-
USCA1 Opinion
August 23, 1994 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1059
IN RE BALLARD SHIPPING COMPANY, ETC.,
Plaintiff, Appellee,
v.
BEACH SHELLFISH, ET AL.,
Claimants, Appellants.
____________________
ERRATA SHEET
Block quote on page 5: line 3, change "tort-feasor" to
"tortfeasor". On line 5, add a comma between "other" and
"unknown".
Page 5, 3 lines below block quote: "MT Fadi B" should be MT
_________ __
FADI B".
______
Page 8, lines 2 and 3 down: change cite to "See R.I. Gen.
___
Laws 46-12.3-2, 46-12.3-3."
Page 13, 5th line down: change cite to "State of Louisiana
__________________
ex rel. Guste v. M/V Testbank, 752 F.2d 1019, 1022 (5th Cir.
______________ _____________
1985) (en banc), cert. denied, 477 U.S. 903 (1986)."
____________
Page 16, second to last line of second paragraph: change
"Id." to "Id."
__ ___
Page 18, footnote 5, 5th line up: change period after
"Fireman's Fund Ins. Co.." to a comma.
_______________________
Page 20, footnote 20, second to last line: "Rule" should
not be underlined.
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1059
IN RE BALLARD SHIPPING COMPANY, ETC.,
Plaintiff, Appellee,
v.
BEACH SHELLFISH, ET AL.,
Claimants, Appellants.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ronald R. Lagueux, U.S. District Judge]
___________________
____________________
Before
Selya, Circuit Judge,
_____________
Bownes, Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
____________________
Thomas M. Bond with whom David B. Kaplan and The Kaplan/Bond
_______________ _________________ _______________
Group were on brief for appellants.
_____
John J. Finn with whom Thomas H. Walsh, Jr., Marianne Meacham and
____________ ____________________ ________________
Bingham, Dana & Gould were on brief for appellee.
_____________________
____________________
August 18, 1994
____________________
BOUDIN, Circuit Judge. This appeal presents the
______________
question whether federal maritime law preempts Rhode Island
legislation affording expanded state-law remedies for oil
pollution damage. In an able opinion, the district court
held that the remedies were preempted. Discerning the law in
this area is far from easy; one might tack a sailboat into a
fog bank with more confidence. Yet guided in part by an
important Supreme Court decision rendered after the district
court's decision, we are constrained to reverse in part and
to remand for further proceedings.
The basic facts of the case are not in dispute. On June
23, 1989, the M/V World Prodigy, an oil tanker owned by
Ballard Shipping Co., ran aground in Narragansett Bay, Rhode
Island, spilling over 300,000 gallons of heating oil into the
bay. The wreck occurred when the ship strayed from the
designated shipping channel and collided with a rock near
Brenton Reef, about a mile south of Newport at the mouth of
the bay. The oil slick prompted the State of Rhode Island to
close Narragansett Bay to all shellfishing activities for a
period of two weeks during and after cleanup operations.
State authorities charged the captain of the ship with
entering the bay without a local pilot on board in violation
of state law. Both the captain and Ballard also pleaded
guilty to criminal violations of the Federal Water Pollution
Control Act, see 33 U.S.C. 1319(c). The captain and owner
___
-2-
-2-
were fined a total of $30,500 and $500,000, respectively. In
addition, Ballard agreed to pay $3.9 million in compensation
for federal cleanup costs, $4.7 million for state cleanup
costs and damage to natural resources, $500,000 of which was
to be available to compensate individuals, and $550,000 to
settle claims for lost wages by local shellfishermen.
A number of claimants filed suit against Ballard in
Rhode Island. Ballard responded on December 22, 1989, by
bringing a petition in admiralty for limitation or
exoneration from liability. 46 U.S.C. 185. "[T]he court
of admiralty in [a limitation of liability] proceeding
acquires the right to marshal all claims, whether of strictly
admiralty origin or not, and to give effect to them by the
apportionment of the res and by judgment in personam against
___ ___________
the owner, so far as the court may decree." Just v. Chambers,
____ ________
312 U.S. 383, 386 (1941). In the present case, several
claimants reasserted their claims in the admiralty action.
