Bareboat Charters - Can A Shipowner Limit Liability To Third Part

Georgia State University Law Review
Volume 25
Article 2
Issue 2 Winter 2008
2008
Bareboat Charters: Can a Shipowner Limit

Liability to Third Parties? Answers for Owners
Attempting to Navigate the Unsettled Waters in the
Eleventh Circuit
John W. Chitty
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Chitty, John W. (2008) "Bareboat Charters: Can a Shipowner Limit Liability to Third Parties? Answers for Owners Attempting to
Navigate the Unsettled Waters in the Eleventh Circuit," Georgia State University Law Review: Vol. 25: Iss. 2, Article 2.
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Chitty: Bareboat Charters: Can a Shipowner Limit Liability to Third Part
BAREBOAT CHARTERS: CAN A SIDPOWNER

BAREBOAT SHIPOWNER
LIMIT LIABILITY TO THIRD PARTIES? ANSWERS
ANSWERS
FOR OWNERS
OWNERS ATTEMPTING TO NAVIGATE
NAVIGATE THE
UNSETTLED WATERS
UNSETTLED WATERS IN THE ELEVENTH
ELEVENTH
CIRCUIT
INTRODUCTION
INTRODUCTION
A bareboat
bareboat charter is a contractual agreement akin to the lease of a
vessel whereby most of the "customary
"customary liabilities"
liabilities" of the owner are
shifted to the charterer.'
charterer. I Some courts have raised concerns
concerns over
bareboat charters-also referred to as a demise charter
bareboat charters-also 2-regarding
chartec-regarding
the ability of owners to use the bareboat
bareboat device as a means to limit
liability to injured third parties. 3 In Baker v. Raymond International,
International,
Inc.
Inc. the Fifth Circuit brought force to this concern;
concern; the court held a
bareboat
bareboat charter would no longer shield owners from personal personal
liability for third party injuries caused by the unseaworthiness
unseaworthiness of a
vessel, even though the owner had no control over the vessel, and
regardless
regardless of whether it was the owner charterer who created the
owner or charterer
1.
I. The bareboat
bareboat charter is best understood as the lease of a vehicle. The The charterer is the lesee who,
for most purposes of liability, is considered
ofliability, considered the vehicle's owner while
while in possession. See, e.g., BLACK'S
BLACK'S
LAW DICTIONARY
DICTIONARY 250 (8th ed. 2004); 70 AM. JUR. Shipping 202 (2005).
JuR. 2D Shipping
2. The terms "bareboat"
"bareboat" and "demise" are often used interchangeably
interehangeably as though identical in regards
to this type of charter. See 80 C.J.S. Shipping
Shipping 92 (2007)
(2007) (stating "[a] 'demise charterer' or 'bareboat
"[a] 'demise 'bareboat
charterer' is one
charterer' one who contracts for the vessel itself and assumes exclusive exclusive possession,
possession, control,
command, and navigation thereof for specified period, and the charterer charterer furnishes the crew and
maintenance for the vessel."). There is a technical difference
maintenance difference between
between the two. See THOMAS J.
SCHOENBAUM, ADMIRALTY AND
SCHOENBAUM, AND MARITIME
MARITIME LAW 671 n.6, 675 n.1 (4th ed. 2007) (stating "[a] true
(stating "[a]
'bareboat' charterer to select his own master and crew. If the owner provides
'bareboat' charter allows the charterer provides the
the
master and crew
crew...... the charter is a demise, although not technically a 'bareboat'
'bareboat' charter."). When
When an
owner's master
master and crew stay on the vessel subject to the charterer's
charterer's control,
control, the agreement is a demise
charter. Id.
Id. In a bareboat charter, "the owner may also turn over the vessel to the charterer charterer without a
master and crew."
crew." ROBERT
ROBERT FORCE, ADMIRALTY AND MARrrIME LAW
AND MARITIME LAW 43 (2004). The agreement
agreement and
obligations of the parties are unaffected by the term used, though courts courts will look harder at a demise
charter to see if the owner retains
retains any control-behavior
control-behavior inconsistent
inconsistent with an intent to create
create a bareboat
surrendering complete
charter by surrendering complete control and possession
possession of the vessel. See, e.g.,
e.g., Sheldon A.A. Gebb,
Admiralty Law Institute:
Institute: Symposium on CharterCharter Parties:
Parties: The Demise Charter:
Charter: A Conceptual
Conceptual and
PracticalAnalysis,
Practical Analysis, 49 TUL.TuL. L. REv. 764, 768 (1975);
(1975); 80 C.J.S. Shipping
Shipping 94-96 (2007). For purposes
purposes
of this Note, the term 'bareboat'
'bareboat' will be used
used unless the facts indicate
indicate the owner's master
master and crew
remained onboard as part of the agreement.
3. See, e.g., Baker v. Raymond Int'l, Inc., 656 F.2d 173,
Raymond Int'I, 173, 184 (5th Cir. 1981).
1981).
477
Published by Reading Room, 2008 1
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Georgia State University Law Review, Vol. 25 [2008], Iss. 2, Art. 2
478 GEORGIA STATE UNIVERSITY

GEORGIA UNIVERSITY LAW REVIEW
REVIEW [Vol.
[Vol. 25:2
unseaworthy condition.44 The Baker decision created a split among

federal circuits on the issue of liability to third parties. 55 The Supreme
Court declined to determine whether or not a bareboat charter would
shipowner to shield himself from third party liability for
allow a shipowner
injuries resulting from an unseaworthy condition of his vessel.6 While
the vast majority of circuits clearly support limited liabilityliability under a
bareboat charter, the Eleventh Circuit has yet to indicate its position position
on this issue.7
Part I of this Note provides background
background about bareboat
bareboat charters,
88
their uses, and how they are created. Part II addresses the duties
owed to third parties by owners and charterers, charterers, the doctrine of of
seaworthiness,
seaworthiness, and the role of seaworthiness
seaworthiness in a bareboat charter
charter
agreement. 9 Part III outlines
outlines federal precedent
precedent prior to the Fifth
Baker.'10 The position of
Circuit's decision in Baker. the Supreme
ofthe Supreme Court, and
l1
the Fifth Circuit's decision in Baker, are addressed
addressed in Part IV. N. " Part
V evaluates the state of the law following the Supreme Court's Court's
reluctance to address the issue and the split created
reluctance created by the Fifth
COurt. 12 Part VI reviews current Eleventh Circuit cases
Circuit Court. cases
concerning bareboat charter
concerning charter agreements
agreements and its reasoning for not
addressing the issue. 13 13
Part VII offers solutions for owners and
charterers
charterers seeking to clarify and protect their
their interests when entering
bareboat charter agreement, regardless
a bareboat regardless of the jurisdiction;
jurisdiction; parties to
a bareboat agreement should utilize comprehensive
bareboat agreement comprehensive contractual
provisions
provisions and indemnity clauses
clauses to protect themselves and ensure
their expectations are met.14
expectations are met. 14
4. [d. at
Id. at 184.
184.
5. See infra Parts HI,
DI, IV.B, v.
N.B, V.
6. See infra Part [V.A.
N.A.
7. See infra Parts In,
UI, V-VI.
V-VI.
8. See infra Part I.
I.
9. See infra Part II.
II.
10. See infra Part HI.
DI.
11.
II. See
See infra Part IV.
N.
12.
12. See infra Part v.
Part V.
13.
13. See infra Part VI.
VI.
14.
14. See infra Part
Part VII.
VII.
http://readingroom.law.gsu.edu/gsulr/vol25/iss2/2 2
20081
2008) BAREBOAT CHARTERS
BAREBOAT CHARTERS 479
I. BAREBOAT
I. BAREBOAT CHARTERS:
CHARTERS: CREATION
CREATION AND
AND USES
USES
Bareboat charters
Bareboat charters are a valuable "encourage enterprise,"
device to "encourage
valuable device enterprise,"
owners to
allowing owners
allowing to lease the use and services
lease the vessels which may
services of vessels may
otherwise lay dormant
otherwise dormant while charterers control of a
charterers gain full use and control
expense of actually
the expense purchasing one.'
actually purchasing 5 Charters are
one. 15 Charters
vessel without the
a contractual
contractual device
device giving
giving parties modify the
leeway to modify
parties great leeway
1166
agreements particular needs. More specifically, bareboat
agreements to fit their particular bareboat
charters are useful in allowing
charters allowing involved
involved
17
parties allocate the
parties to freely allocate
costs of doing business.
risks and costs doing business. 17
A. Creation ofa Bareboat

A. Creation Charter
Bareboat Charter
bareboat charter
Because a bareboat
Because unless the owner transfers
charter is not valid unless
complete control
complete vessel to the charterer, the contract should
control of the vessel
include specific
include language describing such a transfer as there is often
specific language often a
18
8
presumption against bareboat
presumption bareboat agreements. courts often focus
agreements.' While courts
parties' actions
on the parties' specific language to find a
actions and do not require specific
valid bareboat charter, language
language should be contract to
included in the contract
19 transferring control,
parties' intent to transfer control. 19 In transferring
show the parties' control,
20
the owner has a duty to deliver a seaworthy vessel to the charterer.
deliver a seaworthy vessel to the charterer. 20
Although this duty is implied by law, the owner should still address
Although
seaworthiness by including a clause that the vessel is "tight, staunch,
seaworthiness staunch,
15. Baker v. Raymond 173, 183 (5th Cir. 1981). See,

Int'l, Inc., 656 F.2d 173,
Raymond Int'I, See, e.g., Gebb, supranote 2, at
Gebb, supra
764.
supra note 2, at 42; see infra Part il.A;
16. FORCE, supra see, e.g.,
H.A; see, supranote 2, at 774.
e.g., Gebb, supra
l.B, Vil.
infra Parts il.B,
17. See infra VIl.
SCHOENBAUM, supra
18. See SCHOENBAUM, supra note 2, at 671. specifY that the charterer
language should specify
671. The language "shall
charterer "shall
have the same authority as the owner of the vessel as to her management and the control control of the officers"
officers"
or that the charterer
charterer "shall exclusive possession, control, and command of the vessel during the
"shall have exclusive
use...
entire period of use [and] shall man, victual and navigate such
... [and] expense or by
such vessel at its own expense by its
its
own procurement." Shipping 96 (2007); Gebb, supra
procurement." 80 C.J.S. Shipping supra note 2, 767~8 (quoting Maritime
2, at 767-68
Administration Bareboat Charter Party Agreement, 46 C.F.R. 221.13 (1974)); Guzman v. Pichirilo,
221.13 (1974;
U.S. 698, 700 (1962)
369 U.S. find aa demise
"reluctant to frod
(1962) (stating that courts are "reluctant demise when the dealings
when the between
dealings between
the parties are consistent with any lesser relationship"); see infra IB, note 126 and accompanying
infra Part I.B, accompanying
text.
Guzman, 369 U.S. at 700-01 (1962);
Shipping 94-96 (2007); Guzman,
See, e.g., 80 C.J.S. Shipping
19. See, (1962); Backhus v. v.
Transit Cas. Co., 532 So. 2d 447, 449 (La. App. I Cir. 1988). A contract should clearly clearly indicate the
indicate the
owner, charterer, and the payment amount. FORCE, supra supra note 2, at 44; see infrainfra notes 126, 139 and
accompanying text.
accompanying
20. infra Part I.B.
20. See infra il.B.

