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Will Changes in Laws Following the Gulf Oil Disaster Affect Pleasureboaters?

I have read some news reports about pending changes to various provisions of federal maritime law as a result of the Deepwater Horizon oil well disaster in the Gulf of Mexico. Can you shed some light on this? Will the changes have any effect on recreational boating?
There’s nothing like a disaster to spur Congress into action. The Exxon Valdez grounding in 1989, for example, led to the enactment of the Oil Pollution Act of 1990 and the strengthening of other anti-pollution laws.

The cleanup effort in the Gulf is in its infancy, but Congress has already set its sights on a number of federal statutes. This time around, they are looking at the rights of people who have been harmed by the spill, rather than oil spill prevention and response. Specifically, Congress has proposed changes to the Jones Act, the Death on the High Seas Act and the Limitation of Liability Act. The bill that is currently being considered by the House of Representatives is H.R. 5503, sponsored by Rep. John Conyers of Michigan.

The Jones Act was enacted in 1920 to protect the rights of killed and injured maritime workers and their families, and to protect U.S. maritime industries from foreign competition. The proposed changes to the law will address only those portions that relate to killed and injured seamen — but we should talk a little about the foreign competition component of the Jones Act, since it has also been in the news in connection with the Gulf oil disaster.

The Jones Act requires any vessel that participates in “coastwise trade” to be constructed in the United States and manned by an American crew. Coastwise trade is the carriage of passengers or cargo from one U.S. port to another.

In connection with the Gulf oil disaster, the Obama administration has taken some heat for failing to waive the Jones Act, so that foreign boats could, theoretically, participate in the cleanup. Comparisons were made to the relief efforts that followed Hurricane Katrina, when President Bush waived the Jones Act to allow foreign commercial vessels to operate in Louisiana and Mississippi.

The comparison, however, is inappropriate. The Katrina relief efforts required vessels to operate in the waters of the various coastal cities that were affected by the hurricane, and as such they were participating in coastwise trade activities. In contrast, the Deepwater Horizon rig was 50 miles offshore when it exploded and sank. The foreign vessels that are working on the offshore cleanup activities are, therefore, not subject to the Jones Act, because they are not participating in coastwise trade.

As noted above, Congress has proposed changes to the Jones Act and other federal laws, but these changes do not include the foreign competition components of the Jones Act. Instead, they are looking at the provisions of these federal laws that relate to maritime accidents.

The Jones Act and the Death on the High Seas Act each provide a remedy to victims who are killed or injured at sea, and to their families. Unfortunately, the remedies available under these laws are limited to “pecuniary losses” only, which means that there can be no recovery for the victims’ pain and suffering, or for other losses that are not supported by documentation and cannot be calculated to a specific amount. This leaves the families of the 11 workers who were killed on the Deepwater Horizon rig with very little recourse against BP or the owner of the rig.  The proposed changes to the Jones Act and the Death on the High Seas Act would allow for the recovery of “non-pecuniary” losses for victims of future offshore incidents.

Congress is also considering the repeal of major provisions of the Limitation of Liability Act. This law, enacted in 1851, allows a ship owner to limit its liability for losses from negligence or unseaworthiness arising without his or her privity (participation and involvement) and knowledge.

If the ship owner successfully establishes that the negligent activity was solely due to the acts of the shipboard crew, the owner may limit its financial exposure to the post-incident value of the vessel and any revenue relating to its cargo.  The most famous limitation case involved Titanic, where the White Star Line unsuccessfully sought to limit its total liability to the value of the recovered lifeboats.

In connection with the Gulf oil disaster, the owner of the Deepwater Horizon rig has asked a federal judge to limit claims against it to $27 million, which is the value of the undelivered oil that was not lost in the explosion. The owner may or may not succeed in this, since it will need to establish that it was not connected to the cause of the incident — but if this law is repealed, these protections will not be available at all to owners of vessels involved in future incidents.

Our reader asked whether H.R. 5503, if passed, would have any effect on recreational boating. It may seem to be quite a stretch to link the legal fallout of the Gulf oil disaster to a 30-foot sailboat in California, but the answer is “yes.”

Consider, for example, a scenario where a boat owner allows a friend to borrow his boat, and a passenger is killed or injured aboard the boat while under the command of the friend. If the owner is not aboard at the time of the incident, he may be able to limit his financial exposure under the Limitation of Liability Act. If the act is repealed, the owner may face personal liability for the incident even though he was not responsible.

Maritime law, and maritime jurisdiction, is based upon the involvement of a vessel. A “vessel” is defined as “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.” The definition does not reference the size of the vessel, and courts have expressly held that recreational vessels are subject to the same laws as commercial vessels.

As we have often discussed in this column, maritime legal principles have evolved over hundreds of years in the context of commercial maritime activities, but these same laws apply with equal force to the yachting community. A commercial maritime disaster thousands of miles away could easily affect the rights of a small boat owner in California.

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