This section contains the nature of the case and procedural background.

P bid on a contract with the city of Chicago to replace wooden pilings clustered around the piers of several bridges spanning the Chicago River, a navigable waterway within the meaning of The Daniel Ball. The pilings keep ships from bumping into the piers and so protect both. P carried out the work with two barges towed by a tug. One barge carried pilings; the other carried a crane that pulled out old pilings and helped drive in new ones. P replaced the pilings around the piers projecting into the river and supporting the Kinzie Street Bridge. After towing the crane carrying barge into position near one of the piers, P secured the barge to the river bed with spuds, or long metal legs that project down from the barge and anchor it. The workers then used the crane on the barge to pull up old pilings, stow them on the other barge, and drive new pilings into the riverbed around the piers. Seven months later, an eddy formed in the river near the bridge as the collapsing walls or ceiling of a freight tunnel running under the river opened the tunnel to river water, which flowed through to flood buildings in the Loop. Many of the victims brought actions in state court against P and the city of Chicago, claiming that in the course of replacing the pilings, P had negligently weakened the tunnel structure, which Chicago (its owner) had not properly maintained. P brought this lawsuit in the United States District Court, invoking federal admiralty jurisdiction. P seeks the protection of the Limitation of Vessel Owner's Liability Act (Limitation Act) that would, in effect, permit the admiralty court to decide whether P committed a tort and, if so, to limit P's liability to the value of the vessels (the tug and two barges) involved if the tort was committed 'without the privity or knowledge' of the vessels' owner. Ds, the city, and Grubart, Inc., one of the state-court plaintiffs, filed a motion to dismiss this suit for lack of admiralty jurisdiction. The District Court granted the motion, and the Seventh Circuit reversed. Ds appealed.

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