480 GEORGIA STATE

STATE UNIVERSITY
UNIVERSITY LAW REVIEW (Vol.
[Vol. 25:2
service" of
the service"
for the
strong, and in every way fitted for its intended
of its use.21
intended use. 21
An owner must also protect the remaining interest in the vessel and
should insert a clause requiring the charterer to return the vessel "in
as good condition, expected, as that in which
ordinary wear and tear expected,
22
her."
he received her.,,22
Moderating
Moderating phrases such as "more or less" or "about" should be
included to indicate flexibility in the duration of bareboat charters,
distinguishing them from time charters. 23 23
An owner should also
address whether or not the charterer is allowed to sub-charter the
vessel.24
24 Care is needed here so the owner does not appear to retain
any measure of control over the charterer or vessel, possibly
bareboat agreement. 225 Arbitration
frustrating the creation of the bareboat
clauses 26
clauses are helpful to handle possible
possible disputes.
disputes?6 The parties
parties will also
want to include various provisions to allocate
allocate liability, insurance, and
provide for indemnity if damages are required.27 27
B. Bareboat
B. CharterUses
Bareboat Charter
Owners often use bareboat charters to lease their vessels while
limiting their liability 28 Unlike other types of
liability to third parties.28 of
charters, 29 a bareboat
charters,29 bareboat charter "substantially alters the rights and
charter "substantially
21. FORCE, supra

21. FORCE, supra note 2, 2, atat 46;
46; see SCHOENBAUM,
SCHOENBAUM, supra note 2,2, atat 690; Gebb,
supranote Gebb, supra
supra notenote 2, atat 769.
22. GRANT GILMORE
22. GRANT GILMORE & CHARLES L.
& CHARLES BLACK, THE LAW OF
L.BLACK, OF ADMIRALTY
ADMIRALTY 4-22 (2d ed. 1975). 1975). ToTo
assure
assure the vessel isis inin proper
the vessel proper order when when returned,
returned, aa provision for for aa redelivery inspection should should be
included. Id. [d.
23. Gebb, supra
23. Gebb, note 2,2, atat 774;
supra note 774; see infra note 148
infra note 148 and accompanying
accompanying text. text. A time
time charter
charter is aa charter
for aa specific
specific period where
where "the"the shipowner continues
continues to manage and and control the vessel, but but the
the charterer
charterer
designates the
designates the ports of call and the cargo carried."
ports of carried." BLACK'S
BLACK'S LAW DICTIONARY
DICTIONARY 250-51 250-51 (8th(8th ed. 2004).
2004).
24. See FORCE,FORCE, supra
supra notenote 2,2, atat 50.
25.
25. See supra note 19;
supra note 19; infra notenote 148
148 and
and accompanying
accompanying text.text.
26. FORCE, supra
26. See FORCE, supra notenote 2,2, atat 51.
51.
27.
27. See infra Part Part VII.
VII.
28. See supra note 15 and
supra note and accompanying
accompanying text. text.
29. The
29. The three
three basic
basic categories
categories of of charters
charters include
include (1) bareboat (or
(I) bareboat (or demise)
demise) charters,
charters, (2)
(2) time
time charters,
charters,
and
and (3)
(3) voyage
voyage charters.
charters. FORCE,
FORCE, supra note
supra note 2,
2, at
at 42.
42. time
A time charter
charter isis an
an agreement
agreement
"carrying capacity" to the charterer for a specific period of time; a voyage charter is an agreement to
to
to lease
lease the
the vessel's
vessel's
"carrying capacity" to the charterer for a specific period of time; a voyage charter is an agreement to
lease the
lease the ship
ship for
for aa specific
specific voyage(s).
voyage(s). Id. Owners inin both
[d. Owners both time
time and
and voyage
voyage charters
charters provide
provide the crew and and
are responsible
are responsible for for "navigation
"navigation and and management
management of of the
the vessel
vessel ... maintenance, repairs
... maintenance, repairs toto the
the vessel,
vessel,
[and] injuries
[and] injuries to
to third
third parties
parties arising
arising from
from the
the crew's
crew's operational
operational negligence."
negligence." Id. at 42-43.
[d. at 42-43. TheThe opposite
opposite
is true
is true ofofaabareboat
bareboat charter.
charter. Id.[d.
20081
2008) BAREBOAT
obligations charterer., 30 A major reason courts

obligations of both owner and charterer.,,30
allow this transfer of responsibility
responsibility is a general misgiving about
holding liable an owner not in controlcontrol and far-removed from the
operations of the vessel. 331'
operations
The charterer in a bareboat agreement
agreement becomes
becomes responsible
responsible for the
operation
operation of the vessel and is liable for damages to third parties or to
the vessel.3322 This alteration of rights has led many courts to carefully
carefully
scrutinize
scrutinize bareboat charter agreements. 33
33 They closely examine the
parties'
parties' actions in combination with the contract
contract terms to determine if
bareboat charter exists and was intended.34
a bareboat 34 Courts impose a heavy
burden on owners attempting to limit liability as there is a
presumption
presumption against bareboat charters. 35
bareboat charters. 35 It must be clear the owner
owner
"completely and exclusively relinquish[ed]
has "completely relinquish[ed] 'possession,
'possession,
command, and navigation'
navigation' of the vessel
vessel to the charterer"
charterer" for a valid
36
bareboat charter to exist.
to exist. 36
Traditionally, an owner benefited from a bareboat charter
bareboat charter
agreement
agreement by using it "as "as a shield against in personam
personam [sic] liability"
liability"
for injuries to third parties caused by the vessel's operation. 37 37
If the
bareboat charter is properly executed, the charterer will be considered
considered
30. Melanee A. A. Gaudin,

Gaudin, Vessel Owner'sOwner's Personal Liabilitiesfor Injuries
Personal Liabilities/or Injuries Sustained
Sustained by Third
ThirdParties
Parties
Under Demise Charter:
While Under Charter:Strict Baker v. Raymond
Strict Liability After Baker Raymond Int'I,
Int'l, Inc., 8
8 MAR. L. 121,
121, 122-
122-
23 (1983);
(1983); see also FORCE, supra
also FORCE, supra note 2, 2, at 43 (explaining
(explaining that because aa bareboat charter charter gives
"possession and
"possession and control
control of
of the
the vessel
vessel to the charterer,"
to the the charterer
charterer," the charterer isis then
then generally responsible for
generally responsible for
maintenance, repairs, and any any damage
damage thethe vessel
vessel causes
causes due to to negligent operation).
31. See SCHOENBAUM,
SCHOENBAUM, supra note 2, atat 710-11;
supra note 710--11; see, e.g., Forrester v. Ocean
see, e.g., Ocean Marine
Marine Indem.
Indem. Co., II1I
F.3d 1213,
1213, 1215 (5th Cir. 1993); see also also Kerr-McGee Corp. v. v. Law, 479 F.2d F.2d 61,
61, 63
63 (4th
(4th Cir. 1973)
(noting because
because the owner in aa bareboat agreement "no "no longer has has the
the right
right toto control the use
use of
of the
vessel, he isis no longer
longer charged
charged with with the
the duties
duties and
and liabilities
liabilities that arise
arise out of its ownership").
ownership").
SCHOENBAUM, supra
32. See SCHOENBAUM, supranote note 2,2, atat 676,
676,711.
711.
See, e.g.,
33. See, Gebb, supra
e.g., Gebb, supra note 2, at at 768; Guzman v.v. Pichirilo, 369 U.S. 698, 698, 700 (1962);
(1962); Backhus v.
Transit Cas. Co., 532 532 So. 2d2d 447,
447, 449
449 (La.
(La. App.App. 1I Cir.
Cir. 1988).
34. See infra PartPart Bl.A.
U.A.
See, e.g., Backhus, 532
35. See, 532 So. 2d 2d atat 449;
449; see also
also 80 C.J.S. Shipping
Shipping 93 (2007) (noting(noting as courts
courts
are "reluctant"
''reluctant'' to
to find
fmd aa bareboat agreement
agreement ifif aa "lesser relationship"
relationship" can found, the owner
can be found, owner "bears aa
heavy burden" of of proof).
Backhus, 532 So. 2d at 449 (quoting Guzman, 369
36. Bac/chus, 369 U.S.
U.S. at 699); see SCHOENBAUM,
SCHOENBAUM, supra supra note 2,
atat 671; FORCE, supra
671; FORCE, note 2,2, atat 43.
supra note 43.
37. Backhus, 532 So. 2d 2d atat 449; Gebb,
Gebb, supra note 2, atat 765.
supranote

482 STATE UNIVERSITY

GEORGIA STATE UNIVERSITY LAW REVIEW JVoL 25:2
(VoL
the owner pro

pro hachac vice and thus responsible for providing a
38
seaworthy vessel. 38
II. DUTIES TO THIRD PARTIES AND THE WARRANTY

WARRANTY OF
SEAWORTHINESS
SEAWORTHINESS
Under maritime law, certain duties are required of vessel owners,

especially regarding third parties, longshoremen, and seamen. 39
especially 39 The
bareboat device allows the owner to pass many of these duties along
to the charterer. 44o0 A bareboat charterer becomes
becomes liable for the wages
of the crew, "collision, personal injuries to the master, crew, and third
parties, pollution damages, and for loss or damage to the chartered chartered
vessel. '4 1 General mantime
vessel.,.41 maritime law requires
requires this "warranty of of
seaworthiness, 42
seaworthiness,,,42 that is, a "shipowner
"shipowner [must] furnish a vessel that is
reasonably fit for its intended purpose. ' 43
reasonably for its intended purpose.'.43
A. Duties:
Duties: Generally
Generally
The shipowner or the bareboat
bareboat charterer "responsible for
charterer is "responsible
maintenance,
maintenance, repairs, or damages
damages caused to third parties by the
crew's negligent navigation 4 Thus, if harm-such
crew's negligent navigation of the vessel."
vessel.'.44 harm-such as a
collision-results
collision-results from a negligent
negligent act, the party
party found to possess
possess and
38. See,
See, e.g., McAleer v.v. Smith,
e.g., McAleer Smith, 57 57 F.3d 109, 112
F.3d 109, (1st Cir.
112 (lst Cir. 1995);
1995); GILMORE
GILMORE & BLACK, supra
& BLACK, supra note
22, 4-23.
4-23. An owner
owner pro
pro hac vice is is one
one who "stands
"stands in the the place of
of the
the owner
owner forfor the
the voyage
voyage or service
contemplated
contemplated and bears the
and bears the owner's responsibilities even
owner's responsibilities even though
though the
the latter
latter remains
remains the the legal
legal owner of of
the vessel." Matute v.v. Lloyd Berm. Lines,
the vessel." Lines, Ltd.,
Ud., 931 F.2d F.2d 231, 235 n.2
231, 235 n.2 (3d(3d Cir. 1991) (quoting Aird
1991) (quoting Aird v.
Weyerhaeuser
Weyerhaeuser S.S. S.S. Co., 169 F.2d
Co., 169 F.2d 606, 610 (3d
606, 610 (3d Cir.
Cir. 1948.
1948)).
39. See, e.g., Gebb, supra
e.g., Gebb, supra notenote 2,2, atat 772;
772; FORCE,
FORCE, supra note 2,2, atat 99,
supra note 99, 102;
102; see infra Part U.A; see
Part I.A;
BLACK'S LAW
also BLACK'S
also LAW DICTIONARY
DICTIONARY 961 961 (8th
(8th ed. 2004) (defining
ed. 2004) (defining aa longshoreman
longshoreman as as aa "maritime
"maritime laborer
laborer
who works
works on
on the wharves
wharves inin aa port;
port; esp.,
esp., aaperson
person who who loads
loads and
and unloads ships").
ships").
40. See
See supra
supra Part I.B.
Part I.B.
41. SCHOENBAUM,
41. SCHOENBAUM, supra note note 2,2, atat 676;
676; GILMORE
GILMORE && BLACK, BLACK, supra
supra note note 22, 4-23. 4-23. AAclaim
claim ofof
unseaworthiness can
unseaworthiness can only
only be
be brought
brought by by seamen.
seamen. See,See, e.g., FORCE, supra
e.g., FORCE, supra note note 2,2, atat 99.
99.
42. Baker
42. Baker v.v. Raymond
Raymond Int'l,
Infl, Inc.,
Inc., 656
656 F.2d
F.2d 173,
173, 181 181 (5th
(5th Cir.
Cir. 1981);
1981); see also FORCE, FORCE, supra note 2,2, atat
supra note
99 (noting
99 (noting seaworthiness
seaworthiness includes
includes "all parts of
"all parts of thethe vessel
vessel and
and its its operation,
operation, including
including the the hull,
hull,
machinery, appliances,
machinery, appliances, gear and and equipment,
equipment, and and other
other appurtenances").
appurtenances").
43. Gatewood
43. Gatewood v.v. At.
Ati. Sounding
Sounding Co., Co., Inc.,
Inc., No.
No. 3:06-cv-41-J-32HTS,
3:06-cv-4I-J-32HTS, 2007 2007 WLWL 1526656,
1526656, atat *5 (M.D.
Fla. May
Fla. May 23,
23,2007); FORCE, supra
2007); see also FORCE, supra notenote 2,2, atat 100; SCHOENBAUM,
SCHOENBAUM, supra note 2,2, atat 675.
supra note 675.
44. FORCE,
44. FORCE, supra
supra note 2, 2, atat 43.
43.
20081
2008) BAREBOAT
control the vessel is liable for the damages.4455 Similarly, the owner or
bareboat charterer
charterer in possession and control is liable for 46 the actions
and torts of the crew under respondeat superior principles.
under respondeat superior principles. 46
agreements can also affect the parties'
Bareboat agreements personam and
parties' in personam
47
47
in rem liabilities. A seaman's remedy for unseaworthiness
unseaworthiness "is in in
rem against the vessel and in personam
personam against either the title owner
of the vessel
vessel . . . or the owner pro pro hac vice under a [bareboat]
charter.' 48 If an injury
charter.'.48 injury results from an unseaworthy condition, a
charterer may be found liable in personam
bareboat charterer personam for damages
damages
while the owner usually is not, though the ship-and ship--and thus the
49
49
owner-may
owner-may be liable in rem. rem. In any other charter
charter agreement-
agreement-
transferred-the charterer
where possession and control are not transferred-the charterer is
neither liable in rem nor in personam
personam for injuries resulting from
unseaworthiness. 5
0
unseaworthiness. 50 Though
Though bareboat charter agreements generally
charter agreements generally
owners to shield themselves from in personam
allow owners personam liability to third
parties, the vessel-and
vessel-and therefore the owner-can
owner-can still be liable in
51
rem for damages exceeding the vessel's value. 51
damages not exceeding
1. Duties
1. Duties to maritime
maritime workers
workers
Maritime
Maritime workers are a special class and include
include longshoremen
longshoremen
52
and harbor workers. 52 They are granted "special
"special status"
status" under the
Longshoremen's
Longshoremen's and Harbor Compensation Act
Harbor Workers' Compensation Act
(LHWCA).
(LHWCA).5353 Under the LHWCA, maritime
maritime workers are entitled
entitled to
45. Id.; see, e.g., Emery

