IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-30703
In Re: In the Matter of the Complaint
of TRANSPORTER MARINE, INC., as Owner of
M/V Transporter, and GULF TRAN INC., as
Operator of the M/V Transporter, for
Exoneration from or Limitation of Liability.
TRANSPORTER MARINE, INC., as owner of M/V
Transporter; GULF TRAN INC., As Operator of
M/V Transporter,
Petitioners-Appellants,
versus
NEWFIELD EXPLORATION COMPANY; ET AL.,
Claimants,
NEWFIELD EXPLORATION COMPANY; ST. PAUL
SURPLUS LINES INSURANCE COMPANY,
Claimants-Appellees,
and
UNITED STATES OF AMERICA, on behalf of the
United States Coast Guard,
Appellee.
NEWFIELD EXPLORATION COMPANY; ST. PAUL
SURPLUS LINES INSURANCE COMPANY,
Plaintiffs-Appellees,
versus
EROICA HALL also known as RICO HALL,
Defendant,
versus
TRANSPORTER MARINE, INC.; GULF TRAN INC.;
Defendants-Appellants.
--------------------
Appeal from the United States District Court
for the Eastern District of Louisiana
--------------------
July 13, 2000
Before WIENER, BENAVIDES, and PARKER, Circuit Judges.
PER CURIAM:
This appeal involves narrow legal issues of first impression
arising from a collateral skirmish in the same district court that
is conducting a marine limitation of liability proceeding. That
proceeding was provoked by Petitioners, the owners and operators of
the M/V Transporter, after Claimant-Appellee Eroica R. Hall, a
seaman on the M/V Transporter, lost both legs in a shipboard
accident.1 Some time after the incident, the Coast Guard
instituted administrative proceedings against Petitioners for
allegedly failing properly to comply with the Coast Guard’s
regulations that require marine employers to test for drugs and
alcohol all those on board a vessel who are directly involved in a
serious marine incident.2 The Coast Guard’s authority to require
such testing is derived from a federal statute.3
Petitioners, whose rights to invoke court protection in
exoneration or limitation of liability emanate from the Limitation
of Liability Act of 1851 (“the Limitation Act”),4 obtained an order
from the district court directing all persons with claims for any
losses, damages, injuries, or destruction resulting from or
incidental to Hall’s accident to file claims in those proceedings,
and restrained the commencement or continued prosecution of any
1
Hall has settled, and this appeal has been dismissed as
to his interests in it.
2
See 46 C.F.R. § 4.06-1.
3
See 46 U.S.C. § 2115.
4
46 U.S.C. §§ 181-89.
2
action or proceeding against Petitioners. They contended that the
district court’s orders require the Coast Guard to assert its
claims for fines and penalties under its drug and alcohol testing
regulations in the exoneration and limitation action. The Coast
Guard countered by insisting that its drug testing regulations and
all proceedings thereunder are subject to the Administrative
Procedures Act (“APA”), do not arise from and are not in connection
with the maritime action underlying the Limitation Act proceedings
in the district court, are temporally remote from Hall’s accident,
and are regulatory in nature and thus not subject to the otherwise
broad sweep of the Limitation Act.
The district court agreed with the Coast Guard and denied the
requests of Petitioners on two separate grounds: (1) The
regulatory proceedings of the Coast Guard are not subject to
limitations under the Act, and (2) those regulatory proceedings
arose from a failure to act (inadequate compliance with the drug
testing requirements) that occurred after Hall’s accident and, as
such, were not “done, occasioned, or incurred” as part and parcel
of the accident. Dissatisfied with the rulings of the district
court, Petitioners instituted this appeal.
I.
