United States Court of Appeals
For the First Circuit
No. 99-2024
PAN AMERICAN GRAIN MANUFACTURING CO., INC.,
Plaintiff, Appellant,
v.
PUERTO RICO PORTS AUTHORITY; CCC UNDERWRITERS;
PROCESADORA DE GRANOS DE PUERTO RICO, INC.,
Defendants, Appellees,
CONTINENTAL GRAIN COMPANY, INC.; MOLINOS NACIONALES, INC.,
INDUSTRIAS AVÍCOLAS A/K/A POLLOS PICÚ,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Héctor M. Laffitte, U.S. District Judge]
Before
Torruella, Selya and Lipez, Circuit Judges.
Derek A. Walker, with whom H. Michael Bush and Chaffe, McCall,
Phillips, Toler & Sarpy, L.L.P. were on brief, for appellant.
Ian P. Carvajal, with whom Manuel Sosa-Báez, Luis N. Saldaña,
Saldaña & Carvajal, P.S.C., David Karcher and Underwood, Karcher &
Karcher, P.A. were on brief, for Puerto Rico Ports Authority.
Darío Rivera-Carrasquillo, with whom William P. Kardaras and
Darío Rivera-Carrasquillo, P.S.C. were on brief, for Procesadora de
Granos.
July 9, 2002
TORRUELLA, Circuit Judge. On April 24, 1999 the
integrated tug and barge Zorra ("ITB Zorra")1 caught fire in the
harbor in Guánica, Puerto Rico, and was substantially destroyed.
The ship's owner, Pan American Grain Manufacturing Co.
("Pan American" or "appellant"), filed an action in admiralty
against, inter alia, the Puerto Rico Ports Authority ("PRPA"), the
owner of the Guánica docking facilities, and Procesadora de Granos,
Inc. ("Procesadora"), the lessee of the docking facilities,
alleging their responsibility for this casualty. Pan American
claimed that the fire resulted from a chain of events starting when
the vessel's starboard propeller struck uncharted submerged pilings
in the dockage area, for which both PRPA and Procesadora (jointly
"appellees") were responsible. Appellees rebutted this view of the
events, presenting several alternate theories. One claimed that
appellant's own imprudence in venturing into charted shallow waters
outside of the dockage area initiated the destructive chain of
events.2
1
An ITB, although technically two vessels, a barge and a tug,
operates mostly as a single unit: the tug inserts itself into the
stern section of the barge, is secured thereto, and becomes the
barge's method of propulsion and steerage. Therefore, for purposes
of this opinion the ITB Zorra will be referred to as a single ship
or vessel.
2
Appellees also argued that the fire started as a result of a
malfunction in the ship's fuel lines or clutch. The district court
rejected both these theories, finding that the fire was indeed
caused by "an allision of the starboard propeller." Pan Am. Grain
Mfg. Co. v. P.R. Ports Auth., 121 F. Supp. 2d 710, 711 (D.P.R.
1999). Appellees do not challenge this finding of the district
court. Therefore, the only dispute before us is whether the
starboard propeller struck uncharted pilings in the berthing area,
as claimed by the appellant, or grounded in the shallow water, as
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The matter went to trial before the district court,
sitting in admiralty, and the court eventually found appellees'
version to be more credible and so ruled. Pan Am. Grain Mfg. Co.
v. P.R. Ports Auth., 121 F. Supp. 2d 710 (D.P.R. 1999) (hereinafter
Pan Am. I). This appeal followed. Appellant additionally appeals
from a separate order which imposes sanctions on the appellant for
"abusive" and "shameful" discovery practices. Pan Am. Grain Mfg.
Co. v. P.R. Ports Auth., 193 F.R.D. 26 (D.P.R. 2000) (hereinafter
Pan Am. II). After fully reviewing the record, we affirm the
judgment of the district court and the imposition of sanctions
against appellant.
