REVISED SEPTEMBER 3, 2009
       IN THE UNITED STATES COURT OF APPEALS
                FOR THE FIFTH CIRCUIT   United States Court of Appeals
                                                 Fifth Circuit

                                                                  FILED
                                                                August 12, 2009

                                No. 08-60696                 Charles R. Fulbruge III
                                                                     Clerk

In Re: In the Matter of the Complaint of SIGNAL INTERNATIONAL LLC,
Petition for Exoneration from or Limitation of Liability


v.

MISSISSIPPI DEPARTMENT OF TRANSPORTATION

                        Counter Claimant - Appellant - Cross - Appellee

v.

SIGNAL INTERNATIONAL LLC, Petitioning for Exoneration From or
Limitation of Liability

                        Cross Defendant - Appellee - Cross - Appellant



                Appeal from the United States District Court
                  for the Southern District of Mississippi


Before JONES, Chief Judge, and KING and ELROD, Circuit Judges.
KING, Circuit Judge:
      During Hurricane Katrina, two vessels owned by Signal International,
LLC broke from their moorings on the Pascagoula River, Mississippi, and allided
with and damaged a bridge of Interstate 10 approximately five miles away.
Thereafter, Signal International brought this petition seeking exoneration from
                                       No. 08-60696

or limitation of liability for the allision.           The Mississippi Department of
Transportation, which had repaired the bridge, opposed the petition. The
district court held that Signal International was not entitled to exoneration from
but was entitled to limitation of its liability. The court then entered limited
judgment in favor of the Mississippi Department of Transportation. Signal
International now appeals the district court’s denial of exoneration and its
antecedent holding that Signal International failed to timely challenge the
Mississippi Department of Transportation’s status as a real party in interest.
The Mississippi Department of Transportation appeals the district court’s grant
of limitation of liability and its failure to award prejudgment interest. For the
following reasons, we affirm the district court’s holding that Signal International
waived its real party in interest defense, its finding that Signal International
was not entitled to exoneration, and its finding that Signal International was
entitled to limitation of its liability. We vacate the district court’s judgment to
the extent that it omitted an award of prejudgment interest for a portion of the
time that elapsed prior to entry of judgment, as discussed herein. We therefore
remand for calculation of prejudgment interest and entry of a modified judgment
including that interest.
             I. FACTUAL AND PROCEDURAL BACKGROUND
       Signal International, LLC (“Signal”) is a marine fabrication and repair
company. It owns two facilities in Pascagoula, Mississippi, which sits on the
Mississippi Sound, north of the Gulf of Mexico.1 In August 2005, it owned and




       1
         The two facilities are the East Yard, located on the Bayou Casotte, and the West Yard,
located on the Pascagoula River’s east branch.

                                              2
                                       No. 08-60696

operated two ringer crane barges,2 the D/B Mr. T and the D/B Miss Tiff, and one
smaller, steel deck barge, the D/B Jack King.3 During Hurricane Katrina, the
Miss Tiff and the Jack King broke from their moorings on the east branch of the
Pascagoula River and allided4 with a bridge of Interstate 10 approximately 4.7
miles away. Although the federal government owns the bridge, the Mississippi
Department of Transportation (“MDOT”) serves as a trustee and proprietor that
is responsible for maintaining and repairing the bridge, and quickly undertook
to repair it. Signal brought this petition seeking exoneration from or limitation
of liability for the allision. MDOT opposed the petition. On March 24, 2008, the
district court held a trial without a jury pursuant to Rule 52 of the Federal Rules
of Civil Procedure. During that trial, the following facts were presented.
       Hurricane Katrina approached the Gulf Coast in late August 2005. In
order to monitor anticipated weather conditions at its facilities, Signal
contracted with ImpactWeather to receive frequent, site-specific weather reports.
On August 23, 2005, ImpactWeather began issuing weather advisories related
to Tropical Depression Twelve, which eventually developed into Hurricane
Katrina. On August 26, after Hurricane Katrina passed over the Florida
peninsula and entered the Gulf of Mexico, ImpactWeather issued Advisory 14,
which reported that some models were predicting that the hurricane could strike


       2
        Ringer crane barges are platform vessels that support large, fixed cranes. Signal uses
them to facilitate work on the off-shore side of rigs that are under construction or repair.
       3
          Signal had previously employed the Jack King as a ringer crane barge but converted
it to a steel deck barge after the other ringer crane barges came into service.
       4
         “‘An allision is a collision between a moving vessel and a stationary object.’”
Mid-South Towing Co. v. Exmar Lux (In re Mid-South Towing Co.), 

, 528 n.1 (5th
Cir. 2005) (quoting THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 14-2 (4th ed.
2004)).

                                              3
                                       No. 08-60696

Mississippi late on August 28 or early on August 29 with hurricane-force winds
possible in Pascagoula.5
        At that time, Signal had a written hurricane plan to secure its facilities
and vessels in the event of an approaching storm. Ronald W. Schnoor, Signal’s
senior vice president and general manager of its Mississippi operation, was
responsible for Signal’s hurricane preparations in Pascagoula and approved the
plan.       Among the other components of the plan, Signal was to monitor
approaching hurricanes and hold a meeting to discuss preparation of its
facilities, property, and equipment when there was the possibility of a hurricane
strike within seventy-two hours (the “seventy-two hour meeting”). Once the plan
was set in motion, Signal crews were, among other tasks, to use ringer crane
barges to secure the rigs, vessels, and objects in the facilities. The crews were
then to prepare the ringer crane barges for transit to the mooring site by
removing the crane booms because, during high winds, the booms function like
large sails and could cause the barges to strike other objects. After preparing
the ringer crane barges, the crews were to move them upriver and moor them
“with the barge spuds, or other suitable moorings.”6
        After receiving the Advisory 14 on August 26, Signal held its seventy-two
hour meeting. At the completion of that meeting, Signal braced its Pascagoula


        5
        By 3:00 a.m. on August 27, however, an ImpactWeather report predicted that
Pascagoula would be subject only to below-hurricane conditions: fifty-eight miles-per-hour
winds and six-feet storm surges. Nonetheless, Hurricane Katrina was still expected to strike
Louisiana as a Category 4 hurricane.
        6
         Barge spuds are eighty-to-ninety-feet-long pipes that are dropped through wells in the
barges. Weighing eight to ten tons each, the barge spuds penetrate the bottom of the river bed
to a depth of approximately ten feet, effectively mooring the barges in place. Although not
specified in the plan, other suitable moorings might include anchors, wire rope, or nylon rope,
depending on the mooring site and expected conditions.

                                              4
                                 No. 08-60696

facilities for a Category 4 hurricane. Category 4 hurricanes pack maximum
sustained winds of 155 miles per hour and maximum storm surges of eighteen
feet. As part of Signal’s preparations, its rigging crews used the ringer crane
barges to secure the rigs in Signal’s yard. At the time, the Miss Tiff’s spud
motor, which was used to lift the barge spuds, was inoperable and had been for
several weeks. In the yard, the crews were able to use the Miss Tiff’s ringer
crane to raise and drop the barge spuds; however, because they needed to
remove its boom to prepare the Miss Tiff for transit to the mooring site, the
ringer crane was unavailable for use. Undeterred, Signal’s rigging crew drove
a smaller crawler crane onto the deck of the Jack King to facilitate the use of
barge spuds to moor the Miss Tiff. Although the Jack King would not typically
accompany the ringer crane barges to the mooring site, on this occasion, the
crews tied the Jack King to the Miss Tiff, used the crawler crane to partially
raise the Miss Tiff’s barge spuds, and sent the flotilla up the Pascagoula River
to the mooring site. On the initial journey, the Miss Tiff’s spuds caught on a
fiberoptic cable that should have been buried deeper into the riverbed. William
L. Tanner, Signal’s rigging department manager, reported the problem to
William D. Bingle, Jr., Signal’s production manager, who was in charge of
implementing the hurricane plan. Bingle ordered that the spuds should be
removed and that the Miss Tiff should be moored at the mooring site without
them. The crews took the Miss Tiff back to Signal’s West Yard and removed the
spuds. At that time, Tanner developed a plan to tie the Miss Tiff and the Jack
King to the Mr. T using nylon rope and instructed the rigging crews on his plan.
He did not consult with Signal’s engineering department to determine if the
mooring arrangement would work.


