Will New York City Try to Claim Limitation of Liability on Yesterday’s Staten Island Ferry Crash?

On October 15, 2003, the Staten Island Ferry vessel Andrew J. Barberi missed its dock and hit a maintenance pier at full speed. Eleven people were killed and 71 injured, some critically. Yesterday, the same ferry lost some of its engine ability to slow and stop and slammed into a pier. Nearly 40 people of the 252 people on board were taken to hospitals. People were treated for injuries including cuts, bruises, broken bones and head trauma.

After the first crash, which resulted when the ship’s pilot became incapacitated and no other crew member was in a position to help, the City of New York unsuccessfully tried to claim that its liability to those who sustained personal injuries was limited to the value of the vessel and pending freight pursuant to a 1851 federal statute. Had the City been successful, its liability would have been limited to $14.4 million, far less than what it has paid and will pay for the injuries sustained in that accident. The pilot, who had been incapacitated at the time of that crash, pleaded guilty to manslaughter, but investigators also faulted training and enforcement of safety rules.

Yesterday’s crash, according to initial reports, appeared to be a mechanical failure. Assuming that remains the case, will the City again attempt to limit its liability? Will it be successful? Under admiralty law, the owner of a ship in navigable waters owes a duty to its passengers to exercise reasonable care under the circumstances. The Limitation of Liability Act (46 U.S.C.A. 30505) limits the owner of a vessel’s liability for, among other things, any loss, damage, or injury by the collision … done, occasioned, or incurred without the privity or knowledge of the owner, to the value of the vessel and pending freight. 46 U.S.C. 30505(b).

This limit does not apply where there is privity or knowledge of the owner pursuant to 46 U.S.C. 30505(e): Privity or knowledge.–In a claim for personal injury or death, the privity or knowledge of the master or the owner’s superintendent or managing agent, at or before the beginning of each voyage, is imputed to the owner.

The key to the statute as applied to the 2003 Staten Island Ferry crash was whether the City of New York, as the owner of the vessel, had privity or knowledge of the negligent acts. If not, instead of being vicariously liable for the full extent of any injuries caused by the negligence of the captain or crew employed to operate the ship, the City’s liability would have been limited to the value of the ship.

In re City of New York, 522 F.3d 279 (N.Y.) 2008), the U.S. Court of Appeals for the Second Circuit affirmed the decision of the District Court rejecting the Citys limited liability defense. The court found that the Citys director of ferry operations had knowledge that the City’s written standard operating procedures for the Staten Island Ferry contained a two-pilot rule that generally required the captain and assistant captain to be together in the operative pilothouse while the ferry was underway.

Although the Court disagreed that literal enforcement of the two-pilot rule was required, the standard of care required that, in addition to the pilot, at least one other person in or near the pilot house be paying attention to the navigational situation of the ship, thereby being ready to render or summon assistance in the event of an emergency such as the incapacitation of the pilot.

National Transportation Safety Board (NTSB) investigators are probing yesterday’s Staten Island Ferry crash. Investigators will look into what crew members were doing in the 72 hours before the crash, as well as their interaction with each other. The team will also look into the ferry’s navigation and propulsion systems, maintenance and inspection records, and surveillance tapes. Investigators say no engine alarms sounded on a New York City ferry before it crashed into a pier.

The appeals court decision noted the gravity of the potential injury if a ferry carrying more than a thousand commuters were to crash at full speed is well illustrated by the harm actually done in this case-the loss of eleven lives, injuries to many more, and substantial property damage. The court also observed that the burden to the City of taking adequate precautions is relatively small. These factors will probably be no different in the analysis of yesterdays Staten Island Ferry crash. Investigators have yet to determine what the cause of the apparent mechanical failure was and whether the City actually knew or should have known in advance of the cause. Privity and knowledge – keep these words in mind.

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