Crowley Marine Services Inc. v. Maritrans Inc. , 447 F.3d 719 ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CROWLEY MARINE SERVICES INC., a 
Delaware corporation,
Plaintiff-Appellant,
v.
MARITRANS INC., a Delaware No. 04-35724
corporation; MARITRANS
TRANSPORTATION INC., a Delaware  D.C. No.
CV-02-02487-JCC
corporation; MARITRANS OPERATING
OPINION
COMPANY LP, a Delaware Limited
partnership; MARITRANS GENERAL
PARTNER INC., a Delaware
corporation,
Defendants-Appellees.

Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, Chief Judge, Presiding
Argued and Submitted
October 17, 2005—Seattle, Washington
Filed May 8, 2006
Before: Richard D. Cudahy,* Thomas G. Nelson, and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown
*The Honorable Richard D. Cudahy, Senior United States Circuit Judge
for the Seventh Circuit, sitting by designation.
5121
5124 CROWLEY MARINE SERVICES v. MARITRANS INC.
COUNSEL
Vincent R. Larson, Daniel J. Gunter, and C. William West,
Riddell Williams P.S., Seattle, Washington, for plain-
tiff-appellant Crowley Marine Services, Inc.
Marc E. Warner, LeGros, Buchanan & Paul, Seattle, Wash-
ington, for defendant-appellee Maritrans Operating Company
L.P.
CROWLEY MARINE SERVICES v. MARITRANS INC. 5125
OPINION
McKEOWN, Circuit Judge:
This case calls on us to decide a matter of first impression
regarding the application of the International Regulations for
Preventing Collisions at Sea, Oct. 20, 1972, 28 U.S.T. 3459,
T.I.A.S. 8587, adopted by statute at 33 U.S.C. § 1602, better
known by their common acronym as the COLREGS. Crowley
Marine Services, Inc. (“Crowley”) owned and operated a tug
boat hired to accompany an oil tanker operated by Maritrans
Operating Company L.P. (“Maritrans”) to an oil platform in
the Puget Sound. During the crossing the two vessels collided,
causing more than $2 million in damages.
In the inevitable suit that followed, each side identified
numerous violations of the COLREGS as the alleged cause of
the collision. The district court apportioned fault for the acci-
dent as 75% to Crowley and 25% to Maritrans. The district
court found that the two vessels were operating in concert
according to agreed maneuvers, and therefore determined that
several substantive provisions of the COLREGS at issue were
inapplicable. Specifically, the court ruled that this situation
presented “special circumstances” that provide an exception
to the COLREGS. We hold that the plain language of the
COLREGS precludes such a broad exception, and remand for
the district court to reconsider the relative liability of the par-
ties consistent with this opinion.
BACKGROUND
Crowley provides vessel escort and assistance services in
Puget Sound. Federal law requires that any tanker transiting
Puget Sound east of navigational buoy “R” with oil cargo
must be escorted by two vessels. Maritrans hired Crowley to
provide escort services for the Allegiance, an oil tanker under
the command of Captain Joseph Semler, on the evening of
January 19, 2002. Crowley provided two tug boats: the Sea
5126 CROWLEY MARINE SERVICES v. MARITRANS INC.
King, under the command of Captain Donald Nekeferoff, and
the Chief, under the command of Captain William Lowery.
At 8:50 p.m., the three captains held a radio conference to
plan the escort. According to the agreed-upon plan, the Alle-
giance would travel east towards Buoy R at a speed of about
15 knots. While the Allegiance was still two to three miles
away, the two tugs would depart from Buoy R at about 12.5
knots. The Allegiance would gradually overtake the two tugs
and pass between them, at which point the tugs would take up
position on either side of the tanker to complete the escort
maneuver, with the Chief tethered to the stern and the Sea
King on the tanker’s port shoulder.
For approximately the first forty-five minutes, the maneu-
ver went according to plan. Each of the three vessels sailed
with auto-pilot set to 58 degrees true, with the Allegiance
gradually overtaking the tug boats. During this time both the
Allegiance and the Chief made numerous adjustments to their
course to account for the fact that the vessel’s auto-pilot func-
tion maintains a ship’s heading (the direction in which the
bow points) but does not reflect changes due to wind or cur-
rents. The Sea King made no comparable adjustments to its
course.
