Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

IN RE OSWEGO BARGE CORP.

June 1, 1977

In the Matter of the Complaint of OSWEGO BARGE CORPORATION, Plaintiff as Bare Boat Chartered Owner of the Tug "EILEEN C" and Owner of the Barge "NEPCO 140", for Exoneration from or Limitation of Liability


The opinion of the court was delivered by: MUNSON

MEMORANDUM-DECISION AND ORDER

This is an Admiralty proceeding arising out of a barge grounding and subsequent oil spill which occurred in June of 1976 along the St. Lawrence Seaway. Following the spill, the barge owner filed with this Court a petition for exoneration from or Limitation of Liability, pursuant to 46 U.S.C. § 183 and Admiralty and Maritime Supplemental Rule F. Judge Port then ordered that all potential claimants submit their claims by December 31, 1976, and enjoined any and all other actions resulting from the incident in issue. New York State, a claimant with respect to the oil spillage, seeks to have the Order of Judge Port relaxed so to allow it to prosecute three of its five claims in another proceeding, without being subject to any limitation with respect to recovery.

The State maintains that it has five separate and distinct claims as a result of the accident in issue. The first three, which are the subject of this motion, all arise under sections of the New York Environmental Conservation Law which provide for strict liability in cases of, respectively, oil spills, water pollution in general, and endangerment of protected waterfowl by oil spills. New York Environmental Conservation Law §§ 71-1941, 17-0501, 71-0925(5), and 11-0505(1) (McKinney's 1973). *fn1" The remaining two claims, which are not involved in the State's motion, involve public nuisance and negligence and trespass, causing injury to State lands.

 I. LIMITATION OF LIABILITY

 The Limitation of Liability provision now in issue provides, in relevant part:

 
(a) The liability of the owner of any vessel, whether American or foreign, for any embezzlement, loss, or destruction by any person of any property, goods, or merchandise shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not, except in the cases provided for in subsection (b) of this section, exceed the amount or value of the interest of such owner in such vessel, and her freight then pending. 46 U.S.C. § 183.

 The applicability of the federal Limitation of Liability provision, 46 U.S.C. § 183, to strict liability statutes enacted by the various states in response to the increasingly serious problem of oil spills in navigable waters has been considered in only one case to date. See Complaint of Harbor Towing Corporation, 335 F.Supp. 1150 (D.Md.1971); see also Askew v. American Waterways Operators, Inc., 411 U.S. 325, 332, 93 S. Ct. 1590, 36 L. Ed. 2d 280 (1973), reh. den. 412 U.S. 933, 93 S. Ct. 2746, 37 L. Ed. 2d 162, wherein the Supreme Court (Douglas, J.) expressly declined to rule upon the issue. In Harbor Towing, the Maryland District Court held that 46 U.S.C. § 183 did apply to limit claims brought under state strict liability provisions which were virtually identical to the New York statutes now in issue. *fn2" The court found a conflict to exist between the state statute, purporting to impose liability upon an owner without knowledge or privity, and 46 U.S.C. § 183, which expressly limits such an innocent owner's liability. The conflict, the court held, must be resolved in favor of the federal statute, by virtue of the Supremacy Clause. This result is consistent with one case wherein a federal court sitting in New York held that no state statute could impair or qualify the Limitation of Liability, which applies to both maritime and non-maritime torts. In re Highland Navigation Corporation, 24 F.2d 582 (S.D.N.Y.1927), aff'd 29 F.2d 37 (2d Cir. 1928).

 The State has conceded the fact that, were there a conflict between the New York Environmental Law provisions and the federal Limitation of Liability statute, the state provisions would necessarily yield to the extent of the conflict. In this respect, however, the State claims this case is distinguishable from Harbor Towing. Relying upon two recent cases, United States v. Ohio Valley Company, Inc., 510 F.2d 1184 (7th Cir. 1975); Hines, Inc. v. United States, 551 F.2d 717 (6th Cir. 1977), the State argues that the Limitation of Liability provision, 46 U.S.C. § 183, has no applicability to strict or absolute liability statutes, inasmuch as the "triggering" language of that provision is "privity or knowledge", which necessarily implies the presence of fault or negligence.

