Appeal from a judgment of the United States District Court for the Southern District of New York (Swain, J.), holding that Defendants-Counter- Claimants-Appellees ("Defendants") were entitled to summary judgment because, in the circumstances presented, Defendants, American Bureau of Shipping ("ABS") and its subsidiaries, did not owe Plaintiff-Counter- Defendant-Appellant Reino de Espana ("Plaintiff") a duty in tort in connection with ABS's inspection of the tanker Prestige.
The opinion of the court was delivered by: Livingston, Circuit Judge:
Reino de Espana v. American Bureau of Shipping
(Argued: November 14, 2011
Before: WALKER, RAGGI, and LIVINGSTON, Circuit Judges.
Without reaching that issue, we conclude that even if such a duty were owed, Plaintiff did not introduce evidence sufficient to create a genuine dispute of material fact as to whether Defendants recklessly breached that duty, and therefore AFFIRM.
In November 2002, the oil tanker Prestige sank off the northwestern coast of Spain, releasing large quantities of oil into the ocean. Plaintiff-Counter- Defendant-Appellant Reino de Espana ("Spain" or "Plaintiff") alleges that this oil, on washing up on the Spanish coastline, caused serious environmental and economic damage to Spain and its citizens. Spain, in reaction to the alleged effects of this marine casualty, brought suit against Defendant-Counter- Claimant-Appellee American Bureau of Shipping ("ABS") and its subsidiaries (collectively, "Defendants").
ABS is a classification society--an organization that, as relevant to the present appeal, is contracted by shipowners regularly to survey their vessels for compliance with ABS's requirements on, inter alia, structural soundness. ABS, one of the world's leading classification societies, is engaged to inspect (or "class") thousands of vessels worldwide. One such vessel was the ill-fated tanker Prestige, which was classed by ABS for its entire working life until its casualty. Spain alleges that by virtue of the surveys it conducts, ABS (like other comparable classification societies) forms a crucial link in the "maritime safety chain," by which a range of parties, from individual sailors all the way to the world's coastal nations as a whole, are protected against accidents, shipwrecks, pollution, and the like. In particular, Spain alleges that it and other nations like it are not in a position to inspect the seaworthiness of every vessel passing through their waters, and rely on classification societies to ensure the seaworthiness of those vessels. More precisely, Spain argues that ABS owes a duty in tort to perform its classification surveys with due care not simply to the vessel's owner who contracted for the survey (or to the insurers of the vessel and its cargo), but to third-party coastal nations generally.
Though this Court has previously suggested that "a shipowner is not entitled to rely on a classification certificate as a guarantee to the owner that the vessel is soundly constructed," Sundance Cruises Corp. v. Am. Bureau of Shipping, 7 F.3d 1077, 1084 (2d Cir. 1993), we there distinguished the situation of "a suit brought by an injured third party who relied on the classification . . . certificate," id. We have not decided the question whether a classification society can be held liable to a third party for negligent conduct in connection with a classification survey. That said, Spain concedes in the present appeal that the "policy interests" described by the Sundance Cruises Court "justify an exemption for classification societies from the general rule of negligence liability," Appellant's Br. 39; see also id. at 30 (same). Spain maintains, however, that such interests "do not . . . extend to reckless conduct," id. at 39 (emphasis added). Thus, Spain argues, because the claim here is that ABS was not simply negligent but reckless in its actions that led to the wreck of the Prestige, ABS is not shielded from liability to third parties such as Spain who putatively suffered harm as a result of those actions. The district court, however, did not agree. Rather, applying U.S. maritime law, the court concluded first that Spain was outside the (quite limited) set of parties to whom a classification society might normally be liable in tort for conduct relating to its surveys. Moreover, it held that reckless conduct such as alleged here would still not give rise to tort liability to a third party such as Spain, absent a pre-existing specific relationship between Spain and the society of a sort not present here. The district court therefore granted summary judgment to Defendants, from which Spain now appeals.
We conclude that we need not resolve the question whether a classification society may be held liable in tort to a third party such as Spain for reckless conduct in connection with the classification of vessels.*fn1 Rather, we assume arguendo for purposes of this appeal that Defendants did owe the claimed duty to Spain. In our view, Spain has nonetheless failed to adduce sufficient evidence to create a genuine dispute of material fact as to whether Defendants recklessly breached that duty such that their actions constituted a proximate cause of the wreck of the Prestige. We therefore AFFIRM the district court's grant of summary judgment to Defendants, albeit on alternative grounds.
