Facts
- McDermott, an offshore construction company, used a crane purchased from AmClyde to move an offshore platform in the Gulf of Mexico.
- During the lift, a prong of the crane hook broke, damaging both the platform and the crane.
- Potential causes included McDermott’s negligent operation, AmClyde’s faulty design or construction, a defect in the hook manufactured by River Don Castings, or failures by three sling suppliers.
- McDermott sued AmClyde, River Don, and the three sling suppliers in admiralty and settled with the sling suppliers for $1 million before trial.
- A jury found total damages of $2.1 million and allocated fault: 32% to AmClyde, 38% to River Don, and 30% jointly to McDermott and the sling defendants.
- The district court entered judgment against AmClyde and River Don for their respective percentages of the total damages, without reducing those amounts by the settlement.
Issues
- In a maritime case with partial settlements, should a nonsettling defendant’s liability be determined by the factfinder’s allocation of proportionate responsibility (proportionate share), or reduced dollar-for-dollar by the settlement amount (pro tanto credit)?
Decision
- The Supreme Court reversed and remanded.
- The Court held that, in federal maritime law, a nonsettling defendant’s liability is calculated by the jury’s allocation of proportionate responsibility, not by subtracting the settlement amount from the judgment.
- The Court assumed without deciding the appellate court’s separate contract ruling affecting AmClyde and addressed only the settlement-credit rule for nonsettling defendants.
Legal Principles
- Federal maritime comparative fault requires damage allocation by proportionate responsibility when feasible.
- When a plaintiff settles with some joint tortfeasors, remaining defendants are liable only for their own adjudicated shares of fault; no pro tanto settlement credit applies.
- The risk that a settlement is higher or lower than the settling parties’ adjudicated fault share falls on the settling parties (including the plaintiff), not on nonsettling defendants.
- The proportionate-share rule supports settlement finality by avoiding contribution litigation and avoids judicial “good-faith” settlement valuation hearings.
- Uniform federal rules in admiralty favor a single settlement-credit approach applicable across maritime cases.
Conclusion
The Court adopted a proportionate-share settlement-credit rule for maritime tort cases, requiring that nonsettling defendants pay only the percentage of total damages corresponding to their allocated fault, regardless of the plaintiff’s settlement amounts with other defendants.