Megen Gold Remove it or Lose it

Journal of Maritime Law & Commerce, Vol. 46, No. 1, January, 2015

Remove it or Lose it: Wrecking and Removingin the United States

MEGEN GOLD*

IINTRODUCTION

An ill-fated day, January 13, 2012, brought with it the capsizing of theCosta Concordia, a cruise ship carrying about 3,200 passengers and 1,000crewmembers.1 When the ship sailed too close to the coastline of the Isoladel Giglio, on the western shore of Italy, it struck a rocky reef, causing theship to inundate with water.2 When the captain tried to turn the CostaConcordia around and proceed to the island’s port, the ship capsized.3 Theship was righted in September 2013 after an 18-hour parbuckling operation.4

The re-floating operation to raise the Costa Concordia off the platform onwhich it had been sitting since righted, concluded nearly one year later.5 Afleet of 14 vessels then assisted in towing the Costa Concordia to the port ofGenoa.6 Finally, in July 2014, over two years after the Costa Concordiawrecked off the coast of Italy and after one of the most extensive maritimesalvage operations in history, the Costa Concordia entered the port of Genoato be scrapped.7

The removal of the Costa Concordia presented many complex problemsdue to the enormity of the vessel. Had the Costa Concordia wrecked in theUnited States, an abundance of obligations and responsibilities would have

51

*Megen Gold is a third-year law student at Tulane University Law School in New Orleans, Louisiana.She is expected to graduate in the spring of 2015. She is currently studying maritime law and pursuingan Admiralty & Maritime Law Certificate.

1Claudio Perrella, Concordia Rises Along with Cost, MARITIME RISK INTERNATIONAL, Nov. 05, 2013,Vol. 27, No. 09.

2Id.3Id.4BBC News Europe, Costa Concordia: Stricken Ship Set Upright in Italy (17 September 2013),

http://www.bbc.com/news/world-europe-24121480.5Rossella Lorenzi, Concordia Enters Italian Port to be Scrapped: Updates, Discovery News (22 July

2014), http://news.discovery.com/earth/oceans/costa-concordia-refloating-live-at-the-scene-140715.htm.6Id.7BBC News Europe, Costa Concordia Wreck Enters Genoa Port for Scrapping (27 July 2014),

http://www.bbc.com/news/world-europe-28508387.

been placed upon the shipowner(s), and the United States government, withrespect to marking and removing the wreckage. However, due to the intrica-cies of the Costa Concordia removal operation, specifically with respect tothe vessel’s size, the requirements under United States law generally appli-cable to the removal of other types of vessels, such as barges, tug boats, andcontainer ships, would not have applied to the removal of the CostaConcordia.

The Rivers and Harbors Appropriation Act of 1899 (“Rivers and HarborsAct”) is the primary statutory source for regulating the unobstructed flow ofnavigable waterways in the United States.8 The primary responsibility forkeeping navigable waterways free from obstruction rests with the UnitedStates Army Corps of Engineers (“Corps of Engineers”) and the UnitedStates Coast Guard (“Coast Guard”).9 Within the Rivers and Harbors Act isthe Wreck Act. The Wreck Act imposes specific duties upon owners whosevessels have sunk in the navigable waters of the United States.10 The primaryresponsibilities of a shipowner under the Wreck Act are to: (1) mark, and (2)subsequently remove the wrecked vessel from the waterway.11 The markingof wrecked vessels is under the Coast Guard’s purview and inspection and isregulated under 33 C.F.R. § 64. The removal of wrecked vessels is under thediscretion of the Corps of Engineers and regulated under 33 C.F.R. § 245.12

This article will first examine the statutory scheme in force currentlyunder the Wreck Act, briefly considering the changes made since its amend-ments in 1986, and then focus on the federal regulations presently in effectwith respect to the execution of the Wreck Act. Additionally, this article willreview case law and courts’ interpretations of the Wreck Act, including theissues of marking, removal, abandonment of wrecks, as well as issues ofinsurance, and liability to third parties damaged by wrecks which have notyet been removed from navigable waterways. This article will then considerthe recently established Nairobi International Convention on the Removal ofWrecks (“Nairobi Convention”). Finally, this article will analyze how U.S.law would have treated the Costa Concordia had the incident taken placewithin the United States, and compare that with how the Nairobi Convention

52 Journal of Maritime Law & Commerce Vol. 46, No. 1

8The Rivers and Harbors Appropriation Act, 33 U.S.C. §§ 401-67 (1983), Wyandotte TransportationCo. v. United States, 389 U.S. 191, 201 (1967) (stating that the federal government was charged withensuring navigable waterways remain free of obstruction).

933 C.F.R. § 245.10 (2014).10The Wreck Removal Act, 33 U.S.C. §§ 409-15 (2004).1133 U.S.C. § 409; see M.J. Rudolph Corp. v. Lumber Mutual Fire Insurance Co., 371 F. Supp. 1325,

1327 (E.D.N.Y. 1974) (holding that a sunken vessel damaged to the extent of being rendered unnaviga-ble is a wreck).

12Removal of Wrecks and Other Obstructions, 53 Fed. Reg. 27511-02 (July 21, 1988).

would approach the Costa Concordia situation had its provisions beenapplied.

IITHE WRECK ACT

A. Statutory Provisions

The language of the Wreck Act stipulates that it is unlawful to “sink, orpermit or cause to be sunk, vessels or other craft in navigable channels” soas to prevent or obstruct the passage of other vessels or craft.”13 The purposeof § 409 is to protect other vessels plying the same waters and therefore,shipowners of wrecked vessels can be held liable for injury to third parties.14

Additionally, § 409 creates a duty on the part of the owner, lessee, or oper-ator of a sunken vessel to “immediately mark it with a buoy or beacon dur-ing the day and . . . a light at night, and to maintain such marks until sunkencraft is removed or abandoned.”15 Section 409 also imposes a duty on theowner, lessee, or operator of the sunken vessel to “commence immediateremoval . . . [and] prosecute such removal diligently.”16 If the owner, lessee,or operator fails to remove the vessel immediately and diligently, the vesselwill be considered abandoned and subject to removal by the United States.17

Section 411 of the Wreck Act provides for penalties of violating § 409,punishable as a misdemeanor for which the guilty party may be fined up to$25,000 per day until the wreck is removed, or imprisoned for a minimumof 30 days up to one year, or both fined and imprisoned.18 Although § 409 isa criminal statute, it has been construed to apply to civil actions.19 Section412 reinforces that notion by stipulating that in addition to being held liablefor pecuniary penalties under § 411, any boat, vessel, or other craft used inviolation of § 409 may be proceeded against in an action before a court.20

Though § 412 implies only an in rem remedy, courts have interpreted § 409

January 2015 Remove it or Lost it 53

1333 U.S.C. § 409.14United States v. Raven, 500 F.2d 728, 732 (5th Cir. 1974).1533 U.S.C. § 409.16Id.17Id.1833 U.S.C. § 411.19Morania Barge No. 140, Inc. v. M. & J. Tracy, Inc., 312 F.2d 78, 80 (2d Cir. 2962) (holding that §

409 “reflects a legislative judgment of the standard of care to which owners of sunken vessels should beheld in civil actions”).

2033 U.S.C. § 412.

as inclusive of other remedies, including an in personam remedy against theperson causing the wreck.21

Section 414(a) of the Wreck Act provides that when a sunken vessel, boat,water craft, raft, or other similar obstruction has obstructed or endangeredthe navigation of a waterway for more than 30 days, then that vessel is “sub-ject to be broken up, removed, sold, or otherwise disposed of by theSecretary of the Army at his discretion, without any liability for any damageto the owner.”22 Money received from the sale of the vessel will be deposit-ed into the Treasury of the United States.23 Section 414(b) stipulates that theowner, lessee, or operator of such a vessel obstructing navigation is liable tothe United States for “the cost of removal or destruction and disposal . . .which exceeds the costs recovered” in a sale under § 414(a).24 All proceedsfrom the sale “shall be deposited in the general fund of the Treasury of theUnited States.”25

Section 415(a) governs removal of a vessel, boat, water craft, raft, or othersimilar obstruction in an emergency situation.26 If a vessel is obstructing anavigable waterway in the United States so as to “stop, seriously interferewith, or specially endanger navigation,” the Secretary of the Army has theright, using his best judgment, to take “immediate possession of such boat,vessel, or other water craft . . . so far as to remove or to destroy it and to clearimmediately the . . . navigable waters . . . of the obstruction . . . to preventany unnecessary injury . . . and no one shall interfere with or prevent suchremoval or destruction.”27 Section 415(a) additionally provides that the actu-al expense, including administrative costs, of removing an obstruction willbe a charge against the vessel and cargo.28 If the shipowner fails or refusesto reimburse the United States for that expense within 30 days after theowner is notified of the obstruction, then the Secretary of the Army may sellthe vessel and cargo or any of its parts and the proceeds will go to theTreasury of the United States.29 Section 415(b) stipulates that no later than


21Wyandotte Transp., 389 U.S. at 385, see, e.g., Wyandotte at 204-205 (recognizing that the UnitedStates could obtain declaratory and injunctive rulings to require the responsible parties to remove wrecksor reimburse the United States for removal costs and holding that there was “no indication anywhere . . .in the legislative history of the Act, in the predecessor statutes, or in nonstatutory law . . . that Congressmight have intended that a party who negligently sinks a vessel should be shielded from personal respon-sibility).

