• Written by Paul J. Kozacky on June 24, 2016

    Westrec Marinas manages Chicago’s harbors and it recently hosted a party in celebration of the America’s Cup Race on a converted barge. The event surely created excitement, but the party barge may have entered the strange straits known as admiralty law which is often considered a legal world unto itself.

    Admiralty Law Generally Applies

    As set forth by the United States Supreme Court in Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995), admiralty jurisdiction generally attaches and admiralty law applies when a tort occurs on a vessel in navigable water or where an injury suffered on land is caused by a vessel on navigable water, when the tort has a sufficient connection with traditional maritime activity and poses a substantial risk to maritime commerce. Under Lozman v. City of Riviera Beach, Florida, 133 S. Ct. 735 (2013), it is possible that the reconfigured barge of the America’s Cup viewing party could be considered a “vessel” for admiralty purposes and the fresh water upon which she floated certainly constitutes navigable waters of the United States. the fact that the barge may have constituted a type of “pleasure boat” rather than a cargo vessel or ferry would not defeat admiralty jurisdiction. It’s not difficult to imagine scenarios where an incident on the barge could have disrupted maritime commerce, such as a search and rescue. Thus, it is possible that any injuries occurring on, around, or as a result of the party barge could be subjected to admiralty law and all of its intricacies.

    Impact of Admiralty Jurisdiction

    Application of admiralty law to torts involving the barge could prove significant for Chicago and Westrec Marinas, depending on their precise contractual arrangements, each of which could be sued for alleged negligence in a mishap. Notably, under the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/1-101 et seq., the city and its employees or agents generally are afforded broad immunity for their negligent conduct which results in harm to others. However, the city and its employees or agents would not be entitled to immunity in an admiralty case. See Workman v. City of New York, 179 U.S. 552 (1900); Complaint of Great Lakes Dredge & Dock Co., No. 92 C 6754, 1996 WL 210081 (N.D. Ill. Apr. 26, 1999). This is due to an important feature of admiralty law, which also is the ecumenical basis for the federal grant of admiralty jurisdiction under Article III of the United States Constitution, which states that for efficient maritime commerce, admiralty law has to be uniform. For example, it doesn’t make sense for a vessel to be governed by certain law on one bank of the Mississippi River and governed by inconsistent law on the other. Admiralty law strives for uniformity throughout the nation. Accordingly, in respect to a hypothetical patron injured on the barge, the city would be unable to cloak itself in municipal immunity.

    It’s also possible that the application of admiralty law could provide some benefit to the owner of the converted barge. Under admiralty law, and pursuant to the Limitation of Vessel Owner’s Liability Act, 46 U.S.C. § 30501 et seq., a vessel owner may institute a petition to limit its liability to the value of the vessel (and pending freight) in respect to claims brought by injured parties, provided the owner is not in privity to the cause of loss. By illustration, it was possible that an American court would determine limitation on liability to passengers lost aboard the R.M.S. TITANIC at merely the value of her 14 lifeboats and some unpaid passenger fare, $92,000 of the $16 million claimed. Such an opportunity to limit liability and prevent massive punitive damage judgments is only available to vessel owners in admiralty.

    Admiralty law presents many differences with state law. For example, under 815 ILCS 205/2, a claimant generally is entitled to prejudgment interest on a claim only where that claim is based upon a written instrument. In admiralty, an award of prejudgment interest for all claims is the norm. See City of Milwaukee v. Cement Div., Nat’l Gypsum Co., 515 U.S. 189, 195-99 (1995). Under Illinois law and pursuant to the Seventh Amendment for common law cases exceeding a whopping $20 in controversy, civil defendants have a right to a trial by jury, unless otherwise waived contractually. 735 ILCS 5/2-1105. Contrarily, admiralty law allows a plaintiff generally to secure a bench trial, even if defendants desire a jury. See St. Paul Fire and Marine Ins. Co. v. Lago Canyon, Inc., 561 F.3d 1181 (11thCir. 2009). In the context of ocean carriage, admiralty law provides substantial property damage limitations and strong enforcement of forum selection clauses, including of foreign fora, which do not exist in motor or rail carriage.

    By: Paul J. Kozacky and Brian O’Connor