Exxon loses bid for damages in Oahu grounding Tanker broke away, hit coral reef after captain's maneuvers

June 11, 1996|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON -- The Supreme Court ruled unanimously yesterday that the owner of a cargo vessel that runs aground after pulling away from its moorings cannot force others to share the blame, if errors by the vessel's own captain caused the grounding.

The justices upheld a lower-court ruling that the captain's mishandling of a drifting vessel, causing its loss, absolves the maker of the gear that failed and set the ship adrift.

Yesterday's decision arose from the 1989 loss of the Exxon Houston, a 72,000-ton, 766-foot oil tanker that hit an undersea coral reef off Oahu in Hawaii. The Houston broke away from its moorings and hit the reef after a series of maneuvers by its captain, who was trying to get the vessel under control.

The vessel's owner, Exxon Co. USA, and its tanker affiliate, Exxon Shipping Co., contended that they should be able to collect some of the cost of the vessel's loss from manufacturers of faulty equipment that allowed the Houston to break free from its tie-up at a Hawaiian refinery.

Lower courts, however, ruled that the captain's later actions -- including a failure, until it was too late, to ask navigators to pinpoint the ship's position -- caused the loss and made him wholly to blame. That was the result the Supreme Court upheld yesterday in clarifying the law on shared responsibility for maritime losses.

In a second ruling, the court decided by a 6-2 vote that it was unconstitutional for the government to apply domestic taxes to any exports or to any insurance issued by foreign companies to protect those goods or service during transit abroad.

Reaffirming a 1915 ruling which barred U.S. taxes on export insurance, the court refused the federal government's plea to reconsider that ruling and give the government authority to impose general taxes which are not discriminatory to exports as well as to domestic goods and services.

The ruling upheld a challenge by International Business Machines Corp. to a $1.5 million tax on the insurance it bought abroad to cover overseas shipments of U.S.-made computer products.

Pub Date: 6/11/96

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