The claimants in the present appeal are a group of
shellfish dealers who allege severe economic losses arising
from the two-week hiatus in shellfishing activities, which
suspended their operations during the busiest time of the
shellfishing season. They alleged negligence under the
general maritime law and the common law of Rhode Island, as
well as a claim for economic losses pursuant to the Rhode
Island Environmental Injury Compensation Act, R.I. Gen. Laws
-3-
-3-
ch. 46-12.3 et seq. ("the Compensation Act").
_______
On June 17, 1992, Ballard moved to dismiss the shellfish
dealers' claims on the basis of the Supreme Court's decision
in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303
_______________________________ _____
(1927), which held that compensation for economic losses
standing alone is unavailable in admiralty cases. The
district court granted the motion, holding that Robins
______
preempted the contrary provisions of the state's Compensation
Act, which expressly provides for recovery of purely economic
losses arising from an oil spill. In re Complaint of Ballard
__________________________
Shipping Co., 810 F. Supp. 359 (D.R.I. 1993). The dealers
_____________
now appeal from that dismissal.
We first address the federal claims brought under the
general maritime law. The Constitution grants the federal
courts authority to hear "all Cases of admiralty and maritime
Jurisdiction." U.S. Const. Art. III, 2. The parties agree
that the dealers' federal claims fall within this group
because the spill occurred on navigable waters and arose out
of traditional maritime activity. See Executive Jet
___ _______________
Aviation, Inc. v. City of Cleveland, 409 U.S. 249 (1972).
______________ __________________
Admiralty jurisdiction brings with it a body of federal
jurisprudence, largely uncodified, known as maritime law.
See East River S.S. Corp. v. Transamerica Delaval, 476 U.S.
___ ______________________ _____________________
858, 864 (1985).
The dealers assert that their businesses were injured
-4-
-4-
when the World Prodigy spill prevented local fishermen from
harvesting shellfish in Narragansett Bay and thereby
precluded the dealers from purchasing the shellfish and
reselling them to restaurants and other buyers. The dealers'
maritime-law claims are thus purely for economic losses,
unaccompanied by any physical injury to their property or
person. Those federal claims, as the district court held,
are squarely foreclosed by Robins Dry Dock & Repair Co. v.
______________________________
Flint, 275 U.S. 303 (1927).
_____
In Robins, the charterer of a vessel sued a repair
______
company that negligently damaged the vessel while it was in
dry dock, alleging that the resulting delay caused the
charterer to lose profits that it would have otherwise
derived from the use of the ship. Justice Holmes wrote for
the Court in holding that the suit could not be maintained:
[N]o authority need be cited to show that, as a
general rule, at least, a tort to the person or
property of one man does not make the tortfeasor
liable to another merely because the injured person
was under a contract with that other, unknown to
the doer of the wrong. . . . The law does not
spread its protection so far.
275 U.S. at 309.
Justice Holmes's pronouncement could have been read
merely as negating a claim of negligent interference with
contract. See Getty Refining and Marketing Co. v. MT FADI B,
___ ________________________________ _________
766 F.2d 829, 831-32 (3d Cir. 1985). Instead, Robins has
______
generally been taken to establish the broader rule that
-5-
-5-
purely economic losses arising from a tort, but unaccompanied
by physical injury to anything in which the plaintiff has a
proprietary interest, are not compensable under federal
maritime law. See, e.g., State of Louisiana ex rel. Guste v.
_________ ________________________________
M/V Testbank, 752 F.2d 1019, 1022 (5th Cir. 1985) (en banc),
_____________
cert. denied, 477 U.S. 903 (1986). Our circuit adopted this
_____________
broader reading in Barber Lines A/S v. M/V Donau Maru, 764
_________________ _______________
F.2d 50, 51-52 (1st Cir. 1985), and, in any event, the
secondary nature of the economic injury here--which is akin
to interference with contract--would likely bring this case
within even a narrow reading of Robins.
______
Several courts have recognized exceptions to Robins, but
______
none of the familiar examples apply in this case.1 The
district court so held, and the dealers do not challenge that
conclusion on appeal. Accordingly, we agree that plaintiffs'
federal claims for purely economic losses under the general
maritime law are barred. The appeal thus turns upon the
extent to which Robins bars the states from permitting a
______
different result under state law pursuant to the exercise of
_____
the state's police powers.
