Skanska USA Civil Southeast, Inc. and Skanska USA v. Bagelheads, Inc. ( 2023 )

USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 1 of 40
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13850
____________________
SKANSKA USA CIVIL SOUTHEAST INC.
AND SKANSKA USA, INC.,
as owners of the Barge KS 5531 praying for
exoneration from or limitation of liability,
Petitioner-Appellant,
versus
BAGELHEADS, INC.,
FLOWERS BY YOKO,
GULF BREEZE BAIT & TACKLE, INC.
DOG HOUSE DELI II, INC.
JLO, INC., et al.,
Claimants-Appellees.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 2 of 40
2 Opinion of the Court 21-13850
____________________
Appeal from the United States District Court
for the Northern District of Florida
D.C. Docket No. 3:20-cv-05980-LC-HTC
____________________
____________________
No. 22-10203
____________________
SKANSKA USA CIVIL SOUTHEAST INC. AND
SKANSKA USA, INC.,
As owners of the Barge KS 5531
praying for exoneration from or limitation of liability,
Petitioner-Appellant,
versus
BAGELHEADS, INC.,
FLOWERS BY YOKO,
GULF BREEZE BAIT & TACKLE INC,
DOG HOUSE DELI II INC,
JLO INC, et al.,
Claimants-Appellees.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 3 of 40
21-13850 Opinion of the Court 3
____________________
Appeal from the United States District Court
for the Northern District of Florida
D.C. Docket No. 3:20-cv-05980-LC-HTC
____________________
Before BRANCH, GRANT, Circuit Judges, and SCHLESINGER,* District
Judge.
GRANT, Circuit Judge:
Hurricane Sally hit Pensacola Bay with a vengeance in
September 2020, and 28 barges moored in the Bay were not spared.
The barges slammed around the Bay after their moorings snapped,
leading to significant damage—including to the Pensacola Bay
Bridge, which was closed for months. Skanska, the construction
company that owned the barges (and was working on replacing the
Bay Bridge) faced hundreds of potential lawsuits. Some were
directly related to property damage, but most were economic loss
claims from nearby businesses that lost customers during the
months-long closure of the bridge.
Skanska filed what are called petitions for limitation of
liability, one for each of its 28 barges. These petitions invoked the
Limitation Act, a federal law that allows the owner of a maritime
vessel to limit its damages in a negligence suit to the combined
* The Honorable Harvey E. Schlesinger, United States District Judge for the
Middle District of Florida, sitting by designation.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 4 of 40
4 Opinion of the Court 21-13850
value of the vessel and its cargo—but only where the owner has
neither privity nor knowledge of the negligent acts at issue. After
extensive discovery and a bench trial, the district court decided that
Skanska could not limit its liability because its own corporate
officials were responsible for the negligent acts that led to the
barges getting loose in the storm. And once it decided that no
limitation of damages could apply, it dismissed the Limitation Act
petitions—freeing the claimants to pursue litigation in state court.
Skanska says the district court acted too fast, because the
Limitation Act entitles it to more than a decision on limitation of
damages (the denial of which it does not contest). It claims that the
Limitation Act required the district court to decide whether it was
liable to each and every claimant and only then to determine
whether it had a right to limit that liability. Here, it says, that
would have meant dismissing the economic loss claims because it
had no duty as the owner of the barges to prevent that sort of
indirect damage.
Skanska’s approach would turn the Limitation Act on its
head, and our precedents have already rejected it. We have been
clear that the purpose of the Act is limitation, not exoneration. And
the statute’s text is equally clear—we see no mandate to enforce
the two-step process that the company insists is necessary. The
Limitation Act allows a federal court to take over all negligence
claims to preserve the vessel owner’s right to limit its liability and
then proportionally distribute the available assets to the successful
claimants. But only to the extent necessary to protect the right to
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 5 of 40
21-13850 Opinion of the Court 5
limitation; it does not create an independent right to have the full
merits of each individual claim decided in federal court when no
limitation is available.
Skanska also disputes several of the district court’s other
decisions, including multiple evidentiary rulings, the conclusion
that it committed negligent acts when it left the barges in the Bay,
and the imposition of spoliation sanctions for the destruction of
cellphone data. Here too we disagree. We see no reversible error
in the district court’s evidentiary rulings, its findings of fact, or its
spoliation sanctions. We therefore affirm the district court.
I.
A.
Pensacola is a city in the westernmost part of the Florida
panhandle. It is known for its access to beaches, which attract both
locals and tourists from across the country. But Pensacola Bay
separates the actual city of Pensacola from the area’s major
beaches (and from several smaller towns such as Gulf Breeze).
Pensacola remains connected to its beaches thanks to the Pensacola
Bay Bridge—a roughly three-mile bridge across the Bay that has
existed in some form since the 1930s.
Around 2010, the bridge needed replacing. Skanska USA
Civil Southeast Inc.—which is wholly owned by Skanska USA,
Inc.—won a contract to build two new spans and then to destroy
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 6 of 40
6 Opinion of the Court 21-13850
the old bridge. 1 Those tasks required construction barges—lots of
them. Skanska had a hurricane preparedness plan for the project.
If winds of 58 miles per hour or greater were expected within the
next 72 hours, the plan called for the construction barges to be
moved to Butcherpen Cove on the south side of the Bay, a process
that would take at least 30 hours.
The first major warning sign of Hurricane Sally came on
Thursday, September 10, 2020, five days before Skanska’s barges
began to break loose. That’s when the National Hurricane Center
issued its notice of a potential storm. Skanska had 55 barges
working on the project, and the record does not show that anyone
at Skanska was yet aware of the notice. The next day, the National
Hurricane Center issued Advisory 1 about what it then called
“Tropical Depression 19.” Though it projected that the storm
would most likely land at the border between Louisiana and
Mississippi, Pensacola Bay fell in the possible 5-day path. Still no
sign that Skanska was aware of the storm.
By Saturday morning, that had changed. The National
Hurricane Center’s 72-hour report showed a 16% chance that
winds of 58 miles per hour or greater would reach Naval Air
1 The district court sat in admiralty and made findings of fact after a bench
trial. “When reviewing the judgment of a district judge sitting in admiralty
with no jury, we may not set aside the court’s findings of fact unless they are
clearly erroneous.” Dresdner Bank AG v. M/V Olympia Voyager, 446 F.3d 1377,
1380 (11th Cir. 2006). So—other than those findings of fact that Skanska
challenges, which we review for clear error—we take all of the district court’s
findings of fact as true.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 7 of 40
21-13850 Opinion of the Court 7
Station Pensacola (a few miles west of the bridge) by Tuesday.
Skanska decisionmakers conferenced on Saturday afternoon. By
that point, the storm had been upgraded to Tropical Storm Sally
and forecasters thought it would be a hurricane by Monday
evening. The storm was still projected to make landfall near the
Louisiana-Mississippi border—but Pensacola Bay remained on the
outskirts of the storm’s three-day probable path. Skanska
management decided to begin preparations to move and secure the
barges if necessary. But—in part because of logistical issues with
moving the barges over the weekend—the group largely took a
“wait and see” approach and agreed to meet again the next
morning.