2233 U.S.C. § 414(a).23Id.2433 U.S.C. § 414(b).25Id.26Id. § 415(a).27Id.28Id.29Id.

24 hours after the Coast Guard issues an order to “stop or delay navigationin any navigable waters of the United States because of conditions related tothe sinking or grounding of a vessel,” the owner or operator of that vesselmust begin removal of the vessel “using the most expeditious removalmethod available” or secure the vessel to allow navigation to resume.30 If theowner or operator fails to remove or secure the vessel, or fails to expeditethe removal, the Secretary of the Army will remove or destroy the vessel.31

Section 415(c) provides that the owner, lessee, or operator of a vessel, boat,water craft, raft, or other obstruction is liable to the United States for theactual expense, including administrative costs, of removal or destruction anddisposal which exceeds the costs recovered under a sale of the craft.32

Section 416 of the Wreck Act specifies that any money necessary to removean obstruction from navigable waterways by the United States will be takenout of the Treasury of the United States.33

B. 1986 Amendments

Prior to the 1986 amendments of the Wreck Act, § 409 stipulated that itwas unlawful to “voluntarily or carelessly sink, or permit or cause to besunk, vessels or other craft in navigable channels.”34 It also provided that“whenever a vessel, raft, or other craft . . . [was] wrecked and sunk in a nav-igable channel, accidentally or otherwise, it . . . [was] the duty of the owner. . . to immediately mark it . . . and commence immediate removal . . . dili-gently, and failure to do so . . . [was] considered as an abandonment . . . sub-ject[ed] . . . to removal by the United States.”35 Thus, other sections of theWreck Act were unchanged by the amendments, except that “lessee or oper-ator” was added in every section after “owner.”36 Prior to the 1986 amend-ments, the abandonment of a wrecked vessel by the shipowner extinguishedliability for the cost of removal for the non-negligent shipowner; only thenegligent shipowner who voluntarily or carelessly sunk his/her vessel wouldincur liability.37


30Id. § 415(b).31Id.32Id. § 415(c).33Id. § 416.34Ison v. Roof, 698 F.2d 294, 297.35Id.36Water Resources Development Act of 1986, Pub. L. No. 99-662, 100 Stat. 4082 (1986).37Tennessee Valley Sand & Gravel Co. v. M/V Delta, 598 F.2d 930, 934 (5th Cir. 1979) (stipulating

that “[t]he duty of an owner whose actions [were] responsible for the sinking [was] non-delegable andinescapable. If he fail[ed] to act to remove the obstruction, the government [could] undertake the task in


Currently, except in cases of non-negligent sinking that occurred prior tothe enactment of the 1986 amendments, the abandonment of a wreck or otherobstruction does not eliminate the shipowner’s liability for the cost ofremoval and disposal undertaken by the Corps of Engineers.38 For vesselsthat wrecked or were sunk prior to the 1986 amendments, the obligation toremove the wreck rested solely with the owner, excluding the operator or les-see, and the owner’s obligation to reimburse the United States for removalcosts was limited to cases of voluntary or careless sinking.39 With the 1986amendments came the reinvention of the standard under the Wreck Act. Now,§ 409 has a strict liability standard and the shipowner, regardless of whetherhe/she is negligent or non-negligent, is liable without fault for all removalcosts.40 The purpose of amending the Wreck Act in 1986 was to increase theability of the Corps of Engineers to recover wreck removal costs becausegenerally, wreck removal costs exceed the salvage value of the vessel.41

the interest of navigation safety and the owner [would] be held liable not only for this cost . . . but forany damage caused by the wreck in the meantime”) (holding further that “[t]he owner of a vessel sunkwithout any negligence on his part [was] still subject to the statutory obligation to remove the wreck . . .but [was] given an option: he [could] either raise the vessel himself and seek recovery of the expensesfrom the party responsible for the sinking . . . or he [could] abandon the vessel and allow the UnitedStates to bear the burden of removal and recovery of expenses from the negligent party. If the non-negligent owner exercise[d] his right to abandon, he [was] liable neither for the cost of removal nor fordamages suffered by third parties as a result of the wreck.”). See Wyandotte Transp., 389 U.S. at 207(declaring that unlike a negligent sinking, a non-negligent sinking was not unlawful under the Wreck Actand stating that it was highly unlikely that “Congress, having specified that only a negligent or intentionalsinking [was] a crime, would then employ such indirect language to grant the culpable owner a person-al civil immunity from the consequences of that crime”), Mecom v. Levingston Shipbuilding Co., 622F.2d 1209, 1212 (5th Cir. 1980) (deciding that because the shipowner abandoned his barge and since hewas a non-negligent owner, he would “never voluntarily incur the expense of raising the vessel, nor mayhe be forced to reimburse the government for its salvage costs”), Humble Oil & Refining Co. v. The TugCrochet, 422 F.2d 602, 608 (5th Cir. 1970) (holding that when a vessel wrecked in a navigable channeldue to the negligence of its owner, that vessel could not be abandoned to the United States, and theshipowner remained liable for all damages resulting from the wreck’s continued interference with navi-gation), United States v. Cargill, Inc., 367 F.2d 971, 978 (5th Cir. 1966) (establishing that the WreckRemoval Act allowed only an innocent owner to abandon his ship and that a negligent party must raisethe vessel or pay for its removal), Jones Towing, Inc. v. United States, 277 F. Supp. 839, 848 (E.D. La.1967) (determining that the owner of a wrecked ship had the initial duty of removing or marking the ves-sel but after the wreck was abandoned, the duty clearly rested with the United States), United States v.Osage Co., 414 F. Supp. 1097, 1101 (W.D. Pa. 1976) (stating that “[o]nly owners of ships which sinkwithout fault still retain the right to abandon as an alternative to removal without paying the cost ofremoval”).

3833 C.F.R. § 245.45(f), In re Barnacle Marine Management, Inc., 233 F.3d 865, 871 n.6 (5th Cir.2000).

39Id. § 245.3(c).40In re Southern Scrap Material Co., 713 F. Supp. 2d 568, 576 (E.D. La. 2010).41Fuesting v. Lafayette Parish Bayou Vermilion District, 470 F.3d 576, 580 (5th Cir. 2006).

C. Code of Federal Regulations

1. United States Coast Guard

The purpose of 33 C.F.R. Chapter I, Part 64 is the protection of maritimenavigation and the regulation applies to sunken vessels in the navigablewaters or waters above the continental shelf of the United States.42 Under §64.11(a), the “owner and/or operator of a vessel, raft, or other craft wreckedand sunk in a navigable channel must mark it immediately with a buoy orbeacon during the day and with a light at night.”43 Additionally, § 64.11(b)stipulates that the owner and/or operator of a sunken vessel, raft, or othercraft must mark it if it constitutes a hazard to navigation.44 Accordingly, itappears that § 64.11(a) applies to any craft wrecked and sunk in a navigablechannel, regardless of whether it constitutes a hazard to navigation.45 A haz-ard to navigation is defined as an obstruction that “presents sufficient dan-ger to navigation so as to require expeditious, affirmative action such asmarking, removal, or redefinition of a designated water to provide for navi-gational safety.”46 Furthermore, under § 64.11(c), the owner and/or operatorof a sunken vessel, raft, or other craft must promptly report the wreck to theDistrict Commander, and under § 64.11(g), all markings of sunken vessels,rafts, or other crafts must be reported to and approved by the DistrictCommander.47 If not approved, then under § 64.11(h), the markings must bereplaced as soon as practicable with approved markings.48

Section 64.16 requires markings to be maintained until the sunken vesselis removed or the right of the shipowner to abandon the vessel is legallyestablished and exercised. Notice to abandon must be made to the Corps ofEngineers, rather than the Coast Guard.49

2. United States Corps of Engineers

33 C.F.R. Chapter II, Part 245 also applies to the removal of wrecks with-in the navigable waters of the United States. Its purpose is to ensure that theimpacts from obstructions are minimized, while recognizing the obligationsof owners, operators and lessees.50 Section 245.10(b) stipulates that primary


4233 C.F.R. § 64.01, 33 C.F.R. § 64.03(a)(2).43Id. § 64.11(a).44Id. § 64.11(b).45Id. § 64.11(a).46Id. § 64.06.47Id. § 64.11(c), Id. § 64.11(g).48Id. § 64.11(h).49Id. § 64.16.5033 C.F.R. § 245.1, 33 C.F.R. § 245.3(a).

responsibility for the removal of wrecks rests with the owner, operator, orlessee.51 Further, before undertaking Corps of Engineers removal, theDistrict Engineer will attempt to identify the owner or other responsibleparty and actively pursue removal if an obstruction presents a hazard to nav-igation and therefore removal is warranted.52 Under § 245.10(c), the Corpsof Engineers may remove obstructions that impede or stop navigation orpose an immediate and significant threat to life, property, or a structure thatenables navigation.53 In non-emergency situations, the Corps of Engineersand the Coast Guard jointly evaluate all reported obstructions to determinewhether they impact safe navigation, and the two organizations then estab-lish a course of action for removing the wreck.54 If the obstruction is not ahazard to general navigation, it will not be removed by the Corps ofEngineers.55 A hazard to navigation is defined as an obstruction that presentssufficient danger to navigation so as to require expeditious, affirmativeaction to provide for navigational safety.56