Although the Judiciary Act of 1789 vested "exclusive
____________________
1The classic exceptions include claims brought by
fishermen as "favorites of admiralty," see Union Oil Co. v.
___ ______________
Oppen, 501 F.2d 558 (9th Cir. 1974), and claims for economic
_____
losses that are intentionally caused, see Dick Meyers Towing
___ __________________
Service, Inc. v. United States, 577 F.2d 1023, 1025 (5th Cir.
_____________ _____________
1978), cert. denied, 440 U.S. 908 (1979).
____________
-6-
-6-
original cognizance of all civil causes of admiralty and
maritime jurisdiction" in the federal courts, the act added a
provision "saving to suitors, in all cases, the right of a
common law remedy, where the common law is competent to give
it." 1 Stat. 76-77. The modern version of the statute saves
"all other remedies to which [suitors] are otherwise
entitled." 28 U.S.C. 1333. The upshot is that an injured
party may have claims arising from a single accident both
under federal maritime law and under state law, whether
legislation or common law. See G. Gilmore & C. Black, Jr.,
___
The Law of Admiralty 1-13, at 37 (2d ed. 1975). State
_____________________
remedies under the savings to suitors clause may be pursued
in state court or, where there is a basis for federal
jurisdiction, in federal court.
Whether a state claim is litigated in a federal court or
a state forum, "the extent to which state law may be used to
remedy maritime injuries is constrained by a so-called
``reverse-Erie' doctrine which requires that the substantive
____
remedies afforded by the States conform to governing federal
maritime standards." Offshore Logistics, Inc. v. Tallentire,
________________________ __________
477 U.S. 207, 223 (1986) (citations omitted). How far this
conformity requirement extends, and whether it preempts the
dealers' state-law claims, are the central issues in this
case.
On appeal, the dealers mainly stress their claims under
-7-
-7-
Rhode Island's Compensation Act. The Compensation Act
provides generally that owners or operators of seagoing
vessels may be held liable for harms arising from negligence
of the owner, operator or agents or from the violation of
Rhode Island pilotage and water pollution laws. See R.I. Gen.
___
Laws 46-12.3-2, 46-12.3-3. The statute also contains the
following specific provisions regarding economic loss:
(a) A person shall be entitled to recover for
economic loss . . . if the person can
demonstrate the loss of income or diminution
of profit to a person or business as a result
of damage to the natural resources of the
state of Rhode Island caused by the violation
of any provision [of the piloting or water
pollution laws] by the owner or operator . . .
of the seagoing vessel and/or caused by the
negligence of the owner or operator . . . of
the seagoing vessel.
(b) In any suit brought to recover economic loss
it shall not be necessary to prove that the
loss was sustained as a result of physical
injury to the person or damage to his or her
property, nor shall it be a defense to any
claim that the defendant owed no special duty
to the plaintiff or that the loss was the
result of governmental action taken in
response to the violation and/or negligence of
the defendant.
(c) Without limiting the generality of the
foregoing, persons engaged in commercial
fishing or shellfishing and/or the processors
of fish or shellfish, who can demonstrate that
they have sustained a loss of income or profit
as a result of damage to the environment
resulting from [violations of law or
negligence] . . . shall have a cause of action
for economic loss. Persons employed by, or
who operate businesses, who have sustained a
loss of income or profit as a result of a
decrease in the volume of business caused by
the damage to the environment shall also be
-8-
-8-
entitled to maintain an action for economic
loss.
R.I. Gen. Laws 46-12.3-4.
For the purposes of this appeal only, Ballard concedes
that the dealers would have a valid cause of action under
this statute, and that the Compensation Act, which became
effective on September 30, 1990, may be applied retroactively
to cover the 1989 M/V World Prodigy spill.2 We think that
the statutory claims effectively subsume state common law
claims since the Compensation Act appears to go as far and
further than common law in departing from Robins. Thus, we
______
focus upon the statute.