By then, Sunday, the National Hurricane Center had issued
a tropical storm warning for the panhandle coast. The 72-hour
forecast was slightly better than it had been on Saturday, but it still
showed a 9% chance that winds of 58 miles per hour or greater
would hit Naval Air Station Pensacola by Wednesday. Skanska
began moving its barges, but decided not to take them all the way
to Butcherpen Cove. Instead, it moored the barges to various pipe
pilings in the Bay—generally within 500 feet of the bridge. Most,
but not all, of the barges were tied down by Monday morning,
which is also when Tropical Storm Sally was upgraded to
Hurricane Sally and the Governor of Florida issued a State of
Emergency for the greater Pensacola area. By Monday afternoon,
Pensacola Bay was squarely within the hurricane warning zone.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 8 of 40
8 Opinion of the Court 21-13850
On Tuesday morning, Naval Air Station Pensacola reported
winds from 15–26 miles per hour, with gusts reaching almost 45
miles per hour. Skanska’s barges began to break loose in the Bay,
and multiple barges crashed into the bridge. At first, Skanska tried
to secure its unmoored barges, but by Tuesday evening it was too
dangerous to continue the recovery attempts. On Wednesday,
when Hurricane Sally passed through the Bay, it brought winds
from 47 to 74 miles per hour, with gusts as high as 92 miles per
hour—causing even more barges to slip their moorings. In the end,
28 barges came loose, slamming into the bridge and other property
along the Bay’s edge.2 The bridge was closed to traffic for many
months because of the damage. This dramatically increased the
amount of time it took to get between Pensacola and the towns
and beaches on the other side of the Bay.
B.
In short order, Skanska found itself facing state-court
lawsuits—many lawsuits—about the damage caused by its barges.
Seeking both to limit its liability and to consolidate the multiplying
claims in a single forum, Skanska initiated proceedings in federal
district court under the Limitation Act. The core of that Act is
relatively simple: when a vessel causes “loss, damage, or injury by
2 The district court mentioned 27 barges that broke loose. But Skanska
initiated Limitation Act proceedings for 28 barges, and on appeal, both parties
refer to 28 barges as having broken loose. We adopt the parties’
characterization that 28 barges broke loose for clarity, but we do not hold one
way or the other whether the district court’s finding that 27 barges broke loose
was erroneous.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 9 of 40
21-13850 Opinion of the Court 9
collision” without the vessel owner’s “privity or knowledge,” the
owner’s liability is limited to the value of the vessel and its pending
freight. 46 U.S.C. § 30523.
To initiate a limitation proceeding, a vessel owner brings a
civil action and deposits the value of the vessel and its freight with
the district court. Id. § 30529; Fed. R. Civ. P. Supp. Admiralty &
Mar. Claims (Supplemental Rules) F(1), F(2), F(9). This creates a
single equitable proceeding about the damage caused by the vessel.
All other litigation about the incident—whether in state or federal
court—must “cease.” 46 U.S.C. § 30529(c); Supplemental Rule
F(3); Beiswenger Enters. Corp. v. Carletta, 86 F.3d 1032, 1036 (11th Cir.
1996). At the same time, those injured by the vessel retain rights
under the “saving to suitors” clause. 28 U.S.C. § 1333. That clause,
which accompanied the original grant of admiralty jurisdiction to
federal district courts, ensures that federal admiralty jurisdiction
does not eliminate traditional remedies, including state jury trials.
Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 443–46, 453–55
(2001).
Between December 2020 and March 2021, Skanska filed 28
petitions for exoneration or limitation of liability—one for each
barge that broke loose during the storm. Following Skanska’s
unopposed motion, all 28 proceedings were consolidated. 3 The
consolidated proceedings followed standard Limitation Act
3 Twenty-two of the proceedings were consolidated in an order on February
15. The remaining six proceedings were filed on March 26 and were treated
as part of the consolidated proceeding.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 10 of 40
10 Opinion of the Court 21-13850
procedure: Skanska deposited the value of each of the barges with
the district court, initiating a Limitation Act proceeding for each
barge, and the court enjoined the filing or prosecution of all related
proceedings in other courts. Parties alleging that they had suffered
harm from the loose barges then filed claims in the consolidated
proceeding, generally with “reservation of rights to proceed in
state court.”
Some of these claims came from people and entities whose
property was directly damaged by the barges—the United States,
for example, alleged that multiple barges caused millions of dollars
of damage when they allided with property at Naval Air Station
Pensacola. But most of the filings came from businesses claiming
not direct physical damage, but economic loss suffered after the
closure of the Pensacola Bay Bridge. As an example, the top-line
plaintiff here is Bagelheads, Inc., a bagel shop immediately next to
the bridge on the Pensacola side. It says it suffered more than
$90,000 in damages from the bridge outage because the dramatic
increase in travel time from Pensacola to the beach and to the
residential towns on the other side of the bridge cut the shop’s sales
by 35%. And Bagelheads was not alone—hundreds of similar
claims followed. Skanska moved to dismiss these claims from the
limitation proceeding, arguing that it owed no duty to any party
whose property did not suffer direct physical damage from the
barges.
The district court entered a scheduling order setting a
deadline for claimants to join the proceeding and directing all
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 11 of 40
21-13850 Opinion of the Court 11
claimants to join in two amended master complaints—one for
direct property damage and one for economic damage arising from
the bridge outage. The court also announced a bifurcated bench
trial. First, the court would consider whether Skanska was entitled
to limitation of liability. That involved deciding whether the
accident was caused by any negligent acts and, if so, whether
Skanska had privity or knowledge of the negligence. Next—but
only if that first inquiry showed that Skanska had a right to limit its
liability—the parties would conduct damages discovery and the
court would schedule any necessary further proceedings. Neither
Skanska nor the claimants objected to this scheduling order.
In the end, over 1,000 claimants joined the proceedings—
more than 900 of whom alleged economic loss damages from the
bridge outage. After the window closed for new filings, Skanska
renewed its motion to dismiss the economic loss claims. The court
deferred consideration of that issue, in part to better protect the
claimants’ right to litigate in the forums of their choice if Skanska
were denied limitation.
During discovery, Skanska sought evidence about the
claimants’ storm preparations, including extensive discovery from
the United States Navy about steps it had taken at the nearby naval
air station. A magistrate judge handling pretrial issues held that the
Navy’s preparations were of minimal relevance because it operated
seagoing vessels (not barges) and that Skanska’s discovery of the
Navy was not proportional to the needs of the case. See Fed. R. Civ.
P. 26(b). Despite that discovery order, Skanska requested
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 12 of 40
12 Opinion of the Court 21-13850
depositions from fifteen individuals under the control of the
United States Navy, and the magistrate judge granted the Navy a
protective order.
After discovery, the district court conducted a five-day bench
trial on two issues: Skanska’s negligence and Skanska’s right to
limit its liability. Yet again, an evidentiary dispute arose. Skanska
examined a tugboat captain who had two barges moored to a
wharf in Pensacola Bay during Hurricane Sally, with the court
repeatedly warning Skanska’s counsel that his questions about the
captain’s personal experience up to and during the hurricane were
mostly irrelevant and directing him to get to the point. After about
14 minutes, the court dismissed the captain, but Skanska was
allowed to proffer the rest of his testimony, which showed that the
captain would have testified about his experience with storms and
about his decision to moor his barges in Pensacola Bay during
Hurricane Sally.
