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A petition to invoke a long-standing but little-known provision of federal maritime law has been filed in U.S. District Court to stop the filing of a wrongful death suit on behalf of a 36-year-old Texas man who drowned in a paddleboat accident in the Atlantic Ocean while on vacation last year in Palm Beach County. If successful the action would limit the paddleboat owner’s potential damages in the suit to an amount equivalent to the value of the boat — $1,200. The federal law, the Shipowner’s Limitation of Liability Act of 1851, was designed to encourage investment in commercial shipping in the 19th century by shielding vessel owners from large judgments in what was then a highly risky field of enterprise. But despite its original intent — and despite frequent judicial grumbling — courts have interpreted the law so it shields owners from large awards regardless of the size of the vessel. In 1990, the 11th U.S. Circuit Court of Appeals held that even owners of Jet Skis are covered by the law. The courts are “extremely uncomfortable” with the limitation, according to Robert Jarvis, a law professor at Nova Southeastern University and an expert on maritime law. “You read the opinions and find this openly snarling hostility.” “It’s sometimes called ‘the admiralty trap,’” conceded Marc Sarnoff, a Miami attorney for the paddleboat owner who filed the federal claim. “Some of the judges don’t like it. The 11th Circuit was critical of it. But they say their hands are tied.” The federal action arose following the February 2003 drowning death of Michael Carillo, a Texas native who traveled to Florida to take riding lessons at the Spirit Ranch stables in Jupiter, Fla. According to Carillo family attorney W. Riley Allen, Carillo and two of the ranch’s instructors were in a paddleboat 75 yards off the beach north of the Jupiter Reef Club when a wave capsized the boat. Carillo tried to swim to shore, got caught in a riptide and drowned. In an interview, Allen said that because the paddleboat was owned by Spirit Ranch, it gave its “implied consent” for Carillo’s use of it. He said the employment relationship of the instructors to the ranch was “still under investigation.” On Aug. 14, 2003, Allen, a partner at Allen & Murphy in Maitland, notified Spirit Ranch of the Carillo family’s intention to pursue damages on a claim for wrongful death. Spirit Ranch retained Sarnoff, a partner in the maritime law firm Sarnoff & Bayer in Coconut Grove, and responded with the Feb. 9 petition for limitation of liability, citing the provisions of the more than 150-year-old federal maritime law. Carillo was single and had no children, but under Florida’s Wrongful Death Act, his parents can bring suit for loss of consortium and pain and suffering. Allen declined to put a dollar value on the claim. But, he said, “A parent should never have to bury a child of any age.” Sarnoff also moved for an injunction against the prosecution of any civil suits over Carillo’s death until the petition for limitation was tried. Senior U.S. District Judge Kenneth Ryskamp ordered the injunction Feb. 11. With an exception for seagoing vessels, the maritime limitation of liability restricts the liability of ship owners to the value of the ship and its freight “for any loss, damage, or injury by collision, or for any act, matter or thing … done, occasioned, or incurred, without the privity or knowledge” of the owner. The courts have generally read the law broadly, according to Baltimore attorney Don Greenman, a past chair of the Maritime Law Association’s limitation of liability committee. “Oliver Wendell Holmes explained the provision as ‘a limitation on the doctrine of vicarious liability,’” Greenman said in an interview. “The rationale at the time was that because the operation of ships often took place far from the presence of their owners, it was unjust to place no limit on their responsibility for the actions of their captains and crews.” TITANIC ET AL. The law estimates the value of the ship based on its condition following the incident that caused the injuries, which has produced some bizarre results. In 1912, the law was invoked by the owners of Titanic after it struck an iceberg and sank on its maiden voyage, causing the deaths of 1,500 people. Before settling with the survivors’ and victims’ families, who filed claims of more than $17 million, the owners sought to limit their total damages to $91,000 — the value of the surviving lifeboats plus the passengers’ ticket fees. In 1934 the owners of the Morro Castle, which caught fire and sank off the coast of New Jersey with 135 passengers aboard, sought to limit their liability to the ship’s scrap value. They successfully limited their losses to $20,000. The Morro Castle case caused enough outrage to prompt a revision of the law, increasing the liability of “seagoing vessels” to $60 per gross ton of the vessel. In the 1980s, the standard was increased to $420. According to Greenman, the latter revision occurred without the knowledge of the shipping industry. He said international agreements have instituted even higher limits but the U.S. hasn’t signed on to any of them. Controversy over the law arose most recently when New York City last December filed for the limitation to protect itself against an estimated $3 billion in claims arising from deaths and injuries in the crash of the city-owned Staten Island Ferry in October 2003. Jarvis of Nova Southeastern attributes the limitation’s endurance to the “indifference” of Congress. “There’s no constituency pushing for changes,” he said. “Its use causes the occasional controversy but it’s not often successfully invoked. The courts are extremely hostile to it.” Jarvis said the limitation was only “a nice backup” for commercial shipowners, who rely on liability insurance for protection against litigation. He said owners of pleasure craft are more likely to rely on it. That the law applies to pleasure craft was clearly upheld by the 11th U.S. Circuit Court of Appeals in Keys Jet Ski v. Kay, in which a Jet Ski rental company sued to invoke the limitation after the 13-year-old son of a family vacationing in Florida died after renting one of the personal watercraft and colliding with a fishing boat. The district court granted the family’s motion to dismiss the limitation action but the appeals court upheld the rental company’s right to pursue it. Without dissent, the appellate panel wrote, “While we might agree in this case with the district court that extension of the Limitation Act to pleasure craft such as Jet Skis is inconsistent with the historical purposes of the act, restriction of its applicability requires congressional action.” But the limitation claim was never tried, according to Tampa attorney Carl Nelson, a shareholder at Fowler White Boggs & Banker who represented Keys Jet Ski in its appeal. Nelson said that after the company’s insurance carrier went bankrupt, both the limitation claim and the family’s wrongful death suit were dropped. In court documents in the Jupiter paddleboat case, Sarnoff argues that Spirit Ranch isn’t liable at all for Carillo’s death because it had done everything it could to “make the vessel seaworthy” and “suitable for its intended operations.” Alternatively, he argues that if Spirit Ranch were judged liable, “such liability shall be limited to the amount or value of [Spirit Ranch's] interest in the vessel.” “There’s only two points to be tried,” Sarnoff said in an interview. “Did the owner know that the vessel wasn’t seaworthy? And what was the value of the vessel? Our witnesses’ statements say the paddleboat had nothing to do with the drowning.” Andrew Waks, a Miami maritime lawyer retained to represent Carillo’s family in the limitation suit, gave two lines of argument in reply. “We’re not admitting the paddleboat is a ‘vessel’ for purposes of the law,” he said in an interview. “And in [limitation actions] in general, if the courts find any privity at all, they deny the claim. It’s not what the owners of the boat knew. It’s what they should have known.” The limitation of liability petition “would be absurd if found meritorious,” Carillo family lead attorney Allen said. “But we have to respond. That’s the sad part. It’s a waste of the court’s time.”

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