Section 245.20 provides the factors which the Coast Guard and Corps ofEngineers consider to determine whether an obstruction poses a hazard tonavigation.57 The factors to be considered include: (1) the location of theobstruction in relation to the navigable channel and navigational traffic pat-terns; (2) the navigational difficulty in the vicinity of the obstruction; (3) theclearance or depth of water over the obstruction and the fluctuation of waterlevel; (4) the type and density of commercial and recreational vessel traffic;(5) the physical characteristics of the obstruction, including cargo; (6) thepossibility of movement of the obstruction; (7) the location of the obstruc-tion in relation to existing aids of navigation; (8) the prevailing and histori-cal weather conditions; (9) the length of time the obstruction has been inexistence; and (10) the history of vessel accidents involving the obstruc-tion.58

Section 245.25 stipulates that once an obstruction has been determined tobe a hazard to navigation, the Corps of Engineers and Coast Guard willdecide appropriate remedial action.59 Section 245.25(b) lists the options forremedial action, including: (1) no action; (2) charting of the wreck; (3)broadcasting a Notice to Mariners and publicizing navigational safety infor-


51Id. § 245.10(b).52Id.53Id. § 245.10(c).54Id. § 245.10(d).55Id.5633 C.F.R. § 245.5.5733 C.F.R. § 245.20.58Id.5933 C.F.R. § 245.25.

mation; (4) marking; (5) redefining the navigational area; and/or (6)removal.60 Under § 245.30, if marking or removal is determined an appro-priate remedial action and there is no emergency, the Corps of Engineerswill investigate to determine the owner, operator, or lessee of the vessel.61 Ifthe owner is identified, the Corps of Engineers or the Coast Guard will senda notice via certified mail advising the owner of his/her obligation to markand to remove the vessel and the legal consequences for failure to do so.62 Ifthe owner cannot be identified, the Corps of Engineers will publish a legaladvertisement in the newspaper at least once a week for 30 days.63

Section 245.35 provides that if the owner, operator, or lessee has beenidentified and refuses or fails to take prompt action toward removal, theCorps of Engineers may seek a judgment by the courts requiring removal, orthe Corps of Engineers may remove the wreck itself.64 Under § 245.40(a), ifthe owner, operator, or lessee agrees to remove the vessel, the Corps ofEngineers will assure that: (1) the marking is accomplished promptly and ismaintained; (2) the plan for removal and disposal is reasonable andapproved by the District Engineer; (3) the removal operations do not unrea-sonably interfere with navigation; (4) all conditions of the Corps ofEngineers permits are met; and; (5) the removal operations are pursued dili-gently.65 If the Corps of Engineers determines that the removal is not pro-ceeding in a satisfactory fashion, the Corps of Engineers will notify theowner, operator, or lessee of the deficiencies and give them reasonable timeto correct the situation. If the problems detailed by the Corps of Engineersare not corrected promptly, the Corps of Engineers may declare the wreckabandoned and proceed with removal itself.66

Section 245.45 establishes the standards for abandonment of a wreckedvessel.67 Under § 245.45(a), abandonment means the surrendering of allrights to a vessel and its cargo by the owner, and abandonment is a precon-dition to the Corps of Engineers removal, excluding emergency situations.68

Abandonment is established by either affirmative action on the part of theowner declaring abandonment, or by a failure of the owner to commenceimmediate removal of the vessel or to prosecute removal diligently.69 The


60Id. § 245.25(b).6133 C.F.R. § 245.30.62Id.63Id.6433 C.F.R. § 245.35.6533 C.F.R. § 245.40(a).66Id.6733 C.F.R. § 245.45.68Id. § 245.45(a).69Id.

District Engineer determines whether removal has commenced immediate-ly, or has been prosecuted diligently “based on the degree of hazard to nav-igation, the difficulty and complexity of the removal operation, and theappropriateness of the removal effort.”70 Once the vessel is considered aban-doned, the owner may no longer undertake to remove the vessel or make anyclaim upon the vessel or its cargo.71 However, the abandonment of thewrecked vessel does not extinguish the owner’s liability for the costs ofremoval and disposal undertaken by the Corps of Engineers, and the Corpsof Engineers will seek reimbursement from the owner, operator, or lessee forall removal and disposal expenses in excess of the value of the recoveredvessel and cargo.72

D. Judicial Interpretation

Court decisions interpreting the Wreck Act have mostly been uniform, atleast with respect to their construction of the standard requirements of theWreck Act. The Eastern District of Louisiana divided § 409 of the WreckAct into three separate operative clauses:

The first clause prohibits the sinking, or permitting or causing the sinking, ofvessels or other craft in navigable channels [in such a manner as to prevent orobstruct the passage of other vessels73]. The second clause provides that theowner, lessee, or operator of a vessel sunken in a navigable channel must[immediately] mark it with a buoy or beacon by day and a light at night. Thethird clause provides that the owner, lessee, or operator of a vessel sunken ina navigable channel shall commence the immediate removal of the vessel andprosecute the removal diligently, or else be considered as having abandonedthe vessel, subjecting it to removal by the United States . . .” (emphasisadded).74

This section will focus on the case law interpretation of those phrasesemphasized above.

1. Navigable Channels

Because the term “navigable channel” is not expressly defined in theWreck Act, it is important to look to case law in order to attach a particularmeaning to the term. However, the Code of Federal Regulations, Title 33, §


70Id. § 245.45(c).71Id. § 245.45(e).72Id. § 245.45(f), 33 C.F.R. § 245.50.7333 U.S.C. § 409.74Southern Scrap, 713 F. Supp. 2d at 576.

64.06 defines navigable waters with respect to the Coast Guard’s discretionof marking wrecked vessels as those waters described in § 2.36(a) ofChapter 1 of Title 33.75 In § 2.36(a), navigable waters of the United Statesare defined as the “territorial seas of the United States,” the “internal watersof the United States that are subject to tidal influence,” and the

internal waters of the United States not subject to tidal influence that . . . [a]reor have been used, or are or have been susceptible for use, by themselves orin connection with other waters, as highways for substantial interstate or for-eign commerce . . . or . . . [a] governmental or non-governmental body . . .determined to be capable of improvement at a reasonable cost . . . to provide,by themselves or in connection with other waters, as highways for substantialinterstate or foreign commerce.76

In addition to this C.F.R. definition, courts have interpreted navigablechannels to include those channels in or near waters that are open for the useof others and capable of sustaining the traffic of other vessels.77 Additionally,the term “navigational channel” is not limited to the dredged, buoy-markedchannels to which commercial vessels are confined.78 Further, courts haveheld that waterways are navigable when they are navigable in fact.79

Navigable in fact means waterways that are “used, or are susceptible ofbeing used, in their ordinary condition, as highways for commerce, overwhich trade and travel are or may be conducted in the customary modes oftrade and travel on water.”80 Water channels additionally are navigable when“they form in their ordinary condition by themselves, or by uniting withother waters, a continued highway over which commerce is or may be car-ried on with other States or foreign countries in the customary modes inwhich such commerce is conducted by waters.”81 Likewise, a channel hasbeen defined as “the customary and traveled fairway for craft of the partic-ular class under consideration.”82 Therefore, the term “navigable channel”under the Wreck Act seems to be all encompassing, at least with respect tothose waterways frequently traveled.


7533 C.F.R. § 2.36(a).76Id.77Raven, 500 F.2d at 732.78Chute v. United States, 610 F.2d 7, 16 n.5 (1st Cir. 1979), Red Star Towing & Transporting Co. v.

Woodburn, 18 F.2d 77, 77 (2d Cir. 1927).79United States v. Cavalliotis, 105 F. Supp. 742, 744 (E.D.N.Y. 1952), National Forwarding Co. v.

Payne, 297 F. 663, 666 (S.D.N.Y. 1923).80Cavalliotis, 105 F. Supp. at 744.81Id., quoting The Daniel Ball, 77 U.S. 557, 563 (1870).82Duet v. Delta Marine Drilling Co., 215 F. Supp. 898, 901 (E.D. La. 1963).