Emery W. Harper, Admiralty Law Institute:
Institute: Symposium on Charter
Charter Parties:
Parties: Demise
Charters:
Charters: Responsibilities
Responsibilities of Owner or Charterer
Chartererfor Damage, 49 TuL.
for Loss or Damage, REv. 785, 788-89
TUL. L. REV.
(1975).
(1975).
46. See GILMORE & supra note 22, 4-23.
& BLACK, supra
47. Id.
Id 4-23, 4-24,
4-23, 4-24, 9-18;
9-18; FORCE, supra 2, at 86.
supra note 2, 86. In rem liability is limited in that it cannot
exceed
exceed the value of the vessel and its cargo whereas
whereas in personam
personam liability has no prescribed
prescribed ceiling and
and
is unlimited. GILMORE
GILMORE & & BLACK, supra
supra note 22, at 621-22.
48. Rose v. Chaplin Marine
Marine Transp. Inc., 895 F. Supp. 856,860
Inc., 895 856, 860 (S.D. W. Va. 1995)
1995) (citing Wolsiffer
v. Atlantis
Atlantis Submarines,
Submarines, Inc., 1489, 1494
Inc., 848 F. Supp. 1489, 1494 (D. Haw. 1994.
1994)).
e.g., SCHOENBAUM,
49. See, e.g., SCHOENBAUM, supra 711.
supranote 2, at 711.
50. See, e.g., 80 C.l.S.
e.g., 80 C.J.S. Shipping
Shipping 99,102
99, (2007); FORCE,
102 (2007); FORCE, supra 2, at 101.
supra note 2, 101.
51. See, e.g., Harper,
51. See, supra note 45, at 789,
Harper, supra 789, SCHOENBAUM, supra note 2, at 711; see infra
SCHOENBAUM, supra infra note 130
130
and accompanying
accompanying text. But see infrainfra Part lV.B.
V.B.
52. FORCE,
52. supra note 2,
FORCE, supra 2, at 102. See supra
supranote 39.
53. FORCE,
53. supra note 2,
FORCE, supra 2, at 102. See generally Longshoremen's and Harbor Workers' Compensation
generally longshoremen's Compensation
Act, 33 U.S.C.
U.S.C. 901 (2006) [hereinafter Longshoremen's Act].
longshoremen'S Act).

484 GEORGIA STATE

GEORGIA UNIVERSITY LAW
STATE UNIVERSITY LAW REVIEW
REVIEW [Vol. 25:2
IVol.25:2
benefits from their

benefits employers for injuries
their employers or illnesses
injuries or related to
illnesses related
54
54
maritime work. These benefits are
These benefits are akin worker's compensation
akin to worker's compensation
maritime
as the
the worker
worker "accepts damages for work-related
less than full damages
"accepts less work-related
injuries. exchange, he
injuries. In exchange, guaranteed that these
he isis guaranteed statutory benefits
these statutory benefits55
will be paid for every work-related injury without regard to fault."
every work-related injury without regard to fault.,,55
The
The LHWCA against a vessel
employees to file suit against
LHWCA allows these employees vessel
whose negligence
whose worker and
negligence injured the worker against their
and against their employer,
employer, if
56
vessel's owner
employer is the vessel's
the employer or owner pro hac vice.
owner or owner pro hac vice. 56
Duties to seamen
2. Duties
Seamen have traditionally
Seamen protection from the
afforded extra protection
traditionally been afforded the
57
hazards" they face at sea. 57 The term
legal system due to the "special
legal "special hazards"
'seaman' has no statutory definition
'seaman' has no statutory definition but but generally requires a (1)
"connection
"connection to to aa vessel
vessel [or
[or vessels]
vessels] in navigation
navigation . .. .. that is
substantial in both duration and nature; and (2)(2) must contribute to the
function of the vessel or to the accomplishment
accomplishment of its mission." 58 The
mission. ,,58
Jones Act allows seamen to seek relief via negligence claims against against
59 transferred to a
Liability for Jones Act claims are transferred
their employers. 59 Liability
owner or bareboat
bareboat agreement. 60 The owner
charterer in a valid bareboat bareboat
charterer is therefore responsible for providing a seaworthy vessel to
seamen and will be liable for the injuries of a seaman resulting from
failure to provide such a vessel.6161
54. See, e.g., FORCE,

54. See, supranote
FORCE, supra note 2,
2, at
at 102. generallyLongshoremen'S
102. See generally Longshoremen's Act, supra note
Act, supra note 53.
55.
55. FORCE, supra note
FORCE, supra note 2, at 102 (quoting Edmonds v. Compagnie Generale Transatlantique, Transatlantique, 443
443
U.S.
U.S. 256,
256, 279
279 (1979.
(1979)). TheThe Longshoremen's
Longshoremen's Act Act has
has specific
specific requirements to qualify and expressly
exempts
exempts seamen
seamen fromfrom coverage.
coverage. See,See, e.g., FORCE,
FORCE, suprasupranote 2, at 102-{)4.
102-04.
generallyFORCE,
56. See generally supranote
FORCE, supra note 2,2, at
at 108,
108, 110.
110.
57.
57. Chandris,
Chandris, Inc.Inc. v.
v. Latsis,
Latsis, 515
515 U.S.
U.S. 347,
347, 354-55
354-55 (1995)
(1995) (stating
(stating "seamen
"seamen 'are
'are emphatically
emphatically the
wards
wards ofof the
the admiralty'"
admiralty' because
because they
they "are
"are by
by thethe peculiarity
peculiarity of their lives liable to
to sudden sickness
from
from change
change of of climate,
climate, exposure
exposure to to perils,
perils, and
and exhausting
exhausting labour"
labour" (quoting
(quoting Harden
Harden v.v. Gordon,
Gordon, 1111 F.
Cas.
Cas. 480, 485, 483 (C.C.D. Me. 1823) (No. 6,047).
480,485,483 6,047))).
58.
58. FORCE, supra note
FORCE, supra note 2,2, at
at 92.
92. Under
Under general
general maritime
maritime law and statute, seamen
seamen have three
three main
remedies
remedies forfor recovery;
recovery; theythey can
can pursue
pursue "actions
"actions for for maintenance
maintenance and cure, for negligence, and for
unseaworthiness
unseaworthiness of ofaa vessel." See generally
vessel." See generallyid. id. at 86-102
86-102 (discussing these remedies in greater
greater depth).
See, e.g.,
59. See,
59. id. at 91,
e.g., id 91, 96; BLACK'
BLACK'S S LAW
LAW DICTIONARY
DICTIONARY 856 (8th ed. 2004). generallyJones Act,
See generally
2004). See
46
46 U.S.C.
U.S.C. 688
688 (2006).
(2006).
60. See,
60. e.g., FORCE, supra
See, e.g., supranote 2, 2, at
at 96.
96.
61.
61. See id.; Gatewood
See id.; Gatewood v. v. Atl.
At. Sounding
Sounding Co., Co., Inc.,
Inc., No.
No. 3:06-cv-4I-J-32HTS,
3:06-cv-41-J-32HTS, 2007 WL WL 1526656,
1526656, at5
at *5
(M.D.
(M.D. Fla.
Fla. May
May 23,23, 2007).
2007).
20081
2008] BAREBOAT CHARTERS
B. Seaworthiness
B. Seaworthiness
A shipowner's duty to provide a seaworthy
seaworthy vessel
vessel is imposed byby
law and is non-delegable
non-delegable in regards to the protections required
required for
third parties.6622 The seaworthiness
seaworthiness of a ship is circumstantial
circumstantial but
generally
generally requires
requires a vessel to be reasonably
reasonably fit for the intended
intended
63
stipulated in
purpose of the vessel as stipulated the charter agreement.
in the charter agreement. 63
However, the owner
owner and bareboat
bareboat charterer involved in the agreement
agreement
have full discretion to apportion liabilities as they see fit. 6464 Thus,
while a bareboat
bareboat charter agreement cannot alter the scope of the duty
owed to third parties, it allows the owner and charterer
charterer to transfer
amongst themselves
themselves any liability
liability resulting from the duty to provide a
seaworthy vessel. 6565
III. PRECEDENT IN THE FEDERAL CIRCUITS PRIOR TO THE FIFTH

CIRCUIT'S DECISION IN BAKER V.
CIRCUIT'S V. RAYMOND
RAYMOND INTERNA TIONAL
INTERNATIONAL
Before
Before the Fifth Circuit's decision in Baker,
Baker, the federal circuits
were unified in allowing a vessel owner to limit in personam
personam liability
66
for third party injuries through
through the bareboat charter device.66
bareboat charter
A. First
A. Circuit
First Circuit
In Ramos v. Beauregard,
Beauregard, Inc., despite appellant's
appellant's arguments,
arguments, the
First Circuit refused to hold the owner owner of a vessel liable for a
condition
condition of unseaworthiness
unseaworthiness that surfaced
surfaced after the owner gave
67
67 In Ramos, a longshoreman was
control
control of his vessel to the charterer. longshoreman
injured
injured while working
working on a vessel operating under a bareboat
bareboat charter
62. Either
Either the owner or charterer
charterer will be responsible
responsible for providing a seaworthy
seaworthy vessel to third
parties;
parties; they cannot
cannot destroy contract or otherwise as it is implied by law. Gebb, supra
destroy that duty through contract supra
note 2, at 772; see,
see, e.g., FORCE, supra note 2, at 46, 99.
FORCE, supra
63. See supra
supra note 21 and accompanying
accompanying text.
64. See Kerr-McGee
Kerr-McGee Corp. v. Law, 479 F.2d 61,6461, 64 (4th Cir.
Cir. 1973)
1973) (stating the parties to the charter
charter
agreement
agreement "were
"were free to make whatever contractual
contractual allocation of risk they desired,"
desired," thus they could
could
decide
decide the amount
amount each
each would owe in the event of damages);
damages); see infra note 139 and accompanying
accompanying text.
65. See Gebb, supra
supra note 2, at 772-73.
66. See infra
infra Parts m.A-E,
IM.A-E, IV.
67. Ramos Beauregard, Inc.,
Ramos v. Beauregard, Inc., 423 F.2d 916, 917-18
917-18 (1st Cir. 1970).