I. The Facts
On April 22, 1995, the ITB Zorra entered the harbor at
Guánica, Puerto Rico, at the end of a voyage from New Orleans. She
carried a cargo of grain which was to be offloaded at appellees'
docking facilities. The ITB Zorra is 656 feet in length, had a
beam of 85 feet, a stipulated depth of 22 feet at the stern, and
was powered by twin diesel engines, each driving an 18 foot screw
and weighing 16 tons.
argued by the appellees and found by the district court. See id.
at 716.
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Appellees' docking facilities3 consist of six large,
concrete breasting moorings or dolphins4 aligned parallel to the
shore on a north-south axis and 420 feet in length. A chart
introduced at trial and published by the National Oceanic and
Atmospheric Administration shows that the area within these dockage
facilities and its extensions to the north and south, have a depth
of 28 to 29 feet. The chart further shows that the area to the east
of the breasting line,5 south of dolphin number six, is littered
with debris and pilings. Additionally, in that same area, the sea
bottom rises up a sharp embankment to 18 feet, and it eventually
levels out at a depth of 12 feet.
The practice while loading or unloading cargo is for the
vessel to rest alongside the breasting dolphins. To load and
unload, the vessel uses two grain elevators, one forward and one
aft, 200 feet apart from each other. For these purposes the ship's
elevators have to be aligned with appellees' elevator on shore.
That elevator is located in the center of the line of breasting
dolphins.
3
The docks in question are owned by PRPA but are leased to
Procesadora. For purposes of this opinion, we make no distinction
between the two.
4
Dolphins are essentially pilings against which a ship is moored.
The dolphins in question are numbered one to six, in a north-to-
south orientation, so that dolphin number six is the southernmost
dolphin.
5
The breasting line is an imaginary line drawn across the seaward
side of the breasting dolphins and extending out from the outside
dolphins, ad infinitum.
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Upon arriving at Guánica, the ITB Zorra was captained by
Gerard Williams ("Captain Williams"). It took on a pilot, Manuel
Dos Santos ("Dos Santos"), who proceeded to assist in maneuvering
the vessel alongside appellees' docking facilities without
incident, as he had done on prior occasions. In fact, the ITB
Zorra had used these docking facilities on seven different
occasions without incident, as far back as August 1994.
On all the previous occasions when the ITB Zorra had used
appellees' dock, the vessel had unloaded using the ship's forward
elevator first and then the aft elevator. On this occasion,
however, the order was reversed. The ITB Zorra was originally
positioned so that its aft elevator could discharge its cargo. The
ship was winched southward (i.e., toward the stern) along the
dolphins until the ship's forward elevator was aligned with
appellees' shore side elevator. When this maneuver was completed,
because of the overall length of the vessel, the stern of the ITB
Zorra extended approximately 260 feet beyond the southernmost
dolphin.
The vessel was in this shifted position when it finished
unloading on the morning of April 24, 1999. It was from this
shifted position that Captain Williams and Dos Santos commenced
undocking procedures, rather than having the vessel winched forward
to its original docking position. The district court found that
"this failure to winch the vessel forward prior to departure left
a large portion of the vessel's stern unprotected by the breasting
dolphins, [and thus] this one decision proved to be the critical
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factor in the events that followed." Pan Am. I, 121 F. Supp. 2d at
712.
The court found that the pilot intended to "twist" the
vessel's stern out into the harbor, to allow room for an assisting
tug to approach shoreward and help push the ITB Zorra out into the
channel. Id. at 712. This maneuver was accomplished by turning
the rudders hard right and running the starboard engine aft while
the port one was set forward.
The uncontradicted testimony of Dos Santos was to the
effect that the assisting tug, the Oscar, was placed at the stern
of the ITB Zorra to keep it against the breasting dolphins while
the twisting maneuver was commenced. All of the ship's lines were
then released, except for a spring line running from the bow to the
third breasting dolphin, whose purpose was to aid in the twisting
maneuver and prevent the vessel from going forward while this was
taking place. After the stern was opened up from shore, the ship's
engines were stopped to allow the Oscar safe passage astern of the
ITB Zorra and into the space made shoreward. When the engines were
stopped, however, the shoreward breeze, which was blowing at about
17 knots, caused the ship to drift back to its original position
against the dolphins before the Oscar was able to enter the gap and
push the ITB Zorra's stern seaward.
