OPINION
This is an admiralty action arising out of a collision in which the wake of the Defendant-Appellant Tennessee Valley Authority (TVA) tugboat Patricia H capsized a small fishing boat. Plaintiff Ronald Math-eny, a passenger in the fishing boat, died as a result. After a bench trial, the district court concluded that Matheny’s death *313 was caused by the negligent operation of the tugboat and that the TVA was not entitled to limitation of liability under the Limitation of Liability Act, 46 U.S.CA. § 30505 (West 2007), because the captain’s actions were within the privity or knowledge of TVA. The TVA appeals. We REVERSE in part and REMAND for further proceedings.
I. Background
A. Facts
The facts, issues, and relevant law are all adequately presented in the district court’s fifty-seven page opinion and supplemental opinion following a bench trial and are very briefly summarized here.
See Matheny v. TVA,
TVA operates the Cumberland Fossil Plant (CFP), a coal-fired electric power generating plant, on the south bank of the Cumberland River at river mile 103 in Stewart County, Tennessee. See TVA Act of 1933, 16 U.S.C. §§ 831-831ee (2000 & Supp. V 2005). In the 1970s, TVA excavated a second channel and created an island approximately 6,000 feet long between the two channels. TVA has a coal barge unloader and barge mooring cells along the south side of the old channel. Since the early 1970s, various towing companies have delivered tows of barges loaded with coal to barge mooring areas in the old channel, and TVA has used TVA tugboats to move the barges to the unloader and then back to the mooring areas for pickup by the towing companies.
The Patricia H is one of the TVA tugboats used to move barges at CFP. At the time of the accident, it was worth $420,000.
The TVA is aware that the old channel is used fоr recreational fishing by various types and sizes of boats. At approximately 5:30 p.m. on June 5, 2005, Third-Party Defendant/Counter-Plaintiff-Appellee Thomas Lawrence went fishing with his cousin, Matheny, in Lawrence’s fourteen foot Phantom fiberglass boat in the old channel of the Cumberland River near CFP. Lawrence had fished there numerous times before.
At 7:00 p.m., Captain Ralls and his crew started their shift on the Patricia H. Shortly after 7:00 p.m., Captain Ralls piloted the Patricia H from the unloader downstream to pick up a loaded coal barge. As the Patricia H traveled from the unloader downstream “lightboat” (without a barge), it passed the Phantom boat without incident. As the Patricia H traveled back upstream to the unloader with a loaded barge, it passed the Phantom boat again without incident. However, at approximately 7:50 p.m., when the Patricia H came back downstream again to obtain another loaded barge, its wake swamped the Phantom boat. Both men were thrown overboard. The crew of the Patricia H were able to save Lawrence, but Matheny drowned.
Captain Ralls’s immediatе supervisor was David Duke, the coal haul foreman at CFP. Duke was responsible for ensuring that CFP employees obeyed safety rules.
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Matheny was 49 years old when he died. Matheny suffered from coronary artery atherosclerosis and had a heart attack on September 27, 2004.
Mr. and Mrs. Matheny had been married since 1974 and lived for many years in middle Tennesseе. The couple had three adult children — Elan (31 years old at the time of trial), Christina (29 years old at the time of trial), and Stephanie (25 years old at the time of trial). One of Christina’s children, Chloe, lived with Mr. and Mrs. Matheny, and they provided for her care. The district court found that Matheny had “a very close relationship with his children and his wife.”
B. The District Court’s Ruling
The district court found that Captain Ralls was an experienced tugboat captain, 1 and that he “proved himself, up to the time of the accident, to be a perfectly competent captain.” Id. at 722. However, the district court also found, and TVA concedes, “that Captain Ralls violated Rules 2(b) and 6 of the Inland Rules of Navigation by operating the Patricia H at an excessive speed when it passed the fishing boat,” id. at 714, and “that Captain Ralls’s creation of an excessive wake was 100% responsible for the capsize of the fishing boat and the death of Mr. Matheny.” Id. at 712.
