Defeating Limitation of Liability
in Maritime Law, Part 3
From the February issue of 2006 Trial Magazine, the magazine of The Association of Trial Lawyers of America. Posted with permission of Trial Magazine.
Limitation of liability was invoked in the loss of RMS Titanic, which in April 1912 struck an iceberg and sank, taking more than 1,500 lives. In the wrongful death and injury lawsuits that followed, Supreme Court Justice Oliver Wendell Holmes held that the Titanic’s British owner should be allowed to limit liability to the ship’s postcasualty value, which amounted to about $92,000 for a cluster of its remaining lifeboats. Read more below...
Defeating Limitation of Liability in Maritime Law, Part 3
The district court found that because the passengers had received instructions from the cruise line, the cruise line wasnot liable. The court also found that even if the cruise line were liable, it could have limited its liability to the $7,200value of the Jet Skis, as none of the line’s owners or senior management was present or had knowledge of negligence.26
In a Fifth Circuit case, two work boats collided in fog on the Mississippi River in Louisiana.27 The captain of thedefendant’s vessel had not used a lookout or turned on his running lights. Although the vessel had radar, the captainhad not been aboard the day it was installed and was not trained in its use (other than being given a manual to read onhis own). Because the vessel had been running at full speed, engine noise made it difficult to hear the radio or fogsignals of other vessels.
The Fifth Circuit affirmed the district court’s decision to deny limitation of liability. It found several failures thatattributed privity and knowledge of unseaworthiness to the vessel owner, including failure to use a lookout, to trainthe captain in the use of radar, to evaluate the vessel’s unseaworthiness (which became relevant with the enginenoise), to inspect vessel logs, to employ a safety manager, and to provide safety training and safety manuals.28In a federal district court case, deckhands on a passenger ferry were preparing the vessel for debarkation shortlyafter docking. A gate became dislodged from its track and fell on one of the deckhands, fracturing his hip and threefoot bones.29
The court held that the deckhand’s own negligence, together with the negligence of another deckhand, hadcontributed to his injuries. But the court also found the ferry to be unseaworthy and denied limitation of liability. Itconcluded that if the gate had been equipped with a locking device, it would have opened fully and locked in placerather than being knocked off its tracks. The court noted that such a device was called for in the vessel plans and thatthe owner installed one after the deckhand was injured, showing that this safety measure was economical and feasible.Industry changes
Technology and vessel management have evolved tremendously since the liability limitation act was adopted in 1851.Satellite communications, global positioning systems, reliable power plants, and modern construction have minimizedmany perils of going to sea. In addition, strict requirements for inspection, classification, underwriting, and personnelstanding watch have made it less plausible for owners to assert lack of privity and knowledge of vessel and crewdeficiencies.
Passenger vessels of U.S. registry must meet Coast Guard safety regulations and be inspected annually.30 Theseregulations cover hull structure, watertightness, structural soundness to minimize fire hazards, lifesaving andfirefighting equipment, vessel control, and requirements pertaining to the safe navigation of the ship. Any U.S.-registered ship that passes the Coast Guard’s annual inspection must display its certification where passengers cansee it.31
Many passenger vessels in U.S. ports are registered under foreign flags. Although the owner may be headquartered inthe United States, foreign registry allows the owner to avoid U.S. taxes and labor laws. However, foreign vessels thatpick up passengers in the United States are subject to inspection because the Coast Guard enforces the InternationalConvention for the Safety of Life at Sea.32 The Coast Guard examines foreign passenger ships when they first go intoservice at U.S. ports and conducts quarterly inspections thereafter. The Coast Guard observes lifeboat drills andconducts tests on other safety equipment.
