Roger Dreyer And Anthony Garilli Prevail In Limitation Of Liability Action (LOLA)

On February 25, 2019, Dreyer Babich Buccola Wood and Campora attorneys Roger Dreyer and Anthony Garilli won at trial against a vessel operator and Marina who negligently sent a rental party out on Lake Tahoe without adequate safety warnings.

The case was tried in federal court in what is known as a Limitation of Liability Action, or LOLA, due to the vessel owners’ attempt to take advantage of an antiquated 1851 federal statute that allows a vessel owner to attempt to limit the victims’ recovery to value of the vessel and its cargo. 

After a tragedy occurs at sea or on any navigable waterway between two states, under the Limitation of Liability Act, a vessel owner may run to federal court and file a petition as a Plaintiff in Limitation. Once filed, the federal court will issue a stay on all other lawsuits related to the event. The vessel owner must then inform all those whom they know may potentially have claims against them about the Limitation Action. Those with potential claims must then file their claims within the vessel owner’s Limitation Action within six months or risk losing them. Once all claims have been filed, the case essentially begins.

Under LOLA, the claimants must first prove that a negligent act caused their harms and losses. In most other types of cases, this would be the end. All that would remain would be to prove the amount of the injured victims’ or surviving family members’ damages. But, in a Limitation Action, the boat owner is afforded an opportunity to prove that they had “no privity or knowledge” of the negligent acts that caused the harm. If owners prevail, then the court will limit the total amount to be paid out to victims and their families to “the value of the vessel and its cargo then pending.” This means the value of the boat after the tragic event.

A recent example of this tactic by vessel owners involves the very tragic fire aboard the diving boat, The Conception. In that case, the owners of the vessel have already filed a Limitation Petition in federal court attempting to eliminate any financial responsibility. The victims and their families now only have six months to file their claims within the boat owners’ Limitation Action to preserve their rights. If they do, they will still face lengthy litigation governed by federal maritime law and admiralty rules, both of which contain numerous pitfalls for the unwary or inexperienced lawyer unfamiliar with Limitation of Liability Actions. If the owners of The Conception prevail, they can limit their liability to the value of the fire-damaged boat, which is now worthless. This would be a terrible injustice for the victims of The Conception fire and it is time for Congress to repeal this archaic law.

In Dreyer Babich Buccola Wood and Campora’s recent case, the boat owners filed a Limitation Action after our client suffered an above-the-knee amputation as a result of the operator and boat owners’ negligent acts. The case was litigated for just over two years, during which Mr. Dreyer and Mr. Garilli successfully defeated every significant and dispositive motion filed by the boat owners. In February 2019, they took the case to trial and proved their case on negligence. The pair then defeated the boat owners’ claims that they had no privity or knowledge of the negligent acts that caused our client’s injuries. Having defeated the Limitation of Liability Action, the case will now proceed to trial on the sole issue of damages on September 23, 2019 in the Eastern District of California, thus providing our client with the opportunity to recover the full value of the harms and losses that have tragically changed her life.

Additional Reading:

Palla v. L M Sports, Inc. et al: Findings of Fact and Conclusion by District Judge John A. Mendez

Serious safety flaws aboard Conception, early boat fire investigation finds | Los Angeles Times

California dive boat owner asks judge to limit payouts to victims’ families | Los Angeles Times