IN THE MATTER OF: OIL SPILL BY THE

IN THE MATTER OF: OIL SPILL BY THE AMOCO CADIZ OFF THE COAST OF FRANCE ON MARCH 16, 1978. UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT 954 F.2d 1279; 1992 U.S. App. LEXIS 833; 1992 AMC 913; 22 ELR 20835 June 12, 1991, Argued January 24, 1992, Decided
CASE SUMMARY PROCEDURAL POSTURE: The court consolidated appeals from the United States District Court for the Northern District of Illinois, Eastern Division, from a default judgment against shipbuilder defendant, the denial of oil company defendant's petition asserting a right under The Limitation of Liability Act, 46 U.S.C.S. § 183 (a) (1851), and damages award against defendants, jointly and severally, for damages involving the 1978 oil spill off the coast of France.

OVERVIEW: In a suit brought under the federal admiralty laws, the lower court held defendants oil company and shipbuilder jointly and severally liable to claimants France and others for pollution damages and clean up costs due to an oil spill that occurred off the coast of France. Shipbuilder defendant appealed claiming lack of jurisdiction, while oil company defendant appealed the finding of liability, and claimants questioned the amount of damages awarded. All decisions on jurisdiction, liability, and computation of damages were affirmed and the court remanded for application of a multiplier and an increase in the prejudgment interest rates. It concluded that there had been enough minimum contacts for the sovereign to assert power over the shipbuilder so that the court had jurisdiction over it; oil company was not entitled to limit its liability pursuant to The Limitation of Liability Act, 46 U.S.C.S. § 183(a) (1851), because it did not meet its burden of proving lack of privity or knowledge of the negligence that led to the ship's grounding; and the French claimants were entitled to prejudgment interest at the prevailing market rates.

OUTCOME: The court affirmed the lower court's judgment on jurisdiction and liability issues and awarded damages in foreign currency and prejudgment interest.

COUNSEL: REPUBLIC OF FRANCE, Plaintiff - Appellee, Paul McCambridge, 312/368-1262, Warren J. Marwedel, 312/876-6144, KECK, MAHIN & CATE, 233 S. Wacker Drive 8300 Sears Tower, Chicago, IL 60606-6589, USA. Jeffrey D. Colman, 312/222-9350, Barry Sullivan, 312/222-9350, JENNER & BLOCK, 1 IBM Plaza, Chicago, IL 60611, USA. Robert N. Hermes, 312/444-9660, Suite 1505, Gerald G. Saltaralli, 312/444-9660, suite 1505, BUTLER, RUBIN, NEWCOMER, SALTARELLI, BOYD & KRASNOW, 3 First National Plaza, Chicago, IL 60602, USA. Donald M. Haskell, 312/781-9393, HASKELL & PERRIN, 200 W. Adams Street, Chicago, IL 60606, USA. Susan P. Malone, 312/726-2638, Suite 1900, 20 N. Wacker Drive, Chicago, IL 60606, USA. Michael A. Snyder, 312/421-3113, Suite 3102, RAY, ROBINSON, CARLE, DAVIES & SNYDER, 850 W. Jackson Boulevard, Chicago, IL 60607, USA. Charles F. Krause, 512/494-0638, [**2] SPEISER, KRAUSE, MADOLE, MENDELSOHN & MATA, 9846 LORENE, SAN ANTONIO, TX 78216, USA. T. Barry Kingham, 212/696-6046, CURTIS, MALLET-PREVOST, COLT & MOSLE, 101 Park Avenue, New York, NY 10178-0061, USA. Sheri Jurnecka, STERNS, SMITH & WALKER, 100 First Street, San Francisco, CA 94105, USA. Christopher B. Kende, 212/230-9236, HOLTZMANN, WISE & SHEPARD, 745 Fifth Avenue, New York, NY 10151, USA. Joseph C. Smith, 212/425-4107, BURLINGHAM, UNDERWOOD & LORD, One Battery Park Place, New York, NY 10004, USA. Michael J. Murphy, 212/344-8480, LORD, DAY, LORD, BARRETT & SMITH, 1675 Broadway, New York, NY 10019-5874, USA. AMOCO PRODUCTION COMPANY, fka Amoco International Oil Company, Defendant - Appellee, Frank Cicero, Jr., 312/861-2000, Roger L. Taylor, 312/861-2000, Richard C. Godfrey, 312/861-2000, Todd O. Tucker, 312/861-2082, KIRKLAND & ELLIS, 200 E. Randolph Drive, Chicago, IL 60601, USA. ASTILLEROS ESPANOLES, S.A., Defendant - Appellant, James E. Betke, 312/372-2000, 31st Floor, Joseph Keig, [**3] Jr., 312/372-2000, N. Rosie Rosenbaum, 312/372-2000, MCDERMOTT, WILL & EMERY, 227 W. Monroe Street, Chicago, IL 60606, USA. Richard L. Jarashow, HAIGHT, GARDNER, POOR & HAVENS, 195 Broadway, New York, NY 10007, USA

