Consolidated Coal Co.

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
8-18-1997
Consolidated Coal Co.
Precedential or Non-Precedential:
Docket 96-3434
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iled August 18, 1997
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-3434
COMPLAINT OF CONSOLIDATION COAL COMPANY,
as Owner of the Motor Vessel Elizabeth and as Charterer
of Barge Number MC 1029, for Exoneration From or
Limitation of Liability
GEORGE NEWMAN,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civ. No. 90-01206)
Argued June 27, 1997
BEFORE: GREENBERG and MCKEE, Circuit Judges,
and GREENAWAY,* District Judge
(Filed: August 18, 1997)
Paul L. Hammer (argued)
518 Frick Building
Pittsburgh, PA 15219
Attorney for Appellant
_________________________________________________________________
*Honorable Joseph A. Greenaway, Jr., Judge of the United States
District Court for the District of New Jersey, sitting by designation.
James R. Miller (argued)
Dickie, McCamey & Chilcote
Two PPG Place
Suite 400
Pittsburgh, PA 15222-5402
Attorneys for Appellee
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This case is before this court on appeal from the district
court's order exonerating the Consolidation Coal Co.
("Consol") from liability for injuries to its employee George
Newman. This appeal presents complicated and unusual
issues of admiralty procedure. Consequently, we set forth
the convoluted procedural and factual history of this case
at considerable length.
I. CASE HISTORY
A. Procedural History
On April 27, 1989, Newman was injured while working as
a deckhand for Consol. Thereafter, Newman and his wife
filed suit against Consol in the Court of Common Pleas of
Allegheny County, Pennsylvania, asserting claims of
unseaworthiness and negligence under the Jones Act, 46
App. U.S.C. § 688. Subsequently, on July 20, 1990,
invoking jurisdiction under 28 U.S.C. § 1333, Consol filed
suit in the district court pursuant to the Limitation of
Liability Act ("Limitation Act"), 46 App. U.S.C. § 183,
seeking exoneration from or limitation of any liability it may
have had to the Newmans. As a matter of convenience, we
will refer to Consol's case simply as the "limitation action."
Pursuant to the Limitation Act, the district court enjoined
the state court proceedings. See 46 App. U.S.C. § 185.
After filing his claim in the limitation action (in which he
demanded a jury trial), Newman moved on January 18,
1991, to dissolve the stay of the state court proceedings.
2
The district court dissolved the injunction after Newman
stipulated:
1. The Claimants waive any claim of res judicata
based upon any judgment obtained in the State Court
proceeding.
2. Consolidation Coal Company shall have the right
to litigate all issues relating to its claim of limitation
and exoneration of liability in the present proceeding.
. . .
3. The issue of valuation of the limitation fund shall
remain an issue to be resolved by the United States
District Court for the Western District of Pennsylvania.
. . .
App. at 132. At the same time, the district court
administratively dismissed the limitation action subject to
reopening after conclusion of the state court proceedings.
Newman entered into this stipulation even though he could
have rejected it. He instead could have appealed to this
court from the denial of a motion to dissolve the injunction
if the district court refused to dissolve the injunction
without the stipulation. See 28 U.S.C. § 1292(a)(1).
The case then continued in the state court where in
November 1991, Newman (his wife had withdrawn her
claims) obtained a verdict finding Consol negligent and the
vessel unseaworthy and setting Newman's damages at
$1,327,000.1 With the exception of an issue concerning
interest, the Pennsylvania Superior Court affirmed the
judgment of the common pleas court; it thus did not
disturb any of the jury's factual findings. The Pennsylvania
and United States Supreme Courts then respectively denied
petitions for allocatur and certiorari.
On June 15, 1995, Newman moved to have the limitation
action revived.2 After the court restored the case, Newman
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1. The jury also found Newman 11.83% contributorily negligent. The
state court molded the verdict to $1,244,519.50 after making certain
adjustments we need not detail.
2. The evidence at the trial showed that the tug and barge had a total
value of $120,000, far less than the damages Newman recovered in the
state court.
3
filed a motion seeking to have the district court adopt the
findings of the state jury, but the district court denied that
motion. Newman then appealed that denial to this court
and petitioned this court for a writ of mandamus to grant
him similar relief. We, however, dismissed the appeal,
which clearly was not from a final judgment, and denied
the petition for a writ of mandamus. The district court
thereafter adopted the jury's assessment of damages.
Accordingly, the district court at a bench trial heard the
limitation action de novo on liability as well as on certain
admiralty issues, which we need not here set forth. The
district court found in favor of Consol on liability, rendering
the remaining issues moot.
B. Factual History
At the time of his injury, Consol employed Newman as a
deckhand. On April 27, 1989, Newman was serving in that
capacity on a tug, the M/V Elizabeth, with Timothy Stinson
as the pilot. The Elizabeth was being used to move an
empty barge, No. 1029, from Consol's repair yard, across
the Monongahela river a couple of hundred yards to afleet
of empty barges.