After a second attempt at this maneuver, with a similar
outcome as the first one, the ITB Zorra was again carried shoreward
by the breeze. This time, however, the district court found that
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the ITB Zorra's stern was carried into the shallow waters east and
south of the berthing facility, and it ran aground. Id. at 712.
At this point, Captain Williams and Dos Santos decided to
attempt the twisting maneuver by extending a line from the stern of
the ITB Zorra to the Oscar, and trying to pull the ITB Zorra into
the channel while assisting the Oscar with the ITB Zorra's own
engines, which were engaged to this effect. These efforts came to
naught when the line parted. Another line was passed, and the
operation recommenced, but the ITB Zorra became unmaneuverable when
its starboard engine began malfunctioning. Shortly thereafter, the
vessel caught fire, was towed into the channel, and thereafter was
lost as a result of the conflagration.
II. Discussion
Appellant raises several issues on appeal. First, it
contends that the district court's factual findings are not
supported by the evidence and are, thus, clearly erroneous.
Second, appellant argues that the district court misinterpreted the
legal duties of the appellees as wharfingers and improperly found
that neither appellee breached its duty. Third, appellant asserts
that the district court erred when it failed to apply the
Pennsylvania rule. The S.S. Pennsylvania v. Troop, 88 U.S.(19
Wall.) 125, 134 (1873). Finally, appellant contests the imposition
of sanctions. We address each argument in turn.
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A. The district court's factual findings are not clearly
erroneous
We review the factual findings of a district court
sitting in admiralty for clear error. McAllister v. United States,
348 U.S. 19, 20 (1954) ("[i]n reviewing a judgment of a trial
court, sitting in admiralty, the Court of Appeals may not set aside
the judgment below unless it is clearly erroneous"). Appellant's
challenge to the district court's factual findings boils down to
appellant's unhappiness with the finding that the ITB Zorra crossed
the breasting line and grounded in the marked shallow water.
Appellant attempts to undermine this finding in several ways, but
there is more than sufficient evidence in the record to sustain the
district court's judgment. Therefore, the district court's finding
is not clearly erroneous.
The district court concluded that the ship's captain and
pilot maneuvered the ITB Zorra in such a way as to allow its stern
to be "exposed to the charted dangers of pilings and shallows south
of the dolphins and east of the breasting line," thus "drift[ing]
into the shore when the initial twisting maneuver was
unsuccessful." Pan Am. I, 121 F. Supp. 2d at 718. This, in turn,
caused the starboard propeller to strike the charted dangers,
leading to the malfunction of the clutch and engine, and eventually
to the fire.
The district court heard testimony from three witnesses,
all of whom were on the bridge at the time of the maneuver. All
testified as to whether the ITB Zorra crossed the breasting line,
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an incursion which would mean entrance into an area not
contemplated as safe for navigation and so marked in the relevant
chart. See Gemp v. United States, 684 F.2d 404, 408 (6th Cir.
1884) (holding that as a matter of law a mariner is charged with
knowledge of what is shown on charts). On this point, the vessel's
chief mate, Bernard Malpass, contradicted the testimonies of
Captain Williams and the pilot, Dos Santos, stating that the ITB
Zorra's stern crossed the breasting line, entering the area to the
east of that line. After thoroughly analyzing these testimonies,
including the inherent self interest and inconsistencies in the
statements of Captain Williams and Dos Santos, the court concluded
that the evidence adduced through the chief mate was "highly
persuasive" and thus more credible. Pan Am. I, 121 F. Supp. 2d at
713. In making this finding, the court explicitly discounted the
testimonies of Captain Williams and Dos Santos, who both claimed
that the ITB Zorra never crossed the breasting line.
