Saratoga Fishing Co. v. J.M. Martinac & Co.

J.M. Martinac & Co. (defendant) built a ship, the Saratoga, that included a hydraulic system designed by Marco Seattle, Inc. (defendant). J.M. Martinac sold the ship to Joseph Madruga, who outfitted the ship to be used for tuna fishing by installing additional equipment onboard, including a skiff and a seine net. Madruga eventually sold the ship to Saratoga Fishing Co. (plaintiff), which continued to use the vessel for tuna fishing. After Saratoga Fishing bought the Saratoga, the ship caught fire, flooded, and sank. Evidence suggested that Marco Seattle’s hydraulic system was a significant cause of the accident. Saratoga Fishing brought a tort suit in admiralty against Marco Seattle and J.M. Martinac. The district court found that the hydraulic system had been defectively designed and awarded Saratoga Fishing damages, including damages for the loss of the equipment that Madruga had added to the ship after he had purchased it. On appeal, the court of appeals held that the district court had erred in awarding damages for the added equipment because it amounted to part of the defective product itself that had caused the harm and Saratoga Fishing could therefore not recover for that loss. The United States Supreme Court granted certiorari to determine whether the equipment added after the initial sale of the ship was in fact a part of the defective product itself, or other property whose loss could be recovered.