Hurricane Sally and The Million Dollar Oysters

Hurricane Sally and The Million Dollar Oysters

Procedural History

On December 7, 2020, Deluna Oyster Company, Inc. (“Deluna”) filed a complaint in Escambia County, Florida asserting a single count of negligence against Virgina based company, Skanska USA Civil Southeast, Inc (“Skanska”)[i]. On December 9, 2020, Skanska initiated limitation of liability proceedings in admiralty in the Northern District of Florida – Pensacola Division which stayed all state court proceedings.

On December 29, 2021, Senior United States District Judge, Lacey A. Collier, dismissed Skanska’s Complaint thereby dissolving the stay and entered a final judgement in favor of Deluna and the twenty-seven (27) cases related to the instant action. The case proceeded to trial, and on November 15, 2023, the jury awarded Deluna $1,689,777.81 for the damages caused by Skanska’s negligence.[ii]

 

Relevant Facts

On September 16, 2020, as Hurricane Sally swept through the Pensacola Bay area, twenty-seven (27) of Skanska’s fifty-five (55) barges broke free resulting in visible damage to the Pensacola Bay Bridge, and other structures, or ran aground which caused additional property damage. Overall, the damage was significant enough to cause the bridge to be closed to all vehicular traffic for several months thereafter while repairs were performed.[iii]

 

Federal Court Consideration

 

Louisiana Presumption

While the burden of persuasion usually lies with the injured party to establish the elements of negligence, here, the parties agreed the Louisiana Presumption or Louisiana Rule (hereinafter the “LAP”) applied to the instant action. As explained by the Eleventh Circuit[iv], when a moving ship strikes and damages a stationary object, the drifting vessel—including all parties who participated in the management of the vessel—will be presumed to be at fault and the burden of persuasion is shifted to the moving vessel. The presumption is only rebutted where a party shows by a preponderance of the evidence:

  • The allision was the fault of the stationary object; or
  • The moving vessel acted w/ reasonable care; or
  • The allision was an unavoidable accident (“Act of God”).

Given the former, Skanska was required to show human skill and precaution could not have prevented the accident to either be exonerated for the subject accident or alternatively, to qualify for the protections afforded to vessel owners under the Limitation Act.

 

Exoneration

Maritime torts are reviewed under a two-step analysis[v]. The court will first consider whether a vessel owner qualifies for exoneration. Exoneration requires the court to determine what acts of negligence, if any, caused the accident. Liability is established only where the vessel owner’s negligent acts were a ‘contributory and proximate cause of the accident’[vi]. However, if a party’s negligence is deemed by the court as partly responsible for the loss, the court will then determine if the protections provided under the Limitation Act are applicable considering the facts.

 

Limitation Act

As outlined above, Skanska sought a liability determination in the Eleventh Circuit under the Limitation Act. If an incident occurs in waters of the United States, vessel owners and leaseholders who possess, control, and command a vessel(s) may seek exoneration and limitation of liability under the Act. The Limitation Act requires the court to examine whether the vessel owner had knowledge of, or was in privity with, the acts of negligence. If privity or knowledge cannot be shown, the vessel owner remains liable, but damages are limited to the post-casualty value of the vessel and its cargo with the available funds then equitably distributed.[vii]

 

Application

In the context of disaster preparation, reasonable care amounts to whether given the information and resources available, the vessel owner took reasonable action to guard against, prevent, or mitigate the dangers posed by the impending threat. The Court’s review weighed several factors such as Skanska’s time to prepare, the size of the fleet and vessels, and most importantly, Skanska’s Hurricane Preparation Plan. Based on the time afforded to Skanska’s management to implement the steps under its Hurricane Plan, the Court found the company negligent for its failure to take reasonable measures to protect its barges from the impending storm.[viii]  This decision paved the way for the jury’s million-dollar verdict.

 

Takeaway

The Court’s holding highlights the importance of establishing and adhering to a disaster management plan for contractors who operate in waters of the United States. When drafting a plan, the Court’s holding indicates the more adaptable a plan, the greater the likelihood of exoneration, or liability will be limited should a company be hauled into court. Put differently, disaster management plans need not be perfect, but they should develop a framework that outlines different courses of action based on the information known at the time. For example, a designated location may be reasonable if a storm is approaching from the east, but an imprudent location if the storm switches directions. Failure to consult with appropriate experts and adhere to a plan when disaster strikes could expose your company to significant damages.

We love oysters, but we do not want to see our clients paying out seven-figure sums to their local [raw] bar. If you or your company needs advisement on drafting a disaster management plan, we are here to help.

 

 

 

Keep Reading

Sources


 

[i] https://www.law360.com/articles/1768231/attachments/0

[ii] https://www.law360.com/articles/1768231/skanska-hit-with-1-69m-verdict-in-oyster-destruction-suit

[iii] https://www.law360.com/articles/1768231/attachments/0

[iv] https://media.ca11.uscourts.gov/opinions/pub/files/202113850.pdf

[v] Id.

[vi] Id.

[vii] Id.

[viii] Id.