486 GEORGIA STATE

UNIVERSITY LAW REVIEW [Vol. 25:2
[Vol. 25:2
agreement.68
agreement. 68 The appellant filed aa claim
The appellant against the
damages against
claim for damages
shipowner alleging
shipowner alleging his injuries resulted from a condition
injuries resulted condition of of
669
9
unseaworthiness and the owner
unseaworthiness therefore liable. The appellant
owner was therefore appellant
urged the First Circuit
urged Circuit to
to overturn precedent and
overturn its precedent allow recovery
and allow recovery
against vessel, even
owner of the vessel,
against the owner even though
though the vessel was leased
leased
70
bareboat charter
under a valid bareboat at the
charter at time of the injury.
the time ofthe injury.70
The First Circuit held the appellant
Circuit held compelling reasons
offered no compelling
appellant offered reasons
711
7
sufficient for the
sufficient alter its position. The court
court to alter
the court reasoned the
court reasoned
doctrine seaworthiness would
doctrine of seaworthiness be greatly diminished if the owner
greatly diminished owner
of under a bareboat
of a vessel operating under charter could be held liable
bareboat charter liable for
for
conditions of
conditions of unseaworthiness accountability would impose a
unseaworthiness as such accountability
duty on the owner who had had no control over the vessel.72 72 The
The court
continued to allow the owner of a vessel operating
continued under a bareboat
operating under bareboat
charter
charter to limit liability
liability from injuries caused by unseaworthy
unseaworthy
conditions.73
73
B. Third Circuit
Third Circuit
Circuit also held shipowners
The Third Circuit bareboat charter
could use bareboat
shipowners could charter
agreements as a shield against liability involving
against third party liability involving injuries
74
74
from unseaworthy conditions. In Haskins Point Towing Co., the
Haskins v. Point 75
affirmed
Third Circuit affirmed the judgment for the
judgment for the defendant owner.75
defendant owner.
Haskins involved a suit by an injured seaman against a barge owner
Haskins
Id at 917; see also

68. Id. also supra
supra note 39.
F.2d at 917.
69. Ramos, 423 F.2dat917.
70. Id; see, e.g., Vitozi v. Balboa Shipping Co., Co., 163 F.2d 286, 289 (1st Cit. 1947);
(1st Cir. 1947); Pichirilo v.
Guzman, 290 F.2d 812, 813-14 (1st Cir. 1961),
812,813-14 rev'don
1961), rev'd on other
other grounds, U.S. 698 (1962).
grounds, 369 U.S. (1962).
71. Ramos, 423 F.2d at 917.
Ramos,423F.2dat917.
72. Id at 918
Id. at918
73. Id.
Id.
74. Haskins v. Point Towing Co., 421 F.2d 532, 536 (3d Cir. 1970); see also Aird v. Weyerhaeuser
see also Weyerhaeuser
169 F.2d 606, 609-10 (3d Cir.
S.S. Co., 169 1948) (stating though an owner
Cir. 1948) owner is liable for a seaman's wages,
when the owner uses a bareboat charter to give entire possession and control of the vessel to a charterer,
charterer becomes the owner pro
the charterer pro hac vice and "assumes responsibilities of [an] owner with
"assumes all the responsibilities
discharge"); Simko v. C &
respect, inter alia, to the wages of the seamen and their wrongful discharge"); & C Marine
Maint. Co., 484 F. Supp. 401, (W.D. Pa. 1980) (stating a bareboat charterer with full possession and
401, 404 (W.O.
considered the ownerpro
control of a vessel is considered "stands in place of the owner for the voyage
owner pro hac vice and "stands
or service contemplated and bears the owner's responsibilities"
responsibilities" (quoting Blair v. U.S. Steel Corp., 444
F.2d 1390, 1391 (3d Cir. 1971).
1971))).
Haskins,421 F.2d at 536.
75. Haskins,
20081
2008) BAREBOATCBARTERS
for injuries
injuries suffered from an alleged unseaworthy 76 As part
unseaworthy condition.76
of the holding, the court found no evidence of unseaworthiness. 77
evidence ofunseaworthiness. 7 The
court also stated that because the owner gave up full possession of the
vessel under the bareboat
bareboat agreement, the charterer "had the requisite
control
control of the vessel . . . necessary to premise liability for
unseaworthiness."
unseaworthiness.,,7s78 Thus, Third Circuit precedent allowed owners to
shield themselves from third party liability via the bareboat charter
charter
79
79
device.
C. Fourth
C. FourthCircuit
Circuit
The Fourth Circuit held vessel owners could shield shield themselves
from liability to third parties
parties injured by unseaworthy
unseaworthy conditions if the
vessels were operating
vessels agreements.8so
operating under bareboat charter agreements. " In Kerr-
Kerr-
McGee Corp.
Corp. v. Law, the Fourth Circuit stated that "[w]hen "[w]hen the
owner
owner of [a]
[a] vessel enters
enters into a demise charter ... longer
. . . he is no longer
charged with the duties and liabilities that arise out of its
81
ownership."sl
ownership."
Kerr-McGee involved a suit for damages from cargo that was lost
Kerr-McGee lost
when the barge transporting 8 2
transporting the cargo capsized in transit. 82 The court
found defective hatch covers caused the barge to sink and constituted an
unseaworthy condition. 833 Even though the owner was aware of the
unseaworthy
unseaworthy
unseaworthy condition and the court explicitly recognized
recognized his failure to
exercise due care, he was not held liable in personam personam as the
unseaworthy
unseaworthy condition arose after the execution
execution of the bareboat charter
charter
agreement
agreement and delivery of the barge. 84
delivery of the barge. 84
The Fourth Circuit explained this result is required as owners no
longer have the right to control the use of the vessel nor the duty to
76. Id. at 533-34.

Id. at 533-34.
77. Id. at 536.
Id. at 536.
78. Id.
Id.
79. See id.
Seeid.
80. Kerr-McGee
80. Kerr-McGee Corp. v. Law,Law, 479
479 F.2d 61,63 (4th Cir. 1973).
61, 63 (4th 1973).
81. Id.
81. Id.
82. Id. at 62.
Id. at 62.
83. Id. at 62-63.
/d. at 62-63.
84. Id. at 63
/d. at 63 (stating
(stating an owner
owner whose vessel
vessel isis operated
operated under aa demise charter
charter can only be held
held
liable for
for unseaworthy conditions that
that existed
existed before
before the charter agreement
agreement was executed).
executed).

488 GEORGIA
GEORGIA STATE
[Vol. 25:2
maintain it after
maintain after giving
giving total possession and
total possession and control
control to to a bareboat
bareboat
charterer.85
85 The
The normal duties and
normal duties and liabilities out of
arise out
liabilities that arise of
86
ownership are
ownership transferred to the
are transferred the bareboat charterer;86 the court
bareboat charterer; court
stipulated that once
stipulated once the bareboat charter
the bareboat into, "the
entered into,
charter is entered "the demise
demise
charterer 'becomes
charterer 'becomes subject responsibilities of
duties and responsibilities
subject to the duties of
ownership.
ownership.' 87
",87 Because
Because the
the barge
barge owner
owner no
no longer had
had a duty of
of
maintenance, though the
maintenance, even though aware of the
the owner was aware the unseaworthy
unseaworthy
condition, hehe could not bebe held negligence as that
held liable for negligence that duty and
and
transferred to the charterer.
the resulting liability were transferred 88
charterer. 88
D. Sixth Circuit
D. Circuit
decision in Baker,
Prior to the Fifth Circuit's decision established precedent
Baker, established precedent
agreement were not
bareboat agreement
in the Sixth Circuit held owners in a bareboat
liable to third parties
liable injuries resulting from a vessel's
parties for injuries vessel's
89
89
unseaworthiness. In W
unseaworthiness. W. G.
G. Bush & & Co. & New Orleans
Co. v. Sioux City & Orleans
Barge Lines,
Barge charterer entered into a bareboat
Lines, Inc., an owner and charterer
required the owner to pay for
agreement; part of that agreement required
agreement;
repairs to cure an existing unseaworthy condition before of
before delivery of
90
90 delivered to the charterer, the
vesse1. After possession was delivered
the vessel.
vessel sank while being loaded and damaged
vessel damaged the third party's
party's
91
91 unseaworthy condition
terminal. A finding of fact held an unseaworthy
docking termina1. condition
92 The
transferred possession of the vessel. 92
existed before the owner transferred
Kerr-McGee, 479
85. Kerr-McGee, 479 F.2d
F.2d at 63.
86.
86. See.
See, e.g., id.id.
87. Id.(quoting
87. Id (quoting Leary
Leary v.
v. United
United States,
States, 81 U.S.
U.S. 607,
607, 610
610 (1872.
(1872)).
88.
88. See. Kerr-McGee,479
See, e.g., Kerr-McGee, 479 F.2d
F.2d atat 63.
63.
89.
89. See. e.g., W. G.
See, e.g., G. Bush
Bush && Co.
Co. v.v. Sioux
Sioux City
City && New
New Orleans
Orleans Barge
Barge Lines, Inc., 474 F. F. Supp. 537,
544 (M.D. Tenn.
544 (M.D. Tenn. 1977);
1977); see also re Cook
In re
also In Cook Transp.
Transp. Sys.,
Sys., Inc., 431 F. Supp. 437,443
437, 443 (W.D. Tenn.
1976)
1976) (stating
(stating a a bareboat
bareboat charter
charter "in
"in practical
practical effect
effect and
and in
in important
important legal
legal consequence,
consequence, shifts the
possession
possession and and control
control of
of the
the vessel
vessel from
from oneone person
person to
to another"
another" (quoting
(quoting GILMORE & & BLACK, supra
supra
note
note 22, atat 673.
673)). Because
Because thethe owner
owner in Cook Transp.
in Cook Sys. retained
Transp. Sys. retained partial
partial control,
control, the
the court
court found
found he
he
failed
failed to
to meet
meet thethe burden
burden ofof proving
proving a a bareboat
bareboat agreement
agreement existed
existed and
and thus
thus had
had no
no "right
"right to
to exoneration
exoneration
and/or
and/or limitation"
limitation" thatthat an
an owner
owner isis allowed
allowed under
under aa bareboat
bareboat charter. Cook, 431
charter. Cook, F. Supp.
431 F. Supp. at
at 443.
443.
90. W.
90. Bush, 474
G. Bush,
W. G. 474 F.
F. Supp.
Supp. at
at 538-39.
538-39.
91. Id.
91. Id.atat 539.
539.
92. Id.
92. Id.atat 538.
538.
20081
BAREBOAT 489
unseaworthiness of the vessel had not been

been cured as stipulated in the
agreement and subsequently caused the vessel to sink. 93
agreement 93
The court held the owner's failure to deliver a seaworthy

