## Facts

- Denet Towing Services, Inc. (Denet) operated a tugboat in the Mississippi River Gulf Outlet.
- Denet’s tug picked up a barge loaded with chemical cargo owned by Halliburton and began towing it from a Halliburton facility through a channel.
- While under tow, the barge suddenly listed to one side, and the bow began to submerge.
- Most of the chemical cargo broke free and went overboard.
- The evidence indicated the barge did not strike an object and did not run aground during the tow.
- Evidence instead pointed to pre-existing cracks and holes in the barge that allowed water to enter and caused the listing and partial submergence.
- Halliburton sued Denet for negligence, seeking to hold Denet responsible for the cargo loss.
- The evidence also showed the tug captain had committed several regulatory violations before the casualty, including being on duty longer than allowed by applicable work-hour rules.
- After a bench trial, the district court ruled for Denet, finding the loss resulted from the barge’s condition rather than fault by Denet.
- Halliburton appealed, arguing that under *The Pennsylvania* rule Denet should have been required to prove its statutory violations could not have been a cause of the casualty.

## Issues

1. Whether Denet’s non-collision regulatory violations (including duty-time violations) triggered *The Pennsylvania* rule, shifting to Denet the burden to prove the violations could not have been a cause of the barge’s listing and cargo loss.
2. Whether the district court clearly erred in finding that pre-existing cracks and holes in the barge, not fault by Denet, caused the casualty.

## Decision

- The Fifth Circuit affirmed the judgment for Denet.
- The court upheld the district court’s refusal to apply *The Pennsylvania* rule because the cited regulatory violations were unrelated to the cause of the accident.
- The court found no clear error in the district court’s factual finding that the barge’s pre-existing structural defects, rather than fault by Denet during the tow, caused the listing, submergence, and cargo loss.

## Legal Principles

- *The Pennsylvania* rule shifts the causation burden to a party who violated a statute or regulation, requiring that party to show the violation could not have been a cause of the casualty.
- The burden shift is not automatic for every regulatory breach; the violated rule must bear a meaningful relation to the type of accident that occurred and the violation must have a plausible causal connection to the loss.
- Work-hour and similar administrative or non-collision regulatory violations do not trigger *The Pennsylvania* rule when the trial court finds they had no causal link to the casualty.
- In admiralty cases tried to the bench, the appellate court reviews factual findings (including causation and vessel condition) for clear error and will not disturb findings supported by the record.

## Conclusion

The Fifth Circuit affirmed judgment for Denet because the district court reasonably found that the barge’s pre-existing cracks and holes caused the listing and cargo loss, and because the tug captain’s duty-time and other non-collision regulatory violations were unrelated to the accident and therefore did not trigger *The Pennsylvania* burden-shifting rule.


In re Denet Towing Services, Inc., 178 Fed. Appx. 427, 2006 AMC 1517 (2006)