The shipowner and captain insist, and the district court
agreed, that the state claims are preempted under the
doctrine of Southern Pacific Co. v. Jensen, 244 U.S. 205
_____________________ ______
(1917). Jensen, in a now famous passage, held that state
______
legislation affecting maritime commerce is invalid "if it
contravenes the essential purpose expressed by an act of
Congress, or works material prejudice to the characteristic
features of the general maritime law, or interferes with the
proper harmony and uniformity of that law in its interna-
tional and interstate relations." Id. at 216.
___
____________________
2See 1990 R.I. Pub. Laws ch. 198, 2 (providing that
___
the Compensation Act shall apply to all causes of action
pending on or after September 30, 1990, regardless of when
the violation and/or act of negligence occurred, as long as
suit was commenced within the applicable statute of
limitations).
-9-
-9-
Jensen, however, was by its own terms something less
______
than a rule of automatic and mechanical preemption. "It
would be difficult, if not impossible," said the Court, "to
define with exactness just how far the general maritime law
may be changed, modified, or affected by state legislation.
That this may be done to some extent cannot be denied." 244
_______________________________________________________
U.S. at 216 (emphasis added). What is even more telling is
that the Supreme Court after Jensen, without ever repudiating
______
its language, upheld the application of state law in a number
of maritime-related cases despite the existence of a direct
conflict between maritime rules and state law.
This saga is recounted in Professor Currie's classic
article, aptly titled "Federalism and the Admiralty: ``The
Devil's Own Mess,'" 1960 Sup. Ct. Rev. 158. A familiar
example is Just v. Chambers, 312 U.S. 383 (1941), where the
____ ________
Court permitted a state law claim for personal injury
occurring on board a ship against the estate of the vessel's
owner, despite a contrary maritime rule that a shipowner's
liability does not survive his death. This year, in American
________
Dredging Co. v. Miller, 114 S. Ct. 981 (1994), the Court
_____________ ______
upheld a Louisiana open-forum statute, making the forum non
_________
conveniens doctrine unavailable in savings clause cases, even
__________
though forum non conveniens is a part of federal maritime
_____________________
law.
American Dredging assertedly reaffirms Jensen's three-
_________________ ______
-10-
-10-
prong test for preemption quoted above. Since no act of
Congress directly governs our case, the first prong
(contravention) is irrelevant to our case. The third prong
("proper harmony and uniformity") we reserve for
consideration below. What is of immediate concern is the
second ("material prejudice") prong; and here, American
________
Dredging gave the famous language a twist that could not
________
easily have been anticipated by the litigants in this case or
by the district court.
Judged by the bare language of Jensen, the Compensation
______
Act might easily seem to do "material prejudice" to a
"characteristic feature" of maritime law, since Robins is the
______
governing maritime rule and the Compensation Act rejects
Robins in everything but name. But the word "characteristic"
______
has different shadings, and American Dredging, in its first
_________________
and most important holding, gives the "characteristic
feature" language a definitive meaning: it reads the phrase
to apply--and apparently only to apply--to a federal rule
that either "originated in admiralty" or "has exclusive
application there." 114 S. Ct. at 987.
Indeed, Justice Scalia goes on to say that the doctrine
at issue in American Dredging, the doctrine of forum non
___________________ __________
conveniens, "is and has been a doctrine of general
__________
application" and that "therefore" its disregard by Louisiana
does not prejudice "[a} characteristic featur[e]" of general
-11-
-11-
maritime law." 114 S. Ct. at 987. Further, only so narrow a
reading of the characteristic feature test comports with the
result in American Dredging. Since the forum non conveniens
______ _________________ ____________________
doctrine had long and widespread application in admiralty
cases, id. at 986, a broad reading of the characteristic
___
feature test would have resulted in preemption.
Although it is easier to identify the origins of a
doctrine recognizing liability than one denying it, we have
found no evidence that Robins' denial of recovery for purely
______
economic losses originated in admiralty. Justice Holmes's
opinion in Robins presents the rule as a virtual truism for
______
which "no authority need be cited," 275 U.S. at 309, and
refers the reader to three other opinions in which "[a] good
statement [of the rule] will be found." Id. (citing Elliot
___ ______
Steam Tug Co., Ltd. v. The Shipping Controller, 1 K.B. 127,
___________________ _______________________
139, 140 (1922); Byrd v. English, 117 Ga. 192, 43 S.E. 419
____ _______
(1903); and The Federal No. 2, 21 F.2d 313 (2d Cir. 1927)).
