Northern Insurance Co. of New York v. Chatham County, GA (04/25/2006)

Question presented: Whether an entity that does not qualify as "an arm of the state" for 11th Amendment purposes can nonetheless assert sovereign immunity as a defense to an admiralty action?

BY CORA WEISENBERGER, MEDILL NEWS SERVICE

On Oct. 6, 2002, James K. Ludwig, Jr., was sailing his yacht Love of My Life on Georgia's Wilmington River, which is a part of the Intercoastal Waterway. As he neared the Causton Bluff Bridge, a drawbridge owned and operated by Chatham County, Georgia, Ludwig radioed the bridge operator and asked that the bridge be raised so his vessel could pass underneath.

The operator opened the bridge by raising the spans, but one span did not remain upright and started drifting downward. The operator immediately tried contacting Ludwig, but was unable to reach him because the yacht's radio had been switched off. Although the bridge operator stopped the span and started it back up again, the yacht hit the span and then struck the bridge. The yacht sustained approximately $79,000 worth of damages.

In June 2003, Ludwig, through his insurance company, Zurich Insurance (later Northern Insurance Co. of New York), filed suit in admiralty in the U.S. District Court for the Southern District of Georgia, charging Chatham County with "negligence, maintenance of a continuing nuisance and statutory and/or regulatory fault." It sought approximately $138,000, which included the damages to the yacht and other expenses. Motions for summary judgment were filed by both Zurich Insurance and Chatham County.

Chatham County argued that it could not be held responsible for the damages to Ludwig's yacht because the county had sovereign immunity.

The 11th Amendment of the U.S. Constitution grants individual states immunity from law suits unless the state agrees to be sued. Immunity does not extend to counties, however, unless they can prove they are "arms of the state."

"The County has been delegated power by the State to operate, construct and maintain the Bridge," Chatham County attorneys said. "In operating and maintaining the Bridge, Chatham County is an arm of the State of Georgia."

Because Chatham County is an "arm of the state" it is entitled to sovereign immunity, attorneys said. Sovereign immunity is also based on common law doctrines, adopted by Georgia in 1784, which protect all levels of government, including counties, from unconsented-to legal actions, said the county.

Zurich Insurance said sovereign immunity should not apply in this case because the county's failure to properly maintain the bridge created a "hazard to navigation." Prior to Ludwig's collision, there had been several other accidents dating back to 1990 involving the same bridge. The Georgia Constitution and statutory law states that the acts of repairing and maintaining a bridge are "ministerial in nature," and sovereign immunity does not apply, Zurich Insurance said.

The court granted Chatham County's motion for summary judgment in June 2004, stating that the county did have "residual sovereign immunity."

"The pertinent issue before the Court is whether the County is entitled to the same immunity as the State," Chief Judge William Moore said. "To determine whether a governmental entity was acting as a part of the State, courts typically examine whether it was exercising power delegated from the state or whether it was performing a proprietary function.

"By acquiring land, constructing and operating the bridge in question, the County was exercising these state powers … [T]he Plaintiffs have not otherwise shown that the County's sovereign immunity was waived. Accordingly, the Court finds that the County is protected by sovereign immunity."

Zurich Insurance appealed to the 11th Circuit Court of Appeals which, in January 2005, also sided with the county.

"It is clear that the state of Georgia itself cannot be sued under maritime law based on 11th Amendment sovereign immunity," the appeals panel said. "The same immunity does not extend to counties. Rather common law has carved out as ‘residual immunity,' which would protect a political subdivision such as Chatham County from suit."

"This is an important issue in maritime law," said Fred S. Clark, attorney for Zurich Insurance. "We can't have bridges falling."

He said officials of Chatham County knew other vessels had been damaged by the Causton Bluff Bridge, Clark said, but the county did nothing to permanently fix the mechanical problems. He said this was the seventh time the Causton Bridge had fallen.

Clark said the rulings of the district and appeals court are in direct conflict with the Georgia Supreme Court in Hines v Georgia Port Authority (2004). In that case, a longshoreman was injured by a crane improperly operated by an employee of the Georgia Port Authority. Lower courts ruled that the port authority, an arm of the state government, had sovereign immunity. However, the Georgia Supreme Court overturned those decisions, stating immunity did not apply because the crane was improperly operated, so therefore admiralty law preempted state-conferred immunity.

Governmental bodies need sovereign immunity to protect themselves and their citizens from expensive law suits, said R. Jonathan Hart, one of the attorneys for Chatham County.

"To allow individuals to sue (a state) for money has never been allowed," Hart said. "Taxes aren't collected to pay law suits."

Emily Garrard, another attorney for Chatham County, disagreed that the bridge has a history of mechanical problems and said Clark has not been able to back up his claims with documentation.

However, according to documents submitted by Chatham County in its response to Zurich Insurance's petition of writ of certiorari to the U.S. Supreme Court, the Causton Bridge was the subject of an almost identical law suit. In Dennis K. Rings and Continental Insurance Company v Chatham County (2005), Ring's vessel was also struck by a span of this drawbridge. As in Zurich Insurance, the district court ruled Chatham County had sovereign immunity.

On Oct. 11, 2005, the U.S. Supreme Court accepted review in the case, and six months later, on April 25, 2006, the Court unanimously reversed.

Writing for the Court, Justice Clarence Thomas reasserted past precedent in holding that the county doesn't qualify as an "arm of the State" for 11th Amendment purposes, and therefore, can't assert sovereign immunity as a defense to an admiralty suit.

The Court also rejected the argument that sovereign immunity should exist anyway because the county was exercising core state functions with regard to navigable waters.