Barge 1029 was about 175 feet long, 26 feet wide and 10
feet deep. Stinson and Newman were inserting Barge 1029
into a row of the empty fleet after removing another barge
to the repair yard. Newman was using a rope, or leaving
line, to tie Barge 1029 to the adjoining barge at the half-
head. Newman already had attached the ends of the barges
with wires. Stinson testified that he looked away briefly,
and when he turned back, "Mr. Newman was going through
the air backwards with a little bit of force . . . ." App. at
1224. Newman has no memory of the accident. Newman fell
into the bottom of the barge, hitting his head and severely
injuring himself. Stinson said he saw part of the line still
attached to the half-head, and part down with Newman.
Stinson untied the barge and took it back across to the
repair facility to bring Newman to medical aid.
Newman was lifted out of the barge and set on the bank
to await an ambulance. Michael Hughes, Consol's assistant
operating manager in 1989, retrieved the piece of the line
4
from the bottom of the barge. Thomas Brown, the foreman
at the repair facility, removed the piece of line with the eye
from the half-head. Hughes then took possession of the
whole line, put it in his office, and later bagged and labeled
it. The line was taken to the Pittsburgh Testing Laboratory
for analysis by Clarence Clegg. Warren Orr (the port
captain), and Louis Truntich (assistant foreman) both
testified that they observed the line after the accident and
thought it had been cut. Brown stated that the line did not
look freshly cut but instead was old and worn. Clegg,
Consol's expert witness, testified that the rope had been cut
with a sharp instrument, except for a few strands on the
outside which could have broken under tension. All the
Consol employees who testified stated that the standard
practice was for the person using a line to inspect it and
replace it if worn out, although Consol did not have a
written policy to this effect. New leaving line was available
for deckhands needing to replace old line.
On July 18, 1996, the district court entered its decision
and order exonerating Consol from liability, finding that
there was neither unseaworthiness nor negligence. The
court found as a fact that Newman slipped and fell, and
that the line was cut through entirely after the accident.
This result obviated the need for the district court to decide
the limitation of liability issues. Newman then appealed. We
have jurisdiction pursuant to 28 U.S.C. § 1291.
On appeal Newman argues that the district court
improperly forced him to stipulate that he would not claim
any res judicata effect from the state court judgment; he
also challenges as violative of the Seventh Amendment the
denial of his motion to adopt the state jury findings.
Newman also argues that the district court's factual
findings on the exoneration issue were clearly erroneous.
He further contends that the court's exclusion, as a
subsequent remedial measure, of a Consol safety memo
issued about Newman's accident was erroneous as was its
denial of a motion he made to dismiss the limitation action
by reason of the spoliation of evidence. He predicated the
spoliation argument on the contention that if the line was
cut after the accident Consol must have cut it.
5
II. DISCUSSION
A. Standard of Review
This appeal highlights two areas for review. The first
arises from the legal consequences flowing from the
circumstance that the accident led to both state and federal
court proceedings. This area is essentially legal in
character. The second area of inquiry focuses on the trial
itself. We have plenary review over the district court's legal
determinations. Universal Minerals, Inc. v. C.A. Hughes &
Co., 669 F.2d 98, 102 (3d Cir. 1981). But we must affirm
the district court's factual findings unless they are clearly
erroneous. Fed. R. Civ. P. 52(a); FMC Corp. v. United States
Dep't of Commerce, 29 F.3d 833, 838 (3d Cir. 1994) (in
banc).
We review the district court's evidentiary rulings
principally on an abuse of discretion standard. Glass v.
Philadelphia Elec. Co., 34 F.3d 188, 191 (3d Cir. 1994). We
exercise plenary review, however, of its rulings to the extent
they are based on a legal interpretation of the Federal Rules
of Evidence. Barker v. Deere and Co., 60 F.3d 158, 161 (3d
Cir. 1995); Lippay v. Christos, 996 F.2d 1490, 1496 (3d Cir.
1993). We review the court's decision on the motion seeking
a dismissal by reason of spoliation of evidence on an abuse
of discretion standard. Schmid v. Milwaukee Elec. Tool
Corp., 13 F.3d 76, 78 (3d Cir. 1994).
B. Background Admiralty Law
The Limitation Act provides that when a maritime
accident occurs "without the privity or knowledge of [the]
owner," the shipowner's liability "shall not ... exceed the
amount or value of the interest of such owner in such
vessel, and her freight then pending." 46 App. U.S.C.
§ 183(a). A shipowner facing potential liability can file a
complaint for limitation of liability in a federal district court
which then is authorized to stay all other proceedings
against the shipowner and receive all claims. 46 App.
U.S.C. § 185; Fed. R. Civ. P. Supp. Rule F(4).
Under Rule F of the Supplemental Rules for Certain
Admiralty and Maritime Claims, the shipowner "may
6
demand exoneration from as well as limitation of liability."
See Texaco v. Williams, 47 F.3d 765, 769 n.19 (5th Cir.