The district court held that the Limitation Act did not apply to limit TVA’s liability to the value of the Patricia H ($420,000) “because TVA had privity or knowledge of the risks posed by Captain Ralls[’s] negligent operation оf the Patricia H at an excessive speed.” Id. at 721. “As a separate basis for liability” without limitation, the district court found that TVA negligently supervised Captain Ralls, “by failing to specifically instruct him to maintain a low speed or a low wake in the presence of small fishing vessels.” Id. at 725. On the other hand, the district court found that TVA did not commit negligent en-trustment: “Although the court finds that Captain Ralls was negligent in this specific instance, it finds no basis to question his overall competency as a tugboat captain. Accordingly, TVA did not commit negligent entrustment.” Id. at 726.
The district court awarded Becky Math-eny, as surviving spouse of Matheny, a total of $3,324,352, which represented $124,352 for lost future earnings and household services, and $3.2 million for consortium losses of Mrs. Matheny and Matheny’s three adult children.
See
Thomas Lawrence and his wife were awarded a total of $238,685 based on Lawrence’s injuries.
See
II. Analysis
Factual findings from a bench trial are reviewed for clear error.
In re Cleveland Tankers,
A. Limitation of Liability
The Limitation of Liability Act states in relevant part as follows: “[T]he liability of the owner of a vessel for any claim ... or liability described in subsection (b) shall not exceed the value of the vessel and pending freight.” 46 U.S.C.A. § 30505(a) (West 2007).
2
Subsection (b) states in relevant part that “claims ... and liabilities subject to limitation under subsection (a) are those arising from ... any loss, damage, or injury by collision, or any act ... done, occasioned, or incurred, without the privity or knowledge of the owner.”
Id.
§ 30505(b);
see Kellogg & Sons v. Hicks (The Linseed King),
Limitation of liability involves two inquiries: (1) negligence or unseaworthiness, and (2) knowledge or privity of the vessel owner.
See In re Muer,
TVA concedes оn appeal that it is liable for Captain Ralls’s negligence, but claims that it is entitled to limitation of liability because it had no privity or knowledge of Ralls’s negligent act. Thus, the only issue is whether TVA had privity or knowledge of Ralls’s negligent act. In answering this question, we are mindful that “[t]he shipowner’s privity or knowledge is not measured against every fact or act regarding the accident; rather, privity or knowledge is measured against the specific negligent acts or unseaworthy conditions that actually caused or contributed to the accident.”
Suzuki of Orange Park, Inc. v. Shubert,
The district court held that the Limitation Act did not apply “because TVA had knowledge of the risks posed by Captain Ralls’s negligent operation of the Patricia H at an excessive speed.” 523 F.Supp.2d *316 at 721 (emphasis added); see also id. at 722 (framing the “the relevant inquiry [as] whether the defendant had privity or knowledge of the risks posed by tugboats bеing operated too fast, creating potentially dangerous wakes for nearby fishing boats”). Thus, according to the district court, because TVA was aware of the fact that if a tugboat operates at an excessive speed it may create a dangerous wake for nearby recreational boats, and TVA did not tell Captain Ralls that, TVA is fully liable.
The district court misreads the Limitation of Liability Act, which speaks in terms of
acts,
not
risks.
As TVA points out, it is indisputable that all vessel owners know that if a competent captain commits a negligent act, there is a risk of harm. Instead, the Limitation of Liability Act focuses on “the specific negligent acts or unseaworthy conditions that actually caused or contributed to the accident,”
Suzuki,
There is no evidence in this record to justify imputing knowledge to TVA about the specific conditions that led to the accident. TVA barges and fishing boats have peacefully coexisted for years in the area in which the drowning occurred. Lawrence and his friend James Stanley testified that the harbor is considered a safe place in which to fish, that they havе fished there on hundreds of occasions without incident, and that they have continued to fish in the same area were the accident occurred even after Matheny’s death. Although Stanley mentioned that on two occasions he saw wakes cause spillovers into fishing boats, two isolated incidents involving wakes causing spillovers into fishing boats do not impart knowledge to TVA about a dangerous condition. Thus, TVA was justified in assuming that the area was safe for both barges and fishing boats.