By 9:35 p.m., with the Sea King still a short distance ahead,
the pilot and helmsman aboard the Allegiance realized that
the tug boat was also closing the lateral distance between the
vessels. Nonetheless, both men testified that they had seen
escort tugs running close alongside tankers many times
before, and saw no cause for alarm. As the Sea King came
closer and closer, Captain Semler aboard the Allegiance
decided that the vessels’ proximity exceeded his comfort
zone. Although later testifying that he did not see any risk of
collision, Captain Semler radioed Captain Nekeferoff aboard
the Sea King, inquiring, “Don, are you ok?” Captain Nekefer-
off responded affirmatively.
CROWLEY MARINE SERVICES v. MARITRANS INC. 5127
Shortly after the radio communication, the Allegiance and
the Sea King collided, with the tug boat pushed along by the
tanker’s bow and nearly capsizing as she rolled to the tanker’s
starboard side while heeling to port. About halfway down the
tanker’s side, the Sea King righted itself as the tanker sailed
past. The exact dynamics of the collision were disputed.
Crowley presented expert testimony that the two vessels grad-
ually converged until the Allegiance struck the Sea King
almost directly from behind. Maritrans presented testimony
that the Sea King veered suddenly to starboard, into the path
of the Allegiance.
At trial, each side attributed fault entirely to the other, rely-
ing in large part on the COLREGS. The COLREGS provide
a “universal system of sea traffic rules” applicable to vessels
in international waters. William Tetley, International Mari-
time and Admiralty Law 237 (2002). Originally adopted by
treaty under the auspices of the International Maritime Orga-
nization in 1972, the COLREGS have since been incorporated
into the national law of “every shipping nation in the world.”
Id. These rules apply to “all vessels upon the high seas and
in all waters connected therewith navigable by seagoing ves-
sels.” Rule 1(a).
Crowley argued that Maritrans violated four provisions of
the COLREGS: Rule 5, which establishes a duty to maintain
a lookout; Rule 8, which establishes a duty to avoid collision;
Rule 13, which makes an overtaking vessel responsible for
avoiding collision; and Rule 34, which requires vessels in
sight of each other to give a signal when changing course.
Maritrans countered that Crowley violated Rule 5 by failing
to maintain a proper lookout. Maritrans also maintained that
Crowley reasonably should have investigated the risks stem-
ming from Captain Nekeferoff’s history of alcoholism and
health problems, conditions that appeared to be related to a
temporary loss of situational awareness shortly before and
during the collision.
5128 CROWLEY MARINE SERVICES v. MARITRANS INC.
The district court credited Maritrans’ arguments, finding
that because the two vessels were operating according to
agreed maneuvers, Rules 8 and 13 of the COLREGS did not
apply. To reach this decision, the district court invoked
Rule 2, which provides that “[i]n construing and complying
with these Rules due regard shall be had to all dangers of nav-
igation and collision and to any special circumstances, includ-
ing the limitations of the vessels involved, which may make
a departure from these Rules necessary to avoid immediate
danger.” Rule 2(b).
Although noting that the plain language of the special cir-
cumstances exception in Rule 2 did not provide such an
exception on its face, the district court found that “courts have
either expanded the scope of Rule 2(b)’s special circum-
stances or have created a wholly separate category of special
circumstances involving vessels operating in concert and pur-
suant to agreed maneuvers.” Thus freed from the restrictions
of Rule 8 and Rule 13, which would have focused on Mari-
trans’ fault for failing to avoid the Sea King, the district court
found Maritrans to be only 25% responsible for the accident.
ANALYSIS
This opinion addresses the proper scope of Rule 2(b)’s spe-
cial circumstances exception to the COLREGS. The remain-
ing issues presented by Crowley’s appeal are addressed in a
separate memorandum disposition.1
The district court observed that jurisprudence regarding the
scope of the special circumstances exception has done “little
to clarify murky waters.” This feeling is not unwarranted and
1
Crowley presented two other contested issues—Crowley’s vicarious
liability for Captain Nekeferoff’s medical and alcohol problems and the
admission of expert testimony regarding hydrodynamic forces that would
have affected the collision. These matters are addressed in a memorandum
disposition filed simultaneously with this opinion.