1995). Thus, a complaint under the Limitation Act is a two-
step process. The district court, sitting in admiralty without
a jury, first determines " `whether there was negligence;
[second] if there was negligence, whether it was without the
privity and knowledge of the owner; and [finally] if
limitation is granted, how the [limitation] fund should be
distributed.' " In re Complaint of Dammers & Vanderheide &
Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d
Cir. 1988) (quoting Universal Towing Co. v. Barrale, 595
F.2d 414, 417 (8th Cir. 1979)). The claimant has the initial
burden of showing negligence or unseaworthiness, and
then, if the claimant is successful, the burden shifts to the
shipowner to demonstrate a lack of privity and knowledge
in order to obtain the benefit of limitation of liability.
Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943,
948 n.14 (3d Cir. 1985).
The exclusive admiralty jurisdiction of the federal courts
in Limitation Act actions directly conflicts with the "saving
to suitors" clause of 28 U.S.C. § 1333, which preserves
common law rights in certain maritime cases, including the
right to a jury trial. See Gorman v. Cerasia, 2 F.3d 519, 524
(3d Cir. 1993). There is a conflict because "[t]here is no
right to a jury in actions instituted in admiralty, and the
claimants are enjoined from pursuing common law actions
in other forums." Dammers, 836 F.2d at 755 (citation
omitted). The conflict derives from the Seventh Amendment,
as the Amendment applies only to cases brought at
common law, not those brought in admiralty. Waring v.
Clarke, 46 U.S. (5 How.) 441, 458-60 (1847).
There are two exceptions to this exclusive admiralty
jurisdiction over Limitation Act proceedings. Thefirst arises
when the value of the vessel and its freight exceeds that of
all claims, that is the fund is adequate to cover all claims
filed against the owner. See Lake Tankers Corp. v. Henn,
354 U.S. 147, 152, 77 S.Ct. 1269, 1272 (1957); Gorman,2
F.3d at 524. The second exception arises when there is only
one claimant whose claim exceeds the value of the vessel
and its freight.3 In this case, because the second exception
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3. If a single claimant's claim is for less than the value of the vessel and
its freight, a limitation proceeding is not needed.
7
applied, the district court was obliged to dissolve the stay
against other proceedings if Newman stipulated to the
district court's exclusive jurisdiction to determine all issues
relating to limitation of liability. See, e.g., Ex parte Green,
286 U.S. 437, 438-40, 52 S.Ct. 602, 602-03 (1932);
Langnes v. Green, 282 U.S. 531, 540-44, 51 S.Ct. 243, 246-
48 (1931); Gorman, 2 F.3d at 524. These stipulations must
waive any claim of res judicata based on the state court
judgment and concede the shipowner's right to litigate all
limitation issues in federal court. Id. at 524-25; see also,
Grant Gilmore & Charles L. Black, Jr., The Law of
Admiralty § 10-19, at 871 (2d ed. 1975). 4
C. Stipulations and Trial de novo
Newman argues that the district court erred in denying
his motion to adopt the factual findings of the state court
jury on the liability issues and in trying the exoneration
and limitation issues de novo. However, the case law is
clear that in a single claimant/inadequate fund situation
like this, the claimant is entitled to proceed in state court
after making the appropriate stipulations. See , e.g.,
Langnes, 282 U.S. at 540-44, 51 S.Ct. at 247-48; Gorman,
2 F.3d at 524. The requirement that the claimant waive any
claim of res judicata from a state court judgment and
concede the shipowner's right to litigate all limitation issues
in federal court "has been accepted by federal courts for
over half a century and is now beyond dispute." Id. at 524-
25. Any factual findings by the state court jury thus will
not bind the federal court in determining the shipowner's
right to limitation. Id. at 528-29. The Seventh Amendment
is inapplicable in such a situation because thefinding on
the owner's privity and knowledge, which is critical on the
limitation issue, is separate from the liability determination
made by the state court.
_________________________________________________________________
4. In this opinion, we use the terms "res judicata" and "collateral
estoppel" rather than "claim" or "issue" "preclusion" because the
stipulation in the district court leading to the dissolution of the
injunction against the state court proceedings was that Newman
"waive[d] any claim of res judicata based upon any judgment obtained in
the State Court proceeding."
8
The law is less clear on whether a shipowner has the
right to litigate the issue of exoneration in federal court
without regard to the findings in the state court, as the
exoneration issue mirrors the liability determination that
the state court makes. The Court of Appeals for the Seventh
Circuit recently held in an exoneration and limitation of
liability action that the liability issue should be determined
in state court and the case should return to the federal
court only to decide limitation issues if the claimant wins a
judgment in excess of the limitation fund. In re Complaint
of McCarthy Bros. Co./Clark Bridge, 83 F.3d 821, 828 (7th
Cir.), cert. denied, 117 S.Ct. 361 (1996). The Court of
Appeals for the Fifth Circuit, however, has held that
notwithstanding the inherent redundancy in having
overlapping state and federal court proceedings, claimant
stipulations can protect both "the shipowner's right to limit
liability and [to] litigate the issue of exoneration in federal
court. . . ." Texaco v. Williams, 47 F.3d at 769. See also
Odeco Oil and Gas Co. v. Bonnette, 4 F.3d 401, 405 (5th
Cir. 1993) (When "the claimants are so anxious to take
advantage of the perceived magnanimity of South Texas
juries that they are willing to stipulate essentially that they
will submit to two trials -- the state court trial followed by
a substantially redundant federal limitation proceeding --
this court is hard put to deny them.").