Petitioners proffer at least four issues on appeal:
1. Whether federal sovereign immunity exempts the Coast
Guard administrative hearing from proceedings conducted
in the district court under the Limitation Act;
3
2. Whether, as a matter of statutory interpretation or
otherwise, the Coast Guard administrative proceedings are
exempt from the Limitation Act;
3. Whether, as a matter of statutory interpretation, the
facts of this case demand that these particular Coast
Guard administrative proceedings come within the
statutory ambit of the Limitation Act, assuming it is
found applicable in the first place; and
4. Whether, and to what extent, a determination that Gulf
Tran had “privity and knowledge” of the violations that
give rise to the Coast Guard administrative proceedings,
might be relevant, thereby removing such proceedings from
the protections afforded by the Limitation Act.
As we shall proceed to analyze issues 2 and 3 and to dispose of
this appeal in alternative rulings on those two issues, we need not
and therefore do not address issues 1 and 4.
A. Exemption of Coast Guard Administrative Proceedings from the
Limitation Act
The Coast Guard requires marine employers to test for drug and
alcohol abuse all persons on board a vessel who are directly
involved in a serious marine incident.5 Petitioners do not contest
the authority of the Coast Guard to require such testing and to
require submission of the results of such testing to the Coast
Guard. Petitioners focus instead on the determination of the
proper forum in which these administrative requirements can and
5
See 46 C.F.R. § 4.06-1.
4
should be enforced: (1) a Limitation Act proceeding in district
court, or (2) an administrative hearing in accordance with Coast
Guard procedures under the aegis of the Administrative Procedures
Act. Petitioners insist that the broad language of the Limitation
Act and the protection it affords apply to enjoin all other
proceedings in any other forum. They argue that this is the only
way to protect an owner who is personally free from blame from
damages that arise out of a marine incident. In diametric
opposition, the Coast Guard insists that its proceedings are exempt
from the Limitation Act.
There is a dearth of jurisprudence on this point. We find
some guidance in the opinion of this court in University of Texas
Medical Branch at Galveston v. United States.6 In that case, the
United States spent some three million dollars to remove a wrecked
vessel from the sea bottom. The vessel owner filed a limitation
action and the United States sought exclusion. We determined that
the Wreck Act, part of the Rivers and Harbors Act of 1899,7 which
governs allocation of costs incurred in removing a wrecked vessel,
creates a statutory duty to remove the vessel. This in turn
results in the owner’s bearing the cost of removal, regardless of
limitation. Reasoning that the government should not be penalized
for promptly removing the wreck, we allowed the government to
6
557 F.2d 438 (5th Cir. 1977).
7
33 U.S.C. § 401 et seq. (Originally enacted as Act of
Mar. 3, 1899, Ch. 425, 30 Stat. 115 et seq.). Sections 13, 16,
19, and 20 of the Wreck Act are codified at 33 U.S.C. §§ 409,
411, 412, 414 and 415, respectively.
5
recover its costs unfettered by the constraints of a limitation
proceeding.
We find the implications of that case instructive. Congress
has granted authority to the Coast Guard to enforce mandated drug
and alcohol regulations. Even though the government filed a civil
suit under the Wreck Act in University of Texas Medical Branch and,
in contrast, instituted administrative proceedings for fines and
penalties in the instant case, both claims arose from statutory
authority creating an independent statutory duty on the part of the
shipowner. To subject either claim to limitation would thwart the
expressed intent of Congress —— removal of sunken vessels that are
hazards to navigation in the one instance and promotion of safety
on the high seas in the other. To allow shipowners to limit their
liability in such cases could reduce their incentive to comply with
important regulations.
We find inapposite the cases cited by Petitioners to support
their argument that the term “forfeiture” used in the Limitation
Act encompasses penalties that result from the Coast Guard
proceedings. We do not read the Limitation Act to embody an
intention to protect against fines and forfeitures in the form of
civil regulatory penalties. The history of application of the
Limitation Act reflects the limiting of liabilities arising out of
damage to cargo or goods, injuries or damages resulting from
collision, salvage claims, fires, personal injury suits by seamen,
6
and damages to structures or persons on land.8 The Limitation Act
applies for the most part to limit tort ability, so penalties of
the nature the Coast Guard seeks to recover in this case do not
appear to be among the kinds of maritime misfortune that are
subject to the Limitation Act. We agree with the district court’s
analysis and holding on this issue.
