Limitation of Liability Act
The following are digests and case links to
Circuit Court Admiralty Cases that have as an issue the Limitation of Liability
Act:
Mediterranean
Shipping Co. v. Pol-Atlantic
Second Circuit Court of Appeals
October 13, 2000
Limitation of Liability Act: When a
vessel owner personally warrants the seaworthiness of the vessel, the owner
has made a personal contract and is not entitled to limitation under the
Act. Thus where the slot charter at issue contained such a personal promise,
the slot charterers' indemnity claims against the owner for cargo damage
fall outside the limitation proceeding. Arbitration: If on remand
the district court concludes that the owner and slot charterers agreed
to arbitrate within the meaning of the Federal Arbitration Act, and the
slot charterers raise no other valid defenses, the court should grant owner's
motion to stay the indemnity claims and require that such claims be brought
in London arbitration pursuant to the charter.
In re Tetra
Applied Technologies
Fifth Circuit Court of Appeals
March 25, 2004
Limitation of Liability Act: Claimant
was entitled to pursue his remedies in state court, although a federal
limitation action was pending, where he stipulated as follows: (1) that
Owner is entitled to and has the right to litigate all issues relating
to limitation of liability in federal court; (2) that he would not seek
in other federal or state courts any judgment or ruling on the issue of
Owner's right to limitation of liability; (3) that he would consent to
waive any claim of res judicata relevant to the issue of limitation of
liability based on any judgment that the state court may render; and (4)
that he would not seek to enforce any judgment or recovery in excess of
$725,000 (the value of the vessel) pending the adjudication of the complaint
of limitation of liability in federal court. Claimant was not required
to stipulate that exoneration from liability issues, as opposed
to limitation of liability issues, would only be heard in federal
court.
Karim
v. Finch Shipping
Fifth Circuit Court of Appeals
September 5, 2001
Procedure (Jurisdiction)/Limitation of
Liability Act: The shipowner waived its jurisdictional defense where
it voluntarily provided the district court
in rem jurisdiction by
commencing the limitation proceeding and placing the res, or the
bond, in the hands of the court, and where it invoked the powers of the
court to require the plaintiff seaman to halt his proceeding in another
forum and to file in the limitation action.
Procedure (Forum Non Conveniens):
The relevant private and public interest factors under
Gulf Oil/Piper
Aircraft, such as Plaintiff receiving medical treatment in the United
States, evidence and testimony being easily accessible in this forum, counsel
for both parties being based in this forum, and the fact that United States
limitation law applied, weighed against dismissal.
Choice of Law:
The district court did not err in making a determination of quantum of
personal injury damages under Bangladeshi law by applying English and Indian
precedent since experts informed the court that Bangladeshi courts would
look to Indian and British cases for guidance where their precedents were
lacking. Damages (Prejudgment Interest): The award of prejudgment
interest is discretionary (both under Bangladeshi and United States law)
and the district court did not abuse its discretion in setting the initial
date of the interest accrual to be the date the limitation action was reactivated
in federal court, rather than the date of injury.
In
re Hellenic, Inc.
Fifth Circuit Court of Appeals
May 21, 2001
Limitation of Liability Act: Once the
claimant establishes negligence or unseaworthiness caused the loss, the
owner of the vessel must prove that the negligence was not within
the owner's privity or knowledge to limit its liability. The construction
superintendent whose negligence caused the loss, although he may have possessed
significant power over the management of an individual job, could not make
"basic business decisions" for the corporation and did not possess managing
authority over "the field of operations" in which the negligence occurred,
thus his negligence was not within the privity or knowledge of the corporate
owner.
In
re Tidewater Marine, Inc.
Fifth Circuit Court of Appeals
April 18, 2001
Limitation of Liability Act: The district
court erred in declining to lift its stay against state court proceedings
against the vessel owner where the claimants had stipulated: (1) that they
would not enforce a state court judgment beyond the alleged value of the
vessel and her pending freight unless and until the district court established
a higher value or denied the owner's right to limitation and (2) that none
of their claims had priority over any other and that they would be paid
from the limitation fund on a pro rata basis. The district court erred
in concluding that persons who had failed to file claims directly against
the shipowner long after the accident were "potential claimants" that must
be included in the stipulation before a stay will be lifted. Further, the
claimants were not required to include an exoneration stipulation to have
the stay lifted.
