Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co.

Background

In 1991 Great Lakes, a dredging company, used a crane mounted on a barge in the Chicago River to replace pilings near bridge piers. Seven months later a freight tunnel underneath collapsed and flooded downtown basements. Many victims sued in state court, and Great Lakes filed in federal court seeking admiralty jurisdiction and protection under the Limitation of Vessel Owner’s Liability Act to determine and possibly limit its liability.

Reasoning

The Court asked whether admiralty jurisdiction applies when alleged negligence occurs from a vessel on navigable waters and causes land damage. It applied the two-part Sisson framework: a location test (was the harm caused by a vessel on navigable water) and a connection test (whether the incident and activity relate to traditional maritime activity and could disrupt maritime commerce). The Court found location met because the crane worked from a barge, and connection met because damage to an underwater structure can disrupt navigation and repair work from barges is traditionally maritime. The Court rejected extra limits based on distance or a broad multifactor balancing test and said proximate-cause rules limit coverage.

Real world impact

By holding the case within admiralty, the Court allows the dredging company to pursue limitation of liability under the Limitation Act in federal maritime court. That will bring core claims under maritime procedures and law, though state law may still govern some issues and other parties or claims can be handled through supplemental procedures. Justice O'Connor emphasized that finding jurisdiction over a maritime party does not automatically force all claims into admiralty; Justice Thomas agreed with the outcome but urged a simpler situs-only rule.