United States v. Reliable Transfer Co.

Background

A coastal tanker called the Mary A. Whalen, owned by a private shipping company, ran aground near Rockaway Point after its captain misjudged his position on a stormy night and turned into shoals. The breakwater light maintained by the Coast Guard was not operating that night. The tanker sued the United States for damage to the vessel; the trial court found the Coast Guard 25% at fault and the tanker’s crew 75% at fault but applied the old admiralty rule that splits damages equally between parties who both contributed to the harm. The Court of Appeals affirmed that result, and the case reached this Court to consider whether that equal-division rule should continue to apply.

Reasoning

The Court examined the long history of the equal-division rule, beginning with a 19th-century decision, and concluded the rule is outdated and often unfair. The opinion notes that most other maritime nations now apportion damages according to each party’s degree of fault when that can be measured, and that continuing the equal split produces unjust results in many cases. The Court held that when comparing fault is possible, liability for property damage in maritime collisions or strandings should be allocated proportionally to each party’s fault; equal division should be used only when fault is truly equal or when fair measurement is impossible. The Court vacated the judgment and sent the case back for further proceedings under this new rule.

Real world impact

The decision changes how courts and parties will divide financial responsibility in maritime property-damage cases. It aims to reduce clearly unfair outcomes from automatic equal splits, may alter settlement incentives, and brings U.S. admiralty practice closer to international norms. The case was returned to the lower court to apply the proportional-fault rule and reassess recovery in light of that standard.