Boca Grande Club, Inc. v. Florida Power & Light Co.

Background

This case arose from a maritime accident in which a plaintiff sued several parties seen as jointly responsible. Some defendants settled with the plaintiff before trial, while other defendants went to trial and later sought to require the settling parties to pay part of the judgment. The question before the Court was how settlements should affect later claims by nonsettling defendants for contribution under general maritime law.

Reasoning

The Court, speaking through Justice Stevens, followed the opinion announced in McDermott, Inc. v. AmClyde and adopted the proportionate-share approach. Under that approach, each party’s financial responsibility is set according to its share of fault, and contribution claims against settling defendants are neither necessary nor permitted in the way some older rules allowed. The opinion explains that alternative rules, such as the pro tanto rule, can produce unfair results and discourage settlement. The Court therefore vacated the Court of Appeals’ judgment and sent the case back so the lower courts can proceed consistent with the proportionate-share rule.

Real world impact

The decision changes how damages and prior settlements are treated in admiralty lawsuits. Settling parties will be credited based on apportioned fault instead of having their settlements automatically reduce other defendants’ liability in a simple dollar-for-dollar way. This affects injured claimants, settling defendants, and defendants who go to trial, and it alters incentives around settlement in maritime cases. The Court’s order vacated the earlier appellate judgment and remanded for further proceedings under the new rule.