The United States Court of Appeals Second Circuit heard a case where two shipping companies sought exoneration or limitation of liability for damages caused by their steamers. The case arose from a series of incidents on the Buffalo River on January 21, 1959, where an ice jam disintegrated due to rain and thaw, causing damages to various parties. The MacGilvray Shiras, loaded with grain owned by Continental, was moored at a hazardous berth at the Concrete Elevator dock, with no anchors put out. Large chunks of ice and debris caused the mooring lines to part, and the ship drifted into the current, colliding with the Tewksbury, owned by Midland Steamship Line, Inc., which was moored in a protected area with no ice buildup. The collision caused damage to the Steamer Druckenmiller, which was moored opposite the Tewksbury. There was disagreement about the response to the initial events, with the Concrete Elevator superintendent calling another employee to report the Shiras adrift, and the watchman at the elevator where the Tewksbury was moored calling the bridge crew to raise the bridge, which was not raised until too late. The City of Buffalo maintains a lift bridge at Michigan Avenue, and the river's navigable western portion is lined with docks, grain elevators, and industrial installations. Thaws and rain frequently cause freshets to develop in the upper part of the river and its tributary, Cazenovia Creek, which sometimes overflows its banks. The United States Weather Bureau had issued appropriate warnings that were published and broadcast. The MacGilvray Shiras was moored at a hazardous berth with no anchors put out, which contributed to the collision and subsequent damages. Additionally, there was disagreement about the response to the initial events, which may have contributed to the damages. The case was heard and decided by the United States Court of Appeals Second Circuit, with modifications made on December 1, 1964.

The City of Buffalo is solely liable for damages sustained by Shiras and Continental as operator of the Concrete Elevator under the last clear chance rule. Kinsman and Continental were at fault for not properly securing the Shiras, which contributed to the disaster. Kinsman's liability limitation is complex and requires further explanation. Tewksbury and Druckenmiller can recover equally from Continental and Kinsman. The City, Continental, and Kinsman are jointly and severally liable for damages to others. The last clear chance doctrine may not apply in this case, and damages should be divided among all parties involved. Continental's position is stronger as it was foreseeable that the improper construction and lack of inspection of the "deadman" could cause a ship to break loose and cause damage.

The Wagon Mound case established foreseeability of danger as necessary to prove negligence. Damages should be shared by taxpayers and not solely imposed on the city. Kinsman's responsibility is divided equally between Buffalo and Continental. The limitation fund should be applied ratably to 50% of the claims of innocent parties for which Kinsman and Continental share responsibility. The City can recover half of its costs from Kinsman and Continental, and Kinsman can recover half of its costs from the City and Continental. Costs awarded against Kinsman must be paid personally and not from the limitation fund. The majority's decision rejects the concept of foreseeability in negligence law, but still expresses doubts about this approach. The dissenting judge disagrees with the majority's decision to award damages for flooding of properties upstream. The lower court's decision is not mentioned.