__________________
Although Elliot Steam Tug and The Federal No. 2 are both
_________________ __________________
maritime cases, Byrd involved a suit against a defendant who
____
had negligently damaged the lines supplying power to
plaintiff's printing company. Justice Holmes also cited
another case, National Savings Bank v. Ward, 100 U.S. 195
______________________ ____
(1879), which involved a suit by a plaintiff who had relied
upon a certificate of title prepared by the defendant
attorney for a third party.
-12-
-12-
The rule applied in Robins is also sometimes traced to
______
Cattle v. Stockton Waterworks Co., 10 Q.B. 453 (1875), which
______ _______________________
concerned liability for delays suffered by plaintiff's
construction company caused by water leaking from defendant's
pipes. The admiralty cases thus reflect a traditional, if
not invariable, "general principle denying liability for
purely economic loss in the law of negligence." Atiyah,
"Negligence and Economic Loss," 83 L.Q. Rev. 248, 248-51
(1967). In sum, "Robins broke no new ground but instead
______
applied a principle, then settled both in the United States
and England, which refused recovery for negligent
interference with ``contractual rights.'" Testbank, 752 F.2d
________
at 1022.
Nor has the doctrine forbidding recovery of such losses
had "exclusive" application in admiralty. State of Louisiana
__________________
ex rel. Guste v. M/V Testbank, 752 F.2nd 1019, 1022 (5th Cir.
_____________ ____________
1985) (en banc), cert. denied, 477 U.S. 903 (1986). Rather,
____________
courts have denied liability for purely economic harm in a
variety of land-based contexts.3 Such cases rest on a
____________________
3See, e.g., Dundee Cement Co. v. Chemical Laboratories,
_________ _________________ ______________________
Inc., 712 F.2d 1166 (7th Cir. 1983) (denying recovery for
____
lost profits from owner of tanker truck which overturned,
blocking the only entrance to plaintiff's cement plant);
Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345
_________________________ ___________________________
N.W.2d 124 (Iowa 1984) (holding that businesses adversely
affected by closing of bridge in which cracks developed could
not recover for economic losses against the builder of the
bridge); Stevenson v. East Ohio Gas Co., 73 N.E.2d 200 (Ohio
_________ _________________
Ct. App. 1946) (holding that plaintiff could not recover lost
wages against defendant, whose negligence in storing
-13-
-13-
concern about extending the scope of tort liability beyond
the generally limited class of individuals who suffer
physical damage to person or property. See Rabin, "Tort
___
Recovery for Negligently Inflicted Economic Loss: A
Reassessment," 37 Stan. L. Rev. 1513, 1528 (1985). This
concern stretches landward quite as much as seaward. Thus,
we hold that Rhode Island's decision to depart from Robins
______
does not materially prejudice a rule that originated in or is
exclusive to general maritime law.
Even absent prejudice to a characteristic feature of
admiralty, state legislation is preempted if (under Jensen's
______
third test) it "interferes with the proper harmony and
uniformity" of maritime law. Jensen, 244 U.S. at 216. As
______
Justice Scalia observed in considering this question, "[i]t
would be idle to pretend that the line separating permissible
from impermissible state regulation is readily discernible in
our admiralty jurisprudence, or indeed is even entirely
consistent within our admiralty jurisprudence." American
________
Dredging, 114 S. Ct. at 987. He did not, however, articulate
________
a definitive test of harmony and uniformity, holding only
that there is no preemption where the relevant state law is
procedural rather than substantive. Id. at 988. In our case,
___
the Rhode Island statute is indisputably substantive.
____________________
explosives caused destruction of plaintiff's nearby place of
employment); Hart Eng'g Co. v. FMC Corp., 593 F. Supp. 1471,
______________ _________
1481-84 (D.R.I. 1984) (Selya, J.).
