(CN) - The owner of a ferry that crashed into a New York pier may owe passengers injured when they were launched from their seats more than $7.6 million, a federal judge ruled.
The Seastreak Wall Street had been ferrying 326 commuters from New Jersey when it slammed into a Manhattan pier on Jan. 9, 2013, according to the complaint.
Crew members said a mechanical failure, possibly caused by hitting a buoy about 100 feet from the dock, had locked the ferry's controls, the New York Daily News reported.
The crash upended passengers, injuring 74 people, two critically - including one whose scalp was "peeled back like a flap," the Daily News said.
Seastreak LLC filed a complaint under the Limitation Act a week later, seeking to either dodge or limit its liability to the value of its interest in the vessel - $7.6 million.
Though a federal judge soon entered an interim order limiting liability to that amount, the total value of the 46 timely field claims exceeds $7.6 million.
The claimants argued in their affirmative defenses that the limitation fund should include the value of three other Seastreak-owned ferries, based on the "flotilla doctrine."
Seastreak, in turn, moved to strike both the claimants' defenses and jury demands, claiming that the doctrine does not apply because the allision involved a single vessel not part of a common enterprise.
It also said the claimants have no right to a jury trial in a Limitation Act case, and it moved to disqualify counsel from representing multiple claimants.
U.S. District Judge William Martini roundly denied these motions on March 27.
"Whether the flotilla doctrine applies will depend upon whether the vessels owned by Seastreak were in some way interdependent in executing the Seastreak passenger ticket contract," Martini wrote. "It will also depend on whether the ferries were under a single command. These are disputed factual issues."
Plus, although the claimants lack a right to a jury trial under the Limitation Act, "this could change prior to trial depending on how many and which claims settle, and whether the limitation fund is increased under the flotilla doctrine," according to the ruling.
The refusal of court-appointed lead counsel Jacqueline DeCarlo of Hobbie, Corrigan & Bertucio to negotiate, "assuming there's a 7.6 limitation," does not show that multiple representation is preventing settlements, the ruling states.
"The transcript indicates that Hobbie is willing to negotiate settlements, but will not base those negotiations on the assumptions that the limitation will be upheld and that only a total of $7.6 million will be available to compensate all claims," Martini wrote. "Basically, Hobbie is willing to settle, but will not assume that it is going to lose the pending case, which would seem to be a reasonable position. Furthermore, Hobbie, as lead counsel, was involved in creating the settlement procedure that the parties are currently utilizing, resulting in numerous settlements."
The motion to disqualify was made "largely for strategic purposes," the judge found.
"Although claimants could eventually have competing interests depending upon the outcome of several issues, their interests are very much aligned concerning SeaStreak's liability and whether the Limitation Act applies," she added. "The court also recognizes that allowing claimants to retain their counsel of choice is an important countervailing policy to disqualification."
Each firm representing multiple claimants must certify within 60 days that it has obtained informed consent from its clients, according to the ruling.