seaworthy vessel
made him liable for any losses sustained by the charterer that were
94
unseaworthy condition. 94
caused by the unseaworthy However, the court also held
the charterer-as
charterer-as a valid bareboat charter
charter existed-was
existed-was the owner
owner
pro hac vice and therefore responsible to third parties for providing
providing a
95
95
seaworthy vessel.
seaworthy vesse1. In upholding the ability of an owner to limit third
decision of the court
party liability through a bareboat charter, the decision
resulted in the charterer paying the third party's damages 96
and the
indemnifying the charterer
owner indemnifying that same
for that
charterer for amount.
same amount. 96
E. Ninth
E. Ninth Circuit
Circuit
The Ninth Circuit has long held the charterer
charterer in a valid bareboat
agreement will be liable to third parties. 97
agreement 97 In
In The Beaver,
Beaver, the Ninth
Circuit affirmed a lower court decision barring one shipowner-the
party-from holding
third party-from holding the charterer partially
charterer of a second vessel partially
liable for damages after the two vessels collided where both were at
fault for the collision. 98
98 The owner
owner of the first vessel claimed
claimed the
charterer of the second was liable for the second
charterer second vessel's "improper
"improper
navigation," contributing cause of the collision. 99
navigation," which was a contributing 99 The
court specifically
specifically found the agreement
agreement was for a time charter
charter and not
a bareboat agreement, thus the charterer
charterer could not "be held in any
any
93. ld.
Id.at 539. The vessel had been delivered
delivered to a repair facility with instruction
instruction to fix the defects and
and
make the vessel
vessel seaworthy. Id.at 544. Both owner
seaworthy. ld. owner and charterer believed the vessel was seaworthyseaworthy
when the charterer took possession. Id.at 539. Still, the owner
possession.ld. owner has a duty to provide
provide a seaworthy vessel
and cannot delegate that duty, even to a repair
repair facility specifically
specifically instructed
instructed to cure
cure the problem. ld.Id.
94. ld.
94. Id. at 544.
95. Id.
ld.
96. See, e.g., W. G. Bush, 474 F. Supp. at 545.
e.g., W.
97. See, e.g.,
97. See, e.g., The Beaver, 219 F. 139, (9th Cir. 1915); see also Miculka v. Am. Mail Line, Ltd.,
139, 141 (9th
229 F. Supp. 665, 667 n.2 (D. Or. 1964) 1964) (stating a "bareboat
"bareboat charterer
charterer is personally
personally liable
liable for the
unseaworthiness ofa
unseaworthiness of a chartered
chartered vessel" (citing Reed v. S.S. Yaka, 373 U.S. U.S. 410, 412-13 (U.S.
410,412-13 (U.S. 1963);
1963)));
Marr Enters., Inc. v. Lewis Refrigeration Co., 556 F.2d 951, 951, 958 (9th Cir.
Cir. 1977)
1977) (dictum) (noting thethe
"primary obligation"
owner's "primary obligation" is to deliver a seaworthy
seaworthy vessel to the charterer,
charterer; the bareboat device vests
in the charterer "most of the incidents of ownership"
ownership" (quoting GILMORE
GILMORE & & BLACK, supra note 22, 4-
20)).
20.
98. Beaver, 219219 F. at 139-40.
Id.
99. ld. at 140.

490 GEORGIA STATE LAW REVIEW

UNIVERSITY LAW
STATE UNIVERSITY REVIEW [Vol.
(Vol. 25:2
25:2
[the owner]."
negligence of [the
responsible for the negligence 100 While Beaver
owner].,,100
way responsible
did not involve owner claiming
involve an owner limited liability to aa third party
claiming limited party by
by
means of
means of a bareboat agreement, the Ninth
charter agreement,
bareboat charter Circuit10specifically
Ninth Circuit specifically
1
the requirements
explained the
explained needed for an owner to do so.
requirements needed for an owner to do SO.101
IV. BAREBOAT No LONGER

CHARTERS No
BAREBOAT CHARTERS LoNGER A LIMIT ON OWNER
OWNER
THE FIFTH
LIABILITY: THE
LIABILITY: CREATES A
FIFTH CIRCUIT CREATES A SPLIT AFTER THE SUPREME
SPLIT AFTER SUPREME
COURT PASSES ON THE ISSUE
COURT
Court's Position
A. The Supreme Court's Bareboat Charters
Position on Bareboat Charters
Supreme Court declined
The Supreme declined to answer "whether a
answer the question of "whether
bareboat charter relieves the owner of liability for [the] unseaworthi-
bareboat unseaworthi-
ness"
ness" of a vessel. I02
10 2 The
question in the 1962
Court first declined the question 1962
case Guzman v. Pichirilo
case Pichirilo and then again in Reed v. S.S.
S.s. Yaka in
103
1963.103
1963.
involved a seaman
Guzman involved seaman injured when a shackle broke and one
of the ship's booms fell upon him.' him. 1044 The seaman
seaman filed suit in rem rem
against the ship and in personam
personam against the owner to recover damages
recover damages
0 5 The Supreme Court-agreeing
for his injuries. 1105 Court-agreeing with the trial court court that
bareboat charter
no bareboat existed-reversed the finding of the Court of
charter existed-reversed of
106
0
1 6
CircUit. The Court explained it was "reluctant to
Appeals for the First Circuit.
[charter] when the dealings between the parties
find a demise [charter] parties are
relationships would not
relationship" as such relationships
consistent with any lesser relationship"
allow an owner to "escape liability" to provide a seaworthy
"escape his normal liability" seaworthy
[d. at 140, 142; see supra

100. Id. supra note 29.
101. Beaver,
Beaver, 219 F. at 140-41.
140-41.
102. Baker v. Raymond
Raymond Int'I, Inc., 656 F.2d
Int'l, Inc., F.2d 173, 183 (5th Cir.
Cir. 1981); see also Reed, 373 U.S. at 411
also Reed,
n.l; Guzman v. Pichirilo, 369 U.S. 698, 700 (1962).
(1962).
103. Guzman, 369 U.S. at
103. at 700; Reed, 373
700; Reed, 373 U.S. at 41
U.S. at 411.I. Though the Court reserved this question in in
Reed and Guzman,
Guzman, prior statements of the Court indicated a a bareboat agreement would limit the liability
of owners toto third parties.
parties. See Leary v. v. United
United States, 81 U.S. 607, 610 (U.S.(U.S. 1871) (noting
1871) (dictum) (noting
"[t]here
"[tihere is no doubt that under some forms of aa charter-party the charterer becomes the owner of the
vessel ... and consequently
vessel.., consequently becomes subject
subject to the duties and responsibilities of ownership."); see also
also
GILMORE && BLACK,
BLACK, supra
supra note 22, 9-18 (discussing in in detail the decisions and reasoning
reasoning in Guzman
and Reed).
andReed').
104. Guzman, 369 U.S. at 698.
104.
105. [d.
Id.
Id. at 703.
106. [d.
20081
2008) BAREBOAT
10 7
vessel. 107 "[W]e need not decide here whether [a
The court stated, "[W]e [a
bareboat charter]
bareboat charter] relieves the owner of his traditional duty to
maintain a seaworthy
maintain vessel.' 0 8
seaworthy vessel."IOS
longshoreman to recover damages for
Reed involved a suit by a longshoreman
injuries sustained when he stepped on a defective
injuries defective pallet
pallet while loading
the vessel. I09
0
1 9 The Supreme Court again declined to address whether whether
or not a bareboat charter releases
releases an owner from the duty to provide a
vessel."l100 The Court instead found recovery was available
seaworthy vessel.l
Longshoremen's and Harbor Workers'
as the Longshoremen's Workers' Compensation Act "was
not intended to take away from longshoremen longshoremen the traditional
traditional
remedies sea;" thus a shipowner's
remedies of the sea;" shipowner's duty to provide a seaworthy
seaworthy
vessel extended to longshoremen
vessel extended longshoremen under the circumstances
circumstances of the case.
III
III
B. The Fifih
Fifth Circuit Federal Circuit
Splitsfrom Federal
Circuit SplitsJrom Circuit Precedent Baker
Precedent in Baker
v. Raymond
Raymond International
The Supreme Court offered little reason for declining to address
whether
whether vessel owners may limit their liability
liability through a bareboat
bareboat
indicate how lower courts
charter, and failed to indicate courts should deal with the
issue. 112
112
Subsequently, the Fifth Circuit in Baker v. Raymond Raymond
International,
International, Inc.Inc. went against its own precedent
precedent and that of other
federal circuits in holding an owner may not use such a charter to
limit liability. I11313
Id.at 700.
107. Id. 700.
lOS. Id.
108. Id.The Court also declined to decide decide "whether [aJ [a] vessel can be
be held
held liable in rem when neither
neither
the demisee nor
the demisee nor the
the owner
owner isis personally
personally liable." Id. at
liable." Id. 700 n.3.
at 700
109. Reed v.v. S.S. Yaka,
109. Yaka, 373 U.S. 410,410-11 (1963).
U.S. 410,410-11 (1963).
110. id at
II O. See, e.g., id. 411 n.l.
at411 n.1.
Ill. Id.
111. Id. at 412-13.
412-13. See generally
generally longshoremen'S
Longshoremen's Act, Act, supra
supra note 53.
II 2. See supra
112. supra Part IVA[V.A.
1l3.
113. Baker
Baker v. v. Raymond
Raymond Int'l, Inc., 656
Int'l, Inc., F.2d 173,
656 F.2d 173, 184
184 (5th Cir. 19SI);
(5th Cir. 1981); see supra Part III.A-E.
supra Part III.A-E. Earlier
Earlier
holdings
holdings ofof the
the Fifth Circuit were
Fifth Circuit were inin accordance
accordance with the precedents
with the precedents of
of other
other federal circuits. Gaspard
federal circuits. Gaspard v.
Diamond
Diamond M. Drilling
Drilling Co., 593 F.2d
Co., 593 F.2d 605,
605, 607
607 (5th Cir. 1979)
(5th Cir. 1979) (upholding
(upholding aadirected
directed verdict
verdict for
for aacharterer
charterer
against aa third
third party's claim
claim for unseaworthiness as the the court
court held the agreement
agreement was for aatime charter).
charter).
The court noted
noted that
that whether the agreement was for aa time or or bareboat
bareboat charter was
was "critical" to the
"critical" to the third
party's case.
case. Id.
Id.at 606.