The district court ultimately concluded that Skanska had
acted negligently. It began with “the Louisiana rule,” which creates
a rebuttable presumption that a vessel is negligent when it collides
with a stationary object. See In re Skanska USA Civil Se. Inc., 577 F.
Supp. 3d 1302, 1313–14 (N.D. Fla. 2021) (citing Bunge Corp. v.
Freeport Marine Repair, Inc., 240 F.3d 919, 923 (11th Cir. 2001)); The
Louisiana, 70 U.S. (3 Wall.) 164, 173 (1866). The court rejected
Skanska’s assertion that it was “caught off guard” by the storm and
found that Butcherpen Cove would have been a safer place to moor
the barges. 577 F. Supp. 3d at 1314–18. The “only surprise” to
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 13 of 40
21-13850 Opinion of the Court 13
Skanska, the court said, “was that its unreasonable choice to
discount—or even ignore—the clear warnings of an approaching
tropical storm turned out to have harsh consequences.” Id. at 1322.
The court quickly rejected Skanska’s “perfunctory”
argument that it lacked privity or knowledge of the negligent acts,
pointing out that those acts “sprung wholly from executive
decision-making that resulted in the failure to take reasonable
measures to protect its barges from the impending storm.” Id. at
1324. It then dismissed Skanska’s petitions for exoneration from or
limitation of liability and dissolved the injunction barring
prosecution of all related litigation. Id. The court never ruled on
Skanska’s motion to dismiss the economic loss claims.
C.
Along with the adverse verdict, Skanska was sanctioned for
spoliating electronic evidence under Rule 37(e); the data from five
out of thirteen discovery custodians’ cell phones was destroyed.
Even with an active litigation hold and actual litigation, Skanska did
not back up the relevant employees’ cell phones. Nor did it suspend
its ordinary cell phone data destruction policies.
Two phones were deliberately reset according to Skanska’s
ordinary employee departure procedures when their owners left
the company. Another was somehow “disabled” and became
inaccessible after the owner left Skanska. Yet another was allegedly
lost overboard. And still another had all text messages deleted
under disputed circumstances.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 14 of 40
14 Opinion of the Court 21-13850
The district court ruled that Skanska “acted with the intent
to deprive” the claimants of the cell phone data and sanctioned the
company under Rule 37(e)(2). 4 The court emphasized that it saw
no cogent explanation, apart from bad faith, for Skanska’s
systematic failure to make any effort to preserve cell phone data
until at least seven months after the litigation hold was (technically)
in place. So it made two adverse inferences against Skanska and
ordered it to pay the claimants’ costs and attorneys’ fees for the
sanctions motion.
Skanska appeals both the district court’s final judgment and
its sanctions order, and we consolidated the appeals. Skanska also
moved to stay the dissolution of the district court’s injunction
pending appeal to prevent the lawsuits from proceeding against it
in state court, but we denied its request.
II.
We begin by addressing Skanska’s core argument—that the
district court violated the Limitation Act by failing to first
adjudicate the full merits of the claims before deciding whether its
liability could be limited. In particular, we consider Skanska’s
argument that it was entitled to have the economic loss claims
dismissed, which would have barred the claimants from bringing
4 The claimants’ spoliation motion was referred to a magistrate judge, who
issued the opinion sanctioning Skanska. But the district court denied Skanska’s
objections to the order and “wholly concur[red]” with the magistrate judge,
so we refer to the magistrate judge’s order as coming from the district court
for clarity.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 15 of 40
21-13850 Opinion of the Court 15
those claims in another forum. We review questions of law about
the scope of the Limitation Act de novo. See Dresdner Bank AG v.
M/V Olympia Voyager, 446 F.3d 1377, 1381 (11th Cir. 2006). And we
review the district court’s decision to dismiss the entire Limitation
Act proceeding for abuse of discretion. See Lewis, 531 U.S. at 454.
A.
The Limitation Act is a difficult statute. It was written in
1851 to address economic realities that are unrecognizable today. 5
Lewis, 531 U.S. at 446–47. And it was “badly drafted even by the
standards of the time.” Id. at 447 (quoting 2 T. Schoenbaum,
Admiralty and Maritime Law 299 (2d ed. 1994)). Of course, that does
not change this Court’s job—we apply the law as it exists, no matter
how poorly it may have aged. But, keenly aware of the
inscrutability of this statute, we offer relevant background about
the basic history and substance of the Act (and its implementing
rules), the petitioner’s ability to demand exoneration, the
5 Nearly fifty years ago, our predecessor Court referred to the Act as
“hopelessly anachronistic”—largely because it was a creative way to limit
liability “in an era before the corporation, with its limited shareholder liability,
had become the standard form of business organization and before the present
range of insurance protection was available.” Univ. of Tex. Med. Branch at
Galveston v. United States, 557 F.2d 438, 441, 454 (5th Cir. 1977). It also quoted
a leading 1950s admiralty treatise that said the Act “has been due for a general
overhaul for the past seventy-five years.” Id. at 441 & n.3 (quoting Grant
Gilmore & Charles L. Black, Jr., The Law of Admiralty 677 (1st ed. 1957)). If
Gilmore and Black were right, then we are at 141 years and counting.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 16 of 40
16 Opinion of the Court 21-13850
injunction against ongoing litigation, and the Act’s relationship
with the equally mysterious saving to suitors clause.
First, the history. In 1851, Congress thought the American
shipping industry was disadvantaged as compared to its foreign
competitors. See Lewis, 531 U.S. at 446–47. Unlike their
counterparts in England, American courts did not limit the
potential liability of vessel owners. See generally Joseph C. Sweeney,
Limitation of Shipowner Liability: Its American Roots and Some
Problems Particular to Collision, 32 J. Mar. L. & Com. 241, 243–52
(2001). Congress stepped in, enacting the Limitation Act “to
encourage ship-building and to induce capitalists to invest money
in this branch of industry.” Lewis, 531 U.S. at 446 (quoting Norwich
Co. v. Wright, 80 U.S. (13 Wall.) 104, 121 (1872)). To that end, the
Act limits a vessel owner’s liability for any “loss, damage, or injury
by collision . . . done, occasioned, or incurred, without the privity
or knowledge of the owner.” 46 U.S.C. § 30523(b). 6 And
“consistent with the statutory purpose to protect innocent
investors, ‘privity or knowledge’ generally refers to the vessel
owner’s personal participation in, or actual knowledge of, the
specific acts of negligence or conditions of unseaworthiness which
caused or contributed to the accident.” Suzuki of Orange Park, Inc.
6 While this appeal has been pending, Congress restructured and renumbered
the codified Limitation Act and limited the extent to which the Act applies to
certain small passenger vessels. James M. Inhofe National Defense
Authorization Act for Fiscal Year 2023, Pub. L. No. 117–263, § 11503, 136 Stat.
2395, 4130–31 (2022).
