Terry P. Murphy, Steven A. Murphy, as Co-Personal Representatives of the Estate of Brendan M. Murphy, and as Parents and Natural Guardians of Steven A. Murphy, Jr., a Minor v. Florida Keys Electric Cooperative Association, Inc., Defendant-Third-Party-Plaintiff-Counter-Defendant-Appellant v. Raymond Ashman, Iii, Individually and as Parent and Natural Guardian, of Raymond Ashman, Iv, a Minor Child, Third-Party-Defendant-Counter-Claimant-Appellee, Steven A. Murphy, Sr., Third-Party-DefendantsTerry P. Murphy, Steven A. Murphy, as Co-Personal Representatives of the Estate of Brendan M. Murphy, and as Parents and Natural Guardians of Steven A. Murphy, Jr., a Minor v. Florida Keys Electric Cooperative Association, Inc., Defendant-Third-Party-Plaintiff-Counter-Defendant-Appellant v. Raymond Ashman, Iii, Individually and as Parent and Natural Guardian, of Raymond Ashman, Iv, a Minor Child, Third-Party-Defendant-Counter-Claimant-Appellee, Steven A. Murphy, Sr., Third-Party-Defendants
Joel D. Eaton, Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, P.A., for Ashman.
Appeal from the United States District Court for the Southern District of Florida.
Before BIRCH, CARNES and BRUNETTI*, Circuit Judges.
CARNES, Circuit Judge:
The issue in this appeal is whether the defendant in an admiralty tort1 action who settles with the plaintiff without obtaining a release from liability for other potential defendants can then be entitled to contribution from them toward the amount it paid to settle its own liability. Putting the Supreme Court‘s decision in McDermott, Inc. v. AmClyde, 511 U.S. 202, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994), together with our decision in Jovovich v. Desco Marine, Inc., 809 F.2d 1529 (11th Cir. 1987), we conclude that a settling defendant cannot bring a suit for contribution against a nonsettling defendant who was not released from liability to the plaintiff by the settlement agreement.
That is the simple bottom line of our decision, and it is a result that makes good sense, but how our circuit law has gotten to that point is anything but simple. Instead of following a straight path our decisions on contribution in admiralty cases have lurched back and fоrth like a drunken sailor. After we set out the facts and procedural history, we will explain the proportionate share approach to apportioning liability among joint tortfeasors and why contribution is not available from nonsettling tortfeasors under that approach, and then explain why we conclude that our Jovovich decision is once again good law. There is also an issue in this case about the district court‘s dismissal of a counterclaim brought under the supplemental jurisdiction of the court, which we will take care of at the end of the opinion.
The facts leading up to these legal issues began shortly after midnight on July 25, 2000, when Raymond Ashman IV and two of his friends went out in a boat owned by his father, Raymond Ashman III, to enjoy the start of the annual “Sportsmen‘s Lobster Mini-Season.” Raymond Ashman IV was piloting the boat. His two friends along for the ride were Brendan and Steven Murphy, who were brothers. The trio‘s trip ended in tragedy soon aftеr it began when the boat collided with an “electrical pole abutment support structure” owned by Florida Keys Electric Co-op Association, Inc. Brendan Murphy was thrown from the boat and killed, and his brother Steven was injured. Raymond Ashman IV was also injured.
Brendan and Steven‘s parents, the Murphys, sued Florida Keys in federal district court for the wrongful death of Brendan and for Steven‘s injuries.2 Their complaint invoked the court‘s admiralty jurisdiction. The Murphys did not sue any member of the Ashman family, and still have not done so. In response to the Murphy‘s complaint against it, however, Florida Keys filed a third-party complaint against the Ashmans3 which also invoked the district court‘s admiralty jurisdiction. Florida Keys claimed that, if it were found liable to the Murphys, it was entitled to contribution from the Ashmans. The Ashmans, for their part, filed a counterclaim against Florida Keys to recover for Raymond IV‘s injuries, but they brought that as a civil action under the district court‘s supplemental jurisdiction, not under its admiralty jurisdiction. They later brought a separate suit against Florida Keys in state court to recover for Raymond IV‘s injuries.
