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ARGUED FEBRUARY 11, 2009

Before BAUER, RIPPLE and WOOD, Circuit Judges. WOOD, Circuit Judge.

When a barge pushed by a towboat owned and operated by American River Transportation Company (“Artco”) collided with a motor boat, passenger Kerrie Vesolowski was injured. After Vesolowski sued Artco for negligence in the Circuit Court of Cook County, Artco filed a complaint in federal court under the Shipowner’s Limitation of Liability Act (“Limitation Act”), 46 U.S.C. §§ 30501 et seq., seeking exoneration from, or limitation of, liability. This appeal considers whether the district court had the authority to stay Vesolowski’s state suit while it decides if Artco is entitled to limitation or exoneration. After initially permitting such a stay, the district court changed its mind, ordered Vesolowski to dismiss the suit, and found her in contempt for maintaining it. Because we find that the law permits Vesolowski to maintain her suit under stay, we reverse the judgment of dismissal and remand for further proceedings consistent with this opinion.

 
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