Atlantic Richfield Company v. United States of America, Commodity Credit Corporation

640 F.2d 759, 1981 U.S. App. LEXIS 18821
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 27, 1981
Docket79-2796
StatusPublished
Cited by4 cases

This text of 640 F.2d 759 (Atlantic Richfield Company v. United States of America, Commodity Credit Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlantic Richfield Company v. United States of America, Commodity Credit Corporation, 640 F.2d 759, 1981 U.S. App. LEXIS 18821 (5th Cir. 1981).

Opinions

CHARLES CLARK, Circuit Judge:

The United States appeals from a judgment holding it liable under the general average doctrine for a portion of the expense of repairing a ship that was carrying its cargo. We affirm.

The United States, in January 1973, acting through the Commodity Credit Corporation, contracted with the Atlantic Richfield Company (ARCO) to ship 1.7 million bushels of wheat to Bangladesh on the SS ATLANTIC HERITAGE. In the process of changing loading berths, the ATLANTIC HERITAGE made a turn in the Corpus Christi ship channel turning basin. During this maneuver, a duty engineer felt a jolt on the port [761]*761side of the engine room and noted this in the engineer’s log. This entry was not brought to the Captain’s attention but was put into the engineer’s smooth log in red. The event was not otherwise noticed or noted. The ATLANTIC HERITAGE re-berthed and completed its loading without incident.

On March 11, 1973, the ATLANTIC HERITAGE set out from Corpus Christi. After refueling in the Netherlands Antilles, the ship headed for Bangladesh. Except for this one-day refueling stop, the vessel sailed at full speed for two weeks, without incident. On March 25, while in calm seas and good weather, the vessel lurched, lost half of its engine’s revolutions per minute, and developed difficulty in steering. An investigation by the crew revealed damage to the ship’s propeller: two blades were bent, and one blade had sheared off completely. At reduced speed the ship proceeded directly to the nearest port, Cape Town South Africa, for repairs. The vessel was dry docked while fully loaded and repaired at a cost of nearly $70,000. The voyage was then completed.

ARCO demanded a share of this repair expense from the United States as owner of the cargo, under the admiralty doctrine of general average. The district court awarded judgment to ARCO in the amount of $31,029.66.

The United States makes two arguments on this appeal. The first is that the ATLANTIC HERITAGE was unseaworthy at the beginning of its voyage and thus was not entitled to recover from the cargo owner under the general average doctrine. In making this argument the Government asserts that, because failure occurred without explanation, a presumption of unseaworthiness at the time of departure should apply and that, even without the presumption, the facts demonstrate the vessel was unseaworthy when it departed Corpus Christi. The second argument is that ARCO failed to meet its burden of proving that it exercised due diligence to make the ship seaworthy prior to sailing.

The law to be applied to this case is drawn from four sources: the maritime doctrine of general average, the York-Antwerp Rules, the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 1300-1315, and the agreement between ARCO and the United States evidenced by the Charter Party and bills of lading. General average is an ancient maritime doctrine making all participants in a maritime venture ratably responsible for losses incurred for their common good.1 The York-Antwerp Rules were adopted by an international conference and have no independent force,2 yet they are incorporated into most shipping agreements. The 1950 version of the York-Antwerp Rules was incorporated by reference in the Charter Party and the bills of lading relevant here. COGSA gives effect, subject to its provisions, to agreements for the carriage of goods by sea to or from any United States port. The Charter Party and the bills of lading expressly incorporated COGSA. The Charter Party contained a “Jason Clause,” named for the case holding such clauses enforceable,3 which provides for general average contribution even where the carrier is negligent, unless the carrier is responsible for the damage under COGSA. COGSA holds the carrier (or ship) at fault for damage to the cargo caused by unseaworthiness only if a “want of due diligence on the part of the carrier to make the ship seaworthy” is shown. 46 U.S.C. § 1304(1).

The parties agree upon the effect of these various sources of law on this case, at least to this extent: where a general average situation exists, the shipowner can recover a contribution from the cargo owner unless the ship owner would be liable to the cargo owner under COGSA in a cargo damage case. This partial agreement permits [762]*762an analysis of the present appeal in the form of three questions. Was there a general average loss or expense? If such a loss or expense occurred, was the ship seaworthy when it left port? If the ship was unseaworthy, did the ship owner exercise due diligence in attempting to make the vessel seaworthy?

The parties agree that in this case, the first question must be answered affirmatively. We therefore move to the second. This circuit recognizes a presumption of unseaworthiness at the time of departure when a ship breaks down shortly after departure in clear weather and calm seas. Ionian Steamship Co. v. United Distillers, 236 F.2d 78, 80 (5th Cir. 1956). The district court’s failure to apply the presumption in this case was not error. To begin with, the Government’s attorney did not adequately request application of the presumption in the trial court. The record discloses only these obtuse remarks on the subject by Government counsel in her opening statement:

We are not here necessarily to prove what incidents caused the unseaworthiness, but we are presenting to the court that a propeller was lost on the high seas and that is somewhat of a preponderance, a good deal of evidence to show that something was wrong with the vessel to lose a propeller on the high seas when there is no logging at all that an object was struck, or the ship grounded on high seas, or anything of that nature.

Explicit articulation of the desire to invoke a presumption, while certainly the best, is not the only way to make the point. However, merely describing the expected proof as indicating “somewhat of a preponderance” or “a good deal of evidence” does not suffice to put the trial court in error for failure to apply the presumption.

Even assuming application of the presumption had been properly requested in the district court, that court would not have been in error in refusing to apply it to these facts. As soon as the defect in the propeller blades became known, the ship was unable to make full revolutions. Before the March 25 incident, the vessel had steamed uneventfully for two weeks at full speed. This period of regular operation makes it highly unlikely that the propeller had been damaged from the start of the voyage. The district court would have been entitled to believe, under the evidence in this case, that application of a presumption of unseaworthiness at the time of departure from Corpus Christi was not warranted.

The burden of proving the affirmative defense of unseaworthiness at the start of a voyage is properly placed on the cargo owner. Most maritime misadventures which qualify as general average situations have an obvious cause. The presumption would apply to unexplained failures that indicate a defect existed at the time of departure.

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640 F.2d 759, 1981 U.S. App. LEXIS 18821, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlantic-richfield-company-v-united-states-of-america-commodity-credit-ca5-1981.