The district court adopted the testimony of the chief
mate for several reasons. First, he testified that during the
undocking maneuvers he felt a violent vibration which caused items
in the wheelhouse to fall on the deck. Second, he claimed that
this occurred while the ship was within ten to fifteen feet of the
dock on a compass heading of 340 degrees. Since it is undisputed
that the dolphin line was between 357 and 358 degrees, if the chief
mate's testimony on this point was credited, his statements are
compelling evidence that the stern of the ITB Zorra crossed the
dolphin line into the shallows east and south of the berthing area,
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and that while there, its propeller struck an object or objects in
an area shown by the chart to be unsafe for navigation by a vessel
with the ITB Zorra's draft. Third, the court looked to the chief
mate's testimony regarding the propeller wash. He testified that
it consisted of a tremendous amount of thick black water, compared
to the normal brownish water created by a floating vessel. All of
this evidence supports the conclusion that the ITB Zorra was
aground and that its starboard propeller was hitting bottom or the
bank. This most probably would have put undue strain on that
engine's clutch, causing the fire which resulted in the eventual
casualty suffered by the ITB Zorra.
Without a doubt, much of the chief mate's testimony
contradicts that of Captain Williams and Dos Santos. However, the
balancing of testimonial evidence and the assessment of credibility
are exactly the functions of trial courts. McAllister, 348 U.S. at
20. The court was simply exercising its classical role when it
found that Captain Williams and Dos Santos were both biased. Pan
Am. I., 121 F. Supp. 2d at 713. Furthermore, the court articulated
concrete grounds on which it both discounted the testimonies of
Captain Williams and Dos Santos and adopted the chief mate's
version of events. Therefore, the district court's conclusion is
far from clearly erroneous, and we affirm.
B. Appellees satisfied their duties as wharfingers
Pan American claims that the appellees breached their
duties as wharfingers because they failed to warn that the berthing
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area contained submerged pilings.6 The law has long established
that a wharfinger is required to exercise due diligence in
maintaining its berths in a safe manner and in removing any
dangerous obstruction therein or warning any vessel using said
facilities of its existence. Smith v. Burnett, 173 U.S. 430, 435-
36 (1899) (citing British cases). This duty, however, only extends
to hidden hazards not reasonably known to the shipowner. Bunge
Corp. v. M/V Furness Bridge, 558 F.2d 790 (5th Cir. 1977). There
is no question, as found by the district court, Pan Am. I, 121 F.
Supp. 2d at 716, that appellees are wharfingers and, as such, are
responsible for using due care to maintain the Guánica berthing
facilities free of dangerous obstructions or properly warning of
the presence of such obstructions. However, the district court
found that Pan American did not establish that there were old
pilings within the berthing area. Id. at 714. Furthermore, any
pilings which may have been within the berthing area were so rotten
that they did not pose a hazard. Id. at 715. These findings are
not clearly erroneous.
After the accident, three sets of divers entered the
waters in the docking area to search for obstructions. All of
these divers had been employed by the appellant to investigate the
docking area, and appellant called two to testify at the trial.
6
At trial, Pan American also claimed that appellees violated
their duties as wharfingers by granting the ITB Zorra leave to dock
at a facility which was too small for the vessel. The district
court rejected this argument, finding that it was not a hidden
danger. Pan Am. I, 121 F. Supp. 2d at 717. Pan American does not
renew this contention on appeal.
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The first diver, Jack Mixer, testified that he found two sets of
pilings within the berthing area which were high enough to have
been hit by the ITB Zorra's propeller. He further indicated that
some of the pilings showed fresh scars. However, the second diver,
Wayne Watson, did not see any pilings within the dockage area, as
claimed by Mixer. Instead, Watson found some pilings pushed at an
angle into the underwater embankment to the south of the last
breasting dolphin. These appeared to him "as if they had been
pushed into the embankment after collision with a ship." Id. The
third diver, Gordon Welch, who was employed by Mixer and the only
diver called by the appellees, testified that there was a large
trench cut into the embankment east of the breasting line.