-14-
-14-
Where substantive law is involved, we think that the
Supreme Court's past decisions yield no single, comprehensive
test as to where harmony is required and when uniformity must
be maintained. Rather, the decisions however couched reflect
a balancing of the state and federal interests in any given
case. See, e.g., Kossick v. United Fruit Co., 365 U.S. 731,
_________ _______ ________________
738-42 (1961); Huron Portland Cement Co. v. City of Detroit,
__________________________ _______________
362 U.S. 440, 442-48 (1960). Our circuit has acknowledged
that "the Supreme Court . . . no longer construes the
Admiralty Clause as requiring ``rigid national uniformity in
maritime legislation,'" Carey v. Bahama Cruise Lines, 864
_____ ____________________
F.2d 201, 207 (1st Cir. 1988), and that the preemption issue
"ordinarily requires a delicate accommodation of federal and
state interests." Id. As Professor Currie summed up the
___
matter:
The maritime nature of an occurrence does not
deprive a state of its legitimate concern over
matters affecting its residents or the conduct of
persons within its borders; but the federal
admiralty powers were granted to protect certain
federal interests in maritime and commercial
affairs. An issue created by such a conflict of
interests can be resolved only by reference to
those interests and by an attempt to maximize the
effectuation of the proper concerns of both state
and nation.
1960 Sup. Ct. Rev. at 169.
In balancing the state interest in regulation against a
potential overriding federal need for harmony or uniformity,
we start with Rhode Island's interest in implementing its
-15-
-15-
Compensation Act. No one can doubt that the state's interest
in avoiding pollution in its navigable waters and on its
shores, and in redressing injury to its citizens from such
pollution, is a weighty one. In Huron Portland Cement, the
______________________
Supreme Court described state air pollution laws as a classic
example of police power, and continued: "In the exercise of
that power, the states . . . may act, in many areas of
interstate commerce and maritime activities, concurrently
________________________
with the federal government." 342 U.S. at 442 (emphasis
added).
In Askew v. American Waterways Operators, Inc., 411 U.S.
_____ __________________________________
325 (1973), the Court sustained, against a maritime-law
preemption challenge, a Florida statute that imposed no-fault
liability on vessel owners and operators for damages to
private parties caused by oil spills in territorial waters.
Justice Douglas described oil spillage as "an insidious form
of pollution of vast concern to every coastal city or port
and to all the estuaries on which the life of the ocean and
lives of the coastal people are greatly dependent." Id. at
___
328-29. See also id. at 332-43.
___ ____ ___
Claimants in this case argue flatly that Askew, without
_____
more, sustains the Rhode Island statute; and perhaps it does.
The difficulty is that Justice Douglas rejected the maritime
law preemption claim on the ground that Jensen had nothing to
______
do with "shoreside injury by ships on navigable waters." 411
-16-
-16-
U.S. at 344. "Historically," said Justice Douglas, "damages
to the shore or to shore facilities were not cognizable in
admiralty." Id. at 240. Although Congress had by statute
___
extended admiralty jurisdiction shoreword in 1948, the Court
said that this extension did not carry Jensen with it. Id.
______ ___
at 341.
If Justice Douglas meant to avoid preemption for
physical damage to the shore or shore facilities, as his
words seem to suggest, this might easily not embrace damage
to bay waters or the beds beneath them. If instead Askew
_____
meant to allow a state remedy for any intangible impact or
loss ultimately felt on shore, it is hard to see what would
be left of preemptive federal authority since the most
traditional of admiralty events--for example, a ship
collision or a seaman's death-- has such intangible effects
ashore. However the riddle of Askew is solved, we think it
_____
safest to take it here merely to show, as it assuredly does,
the importance of the state's interest in providing remedies
for vessel-caused oil pollution damage.
The federal interest in limiting remedies is more subtle
but also not without importance. The Compensation Act does
not regulate the out-of-court behavior of ships or sailors--
what is sometimes called "primary conduct"; rather the act is
concerned with the liability imposed for conduct that is
already unlawful. State regulation of primary conduct in the
-17-
-17-
maritime realm is not automatically forbidden, e.g., Ray v.