 The Ohio Valley Company and Hines, Inc. cases involved claims brought under a federal strict liability statute prohibiting damaging or impairment of wharfs, piers, and the like, situated on navigable waterways. 33 U.S.C. § 408. *fn3" The opinions in both cases make it clear that the basis for refusing to apply the limitation of 46 U.S.C. § 183 to liability found under 33 U.S.C. § 408 is the principle of statutory interpretation which requires that two Congressional provisions, neither of which refer to the other, be construed, if possible, so as to avoid any conflict. *fn4" Recognizing the strong federal policy considerations behind 33 U.S.C. § 408, enacted long after the Limitation of Liability statute, the courts in Hines and Ohio Valley had strong doubts that Congress intended that provision to be subservient to the Limitation of Liability. As stated by the Sixth Circuit Court of Appeals in Hines :

 
We believe that the plain purposes of the Rivers and Harbors Act which we construe here cannot be served by subordinating it to the Limitation of Liability Act which Congress adopted in 1851 and that Congress did not intend the subordination to that Act which appellant now seeks. As a consequence, we hold that the statute later in time (The Rivers and Harbors Act) served to amend the unlimited language of the 1851 Limitation of Liability Act.

 Hines, Inc. v. United States, supra at 718. See also Wyandotte Transportation Co. v. United States, 389 U.S. 191, 88 S. Ct. 379, 19 L. Ed. 2d 407 (1967), and In re Chinese Maritime Trust, Ltd., 478 F.2d 1357 (2d Cir. 1973), cert. den. 414 U.S. 1143, 94 S. Ct. 894, 39 L. Ed. 2d 98 (1974), applying the same rationale to find that claims under the Wreck Statute of the Rivers and Harbors Act of 1899, 33 U.S.C. § 409, *fn5" are not subject to limitation of liability. Similar considerations were expressed by the Seventh Circuit Court of Appeals in Ohio Valley. United States v. Ohio Valley Company, Inc., supra at 1187-1189.

 Were the statutory interpretation principles, referred to above, the sole rationale behind the decisions in Ohio Valley and Hines, this matter would be easily settled based upon the Supremacy Clause reasoning relied upon by the Court in Harbor Towing. It is clear that the opinions in Hines and Ohio Valley heavily rely upon the statutory interpretation grounds cited above. However, there is language in both decisions to support the State's contention that both cases stand for the proposition that the Limitation of Liability provision was not intended to apply to claims brought under provisions imposing strict liability upon vessel owners. The Court in Hines, citing Ohio Valley, stated that to apply the Limitation of Liability provision to restrict recovery under the Rivers and Harbors Act would violate the absolute liability language of 33 U.S.C. § 408. As the Court in Ohio Valley stated:

 
That phrase ("privity and knowledge") implies that the owner be unaware of the fault in his vessel that caused an accident. Since the triggering mechanism for section 183(a) limitation of liability is tied to an awareness of negligence, and because negligence is not significant in actions under sections 14 and 16 (33 U.S.C. §§ 408 and 412), it follows that the limitation of liability provisions are inapplicable to those sections.

 United States v. Ohio Valley Company, Inc., supra at 1188.

 With all due respect to the learned judges of the Sixth and Seventh Circuits Courts of Appeals, this Court believes that Congress, in enacting the Limitation of Liability statute, never intended the loophole relied upon by those courts in Hines and Ohio Valley. The original limitation provision (the forerunner to 46 U.S.C. § 183(a) ) was enacted by Congress in 1851 to foster American shipping as a competitive force to that of Great Britain and other foreign powers. Lake Tankers Corporation v. Henn, 354 U.S. 147, 77 S. Ct. 1269, 1 L. Ed. 2d 1246 (1957). That provision, admittedly in derogation of common law principles, was based in general upon the French Ordinance of 1681 (which eventually was carried into many other civil law jurisdictions), a limitation act of England of 1734, 7 Geo. 2, C.15, and subsequent modifying provisions, and similar statutes already in force in Maine and Massachusetts. 3 Benedict on Admiralty § 4 (7th ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.