Furthermore, it is well-settled that under the Limitation of Liability Act, “an owner may rely оn the navigational expertise of a competent ship’s master.”
Kristie Leigh,
A Sixth Circuit case,
The Longfellow,
The Court explained:
The faults which the trial judge found were clearly faults in the navigation of the Longfellow, and cannot be imputed to her owners, as having occurred through their “privity or knowledge.” If we assume that there was no positive prearrangement between the officers of the Longfellow and the Hercules Carrol as would secure the best cooperative results, it was the fault of those navigating those boats, and not of the owners of the Longfellow.... The navigation of the Longfellow was under the sole control and direction of her pilot, who was a licensed pilot of unquestionable reputation and skill. It was for him to direct how the Hercules Carrol should assist, аnd the latter was subject to his orders and direction so far as the actual navigation of the Longfellow was affected.... The navigation of the towboat when lashed alongside of the Longfellow was necessarily to be governed by the navigation of the latter, and it was for the pilot to give such special orders as his judgment and the circumstances dictated. Neither was it the personal fault of the owners that the navigators of the Longfellow did not stop and back [up] when smoke first obscured her pilot’s view. If there was fault, it was a fault of thоse controlling her navigation, and was without the knowledge or privity of the owners.
Id. Similarly, in this case, Captain Ralls was a skilled pilot, who should have exercised his judgment to slow down while passing the fishing boat in the channel. The accident was caused by Captain Ralls’s navigational decisions.
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Other cases support the conclusion that Ralls’s errors were mistakes of navigation, which do not justify denying limitation of liability. For example, in
In re Omega Protein, Inc.,
Also illustrative is
United States v. Sandra & Dennis Fishing Corp.,
The district court’s reliance on
The Linseed King,
The Supreme Court agreed with the lower courts that “Stover’s position as the works manager of the Edgewater plant and the scope of his authority render his privity or knowledge that of the сompany,” and that “[t]he owner was therefore chargeable with negligence in not taking measures for the safety of the passengers which the weather conditions required.”
Id.
at 511,
But there is a vast difference between the cases relied on and the instant one. The launch was used for ferriage over a distance of about a mile and a third. She was known to be unseaworthy and unfit if there was ice in the river. There is no analogy between such a situation and that presented in the cited cases where the emergency must be met by the master alone. In these there is no opportunity for consultation or cooperation or of bringing the proposed action of the master to the owner’s knowledge. The latter must rely upon the master’s obeying the rules and using reasonable judgment. The conditions on the mоrning in question could have been ascertained by Stover, if he had used reasonable diligence, and we think the evidence is adequate to support the finding that the negligence which caused the disaster was his, and therefore with the owner’s privity or knowledge.
Id.
at 511-512,
The Linseed King is not analogous because the Patricia H was not unseaworthy and there were no weather conditions to alert Duke or anyone else that special care needed to be taken. Rather, the accident here occurred because Ralls did not obey the rulеs of navigation or use reasonable judgment, let alone common sense, during a fairly routine occurrence in the harbor— the presence of small fishing boats. Duke had no way of anticipating that Ralls would not do so in this instance. 4
Also distinguishable are cases where the owners knew of unseaworthiness or crew incompetence prior to the accident at issue.
See, e.g. Trico Marine Assets, Inc. v. Diamond B Marine Servs., Inc.,
In short, the accident was caused by Captain Ralls’s navigational decisions as captain of his ship and his acts cannot be imputed to TVA because there is no evidence that TVA had privity or knowledge of the acts that led to the injuries here.