____ ___
Atlantic Richfield Co., 435 U.S. 151, 179-80 (1978), but such
______________________
regulation presents the most direct risk of conflict between
federal and state commands, or of inconsistency between
various state regimes to which the same vessel may be
subject.4
Instead, the question here is the familiar one of
burden. At some point, a regime of liability, or a diversity
of regimes, could impose or threaten such heavy costs that
maritime commerce may itself be impaired. Initially such
costs are borne by shipowners but in the end they affect
every business that uses ships or receives raw materials by
ship and every citizen who, as a worker or consumer, depends
upon such commerce. A regime may also be so difficult to
administer as to prevent the efficient and predictable
resolution of maritime disputes. These are not trivial or
irrelevant concerns, for "the fundamental interest giving
rise to maritime jurisdiction is the protection of maritime
commerce."5
____________________
4O'Melveny & Myers v. Federal Deposit Ins. Corp., 114 S.
_________________ __________________________
Ct. 2048, 2055 (1994) (suggesting that uniformity is most
important where the rule at issue is one governing primary
conduct); American Dredging, 114 S. Ct. at 988-89 (noting
_________________
that "forum non conveniens does not bear upon the substantive
____________________
right to recover, and is not a rule upon which maritime
actors rely in making decisions about primary conduct").
5Exxon Corp. v. Central Gulf Lines, Inc., 111 S. Ct.
___________ _________________________
2071, 2074 (1991) (internal quotations omitted). The Supreme
Court has regularly considered such burdens in admiralty
-18-
-18-
Indeed, these very concerns--with the burden of
liability and of administration--underpin the Robins rule
______
itself and are discussed at length in Barber Lines, 754 F.2d
____________
at 54-55. But it is one thing to say that a federal court,
largely responsible for shaping the common law of admiralty,
should follow a longstanding liability rule to govern a
federal cause of action. It is quite another to say that a
state remedy, presumptively preserved under the savings to
suitors clause, is potentially so disruptive as to be
unconstitutional. Where as here the state remedy is aimed at
a matter of great and legitimate state concern, a court must
act with caution.
The question, then, is whether absent the Robins rule
______
there remain limitations on the scope of recovery under the
Compensation Act adequate to limit the burden it imposes on
maritime commerce. The Compensation Act has yet to be
construed by the Rhode Island courts. We nevertheless assume
that its extension of liability to cover all "loss of income
or diminution of profit . . . as a result of damage to the
_______________
____________________
preemption cases, see, e.g., Ray v. Atlantic Richfield Co.,
_________ ___ ______________________
435 U.S. 151, 179-80 (1978); Huron Portland Cement, 362 U.S.
_____________________
at 443-44, and has drawn explicit parallels between admiralty
preemption and Commerce Clause analysis. See Davis v.
___ _____
Department of Labor and Industries of Washington, 317 U.S.
__________________________________________________
249, 257 (1942); Wilburn Boat Co. v. Fireman's Fund Ins. Co.,
________________ _______________________
348 U.S. 310, 323-24 (1955) (Frankfurter, J., concurring in
the result). This does not, however, mean that the admiralty
clause simply duplicates a commerce clause analysis. See
___
American Dredging, 114 S. Ct. at 988 n.3.
_________________
-19-
-19-
natural resources of the state of Rhode Island caused by the
______
violation of [Rhode Island pilotage or pollution laws]," R.I.
Gen. Laws 46-12.3-4 (emphasis supplied), incorporates the
familiar tort limitations of foreseeability and proximate
cause. These principles do in some measure limit the burden
imposed on maritime shipping.
Foreseeability may extend some distance, cf. Barber
___ ______
Lines, 764 F.2d at 52, and "remoteness" is scarcely a sharply
_____
defined concept. Compare Petitions of Kinsman Transit Co.,
_______ _________________________________
388 F.2d 821 (2d Cir. 1968) (rejecting Robins but excluding
______
economic losses suffered by the owner of a vessel prevented
from unloading its cargo above a bridge that collapsed as a
result of defendant's negligence as too remote to permit
recovery). We cannot be sure how Rhode Island courts will
develop these concepts in the context of oil pollution cases.
Depending on Rhode Island's solutions, the burdens imposed by
the Compensation Act, financial and administrative, may be
substantial but they may also be tolerable. One might say
that the case for preemption at this stage is subject to the
Scotch verdict--not proven.
Having said all this, we think one final consideration
tips the scales in favor of the Compensation Act's validity.