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 17 of 40
21-13850 Opinion of the Court 17
v. Shubert, 86 F.3d 1060, 1064 (11th Cir. 1996). 7 In other words, the
Act limits the liability of vessel owners who were not in some sense
responsible for the specific negligent acts or conditions of
unseaworthiness that caused the accident. Id.If a vessel owner is entitled to limitation, then its liability is
limited to the post-accident value of the vessel and its pending
freight. 46 U.S.C. § 30523(a); Tug Allie–B, Inc. v. United States, 273
F.3d 936, 939 (11th Cir. 2001). That means that the owner’s total
loss—its liability plus the loss from the accident itself—will be no
greater than the value of the vessel and its cargo. The Act also
recognizes that multiple would-be plaintiffs might need to share in
these limited funds, so it provides that—if the funds are insufficient
to pay all claims—injured parties will be “paid in proportion to
their respective losses.” 46 U.S.C. § 30525(1).
When courts first began to apply the Limitation Act, they
encountered a major problem: it had no procedures. In the
Supreme Court’s first case about the Act, the Court observed that
it was “reduced to the dilemma of inferring that the legislature has
7 Linguistically, the idea of a vessel owner having “privity or knowledge” of
specific “negligent acts” is a little awkward; ordinarily, one thinks of privity as
being with actors, not of acts. But the meaning of this clause can be clarified
by thinking about the archetypical case of limitation: a nineteenth century
shipowner whose ship was thousands of miles away, completely outside of his
control, when the crew unexpectedly acted negligently. In such cases, the
vessel owner might be in a formal sense in privity with the negligent actors,
but would not be thought to have had “privity or knowledge” of the crew’s
specific negligent acts.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 18 of 40
18 Opinion of the Court 21-13850
passed a law which is incapable of execution.” Norwich, 80 U.S. (13
Wall.) at 123. So the Court took matters into its own hands,
promulgating rules of admiralty to implement the Act. Lewis, 531
U.S. at 447 (citing Supplementary Rules of Practice in Admiralty, 80
U.S. (13 Wall.) xii–xiv (1872)). A vessel owner seeking limitation of
liability would deposit the value of his interest in the vessel and its
freight before the court. Id. Then, the district court would order
all claimants to appear. Id. If the vessel owner was entitled to
limitation, the court would distribute the limited fund among the
claimants. Id. at 448.
Congress eventually codified the basic bond posting
procedure for the Limitation Act, and the Supreme Court over time
has amended and restyled the limitation rules. See 46 U.S.C
§ 30529; Supplemental Rule F. But the same basic structure
remains, and the Act’s procedures are still primarily implemented
by court rule rather than statute.
One of those procedures is the injunction against existing
litigation. When a Limitation Act petition is filed, the district court
enjoins the prosecution of all pending litigation that overlaps with
the subject matter of that petition. 46 U.S.C. § 30529(c);
Supplemental Rule F(3). A pause in other litigation about the
incident is necessary to protect the limitation fund—after all, the
plaintiffs’ combined damages may well exceed the value of the
vessel and its cargo. But if one or more plaintiffs received final
judgments in other litigation that exceeded this value, then the
vessel owner’s right to limit its liability would be meaningless.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 19 of 40
21-13850 Opinion of the Court 19
Here, the injunction stopped lawsuits like the one the bagel shop
filed in Florida state court—but only while the limitation petitions
were pending. Skanska’s objection is that the district court
dissolved the injunction and allowed the lawsuits to proceed.
Finally, we discuss the complicated relationship between the
Limitation Act and the saving to suitors clause. See 28 U.S.C.
§ 1333. That clause falls not in the Limitation Act, but in the
general grant of admiralty jurisdiction to the federal district courts.
Id. It gives federal district courts “original jurisdiction, exclusive of
the courts of the States” of any “civil case of admiralty or maritime
jurisdiction.” Id. But it does so while “saving to suitors in all cases
all other remedies to which they are otherwise entitled.” Id. Both
this grant of federal jurisdiction and the clause’s corresponding
protection of suitors have existed in some form since the Judiciary
Act of 1789. Lewis, 531 U.S. at 443–44 (citing Judiciary Act of 1789,
ch. 20, § 9, 1 Stat. 73, 77). The Supreme Court has “theorized that
the saving to suitors clause was ‘inserted, probably, from abundant
caution,’” so that the grant of admiralty jurisdiction was not
wrongly understood to eliminate “‘the concurrent remedy which
had before existed’”—state tort lawsuits. Id. at 444 (quoting N.J.
Steam Navigation Co. v. Merchs.’ Bank of Bos., 47 U.S. (6 How.) 344,
390 (1848)). This clause, then, makes it clear that the existence of
federal admiralty jurisdiction (which offers no jury right) does not
generally keep plaintiffs from seeking relief in other forums—
perhaps forums that do offer a jury trial. See id. at 445–46, 454–55;
see also, e.g., Suzuki, 86 F.3d at 1063.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 20 of 40
20 Opinion of the Court 21-13850
Make no mistake—“tension exists between the saving to
suitors clause and the Limitation Act.” Lewis, 531 U.S. at 448. The
former protects the right to a jury trial. Id. at 445–46, 454–55. The
latter creates a proceeding with no jury trial and stays all litigation
in any other forum—including where a jury trial would be
available. Id. at 448. In light of these somewhat contradictory
provisions, the district court is charged with safeguarding a vessel
owner’s right to have the question of limitation adjudicated in
federal court while simultaneously ensuring that claimants retain
their choice of forum under the saving to suitors clause.
Both this Court and the Supreme Court have repeatedly
grappled with this interplay. See, e.g., Offshore of the Palm Beaches,
Inc. v. Lynch, 741 F.3d 1251, 1257–59 (11th Cir. 2014); Lewis, 531 U.S.
at 448–56; Suzuki, 86 F.3d at 1063–64; Beiswenger, 86 F.3d at 1036–
40; Lake Tankers Corp. v. Henn, 354 U.S. 147, 150–54 (1957); Langnes
v. Green, 282 U.S. 531, 541–44 (1931). At least a few clear principles
have emerged. To start, a vessel owner has an “absolute right to
claim the Act’s liability cap, and to reserve the adjudication of that
right in the federal forum.” Beiswenger, 86 F.3d at 1037 (quotation
omitted). This guarantee means that a primary duty of the
limitation court is to ensure that outside lawsuits do not undermine
its exclusive authority to decide limitation. And if that right to
limitation cannot be adequately protected with other lawsuits
proceeding elsewhere, the limitation court may adjudicate the
merits of the entire controversy—which means deciding both
liability and limitation. Lewis, 531 U.S. at 454. But if the right to
litigate and enforce limitation in federal court is protected, the
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 21 of 40
21-13850 Opinion of the Court 21
saving to suitors clause counsels in favor of giving plaintiffs their
choice of forum. Id. at 454–55. In that case, the district court has
“discretion to stay or dismiss Limitation Act proceedings to allow a
suitor to pursue his claims in state court.” Id. at 454.
B.
With this background, we can address Skanska’s argument
that the Limitation Act requires a federal court to decide whether
it owed a duty to each and every claimant—or, to put it another
way, Skanska’s argument that it had a right to be exonerated in
federal court.
Skanska primarily leans on a two-step procedure that we
have said is “typical” in a Limitation Act case: “First, the court must
determine what acts of negligence or conditions of
unseaworthiness caused the accident. Second, the court must
determine whether the shipowner had knowledge or privity of
those same acts of negligence or conditions of unseaworthiness.”