                                       5
                                       No. 08-60696

       The mooring site was an isolated portion of the east branch of the
Pascagoula River sheltered by marshland and a ridge covered with trees. It is
located about 2.5 miles north of the Mississippi Sound. At the mooring site, the
rigging crew arranged and moored the barges. The Mr. T was spudded down to
the west of a small island with its stern facing south. The Miss Tiff and the Jack
King were tied to the Mr. T, on its west side. The Miss Tiff’s stern also faced
south, and one of its wing barges was interlocked behind the stern of the Mr. T.
The Jack King was positioned on the Miss Tiff’s bow, and the two were
connected using two lines at their corner bits. A team of riggers returned to the
barges on August 28, added two additional lines, and let out slack on the Mr. T’s
spud lines so that the flotilla could rise and fall with the surge. In all, Signal’s
crews used a combined eleven parts7 of two-inch, eight-braid nylon rope to secure
the barges.
       At its maximum intensity, Hurricane Katrina had sustained winds of 170
miles per hour, rendering it a Category 5 hurricane.                    Weakening as it
approached the Gulf Coast, it made landfall on August 29, 2005, in southeast
Louisiana, as a Category 3 hurricane with sustained winds of 127 miles per
hour. Approximately sixty miles to the east, at the mooring site, the barges were
subjected to Category 1 winds, ranging from eighty to ninety miles per hour,
with gusts of 100 to 110 miles per hour. The storm surge was between fourteen
and sixteen feet, corresponding to a Category 4 surge, with wave heights of
approximately two feet.




       7
        A “part” is a single line from point A to point B. Thus, a full wrap from bit A around
bit B and back to bit A would be two parts.

                                              6
                                  No. 08-60696

      After the hurricane, the Miss Tiff and the Jack King were found adjacent
to the Interstate 10 bridge, sitting in a marsh. Interstate 10 runs generally east
to west, and the impacted bridge spans the Pascagoula River basin, including
the east and west branches of the river, as well as the bayous and marshes in
between. The area between the mooring site and allision site is a mixture of
navigable water, bayous, marshes, and dry land with some trees. The barges
had allided with the bridge while the storm surge was between six and eight
feet, displacing the eastbound lanes by four to five feet. The nylon mooring ropes
were frayed, although all but one of the mooring bits was intact—the damaged
bit had apparently been crushed during the impact with the bridge. Before
alliding with the bridge, the barges had drifted approximately 4.7 miles north-
northwest of the mooring site. Powered by wind and the surge’s current, the
barges were estimated to have covered that distance at a pace of 2.3 knots per
hour. At that velocity, it took approximately two hours for the barges to float
from the mooring site to the allision site. The exact route that the barges took,
however, is unknown.
      After the storm, MDOT invited contractors to place bids for a contract to
perform repairs on the damaged sections of the bridge.             T.L. Wallace
Construction, Inc. submitted the lowest bid, and MDOT awarded it the contract.
T.L. Wallace Construction completed the repairs on September 30, 2005, ahead
of schedule. It received a total of $6,268,191, including a $1,000,000 early
completion bonus. The federal government reimbursed MDOT for the cost of the
repairs in late January 2006. Any recovery in this lawsuit by MDOT will accrue
to Mississippi’s coffers, to be held in an emergency fund for future emergencies
and credited against amounts that the federal government agrees to pay in the
event of any such emergencies.

                                        7
                                  No. 08-60696

      After the bench trial, the district court issued its findings of fact and
conclusions of law. It held that Signal failed to timely object to MDOT’s status
as a real party in interest and thus waived that defense. The court also held
that Signal was not exonerated from liability because the owner of a vessel must
overcome a presumption of fault when that vessel allides with a fixed structure
and because Signal failed to rebut this presumption. In particular, the court
found that the allision was not an inevitable accident or vis major because
Hurricane Katrina, at the mooring site, was not an act of God such that no
reasonable preparations could have prevented the allision and because the
conditions experienced were foreseeable. The court further found that Signal’s
negligence, in employing an improvised, untested method of securing the Miss
Tiff and the Jack King using nylon ropes, caused the allision. Although Signal
was not exonerated from liability, the district court limited its liability under 46
U.S.C. § 30505 to the combined value of the Miss Tiff and the Jack King. It so
ruled because Schnoor, Signal’s sole managing agent for its Pascagoula facilities,
had no knowledge or privity of the fault that caused the allision. In particular,
“Schnoor had no knowledge concerning the condition of the spud motor or the
mooring arrangement and plan used prior to the storm.” See In re Signal Int’l,
LLC, No. 1:05-CV-477, slip op. at 19 (S.D. Miss. July 15, 2008). Thus, the
district court entered final judgment for MDOT, awarding it $1,146,000, the fair
market value of the Jack King and the Miss Tiff, plus post-judgment interest
and costs. The court omitted mentioning or ruling on MDOT’s request for
prejudgment interest.
      MDOT appealed, and Signal cross-appealed. We have jurisdiction under
28 U.S.C. § 1291.


                                         8
                                   No. 08-60696

                                II. DISCUSSION
      On appeal, we consider four issues: (1) whether the district court abused
its discretion in holding that Signal failed to timely object to MDOT’s status as
a real party in interest; (2) whether Signal was entitled to exoneration because
it owed no duty to MDOT to act non-negligently; (3) whether the district court
clearly erred by finding that Signal was entitled to limit its liability to the value
of the Miss Tiff and the Jack King because it lacked knowledge or privity of the
faulted mooring arrangement; and (4) whether the district court abused its
discretion by failing to award prejudgment interest.
A. Real Party in Interest
      Signal asseverates that MDOT is not the real party in interest because the
federal government paid for the costs of the repairs to Interstate 10 and any
recovery will be refunded to the federal government. The district court held that
Signal waived this defense by failing to timely object to MDOT’s status. We
review for abuse of discretion the district court’s ruling that Signal’s challenge
was untimely and that the defense was thus waived. See Rogers v. Samedan Oil
Corp., 

, 484 (5th Cir. 2002).
      Rule 17(a)(1) of the Federal Rules of Civil Procedure requires that “[a]n
action must be prosecuted in the name of the real party in interest.” We have
defined the real party in interest as “the person holding the substantive right
sought to be enforced, and not necessarily the person who will ultimately benefit
from the recovery.” Farrell Constr. Co. v. Jefferson Parish, La., 

,
140 (5th Cir. 1990). The purpose of this requirement “is to assure a defendant
that a judgment will be final and that res judicata will protect it from having to
twice defend an action, once against an ultimate beneficiary of a right and then


                                         9
                                   No. 08-60696

against the actual holder of the substantive right.” 

see also Gogolin
& Stelter v. Karn’s Auto Imps., Inc., 

, 102 (5th Cir. 1989) (“The
purpose of the rule is to prevent multiple or conflicting lawsuits by persons such
as assignees, executors, or third-party beneficiaries, who would not be bound by
res judicata principles.”).
      Although an action must be prosecuted by the real party in interest, “[t]he
court may not dismiss an action for failure to prosecute in the name of the real
party in interest until, after an objection, a reasonable time has been allowed for
the real party in interest to ratify, join, or be substituted into the action.” FED.
R. CIV. P. 17(a)(3). This provision requires the defendant to object in time to
allow the opportunity for joinder of the ostensible real party in interest, and the
defense may be waived if the defendant does not timely object. See Gogolin &

. The defendant timely objects so long as joinder of the
real party in interest remains “practical and convenient.” 