GEORGIA STATE LAW REVIEW
[Vol. 25:2
The Circuit created

The Fifth Circuit decision in Baker. 114
created a split with its decision 14 Baker
Baker
seaman who
involved a seaman
involved who was injured repairs to an
while making repairs
injured while
unseaworthy barge. lI155 While
unseaworthy barge." While the court valid bareboat
held no valid
court held bareboat charter
charter
could exist
could given the facts of the
exist given the case,
case, it stated such a charter
stated even if such charter
had existed, the courtcourt would not allow the agreement to shield the
the agreement
owner from liability for the vessel's
owner unseaworthiness. 1166 The
vessel's unseaworthiness."1 The court
court
defended its decision
defended development of strict
claiming that, with the development
decision by claiming strict
unseaworthiness, it was no longer
liability for unseaworthiness,
liability longer useful "restrict[]
useful to "restrict[]
seamen to a remedy in rem [sic] as the sole means of holding the
seamen
owner 1 7 The court stated an injured third party
liable.,,117 should not
party should not
owner liable." stated
have to relyrely on an in rem action and the "fiction "fiction of [a][a] ship's
ship's
8 further claimed this
court further
recovery. I18 The court
personality" as a means of recovery."
personality"
keeping with the general
decision was in keeping
decision courts to protect
general policy of courts
seamen and that an "injured seaman...
"injured seaman ... should not have to speculate
speculate
unseaworthy condition of a vessel
on when the unseaworthy whether a
vessel arose or whether
bareboat charter
valid bareboat existed." 119 However, the court
charter existed.,,119 court noted the
liability imposed on owners for vessels
personal liability
personal operating under
operating under
charters was an unlimited liability. 120
bareboat
bareboat charters not an unlimited liability. 120
656 F.2d
Baker, 656
114. Baker, F.2d atat 184. The decision
184. The decision that
that a a bareboat charter will
bareboat charter will not shield owners from
from third
party
party liability has since been upheld
liability has upheld in the Fifth
Fifth Circuit. See,
See, e.g., Wai v. Rainbow Holdings, 350
e.g., Wai 350 F.F.
Supp.
Supp. 2d2d 1019,
1019, 1029 (S.D. Fla.
1029 (S.D. 2004); supra
Fla. 2004); supra Part III.A-E.
Part HI.A-E.
lIS. Baker,
115. 656 F.2d at 176.
Baker, 656 176.
[d. at
116. Id. 181-82 (( "A
at 181-82 "A bareboat
bareboat or or demise
demise charter
charter ...... constitutes the only fonn form of charter that
purports
purports toto invest temporary powers
invest temporary powers of of ownership
ownership in in the
the charterer and, therefore,
charterer and, therefore, constitutes the only
conceivable basis on
conceivable basis which the
on which the vessel
vessel owner could seek
owner could seek toto escape liability for
escape liability for the
the unseaworthiness
unseaworthiness of his
vessel.").
vessel."). The
The court
court also noted "[a]
also noted seaman may
"[a] seaman may have recourse
recourse in personam against the
personam against the owner of
of an
an
unseaworthy
unseaworthy vessel, without regard
vessel, without regard to to whether
whether owner or bareboat charterer is responsible for the vessel's
[unseaworthy]
[unseaworthy] condition." [d. at
condition." Id. at 184.
184.
Id. (stating
117. [d. (stating the
the "restriction
"restriction functions, instead, only as aa pleading trap for the unwary and as a
functions, instead,
purely fortuitous means whereby an owner owner may escape liability if his his vessel is beyond the court's
jurisdiction").
jurisdiction").
118. [d.Id.(citing GILMORE &
(citing GILMORE & BLACK, supra note
BLACK, supra 22, 9-18);
note 22, supra Part
9-18); see supra Part II.A.2.
II.A.2.
Baker, 656
119. Baker, 656 F.2d
F.2d atat 184
184 (stating
(stating seamen are the "wards of admiralty" (quoting U.S. Bulk
admiralty" (quoting Bulk Carriers,
Inc.
Inc. v.
v. Arquelles
Arquelles [sic], 400 U.S.U.S. 351,
351, 355 (1971); supraPart II.
(1971))); see supra II.
656 F.2d
Baker, 656
120. Baker,
120. F.2d atat 184
184 (stating under the
(stating under the Limitation Act, the owner in aa bareboat bareboat charter
agreement
agreement who who was
was not
not atat fault
fault for
for the unseaworthy
unseaworthy condition can can only be liable up up to the value of the
vessel
vessel involved). generally Limitation Act 46 U.S.C.A 183 (West
involved). See generally (West 2006).
20081
v.
V. FEDERAL CIRCUITS
FEDERAL CIRCUITS CONT1NUE
CONTINUE TO
TO ALLOW BAREBOAT CHARTERS
CHARTERS
TO LIMIT
TO LIMIT SHIPOWNER
SHIPOWNER LIABILITY
LIABILITY DESPITE THE
THE FIFTH
FIFTH CIRCUIT'S
CIRCUIT'S
HOLDING IN BAKER
HOLDING BAKER
In light of the Supreme Court's decision not to address the issue of

whether an owner's liability may be limited through use of a bareboat
and despite the split created by the Fifth
charter agreement, and Fifth Circuit's
Baker,12 1 the majority of circuits continue
decision in Baker,121 continue to follow the
122
in federal
established in
precedent established circuits prior
federal circuits to that
prior to decision. 122
that decision.
Fifth Circuit
A. Fifth Circuit
In Backhus
Backhus v. Transit
Transit Casualty
Casualty Co., the First Circuit Court of
of
Appeal of Louisiana refused to reverse its precedent
precedent that the owner of of
a vessel will not be held liable for conditions of unseaworthiness that
surface after the owner has given over control of his vessel to a
charterer. 123
123 Though
in the Fifth Circuit, the court followed its
precedent by holding a "vessel owner is not liable in
established precedent
personam [sic] for a transitory unseaworthy
unseaworthy condition
condition arising during
the existence of a bareboat charter."' 124 The
bareboat charter.,,124 court reasoned that when
when
the owner in a bareboat charter agreement
charter agreement gives up control and
possession of the vessel, such an owner should not be 25
liable for the
injuries of a party to whom the owner owed no duty.
to whom the owner owed no duty. 125 1
In Backhus, the Louisiana
Louisiana Court of Appeal found the owner of the
vessel met the "heavy
"heavy burden"
burden" of establishing
establishing the existence of a
bareboat
bareboat charter
charter by proving "relinquish[ment
proving "relinquish[ ment of] possession
possession and
control of the vessel ..... . both
both under
under terms of the agreement
agreement and and in
121. See supra

121. Part IV.A-B.
supra Part lV.A-B.
122. See
122. See supra Part 11I.A-E;
supra Part III.A-E; infra Part V;
infra Part V; see Huss v.v. King
see also Huss King Co.,
Co., Inc.,
Inc., 338
338 F.3d
F.3d 647,
647, 652
652 (6th
(6th Cir.
Cir.
2003) (holding
2003) (holding an an injured
injured seaman
seaman could
could not
not recover
recover from
from aa shipowner
shipowner whenwhen the
the evidence
evidence proved
proved aa
bareboat charter
bareboat charter existed
existed and
and no
no evidence
evidence indicated
indicated the
the unseaworthy
condition existed
existed before
before the
the charter
charter
since the
since the "owner
"owner of of aavessel
vessel under
under aademise
demise (or
(or bareboat)
bareboat) charter
charter isis liable
liable only
only for
for unseaworthiness
unseaworthiness thatthat
pre-existed the
pre-existed the charter");
charter"); Rose
Rose v.v. Chaplin
Chaplin Marine
Marine Transp.
Transp. Inc.,
Inc., 895
895 F.F. Supp.
Supp. 856,
856, 860
860 (S.D.
(S.D. W.W. Va.
Va.
1995); Matute
1995); Matute v.v. Lloyd
Lloyd Berm.
Benn. Lines,
Lines, Ltd.,
Ltd., 931
931 F.2d
F.2d 231,
231, 235
235 (3d
(3d Cir.
Cir. 1991);
1991); Aird v. Weyerhaeuser
Aird v. Weyerhaeuser S.S.S.S.
Co., 169
Co., 169 F.2d
F.2d 606,
606, 609-10
609--10 (3d
(3d Cir.
Cir. 1948).
1948).
123. Backhus
123. Backhus v.v. Transit
Transit Cas.
Cas. Co.,
Co., 532
532 So.2d
So.2d 447,450
447,450 (La. App. II Cir.
(La. App. Cir. 1988);
1988); see supra PartPart lII.A.
III.A.
124. Backhus,
124. Backhus, 532 532 So.2d
So.2d atat 450
450 (noting
(noting the
the Baker decision was
Baker decision was "contrary
"contrary toto the
the great
great weight
weight ofof
federal authority").
federal authority").
125. Id.
125. at 449-50.
ld. at 449--50.

494 GEORGIA
GEORGIA STATE
STATE UNIVERSITY
UNIVERSITY LAW
LAW REVIEW
REVIEW [Vol.
[Vol. 25:2
25:2
fact."' 126 The

fact.,,126 conduct of
further found the conduct
The court further the owner
of the owner andand
charterer consistent
charterer with the
consistent with intent of
the intent of the
the bareboat charter agree-
bareboat charter agree-
127
27
ment.'
ment. Stating the
Stating the unseaworthy condition was
unseaworthy condition "clearly a
was "clearly a transitory
transitory
which arose
condition which
condition during the
arose during existence of
the existence of aa valid
valid bareboat
bareboat
charter," the
charter," the court held the owner was not liable for the plaintiffs
court held the owner was not liable for the plaintiff's
128
injuries. 128
The court
The court further stated an owner
further stated owner who who leasesleases a a vessel under a
vessel under a
129
bareboat agreement owes
bareboat agreement duty to
owes a duty deliver a
to deliver a seaworthy vessel. 129 The
seaworthy vessel. The
court that "federal
explained that
court explained "federal courts have taken the position that the
courts have taken the position that the
owner
owner isis liable
liable only for unseaworthy
only for unseaworthy conditions pre-existing the
conditions pre-existing the
charter and bears
charter and no in personam
bears no personam [sic] liability for
[sic] liability those conditions
for those conditions
existence of the charter."'
arising during the existence 13
0
charter.,,130 In other words, owners
other words, owners
without
without control and possession
control and should not
possession should not be be liable for unseaworthy
liable for unseaworthy
conditions they
conditions did not
they did create.13
not create. 1 The court
131 The court in recognized the
in Backhus recognized the
decision in
Circuit's decision
Fifth Circuit's
Fifth in Baker waswas a departure
a departure from general federal
from general federal
1 32
precedent and
precedent declined to join in that
and declined to join in that split.
split. 132
Id at 449. The
126. Id. The court
court in Backhus quoted
quoted the language of the the agreement used
used by the owner to
the owner
transfer complete possession and control of of the vessel to the charterer
charterer as follows:
POSSESSION, USE AND OPERATION.
(a) Charterer shall
(a) victual, fuel, maintain, navigate and supply the Vessel(s)
shall man, victual, Vessel(s) at its
sole cost and expense
expense and shall pay all charges every kind and penalties
charges and expenses of every
levied against the Vessel(s), it being understood that Owner
Owner retains no dominion, control,
possession or command during the Term, Term, all of the same being
being reserved
reserved to Charterer. Id.Id
127. Id.
Id.
128. Backhus, 532 So.2d at 450.
129. Id.
Id. at 449-50.
Id.at 450 (La.
130. Id. also Matute v. Lloyd Berm. Lines, Ltd., 931 F.2d 231,
(La. App. II Cir. 1988); see also 231, 235
(3d Cir.
Cir. 1991)
1991) (stating a charterer will only ''treated as the owner
only become an owner pro hac vice and be "treated
for many purposes and 0 [] subject to an owner's liabilities" under a valid bareboat charter, even though
owner's liabilities"
the court there did not find a bareboat
bareboat charter
charter existed); Aird v. Weyerhaeuser
Weyerhaeuser S.S. Co., 169 F.2d 606, 606,
609-10 (3d Cir. 1948)
1948) (holding that under a bareboat charter agreement, the owner may shield himself
from liability for third party injuries caused by an unseaworthy condition arising after vessel delivery).
But see supra generally Brophy v. Lavigne, 801 F.2d 521 (1st Cir. 1986); Kerr-McGee
supra Part IV.B. See generally KerrMcGee
Corp. v. Law, 479 F.2d 61 (4th Cir. 1973); In re Marine Sulphur Queen, Queen, 460 F.2d 89,
89,100100 (2d Cir. 1972)
1972)
(dictum); Haskins v. Point Towing Co., 421 F.2d 532 (3d Cir. Cir. 1970). But see supra
supra Part IV.B.
131. See Backhus, 532 So.2d at 450; supra I.B.
supra Part LB.
Backhus, 532 So.2d at 450; see also Rose v. Chaplin Marine Transp. Inc., 895 F. Supp. 856,
132. Bac/chus,
861-62 (S.D.W. Va. 1995) (finding the bareboat charterer an owner pro
1995) (rmding hac vice and
pro hac and "legally
"legally
unseaworthiness of the vessel after the date of transfer" even though the vessel was
responsible for the unseaworthiness
subsequently time chartered
chartered by the owner from the bareboat
bareboat charterer, as no proof existed indicating
indicating the
owner had regained complete
complete control required to transfer liability); Kerr-McGee Corp., 479 F.2d at 63.
Kerr-McGee Corp.,
20081
B. Ninth
Ninth Circuit
Circuit
In upholding
upholding its precedent, the Ninth Circuit
Circuit has explicitly declined
to follow the Fifth Circuit's decision not to allow a vessel's owner owner to
limit liability to third parties via a bareboat charter agreement. 133 133 In
Goodwin v. Guy F. F. Atkinson Construction