Beiswenger, 86 F.3d at 1036 (quoting Hercules Carriers, Inc. v. Florida,
768 F.2d 1558, 1563–64 (11th Cir. 1985)); see also, e.g., Farrell Lines,
Inc. v. Jones, 530 F.2d 7, 10 (5th Cir. 1976); Hartford Accident & Indem.
Co. v. S. Pac. Co., 273 U.S. 207, 214–15 (1927); Providence & N.Y. S.S.
Co. v. Hill Mfg. Co., 109 U.S. 578, 595 (1883). 8 Skanska reads these
cases as creating a mandatory order of decision for nearly all
Limitation Act cases. And, in Skanska’s telling, that mandatory first
8 All published cases of the former Fifth Circuit decided before the close of
business on September 30, 1981, are precedent in this Circuit. See Bonner v.
City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 22 of 40
22 Opinion of the Court 21-13850
step includes a decision on every element of negligence—duty,
breach, injury, and actual and proximate cause—for every claimant.
So, Skanska claims, the district court violated this order of decision
by reaching the question of privity and knowledge before fully
adjudicating its liability to each claimant.
This Court has already rejected Skanska’s rigid reliance on
the “typical” Limitation Act procedure. We have held that if it is
“impossible under any set of circumstances for the vessel owner to
demonstrate the absence of privity or knowledge,” then “the
admiralty court may decide the privity or knowledge issue without
first deciding the liability issue.” Suzuki, 86 F.3d at 1064. Although
Suzuki articulated a summary judgment standard, the same basic
principle logically applies at every stage of the proceedings,
including after a trial. 9 Once it is apparent that the vessel owner
cannot establish a lack of privity or knowledge, then limitation is
not at issue. And if limitation is not at issue, then “the basis for
granting exoneration vanishes.” Id. (quoting Fecht v. Makowski, 406
F.2d 721, 723 (5th Cir. 1969)). So whenever the court finds that the
vessel owner cannot establish a lack of privity or knowledge, it is
appropriate to dismiss the petition to protect the claimants’ rights
under the saving to suitors clause—even if that means forgoing (in
part or in entirety) a decision on the vessel owner’s liability.
9 The district court declined to apply Suzuki at summary judgment, holding
that it was still possible at that point in the litigation for Skanska to show a lack
of privity or knowledge. But clearly, after trial, the court determined that
Skanska could not meet its burden to show a lack of privity or knowledge.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 23 of 40
21-13850 Opinion of the Court 23
This is consistent with decades of Limitation Act law about
claimants’ saving to suitors clause rights. The Act does “not create
a freestanding right to exoneration from liability in circumstances
where limitation of liability is not at issue.” Lewis, 531 U.S. at 453.
It is about limitation of liability, not immunity from liability or the
exclusivity of the federal forum. Lake Tankers, 354 U.S. at 152–53.
Courts should thus “give effect to both the Limitation Act and the
saving to suitors clause whenever possible” and “damage claimants
must be allowed to litigate the vessel owner’s negligence in state
court, ‘where it is apparent that limitation cannot be granted.’”
Beiswenger, 86 F.3d at 1037; Suzuki, 86 F.3d at 1063 (quoting Fecht,
406 F.2d at 722). 10
Here, Skanska’s “perfunctory” claim that it lacked privity or
knowledge straightforwardly failed (indeed, Skanska did not even
appeal the district court’s finding that the company had privity or
knowledge). After all, the decision not to move the barges to safety
was made by Skanska executives, and when a corporation owns a
vessel, “the privity and knowledge of corporate managers vested
with discretionary authority is attributed to the corporation.”
Suzuki, 86 F.3d at 1065 (quotation omitted). Once it was clear that
Skanska had privity or knowledge of any negligent acts that caused
10 Skanska claims that Beiswenger identifies the only instances in which district
courts may depart from the two-step Limitation Act procedure. But
Beiswenger did not attempt to identify every scenario where procedural
flexibility is appropriate. To the contrary, we read Beiswenger as blessing
procedural creativity by district courts in order to give effect to both the clause
and the Limitation Act “whenever possible.” See 86 F.3d at 1037.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 24 of 40
24 Opinion of the Court 21-13850
the barges to damage property, it was equally clear that the
company had no right to limit its liability. So there was no
continued need for a limitation proceeding. The district court thus
did not abuse its discretion by dismissing the consolidated
proceedings.11
While we can resolve this case on precedent alone, the text
of both the Limitation Act and its rules point in the same direction.
The operative provisions of the Limitation Act do not mention
exoneration. See 46 U.S.C. §§ 30501–30530. The only source of
positive law that even plausibly supports Skanska’s argument is
Rule F’s statement that a vessel owner “may demand exoneration
from as well as limitation of liability.” Supplemental Rule F(2). But
this argument misses the mark. The rule’s history clarifies its
narrow scope. The limitation rules’ exoneration language was
added to clarify that, unlike under the “very onerous” English rules,
an American vessel owner did not need to concede liability in order
11 The parties dispute, for what it is worth, whether the district court even
departed from the two-step procedure. Although the court did not determine
every element of negligence for every claimant, it did decide that Skanska’s
negligence in not moving the barges to Butcherpen Cove caused the damage
to the bridge and other property struck by the barges. The claimants argue
that this finding was enough to show what “acts of negligence caused the
accident,” satisfying the first step of the two-step procedure, while Skanska
argues that nothing short of a full adjudication of every element of negligence
for every individual claimant will do. But we think that this debate misses the
point; it does not matter whether the district court followed the ordinary two-
step procedure. All that matters is that Skanska’s right to have limitation
adjudicated in federal court was protected—and it was.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 25 of 40
21-13850 Opinion of the Court 25
to seek limitation of liability. Lewis, 531 U.S. at 447–48 (quotation
omitted). In light of this history, we see no reason to think that this
language does anything more than preserve the right to contest
liability while also seeking limitation; it certainly does not “create
a freestanding right to exoneration from liability in circumstances
where limitation of liability is not at issue.” Id. at 453.
Even if there were evidence that Rule F somehow expanded
vessel owners’ rights to a federal forum, we would not be able to
read it that way. Judicially promulgated rules cannot “abridge,
enlarge or modify any substantive right.” 28 U.S.C. § 2072; see also
In re Tidewater Inc., 249 F.3d 342, 347 (5th Cir. 2001) (rejecting an
aggressive reading of Rule F on this ground). Any tension between
the judicially adopted rules and the congressionally enacted saving
to suitors clause must be resolved in the clause’s favor. No matter
how Skanska frames its argument, it simply has no right to a
federal forum beyond the question of limitation.12
12 None of this is to say that the two-step approach articulated in many
Limitation Act cases is obsolete. After all, it is an intuitive way to approach
the problem. “Without negligence there can be no privity or knowledge,”
because the vessel owner’s privity or knowledge must be of a particular
negligent act. Farrell Lines Inc., 530 F.2d at 10 n.1 (quoting 3 Benedict on
Admiralty, § 41, p. 5-5). So it makes sense that courts often decide negligence
(either in part or in full) before deciding privity or knowledge. At the same
time, courts should not overread our discussions of the “typical” Limitation
Act case, including the occasional use of the word “must” when discussing the
steps of that procedure. “The language of an opinion is not always to be
parsed as though we were dealing with language of a statute.” Nat’l Pork
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 26 of 40
26 Opinion of the Court 21-13850
As a last resort, Skanska points to dicta saying that the Act
and its rules protect vessel owners from “being harassed by
litigation in other tribunals” which could lead to the “subversion of
the whole object and scheme of the statute.” Providence & N.Y. S.S.