B. Limitation Act Protections under the Instant Facts
As an alternative basis for affirming the district court, we
address, on an “as applied” basis, the interaction of the
Limitation Act and the Coast Guard’s statutory authority for the
instant drug testing in the context of the particular facts of this
case. Even if we were to assume arguendo that the regulatory
duties imposed on the Coast Guard by Congress in connection with
drug testing somehow come within the ambit of the Limitation Act,
we would still have to determine the statutory scope of the express
language of the Limitation Act in this context.
The Limitation Act works only to limit the liability of a
shipowner for “loss, damage, or injury by collision, or for any
act, matter, or thing, loss, damage, or forfeiture, done,
occasioned, or incurred without the privity or knowledge of such
owner[.]”9 Thus, we must decide whether the regulatory proceedings
8
See Thomas J. Schoenbaum, Admiralty and Maritime Law
§ 15-8 at 317 (2d ed. 1994).
9
46 U.S.C. § 83(a).
7
complained of by Petitioners here are the result of their acts that
were “done, occasioned, or incurred” as part of the Hall accident
that provoked the underlying limitation litigation. Stated
differently, if we assume for the sake of argument that Petitioners
actually failed to perform the required drug and alcohol testing
and reporting, we would then have to determine whether such failure
was part and parcel of the Hall accident or was instead a separate
incident, distinct from the accident and the voyage. Not
surprisingly, Petitioners contend that the regulatory penalties are
forfeitures “done, occasioned, or incurred” as a result of the
accident and are thus subject to limitation; and, no less
surprisingly, the Coast Guard insists they are not. As this
presents a mixed question of fact and law, our review is de novo.
We again find no jurisprudence directly on point. The parties
invite us to consider, for guidance, the “voyage test”10 and our own
precedent establishing the “distinct occurrence test.”11 Although
we find neither test dispositive, we do note that the latter
“requires a factual inquiry into whether the vessel owner had the
‘time and opportunity’ to take the necessary action to avoid
subsequent liability that is distinct from the initial liability
imposing event.”12 Although Petitioners argue that further
10
See Place v. Norwich & New York Transp. Co., 118 U.S.
468, 491 (1886).
11
See Exxon Shipping Co. v. Cailliteau, 869 F.2d 843 (5th
Cir. 1989).
12
Id. at 847-48.
8
proceedings are needed to determine what, if anything, they could
have done to prevent additional liability in the form of
violations, we do not see it that way. The record before us is
sufficient to establish definitively that, after Hall was injured,
Petitioners had ample opportunity to comply with the Coast Guard
requirements. We view the alleged failure to comply under this
construction to be a distinct occurrence giving rise to an
independent liability. Petitioners urge impossibility of
compliance in light of the extremely traumatic nature of the Hall’s
injuries and the difficulty in obtaining blood samples given the
massive transfusions that were necessitated; however, those parties
will have ample opportunity to raise impossibility as a defense in
the regulatory proceedings. This assertion simply has no bearing
on the question of distinct occurrence.
Although both the facts and the timing make this a relatively
close call, the more accurate characterization of the circumstances
is that the administrative violations alleged to have occurred were
distinct from, and subsequent to, the incident in which Hall was
injured. They thus give rise to a liability, if any, that is not
properly subject to the Limitation Act.
II.
We affirm the judgment of the district court that the
regulatory duties of the Coast Guard and the administrative
proceedings to adjudicate charges arising from the enforcement of
its drug and alcohol testing regulations are exempt from
exoneration or limitation proceedings under the Limitation of
9
Liability Act. In the alternative, we affirm the ruling of the
district court to the extent it determined that, under the
particular facts of this case, the regulatory enforcement action by
the Coast Guard would not fall within the ambit of the Limitation
of Liability Act even if it were applicable because that regulatory
action relates to a distinct occurrence.13
AFFIRMED.
13
Appellants’ motion for leave to file supplemental record
excerpts, previously ordered carried with this case, is denied.
10