The opinion of the court was delivered by: Richard Mills, District Judge:
A question of lost profits.
On the morning of April 19, 1992, the tow of the M/V JOYCE HALE
collided with a railroad bridge spanning the Mississippi River.
The Plaintiff owns the bridge and the Defendants own and operate
the vessel. The narrow issue before the Court is whether as a
matter of law recovery for lost profits is limited to the period
in which the bridge was out of service for repairs.
Defendants maintain that under maritime law lost profits are
limited to the period the bridge was out of commission being
repaired — approximately two months. Conversely, Plaintiff
contends that all lost profits proximately caused by the
collision, including lost profits after the bridge was fixed, are
recoverable. Both sides cite authority for their respective
Because the damage to the bridge was allegedly caused by a
vessel on a navigable water, the Court has maritime jurisdiction.
46 U.S.C.App. § 740.*fn1 When jurisdiction is based in
admiralty, substantive admiralty law applies. East River
Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858,
864, 106 S.Ct. 2295, 2298, 90 L.Ed.2d 865 (1986). According to
the Supreme Court, substantive admiralty law is "an amalgam of
traditional common law rules." Id.
The "amalgam" of admiralty rules must be applied with due
consideration of the underlying purpose of maritime jurisdiction.
As explained by Justice Story over a century-and-a-half ago:
A court of admiralty is, as to all matters falling
within its jurisdiction, a court of equity. Its hands
are not tied up by the rigid and technical rules of
the common law, but it administers justice upon the
large and liberal principles of courts which exercise
general equity jurisdiction.
The David Pratt, 7 Fed.Cas. 22, 24 (D.C.Me. 1839) (No. 3597),
quoted in Pizani v. M/V Cotton Blossom, 669 F.2d 1084, 1089
(5th Cir. 1982). In other words, a court sitting in admiralty is
"privileged to exercise flexibility and award what is fair."
Complaint of Valley Towing Service, 629 F. Supp. 139, 147
In admiralty, the maxim for computing damages in a collision
case is restitutio in integrum or restoration to the previous
condition. The Baltimore, 75 U.S. (8 Wall) 377, 385, 19 L.Ed.
463 (1869). In the case of two vessels colliding, if a vessel is
a total loss, the standard measure of damages is the market value
of the ship plus interest and freight pending her salvage value.
THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, § 13-5 (1987).
If the damaged vessel is not a total loss, the owner is
entitled to the cost of repairs, salvage expenses, out of pocket
expenses and detention damages. Id. Detention damage —
sometimes called loss of use damage — is the amount of profit
lost during the period of detention. Id.
Detention damage is traditionally calculated using the three
voyage rule. Kim Crest, S.A. v. M.V. Sverdlovsk, 753 F. Supp. 642,
650 (S.D.Tex. 1990). Pursuant to the three voyage rule,
detention damage is computed by determining the charter rate for
the voyage immediately preceding the collision, the charter rate
during the collision, and the charter rate of the first voyage
succeeding the casualty and averaging them. The average
is then applied to all charters lost during the detention. Id.
When a vessel negligently strikes a shore structure or other
fixed object, detention damage is also recoverable. See e.g.,
Crown Zellerbach Corp. v. Willamette-Western Corp.,
519 F.2d 1327 (9th Cir. 1975). How detention damage is calculated in such
a situation, however, varies. Compare Continental Oil Co. v.
S.S. Electra, 431 F.2d 391 (5th Cir. 1970), cert. denied,
401 U.S. 937, 91 S.Ct. 925, 27 L.Ed.2d 216 (1971) (allowing oil
company to recover for lost profits on 130 days worth of
production) with Bolivar County Gravel Co. v. Thomas ...