U.S.-registered passenger vessels can comply with Coast Guard inspection requirements by submitting to surveysperformed by an authorized classification society, such as the American Bureau of Shipping. Classification societiesset technical standards for ship design and construction. To ensure compliance, these organizations use professionalsurveyors who specialize in various aspects of a ship, such as the hull, machinery, or piping.Crew competence is critical to safe vessel operation. The International Convention on Standards of Training,Certification, and Watchkeeping for Seafarers (STCW) sets qualification standards for masters, officers, and watchpersonnel on seagoing merchant ships.33
As amended in 1995, STCW requires rest periods of 10 hours in any 24-hour period for crews keeping watch. It alsorequires crews to be trained in basic firefighting, elementary first aid, survival techniques, safety, and socialresponsibility. STCW also requires an understanding between the master and deck officers of bridge teamworkprocedures and, for vessels with these systems, training for automatic-radar-plotting aids and the global maritime-distress safety system.34
If a defendant asserts lack of knowledge about the unseaworthiness of a vessel, records of Coast Guard inspections,classification society surveys, or other inspections may reveal otherwise. Advances in nondestructive testing are alsouseful for proving privity and knowledge. Ultrasound testing, for example, is one of the tools available to theshipowner for determining hull-plate thickness. If a corroded hull plate fails during a soft grounding that it shouldhave withstood, ultrasound records can suggest how imminent the failure was and how it might have been addressed.If a ship breaks apart, X-ray imaging of welds can reveal defects that should have been discovered through duediligence. If a ship’s engine fails to restart during a maneuver and a collision occurs, records of previous problemswith fuel pumps or compressed air supply could negate an owner’s contention that he or she was unaware of theproblem.
Limitation of liability was born of a desire to encourage maritime commerce, but in many situations it has become ananachronism—or, according to some commentators, an instrument of tort “reform.” Modern technology and vesselmanagement protocols have resulted in greater control and less risk to shipowners and operators. As such, insurancecarriers appear to have emerged as the true beneficiaries of limitation of liability.
Tim Akpinar is a former merchant marine officer and practices maritime law in Little Neck, New York.
End Notes
1. 46 U.S.C. app. §§181-196 (2000).2. Id. §181. 3. See Susan Saulny & Mike McIntyre, Bid to Limit Ferry Liability Hits Raw Nerve, N.Y. TIMES, Dec. 4,2003, at B3.4. See Tom Perrotta, Report on Ferry Crash Strikes Blow to City’s Bid to Limit Civil Damages, N.Y. L.J.,Mar. 9, 2005, at 1.5. 46 U.S.C. app. §183(a) (2000).6. Oceanic Steam Navigation Co. v. Mellor, 233 U.S. 718 (1914); see also Titanic, 209 F. 501, 502(S.D.N.Y. 1913).7. 46 U.S.C. app. §183(b)(f) (2000).8. Sisson v. Ruby, 497 U.S. 358 (1990).9. Id. at 362 (quoting Foremost Ins. Co. v. Richardson, 457 U.S. 668, 675 n.5 (1982)).10. See, e.g., Keys Jet Ski, Inc. v. Kays, 893 F.2d 1225 (11th Cir. 1990).11. 33 U.S.C. §§2703-2761 (2000).12. 33 U.S.C. §§401-467 (2000).13. 33 U.S.C. §§409, 411, 414-415 (2000).14. 33 U.S.C. §§1471-1487 (2000).15. FED. R. CIV. P., SUPP. R. FOR CERTAIN ADMIRALTY & MARITIME CLAIMS, R.F(1).16. Id. R.F(2).17. Id. R.F(9).18. See 46 U.S.C. app. §185 (2000); R.F(1), supra note 15.19. R.F(3), supra note 15.20. 28 U.S.C. §1333 (2000).21. See Chandris, Inc. v. Latsis, 515 U.S. 347 (1995).22. 46 U.S.C. app. §688 (2000).23. See In re Complaint of Ross Island Sand & Gravel, 226 F.3d 1015, 1017 (9th Cir. 2000).24. In re Royal Caribbean Cruises, Ltd., 55 F. Supp. 2d 1367 (S.D. Fla. 1999), aff’d, 214 F.3d 1356 (11th Cir. 2000).25. Id. at 1370.26. Id. at 1369-72.27. Trico Marine Assets, Inc. v. Diamond B. Marine Servs., Inc., 332 F.3d 779, 783-84 (5th Cir. 2003).28. Id. at 790.29. See In re Parish of Plaquemines as Owner of the M/V Pointe-A-La-Hache for Exoneration from or Limitation ofLiability, 231 F. Supp. 2d 506 (E.D. La. 2002).30. See, e.g., U.S. Coast Guard, Cruise Ship Consumer Fact Sheet (July 1998), available at www.uscg. mil/ hq/g-m/cruiseship.htm (last visited Jan. 4, 2006).31. See, e.g., id.32. International Convention for the Safety of Life at Sea (SOLAS), Nov. 1, 1974.33. International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers (STCW),July 7, 1978; see also U.S. Coast Guard, STCW—What’s SCTW?, available at www. uscg.mil/stcw/stcw-history.htm (last visited Jan. 4, 2006).34. see, e.g., U.S. Coast Guard, supra note 33.