Again, exercising its classical functions of determining
the credibility of witnesses, weighing the various pieces of
evidence, and making the reasonable inferences that arise from the
evidence, the district court credited the testimony of Watson and
concluded that "[t]he ship's stern crossed the breasting line, ran
aground on the bank and its propellers were stopped or slowed by
coming into contact with the bank itself or the pilings embedded in
it." Id. at 715.
Moreover, one independent corroborating fact, undisputed
but ignored by almost everyone involved, is that the ITB Zorra had
used, without mishap, the same facilities on seven prior occasions.
The relevant chart also shows no obstructions within the berthing
area but does indicate them in the area to the south and east of
the berthing line.
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Therefore, the district court's finding that there were
no obstructions in the berthing area is not clearly erroneous.
Since there were no obstructions, appellees' duties as wharfingers
are not implicated.
C. A red herring is loose in Guánica Bay: The Pennsylvania
Rule is not applicable
Similarly, appellant's contention that the district court
erred by not applying the Pennsylvania rule fails. Since the
district court found that there were no obstructions in the
berthing area, the Pennsylvania rule is not implicated.
In its venerable decision The S.S. Pennsylvania v. Troop,
88 U.S.(19 Wall.) 125, 134 (1873), the Supreme Court established a
burden shifting regime for maritime cases. If a plaintiff can
establish both that the defendant breached a statutory duty and
that the breach is relevant to the casualty in question, the
defendant assumes the burden of proving that its breach could not
have caused plaintiff's damages. Id.; see also Am. Dredging Co. v.
Lambert, 81 F.3d 127, 130 (11th Cir. 1996); Havinga v. Crowley
Towing & Transp. Co., 24 F.3d 1480, 1483 (1st Cir. 1994). The
problem here is that appellant has failed to prove that appellees
violated any statutory duty.
To establish a statutory violation, appellant points to
33 U.S.C. § 403, which in essence prohibits the creation of
unauthorized obstructions in the navigable waters of the United
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States.7 However, appellant presented no credible evidence that
there were any obstructions in the appellees' berthing areas, much
less evidence that appellees created prohibited obstacles to
navigation.
Furthermore, even if there were credible evidence of a
statutory violation by the appellees, any such violation was not
sufficiently related to the casualty in question. The district
court found that the casualty in question was a direct result of
the fact that the ITB Zorra struck obstructions outside of its
proper area of navigation. Additionally, the obstructions which
the ITB Zorra struck were properly marked on the charts and known
to the master and pilot. Thus, appellant has only its own
imprudence to blame for the predictable result, and the district
court properly refused to apply the Pennsylvania rule.
D. The district court did not abuse its discretion when it
imposed sanctions on appellant
After the district court ruled on the merits of
appellant's claim, appellees moved for the imposition of attorney's
fees and costs upon appellant. Appellees also wanted the court to
require appellant to post a bond on appeal. In their motion for
attorney's fees, appellees claimed that the underlying action by
appellant had been filed in bad faith. The district court denied
appellees' request for imposition of full attorney's fees, but
7
The act states, in relevant part, that "[t]he creation of any
obstruction not affirmatively authorized by Congress, to the
navigable capacity of any of the waters of the United States is
prohibited. . . ." 33 U.S.C. § 403.
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instead imposed sanctions against appellant for "actions in the
course of discovery [that] were disruptive of the orderly course of
litigation, insulting to the dignity of the Court, and, most
importantly, utterly lacking in civility." Pan Am. II, 193 F.R.D.
at 30. Specifically, the court awarded attorney's fees to PRPA in
relation to several motions to compel which had been granted during
the course of discovery and for which the court found that Pan
American's earlier failure to comply was "clearly without
justification." Id.; see also Fed. R. Civ. P. 37(a)(4) (providing
that attorney's fees shall be awarded if the court grants a motion
to compel unless the opposing party's behavior was "substantially
justified"). The court also imposed sanctions under its inherent
powers in response to Pan American's "bad-faith litigation
tactics." Pan Am. II, 193 F.R.D. at 31; see also Chambers v.
