Unenforced Cell Phone Usage Policy May Prevent Limitation of Liability

An excursion boat carrying 35 passengers stalled and anchored in the Delaware River’s navigational channel.  As the boat waited for a tow, a tug pushing a 250 foot barge was passing through the area.  Roughly an hour before the accident, the tug’s pilot learned of a serious medical emergency involving his five year old son.  The pilot left the upper wheelhouse to go down to the lower wheelhouse where he researched his son’s condition on a laptop computer and made multiple calls on his cell phone to relatives.  The distracted pilot, who had limited visibility from his position in the lower wheelhouse, did not hear the radio distress calls from the stalled boat.  The barge ran over the excursion boat, killing two passengers.  The tug pilot plead guilty to involuntary manslaughter and agreed to a permanent revocation of his Coast Guard license.

In the corollary civil action, the tug’s owner sought protection under the Limitation of Liability Act claiming the accident resulted from the pilot’s violation of the company’s policy against cell phone use while on watch.  The attorney for the families countered that the owner was not entitled to limit its liability to the tug’s $1.65 million value because the company did not enforce the rule against cell phone usage and instead regularly looked the other way despite evidence of rampant cell phone use among employees who were on watch.  There was testimony from the tug’s captain that he had used his cell phone thousands of times while on watch and testimony from a deckhand that he used his cell phone at least once every watch.  On the second day of what was expected to be a four week bench trial, the judge recessed and urged the parties to enter settlement talks.  Two days later, the owner of the tug and the owner of the boat (who had also sought to limit its liability to the boat’s $150,000.00 value) settled with the families for $17 million.

K Sea Operating Partnership, L.P. et al, 2:10-cv-05750 (E.D. Pa., May 12, 2012).