New Bill Would Make Shipowner Pay More for Destruction of Key Bridge

Rep. John Garamendi (D-CA) and Rep. Hank Johnson (D-GA) have introduced new legislation that would alter the 170-year-old law that limits shipowners' liability when something goes wrong. The bill would increase the liability threshold for foreign-flagged ships, and it would affect ongoing lawsuits against the owners of the boxship Dali, which hit Baltimore's Francis Scott Key Bridge earlier this year. 

"Access to America’s ports and our consumers is a privilege, not a right. If the foreign owners of the [Dali] want to keep that privilege, they can break out their checkbooks, call their insurance company, and pay their fair share of the bridge replacement costs and compensation to the families of the six workers who died tragically that day," said Garamendi in a statement.

The existing law - the Limitation of Liability Act of 1851 - was written to encourage investment in American shipping by reducing the unpredictable costs of marine casualties for the shipowner. The act capped liability at the value of the hull and pending freight, as assessed after the accident, minus cost of salvage. In the worst-case casualties - where the vessel has zero net value after the accident - the Act may absolve the shipowner of any financial liability, leaving victims with nothing. (This can be controversial after serious disasters aboard inexpensive vessels, like the dive boat Conception.)

The Act was written at a time when American coastwise commerce was relatively robust, and it may not have anticipated modern developments in shipping. The majority of oceangoing vessels calling in the U.S. are now foreign-owned, making foreign shipowners and their insurers among the most prominent beneficiaries of the Act. 

Garamendi and Johnson's bill would attempt to change the Act's incentive structure. The bill would increase the liability for foreign-flagged ships to ten times the value of the vessel and its cargo, minus expenses. The Act's threshold would remain the same for U.S.-flagged vessels.

The bill would also apply the higher liability threshold retroactively to March 25, 2024, just before the boxship Dali destroyed the Francis Scott Key Bridge. (Through Supreme Court interpretation, Congress can enact retroactive civil statutes, though retroactive laws are otherwise prohibited by the Constitution.) 

The owners, operators and insurers of the Dali have invoked the Limitation of Liability Act in an attempt to cap their compensation costs to just $44 million - a fraction of the cost of cleanup, bridge reconstruction, and compensation. As Garamendi and Johnson's bill would lift this cap, it has support from the group of trial lawyers who represent six victims' families. 

"This legislation protects all Americans from having their lives shattered by corporate vessels from foreign countries due to preventable failures. This issue is not about whether you are a Democrat or a Republican; it is about whether you love and want to protect Americans," said lawyers L. Chris Stewart, Justin Miller, Dan Rose, Kevin Mahoney and Craig Sico in a statement.