Bartholomew v. Crowley Marine Services Inc.

Citations: 337 F.3d 1083; 2003 WL 21750746Docket: No. 02-35364

Court: Court of Appeals for the Ninth Circuit; July 30, 2003; Federal Appellate Court

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The excerpt addresses the apportionment of a salvage award granted to crew members but not to the owner of the vessel that conducted the salvage operation. The historical basis for salvage rights is traced back to ancient maritime practices, particularly the Rhodians, who had a system of maritime law that included provisions for rewarding salvors. These principles evolved through Roman law and the Laws of Oleron, influencing early American admiralty law. The Supreme Court defines salvage as compensation for those who assist in saving a ship or its cargo from danger at sea, emphasizing that salvors are volunteers acting without a prior contractual obligation. The rationale for awarding salvage is to incentivize individuals to undertake risky rescue operations. While salvors are rewarded for their perilous efforts, owners of the salving vessel are also recognized for the risks associated with deploying their ships in such dangerous tasks. This reflects a broader principle that remuneration for salvage services acknowledges the dangers faced by both salvors and vessel owners during such undertakings.

Luther Bartholomew, Zeljiko Brcic, Jim W. Haithcock, and James Kristovich, employees of Crowley Marine Services, Inc. (CMS) and crew members of the tug Sea Voyager, participated in a salvage operation on January 9, 1999, in the Gulf of Alaska. They assisted the tug Sea Vixen, which had caught fire while towing a barge loaded with urea fertilizer owned by UNOCAL. The Sea Voyager arrived approximately fourteen hours after being summoned, and within an hour, the crew attached the Sea Vixen to their tug using a tow line. During this process, two crew members, Bartholomew and Kristovich, undertook risky maneuvers between the two vessels.

After about a day and a half, the Sea Vixen was transferred to another CMS tug, and the fire had extinguished itself during the tow. CMS, which includes salvage services among its offerings, used an “Emergency Tow Package” for this operation. Although CMS billed UNOCAL for routine towing, it did not charge for salvage services, nor did it provide any salvage award to the crew members. The employment contract included a clause stating that any waiver of salvage claims by the tug or its representatives would also apply to the crew.

The crew members filed a lawsuit against CMS for a salvage award based on their successful efforts. CMS defended itself by arguing that the crew was simply fulfilling their employment duties, and contended that the failure to bill for salvage constituted a waiver of any claims. However, the district court ruled that the crew had performed salvage work deserving of compensation and that CMS's billing practices did not waive the crew's rights. The court valued the salvaged assets at $5,664,066 and awarded the crew 5% of this amount, excluding any compensation to CMS. CMS appealed, maintaining that the crew was not entitled to a salvage award under their employment contract, that the lack of billing constituted a waiver, and that CMS should receive a share of any award if one was granted, along with all crew members benefiting from any unclaimed shares.

The crew of the Sea Voyager was employed under a collective bargaining agreement (CBA) with the Inlandboatmen’s Union, which outlined their tasks related to vessels operating in Valdez, Alaska, including docking assistance and various emergency services like fire-fighting and oil spill cleanup. However, the CBA did not explicitly address salvage work or payment terms for such services. The district court noted that the CBA's reference to "salvage work" did not prevent the crew from receiving a salvage award, as there was no specific provision tying the crew’s wages to salvage operations. Under maritime law, a successful salvage operation typically justifies an award unless a contractual agreement dictates otherwise. 

For a salvage award to be barred, there must be clear language in the contract guaranteeing payment regardless of success, which was absent here. The crew's job descriptions did not mention salvage work, and they were not trained for it, indicating that their involvement in the salvage operation was voluntary and at their own risk. CMS’s argument that it waived any salvage claim by billing only for towing services was rejected, as failing to bill for salvage did not constitute a waiver of the salvage claim. This was supported by precedent from Lago Oil Transport Co. v. United States, where billing for towing did not negate the right to seek compensation for salvage services later.