A. Classification Societies and Classification Surveys
The Prestige was an 800-foot long, 40,000-gross-ton oil tanker, first launched in 1976.*fn2 From that time until it sank in November 2002, the Prestige was classified (or "classed") by ABS, a not-for-profit corporation founded in 1862 and one of the leading classification societies in the world. Classification societies such as ABS, inter alia, establish rules for the design, construction, and continued structural and mechanical fitness of vessels that they class, and certify that, at minimum, a vessel is "in class," or in compliance with the applicable rules and requirements of the society. Such a certification is embodied in a "classification" (or "class") certificate.*fn3 ABS is paid for these services by the vessel's owner.
As relevant here, ABS typically classes vessels on a five-year survey cycle. This cycle, broadly speaking, consists of one survey performed every five years (the "Special Survey"), an "Intermediate Survey" halfway through the cycle, and "Annual Surveys." The Special Survey, unsurprisingly the most extensive, includes direct inspection of the interior of a ship's structure (especially, in an oil tanker, the vessel's ballast and cargo tanks) for corrosion and fatigue. The inspection involves examination of the structure both visually and through ultrasonic measurement of the thickness of the hull and interior bulkheads (known as "gauging"). ABS directs the owner to make repairs to the vessel as required to satisfy ABS requirements. If these repairs are completed to the surveyor's satisfaction, and the vessel otherwise meets the applicable requirements of ABS rules and international conventions, the surveyor recommends the renewal of the class and statutory certificates. ABS reserves the right to reconsider, cancel, or suspend classification for noncompliance with its rules.
At relevant times, in addition to these ABS surveys, a for-profit subsidiary of ABS, known at one point as ABS Marine Services ("Marine Services") and eventually as ABSG Consulting Inc.,*fn4 offered an additional service to owners of marine vessels--the structural modeling of a computer program known as SafeHull. SafeHull was used, inter alia, to assess a given vessel's structure and predict areas in which structural fatigue and corrosion were likely to develop over time, given the vessel's design and age combined with pre-set parameters for characteristics such as cargo, trading patterns, and the like.
Marine Services offered to undertake SafeHull analyses of vessels at the request of their owners, for a fee, as an optional supplement to the classification and statutory surveys performed by ABS. As relevant to this case, Marine Services performed SafeHull modeling runs in 1996 and 1998, respectively, on oil tankers (the Alexandros and Centaur) built at the same time to essentially the same plans as the Prestige. The Prestige's owners, however, never purchased a SafeHull analysis, and ABS did not communicate the results of the Alexandros and Centaur analyses to the surveyors examining the Prestige.
In 2000, after the oil tanker Erika sank, ABS proposed that it and other leading classification societies amend their rules to make the type of analysis performed by SafeHull a mandatory part of each classification Special Survey.
3. The Erika and Castor Casualties
The Erika, which had been classed by the Italian classification society RINA, was an older, single-hulled oil tanker (like the Prestige, albeit much smaller). When the Erika sank off the French coast in December 1999, the resultant oil spill attracted significant attention to the potential safety problems posed by such aging tankers. In February 2000, ABS proposed that it and other leading classification societies enact a series of classification rules changes, which--according to an accompanying ABS press release--were "immediately" necessary to adopt in the wake of the Erika casualty.*fn5 As discussed in further detail in our merits analysis below, some of these changes, including the proposal regarding SafeHull, might well have affected the conduct of the final Special Survey of the Prestige (which occurred in April and May 2001) had they been adopted prior to that survey; ABS did not, however, secure agreement from the other classification societies to adopt, or adopt and implement, the relevant proposed changes on that timetable, and did not implement any of its proposals unilaterally.
The wreck of the Erika was not the only marine casualty in this period that prompted ABS to evaluate classification survey procedures, both generally and with particular application to oil tankers. In late December 2000, the Castor, a small tanker classed by ABS, suffered a major structural failure that ultimately required the ship to be abandoned and towed to the nearest port by salvors. ABS, after conducting an extensive inquiry into the causes of the Castor casualty, ultimately concluded, in a report issued in October 2001, that certain additional changes in the rules and conduct of ABS classification surveys were required. Specifically, ABS determined that ballast tanks and cargo/ballast tanks on certain older tankers, like the Prestige, should be carefully inspected annually. Those changes, as relevant here, were not implemented prior to the Prestige's final annual survey in April 2002.
4. The Final Surveys (and Casualty) of the Prestige
The Fifth (and final) Special Survey of the Prestige occurred in Guangzhou, China, from April 2, 2001, to May 19, 2001. The surveyors who conducted the Fifth Special Survey concluded that the Prestige, upon the completion of required repairs, satisfied all applicable ABS requirements. Spain's position, which ABS hotly contests, is that these surveyors in fact conducted an inadequate examination of the Prestige, and that the inadequacies of the survey, resulting from reckless ...