New Admiralty Case from Fifth Circuit – Combo Mar., Inc. v. U.S. United Bulk Terminal, LLC

New case from the Fifth Circuit Court of Appeals addressing the Louisiana Rule and contribution among settling defendants. The case is Combo Mar., Inc. v. U.S. United Bulk Terminal, LLC, 2010 U.S. App. LEXIS 17644 and can be found here. This case arises from an allision caused by drifting barges in Louisiana. Several defendants were sued and one settled. Contribution: At issue was if a settling defendant obtains a full release of claims from the plaintiff, whether that release extinguishes an action for contribution against a non-settling tortfeasor. The court found that the release did not prevent such an action. The court stated: As discussed above, in order to bring a claim for contribution, the settling tortfeasor must have (1) paid more than he owes to the plaintiff, and (2) have discharged the plaintiff's entire claim. The AmClyde court held that a litigating defendant could not pursue a settling defendant for contribution, because the litigating defendant would, under the proportionate share rule, pay only his share of the judgment. AmClyde, 511 U.S. at 221. Because a right of contribution requires that a defendant pay more than he owes, and the proportionate share rule dictates that a defendant pays only his share of the judgment-no more, no less-a litigating defendant could never have a contribution claim, by definition. By extension, the amount a settling defendant, who obtains only a release for himself, pays represents only his share of the judgment, regardless of the actual dollar amount. Id.; Murphy v. Fla. Keys Elec. Coop. Assoc., 329 F.3d 1311, 1314 (11th Cir. 1314). Therefore, he too has no claim for contribution as long as the settlement represents only his portion of the damages. Where the settling tortfeasor takes an assignment of the plaintiff's claim, then the settling tortfeasor essentially steps into the plaintiff's shoes and pursues the plaintiff's claim. In that scenario, the plaintiff's claim is not extinguished. And, as we discussed in Ondimar, allowing assignment of a claim undermines the goals of AmClyde. Ondimar, 555 F.3d at 188-89. Further, there are strong policy reasons for not allowing a settling defendant to take an assignment of a tort claim under these circumstances. Id. at 188 (citing Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex. 1987)). If, however, the settling defendant discharges the plaintiff's entire claim as evidenced by a total release of all potential joint tortfeasors, then the settling defendant has met the requirements for a contribution claim. Because he is responsible for only his portion of the damages, and he paid the entire amount, he has paid more than he owes. And, because he has obtained a release of all other potential joint tortfeasors, he has extinguished the plaintiff's claim. Therefore, he may bring a claim for contribution against the non-settling potential tortfeasors. Colliding Admiralty Presumptions: The Louisiana Rule extends the Oregon Rule to drifting vessels that allide with a stationary object. It is a presumption of fault closely related to the tort doctrine of res ipsa loquitor. In this case, two defendants with different presumptions against them (one had a Louisiana Rule presumption, the other a presumption that passing vessels are presumed liable when their wake causes damages to a moored vessel), do the presumptions cancel each other out vis a vis their intra-defendant liability? Quoting Judge Posner's opinion in Rodi Yachts v. Nat'l Marine, Inc., 984 F.2d 880 (7th Cir. 1993), the court found the drifting vessel presumption (Louisiana Rule) did not operate between co-defendants. Whether the passing vessel presumption was supported factually was unclear, so the appeals court remanded the case for a trial.

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