In this case it is not necessary for us to take a position
on how far a claimant's stipulations must go. In other
words, we need not decide whether a district court, as a
condition of dissolving the injunction against the state
court proceedings, may insist that the claimant waive the
res judicata effect of the state court finding on the liability
issue because Newman has not preserved his right to raise
this issue. Here, in the same manner as the claimants in
Texaco v. Williams, Newman agreed by stipulation to waive
any claim of res judicata regarding issues of both limitation
and exoneration. Although the district court required
Newman's stipulation as a condition of dissolving the
injunction against the continuation of the state court
proceedings, Newman could have refused to enter into the
stipulation and then appealed the court's refusal to dissolve
the injunction without the stipulation. 28 U.S.C.
§ 1292(a)(1) ("the courts of appeals shall have jurisdiction of
9
appeals from: (1) Interlocutory orders . . . refusing to
dissolve or modify an injunction. . . ."); see also Gorman, 2
F.3d at 523.5 Because Newman did not take such an
appeal, or even object to the form of the stipulations in the
district court, we will not review the issue, see Dillinger v.
Caterpillar, 959 F.2d 430, 447 (3d Cir. 1992), and Newman
is now bound by the stipulations he made and cannot
argue that the district court required them improperly.6 We
therefore need not decide whether a claimant in a limitation
action must waive the res judicata effect of the state court
proceedings as to both limitation and exoneration issues in
order to proceed in state court under the saving to suitors
clause. We do indicate, however, that we have serious
doubts that the claimant must do so; thus the district
courts should not read this opinion as approving implicitly
a requirement that the stipulation waiving the res judicata
effect of the state court action include liability issues.
D. Jury Trial and the Seventh Amendment
Newman argues further that even if retrial of the
exoneration issue in the federal court was appropriate, it
should have been before a jury. Newman's problem here is
that while Congress can provide for jury trials in admiralty
cases, as it has done under the Jones Act, the Seventh
Amendment does not provide a right to a jury trial in
admiralty. Fitzgerald v. United States Lines Co., 374 U.S.
16, 20, 83 S.Ct. 1646, 1650 (1963). While an admiralty
claim may be heard by a jury when it is joined with a claim
for which there is a right to a jury trial, id., Newman did
not bring his Jones Act and unseaworthiness claims in
federal court where he might have been able to obtain a
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5. Newman's attorney conceded at oral argument that under Fifth Circuit
case law he could have filed such an appeal, but contended that he
could not in the Third Circuit. We find unpersuasive his argument that
the plain language of section 1291(a)(1) differs depending on which
circuit you are in.
6. In addition, judicial estoppel would apply in this case. The district
court dissolved the injunction based on Newman's stipulations. Newman
cannot change position now and argue that those stipulations are not
binding upon him. See Murray v. Silberstein, 882 F.2d 61, 66 (3d Cir.
1989).
10
jury trial on the claims relating to exoneration. 7 See Simko
v. C & C Marine Maintenance Co., 594 F.2d 960, 965 (3d
Cir. 1979); Red Star Towing & Trans. Co. v. Ming Giant, 552
F. Supp. 367, 371 (S.D.N.Y. 1982). Instead, Newman
brought his Jones Act and unseaworthiness claims in state
court, and later entered into stipulations to stay Consol's
exoneration/limitation action and return to state court
where he won a jury verdict. Thus, the case in the district
court was entirely an admiralty case which did not include
a right to a trial by jury. See Cooper v. Loper, 923 F.2d
1045, 1048 (3d Cir. 1991). We are not aware of any
authority holding that a nonjury admiralty claim must be
tried to a jury when it is not joined with another claim
which carries a right to a jury trial.
Newman seems to think that the district court retried his
Jones Act and unseaworthiness claims. That belief is not
correct. Those claims were tried in the state court. The
district court tried only the limitation/exoneration action,
an admiralty case for which there is no right to a jury trial.
As we indicated in Gorman, 2 F.3d at 524, a proceeding
under the Limitation Act is heard by a court sitting in
admiralty without a jury. We will not allow a claimant in a
limitation action to obtain consecutive jury trials in the
state and federal courts through the device of
characterizing his claim in the limitation action as being
predicated on the Jones Act or unseaworthiness. Thus, no
matter how Newman characterizes his claim in the
limitation action, his claim was a part of that action. See In
re McCarthy Bros. Co., 83 F.3d at 826 ("Claimants have no
right to a jury in admiralty actions, and thus lose their
right to pursue common law remedies before a jury when
forced into admiralty court under the Limitation Act.")
(citation omitted).
In trying the admiralty action, the district court
considered independently issues decided earlier by the state
court jury, but reached a different result. Yet the
inconsistency was entirely appropriate because Newman
waived any claim to res judicata based on the state court
_________________________________________________________________
7. We, of course, do not rule that he could have obtained a jury trial in
these circumstances as the situation we describe is not before us.
