Most Florida boat accident victims do not know there is a law on the books which allows boat owners to sue them in Federal court! The goal of such lawsuits is to obtain a ruling that either exonerates the boat owner from wrong doing or limit the amount the injured in the boating accident could receive in compensation. The Shipowners’ Limitation of Liability Act passed by Congress in 1851 allows just that. Most people are also unaware this federal law also allows the boat owner to pick the court where the lawsuit must take place. Let’s assume you were injured in a boating accident and your lawyer files the case in the local state court. Under the Act, the boat owner’s lawyer can file a lawsuit in Federal court which could be hundreds of miles from where you live. The federal judge will then order the state court to relinquish jurisdiction requiring you to re-file your case in the federal court where the boat owner selected.
The original purpose of the case was to promote American shipbuilding in a time where insurance was not common. The idea behind the law was Americans would enter the shipping business if there existed an incentive in place to limit their liability to the ship value should an accident occur. Times have changed and most boat owners have liability insurance. However, the law is still on the books. There is, however, good news for Florida boat accident injury victims. The Eleventh Federal Circuit Court has taken a very hostile view of this act calling it “hopelessly anachronistic”. Through the years, the Eleventh Circuit issued multiple legal options which have eroded the competitive edge given boat owners by the Act. What has become known as the “Signal Claimant Exception” is one such instance.
The Signal Claimant Exception allows a Florida boat injury victim to proceed in state court despite the boat owner’s federal action. In order to accomplish this, the injury victim must agree in writing to not collect on the state court judgment until the federal court decides the issue of whether the boat owner is entitled to be exonerated from wrong doing or allowed to limit the state court judgment to the value of the boat. Once this agreement is filed, the federal trial judge can stay the federal lawsuit and allowed the case to proceed in the local state court. After the state court trial, the federal case will be reopened wherein the federal judge can decide whether or not the owner should be exonerated from wrong doing or the state court jury verdict reduced to the value of the boat.
Typically the Signal Claimant Exception scenario occurs when the Florida boat injury victim’s lawyer files the state court lawsuit before the boat owner files the federal action. An Eleventh Circuit case decided this month addressed a situation where the boat owner filed the lawsuit first. That case involved a woman who was injured in a boat accident in Palm Beach County, Florida. The boat owner filed the federal action before the injured woman filed her state court lawsuit. The boat owner argued that since it “won the race to the courthouse” and filed first, it should get to decide where the trial should occur. The Eleventh Circuit rejected this argument. The published legal decision discusses at length the tension between the right of an injured person to select the location of where the case is to be tried and the right of a boat owner to have a federal judge decide issues of exoneration and/or limitation of liability. Relying on its long history of refusing to expand the rights of boat owners afforded under the Act, the Eleventh Circuit found the Signal Claimant Exception applies to situations where the boat owner files federal lawsuit was filed first.
The Florida Board Certified Maritime Lawyers of Brais Brais & Rusak are keenly aware of the Limitation of Liability Act’s nuisances. The law firm has handled several such cases involved Florida boat injury victims and have wrote comprehensive legal papers on the Limitation of Liability Act which were presented at maritime law symposiums. If you are a victim of a Florida boating accident and would like to learn more about your rights, fell free to contact us.