United States v. Reliable Transfer Co. [1975]

The Supreme Court replaced the traditional rule of divided damages in admiralty collision cases (equal division of damages when both parties are at fault) with a rule of proportional fault. The Court held that liability for property damage in a maritime collision should be apportioned according to the relative degree of fault of each party, not divided equally.

Whether the maritime rule of equally dividing property damage when both parties are at fault should be replaced by a rule requiring apportionment of damages in proportion to the relative fault of each party.

Yes. The equal division rule is replaced with a comparative fault rule. Damages are to be apportioned according to the respective degrees of fault of the parties. The 75/25 split in this case should be applied, not an equal division.

The admiralty rule of equally dividing damages in mutual fault collisions is archaic and unfair. It discourages settlement and does not reflect modern tort principles of comparative negligence. The proper rule is that each party bears liability for property damage in proportion to its percentage of fault. This rule also applies in all cases of mutual fault maritime property damage, not only collision cases.

The Court noted that the rule of divided damages had been subjected to widespread criticism and that many countries had already adopted proportional fault. The Court left open the issue of whether personal injury or death claims should also be subject to proportional fault (but later cases applied it).

• comparative negligence
• divided damages
• collision liability
• maritime tort
• proportional fault

• The Schooner Catharine v. Dickinson, 17 U.S. 170 (1819) (old rule)
• The North Star, 106 U.S. 17 (1882)

• Socony-Vacuum Oil Co. v. Smith, 305 U.S. 424 (1939) (dicta criticizing rule)
• Matter of Waterman Steamship Corp., 780 F.2d 1160 (5th Cir. 1986) (applying rule)

• The rule of divided damages is not a sound principle of law. It improperly forces the loss to be divided equally between the parties, even when one is much more at fault than the other.
• We hold that when two or more parties have contributed by their fault to a property injury in maritime collision or stranding, liability for such damage is to be apportioned equitably among the parties in proportion to the comparative degree of their fault, and that the liability for such damages is to be allocated accordingly.

• The Schooner Catharine v. Dickinson17 U.S. 170 (1819)
• Pope & Talbot, Inc. v. Hawn346 U.S. 406 (1953)
• United States v. Standard Oil Co.495 F.2d 911 (5th Cir. 1974)

• Name the issue before discussing facts so the marker sees the legal question immediately.
• State the holding in one sentence, then use the ratio to explain why the court reached that result.
• Use the citation and jurisdiction to show why this authority matters for the problem you are answering.
• Pair this case with one supporting or contrasting authority if the question tests limits, policy, or exceptions.

• Applying the old equal division rule without discussing Reliable Transfer
• Forgetting to apportion damages for property damage
• Confusing the rule with the 'last clear chance' or 'major-minor' fault doctrines that were sometimes used before

• https://supreme.justia.com/cases/federal/us/421/397/
• https://www.oyez.org/cases/1974/73-1661