11
proceeding with respect to exoneration. We emphasize that
we are not concerned here with a situation in which a
claimant brings his Jones Act and unseaworthiness claims
in a district court and then the shipowner brings a
limitation action.
Newman argues that by trying the exoneration issue de
novo, the district judge was re-examining the facts found by
the state court jury contrary to the Seventh Amendment.
But the cases Newman cites on this point all involved
situations where the trial or appellate court rejected or
modified a jury's factual finding in the same case. Here, the
jury findings were in a different forum. Normally, res
judicata or collateral estoppel would apply in such
circumstances because both the state claims and the
exoneration/limitation action arose from the same set of
events. Here, however, Newman explicitly waived any right
to res judicata on the limitation and exoneration issues.8
Thus, the Seventh Amendment did not forbid the
independent examination in the admiralty case of the
issues previously adjudicated in the state court case.
Newman received a jury trial for those claims in the forum
in which he was entitled to one.
Adopting the facts found by the state court jury would
mean that the state court proceedings had res judicata
application on the exoneration issue and would eliminate
Consol's right to litigate the exoneration issue in the district
court. Such an application would be directly contrary to
Newman's stipulation in the district court to Consol's right
to litigate in the district court all issues relating to both
exoneration and limitation. The district court did adopt the
jury's findings on damages because the damages issue was
not covered by Newman's waiver of res judicata. Thus, the
state court trial was not a "complete nullity" as Newman
now claims. Newman may consider his efforts in state court
to have been a waste of time, given the final result, but he
was the party who sought to be in state court, and as he
entered into the stipulations which have led to this result,
he must live with their consequences.
_________________________________________________________________
8. This court in Gorman held that the term "res judicata" in a limitation
action stipulation also encompasses the doctrine of issue preclusion. 2
F.3d at 528-29.
12
E. District Court Factual Findings
We turn now to the second area of inquiry on appeal, the
area relating to the trial itself. Newman argues that the
district court's factual findings in support of its decision to
exonerate Consol from liability were clearly erroneous in
several respects. First, he contends that Consol did not
disclose in pretrial proceedings that it was claiming that the
leaving line Newman used was cut after the accident. The
evidence Newman has for this contention is one response
from Consol's attorney at a pretrial conference. After
Newman's attorney asked if the legal theory of the case was
that the rope was cut after the accident, Consol's attorney
said: "No, I don't believe that is the theory." App. at 1110.
Newman does not mention, however, that the court
responded first to Newman's attorney's inquiry by saying:
"Well, that has been mentioned as one of the, certainly one
of the theories. I don't know that that's, that is the, the
theory." Id. Then, after Consol's attorney responded, the
court said: "But they certainly have, I've seen it in their
pretrial report, mentioned there." In the circumstances,
Consol's attorney's statement easily can be seen as a
response to the court that it was not the only theory,
although it was a possible theory.
This conclusion is consistent with Consol's earlier
statements on the matter. Consol argued in its pretrial
statements that the rope was cut, but it did not know when
it was cut, and if it had been cut before the accident
Newman should have seen it and replaced the rope. App. at
88-89, 1086 ("It is presently unknown precisely when the
rope in question was cut, or by whom it was cut, except
that it was cut prior to being brought to Consolidation's
marine ways landing after the alleged accident."). These
statements are consistent with the court's factualfinding
that Consol cannot be deemed to have waived or disclaimed
the issue.
Newman also argues that there is no evidence to support
the court's finding that Newman slipped. Newman has no
memory of the accident, and Stinson, the only witness, was
looking away when Newman began to fall and only turned
back when Newman already was falling backwards. Thus,
Newman is correct that there is no direct evidence that
13
Newman slipped, nor could there be. The district court
apparently inferred that Newman slipped after the court
first found that the rope did not break, but was cut after
the accident. We cannot find these factual findings clearly
erroneous because there is clear support for them in the
record.
Clegg, the expert witness, testified that the rope had been
cut almost entirely through except for a few yarns (of 156
total yarns in the rope) on the outside of the rope which
broke under tension. Newman appears to argue that the
line was cut before the accident, but remained at least
partly attached until Newman pulled on it so that it was the
breaking of the remaining intact yarns that caused him to
fall. This theory is consistent with the facts, but so is the
one reached by the district court, that the rope was cut
through after the accident. This conclusion is particularly
plausible, because it would be fairly obvious if a rope was
held together by only a few of 156 yarns, and Newman
testified that he would have replaced bad line had he
noticed it. We do not decide which version of the facts we
find more probable. The district court decided that the rope
was cut after the accident and we cannot say that this
finding was clearly erroneous.
Given the finding that the rope did not break, but was
cut, a permissible if not a necessary inference to be drawn
is that Newman slipped. He was walking along a 2-3 foot
gunnel on the barge with large drop-offs on either side, a
situation which presents a severe slipping hazard. We
cannot find clear error in the conclusion that he fell in
these circumstances.