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In a Fifth Circuit case, two work boats collided in fog on the Mississippi River in Louisiana.27 The captain of thedefendant’s vessel had not used a lookout or turned on his running lights. Although the vessel had radar, the captainhad not been aboard the day it was installed and was not trained in its use (other than being given a manual to read onhis own). Because the vessel had been running at full speed, engine noise made it difficult to hear the radio or fogsignals of other vessels.
The Fifth Circuit affirmed the district court’s decision to deny limitation of liability. It found several failures thatattributed privity and knowledge of unseaworthiness to the vessel owner, including failure to use a lookout, to trainthe captain in the use of radar, to evaluate the vessel’s unseaworthiness (which became relevant with the enginenoise), to inspect vessel logs, to employ a safety manager, and to provide safety training and safety manuals.28In a federal district court case, deckhands on a passenger ferry were preparing the vessel for debarkation shortlyafter docking. A gate became dislodged from its track and fell on one of the deckhands, fracturing his hip and threefoot bones.29
The court held that the deckhand’s own negligence, together with the negligence of another deckhand, hadcontributed to his injuries. But the court also found the ferry to be unseaworthy and denied limitation of liability. Itconcluded that if the gate had been equipped with a locking device, it would have opened fully and locked in placerather than being knocked off its tracks. The court noted that such a device was called for in the vessel plans and thatthe owner installed one after the deckhand was injured, showing that this safety measure was economical and feasible.Industry changes
Technology and vessel management have evolved tremendously since the liability limitation act was adopted in 1851.Satellite communications, global positioning systems, reliable power plants, and modern construction have minimizedmany perils of going to sea. In addition, strict requirements for inspection, classification, underwriting, and personnelstanding watch have made it less plausible for owners to assert lack of privity and knowledge of vessel and crewdeficiencies.
Passenger vessels of U.S. registry must meet Coast Guard safety regulations and be inspected annually.30 Theseregulations cover hull structure, watertightness, structural soundness to minimize fire hazards, lifesaving andfirefighting equipment, vessel control, and requirements pertaining to the safe navigation of the ship. Any U.S.-registered ship that passes the Coast Guard’s annual inspection must display its certification where passengers cansee it.31
Many passenger vessels in U.S. ports are registered under foreign flags. Although the owner may be headquartered inthe United States, foreign registry allows the owner to avoid U.S. taxes and labor laws. However, foreign vessels thatpick up passengers in the United States are subject to inspection because the Coast Guard enforces the InternationalConvention for the Safety of Life at Sea.32 The Coast Guard examines foreign passenger ships when they first go intoservice at U.S. ports and conducts quarterly inspections thereafter. The Coast Guard observes lifeboat drills andconducts tests on other safety equipment.
U.S.-registered passenger vessels can comply with Coast Guard inspection requirements by submitting to surveysperformed by an authorized classification society, such as the American Bureau of Shipping. Classification societiesset technical standards for ship design and construction. To ensure compliance, these organizations use professionalsurveyors who specialize in various aspects of a ship, such as the hull, machinery, or piping.Crew competence is critical to safe vessel operation. The International Convention on Standards of Training,Certification, and Watchkeeping for Seafarers (STCW) sets qualification standards for masters, officers, and watchpersonnel on seagoing merchant ships.33
As amended in 1995, STCW requires rest periods of 10 hours in any 24-hour period for crews keeping watch. It alsorequires crews to be trained in basic firefighting, elementary first aid, survival techniques, safety, and socialresponsibility. STCW also requires an understanding between the master and deck officers of bridge teamworkprocedures and, for vessels with these systems, training for automatic-radar-plotting aids and the global maritime-distress safety system.34
If a defendant asserts lack of knowledge about the unseaworthiness of a vessel, records of Coast Guard inspections,classification society surveys, or other inspections may reveal otherwise. Advances in nondestructive testing are alsouseful for proving privity and knowledge. Ultrasound testing, for example, is one of the tools available to theshipowner for determining hull-plate thickness. If a corroded hull plate fails during a soft grounding that it shouldhave withstood, ultrasound records can suggest how imminent the failure was and how it might have been addressed.If a ship breaks apart, X-ray imaging of welds can reveal defects that should have been discovered through duediligence. If a ship’s engine fails to restart during a maneuver and a collision occurs, records of previous problemswith fuel pumps or compressed air supply could negate an owner’s contention that he or she was unaware of theproblem.