Construction Co., Co., Judge Owen M. Panner
asserted that "[a
"[a]lthough Baker's reasoning is interesting, II conclude that
]lthough Bakers
the Ninth Circuit would not follow the Fifth Circuit's lead" and held held
owners could continue
continue to limit their liability through use of bareboat
bareboat
1 34
agreements. 134
charter agreements.
The Ninth Circuit maintained that position position in the more recent case
135
In re
re Tidewater Barge Lines,
Tidewater Barge Lines, Inc.135
Inc. Again, the court recognized the
Supreme
Supreme Court has not resolved the issue and stated "the "the Ninth
Circuit has held that under a bareboat
bareboat or demise charter, an owner owner []
has no liability for unseaworthiness
unseaworthiness to a third party.' ' 136
party.,,136 The pertinent
pertinent
claim in Tidewater
Tidewater involved
involved a fourth party complaint contribution
complaint for contribution
against the owner of a barge for damages caused when the barge barge
capsized and its cargo was IOSt. lost. 137
13 7
The claim was basedbased on the theory
theory
that the owner was liable because
because the sinking of the barge and loss of of
cargo resulted from unseaworthy
unseaworthy conditions. 138
138
However, the court
found the barge was operating
operating under a valid bareboat
bareboat charter
charter and stated:
Unseaworthiness is the duty of the owner, but the owner can
Unseaworthiness can transfer
that duty to a charterer through a bareboat
bareboat charter. Once transferred, the the
owner no longer has control over the vessel, and the charterer charterer becomes
becomes
133. See supra

supra Parts ill.E,
Ill.E, IV.B; see,
see, e.g., Goodwin v. Guy F. F. Atkinson Const. Co., No.No. CV 89-1401-
89-1401-
PA, 1991 WL 187462, atat *2-3 (D. (D. Or. Feb. 11, 1991); see also Griffith v. Martech
II, 1991); Martech Int'l,
Int'l, Inc., 754
754 F.
Supp. 166, 171 (C.D. Cal. 1989) (declining toto adopt the Fifth Fifth Circuit's
Circuit's "divergent
"divergent views" that that allow
allow in
personam claims against owners whose vessels
personam vessels are operating
operating under
under bareboat charters);
charters); Dant
Dant && Russell,
Inc. v.v. Dillingham TugTug && Barge Corp., 895 F.2d 507, 509-10 (9th Cir. 1989) 1989) (finding
(finding an owner not not
liable in personam
personam forfor an injury toto aa third
an injury third party
party caused
caused byby an unseaworthy
condition of his vessel
of his that
vessel that
pre-existed the bareboat
bareboat charter
charter agreement because because the charterer was was aware
aware of of the
the unseaworthy
unseaworthy
condition but waived
waived the owner's
owner's liability
liability by postponing the
by postponing the needed
needed repairs).
repairs).
134. Goodwin,
Goodwin, 1991 WL 187462, at at *3.
*3.
135. In rere Tidewater
Tidewater Barge Lines, Inc., No. No. 03-CV-1225-ST,
03-CV-1225-ST, 2005 WL 3992463, at *9 *9 (D.
(D. Or. Oct.
21,2005).
21, 2005).
136. Id. at *7 (citing Dan!
Id. at Dant & Russell, 895 F.2d
& Russell, F.2d atat 510).
137. InIn rere Tidewater, 2005 WL
Tidewater, 2005 WL 3992463,
3992463, at *1.*1.
138. Id Id at *1, *4. Numerous
*1,*4. Numerous unseaworthy conditions were were cited, including (1) the barge "was not fit
(I) the fit
for use as as aa carrier of
of cargo containers;
containers; (2) (2) [d]id
[d]id not have
have proper watertight
watertight integrity;
integrity; (3)
(3) [h]ad
perforations in thethe bin walls; (4) [h]ad water inin the bottom
bottom ofof the cargo
cargo bin,
bin, the
the double
double bottom, or or both;
both;
and (5)
(5) [w]as unstable." Id.Id at *4.
*4.


GEORGIA STATE UNIVERSITY LAW REVIEW [VoL 25:2
the equivalent
equivalent of the owner. The duty of providing a seaworthy vessel
continues to exist, but is owed by the party party that actually possesses and
139
controls the vessel.
vessel. l39
Thus, the Ninth Circuit affirmed its prior position

position allowing owners to
use a bareboat charter to protect themselves from liability to charterers
bareboat charter
or third parties for injuries resulting
resulting from unseaworthy
unseaworthy conditions, rather
than enforcing
enforcing such a duty on an owner that has neither control
control nor
140
possession of the vessel.
possession of the vessel. l40
VI. THE ELEVENTH

ELEVENTH CIRCUIT
CIRCUIT DECLINES ADDRESS THE ISSUE
DECLINES TO ADDRESS ISSUE
In Lovette v. Happy
Happy Hooker
Hooker II, the Middle
Middle District of Florida
recognized the federal circuit split as to whether or not a bareboat bareboat141
charter relieves the shipowner from liability for
from liability unseaworthiness. 141
for unseaworthiness.
acknowledged that the Eleventh
The court acknowledged Eleventh Circuit had not yet
142
resolved the issue, and declined to do so in Lovette.
declined to do so in Lovette. 142
In Lovette, the plaintiff
plaintiff seaman was injured while trying to operate
operate
the vessel's anchor. 1143 43
The seaman
seaman filed suit alleging his injury
resulted from an unseaworthy condition and the owner was liable in
failing to maintain a seaworthy vessel. vessel.'l44
44 The owner
owner filed for
summary judgment
judgment claiming no liability to the seaman as the vessel
vessel
was operating
operating45 under a bareboat charter agreement when the seaman
.. d 145
injured.
was InJure. 1
Instead
Instead of resolving the Eleventh
Eleventh Circuit's
Circuit's position in the split, the
court acted in similar fashion to the Supreme Supreme Court and held the
owner failed to meet the heavy burden of proving a bareboat charter
139. Id.
[d. at *8. The court found the terms tenns of the lease agreement
agreement for the barge consistent with a
bareboat
bareboat charter, specifically that the owner had relinquished and the charterer
charter, specifically charterer assumed "responsibility,
liability and benefit of and for the use, control and operation of the [barge],"
[barge]," including "responsibility
"responsibility
expenses ...
for all costs, expenses . . . damages, claims or other charges
charges of any kind...
kind ... attributable
attributable to the use,
operation, maintenance [barge]." [d.
maintenance or condition of the [barge]." Id. at *10.
*10.
140. Id.
[d. at *9; see supra
supra Part lI.E; see, e.g., Baker v. Hasbrouck, Civ. No. 91-124-FR,
Part OLE; 91-124-FR, 1991
1991 WL
240740,
240740, at *3 (D. Or. Nov. I, 1, 1991).
1991).
141.
141. Lovette v. Happy Hooker It, No. 2:04CV522FfM29SPC,
Hooker II, 2:04CV522FTM29SPC, 2006 WL 66722, 66722, at *3 (M.D. Fla. Jan.
11,2006).
142. Id.
[d.
143. Id.
143. [d. at *2.
144. Id.
[d.
145. Id.
[d. at *3.
*3.
20081
2008J BAREBOAT CHARTERS
existed. 146
146
The court
The court dismissed the the owner's claimclaim for summary
summary
147
judgment and held neither the language
judgmentl47 language of the agreement
agreement nor the the
48
actions of the parties were
of the with aa valid
consistent with
were consistent valid bareboat charter.1148
bareboat charter.
In Gatewood
In Gatewoodv. v. Atlantic
Atlantic Sounding
Sounding Co., the Middle District Court Court ofof
Florida once more declined to address the the issue of an owner's
owner's ability
149
to use a bareboat charter as a shield against liability to
charter as a shield against liability to third parties. 149
third parties.
The court
court again
again acknowledged
acknowledged the splitsplit as unresolved in the Eleventh
Circuit but remanded the case for factual findings as to the existence
of a bareboat charter and whether an unseaworthy condition pre-
existed the charter agreement. 150 In issuing the order, the court gave
no indication
no indication on the direction the Eleventh Circuit would take on the
1 1
issue. 5
issue.I51
VII.
VII. SOLUTIONS FOR OWNERS CHARTERERS TO CLARIFY AND
OWNERS AND CHARTERERS
LIMIT LIABILITY
LIMIT LIABILITY IN BAREBOAT CHARTER
INBAREBOAT AGREEMENTS
CHARTER AGREEMENTS
The Fifth Circuit in Baker stated "[t]he "[t]he allocation

allocation of ultimate
liability should be the responsibility of the owner
owner and charterer, who
'can sort out which between them
'can sort out which between them will bear will bear the final cost of of
52
recovery."",1
recovery. ",152 Thus, in its break from established
established precedent, the Fifth
Circuit gave charterers a hint at how best to protect
gave owners and charterers protect
themselves from the risks of uncertain liability; this instruction
instruction holds
53
true for those in the the unsettled Eleventh Circuit and elsewhere.'153
unsettled Eleventh Circuit and elsewhere.
Through "the wise use of indemnityindemnity clauses and comprehensive
comprehensive
insurance
insurance coverage,"
coverage," parties
parties can
can mitigate
mitigate most
most uncertainties over
uncertainties over
146. at *3-4;
ld. at
146. Id. 3-4; seesee supra Part IV.A.
supra Part lV.A.
147. Lovette, 20062006 WL 66722, atat *3-4
WL 66722, 3-4 (stating
(stating there
there isis aa "heavy burden
burden on on the
the party
party who
who attempts
attempts toto
show that
show that the
the owner
owner of of the
the vessel
vessel has
has been
been relieved
relieved ofof his
his legal
legal obligations
obligations asas owner"
owner" (citing
(citing Guzman
Guzman v.v.
Pichirilo, 369
Pichirilo, 369 U.S.
U.S. 698,
698, 700
700 (1962))).
(1962).
148.
148. Id. (fmding the
ld. (finding the specification
specification ofof dates
dates for
for the
the term
term of of the
the charter
charter more
more consistent
consistent with
with aa time
time
charter and
charter and aa contract
contract clause
clause allowing
allowing the
the owner
owner access
access toto thethe vessel
vessel atat any
any time
time being
being "contrary
"contrary toto the
the
demise charter's
demise charter's requirement
requirement thatthat the
the [charterer]
[charterer] has
has exclusive
exclusive possession
possession over
over the
the vessel").
vessel").
149. Gatewood
149. Gatewood v.v. Atl. Atl. Sounding
Sounding Co.,
Co., Inc.,
Inc., No.
No. 3:06-cv-41-J-32HTS,
3:06-cv-4I-J-32HTS, 2007 2007 WLWL 1526656, at at5
*5 (M.D.
(M.D.
Fla. May
Fla. May 23,23, 2007).
2007).
150. at *5-6.
ld. at
150. Id. 5-6.
151.
151. See, e.g.,
e.g., id.
id.
152. Baker
152. Baker v.v. Raymond
Raymond Int'l,Int'I,Inc., 656 F.2d
Inc., 656 F.2d 173,
173, 184
184 (5th
(5th Cir.
Cir. 1981)
1981) (quoting
(quoting Spinks
Spinks v.v. Chevron
Chevron Oil Oil
Co., 507
Co., 507 F.2d
F.2d 216,
216, 225
225 (5th
(5th Cir.
Cir. 1975)).
1975.
153.
153. See, e.g.,
e.g., Baker,
Baker, 656 656 F.2d
F.2d atat 184.
184.
498 GEORGIA UNIVERSITY LAW REVIEW

