Construction company loses appeal over Hurricane Sally barge damage to Pensacola Bay Bridge

by | Aug 3, 2023

  • A federal appeals court rejected a construction company’s attempt to limit liability after barges broke loose and damaged the Pensacola Bay Bridge during Hurricane Sally in 2020.
  • The court decision was a victory for property owners and businesses that filed lawsuits against the Skanska construction company for damages caused by the barges and economic losses due to the bridge closure.
  • Skanska sought to limit its liability under the Limitations Act, but the court upheld the ruling that the company cannot establish a lack of privity or knowledge of negligence and, therefore, cannot limit its liability.

TALLAHASSEE — A federal appeals court Wednesday rejected a construction company’s attempt to limit liability after barges broke loose and damaged the Pensacola Bay Bridge during Hurricane Sally in 2020.

The 40-page decision by a panel of the 11th U.S. Circuit Court of Appeals was a victory for property owners and businesses that filed lawsuits in state courts against the Skanska construction company. While some lawsuits involved property damaged by the barges, many were filed by businesses that lost money because the bridge had to be closed, according to the decision.

Hurricane Sally made landfall in September 2020 as a Category 2 storm near Gulf Shores Ala., west of Pensacola. At the time, Skanska USA Civil Southeast Inc., part of Skanska USA, Inc., had a state contract to build a new Pensacola Bay Bridge, which is about three miles long,

Skanska was using 55 barges on the project, and 28 broke free during the storm, causing damage to the bridge and bayfront properties, according to court documents. The lawsuits filed in state courts alleged negligence by the company in not properly securing the barges.

Skanska sought to limit its liability by filing petitions in federal court under a law, first passed in 1851, known as the Limitations Act. That law was designed to help ship owners limit damages from alleged negligence if they could show they had “neither privity nor knowledge of the negligent acts at issue,” the appeals court decision said. Damages can be limited to the value of ships and cargo.

U.S. District Judge Lacey Collier ruled in December 2021 that Skanska should not be shielded by the law. That effectively meant state-court lawsuits filed by property owners and businesses could move forward.

Collier wrote that Skanska “was indeed found negligent, and that negligence sprung wholly from executive decision-making that resulted in the failure to take reasonable measures to protect its barges from the impending storm. Because Skanska obviously cannot establish any lack of privity or knowledge, it is unable to limit its liability to the value of its barges under the Limitation Act.”

Skanska took the case to the Atlanta-based appeals court, arguing, in part, that Collier should have decided whether the company was liable for each claim before determining a right to limit liability, Wednesday’s decision said. The company contended that businesses’ claims about economic losses should be dismissed.

But the appeals court panel rejected the arguments and upheld Collier’s ruling.

“The Limitation Act allows a federal court to take over all negligence claims to preserve the vessel owner’s right to limit its liability and then proportionally distribute the available assets to the successful claimants,” said the decision, written by Judge Britt Grant and joined by Judges Elizabeth Branch and Harvey Schlesinger. “But only to the extent necessary to protect the right to limitation; it does not create an independent right to have the full merits of each individual claim decided in federal court when no limitation is available.”

The decision also said that when “it was clear that Skanska had privity or knowledge of any negligent acts that caused the barges to damage property, it was equally clear that the company had no right to limit its liability. So there was no continued need for a limitation proceeding. The district court thus did not abuse its discretion by dismissing” Skanska’s petitions, which were consolidated in the case.”

As an example of businesses involved in the litigation, the appeals court cited Bagelheads, Inc., a bagel shop near the bridge that contended its sales dropped 35 percent after the span was closed because of the barge damage. The court also pointed to “hundreds of other similar claims.”

“Under the Limitation Act, Skanska had a right to have the issue of limitation litigated by a federal court,” Wednesday’s decision said. “That’s exactly what Skanska got. The claimants now have the right to determine where any subsequent litigation about the damage caused by Skanska’s barges during Hurricane Sally will occur. And Skanska has failed to show any other reason why the district court’s dismissal of its petitions should be reversed.”

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