A federal appeals court on Wednesday sided with a Pensacola federal judge who found that Skanska was negligent in its response to Hurricane Sally when more than two dozen of its barges broke loose from their moorings, causing chaos across Pensacola Bay.
A three-judge panel of the 11th U.S. Circuit Court of Appeals unanimously ruled against Skanska’s request to overturn Pensacola U.S. District Court Judge Lacey Collier’s December 2021 decision that found Skanska could not shield itself under an obscure 19th century maritime law because its corporate officers were the ones who made negligent decisions that led to the barges coming loose during Hurricane Sally.
More than 1,000 people and businesses have come forward with claims against the company in state court because of damage caused by the barges or economic loss from the closure of the Pensacola Bay Bridge for eight months following the storm.
What does the ruling mean?
A Skanska representative declined to comment on the ruling Wednesday, citing the ongoing litigation.
However attorneys with the three law firms representing the people and businesses with active claims against the construction company praised the ruling.
“It’s a good day for Pensacola,” said Thomas Gonzalez, an attorney with the Beggs and Lane law firm. “Everybody in the region, from people who live by the Navy base over to Warrington over to Santa Rosa, over to Gulf Breeze, etc. had some impact by Skanka’s negligence in just leaving those barges in the middle of the bay.”
The more than 1,000 cases in pending in state court can now begin to move forward.
Sam Geisler, an attorney with Aylstock, Witkin, Kreis and Overholtz, said the first state court case could go to trial as soon as November.
The one issue that will still need to be decided in lower courts is whether economic losses can be claimed in relation to maritime accidents based on a 1927 Supreme Court case known as the Robin’s Dry Dock case.
That case limits liability to only physical damage caused by a vessel.
Nearly 900 of the more than 1,000 cases are related to economic losses caused by the barge disaster and not direct physical damage.
Geisler said that issue could be briefed before an Escambia County Circuit judge as soon as September.
“There’s a battle ahead of us, certainly, but this is a gigantic step forward,” – Sam Geisler of Aylstock, Witkin, Kreis & Overholtz.
Will Skanska appeal?
Skanska can ask the 11th Circuit to hear the case again before all of the appeals court judges or it can appeal the case to the U.S. Supreme Court.
Brian Barr, an attorney with the Levin Papantonio Rafferty law firm, said he fully expects Skanska to appeal the decision.
“I fully expect Skanska to try to take this to the Supreme Court,” Barr said. “We’ll see if they’re successful or not, but meanwhile, the main thing is we can start trying cases in state court, and that’s what we’re aiming to do. We feel our mission at this point is to hold this company responsible, and we now have the ability to do that.” Brian Barr of Papantonio Rafferty.
Barr said Skanska may have more to lose than it will gain in a Supreme Court appeal because if the high court takes up the case, it could indicate it’s looking to roll back some of the outdated liability protections in maritime law.
“I think they need to think really long and hard about whether or not that’s something they’d want to do because we would certainly be making the effort to have those protections taken away,” Barr said.
Barr said he also doubts Skanska would look to settle the case any time soon as the company has refused to enter into talks in cases where their barges clearly caused damage, such as the Escambia County Fishing Pier.
“I have no anticipation that they’re going to all of a sudden get a good heart and come in and try and do the right thing,” Barr said.
What was in the ruling?
The main issue of the ruling was a maritime law known as the Limitation Act that limits the owner of a vessel’s liability to the vessel’s value.
Had Skanska won the case, its liability would’ve been capped at $1.2 million, which was the combined value of the runaway barges.
The Limitation Act was passed by Congress in 1851, and the appeals court noted that 50 years ago, federal courts complained the law was poorly written and “hopelessly anachronistic” and had been due for a rewrite for 75 years. The court noted that the count is now up to 141 years.
Despite the complaints, the appeals court found that Collier followed federal precedents correctly in deciding the Skanska case in ruling that liability limits did not apply and that Skanska was negligent in the episode.
”(The) district court decided that Skanska could not limit its liability because its own corporate officials were responsible for the negligent acts that led to the barges getting loose in the storm,” the appeals court wrote.
Skanska argued the District Court moved through the procedures of the Limitations Act too quickly and that it should have decided whether it was liable in each and every claim first and then determined the limit of its liability in that claim.
The appeals court said that reading would “turn the Limitation Act on its head,” and the courts have already rejected that interpretation of the law.
Skanska also appealed its sanctions for allowing evidence on employee cell phones to be deleted in the case. Collier had imposed $92,000 in attorneys fees over the issue and found Skanska acted in “bad faith” in the case.
The appeal court ultimately agreed, though it noted it could be argued that Skanka wasn’t acting in bad faith with the evidence but rather was “’just’ grossly negligent,” but the court saw no reason to question Collier’s ruling on that issue.
“Skanska is a sophisticated entity — a multinational company tasked with completing a construction contract worth nearly $400 million,” the appeals court wrote. “… Even so, Skanska did not bother to take the most fundamental of precautions — starting with backing up those custodians’ cell phones and suspending its policy of wiping those phones.”