Background
Hunter Marine Group, L.L.C., the bareboat charterer and owner pro hac vice of the M/V MS Adalyn, and Michael Quain Neward Pittman, its registered and bareboat owner, supplied the 38-foot, aluminum-hulled commercial workboat to Encore Dredging Partners under a contractor agreement. Encore paid Hunter Marine a flat daily rate of $2,000 regardless of how the vessel was used and also provided fuel and charter hire.
In November 2024, the Adalyn was transporting eight Encore employees during dredging operations on the Alabama River when it encountered shoaling, ran aground, and struck a steel pipe. The employees reported injuries and sued in state court. Hunter Marine and Pittman then sought exoneration from or limitation of liability under the Limitation of Liability Act. The district court granted summary judgment to the employees, holding that the Adalyn was a “covered small passenger vessel” excluded from the Act.
The Court’s Holding
The Fifth Circuit affirmed. It concluded that the statutory definition of “small passenger vessel” covers either a wing-in-ground craft meeting the specified conditions or a vessel of less than 100 gross tons meeting one of the listed passenger criteria. Because the Adalyn weighed less than 100 gross tons and carried more than six people, the decisive question was whether at least one was a “passenger for hire.”
Reading the interconnected statutory definitions in context, the court held that a crewmember need not personally furnish consideration for carriage to qualify as a passenger. Consideration may be contributed by a third party and may flow directly or indirectly to the vessel’s owner, charterer, operator, agent, or another interested person.
Encore paid Hunter Marine to use the Adalyn, including to carry Encore employees. The employees therefore indirectly supplied consideration for their carriage and qualified as passengers for hire. The Adalyn was consequently a covered small passenger vessel, so the Limitation of Liability Act did not apply.
Key Takeaways
- A vessel under 100 gross tons can qualify as a “small passenger vessel” without also being a wing-in-ground craft.
- A crewmember need not personally pay for transportation to qualify as a passenger for hire; third-party consideration may suffice.
- Because Encore paid Hunter Marine to carry its employees, the Adalyn was a covered small passenger vessel excluded from the Limitation of Liability Act.
Why It Matters
The decision forecloses a vessel owner’s attempt to obtain statutory limitation of liability merely because workers aboard the vessel did not personally pay for passage. In the Fifth Circuit, courts must consider indirect economic benefits and employer-funded carriage when applying the Act’s passenger definitions.
Commercial arrangements involving small workboats may therefore place vessels outside the Limitation of Liability Act when an employer or another third party pays the operator to transport more than six workers.