JUDGES: Before BAUER, Chief Judge, EASTERBROOK, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

OPINIONBY: PER CURIAM

OPINION: [*1285] PER CURIAM. On the morning of March 16, 1978, the supertanker AMOCO CADIZ broke apart in a severe storm, spewing most of its load of 220,000 tons of Iranian crude into the seas off Brittany. The wreck resulted in one of the largest oil spills in history, damaging approximately 180 miles of coastline in one of the most important tourist and fishing regions in France. The clean up took more than six months and involved equipment and resources from all over the country. The disaster has had lasting effects on the environment, the economy, and the people of Brittany, and has resulted in numerous lawsuits. Thirteen years later, the matter is before us. In this consolidated appeal, we are asked to resolve a myriad of issues involving jurisdiction, liability, and damages. Before we begin, a brief history of the litigation and [**4] its cast of characters is in order.

I.

A.

The origins of the AMOCO CADIZ are not difficult to trace. The vessel was born of discussions that began in Madrid, Spain in May 1970 between Astilleros Espanoles, S.A., the shipbuilder who constructed the fleet in which Columbus voyaged to the New World, and Standard Oil Company of Indiana ("Standard") (now called Amoco), an Indiana corporation having its principal office and place of business in Chicago, Illinois. The latter was represented by Robert S. Haddow, vice president in charge of marine operations at Amoco International Oil Company ("AIOC") and chairman of Amoco Tankers and Amoco Transport. (For simplicity's sake, we generally will refer to Amoco and its various subsidiaries -- Amoco Tankers, Amoco Transport, and AIOC -- as "the Amoco parties" or "Amoco.") Astilleros previously had contracted to build two megatankers for Amoco; Haddow wanted two more. The Madrid meeting covered all the essentials: technical specifications, delivery date, and price. Further negotiations took place in New York and Chicago. On May 30, Astilleros confirmed the content of the negotiations [*1286] and submitted a bid to build two ships, the AMOCO CADIZ and the [**5] AMOCO EUROPA. Amoco accepted the bid by letter on June 18, and the parties signed off on the final contract and ship specifications in Chicago on July 31, 1970.

The contract required that the ship be built according to the American Bureau of Shipping's ("ABS") Rules for Building and Classing Steel Vessels. The ABS is a not-for-profit maritime classification society headquartered in New York that promulgates rules and sets standards for shipbuilding, design, and seaworthiness. The ABS's technical staff in London reviewed Astilleros's proposed plan for the AMOCO CADIZ to ensure that it complied with the ABS's Rules. The ABS examined the "general arrangement" plans -- plans featuring the layout and list of components used in the various parts of the ship -- as well as drawings related to the detailed design of the ship. (By "detailed design," we mean items as small as nuts and bolts.) The ABS stamped the plans and drawings with its Maltese cross emblem to signify its approval. The Amoco-Astilleros contract incorporated the general arrangement plans and required Astilleros to submit them to Amoco for acceptance prior to construction. Astilleros did so, but did not pass along to Amoco [**6] its detailed design drawings, calculations, or fabrication drawings showing the mechanical details of the steering mechanism's component parts. Amoco reviewed the design of the steering gear system and approved it on October 19, 1971. Amoco later made two modifications to the system: it designed a low fluid level alarm for the replenishment gravity tank and increased the size of the rudder. It chose not to include an optional hand charging pump. Astilleros's representatives came to Chicago for a two-day meeting in June 1972 to firm up technical details.

Pursuant to the contract, Astilleros built the behemoth at its shipyards in Cadiz, Spain. It took four years to complete the job. Throughout the construction process, both Amoco and the ABS had representatives on the scene at the shipyard. The Amoco representatives were concerned with deadlines and whether construction conformed to the contract specifications and general arrangement drawings. They also were present to witness tests of equipment and gear and to catch any problems that might have been missed in the plan approval process. The ABS representatives monitored the progress of the ship to ensure that construction was in conformity [**7] with the ABS's Rules. The Amoco representatives deferred to the ABS representatives' technical and engineering expertise in evaluating whether construction was proceeding as it should.