In
re Barnacle Marine Management
Fifth Circuit Court of Appeals
December 1, 2000
Limitation of Liability Act: 33 U.S.C.
section 408 of the Rivers and Harbors Act does not provide the United States
with an in personam remedy against the owner of a vessel that damages
a public work, thus the District Court's decision allowing the United States
to proceed with an in personam claim against the vessel owner outside
of the vessel owner's limitation action was in error.
In
re Dolphin Services Inc.
Fifth Circuit Court of Appeals
August 24, 2000
Limitation of Liability Act: An original
state court petition for personal injury damages that incorrectly identified
the subject vessel was not sufficient notice to trigger the Limitation
of Liability Act's provision requiring limitation actions to be filed within
six months of receiving written notice of claim.
In
Re: Complaint of Transporter Marine, Inc.
Fifth Circuit Court of Appeals
July 13, 2000
Limitation of Liability Act/Coast Guard
Regulation: The Coast Guard's adjudication of charges arising from
the enforcement of its drug and alcohol testing regulations are exempt
from exoneration or limitation proceedings under the Limitation of Liability
Act.
Alter
Barge v. Consolidated Grain & Barge Co.
Seventh Circuit Court of Appeals
November 8, 2001
Limitation of Liability Act: Although
the personal injury claimant filed his claim late in the limitation proceeding,
he was not barred since cause was shown (his explanation met the minimal
cause requirement) and permission to file late claims is freely granted
so long as the limitation proceeding is ongoing and the late claim will
not prejudice other parties.
In
Re Complaint of Holly Marine Towing Co.
Seventh Circuit Court of Appeals
October 26, 2001
Limitation of Liability Act: It was
an abuse of discretion for the district court to have dissolved the limitation
act injunction against state court claims against the barge owner where
a third party defendant with a contribution claim against the owner had
not stipulated, along with the plaintiffs, that it would not ask the state
court to resolve any issue concerning the limitation of the barge owner's
liability.
In re
MO Barge Lines
Eighth Circuit Court of Appeals
March 15, 2004
Collisions/Casualties: During the early
hours of July 31, 2000, the Miss Belterra, a new casino vessel heading
up the Mississippi River, collided with the Elizabeth Ann, a towboat
pushing concrete barges down the river. The district court properly found
that Elizabeth Ann's pilot violated Inland Navigation Rule 14 when
he failed to propose the manner of passing as he was the downward vessel.
It is mandatory that a downward vessel on the Mississippi River propose
the manner of passage and initiate the maneuvering signals that will be
used. Limitation of Liability Act: To determine a vessel owner's
entitlement to limit its damages, a court must determine (1) whether negligence
or unseaworthiness caused the accident, and (2) whether the shipowner was
privy to, or had knowledge of, the causative agent. Unseaworthiness
was not supported by the record since the pilot's decision not to increase
the radar's range when he first noticed approaching lights was navigational
error, rather than evidence of incompetence that would render the vessel
unseaworthy. Further, the towboat owner was not in privity since it had
hired a licensed, competent pilot to navigate its vessel and it was not
on notice that the pilot would operate the vessel negligently. Owner could
thus limit its liability.
In
re Complaint of Ross Island Sand & Gravel
Ninth Circuit Court of Appeals
September 12, 2000
Limitation of Liability Act: Under
the "single claimant exception," if only one claim has been filed in a
district court limitation proceeding, a district court is required to dissolve
its injunction to permit the single claimant to pursue a separate action
and jury trial if the single claimant: (1) stipulates that the value of
the limitation fund equals the combined value of the vessel and its cargo;
(2) waives the right to claim res judicata based on any judgment
rendered against the vessel owner outside of the limitation proceedings;
and (3) concedes the district court's exclusive jurisdiction to determine
limitation of liability issues. Thus where the single claimant failed to
stipulate to the value of the limitation fund, the district court's decision
denying claimant's motion to dissolve the injunction was upheld. |