2. Obstruction to the Passage of Other Vessels

The determination whether a wrecked vessel constitutes an obstruction tonavigation rests with the Corps of Engineers, rather than with the party bear-ing the costs of removal, and the Corps’ determination will be overturned bya court only if it is arbitrary and capricious.83 As discussed previously, theCorps of Engineers, together with the Coast Guard, will establish whether awrecked vessel creates an obstruction using the various factors found in §245.20 of Title 33 of the Code of Federal Regulations.84 Under § 414 of theWreck Act, the Corps of Engineers may remove a wrecked vessel if it hasexisted as an obstruction for longer than 30 days, or abandonment by theshipowner has otherwise been established.85 Courts have held that it is notnecessary that the wrecked vessel constitutes a present, actual obstruction tonavigation before action can be taken by the Corps of Engineers under §414; the Corps of Engineers may act if a wrecked vessel restricts, endangers,or interferes with navigation.86 If a wreck endangers navigation because itposes a potential hazard to navigation under circumstances which may rea-sonably be anticipated to occur, then the obligation to remove is triggered.87

Moreover, the Supreme Court has held that an obstruction to navigation isanything that affects the navigable capacity of the waterway of the UnitedStates.88 Anything that affects the navigable capacity of a waterway includesexcavating, filling, or altering the course, location, condition, or capacity ofany port, canal, or channel.89

3. Immediately Mark the Wreckage with a Buoy or Beacon by Day and aLight at Night

The duty to mark a wrecked vessel is a strict one extending to owners,operators, and lessees of vessels. The failure to mark the wreck is unlawfulunder § 409 of the Wreck Act because it undermines the safety of the navi-gable channel.90 Further, the duty to monitor and maintain the marking of a


83Agri-Trans Corp. v. Gladders Barge Line, Inc., 721 F.2d 1005, 1010 (5th Cir. 1983).8433 C.F.R. § 245.20.8533 U.S.C. § 414.8633 C.F.R. 245.5, United States v. Rafael, 349 F. Supp. 2d 84, 95 (D. Mass. 2004), quoting Wolder

v. United States, 613 F. Supp. 1139, 1150 (D. Hawai’i 1985).87Wolder, 613 F. Supp. at 1150.88United States v. Republic Steel Corp., 362 U.S. 482, 489 (1960).89United States v. Moran Towing & Transportation Co., 374 F.2d 656, 662 (4th Cir. 1967).90Removal of Wrecks and Other Obstructions, 53 Fed. Reg. 27511-02, Morania Barge No. 140, 312

F.2d at 80 (holding that the masters of vessels plying navigable channels should be free to assume thatthe channel was clear of sunken vessels unless markers were present as required by law).

wrecked vessel is continuous.91 A vessel owner may hire an agent or thirdparty to search for and mark a wreck. However, the owner remains ulti-mately responsible and although a third party may be held liable for negli-gently marking a wrecked vessel, that does not absolve the owner of liabili-ty under the Wreck Act.92 However, courts have held that if the owner of thevessel makes a good faith search for the wreck and is unable to find it, theowner will be relieved of any liability under the Wreck Act.93 It is unclearwhether this due diligence “defense” is still true after the 1986 amendmentsand the inclusion of the strict liability standard.

The courts have strictly interpreted what constitutes a sufficient markingunder the Wreck Act. Where a vessel wrecked between two piers, the plac-ing of a small red flag on the end of one of the piers was held insufficient tomark the position of the sunken vessel.94 Moreover, where a small red lanternwas placed at the end of a pier to mark a large sunken wreck, it was deemedinadequate to warn of the wreckage.95 Further, where a buoy marking wreck-age was unlit at night, the owner was deemed negligent in failing to ade-quately mark and monitor the wreckage and held liable for the subsequentallision.96 In a case where the master of another vessel considered the mark-


91Inland Tugs Co. v. Ohio River Co., 709 F.2d 1065, 1071 (6th Cir. 1983), Ison, 698 F.2d at 297(deciding that there was ample basis to impose liability on the owners of a partially sunken barge for theirfailure to maintain a light at night, thus, creating a hazard to navigation), Humble Oil & Refining, 422F.2d at 607 (stating that “[c]ommon sense and regulations tell even landlubbers that floating aids to nav-igation [were] liable to be carried away or disabled through natural causes or accidents and [were] not asreliable as shore-based navigation aids”).

92Inland Tugs, 709 F.2d at 1071 (holding that actual marking of a wreck by the Coast Guard did notrelieve the owner of his duty and responsibility to suitably mark the obstruction and the failure to verifythat the Coast Guard had fulfilled its representation to mark the wreck and failure to visit the wreck sceneto determine if the wreck was marked, constituted negligence under the Wreck Act), see Humble Oil &Refining, 422 F.2d at 609 (deciding that while lighting and marking by the United States relieved a pri-vate party of that function, it did not relieve the owner of a negligently sunken wreck of his additionalimmediate and continuing duty to remove the obstruction to navigation).

93Allied Chemical Corp. v. Hess Tankship Co. of Delaware, 661 F.2d 1004, 1061 (5th Cir. 1981), seeMiss Janel, 725 F. Supp. at 1568 (stating that the search that took place for the wreck was inadequate underthe circumstances because the search was done in an efficient means for only three hours and therefore,could not have reasonably been said to have been a full, good faith search fulfilling the shipowner’s obli-gations under the Wreck Act), The Snug Harbor, 53 F.2d 407, 410 (E.D.N.Y. 1931 (holding that the peti-tioner could not escape liability because the wreck could have been found by the exercise of due diligence).

94National Forwarding, 297 F. at 666.95The Cornell No. 20 v. Gladstone, 8 F. Supp. 431, 432 (S.D.N.Y. 1934), see The William Nelson v.

Knickerbocker Ice Co., 296 F. 553, 556 (E.D.N.Y. 1923) (determining that lanterns placed flush with theend of the pier were inadequate because the duty to mark should have been performed in a manner togive notice that the wreck extended 30 to 35 feet in the water beyond the pier), but see Sullivan v. P.Sanford Ross, Inc., 263 F. 348, 350 (2d Cir. 1920) (holding that a lighted lantern fixed to a pole five feetabove the water was sufficient to mark the wreck).

96Tidewater Marine, Inc. v. Sanco International, Inc., 113 F. Supp. 2d 987, 1000 (E.D. La. 2000),Seeley v. Red Star Towing & Transportation Co., 396 F. Supp. 129, 132 (S.D.N.Y. 1975), Home ShippingCo. v. United States, 239 F. Supp. 226, 230 (D. Del. 1965).

ing of a wreck as merely debris, those markings were found inadequate towarn of the wreckage.97 In the case of The E.M. Millard,98 the court held thateven though floating coffee cans in the New York Harbor were uncommon,the vessel owner inadequately marked the wreckage by attaching a coffeecan to the wreck.99

There are many factors courts consider in determining whether a buoywas properly located to mark a wreck, including the width of the channel,the depth of the water, whether the wreck is in open waters, the volume ofvessel traffic, and the probable effect of ice or storms on the buoy.100

Courts have construed “immediate” to mean within a reasonable timeafter knowledge of the wreck, as determined by the particular circumstancesof the case.101 The court in The Anna M. Fahy, stated that what might be jus-tifiable delay in one case might be culpable delay in another. In that case, thevessel owner could have reached the vessel to mark it in less than an hourafter he was notified of the obstruction and therefore, he was liable for fail-ing to do so.102 However, in City of New York v. Morania No. 12, the courtheld that the shipowner was not liable for violating the immediacy require-ment when the tug boat sank within one or two minutes after colliding withanother tug and a few minutes later was collided with by a barge.103

4. Immediate Removal of the Wreckage and Prosecuted Diligently

Under § 409 of the Wreck Act, the owner, lessee, or operator shall com-mence the immediate removal of a wrecked vessel and prosecute thatremoval diligently and if not, the vessel will be considered abandoned andsubject to removal by the United States.104 Although “immediate” and “dili-gently” have not been statutorily defined in this context, courts have givensome guidance as to their meanings. Additionally, it can be inferred from thelanguage of § 414 of the Wreck Act, in which the United States is allowedto remove wreckage after 30 days, that “immediate removal” means removalwithin thirty days after the wreckage came into existence.105 The court inSeeley v. Red Star Towing & Transp., held that a shipowner who discovered


97Ingram Corp. v. Ohio River Co., 505 F.2d 1364, 1367 (6th Cir. 1974) (holding that grease can andClorox bottle attached to the wreck were insufficient markings).

98The E.M. Millard, 285 F. 94, 94 (E.D.N.Y. 1922).99Id. (stating that “[t]here is nothing in the record to justify a finding that a coffee can is a proper

buoy).100Somerset Seafood Co. v. United States, 193 F.2d 631, 637 (4th Cir. 1951).101The Anna M. Fahy, 153 F. 866, 867 (2d Cir. 1907).102Id.103City of New York v. Morania No. 12, Inc., 357 F. Supp. 234, 241 (S.D.N.Y. 1973).10433 U.S.C. § 409.10533 U.S.C. § 414.

his wrecked vessel in December 1971, and unsuccessfully tried to removethe ship in 1973, but then two weeks later successfully removed it, did notconstitute a prompt removal of the ship, and therefore, the shipowner vio-lated the Wreck Act.106

Sections 414 and 415 of the Wreck Act authorize the United States toremove vessels sunken in navigable waterways and to recover removal costsfrom the owner, when the owner, operator, or lessee fails to prosecute theremoval diligently.107 The United States is authorized to assert a personal lia-bility claim against the vessel owner under the Wreck Act for the recoveryof its actual costs of removing the wreckage, without alleging that the ves-sel owner negligently caused the sinking.108 The court in U. of Texas MedicalBranch v. United States, reasoned that the government is entitled to compelthe responsible parties to remove the wreck and if the government itselfremoves, it should not be penalized for its prompt action and should be ableto recover the expenses of removal.109 That same reasoning would also applyunder the current strict liability standard. Likewise, because the Wreck Actis a strict liability statute, contributory negligence on the part of the UnitedStates is not available as a defense for the shipowner. However, if the gov-ernment can be shown to be solely at fault in causing the sinking, then adefense based on the government’s sole fault may be available.110

5. Abandonment of the Wreckage, Subjecting Wreckage to Removal by theUnited States

The Wreck Act provides that if removal is not prosecuted immediatelyand diligently, the wreck is considered abandoned and the United States isauthorized to remove the vessel.111 Before the 1986 amendments to theWreck Act, courts held that the initial duty of removing a wrecked ship rest-ed upon the owner until abandonment, but after abandonment, the duty toremove transferred to the United States.112 Further, courts at that time heldthat it was only the innocent shipowner who could abandon his/her wreckedship that obstructed navigation without responsibility for removal. However,


106Seeley, 396 F. Supp. at 132.107Southern Scrap, 541 F.3d at 589-90.108Id. at 573.109University of Texas Medical Branch at Galveston v. United States, 557 F.2d 438, 447 (5th Cir.

