Exxon Company, U.S.A. v. Sorec, Inc., 517 U.S. 830 (1996)

Exxon Company, U.S.A. v. Sorec, Inc.

No. 95-129

Argued March 19, 1996
Decided June 10, 1996
517 U.S. 830

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

Petitioner Exxon’s oil tanker, the Houston, ran aground and was lost several hours after its "breakout" from a mooring facility owned and operated, or manufactured, by the various respondents. Exxon filed a complaint in admiralty against respondents, alleging, inter alia, negligence and breach of warranty. In granting respondents’ motion to bifurcate the trial, the District Court limited the first phase thereof to the question whether the post-breakout conduct of the Houston’s captain, Captain Coyne, was the superseding and sole proximate cause of the loss of the ship, leaving the issue of causation of the breakout itself for the second phase. After a bench trial, the court found that Captain Coyne’s (and, by imputation, Exxon’s) extraordinary negligence was indeed the superseding and sole proximate cause of the Houston’s grounding, and entered final judgment against Exxon. The Ninth Circuit affirmed. Among other things, it rejected Exxon’s legal argument that the doctrines of proximate causation and superseding cause are no longer applicable in admiralty in light of United States v. Reliable Transfer, 421 U.S. 397, in which this Court abandoned the "divided damages" rule previously applied in admiralty and adopted the comparative fault principle for allocating damages among responsible parties; held that the District Court’s causation findings were well supported by the record and not clearly erroneous; ruled that the lower court did not err in rendering judgment against Exxon on its breach of warranty claims; and concluded that, under the circumstances, the bifurcation of the trial was not an abuse of discretion.

Held: A plaintiff in admiralty that is the superseding, and thus the sole proximate, cause of its own injury cannot recover part of its damages from tortfeasors or contracting partners whose blameworthy actions or breaches were causes in fact of the plaintiff’s injury. Pp. 836-842.

(a) The Court rejects Exxon’s primary argument that the proximate causation requirement, and the related superseding cause doctrine, are not or should not be applicable in admiralty. The Court finds unpersuasive Exxon’s assertion that the lower courts’ refusal to allocate any share of damages to parties whose fault was a cause in fact of its injury conflicts with Reliable Transfer. The proximate causation requirement was not before the Court in that case, and the Court did not suggest that it was inapplicable in admiralty. There is nothing internally inconsistent in a system that apportions damages based upon comparative fault only among tortfeasors whose actions were proximate causes of an injury. Nor is there any repugnancy between the superseding cause doctrine, which is one facet of the proximate causation requirement, and a comparative fault method of allocating damages. Exxon may be correct that common law proximate cause concepts are complex and sometimes confusing, but those concepts are generally thought to be a necessary limitation on liability. In ruling upon whether a defendant’s blameworthy act was sufficiently related to the resulting harm to warrant imposing liability for that harm on the defendant, admiralty courts may draw guidance from, inter alia, the extensive body of state law applying proximate causation requirements and from treatises and other scholarly sources. Pp. 836-839.

(b) Exxon’s argument that the District Court erred in rendering judgment against it on its breach of warranty claims fares no better. Exxon errs in relying upon Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, which does not purport to deal with the proximate causation limitation for damages on such claims, and is not relevant here. Where the injured party is the sole proximate cause of the damage complained of, that party cannot recover in contract from a party whose breach of warranty is found to be a mere cause in fact of the damage. Although the principles of legal causation sometimes receive labels in contract analysis different from the "proximate causation" label most frequently employed in tort analysis, these principles nevertheless also restrict liability in contract. The finding that Captain Coyne’s extraordinary negligence was the sole proximate cause of Exxon’s injury suffices to cut off respondents’ liability for that injury on a contractual breach of warranty theory as well. Pp. 839-840.

(c) Also rejected is Exxon’s argument that the lower courts’ findings that Captain Coyne’s extraordinary negligence was the sole proximate cause of Exxon’s injury were in error. Although Exxon identifies some tension in the courts’ various findings, it has not made the sort of "obvious and exceptional showing of error," Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 336 U.S. 271, 275, that would justify this Court’s reversal of the lower courts’ ultimate conclusion. Pp. 840-841.

(d) Exxon’s argument that bifurcation of the trial was error is not within the questions upon which this Court granted certiorari. To the extent that the argument reprises the issue whether the fault of all parties must be considered together in order that they may be compared under Reliable Transfer, it is rejected. To the extent that Exxon argues that the District Court abused its discretion in dividing the trial in the particular way that it did, the Court declines to address the argument. P. 841-842.

54 F.3d 570, affirmed.

THOMAS, J., delivered the opinion for a unanimous Court.