Ship Owner Seeks Dismissal of All Economic Loss Claims From Baltimore Bridge Collapse

The city of Baltimore and about 11 private entities including dockworkers and small businesses should not be allowed to collect for any economic losses from the collapse of Baltimore’s Key Bridge in 2024, the owner and manager of the Dali cargo ship that caused the collapse told a federal court.

Owner Grace Ocean and manager Synergy Marine, citing a 99-year old Supreme Court opinion (Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), said the public and private entities that have sued are precluded from recovering economic losses resulting from physical damage to the Key Bridge because they had no proprietary interest in the bridge or other property.

Since the economic loss claimants did not have an ownership interest in the Key Bridge, and have failed to identify a recognizable interest in any other property that sustained physical damage as a result of the casualty, their claims “must all be dismissed as a matter of law,” the marine firms told the court in a filing on June 15.

Settlements Reached

On April 1, 2024 Grace Ocean and Synergy Marine filed a petition to limit their liability for the bridge collapse that killed six construction workers. They invoked the Limitation of Liability Act of 1851 to limit their liability to the value of the ship, about $44 million.

Since then, they have settled with 32 of the more than 50 claimants including with the U.S. government ($102 million for cleanup costs), the state of Maryland ($2.5 billion for destruction and replacement of the bridge and environmental damages), and the families of the deceased workers (undisclosed amounts for wrongful death). Other settlements have included reimbursements for workers’ compensation payments and cargo losses. Several claims have been dismissed. The civil settlements contain no admission of wrongdoing by Grace Ocean or Synergy.

Workers’ Families, Other Parties Settle Baltimore Bridge Tragedy Claims

However, the public and private claims for economic losses have not been settled.

Baltimore officials have argued that the city suffered “substantial direct harm” from the collapse and its aftermath, including damage to transportation infrastructure, interruption of commerce and port operations, emergency response expenditures, environmental and navigational impacts to the Patapsco River, lost jobs, and damage affecting public systems and infrastructure connected to the bridge corridor and surrounding areas.

The city has criticized what it maintains is the attempt of the ship owner and operator to “shift the costs” of alleged wrongdoing onto Baltimore residents and taxpayers.

Dockworkers, Innsurers and Private Firms

Eight longshoremen representing the local union have brought claims alleging they depended on the flow of cargo into and out of Baltimore for their livelihood and, after the casualty, this flow ceased and had not been restored after six months. The longshoremen allege that they have suffered past and future economic losses, punitive damages, as well as legal costs.

In addition to claims by the longshoremen and Baltimore, there are about 10 unsettled claims for private economic damages by energy, export, manufacturing, construction services, technology, sugar, molasses and publishing firms along with related insurers including Markel, Liberty Mutual, QBE, AXA XL, Evanston and Canopius. The remaining private claimants are seeking damages for losses due to business interruption, declines in advertisement and directory revenue, increased shipment costs, lost taxes and economic revenue, among others.

For example, insurer Markel alleges that its insured, a terminal operator Ports America Chesapeake, has suffered more than $40 million in losses. A propane supplier claims it has lost profits and business because its route to cross the Patapsco River is 30 miles longer now that it can no longer utilize the Key Bridge. A metals business says that it had multiple containers on the ship and lost $334,601. An energy exporter claims it was effectively forced to shut down operations at its terminal. Also, a construction firm says it suffered a huge loss of productivity as its workers could no longer conveniently access their jobsites and its supply lines of accessory equipment and materials were disrupted.

According to Grace Ocean and Synergy, these claims are precluded as a matter of law by the Robins Dry Dock ruling and related court decisions that have followed because the claimants have no proprietary interest in the bridge or property that were damaged.

Grace Ocean and Synergy argue that since the remaining claims do not involve the carriage of cargo aboard Dali but rather allege economic loss resulting from the inability to ship cargo aboard other vessels as a result of the incident, all of the remaining claims fail as a matter of law.

Baltimore Objection

In interrogatories, Baltimore officials objected to the term “proprietary interest” as vague and ambiguous and criticized the owner and manager for seeking a legal conclusion regarding the ultimate scope of damages in this action.

Baltimore has claimed that it has had a “proprietary interest in the Key Bridge since the Key Bridge’s construction” and that it seeks damages for the cost of replacement of the Key Bridge and its approaches.

Grace Ocean and Synergy maintain that Baltimore has offered no support for its claim of a proprietary interest in the Key Bridge. Rather, Baltimore “attempts to skirt the requirement of a proprietary interest by asserting that it is an ‘intended beneficiary’ of the Key Bridge, entitling it to recovery. However, if that were sufficient to warrant a proprietary interest, every person in the world would arguably have a claim on this same basis,” Grace Ocean and Synergy argue.

In Robins Dry Dock, a dry-docking company damaged a propeller on a steamship, rendering the vessel unusable for two weeks longer than anticipated. The vessel’s time charterer sued the dry dock company to recover its lost profits resulting from the delay while the propeller was repaired. The Supreme Court denied recovery, rejecting the argument that the charterer was a third-party beneficiary of the dry dock contract and rejecting tort liability. The court held that the injury to the propeller did not harm the respondents but only those to whom it belonged.

Grace Ocean and Synergy are seeking judgment on the pleadings on the economic loss claims. If the court rejects that, then they have asked for summary judgment.

The U.S. Department of Justice (DOJ) has brought criminal charges against Synergy for the tragedy. Synergy has called DOJ’s allegations in the indictment “baseless” and said they have “nothing to do with” the Dali’s allision with the Key Bridge.

The Francis Scott Key Bridge collapsed in the early morning hours of March 26, 2024, after being struck by the Dali as the vessel departed the Port of Baltimore. The collapse killed six construction workers, obstructed a major shipping channel, disrupted commerce throughout the region, and caused public and private damages.

Photo: Crane involved in salvage operation after Baltimore Key Bridge collapse. Key Bridge Response 2024 Unified Command photo.