1977).110Southern Scrap, 541 F.3d at 580.11133 U.S.C. § 409.112Jones Towing, 277 F. Supp. at 848, Somerset Seafood, 193 F.2d at 634.

the negligent owner was required to remove the vessel or reimburse theUnited States for the expense of the vessel’s removal.113

Presently, and since the time of the 1986 amendments to the Wreck Act,the negligence of the vessel owner is a moot point. Any owner, lessee, oroperator who abandons his/her wrecked vessel is liable to the United Statesfor the full cost of removal or destruction and disposal which exceeds thecosts recovered in a sale of the salvaged wreck, regardless of whether he/sheis negligent or innocent with respect to the sinking of the vessel.114

Abandonment is a precondition to the United States removing the wreck toavoid “taking” private property for a public purpose.115 Under Title 33 of theCode of Federal Regulations, § 245.45, abandonment is established by affir-mative action on the part of the owner declaring his/her intention to aban-don, or by the shipowner’s failure to commence immediate removal dili-gently.116 Abandonment by the operator or lessee is not sufficient, it must bethe shipowner who abandons the vessel.117 If no removal operations areundertaken and the Corps of Engineers is unable to identify the shipownerthrough investigation or 30 days of public notice, then abandonment of thevessel is presumed.118 After the vessel has been abandoned, the shipownerhas no further right to the vessel or its cargo.119 However, the shipowner willstill be liable the United States for the actual costs of wreck removal, includ-ing administrative costs.120

Even with respect to situations involving maritime catastrophes, courtshave been reluctant to extinguish the shipowner’s strict liability for costs ofremoving a wrecked vessel.121 The Eastern District of Louisiana, deciding onremand from the Fifth Circuit Court, held in In Re Southern Scrap, thatHurricane Katrina, as an Act of God, was not a defense to abolish the vessel


113Mecom, 622 F.2d at 1212 (holding that because the shipowner abandoned the barge and was a non-negligent owner, he would never voluntarily incur the expense of raising the vessel, nor could he beforced to reimburse the government for expenses), Tennessee Valley (stipulating that the owner of asunken vessel without any negligence on his part was still subject to the statutory obligation to removethe wreck but he could either raise the vessel himself and seek recovery of the expenses from the partyresponsible for the sinking, or he could abandon the vessel and allow the United States to assume removaland recovery of expenses from the responsible party. If the non-negligent shipowner abandons the ves-sel, he is neither liable for the cost of removal nor for any damages suffered by third parties as a resultof the wreck), see Osage, 414 F. Supp. at 1101, Humble Oil & Refining, 422 F.2d 602, Jones Towing,277 F. Supp. at 848, Cargill, 367 F.2d at 978.

11433 U.S.C. § 414.11533 U.S.C. § 245.45(a).116Id.117Id.118Id.119Id.120Southern Scrap, 713 F. Supp. 2d at 589.121In Re Southern Scrap, 713 F. Supp. 2d 568, 578-79 (E.D. La. 2010).

owner’s liability for expenses of removal.122 The Court held that “[s]trict lia-bility theory is anchored to being held accountable, even absent bad con-duct.”123 Further, the Court held that under the current Wreck Act, the ownerof a wrecked vessel sunk in navigable waters had a clearly expressed duty,without regard to fault, to both mark and remove the wreck.124 Thus, becausefault was irrelevant, the shipowner could not and would not be excused fromliability by an Act of God, since the statute imposed strict liability and strictaccountability.125 The court additionally reasoned that to allow an Act of Goddefense would “ignore and undermine the clear language of the [Wreck]Act.” Should the Court have ruled otherwise in acceptance of an Act of Goddefense, then the result would be a shifting of the burden of removal fromthe shipowner to the United States to become something of an insurer orsurety for the shipowners, effectively forcing the responsibility for removingthe wreck to the United States. This type of holding by a court would betotally contrary to the purpose of the Wreck Act.126 A ruling permitting anAct of God defense could have resulted in extensive litigation from thou-sands of post-Katrina wreck removal claims where the United States wouldbe responsible for removing and funding the removal of all wrecks ulti-mately left aground in navigable waterways.127 Thus, the court rejected theAct of God defense and determined that the shipowner, as a matter of law,was liable to the United States for the costs of removing the wreckage.128

E. Liability of the Shipowner to Third Parties

Owners of vessels that wreck in navigable waters are liable for resultingdamages to third parties. Negligent conduct occurring on navigable watersthat causes loss to another constitutes a maritime tort and creates liability onthe part of the wrongdoer for damages resulting from a subsequent allisionwith a wreck.129 The Eastern District of Louisiana in Tidewater Marine, Inc.v. Sanco Intn’l, Inc., decided that a party’s negligence is actionable undergeneral maritime law if it is a legal cause of the plaintiff’s injuries, “legalcause” meaning something more than “but for” causation, and that thedefendant’s negligence must be a substantial factor in causing the injury. The


122Id. at 578.123Id.124Id.125Id.126Id. at 579.127Id.128Id.129Tidewater Marine, Inc. v. Sanco International, Inc., 113 F. Supp. 2d 987, 998 (E.D. La. 2000);

Nunley v. M/V Dauntless Colocotronis, 696 F.2d 1141, 1146 (5th Cir. 1983).

Court concluded that the defendant in the case, Sanco International – whichowned a three-legged jack-up rig that had broken up while under tow in theGulf of Mexico, creating an obstruction to navigation and resulting in anallision with an offshore tug – was negligent in not properly monitoring andmaintaining the marking on the obstruction, and therefore liable for damageto the tug which allided with the wreck.130

The Pennsylvania Rule creates a presumption that any party to a maritimeaccident who violates a federal statute intended to prevent allisions is at faultfor the allision.131 The burden of proof is shifted onto the violator to prove notjust that the violation was not a cause of the allision, but also that it could nothave been a cause of the allision.132 Courts have held that the PennsylvaniaRule not only applies to ships, but also applies to those parties who do notproperly mark an object in navigable waters.133 The Sixth Circuit in Ison v.Roof, held that the defendants, owners of a partially sunken barge, were obli-gated to mark the barge with a warning light and in failing to do so, had vio-lated the Wreck Act. The Court went on to hold that the defendants did notadequately prove their violation of the Wreck Act could have not been a causeof the collision and therefore, were liable to the plaintiffs, owner of a pleas-ure craft and his passengers, for personal injury and property damage.134

However, under the Oregon Rule, when a moving vessel strikes a fixedobject, and the person operating the vessel had actual knowledge of theobstruction to navigation, he is under a duty to avoid it and there is a pre-sumption that the moving vessel was at fault.135 Thus, the negligence of thecaptain of a moving vessel which strikes a hazard to navigation, is taken intoaccount when allocating fault in determining damages.

Because the Wreck Act is a federal statute, if the owner of a wreck violatesthat statute, such as by not marking the wreck or not maintaining that marking,that owner will be liable for subsequent damages and will have to prove thathis/her violation could not have caused the resulting allision with the wreck.

F. Limitation of Liability

The Limitation of Liability Act, 46 U.S.C. § 30505 provides:

[T]he liability of the owner of any vessel for any claim, debt, or liability [aris-


130Tidewater Marine, 113 F. Supp. 2d at 990, 1000.131The Pennsylvania, 86 U.S. 125, 136 (1873), see Ison v. Roof, 698 F.2d 294, 297 (6th Cir. 1983).132Tidewater Marine, 113 F. Supp. 2d at 997.133Tidewater Marine, 113 F. Supp. 2d at 997; Gele v. Chevron Oil Co., 574 F.2d 243, 247 (5th Cir.