. Objection is typically practical in the early stages of litigation—disputes
regarding the real party in interest “are likely to be evident to a defendant at the
onset of suit, because [he] almost always knows whether he has been sued by the
party who ‘owns’ the claim.” Gogolin & 

; see also Doherty
v. Mut. Warehouse Co., 

, 610–11 (5th Cir. 1957) (raising objection
contemporaneously with a motion to dismiss). “The earlier the defense is raised,
the more likely that the high cost of trial preparation for both parties can be
avoided if a real party in interest question is determined adversely to a plaintiff.”

(quotation marks and citation omitted). Tardy objection
is inconvenient when it hinders the “goal of judicial efficiency” or manifests the




                                         10
                                  No. 08-60696

defendant’s intention to “lay behind the log” in ambush. See id.; Gogolin &

.
      There is no magic formula for determining practicality and convenience.
See 6A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 1554
(2d ed. 1990) (noting that Rule 17 does not “indicate when the challenge should
be made” and documenting that an objection should be made with “reasonable
promptness”). The decision turns on the facts of each case and is within the
discretion of the district court. 

should be given the flexibility
to treat the waiver question as one addressed to their discretion so that the issue
can be determined in terms of what seems appropriate in a particular case.”).
The relevant factors for making this determination are when the defendant
knew or should have known about the facts giving rise to the plaintiff’s disputed
status as a real party in interest; whether the objection was raised in time to
allow the plaintiff a meaningful opportunity to prove its status; whether it was
raised in time to allow the real party in interest a reasonable opportunity to join
the action if the objection proved successful; and other case-specific
considerations of judicial efficiency or fairness to the parties.
      A few examples illustrate our review of these factors. In Gogolin & 

, the defendant raised the defense for the first time in a motion
for a directed verdict. The defendant had not pleaded the issue, did not raise it
in interrogatories or requests for admissions, and did not address it in the
pretrial motion. 

we held that the defendant’s posture was “surely”
contrary to the rule. 

Similarly, in 

, the
defendant raised the defense the day before trial. We credited the district court’s
conclusion that “this late notice did not afford [the plaintiff] a meaningful


                                        11
                                        No. 08-60696

opportunity to prove [its status] or allow [the ostensible real party in interest]
an opportunity to join as a party to the lawsuit.” 

rejected the
defendant’s assertion that it lacked prior knowledge of the relevant facts because
discovery mechanisms were available and underemployed, the plaintiff was
forthright in its responses, and the defendant should have been aware that the
ostensible real party in interest, an insurer, may have contributed to the
settlement at issue. 

approved of precedent from our sister courts of
appeals that affirmed district courts’ holdings that the defendants had waived
the defense earlier in the litigation. See 

(citing United HealthCare
Corp. v. Am. Trade Ins. Co., 

, 569 (8th Cir. 1996) (defense first
asserted at pretrial conference one week before trial constituted waiver); Hefley
v. Jones, 

, 1388 (10th Cir. 1982) (defense first asserted 16 days
prior to trial constituted waiver)).
       In this case, the district court did not abuse its discretion in holding that
Signal waived the defense by failing to timely object. Signal did not move to
dismiss the suit for lack of the real party in interest and did not challenge
MDOT’s status as the real party in interest until the eve of trial. It first raised
a legal challenge to MDOT’s status as a real party in interest in the pretrial
order dated March 20, 2008, less than two weeks before trial.8 Yet Signal’s

       8
         Signal claims that its inclusion of the issue in the pretrial order meant that it was not
waived because that order supersedes all prior pleadings and controls the scope of trial. See
Elvis Presley Enters., Inc. v. Barry Capece, 

, 205 (5th Cir. 1998). This argument
is without merit. That the pretrial order preserves all prior motions incorporated therein does
not mean that any issue raised therein for the first time was timely asserted. It is axiomatic
that some matters must be raised in earlier pleadings to be timely. See, e.g., FED. R. CIV. P.
9(a) (lack of capacity must be raised by specific denial in the defendant’s answer); FED. R. CIV.
P. 12(h)(1)(B)(ii) (requiring certain defenses to be raised by motion or responsive pleadings).
Thus, “[w]hile pleading is not required to raise a real party in interest challenge, the specific
procedure and policy outlined in Rule 17(a) are equally amenable to finding waiver for an

                                               12
                                        No. 08-60696

proposed findings of fact and conclusions of law argue that MDOT was
reimbursed as early as January 2006, over two years before trial; as such, the
defense could and should have been discovered, raised, and resolved well in
advance of trial.9 In fact, Signal’s earlier submissions to the district court
evidence its prior knowledge of the fact on which it now relies—they recited that
the federal government had reimbursed MDOT and that MDOT had not lost any
money. Those submissions, however, failed to object or otherwise notify MDOT,
the federal government, or the district court that MDOT was not a real party in
interest and that the federal government should be substituted.10 Although


untimely assertion of the issue.” Gogolin & 

n.3.
        As the pretrial order shaped the trial proceedings, Signal also points to its questioning
of MDOT’s witnesses at trial about the timing and extent of federal reimbursement. It argued
that it tried the issue by consent. See FED. R. CIV. P. 15(b). Notwithstanding trial by consent,
Rule 17(a)(3) protects the real party in interest by providing it with the opportunity to join
before trial. Allowing a trial-by-consent of the issue under Rule 15(b) over the district court’s
waiver ruling would hinder the joinder of the appropriate party and thus severely undermine
the goal of judicial efficiency. See Gogolin & 

(“This argument is
untenable; the concept of trial by consent should not be stretched so as to conflict with the
procedure and policy prescribed by [R]ule 17(a).” (citation omitted)). Thus, MDOT’s failure to
object to arguably non-relevant testimony does not render Signal’s challenge to MDOT’s status
timely. Moreover, as discussed below, MDOT’s entitlement to prejudgment interest would
depend on its loss of the use of its funds, for which the timing of its reimbursement—and trial
of that issue—is relevant.
       9
         Signal claims that MDOT was not forthcoming in admitting the federal government’s
reimbursement. Signal, however, has directed us to no record evidence showing MDOT’s
alleged obfuscation. In addition, Signal had recourse to the district court to remedy any
unresponsive discovery responses by MDOT, and its submissions to the district court belie its
lack of knowledge by showing that it had prior knowledge that the federal government had
reimbursed MDOT.
       10
         MDOT’s responsive arguments on the merits, however, show that the mere statement
of federal reimbursement would not have put the court or opposing parties on notice of an
objection to MDOT’s uncertain status as a real party in interest—reimbursement was relevant
to but may not have been controlling of the issue of MDOT’s status. MDOT counters that it
was legally obligated to repair the bridge as trustee and proprietor of Interstate 10; that state
law provides it with the authority and duty to pursue the claim; that federal reimbursement

                                              13
                                        No. 08-60696

Signal now contends that it intended to pursue this defense from the outset, it
did not plainly do so. In this case, the district court did not abuse its discretion
in holding that Signal did not timely object and, thus, that the defense was thus
waived.
B. Exoneration, Duty, and Foreseeability
       Signal next argues that it was entitled to exoneration from liability
because the damage to the Interstate 10 bridge was not a foreseeable
consequence of its negligent mooring of the Miss Tiff and the Jack King.11 It has
framed the issue of foreseeability as determinative of its duty to MDOT. With
respect to Signal’s duty, the district court held that “the damages caused were
foreseeable in that MDOT was within the class of those for which damage would



was a collateral source that was not a matter of right; that federal regulations require the state
to make “prompt and diligent efforts . . . to recover repair costs from the legally responsible
parties,” 23 C.F.R. §668.105(f); and that any recovery would be placed in a fund that the state
(not the federal government) administers, subject to later credits to the federal government
after future emergencies. Because the district court did not abuse its discretion in holding that
Signal waived its defense, we do not weigh the merits of these complex arguments here.
       11
           On appeal, Signal does not challenge the district court’s conclusion that it failed to
overcome the presumption of fault that the owner of the moving vessel bears in allision cases.
Under maritime law, when a vessel breaks free from its moorings and drifts into an allision
with a stationary object, the moving vessel is presumed at fault. The Louisiana, 70 U.S. (3
Wall.) 164, 168 (1865); Dammers & Van Der Heide Shipping & Trading (Antilles), Inc. v. The
Steamship Joseph Lykes (In re United States), 

, 995 (5th Cir. 1970). The drifting
vessel is presumptively liable for damages unless it can “show that her drifting was the result
of an inevitable accident or a vis major, which human skill and precaution and a proper display
of nautical skill could not have prevented.” In re United 

. The district
court found, inter alia, that in Pascagoula, Hurricane Katrina was not an act of God such that
reasonable care could not have prevented the allision. Thus, “Signal has not met its burden
of demonstrating that it acted with reasonable care when mooring its barges and that it has
failed to rebut the presumption of liability for the allision with the Interstate 10 bridge in
Pascagoula, Mississippi.” See In re Signal Int’l, No. 1:05-CV-477, slip op. at 15. Because
Signal has not challenged this conclusion, we assume that Signal’s fault, not the natural forces
wrought by Hurricane Katrina, led to the allision.

