Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 14, 1994 TAG: 9412140111
SECTION: NATIONAL/INTERNATIONAL PAGE: A-8 EDITION: METRO
SOURCE: Los Angeles Times
DATELINE: WASHINGTON LENGTH: Medium
On April 13, 1992, basements all over downtown were flooded. Electricity and phone service were cut off. For days, the central business district sat paralyzed.
Eventually, investigators determined the Chicago River had ``sprung a leak'' when a barge, hired by the city to repair a bridge, had poked a hole in a tunnel. This allowed water to pour into a network of century-old rail tunnels that once were used to deliver coal throughout the central city.
Now the Supreme Court gets to answer what could be a $1 billion question. Was this a ``maritime'' accident, such as two ships colliding on the high seas?
If the answer is yes, the barge owners probably will escape the huge liability for the accident because maritime laws, which would supersede Illinois state law in the case, protect the owners of vessels from liability in most circumstances. The city then would be forced to pay the cost.
Last year, the U.S. Appeals Court in Chicago dealt the city a stunning setback by ruling that admiralty laws did apply, for several reasons: The repair barge was a ``vessel'' capable of moving; it was on a ``navigable waterway;'' and it was engaged in something akin to ``traditional maritime activity'' - in this case, repairing a bridge.
Lawyers for the city and for thousands of downtown business owners have appealed what they call that ``absurd result.'' Court claims have ranged from $300 million to $400 million in direct damages and up to $1 billion if lost business is included.
Congress in 1851 granted ship owners protection from liability involving accidents at sea, to encourage development of an American merchant fleet. The Limitation of Vessel Owner's Liability Act still stands, but has been amended in recent decades to allow damage suits when people are injured or killed. It now also excludes shippers who cause pollution damage, such as in the Exxon Valdez accident.
Not surprisingly, vessel owners fight hard to force lawsuits into federal admiralty court, where a judge presides, rather than going before a state court jury.
``They are looking at a difference in liability between $600,000 [the cost of their two repair barges and a tugboat] and $400 million,'' said University of Texas law Professor Michael F. Sturley, an expert in maritime law. ``That is certainly worth fighting over.''
The stakes are high for the city of Chicago, too. If the damage suits ultimately are tried in state court, the city will not have to pay. Under Illinois law, a city is not responsible for damage caused by negligent contractors.
by CNB