Limitation of Liability Act-Omega Protein Inc. v. Samson Contour Energy

Posted by: rzehl
February 26, 2009
Topic: General Maritime Claims

As I have written before, there is a way for ship owners to limit liability in the event of a maritime injury suit. A recent 5^th circuit case, Omega Protein Inc. v .Samson Contour Energy E&P LLC, (5th Cir. 2008), discussed the issue in great detail. “Under the Limitation of Liability Act, a vessel owner may limit liability for maritime casualties to the value of the vessel and pending freight.  However, if the vessel's negligence or unseaworthiness is the proximate cause of the claimant's loss, the plaintiff-in-limitation must prove it had no privity or knowledge of the unseaworthy conditions or negligent acts.  We have stated that privity or knowledge implies some sort of complicity in the fault that caused the accident. The owner has privity if he personally participated in the negligent conduct or brought about the unseaworthy condition.  A corporate owner is assumed to know what the corporation's managing officers knew or should have known with respect to the conditions or actions likely to cause the loss.  The question of privity or knowledge must turn on the facts of the individual case." Essentially, each case must be analyzed on its own to determine whether or not the vessel owner had knowledge. If it is determined that the ship owner contributed to the cause of the claimant’s injury, that owner will be unable to limit liability under the Act.

The court in Omega Protein also elaborated on imputed knowledge of unseaworthiness or negligent conditions in determining whether or not to allow limited liability. Basically, if a corporate owner did not have direct personal knowledge of unseaworthy or negligent conditions, but should have known, he will be considered to have knowledge and will therefore not be able to limit liability under the Act. “Knowledge of an unseaworthy or negligent condition is normally imputed to a corporate owner if the condition could have been discovered through the exercise of reasonable diligence. A finding of negligence indicated complicity in the cause of the accident sufficient to make limitation unavailable.  There are two exceptions to this rule: (1) mere mistakes of navigation by an otherwise competent crew do not bar limitation of liability; and (2) whether negligence may be imputed can be determined by reference to the negligent employer's stature within the corporate hierarchy.  If sufficiently high, limitation of liability is precluded.”

The maritime injury lawyers at Fitts Zehl have the experience necessary to handle your claim. Contact us today for a free consultation by phone (713) 491-6064 or email info@gulfcoastmaritimelawyer.com. We zealously represent clients from throughout the Gulf Coast region including: Port Aransas, Corpus Christi, Galveston and New Orleans.

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