If the rope did not break, and was cut after the accident,
then it was not defective. Newman's theory of liability for
his unseaworthiness and negligence claims was that Consol
provided defective rope. Newman offered no other evidence
of Consol's negligence or the unseaworthiness of the tug
and the barge. Inasmuch as the court found that the rope
was not defective, and we affirm the factual findings
supporting this conclusion, the legal finding that there was
neither negligence nor unseaworthiness also must be
affirmed.
14
F. Evidentiary Rulings
Newman also challenges certain evidentiary rulings by
the district court. Newman attempted to introduce a Consol
safety memo regarding the accident. The memo, prepared
May 2, 1989 (five days after the accident) by David
Kreutzer, stated that an employee fell after a leaving line
broke and cautioned all employees to inspect ropes
carefully before using them. Consol objected that this
memo was a subsequent remedial measure and thus
inadmissible under Fed. R. Evid. 407, and the court agreed.
While the dissent argues that the memo is not a
subsequent remedial measure within the meaning of Rule
407 because Newman only sought to admit the portion
dealing with Consol's investigation of the accident, dissent
at 19, there is authority supporting the exclusion of
evidence of post-accident investigations under Rule 407.
See Specht v. Jensen, 863 F.2d 700, 701-02 (10th Cir.
1988) (upholding exclusion of press release detailing city
investigation of incident and response to problem
discovered);9; Alimenta v. Stauffer, 598 F. Supp. 934, 940
(N.D. Ga. 1984) (excluding post-incident report and
recommendations for improvement). Furthermore, Newman
argues that the memo should have been admitted under an
exception to Rule 407, as he contends that he offered the
memo only to impeach the testimony of Truntich that the
line looked like it had been cut with an ax. Thus, the
district court properly considered the memo within the
framework of Rule 407.
_________________________________________________________________
9. The dissent relies on Rocky Mountain Helicopter v. Bell Helicopter, 805
F.2d 907 (10th Cir. 1996), for the proposition that post-event "tests or
reports" are not within the ambit of Rule 407. See dissent at 19-20 n.3.
Rocky Mountain dealt with tests and reports designed specifically to
determine the nature of a problem, though, while the memo in question
here was a "safety alert," app. at 1279. This "safety alert" was designed
to alert Consol employees to a potential danger, worn lines, and advise
them of measures to avoid this danger, closer inspection. This is
inherently a subsequent remedial measure designed to prevent future
accidents rather than an investigation or test "conducted for the purpose
of . . . discover[ing] what might have gone wrong or right." Rocky
Mountain, 805 F.2d at 918. Thus, Specht is more relevant to this case
than Rocky Mountain.
15
It can be reversible error to exclude evidence of a
subsequent remedial measure when it is offered entirely for
impeachment purposes. Petree v. Victor Fluid Power, Inc.,
887 F.2d 34, 38 (3d Cir. 1989). Yet a court must interpret
the impeachment exception to Rule 407 circumspectly
because "any evidence of subsequent remedial measures
might be thought to contradict and so in a sense impeach
[a party's] testimony. . . ." Flaminio v. Honda Motor Co., 733
F.2d 463, 468 (7th Cir. 1984) (emphasis added).
Accordingly, the evidence offered for impeachment must
contradict the witness's testimony directly. See Kelly v.
Crown Equip. Co., 970 F.2d 1273, 1278 (3d Cir. 1992).
Here, Truntich testified that the line appeared to him to
have been cut by an ax. The Kreutzer memo described an
accident where a line broke, presumably Newman's
although no names were mentioned. But the memo does
not directly contradict Truntich's testimony. Truntich only
was offering his opinion of the appearance of the line
immediately following the accident. As the Court of Appeals
for the First Circuit has held, there must be "a greater
nexus between the statement sought to be impeached and
the remedial measure than the case at bar." Harrison v.
Sears, Roebuck & Co., 981 F.2d 25, 31 (1st Cir. 1992). The
district court thus correctly interpreted Rule 407 and did
not err in excluding the evidence.
It is also important to point out that, as we observed
above, there was evidence that the line was not cut after
the accident. Thus, when Kreutzer wrote his memo, it was
entirely natural for Consol to give the warning it did. After
all, it surely was appropriate to tell employees to inspect
ropes before using them.
Furthermore, the memo recited that it was based on
Consol's "investigation." Thomas Brown testified that the
line did not look freshly cut, but obviously the district court
rejected that evidence at the trial. In the circumstances, it
is hardly conceivable that the introduction of the memo at
trial could have altered the outcome of the bench trial in
this case. While the dissent suggests that the memo would
have corroborated Brown's testimony, we do not see how it
could have added any further corroboration to the evidence
at the trial in the absence of a showing that the
16
"investigation" which led to Kreutzer sending the memo led
to information not available at trial. As far as we are aware,
Newman did not make any such showing. Certainly his
brief does not say he did.
