In Re: JAR Barge v. ( 2010 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 07-1966/2653
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IN THE MATTER OF THE COMPLAINT OF J.A.R. BARGE LINES L.P.,
As Owner; MON RIVER TOWING, INC., As Owner Pro Hac Vice
of the M/V Rose G., for Exoneration from and/or Limitation of Liability
J.A.R. Barge Lines, L.P.; Mon River Towing, Inc.;
J.A.R. Barge Lines, LLC; Sylvan Investments, Inc.,
Appellants in 07-1966
Ingram Barge Co.,
Appellant in 07-2653
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On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Nos. 03-cv-00163, 03-cv-00180, 04-cv-00753,
04-cv-01611 (Consolidated at 03-cv-00163))
District Judge: Arthur J. Schwab
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Argued March 11, 2010
Before: BARRY, JORDAN and VAN ANTWERPEN, Circuit Judges.
(Filed April 6, 2010)
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Frederick B. Goldsmith [ARGUED]
Goldsmith & Ogrodowski, LLC
247 Fort Pitt Blvd. - 4th Fl.
Pittsburgh, PA 15222
Counsel for Appellants/Cross-Appellees
Leonard Fornella [ARGUED]
Christopher M. Buell
Babst, Calland, Clements & Zomnir, P.C.
Two Gateway Center - 8th Fl.
Pittsburgh, PA 15222
Counsel for Appellee/Cross-Appellant
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OPINION OF THE COURT
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JORDAN, Circuit Judge.
Mon River Towing, Inc., J.A.R. Barge Lines, L.P., J.A.R. Barge Lines, L.L.C. and
Sylvan Investments, Inc. (collectively “appellants”) appeal from a judgment entered
against them by the United States District Court for the Western District of Pennsylvania,
requiring them to pay $296,108.83 in attorneys’ fees to Ingram Barge Co. (“Ingram”).
For the following reasons, we will affirm, with one minor exception as discussed below.
I. Background
As the facts are well known to the parties, we do not repeat them here. The only
issue on appeal is whether the District Court correctly found, pursuant to Ryan
Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124 (1956), that appellants
were required to indemnify Ingram for the attorneys’ fees it incurred while defending
against a lawsuit brought by appellants’ seaman, who was injured while towing one of
Ingram’s barges. The Ryan doctrine, as it has come to be called, allows a shipowner to
recover indemnity from a marine contractor when the shipowner has ceded control of the
ship to the contractor for the performance of certain services and the contractor’s
2
improper performance of those services exposes the shipowner to an unseaworthiness
claim.1 See Burris v. Global Bulk Carriers, Inc., 505 F.2d 1173, 1174-75 (3d Cir. 1974)
(“The Ryan decision was an effort to alleviate the shipowner’s absolute liability under the
unseaworthiness doctrine in situations where the shipowner has relinquished control of
some operations on the vessel to the stevedore.” (citations omitted)). Although Ryan was
decided in the context of an injured longshoreman who was covered by the
Longshoremen’s and Harbor Workers’ Compensation Act (“LHWCA”), which requires
an employer to compensate his employee’s injury pursuant to a schedule of
compensation,2 it was thereafter extended by some courts to cases involving injuries to
Jones Act seamen, who are not covered by the LHWCA.3 See Dunbar v. Henry DuBois’
1
A ship is unseaworthy if it or its appurtenances are not “reasonably fit for their
intended use.” Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 550 (1960). A shipowner
is subject to strict liability if it fails to provide a seaworthy ship. Id.2
Specifically, in Ryan, a shipowner had hired a stevedoring company for all of its
stevedoring operations. 350 U.S. at 126. One of the stevedore’s longshoremen
improperly stowed some cargo on a ship in South Carolina such that, when the ship
arrived a few days later in New York, another longshoreman was injured by the cargo
during the unloading of the ship. Id. The Supreme Court allowed the shipowner to
recover indemnity from the stevedore on the theory that the parties’ contract contained an
implied warranty of workmanlike performance that was breached when the cargo was
stowed unsafely. Id. at 133-34.
3
The Jones Act allows a seaman to sue his employer for negligence. 46 U.S.C. §
30104. In order to qualify as a seaman, an individual must establish that he had an
“employment-related connection to a vessel in navigation,” which requires that the
employee’s duties “contribute to the function of the vessel or to the accomplishment of its
mission,” and that connection must be “substantial in terms of both its duration and its
nature.” Chandris, Inc. v. Latsis, 515 U.S. 347, 368 (1995) (quotations and alteration
omitted).
3
Sons Co., 275 F.2d 304, 305-07 (2d Cir. 1960); see also McDermott Int’l, Inc. v.
Wilander, 498 U.S. 337, 347 (1991) (noting that “the Jones Act and the LHWCA are
mutually exclusive”). In 1972, amendments to the LHWCA abrogated Ryan in its
original context such that it no longer applies to longshoremen covered by the LHWCA.
H.R. Rep. No. 92-1441, at 4701-04 (1972); see also Edmonds v. Compagnie Generale
Transatlantique, 443 U.S. 256, 262 (1979).