1978).134Ison v. Roof, 698 F.2d 294, 297 (6th Cir. 1983).135Tidewater Marine, 113 F. Supp. 2d at 1003.

ing from any embezzlement, loss, or destruction of any property, goods, ormerchandise shipped or put on board the vessel, any loss, damage, or injuryby collision, or any act, matter, or thing, loss, damage, or forfeiture, done,occasioned, or incurred, without the privity or knowledge of the owner] shallnot exceed the value of the vessel and pending freight.136

It is generally held that a shipowner cannot invoke the Limitation ofLiability Act in an action involving the Wreck Act.137 The court in Universityof Texas Medical Branch ruled that in order to invoke the Limitation ofLiability Act, a shipowner must not have been personally negligent and thenegligence of his ship’s master or crew must not have been within his priv-ity or knowledge.138 Therefore, the court held that if the owner of the wreckwas entitled to limit his liability, the majority of the expense of removing thewreck would be borne by the government, an innocent party, and that thegovernment should not be penalized for its action and should be able torecover the expenses of removal.139 The court thus decided that the“Limitation Act does not wreck the Wreck Act and the Wreck Act is not lim-ited by the Limitation Act.”140 Thus, some courts found that because theWreck Act, prior to the 1986 amendments, required the sinking of a vesselto be voluntary or careless, it was in direct conflict with the Limitation Act’srequirement that the owner have no privity or knowledge of the damage orloss.

However, the court in Herbert v. Exxon Corp., held that a vessel ownercan assert limitation of liability for damages caused by his/her wrecked ves-sel, but that failure to comply with the requirements of the Wreck Act pre-cludes the owner from limiting his/her liability.141 Therefore, whether theshipowner of a wrecked vessel will be entitled to the protections of theLimitation Act depends on the circumstances of the case, including: “theowner’s knowledge of the sinking; the owner’s diligence in complying withthe requirements of the Wreck Act; the cause of collision with the wreck;


13646 U.S.C. § 30505 (2006).137University of Texas, 557 F.2d at 447.138Id.139Id.140Id. at 454. See also In re Chinese Maritime Trust, Ltd., 478 F.2d 1357, 1361 (2d Cir. 1973) (hold-

ing that the immediate obligation to remove the obstruction was imposed upon the shipowner regardlessof whether the sinking was caused by his negligence. The owner could not contend, then, that his failureto remove the vessel and the consequent expense of removal incurred was without his privity or knowl-edge), In re Pacific Far East Line, Inc., 314 F. Supp. 1339, 1349 (N.D. Cal. 1970) (stipulating that thestatutory duty to diligently remove the wreck was a mandatory obligation personal to the shipowner andthe failure to do so was within the privity and knowledge of the owner).

141Herbert v. Exxon Corp., 659 F. Supp. 130, 131 (E.D. La. 1987).

and the owner’s privity or knowledge of the fault of the collision with thewreck.”142

Recently, the Fifth Circuit decided that the Limitation Act does not applyto limit a shipowner’s liability under the Wreck Act after the 1986 amend-ments.143 The court in In re Southern Scrap Material Co., decided that per-mitting the shipowner to invoke the Limitation Act would nullify the effectsof §§ 414 and 415 of the Wreck Act, which impose unlimited personal lia-bility upon the shipowner for governmental removal costs when the ownerfails to comply with the obligation to remove the wrecked vessel.144 Further,the court held that when two statutes conflict, the more recent statute con-trols.145 Following the 1986 amendments and presently, a non-negligentshipowner is no longer able to automatically limit his liability by abandon-ing his vessel, but is now held personally liable for the wreck removal costsincurred by the United States when the owner fails to remove the wreckedvessel.146 By contrast, the Limitation Act allows for limitation on the entire-ty of recoverable damages in a marine accident to the post-accident value ofthe vessel and its cargo.147 Thus, the Fifth Circuit concluded that the twostatutes “irreconcilably conflict in respect to the nature and scope of a ves-sel owner’s liability when the United States sues to recover wreck removalcosts” and because the Wreck Act was enacted in 1899 after the LimitationAct in 1850, the Wreck Act controls.148

G. Insurance

Protection and Indemnity (P&I) Clubs provide insurance to shipownersand indemnify members with respect to costs for the raising, removal,destruction, lighting, or marking of a wreck when such activities are com-pulsory by law.149 P&I Clubs have not generally provided any definition of“compulsory by law” so courts have established different standards to deter-mine when wreck removals are compulsory by law.

The Second, Third, and Fifth Circuits have established very different stan-dards. Under the Second Circuit approach, “compulsory by law” is a term ofart that means that removal is covered only when a governmental body


142Id.143Southern Scrap, 541 F.3d at 593.144Id.145Id. at 594.146Id.147Id.148Id.149Steven J. Hazelwood & David Semark, P&I CLUBS LAW AND PRACTICE 178 (4th ed. 2010).

orders such a removal.150 The Fifth Circuit rejected the Second Circuitapproach and created a traditional objective test.151 The court in ContinentalOil v. Bonanza, concluded that the phrase “compulsory by law” should beconstrued in its plain, ordinary, and popular sense and ruled that removal iscompulsory by law when a reasonable owner, fully informed, would con-clude that the failure to remove would likely expose him/her to liabilityimposed by the law sufficiently great in amount, and probable of occurrence,to justify the expense of removing the wreck; in other words, the sanctionsfor not removing the vessel would be sufficiently severe to warrant the costof removal.152 The Third Circuit in Grupo Protexa v. All American MarineSlip, adopted an objective balancing test, which established a hybrid, com-bined approach based on the Second and Fifth Circuits’ decisions.153 Underthe Third Circuit’s approach, a valid removal order would create compulsionbut in the absence of a valid removal order, the court should apply the objec-tive test to weigh the probable costs of removal with the likelihood andamount of liability which would be imposed on the shipowner if the wreckwas not removed.154 If found reasonable under that analysis, then removal isconsidered to be compulsory by law.155 Thus, under the Third Circuit’sapproach, a shipowner has two options for showing compulsion by law.156

The Supreme Court has not yet ruled on this apparent split of opinion.It is important to remember, however, that shipowners are only responsi-

ble for removing a wreck that is an obstruction and hazard to navigation ina navigable channel.157 Thus, there is the possibility that removal may not becharacterized as compulsory by law if the wreck is not an obstruction andhazard to navigation. P&I Clubs, therefore, would not cover such removal,if not included elsewhere in the insurance policy. If that is the case, then theshipowner may not desire to remove the vessel and he/she would not berequired to do so under the law.


150Seaboard Shipping Corp. v. Jocharanne Tugboat Corp., 461 F.2d 500, 504 (2d Cir. 1972).151Continental Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1370 (5th Cir. 1983).152Id. at 1369, 1370, 1372.153Group Protexa v. All American Marine Slip, 20 F.3d 1224, 1234 (3d Cir. 1994).154Grupo Protexa v. All American Marine Slip, 954 F.2d 130, 138 (3d Cir. 1992).155Id.156Id.15733 U.S.C. § 414.

IIINAIROBI INTERNATIONAL CONVENTION ON THE REMOVAL

OF WRECKS

International law with respect to wreck removal procedures has neverbeen uniform, as evidenced by the lack of international conventions andtreaties addressing the topic, and thus there has remained a gap in wreckremoval laws internationally. In attempting to fill that gap, in May 2007 theInternational Maritime Organization (IMO) adopted the NairobiInternational Convention on the Removal of Wrecks.158 The NairobiConvention provides the first set of uniform international rules on wreckremoval.159 Four countries are signatories to the Nairobi Convention,Estonia, France, Italy, and the Netherlands.160 Further, ten countries are con-tracting states and have adopted the Convention into their own laws, includ-ing Denmark, Bulgaria, Germany, India, Iran, Malaysia, Morocco, Nigeria,Palau, and the United Kingdom as one sovereign state.161 Denmark recentlyratified the Nairobi Convention on April 14, 2014, thereby enabling theNairobi Convention to come into force exactly 12 months later, April 14,2015.162 The purpose of the Nairobi Convention is to ensure the prompt andeffective removal of wrecks in the “Convention area” that pose a hazard tonavigation or to the marine environment.163 “Convention area” is defined inArticle 1 of the Nairobi Convention as the exclusive economic zone (EEZ)of a state party, or if the country has not established such a zone, then“Convention area” means the area “beyond and adjacent to the territorialsea” of that country, extending no more than 200 nautical miles from thebaseline of that country’s territorial sea.164 A country can also elect to extendthe Convention’s application into its territorial waters, generally 12 nauticalmiles from its coastline.165 The Nairobi Convention additionally provides forstrict liability of shipowners for the costs of reporting, marking, and remov-


158Nina Hanevold, Cleaning up the Wrecks, MARITIME RISK INTERNATIONAL, Jun. 23, 2011, Vol. 25,No. 05.

159Id.160International Maritime Organization, Status of Multilateral Conventions and Instruments in Respect

of Which the International Maritime Organization or its Secretary-General Performs Depositary or OtherFunctions (Feb. 28, 2014), p. 502, http://www.imo.org/About/Conventions/StatusOfConventions/Documents/Status%20-%202014.pdf.

161Id.162The Maritime Executive, Wreck-Removal Convention to Enter Into Force (April 15, 2014),

http://www.maritime-executive.com/article/WreckRemoval-Convention-to-Enter-Into-Force-2014-04-15/.