NASCO, 501 U.S. 32, 44 (1991) (recognizing the inherent power of
courts to impose sanctions). Pan American now challenges both
awards of sanctions.
We review an award of sanctions, under both a court's
inherent powers and Federal Rule of Civil Procedure 37(a)(4), for
an abuse of discretion. Chambers, 501 U.S. at 55 ("We review a
court's imposition of sanctions under its inherent power for abuse
of discretion."); Thibeault v. Square D Co., 960 F.2d 239, 243 (1st
Cir. 1992) ("In reviewing a trial court's sanction order concerning
a discovery-related matter, an abuse-of-discretion standard
controls."). Here, we find that the district court did not misuse
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its powers when imposing either sanction award. Therefore, we
affirm both.
Appellant complains that the court ignored substantial
justifications when awarding PRPA costs incurred in presenting
several motions to compel. A substantial justification is one that
"could satisfy a reasonable person." Pierce v. Underwood, 487 U.S.
552, 565 (1988). Here, while Pan American advanced various
rationales for its failures to comply with PRPA's discovery
requests, the district court found that "Pan American's failure to
cooperate with PRPA's discovery requests was clearly without
justification and served only to impede the discovery process and
to make life as difficult as possible for PRPA." Pan Am. II, 193
F.R.D. at 30. After reviewing the record, we cannot say that this
finding was an abuse of discretion. In fact, there is ample
support for the district court's determination.8
Pan American also complains that the district court
ignored crucial evidence when it found that Pan American had acted
in bad faith and awarded sanctions under its inherent powers. "It
is beyond serious dispute that a district court may use its
inherent powers to assess attorneys' fees against a party that has
8
Pan American also complains that the district court erred by
awarding PRPA all fees incurred "in connection with" the motions to
compel. Pan Am. II, 193 F.R.D. at 31. This, Pan American claims,
impermissibly broadens the scope of allowable recovery. We,
however, do not need to reach that claim because Pan American's
complaint is a manufactured argument, created by lifting words from
their proper context. Throughout its discussion, the district
court is quite clear that it was awarding "reasonable expenses
incurred in making the motions." Id. at 30. This is the exact
standard contained in Federal Rule of Civil Procedure 37(a)(4).
Therefore, there is no substance to Pan American's complaint.
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'acted in bad faith, vexatiously, wantonly, or for oppressive
reasons.'" Whitney Bros. Co. v. Sprafkin, 60 F.3d 8, 13 (1st Cir.
1995) (internal quotation marks omitted) (quoting Chambers, 501
U.S. at 45-46). However, a district court ordinarily must provide
a sufficiently detailed explanation of its rationale in awarding
sanctions under its inherent powers. Id. Here, the district court
detailed a whole pattern of behavior which it relied upon when
awarding attorney's fees to appellees. The court concluded that
appellant engaged in various acts of bad faith in connection with
the discovery of evidence, all of which required appellees to
expend unnecessary time, efforts, and resources. These acts
included: (1) attempting to hide the identities of two divers who
inspected the ITB Zorra after the accident; (2) attempting to hide
the identity of Roger Rosaldes, a crew member of the ITB Zorra; (3)
installing a hidden camera and microphone aboard the ITB Zorra in
an attempt to record the conversations of appellees' counsel during
an inspection of the vessel; (4) removing the vessel's fuel
delivery system prior to the first inspection of the ship; and (5)
physically violent behavior by appellant's president, José
González, during his deposition when he pulled cables from a video
camera, assaulted the video operator, and threw a cup of hot coffee
at appellees' counsel. Pan American offers no compelling
explanations to justify its behavior; it simply cries about the
fact that the district court chose to discount Pan American's
version of events. This simply will not carry the day.
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It is clear after reviewing the record and the district
court's opinion that awarding attorney's fees to the appellees was
far from an abuse of discretion. The pattern of behavior
identified by the court is both egregious and troubling.
III. Conclusion
For the foregoing reasons, we affirm the district court's
judgment and order.
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