At long last, the vessel was finished. It measured 1095 feet long and 167 feet wide -- the size of three football fields -- and weighed 230,000 deadweight tons. It was powered by a 30,000 horsepower diesel engine driving a single screw and was equipped with a single rudder driven by a hydraulic steering engine. It had a hydraulic steering gear with movement of the rudder controlled by two pairs of rams contained in four cylinders that were filled with hydraulic fluid. The four rams were made of rolled steel and their heads were cast steel. Ram isolation valves controlled the flow of oil through the passages in the distribution block. These valves were a critical safety component. They could capture the remaining hydraulic fluid in the rams in the event of a rupture in the piping. The valves also could be closed to isolate the various lines from the rest of the system or to block the passage of oil to or from the cylinder.

The AMOCO CADIZ's steering system was supposed to work in the following manner. [**8] When the helms

Hasil (Bahasa Indonesia) 1:

IN THE PEDULI OF: TUMPAHAN MINYAK OLEH CADIZ AMOCO LEPAS PANTAI PERANCIS PADA TANGGAL 16 MARET 1978. Amerika Serikat pengadilan banding untuk ketujuh sirkuit 954 F.2d 1279; 1992 US App. LEXIS 833; 1992 AMC 913; 22 ELR 20835 12 Juni 1991, berpendapat 24 Januari 1992, memutuskanKASUS POSTUR PROSEDURAL ringkasan: Pengadilan konsolidasi banding dari pengadilan distrik Amerika Serikat untuk distrik Northern Illinois, Divisi Timur, dari standar penilaian terhadap terdakwa pembuat kapal, penolakan permohonan minyak perusahaan terdakwa menegaskan hak di bawah batasan kewajiban Act, 46 U.S.C.S. § 183 () (1851), dan kerusakan penghargaan terhadap terdakwa, bergabung dan dikenakan pembayaran, untuk kerusakan yang melibatkan 1978 minyak tumpah di lepas pantai Perancis. Ikhtisar: Dalam gugatan dibawa di bawah hukum federal admiralty, pengadilan rendah diadakan terdakwa perusahaan minyak dan pembuat Renteng bertanggung jawab kepada penggugat Prancis dan orang lain untuk kerusakan polusi dan membersihkan biaya akibat tumpahan minyak yang terjadi lepas pantai Perancis. Terdakwa pembuat menarik mengklaim kurangnya yurisdiksi, sementara minyak perusahaan terdakwa mengajukan banding menemukan tanggung jawab, dan pengklaim mempertanyakan jumlah kerusakan yang diberikan. Semua keputusan yurisdiksi, kewajiban dan perhitungan kerusakan yang menegaskan dan pengadilan menyerahkan kembali untuk aplikasi pengganda dan kenaikan suku bunga prejudgment. Itu menyimpulkan bahwa telah ada kontak cukup minimum untuk penguasa untuk menegaskan kekuatan atas kapal sehingga pengadilan memiliki yurisdiksi atas perusahaan minyak tidak berhak untuk membatasi kewajiban sesuai dengan batasan kewajiban UU, 46 U.S.C.S. § 183(a) (1851), karena itu tidak memenuhi beban yang membuktikan kurangnya privity atau pengetahuan kelalaian yang mengarah ke landasan kapal; dan Perancis penggugat berhak prejudgment bunga pada harga pasar yang berlaku. HASIL: Pengadilan menegaskan putusan pengadilan lebih rendah pada masalah-masalah yurisdiksi dan tanggung jawab dan diberikan ganti rugi dalam bunga mata uang dan prejudgment asing. COUNSEL: Republik Perancis, penggugat - Appellee, Paul McCambridge, 312/368-1262, Warren J. Marwedel, 312/876-6144, KECK, MAHIN & CATE, 233 S. Wacker Drive 8300 Menara Sears, Chicago, IL 60606-6589, Amerika Serikat. Jeffrey D. Colman, 312/222-9350, Barry Sullivan, 312/222-9350,, JENNER & blok, 1 IBM Plaza, Chicago, IL 60611, Amerika Serikat. Robert N. Hermes, 312/444-9660, Suite 1505, Gerald G. Saltaralli, 312/444-9660,, suite 1505, BUTLER, RUBIN, pendatang baru, SALTARELLI, BOYD & KRASNOW, 3 Plaza nasional pertama, Chicago, IL 60602, Amerika