City of Chicago v. M/V Morgan

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DMC/SandT/04/53
City of Chicago v. M/V Morgan
United States of America; Seventh Circuit Court of Appeals; No. 03-1789, 2004 U.S. App. LEXIS 14173; 9 July 2004
Maritime: allision: presumption of fault: Application of the "Oregon" Rule
Summary
The United States Court of Appeals for the Seventh Circuit recently affirmed a decision of the District Court for the Northern District of Illinois holding that a shipowner failed to rebut the Oregon Rule by failing to demonstrate that (1) the allision
(i.e., the striking of a stationary object by a moving vessel) was the sole fault of the stationary object, (2) the vessel acted reasonably, or (3) the allision was the result of an inevitable accident. The Oregon Rule creates a presumption of fault against a vessel moving under its own power that strikes a stationary object. In addition, the Seventh Circuit affirmed the District Courtís 50/50 apportionment of liability between the parties on the grounds that the plaintiff bridgeowner had failed to take adequate precautions to prevent the accident.

DMC Rating Category: Developed

This case note was contributed by Matthew H. James, an attorney with Healy & Baillie, LLP, in New York. Healy & Baillie are the International Contributors to the website for the USA

Discussion
While pushing four barges down the Camulet River in Chicago, Illinois, one of the defendant tugboatís winches failed, causing the crew to lose control of the vessel. The somewhat inexperienced crew was unable to regain adequate control of the vessel before it struck a bridge. Although the allision was not violent, the angle of the impact severed a number of electric cables, causing US$625,128.11 in damages. The District Court applied the rule set out by the United States Supreme Court in The Oregon, 158 U.S. 186 (1895), holding that a moving vessel which strikes a stationary object is presumptively at fault. The District Court held that the shipowner failed to rebut the Oregon Rule given that (1) the shipowner could not pinpoint when the winch had last been inspected or who conducted the inspection, (2) it could not explain the cause of the winch failure, and (3) the crew did not follow proper procedures to avoid the allision once the winch failed. However, the District Court apportioned the damages 50/50 since the plaintiff could easily have minimized the damages had it installed a relatively inexpensive fender system across the cable slots on the bridge. The defendant appealed.

Judgment
The Appellate Court agreed with the District Court that the shipowner had failed to rebut the applicable presumption of fault. First, the defendant was unable to demonstrate that the allision was the sole fault of the bridge since the lack of the fendering system did not affirmatively cause the allision, but only contributed to the extent of the damages. Second, the vessel did not "act reasonably" as the crew, which was inexperienced, failed to respond correctly to the winch failure to prevent angular impact with the bridge and had not been diligent in its maintenance of the winch. Finally, the owner failed to establish the allision had resulted from an "inevitable accident," as the defendant was unable to show that the defective winch could not have been discovered through proper inspection. In this respect, the court declined to apply the in extremis doctrine as that doctrine only applies when a vessel is placed in sudden peril through no fault of its own.

The Appellate Court concluded its analysis by affirming the District Courtís determination that due to the lack of the fendering system on the bridge, the installation of which could have been accomplished at minimal cost in comparison to the significant risk resulting from its absence, the plaintiffís damages should be reduced by 50%. The court dismissed the defendantís argument that the plaintiff should be 100% liable for the damage as to so hold would effectively absolve the vessel of liability regardless of its negligence. The Appellate Court thus accepted the lower courtís conclusion that the lack of prudence of both parties in avoiding the accident warranted an equal apportionment of damages.

 

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