                                               14
                                         No. 08-60696

be expected if barges moored on the Pascagoula River broke free during a
hurricane, i.e. those owning property near the Pascagoula River.” In re Signal
Int’l, No. 1:05-CV-477, slip op. at 13 n.12. Determination of the tortfeasor’s duty
is a question of law and thus a function of the court that we review de novo. See
Canal Barge Co. v. Torco Oil Co., 

, 376 (5th Cir. 2000); Lloyd’s
Leasing Ltd. v. Conoco, 

, 1449 (5th Cir. 1989); Consol. Aluminum
Corp. v. C.F. Bean Corp., 

, 67 (5th Cir. 1987).12
       Maritime tort law governs the question of whether Signal owed a duty to
MDOT. See Florida Fuels, Inc. v. Citgo Petroleum Corp., 

, 333 (5th
Cir. 1993). “The analysis of a maritime tort is guided by general principles of


       12
          In its brief, Signal argues alternatively that it might be seeking review of the district
court’s factual determinations. (Signal’s Br. 63–64 (“Even if the Court believes that this issue
is more properly viewed as a factual finding subject to review under a clearly erroneous
standard, Signal maintains that even this standard is met and that reversal is warranted.”).)
Signal’s mixed statements regarding our standard of review are not unfounded in light of the
multiple roles of foreseeability. We have historically considered foreseeability relevant to both
the duty and proximate cause determinations. See Republic of Fr. v. United States, 

, 399 (5th Cir. 1961) (“[N]ot only proximate causal connection but also the very existence
of a duty the breach of which will constitute actionable negligence depends upon reasonable
foreseeability of consequences.”); see also 1 DAN B. DOBBS, THE LAW OF TORTS 336–37 (2001)
(recognizing that foreseeability also entails determinations of the standard of care—“what a
reasonable person would do about the [recognizable] risks.”); 3 STUART M. SPEISER ET AL., THE
AMERICAN LAW OF TORTS 68 (2008) (The doctrine of foreseeability “is sometimes framed in the
concept of ‘duty,’ in other instances as one of ‘proximate cause.’”). The difference between
defining the issue of foreseeability as one of duty or proximate cause is the standard of review
that we apply. We review duty de novo because it is a matter of law, while we review
proximate cause using a clearly erroneous standard because, in maritime cases, it is considered
an issue of fact. See Omega Protein, Inc. v. Samson Contour Energy E&P LLC (In re Omega
Protein, Inc.), 

, 367 (5th Cir. 2008); see generally RESTATEMENT (THIRD) OF
TORTS–LIABILITY FOR PHYSICAL HARM § 7 cmt. a (Proposed Final Draft No. 1, 2005) (reporting
that the important difference between no-duty rules and proximate cause—also labeled the
scope-of-liability doctrine—“is that no-duty rules are matters of law decided by the courts,
while the defendant’s scope of liability is a question of fact for the factfinder”). Because the
parties have briefed foreseeability solely as a question of duty, we confine our analysis to that
legal determination.

                                               15
                                  No. 08-60696

negligence law.” Consol. 

(citing Casaceli v. Martech
Int’l, Inc., 

(5th Cir. 1985); Daigle v. Point Landing, Inc., 

(5th Cir. 1980)). Under general tort principles, “a tortfeasor is accountable
only to those to whom a duty is owed.” 

Watz v. Zapata Offshore
Co., 

(5th Cir. 1970)); see also Canal 

(holding
that to establish maritime negligence, a plaintiff must demonstrate, inter alia,
that there was a duty owed by the defendant to the plaintiff). Thus, if Signal
owed no duty to MDOT, it is not liable for the allision and is entitled to
exoneration. See Consol. 

; 

; see
generally CLARENCE MORRIS & C. ROBERT MORRIS, JR., MORRIS ON TORTS 127 (2d
ed. 1980) (commenting that this form of no-duty rule “interdicts trial of the fault
issue; it relieves [the defendant] from liability even though [the defendant] is at
fault.”).
       “Duty . . . is measured by the scope of the risk that negligent conduct
foreseeably entails.” Consol. 

(quotation marks and
citation omitted); see also 

of duty “involves a number of
factors, including most notably the foreseeability of the harm suffered by the
complaining party.” (citing, e.g., PROSSER AND KEETON ON TORTS § 53 (5th ed.
1984)); see generally 1 

(“The defendant is liable for harms
he negligently caused so long as a reasonable person in his position should have
recognized or foreseen the general kind of harm the plaintiff suffered.”); 3
FOWLER V. HARPER ET AL., HARPER, JAMES AND GRAY ON TORTS § 18.2, at 762 (3d
ed. 2007) (“The obligation to refrain from that particular conduct is owed only
to those who are foreseeably endangered by the conduct and only with respect
to those risks or hazards whose likelihood made the conduct unreasonably


                                        16
                                    No. 08-60696

dangerous.”); 

(“Only when damages to someone could have
been anticipated by a reasonable person in defendant’s position is the defendant
negligent.”). “Foreseeability obviously marks the limits placed on a defendant’s
duty; the precise meaning of the concept is vital.” Consol. 

.
         “The test [of foreseeability] is whether the harm that does occur is within
the scope of danger created by the defendant’s negligent conduct.” 3 

; see also 1 

(“[F]oreseeability is a short hand
expression intended to say that the scope of the defendant’s liability is
determined by the scope of the risk he negligently created.”). Although we
sometimes speak in terms of probability, we do so not in a mathematical, more-
likely-than-not usage, but in terms of the “natural and probable” risks that a
reasonable person would likely take into account in guiding her practical
conduct. See Republic of 

; Consol. 