Serikat. Donald M. Haskell, 312/781-9393, HASKELL & PERRIN, 200 W. Adams Street, Chicago, IL 60606, Amerika Serikat. Susan P. Malone, 312/726-2638, Suite 1900, 20 N. Wacker Drive, Chicago, IL 60606, Amerika Serikat. Michael A. Snyder, 312/421-3113, Suite 3102, RAY, ROBINSON, CARLE, DAVIES & SNYDER, 850 W. Jackson Boulevard, Chicago, IL 60607, Amerika Serikat. Charles F. Krause, 512/494-0638, [** 2] SPEISER, KRAUSE, MADOLE, MENDELSOHN & MATA, LAURENE 9846, SAN ANTONIO, TX 78216, Amerika Serikat. T. Barry Kingham, 212/696-6046, CURTIS, palu-PREVOST, COLT & MOSLE, 101 Park Avenue, New York, NY 10178-0061, Amerika Serikat. Sheri Jurnecka, STERNS, SMITH & WALKER, 100 pertama Street, San Francisco, CA 94105, Amerika Serikat. Christopher B. Kende, 212/230-9236, HOLTZMANN, BIJAKSANA & SHEPARD, 745 Fifth Avenue, New York, NY 10151, Amerika Serikat. Joseph C. Smith, 212/425-4107, BURLINGHAM, UNDERWOOD & Tuhan, satu Battery Park Place, New York, NY 10004, Amerika Serikat. Michael J. Murphy, 212/344-8480, Tuhan, hari, Tuhan, BARRETT & SMITH, 1675 Broadway, New York, NY 10019-5874, Amerika Serikat. AMOCO produksi perusahaan, fka Amoco internasional perusahaan minyak, terdakwa - Appellee, Frank Cicero, Jr, 312/861-2000, Roger L. Taylor, 312/861-2000,, Richard C. Godfrey, 312/861-2000,, Todd O. Tucker, 312/861-2082, KIRKLAND & ELLIS, 200 E. Randolph Drive, Chicago, IL 60601, Amerika Serikat. ASTILLEROS ESPANOLES, S.A., terdakwa - penuntut, James E. Betke, 312/372-2000, lantai 31, Joseph Keig, [** 3] Jr, 312/372-2000,, N. Rosie Rosenbaum, 312/372-2000,, MCDERMOTT, akan & EMERY, 227 W. Monroe Street, Chicago, IL 60606, Amerika Serikat. Richard L. Jarashow, HAIGHT, GARDNER, miskin & HAVENS, 195 Broadway, New York, NY 10007, Amerika Serikat Hakim: Sebelum BAUER, kepala hakim, EASTERBROOK, Circuit hakim dan FAIRCHILD, Senior Circuit hakim. OPINIONBY: PER CURIAM PENDAPAT: [* 1285] PER CURIAM. Pada pagi 16 Maret 1978, kapal tanker raksasa AMOCO CADIZ pecah terpisah dalam badai berat, memuntahkan sebagian besar beban 220.000 ton Iran mentah ke laut lepas Brittany. Bangkai mengakibatkan salah satu dari tumpahan minyak terbesar dalam sejarah, merusak sekitar 180 mil dari pantai di salah satu yang paling penting wisata dan memancing wilayah di Perancis. Membersihkan mengambil lebih dari enam bulan dan terlibat peralatan dan sumber daya dari seluruh negeri. Bencana telah berlangsung efek pada lingkungan, ekonomi, dan orang-orang dari Brittany, dan telah mengakibatkan berbagai tuntutan hukum. Tigabelas tahun kemudian, masalah ini sebelum kita. Dalam permohonan ini konsolidasi, kita diminta untuk menyelesaikan sejumlah isu-isu yang melibatkan yurisdiksi, tanggung jawab, dan kerusakan. Sebelum kita mulai, sejarah singkat litigasi dan [** 4] dengan cast karakter adalah dalam rangka. Saya. A. Asal-usul AMOCO CADIZ tidak sulit untuk melacak. Kapal dilahirkan dari diskusi yang dimulai di Madrid, Spanyol pada Mei 1970 antara Astilleros Espanoles, SA, pembuat kapal yang dibangun armada di mana Columbus voyaged ke dunia baru, dan perusahaan minyak Standard Indiana ("standar") (sekarang disebut Amoco), sebuah perusahaan Indiana memiliki dengan kepala kantor dan tempat usaha di Chicago, Illinois. Yang terakhir diwakili oleh Robert S. Haddow, Wakil Presiden bertanggung jawab atas operasi laut di perusahaan minyak internasional Amoco ("AIOC") dan Ketua Amoco tanker dan Amoco transportasi. (Untuk mudahnya, kita umumnya akan mengacu ke Amoco dan berbagai anak perusahaan--Amoco tanker, Amoco transportasi dan AIOC--"pihak Amoco" atau "Amoco.") Astilleros sebelumnya telah dikontrak untuk membangun dua megatankers untuk Amoco; Haddow ingin dua lagi. Madrid pertemuan tertutup semua penting: spesifikasi