163Nairobi International Convention on the Removal of Wrecks, May 23, 2007.164Id. Article 1.165Nairobi International Convention, Article 3, Charles D. Michel, Introductory Note to the Nairobi

International Convention on the Removal of Wrecks, 46 I.L.M. 694 (2007).

ing wrecks, and requires compulsory insurance or other financial securityfor shipowners.166

Article 5 of the Nairobi Convention provides that a state (country) partymust require the master and the operator of a vessel flying its flag to report,without delay, to the affected state when that ship is involved in a maritimecasualty resulting in a wreck.167 Article 1 defines “affected state” as the coun-try in whose Convention area the wreck is located.168 Article 6 lists the fac-tors to be taken into account by the affected state in determining whether awreck poses a hazard to navigation necessitating removal, including detailsabout the wreck, the maritime traffic in the area, the amount of cargo and oilon the wreck, the vulnerability of port facilities, the meteorological andhydrographical conditions, etc.169 Article 1 defines “hazard” as any conditionor threat that poses a danger or hindrance to navigation or may “reasonablybe expected to result in major harmful consequences to the marine environ-ment, or damage to the coastline or related interests” of a state party.170

Article 1 further defines “related interests” of a state party as those interestsdirectly affected or threatened by a wreck, including: maritime coastal andport activities, tourist attractions and economic interests, the wellbeing ofthe coastal population in the area of the wreck, and the offshore and under-water infrastructure.171 Article 7 of the Nairobi Convention requires anaffected state (i.e. signatory country) to use all practicable means to warnmariners about the nature and location of the wreck and if the affected statebelieves that the wreck poses a hazard, it must ensure that all practicablesteps are taken to determine the precise location of the wreck.172 Article 8provides that if an affected state determines that the wreck constitutes a haz-ard, it must ensure that all reasonable steps are taken to mark the wreck andit must take practicable steps to ensure that the markings conform to theinternationally accepted system of buoying in use in that area where thewreck is located.173

Article 9 of the Nairobi Convention provides that if the affected statedetermines that the wreck constitutes a hazard, it must immediately informthe country of the ship’s registry and the registered owner and consult thatcountry and other countries affected by the wreck regarding measures to be


166Axel Luttenberger, Biserka Rukavina, & Loris Rak, The Implementation of the NairobiInternational Convention on Removal of Wrecks, 2007 in the Croatian Law (2011).

167Nairobi International Convention, Article 5.168Id. Article 1.169Id. Article 6.170Id. Article 1.171Id.172Id. Article 7.173Id. Article 8.

taken with respect to the wreck.174 Additionally, the registered owner mustremove the wreck if it is determined to constitute a hazard, and must providethe affected state with proof of insurance or other financial security.175

Further, the affected state must set a reasonable deadline within which theregistered owner shall remove the wreck, inform the registered owner inwriting of the deadline and specify that the affected state may remove thewreck at the registered owner’s expense using the most practical and expe-ditious means available if the registered owner does not remove the wreckwithin the deadline, and the affected state must inform the registered ownerin writing that it intends to intervene immediately if the hazard becomes par-ticularly severe.176

Article 10 provides that the registered owner will be liable for the costs oflocating, marking, and removing the wreck unless he/she proves that themaritime casualty that caused the wreck resulted from “an act of war, hos-tilities, civil war, insurrection or a natural phenomenon of an exceptional,inevitable and irresistible character.”177 Moreover, if the wreck was whollycaused by an act or omission committed with the intent to cause damage bya third party, or was entirely caused by the negligence or wrongful act of anygovernment or authority responsible for the maintenance of lights or othernavigational aids in the exercise of that function, then the shipowner will notbe liable for the costs of locating, marking, and removing the wreck; suchcosts will be transferred to the negligent party or parties.178 Moreover, Article10(2) states that nothing in the Convention “shall affect the right of the reg-istered owner to limit liability under any applicable national or internation-al regime.”179

Article 12 of the Nairobi Convention requires the registered owner of aship of 300 gross tonnage and above, and flying the flag of a country partyto the Convention, to maintain insurance or other financial security to coverliability in an amount equal to the limits of liability under the applicablenational or international limitation rules, and a certificate attesting that therequired insurance is in force must be issued to each ship.180 Further, anyclaim for costs arising under the Nairobi Convention may be brought direct-ly against the insurer.181


174Id. Article 9.175Id.176Id.177Id. Article 10.178Id.179Id. Article 10(2).180Id. Article 12.181Id.

IVHOW WOULD THE WRECK OF THE COSTA CONCORDIA HAVE

BEEN TREATED UNDER THE WRECK ACT OR THE NAIROBICONVENTION?

A. Costa Concordia Under the Wreck Act

Had the Costa Concordia capsized in United States’ territorial waters, itwould have been subject to the marking and removal requirements of theWreck Act. For purposes of this section, assume the Costa Concordiagrounded near the port of Miami, Florida, creating an obstruction to naviga-tion. The shipowner’s duty under § 409 of the Wreck Act would be toimmediately mark the wreck with a buoy during the day, and a light at night,sufficient to warn of the length of the wreckage. Under 33 C.F.R. § 64.11(c),the owner must promptly report the wreckage to the District Commander ofthe Coast Guard in Miami, who must approve the markings.182 The markingsmust be maintained by the owner until the vessel is removed or the ownerhas legally abandoned the ship. Additionally, the shipowner would possessthe duty to commence immediate removal of the wreckage and then to pros-ecute that removal diligently. If the owner refused, the vessel would be con-sidered abandoned and subject to removal by the United States.

However, the immediacy and diligence requirements must be examinedunder the circumstances. Because of the size of the Costa Concordia (theCosta Concordia had almost three times the gross tonnage of the Titanic), itstype of cargo (passengers, crewmembers and their belongings), and variousenvironmental concerns (preserving the reef below and preventing fuel frompolluting the waters), the 30-day time limit would clearly be insufficient toremove the Costa Concordia. Therefore, even two and a half years wouldlikely be considered an immediate and diligent removal in the case of theCosta Concordia.

Because the capsizing of the Costa Concordia off the coast of Miami (inthis hypothetical case) would probably be considered an emergency by theCorps of Engineers, the Corps of Engineers would be authorized to removethe vessel itself if it impedes or stops navigation, or poses an immediate andsignificant threat to life, property or a structure that facilitates navigation.183

Because the Costa Concordia carries over 3,000 passengers and 1,000 crewmembers and the port of Miami is one of the busiest passenger ports in the


18233 C.F.R. § 64.11(c).18333 U.S.C. § 415(a), 33 C.F.R. § 245.10(c), 33 C.F.R. 245.50.

world, the capsizing of the Costa Concordia would most likely be consid-ered a significant threat to the life of those on board and those in other cruiseships and vessels traveling to the port of Miami. However, the Corps ofEngineers likely would contact the shipowner(s) to determine whether theowner(s) would be willing to remove the Costa Concordia using a privatesalvage company. If the shipowner(s) refused to remove the CostaConcordia, then the Corps of Engineers would take over the removalprocess, with the shipowner(s) subject to liability for the actual costs andexpenses.

If the Corps of Engineers determined that the wrecking of the CostaConcordia was not an emergency situation (albeit unlikely), then it wouldconsult with the Coast Guard to establish whether the obstruction poses ahazard to navigation, using the factors laid out in 33 C.F.R. § 245.20(b).184

The Costa Concordia would probably be considered a hazard to navigationbecause it would most likely be located in or near a navigable channel andwould interfere with navigational traffic patterns and maritime activity in thevicinity of the wreck. The waterways near the port of Miami are navigablechannels because they are highways for commerce over which trade andtravel are conducted, they are open for the use of others and are capable ofsustaining traffic.

It is likely that P&I Clubs would indemnify the Costa Concordia’sowner(s) for removal costs under the Second, Third, and Fifth circuits’approaches if the owner were a member. Due to the extraordinary value ofthe ship, it would be illogical for the owner(s) of the Costa Concordia not tohave carried insurance, considering the size of the vessel and the type andamount of cargo.

Under the Second Circuit approach, there is a governmental body (Corpsof Engineers) that would order the wreck to be removed. Under the WreckAct, the owner would be required to remove the ship because it would like-ly be a hazard to navigation, obstructing the navigable channels. Using theFifth Circuit approach, a reasonable owner might conclude that the failure toremove would expose him/her to liability enough to justify the expense ofremoving the wreck because the placement of the Costa Concordia’s wreckwould likely lead to damages by third parties if it were not removed. Finally,under the Third Circuit’s cost-benefit analysis approach, if there was novalid removal order, which in practice is not likely, then it would probablycost more, with seemingly no benefits, to remove the wreck and be liable tothe government for actual and administrative costs and subsequent third par-ties who may be injured, than the cost of the owner removing the wreck


18433 C.F.R. § 245.20(b).

him/herself immediately, thereby avoiding exposing him/herself to liabilityfor damages to third parties. The United States has the responsibility ofkeeping waterways free from obstruction and in all likelihood would paymore to do so than the shipowner, especially knowing that someone else, theshipowner, would be required to pick up the tab.

B. Costa Concordia Under the Nairobi Convention

Italy is a signatory to the Nairobi Convention subject to ratification.However, because Italy has not yet ratified the Nairobi Convention (to incor-porate its provisions into Italy’s domestic laws), Italy is not a contractingstate. Therefore, the provisions of the Nairobi Convention have not beensubjected to changes in Italy, as they have been in the United Kingdom,which has adopted the Nairobi Convention’s provisions with certain varia-tions. Therefore, assume for purposes of this section that Italy has adoptedthe Nairobi Convention in its entirety without any changes. Additionally,assume that Italy opted in to apply the Nairobi Convention’s provisions toits territorial waters. In this situation, the owner(s) would have strict liabili-ty for the cost of reporting, marking, and removing the wreck and would berequired to have insurance.