GEORGIA STATE UNIVERSITY REVIEW [Vol. 25:2
[Vol.
liability. 5 4 Though
liability.154 Though this can be a difficult task considering
considering the
numerous circumstances and uses of contracts between shipowners
numerous circumstances shipowners
and charterers, the "owner and demise charterer
charterer are free to contract as
contract
they please unrestrained discretion to modify, expand, or
please and have unrestrained
abrogate their obligations inter se."
obligations inter 1 55 The following terms and
se.,,155
clauses provide an outline for owners and charterers to accomplish accomplish
that task. 156
task. 156
A. Insurance andIndemnity
Insurance and Indemnity
To protect their interest in the vessel, owners should carry a hull
"damage to or loss of a vessel."'
policy covering "damage
policy ' 57 Charterer parties
vessel.,,157
owners-carry protection
will usually-and should be required to by owners---carry protection
1158
58
indemnity (P&I) insurance.
and indemnity P&I coverage
coverage insures against
indemnify the owner against such
damages to third parties, is used to indemnify
"primary means whereby shipowners
damages, and is the "primary shipowners and
operators protect themselves against third-party
themselves against claims."' 159
liability claims.,,159
third-party liability
The owner must assure indemnity from the charterer for all in
personam liability and for any in rem actions against the owner's
personam owner's
vessel by including such a clause 160
60
contract.' P&I coverage
clause in the contract.
should include:
Personal injury and death claims (including

(including maintenance and
repatriation); passenger
repatriation); (including luggage); liability for
passenger liability (including
handling costs);
(including extra handling
cargo loss and damage (including
necessitated by law); pollution;
collision, wreck removal (where necessitated
154.
154. supra note 45,
Harper, supra 786-87.
45, at 786-87.
155.
155. supra note 2, at 772;
Gebb, supra 772; see,
see, e.g., Harper, supra
e.g., Harper, 45, at 787.
supranote 45,
156.
156. See infra
infra Part
Part VII.
157. supra note 2,
FORCE, supra 2, at 184-85. Charterers may also carry a hull policy to cover their own own
liability for not returning
possible liability received or for damages resulting
returning the ship in the same condition it was received
from not being able to use the vessel. GILMORE & supra note 22, 4-22.
& BLACK, supra 4-22. Hull policies should
down" clause to indemnify owners
include a "run down" owners for third party liability in cases of collision. FORCE,
FORCE,
supranote 2,
supra 2, at 184-85;
184-85; see supra 22.
supra note 22.
158.
158. FORCE, supra
supra note 2,2, at 184-85;
184-85; GILMORE & BLACK,BLACK, supra 22, 4-22.
supranote 22, 4-22.
159. FORCE, supra
supra note 2, at 185, 187. A policy covering
covering liability for pollution by oil discharge
discharge into
navigable waterways
navigable included in P&I coverage but is now separate and should not be
waterways used to be included
overlooked.
overlooked. Id.
Id
160. supra note 45,
160. Harper, supra 45, at 787.
787.
2008]
20081 BAREBOAT CHARTERS
loss of property on the insured vessel;

vessel; damage
damage to fixed and
16
floating objects; towage; and general average. 161'
and general average.
Owners should include a clause barring the charterer

charterer from creating
liens against the vessel and "requir[ing]
"requir[ing] the charterer to satisfy
satisfy liens"
liens"
if any are attached
attached when the vessel is returned. 162
162 Parties to the
charter agreement
agreement should also be aware that insurance
insurance policies
'free of particular
"written 'free average' (F.P.A.) mean that the
particular average'
underwriters are liable only for a total loss"
loss" and should be sure the
policy is "written 'with
'with average'
average' (W.A.) to provide
provide coverage for
partial losses.' 6 3 Depending
losses.,,163 particular use of the vessel, a
Depending on the particular
64
policy for cargo loss may also be
may also advisable.'164
be advisable.
B. Coverage
Coveragefor Defects
As the owner's duty in a bareboatbareboat agreement is to deliver a
seaworthy vessel at the outset of the charter, a provision should
seaworthy
require inspection
inspection of the vessel at delivery to determine
determine the vessel's
vessel's
seaworthiness. 165
165 The provision should state that "delivery
"delivery to, and
acceptance
acceptance of the vessel by, the charterer constitutes
constitutes full performance
performance
of the owner's obligation
obligation to provide a seaworthy vessel."'166 This will
seaworthy vessel.,,166
protect the owner from liability for patent
patent defects,
defects, as the charterer's
charterer's
opportunity
opportunity to inspect the ship constitutes
constitutes disclosure
disclosure of any defects
affectively waived. 1167
which, if not addressed, are affectively 67
A clause
clause or policy
insuring
insuring for liability
liability resulting from latent defects that are not or could
not be detected by reasonable, diligent inspection should also be be
168
included. 168
161. FORCE, supra note 2, at 187 (quoting Raymond

FORCE, supra Raymond P. Hayden
Hayden & & Sanford E. Balick, Marine
Marine
Insurance: Varieties, Combinations,
Insurance: Varieties, Combinations,and Coverages,
Coverages, 6666 TUL. L. REv. 311, 327
REV. 311, 327 (1991.
(1991)).
162. Gebb, supra 2, at 783; see,
supranote 2, see, e.g., GILMORE
GILMORE & & BLACK, 22, 4-24.
supranote 22,
BLACK, supra 4-24.
163.
163. FORCE, supranote
FORCE, supra 2, at 188.
note 2, 188.
Id.
164. Id.
165.
165. Gebb, 2, at 769-70,
supranote 2,
Gebb, supra 777-79.
769-70, 777-79.
Id. at 769-70, 778.
166. Id. 778.
Id. at 770.
167. Id. 770. The owner may be liable for undiscoverable
undiscoverable latent defects that create
create an unseaworthy
unseaworthy
condition and cause injury after the bareboat
bareboat charter
charter commences. Id; see,
commences.ld.; see, e.g., 80 C.J.S.
e.g., 80 Shipping 102
C.J.S. Shipping
(2007); see supra
supra note 133.
168. Gebb, supra
supranote 2, at 778.

500 UNIVERSITY LAW REVIEW

GEORGIA STATE UNIVERSITY [Vol.
[Vol. 25:2
incorporating a number of provisions and clauses in the

By incorporating
charterers can be assured
bareboat charter agreement, owners and charterers
their interests are protected. 169
169
Given the charterer's complete
possession and control of the vessel, insurance and indemnity clauses
covering any in personam
personam liability and physical damage to or loss of of
170
the vessel are extremely important for owners.170
owners. Finally, an owner
should include a clause requiring indemnity from the charterer
charterer for
any damage or loss resulting from the charterer's failure to honor the
contract provisions that required the charterer to carry comprehensive
171
insurance. 171
CONCLUSION
CONCLUSION
The bareboat charter is a useful device allowing owners to transfer transfer

possession and control of their vessels and, at the same time, pass
along some of the expenses and liabilities that ownership entails,
while allowing
allowing charterers
charterers the freedom
freedom of an owner without the full
purchasing a vessel. 1l72
expense of purchasing
expense 72
Fortunately, because the Fifth
Circuit's departure from precedent
precedent can be countered with appropriate
risk allocation in the contract
contract agreement, bareboat charters remain a
useful tool in the maritime maritime industry. 1173 73 Through use of of
comprehensive indemnity
comprehensive indemnity clauses
clauses and insurance coverage,
coverage, a vessel
owner and charterer
charterer can fully protect
protect themselves from in personam
personam
Eleventh Circuits. 174
and in rem liability, even in the Fifth and Eleventh 174
While
precedent
precedent strongly favors limiting owner liabilityliability to third parties via
the bareboat charter, the ability of owners owners to alternatively
alternatively protect
protect
themselves is one explanation
explanation for the Fifth Circuit's departure
departure from
precedent
precedent and also explains why the Eleventh
Eleventh Circuit has declined
declined to
75
in its
settle the matter in jurisdiction. 1175
its jurisdiction.
169. See, e.g.,

e.g., Harper, supra
supra note 45,45, atat 787.
787.
170.
170. Gebb,
Gebb, supra
supra note 2, atat 781-82.
note 2, 781-82.
171.
171. Gaudin,
Gaudin, supra
supra note 30, at 144.
note 30, 144.
172.
172. Gebb,
Gebb, supra
supra note
note 2,
2, at
at 784; see supra
supra Part
Part LA-B.
I.A-B.
173.
173. Parts IV.B,
See supra Parts N.B, VII.VII. See generally Gaudin,
Gaudin, supra note 30.
note 30.
174. See supra Part VII.
VII.
175. See supra Parts
Parts IV.A-B,
N.A-B, V, VII.
20081
BAREBOAT 501
Being the chief

chief architect of the bareboat
bareboat charter agreement,
agreement, owners
can easily insert the necessary
necessary provisions to mitigate liability
exposure charterer.1176
exposure while distributing those costs to the charterer. 76
Whether
Whether
located in the Fifth, Eleventh, or any other circuit, prudent owners
should take necessary
necessary steps to ensure they appropriately
appropriately quantify and
limit their liability 77
through indemnity
indemnity clauses and comprehensive
insurance coverage. 1
coverage. 177
John w:
John W. 'Chris' Chitty
Chitty
176. See,
See, e.g.,
e.g., Gaudin, supra
supranote 30, at 144-45;
144-45; see supra
supraPart VII.
177. See supra
supra Part VII.
VII.


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BAREBOAT CHARTERS: CAN A SIDPOWNER

478 GEORGIA STATE UNIVERSITY

unseaworthy condition.44 The Baker decision created a split among

A. Creation ofa Bareboat

15. Baker v. Raymond 173, 183 (5th Cir. 1981). See,

Published by Reading Room, 2008 3

480 GEORGIA STATE

21. FORCE, supra

obligations charterer., 30 A major reason courts

30. Melanee A. A. Gaudin,

Published by Reading Room, 2008 5

482 STATE UNIVERSITY

the owner pro

II. DUTIES TO THIRD PARTIES AND THE WARRANTY

Under maritime law, certain duties are required of vessel owners,

45. Id.; see, e.g., Emery

Published by Reading Room, 2008 7

484 GEORGIA STATE

benefits from their

54. See, e.g., FORCE,

III. PRECEDENT IN THE FEDERAL CIRCUITS PRIOR TO THE FIFTH

Published by Reading Room, 2008 9

486 GEORGIA STATE

Id at 917; see also

76. Id. at 533-34.

Published by Reading Room, 2008 11

unseaworthiness of the vessel had not been

The court held the owner's failure to deliver a seaworthy

Published by Reading Room, 2008 13

490 GEORGIA STATE LAW REVIEW

IV. BAREBOAT No LONGER

[d. at 140, 142; see supra

Published by Reading Room, 2008 15

492 STATE UNIVERSITY

The Circuit created

In light of the Supreme Court's decision not to address the issue of

121. See supra

Published by Reading Room, 2008 17

fact."' 126 The

Goodwin v. Guy F. F. Atkinson Construction

133. See supra

Published by Reading Room, 2008 19

496 STATE UNIVERSITY

Thus, the Ninth Circuit affirmed its prior position

VI. THE ELEVENTH

The Fifth Circuit in Baker stated "[t]he "[t]he allocation

498 GEORGIA UNIVERSITY LAW REVIEW

Personal injury and death claims (including

loss of property on the insured vessel;

Owners should include a clause barring the charterer

161. FORCE, supra note 2, at 187 (quoting Raymond

Published by Reading Room, 2008 23

500 UNIVERSITY LAW REVIEW

incorporating a number of provisions and clauses in the

The bareboat charter is a useful device allowing owners to transfer transfer

169. See, e.g.,

Being the chief

Published by Reading Room, 2008 25

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