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Water Log 28.4, February, 2009

Fifth Circuit Affirms Limitation of Liability in Oil Platform Collision

In re Omega Protein, Inc., 548 F.3d 361 (5th Cir. 2008).

Jonathan Proctor, 2010 J.D. Candidate, University of Mississippi School of Law

The U.S. Court of Appeals for the Fifth Circuit held that failure to properly train a captain on how to use electronic obstruction warning equipment did not necessarily make the vessel owner fully liable for the collision with another ship. Where there is insufficient evidence that the failure to train the captain caused the collision, the appellate court found that the vessel owner is not prevented from limiting its liability.

Background
In the dark early morning hours of October 4, 2004, a 396-ton vessel, Gulf Shore, owned by Omega Protein, Inc. (“Omega”), and captained by Luther Stewart, sailed towards the fishing grounds of Freshwater Bayou, Louisiana. The ship’s chief engineer alerted Stewart to a malfunction in the refrigeration system. After a visual scan of the horizon revealed no obstructions, Stewart turned on the wheelhouse lights to examine the problem.

Ten to fifteen minutes later, while Stewart was on a mobile phone requesting a replacement part for the refrigeration system, the Gulf Shore collided with a stationary oil platform owned by Samson Contour Energy E & P LLC (“Samson”). An experienced fishing pilot and captain, Stewart had never been involved in an accident during his twenty year tenure at sea, prior to striking the Samson platform.1 Litigation ensued with respect to liability for the damages incurred as a result of the collision.

The Trial Court
Subsequent observations by members of the Gulf Shore and another vessel owned by Omega indicated that the lights on the Samson platform were not functioning properly.2 At trial, despite Samson witnesses testifying that the platform lights were operating at the time of the accident, the court determined that this evidence satisfactorily proved Samson’s violation of the law requiring fixed structures to have operable lights.3 In light of this finding, Samson bore the burden of proving that Omega acted negligently in order to alleviate or mitigate its own liability.

Samson alleged that, by turning on the wheelhouse lights to inspect the malfunctioning refrigeration part, Stewart created what is known as a “mirror effect,” greatly decreasing his ability to detect unlit objects due to the reflection on the radar display. In addition, Samson contended that Stewart’s speaking on a mobile phone at the time of the accident amounted to a failure to maintain a proper lookout. Additionally, according to Samson, Stewart did not use all available means to detect obstacles in that he failed to utilize the ship’s navigational radar.

Omega sought to limit its liability for the collision by proving that it had no knowledge that these errors would occur when it hired Stewart to captain the Gulf Shore.

Focusing on Stewart’s accident-free work history and his possession of all necessary captaincy licenses, the trial court found that Omega acted reasonably in hiring Stewart, thereby limiting Omega’s liability. The court ultimately found the parties equally liable.

Proceedings before the Fifth Circuit Court of Appeals
On appeal, Samson challenged the trial court’s holding regarding apportionment of fault and Omega’s ability to limit its liability. To overturn the trial court’s decision, the appellate court must find clear error in the ruling. The clear error standard limits the appellate court’s discretion with regards to questions of fact. The trial court’s decision may only be overturned if it interpreted the law incorrectly or if the court’s factual findings were so implausible they were clearly erroneous.

Liability may be equally divided “when the parties are equally at fault or when it is not possible to fairly measure the comparative degree of their fault.”4 Vessel owners may reduce their liability by proving that they had no knowledge of the ship’s un-seaworthiness, or were not negligently complicit in actions of the captain resulting in a maritime accident.5 A ship may be found unseaworthy when its physical condition is unsafe or if the owner should have discovered its captain was incapable of effectively operating the vessel.

Therefore, if Omega exercised due diligence in maintaining the vessel and in selecting its captain, the company could limit its liability. Samson contended on appeal that the Gulf Shore was unseaworthy due to (1) Omega’s failure to properly train Stewart on the radar’s anti-collision warning system, and (2) the system’s outdated electronic navigational charts, on which the Samson platform was absent.

Conclusion on Appeal
The Fifth Circuit rejected Samson’s claim that the equal apportionment of fault was clearly erroneous. Based on the statutory violations of the parties and their collective failures in avoiding the collision, the appellate court held that the district court plausibly found that both Samson and Omega contributed equally to the accident. The appellate court noted that Samson did not offer an alternate allocation of da­mages, instead merely insisting that Omega bore sole responsibility.

Though Omega neglected to train Stewart on the ship’s radar system, the Fifth Circuit upheld the trial court’s finding that there were so many offshore rigs in this portion of the Gulf of Mexico that the captain would not have received an effective warning of the ob­ struction because the radar system’s collision alarm would have been alerting too often. Therefore, Omega’s failure to train Stewart on the radar system did not make Omega fully liable for the collision.

Additionally, the Fifth Circuit found that the district court plausibly determined that any charts referenced by Stewart would have included the platform. Samson’s contentions offered no reason to find that the district court’s ruling on this issue amounted to clear error.

Furthermore, the Fifth Circuit affirmed the trial court ruling that Omega acted reasonably when it hired Stewart, an experienced captain with no prior accidents. The court ruled that the collision was partially due to a mistake of navigation by Stewart and that, since the vessel was not rendered unseaworthy, Omega was entitled to limit its liability.

Endnotes:
1.  In re Omega Protein, Inc., 548 F.3d 361 (5th Cir. 2008).
2.  Id. at 366.
3.  33 C.F.R. A7A7 67.01-1, 67.05-1 (2008).
4.  See In re Omega Protein, Inc., 548 F3d at 370 (citing United States v. Reliable Transfer Co., 421 U.S. 397, 411 (1975)).
5.  See In re Omega Protein, Inc., 548 F3d at 371.

University of Mississippi