Appeal from the United States District Court for the Central District of Illinois, Springfield Division. No. 81 C 3178 -- J. Waldo Ackerman, Judge.
Before CUDAHY and POSNER, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.
CUDAHY, Circuit Judge. This admiralty suit arises out of damage sustained by the towboat Keystone, owned and operated by the plaintiff Central Rivers Towing, Inc. ("Central Rivers"), when it struck a submerged bridge pier located in the navigable channel of the Illinois River. The submerged pier originally was part of a bridge that was owned by the defendant City of Beardstown (the "City"), but was demolished about 1955. Plaintiff brought suit against the City, claiming maritime negligence, as well as violations of statutes including the Rivers and Harbors Act, 33 U.S.C. § 403, involving the City's failure to mark or remove the submerged pier. Beardstown, in turn, filed a third-party complaint against the United States, claiming indemnity or contribution for any judgment won by the plaintiff. The theory of this third-party complaint was that the United States Coast Guard had failed to exercise due care in marking the location of the submerged pier.
The district court held that both the City and the United States were at fault, and that each was liable for fifty percent of the stipulated amount of the plaintiff's damages plus interest. The court required the City to pay interest on its half of the damages from the date of the accident at the rate of twelve percent. The court determined that the government should pay interest from the date the lawsuit was filed at 4% per annum.
On appeal, the City argues that it was entitled to judgment as a matter of law because it fully complied with the Government's specifications when it originally demolished the bridge, and alternatively because it legally abandoned the bridge piers. The City also challenges both the trial court's award of prejudgment interest against it and the court's determination that 12% was an appropriate rate. The United States contends that it cannot be liable to the City in contribution or indemnity, because a direct claim by the plaintiff against the United States would now be barred by the applicable statute of limitations. Hence the government could not be jointly liable with the City. The United States also argues that it was not negligent in maintaining a buoy used to mark the location of the submerged pier. Both the City and the United States claim that the trial court erred in finding that the plaintiff was free from negligence. Finally, the plaintiff Central Rivers cross-appeals on the limited issue whether the trial court erred by limiting its recovery of prejudgment interest from the government to the four percent rate.
The relevant facts as found by the district court may be set out briefly. The City owned and operated the State Street Bridge until 1955, when it decided to demolish it. After correspondence between the City and the United States Army Corps of Engineers, the Corps issued specifications for the demolition which included certain minimum requirements of removal. The specifications allowed several of the bridge piers to remain, including Pier No. 1, which apparently was left in place at the City's request. The pier was to be left above the waterline, but at some point after the demolition the pier became submerged, and subsequently was involved in several accidents. Sometime after the pier remains sank from sight, the United States Coast Guard began marking the underwater obstruction with a buoy. On June 17, 1979, after stopping to purchase fresh water from the City, the Keystone struck the submerged remains of Pier No. 1. No buoy was marking the location of the pier at the time of the accident.
The district court found, based on expert testimony, that the pilot of the Keystone, Robert G. Barber, acted in a reasonable and prudent manner while operating the vessel on June 17th.The court also concluded that the submerged pier constituted a hazard to navigation, noting that prior to the accident at issue here, several other vessels had been grounded on or had struck the pier remains. In one case there was an accident despite the fact that the involved pilot traveled the area daily. The court found that the City made a "conscious decision to leave the obstruction in the waterway," which was "expedient from a cost viewpoint, but not from a safety viewpoint." Thus the court apparently held the City liable because it had failed to remove the pier remains despite its knowledge that they posed a danger.
Finally, the district court reviewed the contradictory evidence concerning the Coast Guard's performance of its obligation to mark the pier remains. Captain Mark Elbrecht testified that the buoy had been missing since March of 1979, and that he had notified the Coast Guard that it was missing at least three times before the accident. Master Chief Donald Urquhart of the Coast Guard testified that the river was closed during March and April of 1979, and so the buoy was not replaced during this period. He asserted that he had inspected the area three or four times before the accident, however, and that he had observed the buoy in place. Finding "no reason to doubt" Captain Elbrecht's testimony, the district court held that the government had failed to use due care in marking the obstruction. See n.2, infra.
With respect to the City's liability, the City's primary argument is that it is entitled to judgment as a matter of law under the rationale of Southern Pacific Co. v. Olympian Dredging Co., 260 U.S. 205, 67 L. Ed. 213, 43 S. Ct. 26 (1922). There a railroad company demolished a bridge that it owned in compliance with specifications provided by the Secretary of War. The specifications included the condition that the railroad remove every portion of the bridge, including the bridge piers, which were to be removed from the bed of the river to a depth of seven feet below the lowest water level. The railroad did more than was necessary, cutting down the old piers to a level at or below the existing river bed. Subsequently the U.S. Government constructed a wing dam and carried on dredging operations very near the bridge, so that the bed of the river and surface of the water were gradually lowered. Twenty-three years later, the stumps of the old piers protruded several feet above the new river bed. A dredge sank after it struck one of these stumps, and its owner sued the railroad for its damages.
In exculpating the railroad from the sinking the Supreme Court emphasized that the railroad had fully complied with the Secretary's directions for removing the old bridge, and that it was entitled to rely on those directions as an "authoritative determination of what was reasonably necessary to be done to insure free and safe navigation" at that time. Id. at 208. The fact that the old piers later became an obstruction was due to "changes of a most radical character" brought about by the government's dredging activities. The Court ruled that the railroad was not negligent in failing to anticipate the effect of such changes. Id. at 209.
Because the City in the present case originally complied with the minimum Corps of Engineers specifications for demolition of the bridge, it contends it cannot be held liable for subsequent changes that resulted in the pier's becoming a submerged hazard. But we do not find Southern Pacific controlling. We do not think Southern Pacific stands for the proposition that compliance with government specifications for removing a bridge forever insulates the bridge owner from liability for damages later caused by the bridge remains. Compliance with the government's specifications in Southern Pacific demonstrated only that the owner was not negligent in the way it removed the bridge piers at the time of the original demolition; in the present case the compliance with government specifications, in itself, established nothing about whether the owner was negligent in failing to take action later, if changed conditions made the pier remains hazardous.
This latter question turns instead on whether the owner could reasonably have anticipated, under the particular circumstances of the case, the effect of those changes. In Southern Pacific the Court emphasized that the changes in the river bed "were not due to natural causes, whose effect could reasonably have been anticipated," so that the railroad would have had to take action. Id. at 210-211. Rather, the railroad was not negligent because it was not "required to take notice of such radical changes as occurred here by the acts of the government over which it had no control and which it had no reason to anticipate or provide against." Id. at 211.
More recent decisions support our interpretation of Southern Pacific. For example, in United States v. New York Central Railroad Co., 252 F. Supp. 508 (1965), aff'd, 358 F.2d 747 (1966), railroads that erected a bridge in accordance with a permit granted by the Secretary of War argued that their subsequent failure to remove parts of the bridge could not subject them to liability for creating an unreasonable obstruction to navigation. The Central Railroad court emphatically rejected this interpretation, stating:
A fortiori, the fact that a bridge was originally properly licensed does not mean that after it has been formally abandoned, the railroad has no liability for the remains of the bridge when they ...