Caseflicks

Court of Appeals for the Second Circuit • 1968

Ira S. Bushey & Sons, Inc. v. United States

398 F.2d 167 | 1968 U.S. App. LEXIS 6456 | 1968 WL 95246

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Takeaway

In short, this case recast respondeat superior around enterprise-created and foreseeable risks, holding an employer liable even for an employee’s purposeless misconduct when the misconduct arises from the setting and risks of the employment.

Background

The Coast Guard vessel Tamaroa was undergoing repairs in Bushey’s floating drydock in Brooklyn. Under the repair contract, the vessel’s crew retained access to the ship. Late one night, Seaman Lane returned from shore leave visibly intoxicated. As he crossed the drydock wall on his way back to the Tamaroa, he turned three large wheels controlling water-intake valves. The resulting flooding made the vessel list; it slid off its blocks, struck the drydock wall, and caused substantial damage to both ship and drydock.

Bushey brought an admiralty libel against the United States under the Public Vessels Act. The district court awarded Bushey liability, with damages to be determined, but concluded that the Public Vessels Act did not apply because the Tamaroa had not caused a "collision" and was effectively inert. The court instead treated the pleading as amended to assert a Federal Tort Claims Act claim, applied New York law, and concluded that New York would apply maritime respondeat-superior principles.

The United States appealed, arguing principally that Lane’s vandalism was outside the scope of his employment. Before reaching that issue, the Second Circuit had to determine whether the case was properly an admiralty action, because only then could it hear an interlocutory appeal determining liability before damages had been fixed.

Issues

Issue #1

Whether the suit was properly maintainable in admiralty, giving the court jurisdiction to review the interlocutory liability ruling.

Holding

Yes. The damage claim was within the Public Vessels Act, and in any event was maintainable under the Suits in Admiralty Act; the court therefore had appellate jurisdiction under 28 U.S.C. § 1292(a)(3).

Reasoning

The district court read the Public Vessels Act too narrowly when it held that a public vessel must cause a collision in a practical, physical sense. The Act speaks broadly of damage "caused by" a public vessel, and a vessel causes damage within that meaning when it is legally responsible for the tort, even if it was stationary and the immediate physical act was committed by a crew member.

Even if the Public Vessels Act did not reach this claim, the Suits in Admiralty Act independently allowed it. Congress’s 1960 amendment removed the former merchant-vessel limitation so that maritime claims against United States vessels could proceed in admiralty without unproductive jurisdictional disputes. Because a comparable proceeding could have been brought in admiralty if the vessel were privately owned, Bushey could sue the United States in an in personam admiralty action.

That classification mattered because an order resolving liability but leaving damages open is ordinarily not a final, appealable judgment in an action at law. In admiralty, however, § 1292(a)(3) expressly permits an appeal from an interlocutory decree determining the parties’ rights and liabilities. The court thus could review the merits.

Issue #2

Whether the United States was vicariously liable for the damage caused by Lane’s drunken opening of the drydock valves.

Holding

Yes. Although Lane was not acting with a purpose to serve the Government, his conduct arose from a risk characteristic of the Government’s maritime enterprise and was sufficiently foreseeable for respondeat superior liability.

Reasoning

The traditional formulation of scope of employment, reflected in Restatement (Second) of Agency § 228, requires that the employee be actuated at least in part by a purpose to serve the employer. Lane’s valve-turning could not plausibly be characterized that way: while returning to the Tamaroa served the Government, turning the wheels did not. The court nevertheless concluded that the motive test was inadequate as the controlling test for this kind of vicarious-liability problem.

Respondeat superior rests on the judgment that an enterprise should bear losses from risks that are characteristic of its activities, not merely on the employee’s subjective motive. Workers bring their ordinary traits, including carelessness, intoxication, impulses, and tendencies toward mischief, into the working setting. When the enterprise places those workers in a setting that creates occasions for such conduct, resulting injuries can fairly be treated as incidents of the enterprise.

The relevant foreseeability is broader than negligence foreseeability. The employer need not have been able to predict the precise harmful act or to have had reason to take a particular precaution against it. Rather, the question is whether the employment creates a foreseeable class of risks to others. Here, it was foreseeable that seamen traveling to and from a vessel through the drydock could damage drydock property, and it was hardly surprising that sailors returning from shore leave might be drunk.

Lane’s conduct occurred in the restricted drydock area through which he was entitled, and required, to pass to return to his assigned berth. Nothing showed that his conduct stemmed entirely from some purely personal matter. That nexus between his seafaring employment and the place and type of risk made it fair to place the loss on the Government.

The court distinguished harms outside the enterprise’s sphere. The Government would not be liable if Lane had burned down a bar while drinking ashore or caused an ordinary street accident while returning to the drydock, because those acts would not arise from risks distinctively created by the vessel’s operations. Likewise, a shooting motivated by a domestic grievance would be personal rather than connected to seafaring activity. Lane’s damage to the drydock, by contrast, fell within the risks generated by the crew’s access to the vessel during repairs.