United States v. Reliable Transfer Company, Inc.

PETITIONER: United States
RESPONDENT: Reliable Transfer Company, Inc.
LOCATION: Republic of Cuba

DOCKET NO.: 74-363
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 421 US 397 (1975)
ARGUED: Mar 19, 1975
DECIDED: May 19, 1975

ADVOCATES:
Copal Mintz - for the respondent
John P. Rupp - for the United States pro hac vice

Facts of the case

It was long the rule in admiralty cases arising from collision or stranding that, when both parties were negligent, the sum of the damages to both should be split evenly between them. The Supreme Court endorsed this "rule of divided damages" in The Schooner Catharine v. Dickenson, 58 U.S. (17 How.) 170 (1855).

On a clear night, in 8-10 foot seas and 45 knots of wind off Rockaway Point, the Mary A. Whalen, a coastal tanker carrying fuel oil to New York from New Jersey, went astray. Unable to locate the breakwater light, her master attempted a U-turn, stranding her upon a sand bar. The light had failed. Its maintenance was the U.S. Coast Guard's responsibility. The tanker's owner sued in federal district court, which found negligence on the parts of both the vessel (75%) and the Coast Guard (25 %). Even though only the ship owner suffered damages, the district court applied the rule of divided damages, assessing both parties equal shares. They cross-appealed, but the U.S. Court of Appeals for the Second Circuit affirmed per curiam.

Abstract prepared by Professor J.P. Jones

Question

Whether, in admiralty cases of collision and stranding, the rule of divided damages ought to be discarded in favor of comparative fault?

Media for United States v. Reliable Transfer Company, Inc.

Audio Transcription for Oral Argument - March 19, 1975 in United States v. Reliable Transfer Company, Inc.

Audio Transcription for Opinion Announcement - May 19, 1975 in United States v. Reliable Transfer Company, Inc.

Potter Stewart:

By contrast -- by inconspicuous contrast the other opinion that I am authorized today to announce is a unanimous one.

That opinion is in Case No. 74-363, being the case of the United States of America, Petitioner, against the Reliable Transfer Company, Respondent.

This case is here by way of writ of certiorari which we granted to review a judgment of the United States Court of Appeals for the Second Circuit.

More than a century ago in the case of The Schooner Catharine, this Court established in our admiralty law the rule of divided damages.

That rule, most commonly applied in cases of collision between two vessels, requires the equal division of property damage whenever both parties are found to be guilty of contributing fault, whatever the relative degree of their fault may have been.

In this case, involving a vessel that ran aground off Rockaway Point outside New York Harbor, the District Court and the Court of Appeals applied this long settled rule of American admiralty law.

But the Courts of every major maritime nation except ours have long since abandoned that rule and they now assess damages in such cases on the basis of proportionate fault when such an allocation can reasonably be made.

We granted certiorari in this case to decide whether this country’s admiralty rule of divided damages should be replaced by a rule requiring when possible the allocation of liability for damages in proportion to the relative fault of each party.

For the reason set out in detail in the written opinion of the Court, we hold that when two or more parties have contributed by their fault to cause property damage in a maritime collision or stranding, liability for such damage is to allocated among the parties proportionately to the comparative degree of their fault and that liability for such damages is to be allocated equally only when the parties are equally at fault or when it is not possible fairly to measure the comparative degree of their fault.

Accordingly, the judgment before us is vacated and the case is remanded for further proceedings consistent with the opinion of the Court filed today.

Warren E. Burger:

Thank you Mr. Justice Stewart.