The second evidentiary ruling that Newman challenges is
the denial of his motion to dismiss this limitation action for
spoliation of evidence. Newman argues that the denial of
this motion is inconsistent with the court's factual finding
that the rope was cut after the accident because if it was
cut, Consol must have cut the rope and prevented Newman
from examining it in one piece, or substituted a cut rope for
the rope that broke. But the court's rulings are not
contradictory. Consol employees testified that they retrieved
the two pieces of the line once the barge was brought back
to the repair facility and showed a chain of custody from
that point forward. Stinson testified that he saw the line in
two pieces after Newman fell and that he did not cut the
line. Stinson admitted that there were cutting tools on the
tug and that he handled the rope in removing Barge 1029
from the empty fleet to take Newman to medical attention.
The district court, faced with this testimony, could have
discredited Stinson's contention that he did not cut the line
and inferred that he did. There is absolutely no evidence
that Consol substituted the cut line for a broken line, and
Newman's argument that Consol cut the line is inconsistent
with his theory that the line broke. Thus, there was no
compelling reason for the court to find that Consol
destroyed any evidence. In the circumstances, the court
surely did not abuse its discretion in denying Newman's
motion to dismiss on spoliation grounds.
III. CONCLUSION
The order of the district court entered July 18, 1996,
exonerating Consol from liability will be affirmed. Therefore,
we need not consider Newman's arguments that Consol had
privity and knowledge and thus is not entitled to limitation
of liability.
17
McKEE, Circuit Judge, dissenting in part and concurring in
part.
I must respectfully dissent from part II.F. of the majority
opinion. Although I concur with the rest of the majority's
analysis, I believe that the district court erred in excluding
the Kreutzer memorandum under Rule 407 of the Federal
Rules of Evidence. Moreover, I do not believe that this error
was harmless, and I would therefore remand for further
proceedings.
The condition of the rope or "leaving line" was crucial to
the determination of Consolidation Coal's liability. Those
lines are used to tie barges together and can, in good
condition, withstand a force of over 18,000 pounds. The
district court concluded that the leaving line Newman was
holding when he fell had been cut. Clearly, if that line was
cut after plaintiff fell, as the district court concluded,
Consolidation Coal would not be liable. However, if before
the fall, the line had been cut or was in defective condition,
Consolidation may well be liable. See Earles v. Union Barge
Line Corp., 486 F.2d 1097, 1104 (3d Cir. 1973) (A
shipowner has a duty "to furnish a reasonably safe place
for . . . one working aboard the barge to perform his chores
. . . [The breach of that duty] results in liability for
negligence when the breach proximately causes injury to a
foreseeable person."). "[A] shipowner's duty to furnish a
seaworthy ship is absolute and completely independent of
his duty . . . to exercise reasonable care . . . ." Id. at 1105(internal quotations omitted); see also Edynak v. Atlantic
Shipping, Inc., 562 F.2d 215, 222 (3d Cir. 1977).
Louie Truntich, the assistant foreman at the time of the
accident, testified that he saw the leaving line on the day of
the accident after Newman's fall, and it appeared to have
been "cut with an axe. . . . It was just a nice, smooth,
straight cut." App. at 1271a. Newman sought to discredit
this testimony by introducing a memo circulatedfive days
after his accident by David Kreutzer, the top company
official on the scene the day of the accident. That
memorandum stated in part:
Our investigation showed that the line had suffered
prior damage and although it was the normal 1-1/2
18
[inch] MPO leaving line typically used for this purpose,
a close inspection should have pointed out the damage
and the line should have been taken out of service .
App. at 1279a (emphasis added).1 The district court
excluded this evidence under Rule 407 of the Federal Rules
of Evidence as a subsequent remedial measure presumably
because the memo goes on to announce that, in the future,
"careful examination of the rigging and lines shall be made
prior to their use in any operation." App. at 1279a. Rule
407 states:
When, after an event, measures are taken which, if
taken previously, would have made the event less likely
to occur, evidence of the subsequent measures is not
admissible to prove negligence . . . . This rule does not
require the exclusion of evidence of subsequent
measures when offered for another purpose, such as
. . . impeachment.
Fed. R. Evid. 407. Certainly, if Newman sought to admit the
memo's language about examining the lines, then Rule 407
would be implicated. The record clearly reflects, however,
that Newman only sought to admit that portion related to
the company's investigation into his accident.2 I do not
believe that this proffered evidence was within the scope of
Rule 407. Therefore, I would remand this case to the
district court for a determination of whether that evidence
could have been excluded on other grounds or whether it
should have been admitted.
Even if the memo's statement about the company's
investigation into Newman's accident is a subsequent
remedial measure,3 the district court should have
_________________________________________________________________
1. Although the memo does not specifically mention Newman's name, it
is clear from its content and date that it is referring to his fall.
2. The memo could have been redacted to exclude the language regarding
the "subsequent remedial measure."
3. Arguably, the last few lines of the above excerpt suggest remedial
action that would fall within the scope of Rule 407: "[A] close inspection
should have pointed out the damage and the line should have been taken
out of service." App. at 1279a (emphasis added). However, that inference
is tenuous at best.