DISCUSSION
In 1994 the Supreme Court settled decades of debate over the proper method of apportioning liability between settling and nonsettling tortfeasors in admiralty cases by holding that the “proportionate share approach” applies. See McDermott, 511 U.S. at 217, 114 S.Ct. at 1470. Under the proportionate share approach adopted in McDermott, if at least one defendant does not settle with the plaintiff and the case goes to trial, the amount of damages and the percentage of liability attributable to each tortfeasor is determined at trial, and any nоnsettling defendant is responsible for only the proportion of the total damages attributed to it in the verdict. Id. at 208-13, 114 S.Ct. at 1465-67. We must decide, under the proportionate share approach, whether Florida Keys is now entitled to have determined at trial the actual amount of the Murphys’ damages and the parties’ relative degrees of fault, all for the purpose of Florida Keys recovering from the Ashmans any amount that it “overpaid” for its share of the damаges in its settlement with the Murphys.
Allowing Florida Keys to recover contribution from the Ashmans in these circumstances is incompatible with the proportionate share approach. An essential tenet of this approach is that when a tortfeasor settles a claim against it, but does not obtain a release for the other tortfeasors, it has settled only its proportionate share of the total damages, no more and no less. It follows that what remains, and all that remains, to be calculated is the compensation the nonsettling tortfeasors owe the plaintiff. Once that amount is determined at trial, the nonsettling tortfeasors are liable only to the plaintiff and only to the extent the trial verdict determines. Their trial-determined liability is in no way affected by a settling defendant‘s negotiated liability. See id. at 220, 114 S.Ct. at 1471 (“[O]ne of the virtues of the proportionate share rule is that, unlike the pro tanto rule, it does not make a litigating defеndant‘s liability dependent on the amount of a settlement negotiated by others without regard to its interests.“).
Applying the proportionate share approach to this case, Florida Keys resolved through the settlement only the amount of damages it owed to the Murphys. The settlement determined between those two parties the amount of damages the Murphys suffered and Florida Keys’ percentage of fault. There is nothing about the issue of how much Floridа Keys should have paid the Murphys that is to be litigated between Florida Keys and the Ashmans, because under the proportionate share approach it does not matter to the Ashmans how much Florida Keys should have paid the Murphys to discharge its liability to them. That is Florida Keys’ business, not a matter of concern for the Ashmans.
To come at the same thing another way, when Florida Keys and the Murphys negotiated their settlement, they each assumed the risk of misjudging what a trial would determine to be the amount of damage the Murphys had suffered and the proportion of the liability for that damage that should be attributed to Florida Keys instead of the Ashmans.5 The Ashmans, who were not a party to the settlement, assumed no such risk, preferring instead to risk whatever verdict the Murphys might obtain against them, perhaps discounted by the hope or expectation that the Murphys would not sue them. If the Murphys got more from settling with Florida Keys than they would havе recovered from taking Florida Keys to trial, that does not lessen the potential liability of the Ashmans. See Id. at 219-20, 114 S.Ct. at 1471 (“[A]ny excess recovery is entirely attributable to the fact that the ... defendants may have made an unwise settlement .... It seems to us that a plaintiff‘s good fortune in striking a favorable bargain with one defendant gives other defendants no claim to pay less than their proportionate share of the total loss.“). Likewise, if the Murphys got less from Florida Keys than they would have recovered by trial, that does not increase the potential liability of the Ashmans. See id. at 221, 114 S.Ct. at 1472 (“Just as the other defendants are not entitled to a reduction in liability when the plaintiff negotiates a generous settlement... so they are not required to shoulder disproportionate liability when the plaintiff negotiates a meager one.“) No suit for contribution will lie against a nonsettling defendant who is not released from liability, because that defendant remains liable for its proportionate share of damages regardless of the terms of the settlement the other defendant made. Id. at 209, 114 S.Ct. at 1466.