Co., 109 U.S. at 594–95; see also, e.g., Hartford, 273 U.S. at 215–16. But
the Court has long-since abandoned this dicta. For example, in
Lake Tankers, “the Court explicitly rejected the argument that the
Limitation Act protects the vessel owner against a multiplicity of
suits.” Beiswenger, 86 F.3d at 1039 (citing Lake Tankers, 354 U.S. at
153–54). If limitation is not implicated, the Court noted, there is
no reason why a vessel owner “should be treated any more
favorably than an airline, bus, or railroad company.” Lake Tankers,
354 U.S. at 153. To be sure, if Congress wishes to protect vessel
owners from a multiplicity of suits, it can always expand the
Limitation Act and contract the saving to suitors clause. But in the
meantime, courts and litigants alike must respect the relationship
between these laws.
Neither Skanska’s appeals to procedure nor its gestures to
policy sway our conclusion that the district court did not abuse its
discretion in dismissing Skanska’s limitation petitions without fully
addressing the question of Skanska’s liability. Yes, Skanska had the
right to have the question of limitation adjudicated in federal court.
And the question of limitation was adjudicated in federal court. But
Producers Council v. Ross, 143 S. Ct. 1142, 1155 (2023) (alteration adopted and
quotation omitted).
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 27 of 40
21-13850 Opinion of the Court 27
that is as far as it goes. Once the district court decided that Skanska
was not entitled to limitation, it correctly dismissed the case so that
the claimants could pursue remedies in whichever forums that
they chose. 13
III.
Skanska also challenges two evidentiary rulings: the order
limiting its discovery of the Navy’s preparations during Hurricane
Sally and the court’s mid-testimony dismissal of Captain Towne at
trial. 14 “We review a district court’s evidentiary rulings for abuse
of discretion.” Great Lakes Ins. SE v. Wave Cruiser LLC, 36 F.4th 1346,
13 Skanska fleetingly briefs another procedural argument, saying that the
district court violated Federal Rule of Civil Procedure 12(i) by failing to rule
on its 12(b)(6) motion. If Skanska wished to argue that Rule 12(i) required the
district court to address the motion to dismiss before the first phase of the
bifurcated trial, then it needed to raise that issue before the first phase of the
bifurcated trial. It did not do so, instead raising the issue for the first time in
post-judgment motions. We review issues not timely raised before the district
court only for plain error, and rarely in civil cases. See SEC v. Diversified Corp.
Consulting Grp., 378 F.3d 1219, 1227 & n.14 (11th Cir. 2004). “Under the civil
plain error standard, we will consider an issue not raised in the district court if
it involves a pure question of law, and if refusal to consider it would result in
a miscarriage of justice.” Burch v. P.J. Cheese, Inc., 861 F.3d 1338, 1352 (11th
Cir. 2017) (quotation omitted). Refusing to consider this argument does not
result in a miscarriage of justice, and we therefore do not consider it.
14 Skanska says that the order denying discovery of the Navy led them to
believe that the court would not allow discovery of other parties. It now
argues that, because this constructively denied additional discovery, the entire
discovery process was defective. But it goes without saying that Skanska
cannot challenge a hypothetical ruling of the district court. We therefore
review only the two specific evidentiary rulings that Skanska appeals.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 28 of 40
28 Opinion of the Court 21-13850
1353 (11th Cir. 2022). And “even a clearly erroneous evidentiary
ruling will be affirmed if harmless.” Id. (quotation omitted). An
error is harmless unless “it affects the substantial rights of the
parties” such that the reviewing court cannot confidently say that
“the judgment was not substantially swayed by the error.” Furcron
v. Mail Ctrs. Plus, LLC, 843 F.3d 1295, 1304 (11th Cir. 2016) (quotation
omitted).
Starting with the Navy, under Rule 26(b), parties may only
obtain discovery that is both “relevant” and “proportional to the
needs of the case.” Fed. R. Civ. P. 26(b)(1). The magistrate judge’s
discovery order limited discovery relating to the Navy because it
was irrelevant and because it was not proportional. On appeal,
Skanska only argues that its proposed discovery was relevant—it
never explains why the burdens were proportional to the benefits.
Skanska has therefore forfeited any challenge to proportionality, so
we affirm. See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681
(11th Cir. 2014). 15
As for Captain Towne, the district court heard nearly fifteen
minutes of his testimony while repeatedly urging Skanska’s
counsel to get to the point. It then considered the captain’s
testimony via a one-sided proffer, and it explicitly stated that the
full testimony would not have affected its decision. Any exclusion
15 Because we affirm the limitation of the discovery as non-proportional, we
do not address whether the information Skanska sought was relevant.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 29 of 40
21-13850 Opinion of the Court 29
of relevant evidence that the captain might have offered was
harmless.
IV.
Moving to the factual basis for the district court’s final
judgment, Skanska challenges the finding that it did not exercise
reasonable care.16 For maritime tort cases, “we rely on general
principles of negligence law” and have consulted “in particular the
Restatement (Second) of Torts” to discern these general principles.
Tesoriero v. Carnival Corp., 965 F.3d 1170, 1178 (11th Cir. 2020)
(quotations omitted). Whether the defendant’s conduct violated
the standard of care is a question of fact. See Restatement (Second)
of Torts § 328C cmt. b (Am. L. Inst. 1965). Because the district
court sat in admiralty without a jury, we review its findings of fact
for clear error. Dresdner Bank, 446 F.3d at 1380. A factual finding is
clearly erroneous if “the entirety of the evidence leads the
reviewing court to a definite and firm conviction that a mistake has
been committed.” Id.The core of the district court’s analysis was simple: Under
the Louisiana rule, Skanska bore the burden of disproving a
presumption that it failed to exercise reasonable care. Throughout
the weekend, the National Hurricane Center’s weather forecasts
showed a 9–16% chance of 58 mile per hour or greater winds
hitting Pensacola Bay. According to Skanska’s own hurricane
16 We do not read the district court as having decided whether Skanska
violated any duty to any particular claimant. So Skanska is still free to argue
in state court that it did not owe a duty to the economic loss claimants.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 30 of 40
30 Opinion of the Court 21-13850
preparedness plan, these wind speeds warranted moving the barges
to Butcherpen Cove. Skanska’s inability to get its barges to
Butcherpen Cove before high winds arrived was one of two things:
a deliberate choice or the consequence of a failure to act more
quickly. Either way, the court explained, Skanska left its barges in
a less safe location than Butcherpen Cove—and its gamble
backfired with disastrous consequences. Given the substantial
damage that the barges could do to others if the wind unmoored
them, the court found that a reasonable company facing a 9–16%
chance of these winds would have moved the barges. Thus, the
court held, Skanska acted unreasonably by leaving the barges by
the bridge.
