RESPONDENT:Cement Div., National Gypsum Co.
LOCATION:Riley Hospital for Children
DOCKET NO.: 94-788
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Seventh Circuit
CITATION: 515 US 189 (1995)
ARGUED: Apr 24, 1995
DECIDED: Jun 12, 1995
David A. Strauss – Argued the cause for the petitioner
Harney B. Stover, Jr. – Argued the cause for the respondents
Facts of the case
After a ship owned by the Cement Division of National Gypsum Co. sank in a winter storm while berthed in a slip owned by Milwaukee, National Gypsum brought an admiralty suit for damages, alleging that the city had negligently breached its duty as a wharfinger. The city denied fault and filed a counterclaim for damage to its dock, alleging that National Gypsum was negligent in leaving the ship virtually unmanned. The District Court found that both parties were negligent, apportioned liability primarily to National Gypsum, and entered a partial judgment for the stipulated amount of National Gypsum’s damages, excluding prejudgment interest. The court held that the fact that National Gypsum’s loss was primarily attributable to its own negligence and the existence of a genuine dispute over the City’s liability were special circumstances justifying a departure from the general rule that prejudgment interest should be awarded in maritime collision cases. In reversing, the Court of Appeals held that mutual fault cannot provide a basis for denying prejudgment interest.
Does the fact that a plaintiff’s loss was primarily attributable to its own negligence, together with the existence of a genuine dispute over liability, justify a District Court’s departure from the general rule that prejudgment interest should be awarded in maritime collision cases?
Media for Milwaukee v. Cement Div., National Gypsum Co.
Audio Transcription for Opinion Announcement – June 12, 1995 in Milwaukee v. Cement Div., National Gypsum Co.
William H. Rehnquist:
The opinion of the court order number 94-788, City of Milwaukee v. Cement Division, National Gypsum Company will be announced by Justice Stevens.
John Paul Stevens:
This case arises out of American disaster that occurred on Christmas Eve in 1979, when a cargo ship sunk in Milwaukee harbor during a very severe winter storm.
The ship was worth about five million dollars and internally caused some damage to the wharf and the city and the owner of the ship got involved in litigation each accusing the other of negligence.
As result of a long trial and appeals and one thing and other, it was finally determined that the ship owner was primarily responsible for the loss.
Two-thirds of the responsibility requested on the ship owner and one-third on the city, which meant that when they figured out all the pluses and minuses, there was a net liability of about million-and-a-half dollars that the city owed to the ship owner.
The question we have to decide is whether or not pre judgment interest shall be paid on net amount for the period of time since the accident occurred.
The general rule in that time collision cases prejudgement interest is awarded, but there are exceptions for peculiar circumstances and the question in this case is whether either of the fact that the plaintiff which make the major recover was primarily responsible for the loss or the fact that there was the genuine dispute about liability constitutes a kind of exceptional circumstance that will justify a denial of prejudgement interest.
The Court of Appeals and the District Court held that no such interest should be awarded.
The Court of Appeals reversed and we agree with the views of the Court of Appeals and hold that prejudgment interest is appropriate.
Opinion is unanimous except for the fact that Justice Breyer took no part in the decision of the case.