Battling Limitation of Liability Claims Against Maritime Injuries

Maritime Injury lawsuits can be laden with traps for individuals who are simply trying to recover damages for injuries sustained aboard a vessel. Most notably, when a vessel owner is sued by an injured party for negligence or unseaworthiness, the vessel owner can attempt to limit the recovery that may otherwise be available to an injured party. By asserting its rights under the Limitation of Liability Act, the vessel owner may be able to limit its liability for a claim arising out of a maritime casualty to the post-casualty value of the vessel and its pending freight.

By reading our Nuts & Bolts of the Limitation of Liability blog, you will learn about how this right is asserted and understand the practicalities of these types of claims. Importantly, you will have learned that if a plaintiff files an injury/death case in a state court against a vessel owner, the vessel owner can then file a limitation action in federal court and consolidate all claims in the federal court. This serves the vessel owner’s interests by stripping the plaintiff of the benefits of state court and locale, and, most importantly, it can strip the plaintiff’s right to have his or her case heard before a jury. This is because federal courts sitting in admiralty jurisdiction do not provide the right to a trial by jury.

The following are a few methods to battle the harsh remedies afforded to vessel owners when filing a maritime injury or wrongful death lawsuit.

1. File Early. File your maritime injury/death claim in state court quickly. Vessel owners are given a huge procedural advantage because once they are on notice of a potential claim, they can file a limitation action preemptively in the district court of their choosing. This defense-forum-shopping can be devastating to a plaintiff with severe injuries.
2. File in State Court. When possible, file the injury claim in state court. Jones Act and general maritime laws often permit the filing of a maritime injury claim in state court.
3. Understand the Parties Involved and the Amount You are Seeking. By filing early and filing in state court, you may be able to maintain the action in state court by exercising one of the following rights to challenge the stay and concursus:
   1. Inadequate-fund single Claimant: When a federal court issues a stay of your state court case in order to resolve the limitation issues, the main reason for doing so is to create the concursus. If a plaintiff is the sole injured party resulting from a maritime accident, there is no need for the concursus. Courts have carved out an exception in this circumstance that allows a “single-claimant” to file stipulations with the federal court and motion to lift the stay on the state court case. The stipulations must include that:
      1. (1) the vessel owner is entitled to litigate limitation issues in federal court;
      2. (2) the claimant will not seek a judgment or ruling in any other court on the issue of limitation;
      3. (3) the claimant consents to waive any claim of res judicata relevant to the issue of limitation of liability based on any judgment from the state court; and
      4. (4) the claimant will not seek to enforce any judgment or recovery in excess of the stipulated value of the vessel until the limitation issues are resolved

These stipulations will prompt the federal court to dissolve the injunction and lift the stay on the state court proceeding, allowing the plaintiff to try his/her case in state court.

1. 2. Multiple Claimants – Adequate Fund: If other claimants arise in the concursus, quickly understand how much each claimant is seeking. If the total value of all claims is less than the limitation fund, then the need for the concursus is moot. The vessel owner’s rights will not be implicated, and the rights of the claimants to have a jury trial in the forum of their choosing will be preserved.
   3. Multiple Claimants – Inadequate Fund: This exception can be used in the same way that the “single claimant rule” is applied, with one difference. Under this circumstance, when there are multiple claimants and the amount of the limitation fund is inadequate to cover all claimant’s claims, the claimants can jointly file stipulations that address the four stipulations above, including a stipulation that the federal court has exclusive jurisdiction to establish the priority of the claims. The stipulation must be signed by all claimants.

Understanding these issues before they arise can help a plaintiff avoid many issues that come with a limitation claim. These are just a few basic methods of battling limitation claims and ensuring that the value of your case is maximized, the plaintiff’s rights are protected, and the case is litigated in a beneficial forum.

If you have experienced a maritime injury, call or inquire to speak with a Jones Act attorney at Morrow & Sheppard LLP to best address the issues in your case.