CROWLEY MARINE SERVICES v. MARITRANS INC. 5129
may actually understate the dearth of applicable precedent.
Relevant case law largely dates to the early part of the last
century, decades before the COLREGS were adopted in the
1970s. The permissive decisions in these cases have not been
reconciled with the plain language construction of the con-
temporary COLREGS as a whole, thus leaving the murky
waters alluded to by the district court.
I. THE LAW GOVERNING COLLISIONS AT SEA
[1] Three of the COLREGS’ collision avoidance rules are
at issue: two rules that govern a ship’s obligation to avoid col-
lision, Rules 8 and 13, and one rule that provides an exception
to the general rules, Rule 2. Crowley primarily alleges that the
Allegiance violated Rule 13, which provides that “any vessel
overtaking any other shall keep out of the way of the vessel
being overtaken.” Rule 13(a). A ship is “overtaking” another
when approaching “from a direction more than 22.5 degrees”
aft of perpendicular. Rule 13(b). Further, “[w]hen a vessel is
in any doubt as to whether she is overtaking another, she shall
assume that this is the case and act accordingly.” Rule 13(c).
The Allegiance, which was approaching the Sea King from
“at least 22.5 degrees aft of perpendicular,” was overtaking
the tug. Nothing in the text of Rule 13 allows us to escape the
conclusion that as the overtaking vessel, the Allegiance had
the responsibility of avoiding the Sea King.
[2] Crowley also argues that, by failing to slow down, the
Allegiance violated Rule 8(e), which provides that “[i]f neces-
sary to avoid collision or allow more time to assess the situa-
tion, a vessel shall slacken her speed or take all way off by
stopping or reversing her means of propulsion.” Rule 8(e). On
its face, the text of Rule 8(e) supports Crowley’s position. The
pilot of the tanker testified that the proximity of the vessels
had exceeded his “comfort zone,” and yet he took no action
to avoid the collision other than a call to the Sea King to
ascertain if that vessel was “OK.” Finding that the agreed
maneuvers of the three vessels precluded a “mechanical appli-
5130 CROWLEY MARINE SERVICES v. MARITRANS INC.
cation” of the rules, the district court diluted Rule 8 by allo-
cating some liability to Maritrans for failing to take more
decisive action once the proximity of the Sea King exceeded
Captain Semler’s comfort zone. But Rule 8(e) sets forth spe-
cific actions to be taken in order to avoid collision, including
reducing speed or changing course. Cf. In re Nat’l Shipping
Co. of Saudi Arabia, 147 F. Supp. 2d 425, 440 (E.D. Va.
2000) (allocating fault 65% to party for, in part, failing to
reduce speed or change course in violation of Rule 8). Given
the overriding policy of the COLREGS and other navigational
rules, “it is not necessary for a collision to be imminent or
even probable before the obligation imposed by them accrues
. . . . There is a danger or risk of collision whenever it is not
clearly safe to go on.” Ocean Marine Ltd. v. United States
Lines Co., 300 F.2d 496, 499 (2d Cir. 1962) (applying earlier
version of the inland navigational rules) (internal marks omit-
ted). On the facts of this case, the Allegiance’s failure to com-
ply with Rule 8(e)’s specific directives cannot be lightly
overlooked.
[3] If Rules 8 and 13 of the COLREGS apply to Maritrans’
actions, the apparent statutory violations would inform, in
great part, the allocation of liability between the Allegiance
and the Sea King. Under admiralty law, if a ship is in viola-
tion of an applicable statutory duty at the time of a collision,
there is a presumption that the violation contributed to the
accident. The Pennsylvania, 86 U.S. 125, 136 (1873), over-
ruled on other grounds in United States v. Reliable Transfer
Co., Inc., 421 U.S. 397, 411 (1975). This presumption may be
rebutted by a showing that the statutory violation “could not
reasonably be held to have been a proximate cause of the col-
lision.” Churchill v. The F/V Fjord, 892 F.2d 763, 770 (9th
Cir. 1988) (quoting Pac. Tow Boat Co. v. States Marine
Corp., 276 F.2d 745, 749 (9th Cir. 1960)) (internal quotation
marks omitted). Where both parties to a collision share in the
fault, “liability for such damage is to be allocated among the
parties proportionately to the comparative degree of their
fault.” Reliable Transfer, 421 U.S. at 411. Although there is
CROWLEY MARINE SERVICES v. MARITRANS INC. 5131
no pre-determined formula for weighing COLREGS viola-
tions against each other, the violations must be accounted for
under the Pennsylvania rule.