We have reached the identical conclusion once before. See Jovovich v. Desco Marine, Inc., 809 F.2d 1529, 1531 (11th Cir. 1987) (under the proportionate share approach contribution actions are not available to settling parties because “settling parties assume the finality and potential benefit and risk of their settlement decision, and ... we will respect the aleatory nature of the settlement process” (internal quotation marks omitted)). We are bound to follow the Jovovich decision, see, e.g., United States v. Smith, 201 F.3d 1317, 1322 (11th Cir. 2000) (“It is the firmly established rule of this Circuit that each succeeding panel is bound by the holding оf the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.” (internal quotation marks omitted)), with which we are in full agreement, anyway.
Florida Keys says that we should not adhere to Jovovich, but should instead follow the later decision in Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller, 957 F.2d 1575 (11th Cir. 1992) (”Great Lakes III“).6 That decision held that settling defendants may sue nonsettling, unreleased defendants for contribution, id. at 1584, which is exactly the opposite result from the one reached five years earlier in Jovovich. A tour of the tortured path of our decisions in this area is necessary to understand why Great Lakes III did not follow Jovovich and why we do.
Our predecessor circuit first confronted the overarching issue of the proper way to apportion liability between settling and nonsettling tortfeasors in admiralty cases in Loffland Brothers Co. v. Huckabee, 373 F.2d 528 (5th Cir. 1967), and Billiot v. Stewart Seacraft, Inc., 382 F.2d 662 (5th Cir. 1967). In those two cases the Fifth Circuit determined that a nonsettling defendant is liable for the entire amount of the plaintiff‘s damages, less a set-off for the amount of the other tortfeasors’ settlement, regardless of the proportion of the plaintiff‘s damages attributable to each tortfeasor. Billiot, 382 F.2d at 664; Loffland, 373 F.2d at 528. That method, of course, is the pro tanto approach. McDermott, 511 U.S. at 211-13, 212 n. 14, 114 S.Ct. at 1467 & n. 14.
Twelve years later, though, the Fifth Circuit overruled Loffland and Billiot and held thаt the proportionate share approach applied to admiralty tort cases. Leger v. Drilling Well Control, Inc., 592 F.2d 1246 (5th Cir. 1979). The overruling was based on the intervening Supreme Court decision in United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). In Reliable Transfer the Supreme Court had abandoned the “divided damages rule,” which mandated that the parties at fault in admiralty cases each be liable for an equal portion of the damages regardless of their degrees of fault. For example, if the plaintiff was 25% at fault and the defendant 75% at fault, each would nevertheless be liable for half of the total damages. Id. at 397, 95 S.Ct. at 1709. In place of the divided damages approach, the Supreme Court in Reliable Transfer adopted the rule that each tortfeasor is responsible for the proportion of damages attributable to it. Id. at 411, 95 S.Ct. at 1715-16.
The proportionate share approach from Leger became part of the law of this circuit with this Court‘s decision in Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (adopting as binding precedent Fifth Circuit decisions issued prior to the close of business on September 30, 1981). In 1987 this Court decided Jovovich, which confronted the precise issue we face in this case and held that under the proportionate share approach adopted in Leger a settling defendant cannot sue a nonsettling defendant whose liability to the plaintiff is not resolved by the settlement under either an indemnification or contribution theory. The Jovovich Court reasoned that Leger‘s holding that “settling parties assume the finality and рotential benefit and risk of their settlement decision, and whether the plaintiff or any of the defendants are ultimately found to have made a favorable settlement, we will respect the aleatory nature of the settlement process” applies with equal force in indemnity or contribution actions. 809 F.2d at 1531. As a result, a settling defendant must live with its bargain and cannot sue a nonsettling, unreleased one for indemnity or contribution. Id.
Shortly after Jovovich was released, however, this Court swerved back the other way, concluding in Self v. Great Lakes Dredge & Dock Co., 832 F.2d 1540 (11th Cir. 1987) (”Great Lakes II“), that the Supreme Court‘s decision in Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 99 S.Ct. 2753, 61 L.Ed.2d 521 (1979), dictated a different result. The Great Lakes II Court held that, given the Supreme Court‘s guidance in Edmonds, the pro tanto approach was actually the approach that the Supreme Court would apply to apportion liability between settling and nonsettling defendants, and so that approach should once again be the law of this circuit. Great Lakes II, 832 F.2d at 1548 (“As we are bound by the Supreme Court‘s guidance and the rule in Edmonds, we adopt the [pro tanto approach].“).
