OSG 243 LLC v. M/V YOCHOW
4:18-cv-02046
| S.D. Tex. | Aug 1, 2024Background
- On June 13, 2018, the M/V YOCHOW (owned by Grand Famous; managed by Beikun; time‑chartered by China Navigation) struck a moored barge (OSG 243) and pushed it along TPC Group LLC’s A Dock, damaging both the barge and the dock; cases consolidated and tried to the bench.
- At trial the court found the immediate cause was a helmsman, Nan Win, who twice executed helm orders in the wrong direction; a Houston pilot was aboard and issued corrective commands but the vessel could not be stopped in time.
- Claimants (OSG, TPC, POHA) argued fatigue, deficient SMS/training, language issues, and inadequate job rotation contributed; Limitation petitioners argued the error was a navigational mistake by a competent helmsman and that owners lacked privity or knowledge of a causal defect.
- The court found Win’s work/rest complied with STCW/46 C.F.R. and expert testimony showed no signs of fatigue; Captain Yang exceeded duty hours but was off the bridge at the time and his absence did not cause the collision.
- The court granted limitation of liability: YOCHOW value ($18,440,000) + pending freight ($543,949.99) = $18,983,949.99; OSG’s stipulated damages $3,600,000 were allowed; TPC’s A Dock was declared a total loss and awarded replacement cost less depreciation of $9,068,718; POHA recovered $0.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Cause of allision / negligence | Win was fatigued and vessel/management (Beikun/Grand Famous) negligently managed fatigue, training, job rotation and communications, causing the helm errors | The helm errors were isolated navigational mistakes by a competent helmsman; equipment functioned and pilot/bridge crew reacted promptly | Allision caused by helmsman Win’s erroneous helm execution; no sufficient evidence Win was fatigued or that training/SMS/language caused the accident |
| Limitation of liability (privity/knowledge) | Owners had constructive knowledge of fatigue risks and inadequate SMS/job rotation and thus cannot limit liability | Owners selected competent crew, maintained an adequate SMS, audited, and lacked privity/knowledge of the navigational error | Limitation petitioners met burden: no privity or knowledge of the specific navigational error; limitation of liability granted under 46 U.S.C. §30523 |
| Measure of dock damages (repair v. replacement) | Temporary repairs and business interruption reflect economic loss; replacement in kind unnecessary | Temporary repairs did not restore pre‑allision condition; full replacement required but betterments must be depreciated | A Dock is a total loss (not repairable to prior condition); replacement cost ($25.4M) less two‑thirds depreciation (new life 75 yrs vs remaining 25 yrs) → $9,068,718 awarded |
| Recoverability of business interruption & temporary repairs | Business interruption, logistical costs, some lost‑profit items, and temporary repair costs are recoverable consequential damages | Consequential damages (loss of use) are barred when property is a total loss; temporary repairs cannot be double‑recovered | Consequential damages (business interruption, additional insurance premium, many logistical/lost‑profit claims) are barred by total‑loss rule; temporary repair costs not recoverable to avoid double recovery |
Key Cases Cited
- Farrell Lines Inc. v. Jones, 530 F.2d 7 (5th Cir. 1976) (two‑step limitation/privity framework and navigational error analysis)
- Canal Barge Co. v. Torco Oil Co., 220 F.3d 370 (5th Cir. 2000) (maritime negligence elements and causation principles)
- The Pennsylvania, 86 U.S. 125 (U.S. 1873) (burden‑shifting evidentiary rule when a statutory violation relevant to collisions is shown)
- Gaines Towing & Transp. Inc. v. Atlantia Tanker Corp., 191 F.3d 633 (5th Cir. 1999) (repair cost as measure of damages and restitutio in integrum)
- King Fisher Marine Serv., Inc. v. NP Sunbonnet, 724 F.2d 1181 (5th Cir. 1984) (market value as ceiling for total loss and valuation approaches)
- Bunge Corp. v. Am. Com. Barge Line Co., 630 F.2d 1236 (7th Cir. 1980) (distinguishing temporary vs permanent repairs; no double recovery)
- Albany Ins. Co. v. Bengal Marine, Inc., 857 F.2d 250 (5th Cir. 1988) (total‑loss rule bars recovery of loss of use/consequential damages)
- Moench v. Marquette Transportation Co. Gulf‑Inland, L.L.C., 838 F.3d 586 (5th Cir. 2016) (total loss defined where repair is not physically feasible)