II. THE “SPECIAL CIRCUMSTANCES” EXCEPTION
Maritrans does not contest that its actions would violate
Rules 8 and 13. Rather, Maritrans tries to fit within the special
circumstances exception set forth in Rule 2 by emphasizing
that no court has applied the overtaking rule to vessels that
were operating in concert pursuant to maneuvers conducted
under an agreed-upon plan. The district court, although criti-
cizing Maritrans’ attempt to stretch the special circumstances
exception, ultimately adopted this reasoning.
[4] Rule 2(b) provides that “[i]n construing and complying
with these Rules due regard shall be had to all dangers of nav-
igation and collision and to any special circumstances, includ-
ing the limitations of the vessels involved, which may make
a departure from these Rules necessary to avoid immediate
danger.” The question is whether such special circumstances
are limited to those involving immediate danger, or include
circumstances that are “special” in a more generic sense. The
district court found, and Maritrans argues on appeal, that
“courts have either expanded the scope of Rule 2(b)’s special
circumstances or have created a wholly separate category of
special circumstances involving vessels operating in concert
and pursuant to agreed maneuvers.” We disagree on both
counts.
[5] The plain language of the statute is our starting point.
See Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)
(“Our first step in interpreting a statute is to determine
whether the language at issue has a plain and unambiguous
meaning . . . .”). By its terms, Rule 2 limits “special circum-
stance[s]” to those circumstances “which may make departure
. . . necessary to avoid immediate danger.” In other words,
vessels may justify departure from the COLREGS in order to
5132 CROWLEY MARINE SERVICES v. MARITRANS INC.
avoid immediate danger, but not for more generic special cir-
cumstances.2 Cf. Dahlia Maritime Co., Ltd. v. M/S Nordic
Challenger, 1993 WL 268413, at *16 n.2 (E.D. Louis. 1993)
(applying Rule 2 where adherence to the COLREGS led to an
“impending unavoidable collision”); In re Otal Investments,
Ltd., 2006 WL 14512, at *7 (S.D.N.Y. 2006) (holding that
Rule 2 “applies to facts ‘where there is an immediate danger,
perfectly clear; and the departure from the rules must be no
more than is necessary’ ”) (quoting Yang-Tsze Ins. Ass’n v.
Furness, Withy & Co., 215 F. 859, 861-62 (2d Cir. 1914).
This interpretation is echoed in one of the leading admiralty
law treatises: “Courts, had they been so minded, could have
sailed a whole armada of exceptions through the opening
made by this Rule. Actually, it has been very narrowly con-
strued, and will not excuse a violation of the plain mandate of
the more specific Rules . . . .” Grant Gilmore & Charles L.
Black, Jr., The Law of Admiralty 508 (2d ed. 1975).
[6] Adhering to the plain meaning of the statute is particu-
larly appropriate in this context. The COLREGS are strictly
construed, to the extent that “[t]he general lawyer . . . must
accustom himself to a far different atmosphere in dealing with
these Rules, for they are strictly and literally construed, and
compliance is insisted upon.” Gilmore & Black, The Law of
Admiralty 489.3 The plain text of the COLREGS allows only
2
Our reading of the text of Rule 2 finds support in decisions applying
Article 27 of the predecessor to the Inland Water Rules, the text of which
is exactly the same as Rule 2. In Zim Israel Navigation Co., Ltd. v. S.S.
American Press, 222 F. Supp. 947 (S.D.N.Y. 1963), the court noted that
under Article 27, “[d]eparture from the statutory duty imposed upon the
vessels is justified only when necessary to avoid immediate danger, and
the burden of proof is upon the vessel which alleges justification for the
departure.” Id. at 954 (internal citations omitted).
3
The long tradition of applying the rules strictly reflects their origins in
earlier practice. See Belden v. Chase, 150 U.S. 674, 698-99 (1893)
(describing the rules for preventing collisions, as they existed on the eve
of the twentieth century, as “not mere prudential regulations, but binding
enactments, obligatory from the time that the necessity for precaution
begins” and insisting that they be “rigorously enforced”).