This conclusion was not clearly erroneous. Skanska does
not attempt to show that the district court’s finding that there was
a 9–16% chance of high winds hitting the Bay was incorrect. Nor
does it present us with evidence that a reasonable company would
have left its barges by the bridge notwithstanding those odds of
high winds. Indeed, it fails to engage with the factual findings of
the lower court, instead repeating its arguments below about how
its preferred weather reports did not show that a hurricane was
more likely than not to hit Pensacola Bay until Monday morning
(without ever suggesting exactly how likely the storm was to hit
the Bay) and emphasizing the difficulty of moving the barges over
the weekend. This argument is non-responsive to the district
court’s finding that reasonable care required Skanska to take
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 31 of 40
21-13850 Opinion of the Court 31
precautions even with a 9–16% chance of high winds in the Bay.
Skanska has failed to show reversible error.17
V.
Finally, Skanska challenges spoliation sanctions it received
under Rule 37(e)(2) for the destruction of the data from five of its
custodians’ cell phones. We review that decision for abuse of
discretion. Tesoriero, 965 F.3d at 1177. In the spoliation context,
this Court has often articulated our abuse of discretion review as
asking whether the district court “has made a clear error of
judgment, or has applied the wrong legal standard.” Mendez v. Wal-
Mart Stores E., LP, 67 F.4th 1354, 1361 (11th Cir. 2023) (quotation
omitted). But we see no difference between this formulation of the
abuse of discretion standard and our articulations of that standard
in other contexts. See, e.g., Callahan v. United Network for Organ
Sharing, 17 F.4th 1356, 1360 (11th Cir. 2021) (“A district court abuses
its discretion when it applies an incorrect legal standard, follows
improper procedures in making the determination, makes findings
of fact that are clearly erroneous, or commits a clear error of
judgment.” (quotations omitted)). Accordingly, as is typical for this
Court’s abuse of discretion review, we review the district court’s
17 Relatedly, Skanska challenges the district court’s factual finding that its
hurricane preparedness plan was triggered at all. But we agree with the district
court that the core inquiry is “whether the decision to demobilize the barges
near the bridge was reasonable,” making the question of whether Skanska’s
plan was triggered largely beside the point. In re Skanska USA Civil Se. Inc., 577
F. Supp. 3d at 1317. In any event, the court’s interpretation of the plan was
not clear error.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 32 of 40
32 Opinion of the Court 21-13850
legal conclusions de novo and its subsidiary factual findings for
clear error. Common Cause Ga. v. Georgia, 17 F.4th 102, 107 (11th Cir.
2021). That means that we review the district court’s conclusion
that Skanska acted in bad faith—a factual finding—for clear error.
Cf. Mar. Mgmt., Inc. v. United States, 242 F.3d 1326, 1331 (11th Cir.
2001).
A.
Spoliation sanctions are often imposed under the broad
discretion of the district court, which has inherent power to
“manage its own affairs and to achieve the orderly and expeditious
disposition of cases.” Flury v. Daimler Chrysler Corp., 427 F.3d 939,
944 (11th Cir. 2005). But sometimes other sources of federal law
provide more specific authority.
Rule 37(e) from the Federal Rules of Civil Procedure is one
such example. It was adopted in 2006 and modified in 2015 in
response to the explosion of electronic discovery. 2015 Committee
Notes on Rule 37(e). The Rule seeks to balance the centrality of
electronic information to modern litigation with the almost always
substantial (and sometimes unnecessary) costs of preserving
electronic data. Id.By its text, Rule 37(e) creates a two-tiered sanctions
regime—with lesser sanctions under Rule 37(e)(1) and more severe
sanctions under Rule 37(e)(2). Both parts of the rule share two
preconditions: (1) “electronically stored information that should
have been preserved in the anticipation or conduct of litigation”
was “lost because a party failed to take reasonable steps to preserve
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 33 of 40
21-13850 Opinion of the Court 33
it” and (2) that information “cannot be restored or replaced
through additional discovery.” The requirements diverge after that.
Rule 37(e)(1) sanctions are centered on the effect of a violation; they
apply only where lost electronic evidence causes “prejudice to
another party,” which then justifies sanctions “no greater than
necessary to cure the prejudice.” Rule 37(e)(2) sanctions, on the
other hand, look more to the cause of the violation. They require
a finding that “the party acted with the intent to deprive another
party of the information’s use in the litigation.” If so, the court is
justified in imposing more severe sanctions: adverse jury
instructions, and even dismissal or default judgment. Fed. R. Civ.
P. 37(e)(2). What’s more, Rule 37(e)(2) sanctions do not require
“any further finding of prejudice.” 2015 Committee Notes on Rule
37(e)(2). “This is because the finding of intent required by the
subdivision can support not only an inference that the lost
information was unfavorable to the party that intentionally
destroyed it, but also an inference that the opposing party was
prejudiced by the loss of information that would have favored its
position.” Id.This is the first time we have had reason to thoroughly
consider Rule 37(e)(2). In previous cases, we have suggested or
assumed, but never held in a published opinion, that the Rule’s
“intent to deprive” standard is the same as the “bad faith” standard
our Court has used in other spoliation contexts. See ML Healthcare
Servs., LLC v. Publix Super Mkts., Inc., 881 F.3d 1293, 1308 (11th Cir.
2018); Ala. Aircraft Indus., Inc. v. Boeing Co., No. 20-11141, 2022 WL
433457, at *15 (11th Cir. Feb. 14, 2022) (unpublished). Here, the
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 34 of 40
34 Opinion of the Court 21-13850
district court and both parties have assumed that “intent to
deprive” and “bad faith” are the same.
We now explicitly agree: the “intent to deprive another party
of the information’s use in the litigation” is the equivalent of bad
faith in other spoliation contexts. Fed. R. Civ. P. 37(e)(2). In this
Circuit’s spoliation precedents, bad faith “generally means
destruction [of evidence] for the purpose of hiding adverse evidence.”
Tesoriero, 965 F.3d at 1184 (emphasis added) (quotation omitted).
This standard is more than mere negligence and aligns with both
the text and advisory committee notes for Rule 37(e)(2). See id. at
1184–86; Rule 37(e)(2); 2015 Committee Notes on Rule 37(e)(2).
The phrase “intent to deprive” naturally requires that the spoliator
has a “purpose of hiding adverse evidence” from other parties.
And the advisory committee notes explain that “intent to deprive”
is more than negligence or even gross negligence. 2015 Committee
Notes on Rule 37(e)(2). So rather than adopt a new law of
spoliation from scratch for Rule 37(e)(2) sanctions, we will borrow
our identical and well-trodden standard of “bad faith.” See also
EEOC v. Jetstream Ground Servs., Inc., 878 F.3d 960, 965–66 (10th Cir.
2017) (conducting a similar analysis). 18
18 We reject, however, the applicability of the so-called “Flury factors” to a Rule
37(e) analysis. See Mendez, 67 F.4th at 1362 n.9 (recognizing that this question
was unresolved). Flury was decided before Rule 37(e) was written, and that
opinion borrowed from Georgia spoliation law because of a lack of federal
Circuit precedent on the precise issue in that case and because the parties and
the district court had relied upon Georgia law. See Flury, 427 F.3d at 944–45.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 35 of 40
21-13850 Opinion of the Court 35
B.
We now review the district court’s imposition of Rule
37(e)(2) sanctions. It is not entirely clear whether Skanska
challenges Rule 37(e)’s first requirement, that information that
“should have been preserved in the anticipation or conduct of
litigation” was “lost because a party failed to take reasonable steps
to preserve it.” Skanska concedes that it was “probably negligent.”