(“[F]oreseeability . . . includes whatever is likely enough in the setting of modern
life that a reasonably thoughtful person would take account of it in guiding
practical conduct.” (quotation marks and citation omitted)); see generally 3

(“[I]n this inquiry foreseeability is not to be measured by
what is more probable than not, but includes whatever is likely enough in the
setting of modern life that a reasonably thoughtful person would take account
of it in guiding practical conduct.”). The scope of danger incorporates “not only
those [natural] forces which are constantly and habitually operating but also
those forces which operate periodically or with a certain degree of frequency.”
Republic of 

(quotation marks and citation omitted); see
generally 3 

(“[W]e look to see what natural forces and


                                          17
                                  No. 08-60696

what human conduct should have appeared likely to come on the scene, and we
weigh the dangerous consequences likely to flow from the challenged conduct in
the light of these interventions.”). The emphasis in this determination is on the
general types of harm and classes of persons within the scope of danger created
by the negligence while accounting for probable or anticipated natural forces.
See Republic of 

(“It is sufficient that the defendant would
reasonably have anticipated consequences or an injury of the general nature of
that which ensued.” (quotation marks omitted)). Consistent with these general
principles, in Consolidated 

, we defined the concept of
foreseeability by reference to general classes of harms and victims:
      We perceive a harm to be the foreseeable consequence of an act or
      omission if harm of a general sort to persons of a general class might
      have been anticipated by a reasonably thoughtful person, as a
      probable result of the act or omission, considering the interplay of
      natural forces and likely human intervention.
      The critical question in this case is whether the allision with the Interstate
10 bridge was a harm of the general sort to an entity of a general class that a
reasonably thoughtful person might have anticipated to result from Signal’s
negligent mooring of the Miss Tiff and the Jack King in light of the anticipated
natural forces wrought by Hurricane Katrina. As the question makes clear, our
analysis does not focus on the particular allision site, but the general risk of
allision; it does not focus on MDOT, but on the class of property owners in the
paths available to the runaway barges. We agree with the district court that the
risk of allision with a fixed structure located within the reach of the anticipated
storm surge was foreseeable if the barges broke free due to negligent mooring.
Allision with fixed structures is one of the principal risks of a vessel, moored
inland, that breaks from its negligently executed moorings. For example, in In

                                        18
                                    No. 08-60696

re Kinsman Transit, 

, 722 (2d Cir. 1964), Judge Friendly’s learned
discussion of the role of foreseeability in defining duty in admiralty cases led the
Second Circuit to hold that “a ship insecurely moored in a fast flowing river is
a known danger not only to herself but to the owners of all other ships and
structures down-river, and to persons upon them.” Considering the topology of
the area, the Interstate 10 bridge was within the general class of fixed structures
in the low-lying areas near the Pascagoula River against which the Miss Tiff and
Jack King could foreseeably allide when propelled by the anticipated storm
surge, and the general class of persons for which the harm of allision was
foreseeable were those possessing fixed or other property within the path of the
anticipated surge, including, in this case, MDOT. Signal does not dispute this
general sort of foreseeable harm and these foreseeable plaintiffs, and we find the
risk of these sorts to be dispositive of its duty.
      To support a lack of foreseeability, Signal instead recites the fact that the
Miss Tiff and the Jack King traveled 4.7 miles over typically non-navigable land
before alliding with the Interstate 10 bridge. In asking us to hold that it had a
duty only if it could have foreseen the “specific risk” of allision with this
particular portion of the Interstate 10 bridge, Signal proposes too narrow of an
inquiry. See 1 

(“When the defendant unleashes large
physical forces such as those associated with . . . large ships broken loose from
their moorings . . ., he creates risks that injury could be caused in diverse ways,
too numerous and particular to foresee in detail. . . . The[se] cases call[] for the
rule that if I foresee the risk in general, I need not foresee the details.”); 

(“The exact consequences do not have to be foreseen.”); 3 

(“It is not essential that the (initial) tortfeasor be able to foresee the


                                          19
                                  No. 08-60696

exact nature and extent of the injuries or the precise manner in which the
injuries occur.”). We find no principled reason to break with our precedent that
guides our determination of duty by reference to the general sorts of harms that
are reasonably foreseeable consequences of the scope of danger risked by the
negligence involved. See Consol. 

; accord City of New
York v. Agni (In re City of New York), 

, 284 (2d Cir. 2008) (“The
probability that the injury would occur in this case . . . is very small. But the
risk, while small, is undoubtedly foreseeable. The City freely admits that it was
aware of the possibility . . ., just as any reasonable person would be aware of that
possibility.”); In re Kinsman 

(“The shipowner and the
wharfinger in this case having thus owed a duty of care to all within the reach
of the ship’s known destructive power, the impossibility of advance identification
of the particular person who would be hurt is without legal consequence.”
(citations omitted)).
      Even when we move beyond the general sort of harms risked by the
negligence and delve into the details of this case to determine whether the
allision was a probable result considering the interplay of natural forces, we find
that neither the distance covered by the barges nor the lack of typically
navigable water around the allision site rendered the allision unforeseeable.
The test of foreseeability is not measured against normal conditions, but those
that were anticipated or reasonably should have been anticipated. See Consol.

(holding that foreseeability incorporates “the
interplay of natural forces”); In re Kinsman 

(“[W]here . . . the damage was caused by just those forces whose existence
required the exercise of greater care than was taken—the current, the ice, and


                                        20
                                      No. 08-60696

the physical mass of the [vessel], the incurring of consequences other and greater
than foreseen does not . . . provide a reasoned basis for insulation.”) (citing HART
AND HONORE CAUSATION IN THE LAW            234–48 (1959)).
       In this case, the approaching hurricane, the expected height and predicted
movement of the storm surge, and the topology of the Pascagoula River basin
gave rise to the need to moor the barges and made this allision a foreseeable
consequence of negligence in that mooring. Signal expected and prepared for a
Category 4 hurricane.13 That preparation was designed to secure its vessels and
facilities against the risk of 155 miles-per-hour winds and eighteen-feet storm
surges. The hurricane winds experienced at the mooring site were not that
strong, reaching Category 1 speeds at eighty to ninety miles per hour with gusts
from 100 to 110 miles per hour. At the mooring site, the peak storm surge
corresponded to that of a Category 4 hurricane—as was anticipated—with
depths of fourteen to sixteen feet.14 Waves were likely two feet high. Thus, the
hurricane exposed the barges to anticipated forces.
       Signal also foresaw that, in a large storm, its vessels would escape from
the mooring site, despite the shelter offered by that location. The Miss Tiff and
the Jack King were moored in a shallow portion of the east branch of the
Pascagoula River. The site was partially protected by a ridge of land and trees
on the north side. Nonetheless, Signal’s own witnesses—including Schnoor;
Gene Rice, Signal’s engineering and emergency preparedness manager; Bingle;

       13
         Although Hurricane Katrina was not forecast to directly hit the Pascagoula area,
Signal does not contest that it anticipated a Category 4 hurricane.
       14
          The district court concluded that the surge was not a factor in the breaking of the
nylon ropes at the mooring site. Because Signal’s fault is not contested on appeal, we review
the anticipated and actual storm surge heights to support our findings regarding whether a
reasonable person would have foreseen the barges reaching the Interstate 10 bridge.

                                             21
                                     No. 08-60696

and Michael J. Schiehl, one of Signal’s expert witnesses—testified that if the
vessels broke free due to faulty mooring, they would have expected them to head
north into the marshes outside of the sheltered mooring area. Thus, they
anticipated that the barges could leave the mooring site and the general confines
of the Pascagoula River’s east branch.
      Once unmoored and outside of the mooring area, however, the topology of
the Pascagoula River basin combined with the anticipated height of the surge
made it foreseeable to a reasonably thoughtful person that the barges could
reach the Interstate 10 bridge.         Navigable waters extended well north of
Interstate 10. The Interstate 10 bridge crosses both branches of the river, and
the area between the two river branches forms a flat, open, lowland channel of
marshes, grassy wetlands, creeks, bayous, and lakes. In fact, the area between
the mooring site and the allision is sufficiently flat that a mere quarter-mile
upriver from the mooring site, the Interstate 10 bridge is visible over the
marshes. Signal’s naval architect and one of its experts, Alfonso M. Sotres,
testified that during the surge, the water would fill in the Pascagoula River
channel and move to the north-northwest. Both Schiehl and Tanner testified
that with a ten- to fifteen-feet surge, they would expect “an unobstructed
waterway right to the bridge.” There were no natural or man-made obstructions
or barriers between the mooring site and the Interstate 10 bridge.15 Because of
the lack of other obstructions north of the mooring site, the Interstate 10 bridge
was arguably the most likely target for a runaway vessel, as it served as a
backstop to the marshlands.



      15
          In fact, Signal’s witnesses referenced the lack of any physical structures up to
Interstate 10 as a reason justifying its selection of the mooring site.