teknis, tanggal pengiriman, dan harga. Negosiasi lebih lanjut berlangsung di New York dan Chicago. Pada 30 Mei, Astilleros dikonfirmasi konten negosiasi [* 1286] dan disampaikan tawaran untuk membangun dua kapal, AMOCO CADIZ dan [** 5] AMOCO EUROPA. Amoco menerima tawaran dengan surat pada tanggal 18 Juni, dan pihak-pihak yang menandatangani dari pada akhir spesifikasi kontrak dan kapal di Chicago pada 31 Juli 1970. Kontrak diperlukan bahwa kapal dibangun menurut Biro Amerika pengiriman 's ("ABS") aturan untuk bangunan dan Classing kapal baja. ABS adalah masyarakat tidak-untuk-laba Maritim klasifikasi berkantor pusat di New York yang menyebarluaskan sejumlah peraturan dan menetapkan standar untuk kapal, desain dan kelayakan. Staf teknis ABS di London ditinjau Astilleros's rencana untuk CADIZ AMOCO untuk memastikan bahwa itu sesuai dengan aturan ABS. ABS diperiksa "pengaturan umum" rencana - rencana menampilkan tata letak dan daftar komponen yang digunakan di berbagai bagian kapal--serta gambar-gambar yang terkait dengan desain rinci kapal. (Oleh "desain rinci," kita berarti item kecil seperti mur dan baut.) ABS dicap rencana dan gambar dengan lambang salib Maltese menandakan persetujuan. Kontrak Amoco-Astilleros dimasukkan rencana pengaturan umum dan diperlukan Astilleros untuk menyerahkan mereka ke Amoco untuk penerimaan sebelum pembangunan. Astilleros melakukan hal itu, tetapi tidak lulus sepanjang untuk Amoco [** 6] desain rinci gambar, perhitungan, atau pembuatan gambar menunjukkan rincian mekanik komponen mekanisme kemudi. Amoco desain sistem gigi kemudi ditinjau dan disetujui pada 19 Oktober 1971. Amoco kemudian membuat dua modifikasi sistem: itu dirancang rendah tingkat cairan alarm untuk pengisian gravitasi tangki dan peningkatan ukuran kemudi. Memilih untuk tidak menyertakan tangan opsional pengisian pompa. Wakil-wakil Astilleros yang datang ke Chicago untuk pertemuan dua hari di bulan Juni 1972 untuk perusahaan atas rincian teknis. Berdasarkan kontrak, Astilleros dibangun para raksasa di galangan kapal yang di Cadiz, Spanyol. Butuh empat tahun untuk menyelesaikan pekerjaan. Seluruh proses pembangunan Amoco dan ABS memiliki perwakilan pada adegan di galangan kapal. Wakil-wakil Amoco prihatin dengan tenggat waktu dan apakah konstruksi serupa dengan spesifikasi kontrak dan gambar pengaturan umum. Mereka juga hadir untuk menyaksikan pengujian peralatan dan perlengkapan dan menangkap setiap masalah yang mungkin telah hilang di proses persetujuan rencana. Wakil-wakil ABS dipantau kemajuan kapal untuk memastikan bahwa konstruksi sesuai [** 7] dengan aturan ABS. Wakil-wakil Amoco ditangguhkan untuk ABS perwakilan teknik dan keahlian dalam mengevaluasi apakah konstruksi adalah melanjutkan sebagaimana mestinya. Pada akhirnya, kapal selesai. Ini diukur 1095 kaki panjang dan 167 kaki lebar--ukuran tiga lapangan bola--dan ditimbang bobot mati 230.000 ton. Ini didukung oleh mesin diesel 30.000 tenaga kuda mengemudi sekrup tunggal dan dilengkapi dengan kemudi tunggal yang digerakkan oleh mesin kemudi hidrolik. Ia mempunyai gigi kemudi hidrolik dengan gerakan kemudi dikendalikan oleh dua pasang domba jantan yang terkandung dalam empat silinder yang dipenuhi dengan cairan hidrolik. Empat rams terbuat dari baja digulung dan kepala mereka adalah baja cast. RAM isolasi valves dikontrol aliran minyak melalui ayat-ayat dalam distribusi blok. Katup ini adalah komponen keamanan kritis. Mereka dapat menangkap cairan hidrolik tersisa di rams jika terjadi pecah di pipa. Katup juga bisa ditutup untuk mengisolasi berbagai jalur dari sisa sistem atau untuk memblokir bagian minyak ke atau dari silinder. Sistem kemudi AMOCO CADIZ seharusnya bekerja dengan cara berikut. [**8] Ketika helms