDI was solely at fault.
- TDI (appellee and cross-appellant) filed a cross-appeal, arguing National Marine was solely at fault.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
In an admiralty case involving joint tortfeasors, is the allocation of relative fault determined by assessing which party could have prevented the accident at a lower cost, with reference to established industry customs?
Opinions:
Majority - Posner, Circuit Judge
Yes. The allocation of fault between joint tortfeasors in admiralty is determined by assessing their relative culpability, which can be framed in terms of which party was the lower-cost accident avoider, considering relevant industry customs. The court found that reliance on rigid legal presumptions, such as the 'drifting-vessel' presumption, obscures the ultimate question of relative fault. Instead, the critical issue is the parties' relative costs of prevention. Industry custom dictates that the barge owner is responsible for the initial mooring and the dock operator is responsible for subsequent inspections. TDI's failure to have inspection capabilities, or to notify National Marine of this deficiency, suggests fault. However, National Marine may also have been negligent if it used defective mooring lines. Because the district court failed to make specific findings of fact regarding the cause of the accident or the parties' compliance with custom, the case must be remanded for a proper determination of relative fault based on these principles.
Concurring - Harlington Wood, Jr., Senior Circuit Judge
Yes, but with reservations about the framing. While agreeing with the decision to remand, this opinion expresses hesitation about framing the issue of relative fault solely in terms of the parties' 'relative costs of prevention.' The concurrence prefers approaching comparative fault on the more traditional basis established in 'United States v. Reliable Transfer Co.' without a primary focus on economic cost-benefit analysis. The author notes, however, that the majority opinion rightly instructs the lower court not to conduct an economic analysis 'from the ground up' but to focus on the parties' compliance with industry custom, which makes the approach more acceptable.
Analysis:
This case is significant for explicitly introducing the 'lower-cost accident avoider' principle from law and economics into the determination of relative fault between joint tortfeasors in admiralty law. By rejecting rigid presumptions in favor of a flexible analysis of prevention costs and industry customs, Judge Posner's opinion provides a modern framework for allocating liability in commercial torts. This approach moves the focus from formalistic rules to a fact-intensive inquiry into which party was in the best position to prevent the harm efficiently. The decision influences future cases by encouraging courts to consider market-based standards and the economic realities of the parties' relationship when apportioning damages.