                                           22
                                       No. 08-60696

       The allision in this case occurred in a way that was consistent with these
predictable natural forces. During the surge, the water flowed upriver, at first
following the course of the existing waterways, and then filling the entire basin.
As might be expected in an eighteen-feet storm surge over a low-lying
marshland, the surge rendered the lower Pascagoula River like a shallow lake:
“It was like a lake in the surge,” according to Schiehl. That the allision occurred
in an area that was typically marshland did not render the allision
unforeseeable because a reasonable person could expect that a storm surge
would inundate normally dry land.16 The Miss Tiff and the Jack King broke
from the Mr. T and allided with the Interstate 10 bridge before the maximum
height of the surge. The storm surge produced “tremendous” force and was
moving the barges at two to three miles per hour at the time of allision.17 The
allision probably occurred between 8:00 a.m. and 9:00 a.m. on August 29, 2005.
At the time, the surge was around six to eight feet and its current pushed in a
northwest direction. The exact course of the Miss Tiff and the Jack King is
unknown, although their starting point to end point trajectory followed the
channel from the mooring site to the north or north-northwest.18



       16
         We have frequently defined a storm surge to be a type of coastal flood over typically
dry land. See Tuepker v. State Farm Fire & Cas. Co., 

, 352–53 (5th Cir. 2007);
Leonard v. Nationwide Mut. Ins. Co., 

, 435–37 (5th Cir. 2007).
       17
         In order to allide with the bridges while moving in a north or north-west direction,
the barges must have allided before the peak surge, at which point the current would slow and
reverse direction, heading back out to sea. The peak surge likely occurred a few hours later,
between 11:00 a.m. and 12:00 p.m.
       18
         Depending on when they broke from their moorings, they may have traveled farther
up the east branch of the Pascagoula River until the surge flowed into the marshes or may
have directly entered the marshes from the mooring site and headed north-northwest.

                                             23
                                        No. 08-60696

       While the distance that these barges covered and the exact allision point
were undoubtedly “surprising” to those involved, we find that it was foreseeable
to a reasonable person considering the interplay of the anticipated hurricane
forces and the Pascagoula River basin’s known topology. Based on the facts of
this case, “[w]e go only so far as to hold that where, as here, the damages
resulted from the same physical forces whose existence required the exercise of
greater care than was displayed and were of the same general sort that was
expectable, unforeseeability of the exact developments . . . will not limit
liability.” In re Kinsman 

.19
       We hold that Signal owed a duty to MDOT because allision with the
Interstate 10 bridge in the Pascagoula River basin was foreseeable. The allision



       19
          Signal places heavy reliance on Consolidated Aluminum and Lloyd’s Leasing. Neither
case supports its argument that it did not owe MDOT a duty because the harms in those cases
did not arise from the risk of danger created by negligence and instead involved the improbable
interplay of natural and human forces. In Consolidated 

, a dredging
company negligently damaged a submerged natural gas pipeline. The gas supplier shut down
the supply, which deprived an aluminum processing plant several miles away of the natural
gas needed to operate its turbines, with the ultimate result of damaging its equipment and
product-in-process. 

was the only aluminum processing plant without a backup
power supply. 

held that such loss “goes beyond the pale of general harm which
reasonably might have been anticipated by negligent dredgers.” 

In Lloyd’s 

, a vessel grounded off the coast of Louisiana, spilling crude oil into the waters
of the Gulf of Mexico. The oil washed ashore on Galveston Island, approximately 70 miles
west. 

beach goers then tracked oil onto the premises of the eventual
claimants. 

affirmed the district court’s determination that the harm was not
foreseeable because the vessel owner “had no reason to have anticipated that the oil would
probably wash ashore in a heavily populated area and then be tracked into businesses and
homes.” 

In each case, the harm was not of the type risked by the negligent acts,
and the party at fault was able to identify events that would not have been foreseen by a
reasonable person. See 

ashore “where there were people to track it and places
to track it into”); Consol. 

(natural gas loss causing shut down of
equipment at plant with the “unique distinction of having only one energy source”); see also
Republic of 

–99, 401 (explosion of chemicals previously thought by “the
scientific field as well as the transportation industry” to be stable even when exposed to fire).

                                               24
                                        No. 08-60696

was a harm of the general sort to an entity of the general class that might have
been anticipated by a reasonably thoughtful person as a probable consequence
of the negligent mooring of the barges on the Pascagoula River in light of the
interplay of the expected storm surge and the surrounding topology. The district
court thus did not err in holding that Signal was not entitled to exoneration.
C. Limitation of Liability
       MDOT contends that the district court erred by holding that Signal is
entitled to limitation of liability under the Limitation of Liability Act, 46 App.
U.S.C. § 183(a) (2006) (repealed and re-codified in similar form at 46 U.S.C.
§ 30505).20 Because entitlement to limitation of liability is a fact issue, we
review the district court’s finding for clear error. In re Omega 

; Pennzoil Producing Co. v. Offshore Express, Inc., 

, 1469
(5th Cir. 1991) (“It is well settled law that . . . in maritime actions the ‘clearly
erroneous’ rule applies to the review of the factual findings of the trial court.”);
accord Tucker v. Calmar S.S. Corp., 

, 444 (4th Cir. 1972) (“A district
court’s findings regarding unseaworthiness and negligence are generally treated
as findings of fact reviewable under the ‘clearly erroneous’ standard of [Federal
Rule of Civil Procedure] 52(a).”) (citing Tex. Menhaden Co. v. Palermo, 

(5th Cir. 1964); Morales v. City of Galveston, 

(5th Cir. 1960)).
       The Limitation of Liability Act provides:
       The liability of the owner of any vessel . . . for any loss, damage, or
       injury by collision . . . incurred, without the privity or knowledge of


       20
           In 2006, Congress codified, reorganized, and restated portions of the appendix to title
46 of the United States Code. See Pub. L. No. 109-304 (2005). Section 183(a) of the appendix
to title 46 was codified at section 30505 with slightly modified language. Congress’s intent was
to “codif[y] existing law rather than creat[e] new law.” See H.R. Rep. 109-170, at 2 (2005),
reprinted in 2006 U.S.C.C.A.N. 972, 973.

                                               25
                                  No. 08-60696

      such owner or owners, shall not . . . exceed the amount or value of
      the interest of such owner in such vessel, and her freight then
      pending.
46 App. U.S.C. § 183(a).        “Once a claimant proves that negligence or
unseaworthiness caused an accident, an owner seeking limitation must show it
lacked privity or knowledge of the condition.” Gateway Tugs, Inc. v. Am.
Commercial Lines, Inc. (In re Kristie Leigh Enters., Inc.), 

, 481 (5th
Cir. 1996) (footnote omitted); see also Verdin v. C&B Boat Co., 

, 156
(5th Cir. 1988). “‘Privity or knowledge,’ sometimes described as ‘complicity in
the fault,’ extends beyond actual knowledge to knowledge that the ship owner
would have obtained by reasonable investigation.”         Cupit v. McClanahan
Contractors, Inc., 

, 348 (5th Cir. 1993) (quoting Brister v. AWI, Inc.,

, 356, 358 (5th Cir. 1991)).
      “Because a corporation operates through individuals, the privity and
knowledge of individuals at a certain level of responsibility must be deemed the
privity and knowledge of the organization, ‘else it could always limit its
liability.’” Cont’l Oil Co. v. Bonanza Corp., 

, 1376 (5th Cir. 1983)
(quoting Coryell v. Phipps, 

, 410–11 (1943)). A corporation “is
charged with the knowledge of any of its managing agents who have authority
over the sphere of activities in question.” In re Kristie Leigh 

; see also Cont’l 

(“A corporation is prevented from
limiting its liability by the act of a managing agent when ‘the negligence is that
of an executive officer, manager or superintendent whose scope of authority
included supervision over the phase of the business out of which the loss or
injury occurred . . . .’” (omission in original) (quoting 

–11)). A “managing” agent or officer is “anyone to whom the corporation has

                                        26
                                  No. 08-60696

committed the general management or general superintendence of the whole or
a particular part of its business.” Cont’l 

(quoting The Erie
Lighter 108, 

, 494 (D.N.J. 1918)); see also 

(“For
the purposes of limitation, a corporation is charged with the privity or knowledge
of its employees when they are sufficiently high on the corporate ladder.”).
      The district court found that “the managing agent for the rigging
department was Mr. Schnoor.” In re Signal Int’l, No. 1:05-CV-477, slip op. at 20.
It also found that “Schnoor had no knowledge concerning the condition of the
spud motor or the mooring arrangement and plan used prior to the storm.” 

