May v. Hamburg-Amerikanische Packetfahrt

The Hamburg-Amerikanische Packetfahrt AG (HAP) (defendant) owned the Isis, a ship loaded with cargo to transport from the west coast of the United States to several ports in Europe. Under the shipping contract, as long as HAP provided a seaworthy vessel, HAP and the cargo owners (plaintiffs) were to split the cost of any damage caused by negligent navigation or management during the voyage. The Isis was seaworthy when it left the United States. As it approached its first European destination in Bremen, Germany, the Isis became stranded, and its rudder was damaged because of negligent navigation. Tugs rescued the ship, and it was dry-docked in Bremen. The ship’s master alerted HAP’s main office, and HAP sent a superintendent to inspect the ship. The superintendent observed some of the damage but failed to notice a bend in the rudder that rendered the ship unseaworthy. The superintendent chose to have the ship tugged to Hamburg. Shortly after leaving Bremen, the Isis was again stranded because of negligent navigation and had to be brought back again. The ship’s cargo was transferred to another vessel, which completed the shipment. Pursuant to the contract, HAP sought and received contribution payments from the cargo owners for the costs of the two strandings. A group of cargo owners then sued to recover a portion of their payments, arguing that, concerning the second stranding, HAP had not satisfied the condition to provide a seaworthy vessel. The district court ruled in favor of HAP, and the court of appeals affirmed. The United States Supreme Court granted certiorari.