II. Discussion4
Appellants’ primary argument on appeal is that Ryan is an outdated relic of
admiralty law that we should put to rest, in light of the 1972 amendments to the LWHCA
and the fact that other circuits have retreated from or criticized it. See, e.g., Lubrano v.
Waterman S.S. Co., 175 F.3d 274, 276 (2d Cir. 1999) (“Ryan indemnity is virtually dead,
at least in [the Second] Circuit.” ). That argument is easily, if not entirely comfortably,
disposed of. Long after the 1972 amendments, we applied Ryan in a case concerning
injuries to a seaman, making clear that Ryan is still binding within this Circuit in the
seaman context. See Cooper v. Loper, 923 F.2d 1045, 1050-51 (3d Cir. 1991); see also
Purnell v. Norned Shipping B.V., 801 F.2d 152, 154 n.1 (3d Cir. 1986) (“[T]he 1972
amendments do not limit Ryan’s applicability to employees ... who are not covered by
[the LHWCA].”). We are obligated to follow our own precedent and are duty bound to
apply Ryan here. We conclude that the District Court, in its thorough and thoughtful
4
The District Court had jurisdiction over this matter pursuant to 28 U.S.C. § 1333. We
have jurisdiction pursuant to 28 U.S.C. § 1291.
4
opinions, correctly applied the doctrine to the facts of this case and we will therefore
affirm its judgment in that regard.5
In so holding, we recognize that the Ryan doctrine is a “rough all-or-nothing
device,” Cooper, 923 F.2d at 1051 (quoting Parfait v. Jahncke Serv., Inc., 484 F.2d 296,
302 (5th Cir. 1973)), that often yields inequitable results, see Smith & Kelly Co. v. S/S
Concordia TADJ, 718 F.2d 1022, 1029 (11th Cir. 1983) (“Ryan-like indemnity creates
great potential for injustice.”); cf. Bosnor, S.A. de C.V. v. Tug L.A. Barrios, 796 F.2d 776,
786 (5th Cir. 1986) (noting, in a property damage case, that “[u]nderlying policy
considerations of uniformity and fairness ... support application of comparative fault
principles rather than the all or nothing approach of Ryan”). Indeed, the Supreme Court
has retreated from similarly blunt rules in the tort context. For example, in United States
v. Reliable Transfer Co., the Supreme Court abrogated the divided damages rule, which
required ships involved in a collision to bear equal portions of the resulting damage, in
favor of a more equitable rule allocating liability based upon fault. 421 U.S. 397, 398,
411 (1975). In doing so, the Court observed that:
5
We are unpersuaded by appellants’ argument that the Supreme Court’s decision in
Stevens v. The White City, 285 U.S. 195 (1932), precludes application of Ryan in the
towing context. We also reject appellants’ argument that Ingram is not entitled to
indemnity simply because it successfully defended the unseaworthiness claims asserted
against it. See Ellerman Lines, Ltd. v. Atl. & Gulf Stevedores, Inc., 339 F.2d 673, 674 (3d
Cir. 1964) (“If conduct of [the contractor] in violation of its warranty to [the shipowner]
was the sole responsible cause of [the employee’s] injury ... the expense to which [the
shipowner] is subjected in defending [the employee’s] suit against it to recover for that
injury is an element of damage caused by the [contractor’s] breach of warranty, even if
[the shipowner] succeeds in defeating [the employee’s] claim.”).
5
The rule of divided damages in admiralty has continued to prevail in this
country by sheer inertia rather than by reason of any intrinsic merit. The
reasons that originally led to the Court’s adoption of the rule have long since
disappeared. The rule has been repeatedly criticized by experienced federal
judges who have correctly pointed out that the result it works has too often
been precisely the opposite of what the Court sought to achieve in
[establishing the rule] – the ‘just and equitable’ allocation of damages.
421 U.S. at 410-11. The same kind of comment could be made about the Ryan doctrine.
It has been abrogated in its original context and the Supreme Court has permitted joint
tortfeasors to seek contribution in maritime personal injury actions under most
circumstances, see Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 109-10
(1974), yet the doctrine lives on. It may very well be that Ryan indemnity has outlived its
usefulness, but, since we are not sitting en banc, we have no authority to decline its
application in the present context. Furthermore, the Supreme Court has not overruled
Ryan in its entirety, despite the 1972 amendments to the LWHCA. Unless and until that
happens, it appears that the doctrine will linger on, regardless of heavy criticism.
We will therefore affirm the District Court’s application of Ryan. However, since
appellants concede that, if Ryan applies, Ingram is entitled to recover the $4,063.07 that it
incurred defending itself in a related action in the United States District Court for the
Southern District of Ohio,6 we will vacate the District Court’s ruling precluding Ingram
6
Specifically, appellants state: “As for Ingram’s appeal for another $4,063.07,
[appellants] oppose[] it only to the extent it is based on the Ryan doctrine, and do[] not
otherwise challenge Ingram’s cross-appeal.” (Appellants’ Fourth-Step Br. at 31.)
6
from recovering that sum, and remand with instructions to the District Court to amend its
judgment accordingly.
7