210
Opinion of the Court
The proportionate share approach 9 would make River Don responsible for precisely its share of the damages, $798,000 (38% of $2.1 million).10 A simple application of the pro tanto approach would allocate River Don $1.1 million in damages ($2.1 million total damages minus the $1 million settlement).11 The Court of Appeals, however, made a different
9 In this opinion, we use the phrase "proportionate share approach" to denote ALI Option 3. We have deliberately avoided use of the term "pro rata," which is often used to describe this approach, see, e. g., T. Schoenbaum, Admiralty and Maritime Law § 4-15, p. 153 (1987), because that term is also used to describe an equal allocation among all defendants without regard to their relative responsibility for the loss. See In re Masters Mates & Pilots Pension Plan and IRAP Litigation, 957 F. 2d 1020, 1028 (CA2 1992); Silver, Contribution Under the Securities Acts: The Pro Rata Method Revisited, 1992/1993 Ann. Survey Am. L. 273. Others have used different terms to describe the approach adopted here. Ibid. ("proportionate method"); Kornhauser & Revesz, Settlements Under Joint and Several Liability, 68 N. Y. U. L. Rev. 427, 438 (1993) ("apportioned share set-off rule"); Polinsky & Shavell, Contribution and Claim Reduction Among Antitrust Defendants: An Economic Analysis, 33 Stan. L. Rev. 447 (1981) ("claim reduction").
10 It might be thought that, since AmClyde is immune from damages, River Don's liability should be $1.47 million (McDermott's $2.1 million loss minus 30% of $2.1 million, the share of liability attributed to the settling defendants and McDermott). This calculation would make River Don responsible not only for its own 38% share, but also for the 32% of the damages allocated by the jury to AmClyde. This result could be seen as mandated by principles of joint and several liability and by Edmonds v. Compagnie Generale Transatlantique, 443 U. S. 256 (1979). See infra, at 220-221. Nevertheless, McDermott has not requested that River Don pay any more than its 38% share of the damages. AmClyde is immune from damages because its contract with McDermott provided that free replacement of defective parts "shall constitute fulfillment of all liabilities . . . whether based upon Contract, tort, strict liability or otherwise." 979 F. 2d 1068, 1075 (CA5 1993) (emphasis omitted). The best way of viewing this contractual provision is as a quasi settlement in advance of any tort claims. Viewed as such, the proportionate credit in this case properly takes into account both the 30% of liability apportioned to the settling defendants (and McDermott) and the 32% allocated to AmClyde. This leaves River Don with $798,000 or 38% of the damages.
11 For simplicity, we ignore AmClyde, which was found to be immune from damages by the Court of Appeals. Id., at 1075-1076. No party
Page: Index Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 NextLast modified: October 4, 2007