Section 11.43 Privity or Knowledge of the Owner

• Library: Tort Law 2016

E. (§11.43) Privity or Knowledge of the Owner

The fundamental condition of the right to limit liability is that the owner did not have privity or knowledge of the cause of the injury. Allseas Maritime, S.A. v. M/V Mimosa, 812 F.2d 243 (5^th Cir. 1987); see also GRANT GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY § 10-13 n.45 (2^nd ed. 1975). Any loss subject to limitation must have occurred "without the privity or knowledge of the owner." 46 U.S.C. § 30505(b). "Privity or knowledge" is a term of art judicially determined to mean complicity of the owner in the fault that causes injury. Union Oil Co. of Cal. v. M/V Point Dover, 756 F.2d 1223 (5^th Cir. 1985). "Privity" is personal cognizance or participation in the fault or negligence that causes the loss. Cont’l Ins. Co. v. Sabine Towing Co., 117 F.2d 694 (5^th Cir. 1941). "Knowledge" means not only personal cognizance, but also the means of knowledge of which a party must avail himself or herself in order to prevent a condition likely to produce or contribute to a loss. The Cleveco, 154 F.2d 605 (6^th Cir. 1946). In Coleman v. Jahncke Service, Inc., 341 F.2d 956 (5^th Cir. 1965), the court stated:

If the owner is chargeable with privity or knowledge, he may not limit. Where, as here, the owner is a corporation, privity or knowledge attributable to management (or those to whom the authority of management has been delegated) binds the...