Justice Frankfurter rejected the theory that CMS’s towing bill constituted a waiver of its right to a salvage claim, emphasizing that CMS did not indicate that the bill covered all expenses associated with transporting UNOCAL’s fertilizer. Consequently, the waiver provision in the Collective Bargaining Agreement (CBA) was not triggered, affirming the district court’s conclusion that the appellees were entitled to a salvage award. The court apportioned the award as follows: $100,000 each to Bartholomew and Kristovich, $25,000 to Brcic, $10,000 to Haithcock, and $48,203.30 to master Swain, with no allocation to two crew members or CMS. CMS contended that all crew members should receive a share and that any waived claim should revert to it as the owner of the salvaged vessel. However, the district court found that the two crew members without awards did not contribute to the salvage, and CMS failed to demonstrate any error in this finding.

The court also denied CMS a salvage award, reasoning that its motivation for participating in the salvage was solely its ownership of the Sea Vixen and Barge, which exposed it to potential loss. Salvage remuneration is traditionally awarded not for mere presence but for the risks taken in saving distressed vessels. The case is unique because both the distressed vessel (Sea Vixen) and the salving vessel (Sea Voyager) were owned by CMS, which equipped the Voyager for the salvage. Historically, vessel owners receive a significant portion of salvage awards based on risk levels. The appellees argued against awarding CMS any share since its involvement was motivated by self-interest. While this argument holds some merit, the court found it neither necessary nor desirable to deviate from established principles, citing 46 App. U.S.C. 727, which protects the right to remuneration regardless of common ownership of the vessels involved.

A distinction in salvage awards based on vessel ownership would result in unequal compensation for crew members salvaging vessels owned by the same entity compared to those owned by different entities, despite identical risks and contributions. Salvage law principles dictate that when a salving vessel is put at risk, its owner is entitled to a portion of the salvage award, regardless of ownership of the distressed vessel. The court referenced the case of Lewis v. A Lot of Whalebone, where the court recognized co-ownership interests and awarded a significant portion of the salvage to the salving vessel's owners. The district court must consider the salving vessel's risk and contribution to determine the owner’s share of the award. The court found that the district court did not allocate any portion of the salvage award to CMS, the owner of the salving vessel, which was inappropriate. Consequently, the court affirmed the crew members' entitlement to salvage but reversed the judgment regarding CMS's share and remanded for further proceedings to evaluate the Sea Voyager's role and determine an appropriate share for CMS. Each party is responsible for its own appeal costs.

Rhodes became a significant trade hub in the late fourth century B.C. after successfully withstanding a siege by Demetrius I, leading to the construction of the Colossus of Rhodes in celebration of their victory. This success bolstered Rhodes' prestige and independence, allowing it to resist larger powers throughout the third century. By the century's latter half, Rhodes had established a formidable fleet that effectively countered piracy and protected island communities. It is speculated that earlier cultures, such as Minoan Crete, may have had principles of salvage rights in maritime commerce, though scholarly understanding is limited. 

A manuscript associated with Rhodian maritime law is believed to date from A.D. 600 to A.D. 800, but its title may not reflect the true nature of its content, as scholars have mistakenly linked it to Justinian's Digest without specific references. The Laws of Oleron, foundational to English admiralty law, influenced U.S. admiralty practices until modified in 1975 by the Supreme Court in United States v. Reliable Transfer Co. Inc., which introduced comparative fault principles. 

Salvage awards are divided based on the complexity and risk of the salvage operation, with high-order salvage meriting a larger crew share and low-order salvage offering a more significant owner share. Current cases suggest a standard division of two-thirds to the owner and one-third to the crew. The exact allocation for the current case remains undetermined, pending further evidence, and the district court will ultimately decide the salvage award distribution, reaffirming that CMS’s ownership of the salvaged vessel does not negate its entitlement to a share of the salvage award.