In particular, “he did not have any prior knowledge of the problems
encountered when attempting to moor the barges.” 

The district court
thus held that “Signal has met its burden of proof that it lacked privity or
knowledge” and that it was “entitled to limit its liability to the value of the
barges post-accident.” 

that the district court clearly erred
because Schnoor had privity or knowledge of (1) the negligent mooring through
his approval of the hurricane plan and (2) the Miss Tiff’s purported
unseaworthiness through his attendance at the seventy-two hour meeting. We
hold that the district court did not clearly err.
      MDOT first asks us to impute knowledge of the negligent mooring to
Schnoor based on his approval of the hurricane plan. Signal’s plan called for the
barges to be moved upriver and moored using barge spuds or other suitable
moorings. Schnoor’s approval of the hurricane plan permitting other suitable
moorings, with the rigging crew to determine the suitability of alternative
arrangements, was not the basis of the district court’s finding of negligence; the
untested method and negligent execution of the alternative arrangement was.


                                        27
                                       No. 08-60696

Only when the need arose on the evening of August 26, 2005, after the plan was
finalized and approved, did Tanner and Bingle decided to tie the Miss Tiff and
the Jack King to the Mr. T using rope moorings. Tanner instructed the crew on
how the barges should be oriented and moored with nylon ropes.21 Schnoor’s
approval of this plan in no way imputed to him knowledge of the negligent nylon
rope moorings that Bingle and Tanner decided to employ. Schnoor was not
directly involved with the securing of the barges because securing the barges
was a relatively unimportant task that could be delegated to an experienced
rigging crew. See In re Omega 

(holding that managing
agents may delegate non-managerial duties and discretion to experienced
employees without subjecting the owner to unlimited liability). The rigging
crews that completed the moorings were experienced, and there is no evidence
showing prior failures by those riggers necessitating investigation or greater
oversight by Signal’s managing agents. Thus, Schnoor did not have knowledge
of this untested mooring scheme or of any negligence in executing it.22 Based on
these facts, we hold that the district court did not clearly err when it held that
Signal met its burden of showing that it lacked privity with or knowledge of the
negligent mooring.




       21
         Although Bingle and Tanner were aware that the spud motor was not functioning and
that the spuds could not be used due to the obstruction of the exposed fiberoptic cable, MDOT
has not argued on appeal that either of them was one of Signal’s managing agents.
       22
          MDOT’s arguments rest heavily on the contention that the district court found that
the hurricane plan was negligent. We disagree. The district court found that the source of
Signal’s negligence, considered in light of the presumption of fault in allision cases, was the
failure to design, test, and execute a suitable alternative mooring arrangement, not an
inadequacy in the approved hurricane plan.

                                              28
                                  No. 08-60696

      MDOT next asks the court to find that the Miss Tiff was unseaworthy and
to construct Schnoor’s knowledge of that purported lack of seaworthiness from
the rigging crew’s atypical plan to bring the Jack King to the mooring site, which
it claims he should have discovered during the seventy-two hour meeting. “A
shipowner has an absolute nondelegable duty to provide a seaworthy vessel.”

. “[U]nseaworthiness is predicated without regard to
fault or the use of due care.” 

omitted). Although “[t]he
courts have struggled to supply and put to use meaningful criteria to determine
seaworthiness, tossed between the horns of liability without fault and fitness of
a sufficiently high standard,” Marshall v. Ove Skou Rederi A/S, 

,
196 (5th Cir. 1967), we have defined that “[t]o be seaworthy, a vessel and its
appurtenances must be reasonably suited for the purpose or use for which they
were intended,” Johnson v. Offshore Express, Inc., 

, 1354 (5th Cir.
1988) (citing Mitchell v. Trawler Racer, Inc., 

, 550 (1960)); see also
Gutierrez v. Waterman S.S. Corp., 

, 213 (1963) (holding that the
seaworthiness doctrine provides “in essence that things about a ship, whether
the hull, the decks, the machinery, the tools furnished, the stowage, or the cargo
containers, must be reasonably fit for the purpose for which they are to be
used”); Weeks v. Alonzo Cothron, Inc., 

, 581 (5th Cir. 1972) (defining
a seaworthy vessel as “a vessel and appurtenances reasonably fit for their
intended use”); Walker v. Harris, 

, 191 (5th Cir. 1964)
(“Seaworthiness . . . is reasonable fitness to perform or do the work at hand.”).
This definition generally balances operating proficiency against anticipated
operating conditions. Mills v. Mitsubishi Shipping Co., 

, 613 (5th
Cir. 1966).


                                       29
                                  No. 08-60696

      The subsidiary questions leading to ultimate conclusion of
      seaworthiness are therefore: what is the vessel to do? What are the
      hazards, the perils, the forces likely to be incurred? Is the vessel or
      the particular fitting under scrutiny, sufficient to withstand those
      anticipated forces? If the answer is in the affirmative, the vessel (or
      its fitting) is seaworthy. If the answer is in the negative, then the
      vessel (or the fitting) is unseaworthy no matter how diligent,
      careful, or prudent the owner might have been.

.
      At the time of the seventy-two hour meeting, the Miss Tiff’s spud motor
was inoperable, so Signal’s rigging department planned to use the crane on the
Jack King to moor the Miss Tiff using its spuds. The district court did not reach
an express finding that the Miss Tiff was unseaworthy due to the inoperable
spud motor.       It did, however, find that Schnoor lacked knowledge of its
inoperable spud motor and that “[s]puds are not absolutely necessary, and
problems with the spud motor do not prevent the barges from performing their
usual work in the yard or from being moored.” In re Signal Int’l, No. 1:05-CV-
477, slip op. at 5 n.5, 19. MDOT had argued for a finding of unseaworthiness,
and, considering the deference we pay to the district court’s findings, we
interpret the district court’s failure to hold Signal liable on this basis as a
finding that the claim of unseaworthiness was not established. See In re
Kinsman 

(“[W]e take the judge’s failure to fault the
[defendant shipowner] on this score as a finding . . . that the claim was not
established.”).
      We hold that the district court did not clearly err for two reasons: (1) the
facts support that the inoperable spud motor was not the proximate cause of the
allision, and (2) the facts support that Schnoor did not have constructive
knowledge of the inoperable spud motor. Signal’s burden to prove lack of privity

                                        30
                                   No. 08-60696

or knowledge only arises when MDOT has shown unseaworthiness was the
proximate cause of the loss. See In re Omega 

(“[I]f the
vessel’s negligence or unseaworthiness is the proximate cause of the claimant’s
loss, the plaintiff-in-limitation must prove it had no privity or knowledge of the
unseaworthy conditions or negligent acts.” (quotation marks and citations
omitted)); 

(“[A] plaintiff must prove that the
unseaworthy condition played a substantial part in bringing about or actually
causing the injury” (quotation marks and citation omitted)); Empresa Lineas
Maritimas Argentinas S.A. v. United States, 

, 155 (5th Cir. 1984)
(first determining “what acts of negligence or conditions of unseaworthiness
caused the accident” before determining “whether the shipowner had knowledge
of the events which caused the loss”); accord Hellenic Lines, Ltd. v. Prudential
Lines, Inc. (In re Hellenic Lines, Ltd.), 