Then came Great Lakes III in 1992, which held that under the pro tanto approach adopted in Great Lakes II, a suit for contribution against a nonsettling, unreleased defendant is available to a settling defendant, even though under Jovovich such a suit is not available under the proportionate share approach. Great Lakes III, 957 F.2d at 1583. In so holding, Great Lakes III departed from the well-settled law of most jurisdictions that settling defendants may not bring a contribution action against nonsettling, unreleased defendants, regardless of which liability-apportionment scheme is in place. McDermott, 511 U.S. at 211 n. 13, 114 S.Ct. at 1467 n. 13 (“[T]he law of most jurisdictions [is] that a settling defendant ordinarily has no right of contribution agаinst other defendants.” (citing Unif. Contribution Among Tortfeasors Act § 1(d), 12 U.L.A. 63 (1975); Unif. Comparative Fault Act § 4(b), 12 U.L.A. 54 (1993 Supp.); Restatement (Second) of Torts § 886A(2) & cmt. f, pp. 337, 339 (1977))).
In 1994 the Supreme Court resolved the issue of how liability between settling and nonsettling tortfeasors in admiralty cases should be apportioned, rejecting the pro tanto approach in favor of the proportionate share approach. See McDermott, 511 U.S. at 209-21, 114 S.Ct. at 1466-72. The McDermott decision authoritatively settled the dispute between our Leger and Great Lakes II decisions about which approach the Supreme Court favored. It established that Great Lakes II was wrong to conclude that Leger had been overruled by the Supreme Court‘s decision in Edmonds. We recognized this in our 1996 decision in Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller, 92 F.3d 1102 (11th Cir. 1996) (”Great Lakes IV“), which announced our return to the proportionate share approach in obedience to the Supreme Court‘s McDermott decision. Id. at 1106. We also held in Great Lakes IV, again in obedience to McDermott, that under the proportionate share approach a nonsettling defendant cannot sue a settling defendant for contribution, the converse of the issue we face in this case. Id. at 1106-07.
Great Lakes III is no longer relevant, at least not in admiralty tort cases. It addressed nothing other than contribution rights under a pro tanto approach to apportioning liability. The pro tanto approach to apportioning liability is no longer the law in admiralty tort cases. See Smith v. GTE Corp., 236 F.3d 1292, 1303 n. 11 (11th Cir. 2001) (“Subsequent panels are not bound by prior decisions where there has been a change in the controlling law as a result of a subsequent en banc or Supreme Court decision or statutory change.“). The question Great Lakes III answered is no longer the question that arises in admiralty tort cases since the Supreme Court‘s McDermott decision.
Florida Keys says that the conclusion we reach will present parties who wish to settle with a Catch 22: either obtain a release for all parties and have contribution precluded by McDermott‘s rule barring contribution from settling parties, 511 U.S. at 209, 114 S.Ct. at 1466, or do not obtain a release and have contribution precluded by our holding in Jovovich and this case. That specter is based on a misreading of McDermott. That decision‘s prohibition against contribution from a settling party does not preclude a contribution suit against a tortfeasor who is released by the settlement even though not a party to it. A release is not the same as a settlement, and a released party is not a settling party within the meaning of McDermott, which does not purport to eliminate altogether the “well-established maritime rule allowing contribution between joint tortfeasors.” Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 113, 94 S.Ct. 2174, 2178, 40 L.Ed.2d 694 (1974). Neither does our holding today. In any event, dilemma or no, we are bound to follow the McDermott/Great Lakes IV/Jovovich decisions.
One other issue remains to be decided. In addition to granting summary judgment in favor of the Ashmans on Florida Keys’ contribution claim, the district court dismissed without prejudice the Ashmans’ counterclaim against Florida Keys under
The Ashmans originally could have brought their maritime tort claim against Florida Keys in one of two ways. They could have sued in state court, a right guaranteed them by the “savings to suitors” clause of
AFFIRMED.