Congress has recently enacted the Oil Pollution Act, 33
U.S.C. 2701 et seq., which almost certainly provides for
_______
-20-
-20-
recovery of purely economic damages in oil spill cases.6
Section 2702(b)(2)(E) of the act provides that "[d]amages
equal to the loss of profits or impairment of earning
capacity due to the injury, destruction, or loss of real
property, personal property, or natural resources, . . .
shall be recoverable by any claimant." The House Conference
Report makes clear that, under section 2702(b)(2)(E), "[t]he
claimant need not be the owner of the damaged property or
resources to recover for lost profits or income". H.R. Conf.
Rep. No. 101-653, 101st Cong., 2d Sess. 103 (1990). The act
also expressly provides that it does not preempt state
imposition of additional liability requirements. 33 U.S.C.
2718(a).
The statute contains another substantial piece of
evidence that Congress means to allow recovery of economic
losses from injury to natural resources even though the
claimant's own property was not damaged. In another
subsection of the damage provision, there is an explicit
provision for recovery of "economic losses resulting from
destruction of real or personal property" by a claimant "who
____________________
6We say "almost" only because one court has held to the
contrary. See In re Petition of Cleveland Tankers, Inc., 791
___ __________________________________________
F. Supp. 669, 678-79 (E.D. Mich. 1992). Most commentators,
by contrast, have read the new statute--as its language and
legislative history suggest--to override the Robins Dry Dock
_______________
rule, see McCurdy, "An Overview of OPA 1990 and Its
___
Relationship to Other Laws," 5 U.S.F. Mar. L.J. 423 (1993);
Gonynor, "The Robins Dry Dock Rule: Is the ``Bright Line'
________________
Fading?" 4 U.S.F. Mar. L.J. 85 (1992).
-21-
-21-
owns or leases that property." 33 U.S.C. 2707(b)(2)(B).
If the "natural resources" injury provision in subsection (E)
were limited to those owned by the claimant, the recovery
thus provided would be already covered by subsection (B) and
subsection (E) would be redundant. United States v. Ven-
_____________ ____
Fuel, Inc., 758 F.2d 741, 751-52 (1st Cir. 1985) (readings
__________
that create redundancies are not favored).
The new federal statute does not apply retroactively to
govern the present case. See Pub. L. No. 101-380, 1020
___
(providing that the statute "shall apply to an incident
occurring after the date the enactment of this Act [August
18, 1990]."). But we think that the statute is compelling
evidence that Congress does not view either expansion of
liability to cover purely economic losses or enactment of
comparable state oil pollution regimes as an excessive burden
on maritime commerce. Given the Congress' superior ability
to weigh the very practical considerations relating to such a
judgment, we give Congress' conclusion substantial weight.
For this purpose, the non-retroactivity of the statute is
irrelevant.
We hold, then, that the Rhode Island's Compensation Act
as reasonably construed and applied is not preempted by the
admiralty clause of the Constitution. We express no judgment
on whether claimants' particular injuries were reasonably
foreseeable or proximately caused by the grounding of the M/V
-22-
-22-
World Prodigy, or whether claimants' claims are otherwise
viable under the Rhode Island statute. That determination is
for the district court in the first instance or for the state
courts. Robins Dry Dock remains the rule in this circuit for
_______________
federal claims; we simply hold that Rhode Island is free to
chart a different course.
Because of the Oil Pollution Act, it may well be that
the immediate problem with which we have wrestled at length
in this case is a transient one; the legal regime for oil
pollution accidents after August 18, 1990, will largely be a
creature of the new statute. But the case before us, like
all cases, is important to the litigants, and the governing
legal standards have application elsewhere. Applying an
imprecise federal preemption standard to a little construed
state statute is no easy task. For the present, assuming
that the Rhode Island statute is providently construed and
applied, we think that it is not unconstitutional.
The decision of the district court dismissing
plaintiffs' federal claims is affirmed; the dismissal of
________
plaintiffs' state claims is reversed and the case is remanded
________ ________
for further proceedings consistent with this opinion.
-23-
-23-
Document Info
Docket Number： 94-1059
Filed Date： 8/23/1994
Precedential Status： Precedential
Modified Date： 9/21/2015