B. Negligent Supervision
TVA also challenges the district court’s conclusiоn that it is not entitled to limitation of liability because of “negligent supervision” of Captain Ralls. Although the Inland Navigation Rules 2(b) and 6 impose a legal duty to maintain an appropriate speed, there is no legal duty on a vessel owner to specifically instruct a licensed captain to follow them prior to a voyage.
See In re MO Barge Lines, Inc.,
Here, TVA did just that: it relied on the navigational expertise of an experienced competent operator with knowledge of the “Rules of the Road.” There was no duty on TVA to remind Captain Ralls to follow those rules. Therefore, the district court erred in holding that TVA negligently supervised Ralls by failing to instruct him not to operate the Patricia H at an excessive speed around small fishing boats.
TVA also asserts that the discretionary function doctrine precludes liability based on the alleged negligent supervision of federal employees. Because TVA is a “ Svholly-owned corporate agency and instrumentality of the United Statеs,’ ”
Edwards v. Tenn. Valley Auth.,
C. Consortium Damages
Both parties agree that damages based on loss of consortium are permissible in this admiralty case because Tennessee’s wrongful death statute, Tenn.Code Ann. § 20-5-113 (1994 & Supp.2006), allows for recovery of the pecuniary value of the decedent’s life, which includes not only lost earning capacity but also the value of tangible household services lost and the value of intangible consortium losses sustained by a decedent’s spouse and children.
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See Jordan v. Baptist Three Rivers Hosp.,
III. Conclusion
For the foregoing reasons, the judgment of the district court is REVERSED in part and the case REMANDED for further proceedings consistent with this opinion.
Notes
. The district court found that Captain Ralls has a first class pilot license as well as a tow-operator license and has had safety training in conjunction with obtaining these licenses. In addition, Captain Ralls has earned endorsements to his licenses, allowing him to work on the deck of a boat, to use the radio, and to observe radar. Captain Ralls has been tested on the "Rules of the Road" portion of the Inland Rules of Navigation by the Coast Guard, specifically regarding рassing, crossing situations, risk of collision, safety, and good seamanship. He has been trained in collision avoidance and considers the wake of his boat hitting another boat to be a collision. He has worked at several TVA harbors and has no prior citations or investigations regarding his performance.
. The Limitation Act was amended and codified on October 6, 2006. The amendments made no substantive change to the law. See 46 App. U.S.C. § 183(a) (2000).
. The Inland Navigational Rules are statutory rules that “apply to all vessels upon the inland waters of the United States." 33 U.S.C.A. § 2001 (West 2001 and 2008 Supp.). Inland Rule 2 ("Responsibility") is codified at 33 U.S.C.A. § 2002 and provides in relevant part that "[i]n construing and complying with these Rules due regard shall be had to all dangers of navigation and collision and to any special circumstances, including the limitations of the vessels involved.” Inland Rule 6, codified at 33 U.S.C.A. § 2006, provides in pertinent part that "[e]very vessel shall at all times proceed at a safe speed so that she can take proper and effective action to avoid collision and be stopped within a distance appropriatе to the prevailing circumstances and conditions.” Rule 6 further provides that "[i]n determining a safe speed,” factors to be considered include “the state of visibility” and “the traffic density including concentration of fishing vessels or any other vessels.” 33 U.S.C.A. § 2006(a)(i), (ii). The term "collision” is used in a broad sense under the Inland Navigational Rules to include a vessel’s wake striking another vessel.
Bernert Towboat Co. v. USS Chandler,
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These Inland Rules of Navigation supply the "Rules of the Road” govеrning navigation on inland waters.
See Turecamo Maritime, Inc. v. Weeks Dredge No. 516,
. Although Matheny alleged that the Patricia H was deficiently equipped and thus unsea-worthy, the district court found that the accident was not caused by any equipment deficiencies.
. The Tennessee Supreme Court also held that "consortium-type damages may be considered when calculating the pecuniary value of a deceased’s life ... [and do] not create a new cause of action but merely refines the term 'pecuniary value.’ "
Jordan,
