Employer of Crew not Entitled to Limit Liability

The U.S. Court of Appeals for the Eighth Circuit ruled that the employer of a vessel’s crew is not entitled to limit its liability for damages caused by negligence of a crewmember. In the instant case, the towboat was owned by one company and was crewed by employees of another company. The crewing company was responsible for routine maintenance, but the towboat owner was responsible for other work, including scheduling, insurance, repairs, and relations with the Coast Guard. The towboat and its tow allided with a bridge on the Mississippi River during a period of high water. The barges broke loose and damaged property owned by third parties, who filed claims. The owner filed a complaint in federal court seeking limitation of liability. The crewing company joined in seeking limitation. Following an extensive analysis of the degree of control a non-owner must exercise so as to be entitled to the benefit of the Limitation of Liability Act, the court determined that the crewing company did not exercise sufficient authority over the vessel to meet the statutory requirement. In the Matter of American Milling Company, Ltd., No. 03-3441 (8th Cir. - HK Law)