But it also seems to suggest in its briefs that its preservation failures
could be excused because it may not have reasonably anticipated
litigation.
The facts reveal that argument’s folly. To start, within days
of Hurricane Sally, Skanska’s in-house counsel had orally informed
employees of an evidence retention policy. And about a month
later, counsel sent a formal legal hold letter about the Pensacola
Bay Bridge incident. Litigation started just a few weeks after that.
But even with an active litigation hold—and then active litigation—
Skanska did not back up its employees’ cell phones. Nor did it
suspend its ordinary cell phone data destruction policies—not even
But there is no reason to believe that Rule 37(e) borrows from Georgia
spoliation law. And one of the Flury factors, prejudice to the defendant, is
specifically disclaimed as a consideration for Rule 37(e)(2) sanctions by the
Advisory Committee. See Flury, 427 F.3d at 945; 2015 Committee Notes on
Rule 37(e)(2). So while we hold that the fourth Flury factor—bad faith—is the
same as “intent to deprive,” courts should not look to the five Flury factors (or,
for that matter, factors from other tests in different contexts) when
interpreting Rule 37(e). The right things to consider are the rule’s text, the
advisory committee notes, and our spoliation caselaw analyzing bad faith.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 36 of 40
36 Opinion of the Court 21-13850
for known electronic data custodians. It was, as we see it, entirely
predictable that cell phone data would be needed for litigation, and
that some of that data would be lost.
Next, Skanska more directly challenges the applicability of
Rule 37(e)’s second condition that the information could not have
been “restored or replaced through additional discovery.” It argues
that, because discovery of other Skanska employees included some
of the text messages and because the claimants were able to depose
the five custodians whose data was destroyed, nothing was actually
lost.
The district court was not moved; nor are we. While some
of the lost text messages were discoverable through other Skanska
employees’ text messages, others were not. And it should go
without saying that deposing workers well after an event is not a
perfect substitute for reviewing their contemporaneous text
messages.
Finally, Skanska challenges the district court’s finding that it
acted in bad faith when it failed to back up the custodians’ text
messages and suspend its destruction policies. The court found a
“lack of any cogent explanation” for Skanska’s complete failure to
make any effort to preserve the destroyed cell phones. In re Skanska
USA Civil Se. Inc., 340 F.R.D. 180, 189 (N.D. Fla. 2021). It focused in
particular on how the company “took no action” to educate its
custodians and administrators about the litigation hold and “made
no effort” to collect its custodians’ cell phone data until at least
seven months after the litigation hold was in place. Id. at 188–89.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 37 of 40
21-13850 Opinion of the Court 37
And it highlighted other egregious discovery behavior by Skanska,
like its representation to the court that “no documents relating to
Skanska’s storm preparations or efforts has [sic] been deleted or
destroyed”—a representation made before Skanska had even
bothered to check if its custodians’ cell phone data was still
available. Id. at 189 (alteration adopted and quotation omitted). In
the district court’s view, bad faith was the only thing that explained
the company’s actions.
If our review were de novo, this would be a close question.
On the one hand, we find Skanska’s utter failure to implement even
the most basic data-protection safeguards egregious—so egregious
that an inference of bad faith is easy to make. On the other, this is
not a case with direct evidence of bad faith; it is also plausible from
this record that Skanska was “just” grossly negligent.
But we review the district court’s finding of bad faith for
clear error. And an inference of bad faith here was not clear error.
Skanska can provide no reasonable explanation for its conduct
other than to plead negligence. True enough, much of the
evidence was destroyed through “routine” document destruction
policies. But a hands-off implementation of an ordinary corporate
destruction policy is not a silver bullet. We have already explained
that we would be “highly skeptical” of a claim that evidence was
unintentionally destroyed “pursuant to a routine policy” after a
request that the evidence be preserved. Tesoriero, 965 F.3d at 1186.
We will not second guess the district court’s skepticism in those
very circumstances.
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 38 of 40
38 Opinion of the Court 21-13850
Our conclusion is further confirmed by the advisory
committee notes to Rule 37(e). The reasonableness of evidence
preservation efforts depends in part on “the party’s sophistication
with regard to litigation in evaluating preservation efforts.” 2015
Committee Notes on Rule 37(e). Skanska is a sophisticated
entity—a multinational company tasked with completing a
construction contract worth nearly $400 million. Skanska USA
even boasts on its website that it is “one of the largest, most
financially sound construction and development companies in the
U.S.” Even so, Skanska did not bother to take the most
fundamental of precautions—starting with backing up the
custodians’ cell phones and suspending its policy of wiping those
phones. And the company is not being held liable for a failure of
imagination—Skanska had an active litigation hold, but took no
steps to implement it.
Finally, Skanska argues that—as a per se rule—a finding of
bad faith premised on circumstantial evidence requires an
“affirmative act” by the spoliating party. 19 But that argument flouts
both the text of Rule 37 and our bad-faith caselaw. As we have
explained, the rule provides for sanctions when “electronically
stored information that should have been preserved in the
anticipation or conduct of litigation is lost because a party failed to
19 In Skanska’s defense, the district court framed its inquiry into “bad faith” by
applying a test that asked whether Skanska had committed an “affirmative
act.” In re Skanska, 340 F.R.D. at 188. But we may affirm the court’s ultimate
finding of bad faith on any ground supported by the record. In re Feshbach, 974
F.3d 1320, 1328 (11th Cir. 2020).
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 39 of 40
21-13850 Opinion of the Court 39
take reasonable steps to preserve it.” Fed. R. Civ. P. 37(e) (emphasis
added). Failure to act can thus—by definition—be a violation of
Rule 37.
Our caselaw on spoliation also shows that failures to act can
be just as harmful as affirmative acts of destruction. In Flury, we
affirmed sanctions after the spoliating party “failed to preserve” a
vehicle that the other party wished to inspect, “inexplicably
ignored” requests for the location of the vehicle, and “allowed the
vehicle to be sold for salvage without notification to defendant of
its planned removal.” 427 F.3d at 943, 947, 945. These are failures
to act—not affirmative actions. Even so, it “is no surprise that we
found bad faith on those facts.” Tesoriero, 965 F.3d at 1185.
So too here. Skanska’s passivity does not change the basic
fact that the evidence was destroyed. Given that other
circumstances pointed to a reasonable inference of bad faith by
Skanska, it is irrelevant whether an act or a failure to act directly
caused the spoliation. The court’s finding of bad faith thus was not
clear error, and its imposition of Rule 37(e)(2) sanctions was not an
abuse of discretion.
* * *
Under the Limitation Act, Skanska had a right to have the
issue of limitation litigated by a federal court. That’s exactly what
Skanska got. The claimants now have the right to determine where
any subsequent litigation about the damage caused by Skanska’s
barges during Hurricane Sally will occur. And Skanska has failed
USCA11 Case: 21-13850 Document: 88-1 Date Filed: 08/02/2023 Page: 40 of 40
40 Opinion of the Court 21-13850
to show any other reason why the district court’s dismissal of its
petitions should be reversed.
We AFFIRM both the district court’s dismissal of the
Limitation Act proceedings and its sanctions order.