On September 7, 1974, Roland Alvarez (third-party plaintiff/defendant) and Frank Lloyd (plaintiff), fellow crew members on the SS Export Commerce (Export) (defendant), got into a fight while the ship was in port in Yokohama, Japan. Lloyd sued Export for compensation for his injuries, Export joined Alvarez as a third-party defendant, and Alvarez counterclaimed against Export, alleging negligence and unseaworthiness and that Export failed to take reasonable precautions to protect him from Lloyd, who was known to be hostile to Alvarez. Lloyd failed to prosecute his case and his complaint was dismissed by the district court. The court proceeded to trial on Alvarez’s counterclaim. At trial, Export attempted to call Lloyd as a witness but he refused to appear. Then Exported attempted to introduce testimony given by Lloyd at a Coast Guard hearing. The hearing was to determine whether Lloyd’s merchant mariner license should be suspended or revoked because of the fight with Alvarez. The hearing looked into Lloyd’s conduct aboard the Export and Lloyd’s history with Alvarez. The jury found that Export was negligent and that the negligence caused Alvarez’s injuries. The jury found damages in the amount of $95,000. Export appealed.