CROWLEY MARINE SERVICES v. MARITRANS INC. 5133
one avenue to steer clear of their obligations: the “special cir-
cumstances” exception enshrined in Rule 2,4 which is limited
to situations involving immediate danger.
In reaching a contrary conclusion, the district court relied
upon a series of cases, cited by Maritrans, holding that vessels
operating in concert participate in a “special circumstance”
within the meaning of Rule 2. These cases, which pre-date the
current COLREGS by many decades, either reflect unique cir-
cumstances or (as noted by the district court) apply a rela-
tively casual version of the special circumstances exception.
Because these cases do not interpret Rule 2 and, in fact, con-
flict with the plain meaning of the current COLREGS, we
decline to adopt their analysis.
In The Joseph Vaccaro, 180 F. 272 (D.C. La., 1910), the
court declined to apply “hard and fast rules as to overtaking
or crossing” because it was difficult to ascertain which vessel
was the overtaking or crossing vessel; indeed, in the facts sub-
mitted to the court, the two ships at issue seemed to alternate
roles. Id. at 275. Although the collision in that case involved
a steamship and a tug, the agreed maneuver (delivering a pilot
to the steamship) had unmistakably ended at the time of the
collision; both ships were continuing on their way with no
prior agreement or concurrent communication regarding their
operations in the close quarters of the South Pass of the Mis-
sissippi River. Id. at 273-74.
4
Courts have continued to apply an analogous in extremis doctrine that
predates the COLREGS, and excuses violations of the rules where one
vessel is placed in “extreme danger” by the faulty maneuvering of another
vessel. Complaint of G&G Shipping Co., Ltd. of Anguilla v. The M/V
“Nedlloyd VanNoort”, 767 F. Supp. 398, 407-08 (D.P.R. 1991) (quoting
The Blue Jacket, 144 U.S. 371, 392 (1892)). While the relationship
between the in extremis doctrine and the special circumstances exception
in Rule 2 has not been resolved with utmost clarity, both rules allow a
party to a collision to escape liability for violations of the applicable rules
only when necessary to avoid an immediate danger.
5134 CROWLEY MARINE SERVICES v. MARITRANS INC.
In The Paulsboro, 11 F.2d 625 (S.D.N.Y. 1925), the court
refused to apply the overtaking rule where a tugboat and tank
steamer collided while the tug was guiding the larger vessel
into port. Id. at 626-27 (“[T]he two vessels cannot, in my
opinion, be regarded as navigating independently, and the sit-
uation is one of special circumstances rather than that of an
overtaking vessel.”). Noting the dearth of caselaw on point,
the court relied on an earlier Second Circuit decision, The
Monterey, 161 F. 95, 97 (2d Cir. 1908), that had reached a
similar conclusion in refusing to apply presumptions of liabil-
ity for violations of the “steering and sailing rules” (precur-
sors of Part B of the current COLREGS, which are entitled
“Steering and Sailing Rules”) when the vessels were engaged
in an agreed maneuver.
[7] To the extent that these cases hold that the cooperation
between a tug boat and her charge is a “special circumstance,”
either within or without Rule 2(b), that excuses neglect of the
COLREGS, we decline to embrace their teaching. Scant evi-
dence in cases predating the contemporary COLREGS by sev-
eral decades cannot overcome both the plain language of Rule
2, which provides an exception to the other rules only when
“necessary to avoid immediate danger,” and the overriding
mandate to apply the COLREGS strictly.
[8] This result does not lead to awkward consequences, as
Maritrans would have us believe. The COLREGS prescribe a
set of “rules of the road” for international navigable waters,
ensuring that all vessels understand the same rules of engage-
ment. There is no reason that these rules should not also apply
to vessels under full sail in the Puget Sound, even those ves-
sels operating in concert. As written, the COLREGS reflect
numerous policy judgments that are not vitiated by the fact of
agreed cooperation between two vessels.
An examination of the facts of this case serve to illuminate
this point. Maritrans argues that the Allegiance was supposed
to overtake the tugs, and thus should not be held liable under
CROWLEY MARINE SERVICES v. MARITRANS INC. 5135
the overtaking rule. But the COLREGS do not prohibit one
vessel from overtaking another, they simply state that the
overtaking vessel shall be responsible for avoiding the other.
