Why El Faro’s Limitation of Liability Complaint Will Likely Fail

On September 29, 2015, the S.S. El Faro set sail from Jacksonville, Fl. in a final voyage that ended in the death of all 33 crewmembers. Anticipating costly litigation from the families affected by this tragedy, the ship’s owner, Tote Maritime, filed a Limitation of Liability complaint with a federal court in Florida.

Maritime attorney Matthew D. Shaffer has tried and defeated similar limitation complaints filed by shipowners. He explains what Tote Maritime’s limitation complaint means and why it will likely fail.

1. What is a limitation of liability action?

There is a federal law in the United States that allows a shipowner to cap its liability for losses stemming from a maritime accident. This law allows a shipowner to limit its liability to the value of the vessel and its freight. To seek the benefits of the limitation act, a shipowner files a complaint in a federal district court and declares a value for the vessel. Then, the shipowner, must deposit an amount equal to that value with the court.

Following the sinking of El Faro, Tote Maritime filed a limitation of liability complaint under this law with the United States District Court for the Middle District of Florida

2. What is the value of the S.S. El Faro?

In the pleadings it filed with the court, Tote Maritime submitted an Ad Interim Stipulation of value, which set aside $15,309,003.50 as a security deposit for claims related to the El Faro tragedy. The value was based on the vessel’s freight and a $420 per gross registered ton fund for death claims.

3. Is there a way to stop Tote Maritime from limiting its liability to that amount?

Yes. Our firm, Schechter, Shaffer & Harris, L.L.P., Accident & Injury Lawyers, has successfully stopped shipowners from hiding behind this law to avoid responsibility in comparable cases. If it can be shown that a shipowner had previous knowledge of the negligent conditions or actions that caused a victim to suffer losses, a shipowner cannot use this law to limit its liability for that claim. A shipowner’s limitation of liability complaint is a proceeding that can be tried before a court in admiralty.

Our attorneys are some of the few to successfully defeat limitation of liability actions in trial. In fact, our team at SMSH collected $17.5 million on a case where the shipowner attempted to limit its liability to a mere $45,000. In the El Faro case, we believe there is enough evidence to prove that Tote Maritime knew of the ship’s unseaworthy conditions and negligent actions that resulted in the death of all 33 crewmembers.

4. What does Tote Maritime’s limitation action mean for the families of the crewmembers aboard El Faro?

A lot of misinformation has been spread on this issue. Tote’s limitation complaint does not mean that the families of crewmembers are prohibited from seeking compensation for their losses. It does not mean that these families’ claims have been blocked or frozen – regardless of whether they have already been filed with a court or not.

It does mean, however, that all claims for loss, damage, injury, or death related to the sinking of El Faro must be filed by December 21, 2015 with the clerk of the United States District Court for the Middle District of Florida in Jacksonville. If a claimant seeks to contest Tote Maritime’s right to limit its liability to a set amount, the claimant must also file and serve an answer to Tote’s limitation of liability complaint by that date.

5. How long do I have to file a claim?

Pursuant to the court’s order, all claims must be filed and served to the attorneys for Tote Maritime by December 21, 2015. There are additional requirements that must be followed as detailed in the court’s order.

6. Do I need to have an attorney to file a claim?

Although a claimant is not required to hire an attorney in this process, it is highly recommended that anyone wishing to pursue a claim contact an attorney as soon as possible to assist them in this litigation.

7. What happens if I don’t file a claim by that deadline?

According to the court’s order, failure to comply with this strict deadline will result in a claim being defaulted, barred, or dismissed. Courts are reluctant to excuse the late filing of claims in limitation of liability proceedings – if at all. If a claim is not filed in accordance with the court’s order, there will not be a second chance or a different venue to file.

8. If I am interested in filing a claim, what should I do next?

You should contact an experienced maritime attorney as soon as possible due to the looming deadline. Selecting an attorney can be overwhelming, for a list of questions to a prospective attorney, you should visit our previous blog.