McDermott, Inc. v. AmClyde and River Don Castings, Ltd. case brief

McDermott, Inc. v. AmClyde and River Don Castings, Ltd. case brief summary
511 U.S. 202 (1994)

CASE SYNOPSIS

Petitioner, an oil platform owner, filed an action for damages under admiralty law against respondents, manufacturers and designers of a crane. The United States Court of Appeals for the Fifth Circuit affirmed a damage award for the owner but reduced the award by deducting the amount the owner received from settlements made with other parties. The owner appealed the reduction in damages.

CASE FACTS
A construction accident in the Gulf of Mexico gave rise to this admiralty claim. Petitioner settled with three defendants. Respondents did not settle and the case went to trial. A jury assessed petitioner's loss at $ 2.1 million and allocated the damages between respondents.

ISSUE
The question presented was whether the liability of nonsettling respondents should have been calculated with reference to the jury's allocation of proportionate responsibility, or by giving nonsettling respondents a credit for the dollar amount of the settlement.

DISCUSSION

• The court stated that the proportionate share approach would have made one respondent responsible for precisely its share of damages. 
• There was no reason to allocate any shortfall to other defendants who were not parties to the settlement. 
• Just as other defendants were not entitled to a reduction in liability when petitioner negotiated a generous settlement, so they were not required to shoulder a disproportionate liability when petitioner negotiated a meager one. 
• The judgment of the court of appeals was reversed and the case remanded for further proceedings.

CONCLUSION

The court reversed and remanded the decision of the court of appeals because respondents were entitled to have their damages allocated revised where the court found that the proportionate allocation among respondents was the correct approach.

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