Eighth Circuit Holds U.S. Government’s Claim for Damage to Lock and Dam is Subject to Limitation of Liability Act

Eighth Circuit Holds U.S. Government’s Claim for Damage to Lock and Dam is Subject to Limitation of Liability Act  

33 U.S.C. Section 408 Does Not Give Rise to In Personam Claim

By: Lindsey Ajubita

Edited By: Brooke E. Michiels

American River Transportation Co. v. United States, No. 14-1867, 2015 U.S. App. LEXIS 14941 (8th Cir. Aug. 25, 2015).Barges separated from a towboat owned by American River Transportation Company (“Artco” herein) causing damage to the United States Government’s lock and dam. The United States Court of Appeals for the Eighth Circuit aligned itself with the Fifth and Tenth Circuits when it held that Section 408 of the Rivers and Harbors Act (“RHA” herein), 33 U.S.C. § 408, does not provide the U.S. Government an action in personam against the vessel owner.This case came before the Eighth Circuit for a second time on appeal from the U.S. District Court for the Eastern District of Missouri following its dismissal of the limitation action brought by Artco. Although the Eighth Circuit did not reach the issues of whether the claim was subject to limited liability and whether the claim could be brought in personam, it reversed the district court’s grant of the government’s motion to dismiss the limitation action, holding that the U.S. Government did not have “statutory standing” under Rule F to move for dismissal because it had not filed a claim. On remand, the district court denied Artco’s motion for exoneration on grounds that the Eighth Circuit had not disturbed its prior holding, that the government’s claim was not subject to limited liability and could be brought in personam under Section 408. The Eighth Circuit settled these issues upon Artco’s second appeal.Section 408 imposes strict liability on the owner of a vessel whose vessel “impair[s] the usefulness of any . . . work built by the United States . . . for the preservation and improvement of any of its navigable waters.” Therefore, the U.S. government argued that Artco was personally liable for the damages to its lock and dam resulting from the barges that separated from Artco’s towboat. The Eighth Circuit disagreed, stating that while Section 411 of the RHA specifically provides for a daily fine against the vessel owner, it does not specifically outline an in personam cause of action. Instead, the RHA provides for an in rem cause of action under Section 412 to recover from the vessel for its liability to the injured party. The court determined that such in rem claims do not fall outside of the coverage of the Limitation Act.The Eighth Circuit found that because remedies available under the RHA and the Limitation Act are not at odds with each other, and the liability standards and statutes of limitations of them can be reconciled, the two bodies of law do not conflict. Therefore, the court held, that the U.S. Government’s claim against Artco for damage to the lock and dam is subject to Artco’s limitation proceeding as an in rem action.