Once the Costa Concordia wrecked, the master or the operator would haveto report immediately to Italy that the ship was involved in a maritime casu-alty. Using Article 6, the wreck would most likely be determined a hazard tonavigation necessitating removal because even if there was not much vesseltraffic at the time of the wreck, the nature and quantity of the wreck’s cargo,its passengers, and any bunkers that might leak into the water, would war-rant removal. Once Italy determined the wreck to be a hazard to navigation,it would be required to contact the country of the ship’s registry, if not Italy,immediately and the registered owner would be required to remove thewreck. If the hazard became particularly severe, Italy would be able to inter-vene to remove the wreck if Italy had previously notified the owner of theCosta Concordia in writing of that right. Further, any claims arising out ofthe costs of removing the Costa Concordia could be directly brought againstthe Costa Concordia’s insurer.

If the Costa Concordia wrecked in United States territorial waters, theowner would not be able to limit his/her liability under the Wreck Act.Conversely, if the Costa Concordia wrecked in the EEZ of Italy, the ownermight be able to limit his/her liability under the Nairobi Convention,depending on the national or international rules applicable.

Under the Nairobi Convention, there is no specific time limit for theremoval of wrecks, except under Article 9, which requires the affected state


to set a reasonable deadline unless the hazard is such that compels its imme-diate removal. However, the Nairobi Convention does not define “reason-able” and it is difficult to infer the meaning from context. In the case of theCosta Concordia, it took more than two years to remove the vessel from thewaters of Italy. A possible reason why the removal of the Costa Concordiarequired over two years of labor is that it was not considered an obstructionto navigation and therefore, did not necessitate immediate removal.However, considering factors such as the health of the marine environment,the tourism industry, and the wellbeing of the residents of Giglio, the CostaConcordia likely was considered an obstruction, especially considering thatthe President of the Council of Ministers declared a state of emergency inIsola del Giglio’s territory where the Costa Concordia wrecked.185

Another, more likely, reason that the Costa Concordia’s removal opera-tions lasted over two years is the complexity of such removal, as well as thedesire to avoid the ship breaking up and causing possible pollution. TheCosta Concordia had a gross tonnage of 114,500.186 To put that into per-spective, the RMS Titanic had a gross tonnage of 46,000.187 The extensiveremoval plan for the Costa Concordia included: (1) securing the hull to theland using steel cables, to stop the vessel from falling deeper; (2) building ahorizontal underwater platform below the vessel; (3) attaching airtight tanksto the port side of the hull; (4) attaching the airtight tanks to the starboardside of the hull; (5) refloating the hull and tanks; and (6) recovery tow to anItalian port.188 Considering the intricate nature of each of these phases, it isnot surprising that it took until July 2014 for the Costa Concordia to beremoved, regardless of the obstruction it created.

B. The Wreck Act v. the Nairobi Convention

The Wreck Act and the Nairobi Convention appear very similar in theirplain language. Both impose a strict liability standard on the owner of awrecked vessel to promptly mark and remove the vessel if it causes anobstruction to navigation. Both require the shipowner to report the casualtyto the authorities and approve the authorities to remove the vessel if deemeda sufficient hazard. However, unlike the Wreck Act, the Nairobi Convention


185Civil Protection Department, President of the Council of Minsters, Concordia Ship Emergency,http://www.protezionecivile.gov.it/jcms/en/emergenza_nave_concordia.wp;jsessionid=1B6AA41B1B43DC48BE1E7A1C1DE817D0?request_locale=en.

186Live Science, Costa Concordia vs. Titanic: Do They Compare? (Jan. 18, 2010),http://www.livescience.com/18004-costa-concordia-titanic-comparison.html.

187Id.188The Parbuckling Project (2012), http://www.theparbucklingproject.com/

is silent as to abandonment and unclear as to whether the shipowner has theright to abandonment.

Further, distinct from the Wreck Act, the Nairobi Convention requires theregistered owner of a ship to maintain insurance to cover liability, whereas,under the Wreck Act, there is no such responsibility to carry insurance. Inthe United States, shipowners are not required to maintain insurance whilesailing their vessels. When comparing this with the fact that the majority ofstates in the United States require drivers to have car insurance, it is odd thatvessel owners do not have that same requirement. One of the purposes ofmaintaining car insurance as a driver on the road is to protect drivers fromothers who may cause collisions and be unable to pay for their liabilities. Itseems as though that same purpose should be codified with respect to ves-sels and shipowners navigating waterways. With respect to wreck removal,it seems logical that vessel owners should be required to carry insurancecovering their ships. Requiring a shipowner to carry insurance would insu-late the owner and the United States from all wreck removal costs. In thatrespect, if a shipowner does not have enough money out-of-pocket to pay forremoval costs but has insurance that will cover removal, then the UnitedStates can be certain that it will receive reimbursement. Further, if a vesselcauses another vessel to wreck and shipowners are required to carry insur-ance, then the other vessel owner will be protected and not have to worryabout the possibility of obtaining compensation.

Moreover, the Nairobi Convention allows for limitation of liability on thepart of the shipowner when consistent with national and international rules.However, through judicial interpretation, the Wreck Act does not allow forlimitation of liability because of the irreconcilable conflict between theLimitation Act and the Wreck Act.

Additionally, the Wreck Act requires the wreck to be removed within 30days or the United States will take over to remove the vessel, whereas theNairobi Convention only uses a “reasonable time” standard and does notprovide any specific time limit. Although the 30-day limit for removingwrecks is practical and effective, it does not make sense in certain situations.In situations involving barges, tugs, or other relatively small vessels, the 30-day limit for shipowners to remove such vessels, before forfeiture to theUnited States, is sensible because such vessels can generally be removedwithout much difficulty, at least in comparison with the removal of the CostaConcordia. The Nairobi Convention’s reasonable time standard would makemore sense in circumstances like that of the Costa Concordia which involvea complex and difficult salvage.

Finally, the Wreck Act is a criminal statute that imposes a daily fine onthe shipowner if the wreck is not removed or abandoned. However, there is


no criminal aspect to the the Nairobi Convention and no daily fines andtherefore, no financial disincentive to the shipowner for failure to remove thewrecked vessel.

C. The United States Should Ratify the Nairobi Convention

The United States has not yet ratified the Nairobi Convention and it isunclear why and whether it will do so in the future. However, the UnitedStates should adopt the Nairobi Convention because few inconsistenciesexist between the Wreck Act and the Nairobi Convention. Certain portionsof the Convention currently inconsistent with the Wreck Act would be a sig-nificant improvement for the United States, if adopted. For example, if theUnited States were to adopt the Nairobi Convention, shipowners would berequired to carry insurance. As discussed previously, requiring shipownersto carry insurance is logical when considering wreck removal and potentialdamages and liabilities. Further, if the United States were to adopt theNairobi Convention, there would be uniform rules for wrecks occurringwithin the EEZ of the United States, which are not clearly establishedpresently. If the Costa Concordia wrecked within the EEZ of the UnitedStates, there is no certainty as to what laws would apply. The purpose of theNairobi Convention is to provide a uniform international legal frameworkfor the removal of wrecks outside of a country’s territorial waters. By rati-fying the Nairobi Convention, the United States would be reinforcing theidea that there needs to be uniformity, because without such uniformity,shipowners and countries would have no idea what to do or who governswhen a ship wrecks outside of a country’s territorial waters.

Additionally, the United States would not necessarily be entirely boundby every provision in the Nairobi Convention; by ratifying the Convention,the United States would have the ability to make reservations and changesto fit its needs. For example, modifying the Nairobi Convention to includethe daily fine for failing to remove the wreck would provide great financialincentive to both owners and P&I Clubs to keep the United States’ water-ways clear of wrecks in a timely fashion. Thus, the United States should rat-ify the Nairobi Convention because it would be a significant improvementfor the United States.

VCONCLUSION

The Wreck Act places a variety of duties on the owner of a wrecked ves-sel, regardless of fault. Thus, negligent and non-negligent shipowners are


treated equally and are liable to the United States for the costs of markingand removing the vessel. The strict liability standard imposed on shipown-ers of wrecked vessels is practical because the United States should not beexpected to fund removal of wrecked vessels, regardless of whether theshipowner is negligent or not. The shipowner should be solely accountablefor his/her ship, irrespective of the level of fault. The Nairobi InternationalConvention on the Removal of Wrecks reflects a recent example of a pushtoward uniformity in the international community with respect to removingwrecks beyond territorial waters. There does not seem to be a desire for uni-formity in the United States, as evidenced by the United States’ reliance onthe Wreck Act, federal regulations, and judicial interpretation, which togeth-er provide a range of arguments shipowners can assert to reduce their dutiesunder the Wreck Act. Thus far, the United States has not ratified the NairobiConvention, nor made any strides in attempting to have it amended.However, if the United States were to ratify the Nairobi Convention, even ina modified form, that could go a long way to clearing up the foregoing con-fusion, thereby promoting uniformity.
