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This section contains the nature of the case and procedural background.

Lloyd got into a fight with Alvarez on a ship called the SS Export Commerce. The fight occurred in Yokohama in 1974. Lloyd sued American Export (D) alleging negligence under the Jones Act and unseaworthiness under general maritime law. D impleaded Alvarez as a third-party defendant. Alvarez then counterclaimed against D, alleging negligence and unseaworthiness. Lloyd disappeared, and the claims of Alvarez came to trial. Alvarez contended that D was liable because Lloyd started the fight and D argued that Alvarez started the fight. Alvarez testified to his version of the events and D then resorted to the former testimony exception and sought unsuccessfully to introduce a transcript of Lloyd's testimony taken by a Coast Guard hearing examiner to determine if Lloyd's merchant marine documents should be suspended or revoked for misconduct. Both Lloyd and Alvarez were represented by counsel at that hearing, and each testified under oath. The jury returned the verdict to Alvarez and awarded him $95,000 but rejected the unseaworthiness claim. D appealed; it was error to exclude the Coast Guard hearing transcript.

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