Limitation of liability was born of a desire to encourage maritime commerce, but in many situations it has become ananachronism—or, according to some commentators, an instrument of tort “reform.” Modern technology and vesselmanagement protocols have resulted in greater control and less risk to shipowners and operators. As such, insurancecarriers appear to have emerged as the true beneficiaries of limitation of liability.
Tim Akpinar is a former merchant marine officer and practices maritime law in Little Neck, New York.
End Notes
1. 46 U.S.C. app. §§181-196 (2000).2. Id. §181. 3. See Susan Saulny & Mike McIntyre, Bid to Limit Ferry Liability Hits Raw Nerve, N.Y. TIMES, Dec. 4,2003, at B3.4. See Tom Perrotta, Report on Ferry Crash Strikes Blow to City’s Bid to Limit Civil Damages, N.Y. L.J.,Mar. 9, 2005, at 1.5. 46 U.S.C. app. §183(a) (2000).6. Oceanic Steam Navigation Co. v. Mellor, 233 U.S. 718 (1914); see also Titanic, 209 F. 501, 502(S.D.N.Y. 1913).7. 46 U.S.C. app. §183(b)(f) (2000).8. Sisson v. Ruby, 497 U.S. 358 (1990).9. Id. at 362 (quoting Foremost Ins. Co. v. Richardson, 457 U.S. 668, 675 n.5 (1982)).10. See, e.g., Keys Jet Ski, Inc. v. Kays, 893 F.2d 1225 (11th Cir. 1990).11. 33 U.S.C. §§2703-2761 (2000).12. 33 U.S.C. §§401-467 (2000).13. 33 U.S.C. §§409, 411, 414-415 (2000).14. 33 U.S.C. §§1471-1487 (2000).15. FED. R. CIV. P., SUPP. R. FOR CERTAIN ADMIRALTY & MARITIME CLAIMS, R.F(1).16. Id. R.F(2).17. Id. R.F(9).18. See 46 U.S.C. app. §185 (2000); R.F(1), supra note 15.19. R.F(3), supra note 15.20. 28 U.S.C. §1333 (2000).21. See Chandris, Inc. v. Latsis, 515 U.S. 347 (1995).22. 46 U.S.C. app. §688 (2000).23. See In re Complaint of Ross Island Sand & Gravel, 226 F.3d 1015, 1017 (9th Cir. 2000).24. In re Royal Caribbean Cruises, Ltd., 55 F. Supp. 2d 1367 (S.D. Fla. 1999), aff’d, 214 F.3d 1356 (11th Cir. 2000).25. Id. at 1370.26. Id. at 1369-72.27. Trico Marine Assets, Inc. v. Diamond B. Marine Servs., Inc., 332 F.3d 779, 783-84 (5th Cir. 2003).28. Id. at 790.29. See In re Parish of Plaquemines as Owner of the M/V Pointe-A-La-Hache for Exoneration from or Limitation ofLiability, 231 F. Supp. 2d 506 (E.D. La. 2002).30. See, e.g., U.S. Coast Guard, Cruise Ship Consumer Fact Sheet (July 1998), available at www.uscg. mil/ hq/g-m/cruiseship.htm (last visited Jan. 4, 2006).31. See, e.g., id.32. International Convention for the Safety of Life at Sea (SOLAS), Nov. 1, 1974.33. International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers (STCW),July 7, 1978; see also U.S. Coast Guard, STCW—What’s SCTW?, available at www. uscg.mil/stcw/stcw-history.htm (last visited Jan. 4, 2006).34. see, e.g., U.S. Coast Guard, supra note 33.
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