19
determined whether it was nevertheless admissible under
Rule 407 as impeachment evidence.4 If, as the memo
suggests, the condition of the rope was such that "a close
inspection" would have disclosed that the line should not
have been used, the district court could have rejected
Truntich's testimony that the rope appeared to have been
"cut with an axe" and concluded that it was not "just a
_________________________________________________________________
The majority suggests that Kreutzer's memo was unambiguously
within the scope of Rule 407 and further contends that "there is
authority supporting the exclusion of evidence of post-accident
investigations under Rule 407." Majority Op. at 15. In support of its
position, the majority cites Specht v. Jensen, 863 F.2d 700, 701-02 (10th
Cir. 1988) and Alimenta v. Stauffer, 598 F. Supp. 934, 940 (N.D. Ga.
1984). Both cases involved an attempt by one party to admit a document
specifically for the subsequent remedial measures it contained. As I
explained above, that is not the case here; Newman clearly only wanted
to admit the findings from Consolidation's investigation, namely, "that
the line had suffered prior damage," not the company's response thereto.
This distinction is explained in the Tenth Circuit's opinion in Rocky
Mountain Helicopters v. Bell Helicopters, 805 F.2d 907 (10th Cir. 1986),
cited in Specht, 863 F.2d at 702.
It would strain the spirit of the remedial measure prohibition in Rule
407 to extend its shield to evidence contained in post-event tests or
reports. It might be possible in rare situations to characterize such
reports as "measures" which, if conducted previously, would reduce
the likelihood of the occurrence. Yet it is usually sounder to
recognize that such tests are conducted for the purpose of
investigating the occurrence to discover what might have gone
wrong or right. Remedial measures are those actions taken to remedy
any flaws or failures indicated by the test. In this case, the remedial
measure was not the Photoelastic Study of the trunnion but rather
the subsequent redesign of the trunnion.
Rocky Mountain, 805 F.2d at 918. In Rocky Mountain, all references to
the redesign were excluded at trial, see id., which is what I suggest could
have been done with respect to the Kreutzer memo's references to
Consolidation's post-accident implementation of an inspection policy.
4. If Truntich was an agent of the company, then his statement about
the rope's condition could be impeached by the statement in the
company memo. I take no position as to whether the record supports the
conclusion that Truntich was testifying as an agent of Consolidation
Coal, however.
20
nice, smooth, straight cut" as Truntich testified. At the very
least, the memorandum would have corroborated the
testimony of Thomas Brown, the foreman at the repair
facility. Brown testified that the rope did not look freshly
cut.
The majority suggests that the memorandum did not
directly contradict Truntich's testimony and cites Harrison
v. Sears, Roebuck & Co., 981 F.2d 25, 31 (1st Cir. 1992), in
support of its statement that "Truntich only was offering
his opinion of the appearance of the line immediately
following the accident. . . . [T]here must be `a greater nexus
between the statement sought to be impeached and the
remedial measure than the case at bar.' " Majority Op. at
16. However, the appearance of the rope immediately
following the fall was crucial evidence. Indeed, I can think
of no other basis for the district court's conclusion that the
rope had been cut after the fall than how the rope appeared
immediately afterwards.
In Kenny v. Southeastern Pennsylvania Transportation
Authority, 581 F.2d 351 (3d Cir. 1978), we allowed evidence
of new lighting fixtures that were installed on a train
platform after an assault there to impeach the testimony of
a SEPTA employee that platform lights were inspected daily.
In Petree v. Victor Fluid Power, Inc., 887 F.2d 34 (3d Cir.
1989), we ruled that the district court committed reversible
error in refusing to admit evidence of a warning decal that
had been applied years after plaintiff 's injury when that
evidence was offered to impeach testimony that a
mechanical press had no inherent dangers. I believe
Kreutzer's memo could have been admitted for similar
purposes.
Moreover, it is important to bear in mind that the
exoneration/limitation proceeding was a bench trial so the
court's usual concern that the jury will misuse the
impeachment evidence is absent. Accordingly, the majority
is far more concerned about the dangers of admitting
evidence of a "remedial action" than is warranted by the
circumstances of this case. See majority op. at 16 (quoting
Flaminio v. Honda Motor Co., 733 F.2d 463, 468 (7th Cir.
1984)(suggesting that "any evidence of subsequent remedial
measures might be thought to . . . impeach")).
21
"The reason for the exclusion [of remedial measures after
an accident] is to encourage post-accident repairs or safety
precautions in the interest of public safety." Kenny, 518
F.2d at 351. That public policy is not furthered by
excluding the language in Kreutzer's memo that simply
described the condition of the rope and stated that the
leaving line "had suffered prior damage." App. at 1279a.
Although the district court could have rejected this
evidence and accepted Truntich's testimony, I believe that
testimony was so crucial that Newman is entitled to have
the district court reconsider the admissibility of this
evidence. If the court determines that there is no other
obstacle to receiving that memo into evidence, then the
court should reexamine the question of Consolidation's
liability in light of this additional evidence. Accordingly, I
respectfully dissent from section II.F. of the majority
opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
22