, 639 (4th Cir. 1987) (“Only
conditions of unseaworthiness that contribute to the collision are relevant to
determining whether the shipowner is entitled to limitation.”). For example, in
In re Hellenic Lines, the Fourth Circuit held that the ship owner had “effectively
overcome” the condition that could have rendered the ship unseaworthy through
an alternative remedial plan, rendering the sole proximate cause of the harm the
negligent noncompliance with that remedial plan and not the original source of
potential 

(“Hellenic had effectively overcome
[the second mate’s] inability by its instructions that, in a low visibility situation,
the master of the ship was to be summoned to the bridge.”).
      Under the facts of this case, we cannot find fault with the district court’s
finding that the spud motor was not necessary to the functioning of the Miss Tiff.
See 

(affirming “the well established admiralty maxim


                                         31
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that a ship need not provide the best or safest gear or method of operation, only
gear or a method which is reasonably safe and fit for the purposes for which it
is intended”) (citing, e.g., Marshall, 

). Although helpful to mooring,
a spud motor was not necessary for the Miss Tiff to be seaworthy in this
case—either in the shipyard or on its voyage upriver to the mooring site.23 The
Miss Tiff was outfitted with the necessary bits and nylon rope to perform the
work at hand—i.e., securing it to the Mr. T at the mooring site—and to prevent
the harm that followed. There is no evidence that the bits and nylon rope were
not fit to perform their assigned tasks, if designed and executed non-negligently,
and there was ample evidence from which the district court could conclude that
the Miss Tiff’s bits and nylon rope rendered it fit for the task at hand. MDOT
has made no showing that the district court clearly erred when it determined
that the inoperable spud motor was not necessary for mooring. Having agreed
with the district court’s factual premise, we concur with its implicit downstream
finding that the inoperable spud motor was not the proximate cause of the
allision. Although recognizing that the Miss Tiff’s spud motor was inoperable,
the district court concluded that the untested and faulty nylon rope mooring
arrangement, not the inoperable spud motor, was the proximate cause of the
allision.   MDOT has not shown that the district court’s proximate cause
determination was clearly erroneous.
       Thus, whether or not Schnoor had constructive knowledge of the
inoperative spud motor is immaterial. Even then, however, we conclude that the


       23
          Indeed, MDOT has not argued that the Jack King was unseaworthy, despite the fact
that it was not outfitted with barge spuds at the time of Hurricane Katrina. Notably, the trial
testimony revealed that not all barges are outfitted with barge spuds; many barges are moored
using bits, bollards, and ropes.

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                                  No. 08-60696

district court did not clearly err when it held that Schnoor lacked knowledge of
the inoperable spud motor. While his inquiry about the Jack King during the
seventy-two hour meeting might have notified Schnoor of the broken spud motor,
even an in-depth investigation at that time would not have notified him that the
Miss Tiff was not capable of being moored with barge spuds. At the time, his
lieutenants had a viable alternative plan to use the crawler crane loaded on the
Jack King to moor the Miss Tiff with barge spuds. The district court did not
clearly err on these facts when it concluded that Schnoor lacked constructive
knowledge of a small, later-occurring part of the overall operations under his
charge that he delegated to an experienced crew. To hold otherwise would
nullify the requirement that a high-level managing agent have knowledge or
privity of the negligence or unseaworthiness that caused the harm. Such a
holding would also impose a requirement that a managing agent tasked with
facility-level emergency preparations speculate about unforeseen events and
engage in potentially onerous detailed review of the plans of lower level decision
makers who are themselves tasked with the discretion to run relatively minor
aspects of the facility’s operations. The district court’s conclusion regarding lack
of privity and knowledge is not clearly erroneous.
      Overall, we hold that the district court did not clearly err by finding that
Signal lacked privity or knowledge of the relevant negligence that gave rise to
the allision.
D. Prejudgment Interest
      MDOT claims that the district court should have awarded it prejudgment
interest. The district court did not mention prejudgment interest in its findings
of fact and conclusions of law or in its judgment. “[I]n maritime cases the award


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                                  No. 08-60696

of prejudgment interest is the rule, rather than the exception, and the trial court
has discretion to deny prejudgment interest only where peculiar circumstances
would make such an award inequitable.” Corpus Christi Oil & Gas Co. v.
Zapata Gulf Marine Corp., 

, 204 (5th Cir. 1995); see also City of
Milwaukee v. Cement Div., Nat’l Gypsum Co., 

, 196 (1995) (“By
compensating for the loss of use of money due as damages from the time the
claim accrues until judgment is entered, an award of prejudgment interest helps
achieve the goal of restoring a party to the condition it enjoyed before the injury
occurred.” (quotation marks and citations omitted)). We review for clear error
the district court’s factual determination of the existence of peculiar
circumstances, while we review for abuse of discretion the district court’s
exercise of the discretion to deny prejudgment interest that accompanies the
existence of any peculiar circumstance. Corpus Christi Oil & 

. In Noritake Co. v. M/V Hellenic Champion, 

, 730 (5th Cir.
1980), we held that “[i]f the trial court does not make any mention of
prejudgment interest in its judgment or its findings of fact and conclusions of
law, then it is . . . difficult to infer that the trial court has found peculiar
circumstances and decided to exercise the discretion that those circumstances
create.” We, nonetheless, “may make that inference, and [are] especially likely
to do so when the record clearly discloses peculiar circumstances.” 

record discloses no peculiar circumstances, “we have reversed the judgment of
the district court insofar as it fails to award prejudgment interest” and either
modify the judgment to award prejudgment interest “or remand with directions
to calculate and award prejudgment interest.” 

08-60696

      In this case, the district court omitted any reference to prejudgment
interest. Thus, under the framework established in Noritake, we analyze the
record to determine if the existence of a peculiar circumstance was clear.
Peculiar circumstances include equitable doctrines that caution against the
award. See Reeled Tubing, Inc. v. M/V Chad G, 

, 1028 (5th Cir.
1986). Based on the record evidence, we find that the federal government’s
reimbursement of the repair costs to MDOT in January 2006 was a peculiar
circumstance because it would inequitably allow MDOT to recover prejudgment
interest for the period after it was reimbursed and thus had full use of its money.
See City of 

(holding that an award of prejudgment
interest restores a party to the condition it enjoyed before the injury occurred by
compensating the plaintiff for the loss of the use of money it would have had at
its disposal between the injury and the judgment). Having concluded that the
factual predicate existed to permit the district court to exercise its discretion to
deny prejudgment interest for the period after the federal government
reimbursed MDOT, we also conclude that the district court did not abuse its
discretion in denying prejudgment interest for that period.
      It did, however, err by failing to award prejudgment interest for the period
from the injury on August 29, 2005, to the date of reimbursement in January
2006. Before the federal government reimbursed MDOT, MDOT was without
the use of its money. Signal’s briefing to the district court conceded that 155
days elapsed between the injury and the federal government’s reimbursement.
On the record before us, we thus conclude that the factual predicate of a peculiar
circumstance did not exist for that period. Without that factual predicate, the
district court lacked discretion to deny prejudgment interest for this earlier


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                                  No. 08-60696

period, and its implicit denial of prejudgment interest for that period was clearly
erroneous. We therefore vacate judgment to the extent it excludes prejudgment
interest prior to the time that MDOT was reimbursed by the federal government
and remand to the district court with directions that it make additional factual
findings as necessary to calculate that interest and enter judgment awarding
MDOT prejudgment interest for that period.
                              III. CONCLUSION
      For the foregoing reasons, we AFFIRM the district court’s judgment in
part, VACATE it in part, and REMAND. We AFFIRM the judgment to the
extent that it denied Signal’s objection to MDOT’s status as a real party in
interest, denied Signal’s petition for exoneration from liability, and granted
Signal’s petition for limitation of liability. We VACATE the judgment to the
extent that the district court failed to grant MDOT’s motion for prejudgment
interest for the period prior to the federal government’s reimbursement to
MDOT, consistent with this opinion.          We REMAND for calculation of
prejudgment interest and for entry of judgment including that interest. Each
party shall bear its own costs.




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