The policy behind this rule reflects realities of navigation, and
is not changed by the fact that the overtaken vessel has agreed
to be overtaken. For example, in commenting on an identical
overtaking rule in the Inland Navigational Rules Act of 1980,
a United States Senate report recognized “that the overtaking
vessel should have less problem in keeping clear and avoiding
collision than the vessel being overtaken, even if the over-
taken vessel has agreed to allow the maneuver.” S. Rep. No.
96-979, at 12 (1980) as reprinted in 1980 U.S.C.C.A.N. 7068,
7079 (1980).5
Another example is perhaps even clearer—the district court
diluted the application of Rule 8, which requires vessels to
take action to prevent collision. A vessel perceiving such a
risk of collision should not be released from the COLREG’s
specific instructions to take precautionary measures simply
because it is engaged in a predetermined maneuver.6 Cf. The
Monterey, 161 F. at 97 (applying an exception for special cir-
cumstances, but noting that “[t]he vessels are co-operating in
an agreed maneuver, and each is bound to act prudently
toward the agreed end”). Maritrans’ theory is akin to standing
on principle and insisting on the right of way even in the face
of an imminent collision.
5
Although distinct from the COLREGS, the legislative history underly-
ing the adoption of the Inland Navigational Rules is instructive in this
case. In adopting the Inland Navigational Rules, Congress noted that “the
bill attempts to make them as consistent as possible with the [COL-
REGS].” S. Rep. No. 96-979, at 1 (1980), as reprinted in 1980
U.S.C.C.A.N. 7068, 7068 (1980).
6
The maneuver situation is different than the judicially-recognized in
extremis exception. Maritrans does not argue that the Allegiance’s viola-
tions of the COLREGS were taken in response to an immediate danger
created by the Sea King.
5136 CROWLEY MARINE SERVICES v. MARITRANS INC.
[9] Our analysis of the applicability of the COLREGS does
not, of course, determine the ultimate allocation of liability in
this case. Despite construction of the COLREGS, including
the special circumstances exception, in accord with their plain
meaning, the assignment of liability is not absolute. We leave
to the district court to factor and weigh relative liability in a
fault allocation analysis. See, e.g., Complaint of G & G Ship-
ping Co., 767 F. Supp. at 412 (apportioning liability between
the parties 80% and 20% upon finding several violations of
the COLREGS on both sides); Hal Antillen N.V. v. Mount
Ymitos MS, 147 F.3d 447, 451-52 (5th Cir. 1998) (upholding
part of a district court decision apportioning minimal liability
on the basis of a violation of Rule 5 because the violation had
not been a proximate cause of the collision).
The flexibility and adaptability of the apportionment con-
cept explain why we are unswayed by the collection of policy
arguments offered by Maritrans.7 The blameworthiness of
each party’s conduct would ultimately depend not only on the
rules that each party violated but on whether those violations
actually caused the collision, considering all the facts of the
case. See, e.g., Pennzoil Producing Co. v. Offshore Express,
Inc., 943 F.2d 1465, 1472 (5th Cir. 1991) (recognizing that
under The Pennsylvania and Reliable Transfer, an assessment
of comparative fault must be based on all the facts of the case,
not on a simple count of how many rules of navigation each
vessel has violated). Therefore, the district court should con-
sider the pre-arranged escort plan, along with all the other
facts, when it apportions fault. It may well be that the Alle-
giance’s violation of Rule 8(e) contributed relatively little to
the eventual collision in relation to the Sea King’s failure to
adjust course and Captain Nekeferoff’s apparent loss of situa-
7
The Supreme Court explained that it established comparative fault lia-
bility in admiralty in order to bring “flexible and fair remedies in the law
maritime.” Reliable Transfer Co., 421 U.S. at 409. It is this flexibility that
allows a “ ‘just and equitable’ allocation of damages” proportional to the
comparative degree of fault of each party. Id. at 411.
 CROWLEY MARINE SERVICES v. MARITRANS INC. 5137
tional awareness. However, neither is there any basis for con-
cluding (on the other extreme) that such considerations bypass
the COLREGS entirely.
[10] The judgment of the district court is REVERSED, and
this case is REMANDED for further proceedings consistent
with this opinion.