Opinion ID: 70830
Heading Depth: 2
Heading Rank: 1

Heading: Exoneration and Limitation of Liability

Text: 9 A shipowner is entitled to exoneration from all liability for a maritime collision only when it demonstrates that it is free from any contributory fault. Tittle v. Aldacosta, 544 F.2d 752, 755 (5th Cir.1977). The determination of whether a shipowner is entitled to limit liability, however, involves a two-step analysis which this Court explained in Hercules Carriers, Inc. v. Claimant State of Florida, 768 F.2d 1558 (11th Cir.1985): 10 First, the court must determine what acts of negligence or conditions of unseaworthiness caused the accident. Second, the court must determine whether the shipowner had knowledge or privity of those same acts of negligence or conditions of unseaworthiness. 11 Id. at 1563-64 (citation & quotation omitted). 12 In this case, the district court determined first that the uncontroverted facts established that American Dredging violated statutory regulations designed to prevent the type of accident which occurred here. Among the cumulative evidence indicating noncompliance with 33 C.F.R. § 88.15, the district court noted that American Dredging had not placed red lights on the ends of the newly divided dredge pipeline to indicate where vessels could pass, and that it placed flashing yellow lights only every 100 feet along the pipeline, instead of at 10-meter intervals as required under the statute to warn vessels of the presence of a pipeline across a navigable channel. 13 The court then found that American Dredging had failed to produce evidence to show that its negligence could not have been one of the causes of the accident. 3 When a ship is involved in a collision and that ship is in violation of a statutory rule designed to prevent collisions, the burden shifts to the shipowner to prove that the violation was not a contributing cause of the collision. See Self v. Great Lakes Dredge & Dock Co., 832 F.2d 1540, 1554 (11th Cir.1987). Accordingly, the court found that American Dredging was negligent as a matter of law, that its negligence was a proximate cause of the accident, and that it was not entitled to exoneration from liability. 14 Once a claimant satisfies the initial burden of proving negligence or unseaworthiness, the burden of proof shifts to the shipowner trying to limit liability to prove lack of privity or knowledge. Hercules, 768 F.2d at 1564. This burden is not met by simply proving a lack of actual knowledge, for privity and knowledge is established where the means of obtaining knowledge exist, or where reasonable inspection would have led to the requisite knowledge. Id. (citation omitted). Thus, while knowledge may stem from an owner's personal participation in the negligence, see Petition of M/V Sunshine, II, 808 F.2d 762, 763 (11th Cir.1987), it also may exist where the owner could have and should have obtained the information by reasonable inquiry or inspection, Hercules, 768 F.2d at 1577. In addition, when the shipowner is a corporation, privity or knowledge means the privity or knowledge of a managing agent, officer, or supervisory employee. Id. at 1574. 15 In this case, supervisory personnel had offices near the dredging site and were on the site often. With respect to this second step, the district court found that American Dredging could not carry its burden of showing that it had no privity or knowledge of the negligence. After reviewing the record, we agree, and accordingly, we affirm the grant of summary judgment denying American Dredging's petition for exoneration from or limitation of liability.