United States v. Reliable Transfer Co.

Brief Fact Summary.

Plaintiff owned a tank that was stranded on a sandbar and brought suit against the United States on the basis of negligence. The court held that, under the divided-damages rule in admiralty law, each party was liable for half of the damages to the tanker. The United States petitioned for certiorari.

Synopsis of Rule of Law.

In admiralty cases, the divided-damages rule is inapplicable except if the parties are equally at fault or if it is impossible to determine each parties comparative degree of fault.

Facts.

Reliable Transfer Co., Plaintiff, owned a tank that became stranded on a sandbar. Plaintiff brought suit against the United States on the basis that the United States Coast Guard negligently failed to maintain a flashing light because the flashing light would have allowed the tanker’s captain to circumvent the sandbar. A federal district court held that Plaintiff was 75 percent at fault and the Coast Guard was 25 percent at fault. Also, the court noted that the tanker’s captain had multiple other devices for navigating past the sandbar, but chose to use none. Pursuant to the divided-damages rule in admiralty law, the court held that each party was liable for half of the damages to the tanker. Thereafter, the United States petitioned the Supreme Court for certiorari.

Issue.

Whether in admiralty cases, the divided-damages rule is inapplicable except if the parties are equally at fault or if it is impossible to determine each parties comparative degree of fault.

Held.

Yes, in admiralty cases, the divided-damages rule is inapplicable except if the parties are equally at fault or if it is impossible to determine each parties comparative degree of fault.

Discussion.

Here, the damages Plaintiff endured should be subject to the doctrine of comparative fault, not the divided-damages rule. Under the divided-damages rule, as adopted in 1855, the damages on the maritime vessel caused a collision or stranding are equally divided by the parties at fault. However, all major maritime nations, including England, have abandoned that rule in favor of a doctrine of proportional fault. Now, this Court finds that the United States will no longer automatically apply the divided-damages rule in admiralty. The purpose of the divided-damages rule was because it is difficult to apportion fault between two vessels. However, fault is not always difficult to apportion. In the non-difficult circumstances, the court should apply a comparative fault in maritime action and liability should be apportioned based on their comparative degree of fault. Overall, the lower court’s judgment is vacated and remanded.