The opinion of the court was delivered by: Korman, Chief Judge
On the afternoon of October 15, 2003, the Staten Island Ferry Andrew J. Barberi (the "Barberi" or "Ferry") crashed into a maintenance pier near the Staten Island Ferry Terminal. The collision came without warning. The Ferry had been making its regularly scheduled trip from Whitehall Terminal, Manhattan, to St. George, Staten Island. Until only a few moments before the crash, nothing appeared to be out of the ordinary. The assistant captain, Richard Smith, who was at the controls in the pilothouse, was an experienced, licensed captain, and the crew had no reservations about his abilities. The weather, though very windy, was otherwise not a matter of concern. There were no signs of mechanical failure or impairment. And despite the fact that the Barberi had been off course before the accident occurred and was proceeding at full speed toward the Staten Island Ferry Terminal, the only evidence in the record that any crew member noticed that something was amiss is the affidavit of the deckhand, Joseph Selch, which stated:
I was untying a door in preparation for docking, I looked up and saw that the ferry was proceeding past the slips and on what appeared to be a collision course with a nearby pier. I took immediate action to guide passengers away from the Staten Island end of the ferry. Moments later the ferry hit the pier.
When the Ferry struck the maintenance pier, it was traveling at its full speed of 14 to 16 knots, or 16 to 18 miles per hour. The speed, however, does not convey the force of the impact. The Barberi weighs more than 3,000 tons, and its momentum was enough to destroy roughly 1,500 square feet of the maintenance pier and tear a 210-foot-long gash in the main deck of the boat. The passengers who happened to choose the port, or Brooklyn-facing, side of the vessel generally escaped injury. Those who awaited arrival on the starboard, or New Jersey-facing, side found themselves in grave danger. The impact with the pier shattered seats, tore metal, destroyed support stanchions, and collapsed a stairway and a bulkhead. The collision had an even more devastating effect on the passengers on that side; it instantly killed ten passengers and left scores of others with injuries that varied from minor to severe. One of the seriously injured passengers later died from injuries sustained in the crash.
This case was tried before me on the issue of liability. The trial without a jury was based on a record stipulated to by the City of New York and the plaintiffs who seek redress for their injury and loss. The record provides a reasonably clear picture of the events leading up to the collision. As the Barberi left Whitehall Terminal, Assistant Captain Smith was accompanied in the pilothouse by Selch, the deckhand who was the assigned lookout on the passage. Selch Aff. ¶ 4. Somewhere near the midpoint of the voyage, Senior Mate Robert Rush joined Smith and Selch in the pilothouse and took a seat on a low-slung bench near the rear of the pilothouse known as the "settee." Rush Aff. ¶¶ 8-9. Rush, however, had no assigned responsibilities in the pilothouse with respect to piloting the boat or serving as a lookout. Instead, he "had planned to ride out the balance of the 15:00 [minute] run in the Staten Island pilot house where [he] could organize [his] thoughts regarding  various work orders and then proceed to the Saloon deck for docking." Id. ¶ 8. Moreover, the height and position of the settee made it impossible for him to monitor the Ferry's position or to take notice of the circumstances leading up to the impending disaster.
As the Barberi passed the Kill Van Kull Buoy ("KV Buoy"), which is a little more than half of a mile from the St. George Terminal, Selch asked for and received Smith's permission to leave the pilothouse so that he could prepare the exit doors for docking. Selch Aff. ¶ 6. As Selch left the pilothouse, Smith stood up, as was his custom, apparently to better guide the Barberi into the ferry slip at the St. George Terminal. Id. ¶ 7. At this point things began to go wrong. Smith remembers nothing from the time Selch left the pilothouse until the moment when the Barberi collided with the maintenance dock. Rush, who was on the settee in the pilothouse throughout this period, noticed nothing unusual. Rush Aff. ¶¶ 11-13. He recalls that Smith stood at the controls, but did not notice anything amiss. Id. ¶¶ 11-12. In fact, however, Smith had lost conscious or situational awareness due to fatigue, a condition Dr. David Dinges, a sleep expert, described as follows:
You lose your awareness of the time where you're at and time and space and what you're supposed to do next. You don't completely lose it in the sense that you don't know that you're on the water in a vessel or in a car or in a truck but you lose the sense of what you're supposed to do next in what timely order. And that is common as a result of fatigue.
Smith Fatico Hr'g Tr. 40:20-41:1, June 14, 2005. Smith remained in the state described by Dr. Dinges for approximately two minutes until the Barberi collided with the maintenance pier.
While Smith's condition posed a serious hazard, it would have presented no threat to the safety of the Barberi's passengers had the boat's captain, Michael Gansas, been present with Smith in the pilothouse, as is required by the City's internal regulations. In fact, because it foresaw the possibility of pilot incapacitation, the City's rules required that the captain and the assistant captain both be in the pilothouse at all times while the Ferry was underway. This rule could have easily been complied with on the Barberi, because there were two pilots on the vessel at all times. Instead, Captain Gansas spent the entire voyage in the aft, or Manhattan-facing, pilothouse. Had Gansas been present, the disaster would have been avoided.
It is not surprising that the Staten Island Ferry's rules were not followed given the haphazard way in which they were disseminated. At the time the accident occurred, the internal rules were neither well understood nor effectively enforced. The Staten Island Ferry had no formal safety management system. There was no single manual that was readily accessible to crew members. There was no mechanism to monitor who had received the procedures and at what time. And there was no system for ensuring that the rules were actually obeyed. Indeed, "there [were] no formal training programs at the Staten Island Ferry." Gansas Aff. ¶ 5. Instead, according to Captain Gansas, "there was 'on the job' training and the policies and procedures were passed down from the senior Captains and Assistant Captains" by word of mouth. Id.
The blame for this laxity lies squarely on the shoulders of the City. The New York City Department of Transportation (and its predecessor, the Department of Docks and Ferries) has operated the Staten Island Ferry for more than a century. For most of that time, it has had some form of standard operating procedures to govern the crew's behavior and to provide for the passengers' safety. By the time of the collision in this case, however, what was once a concise manual had apparently become a diffuse series of practices and procedures issued by the director of ferry operations. Rush Aff. ¶ 5. These directives were assembled in a handout that was never properly distributed. See Ryan Plea Allocution 53:17-25, Apr. 22, 2005. In his plea allocution in the related criminal case, Patrick Ryan, the City's director of ferry operations at the time of the accident, conceded that he knew that the Staten Island Ferry's Standard Operating Procedures ("SOP") were not being followed:
[W]hen I was the director of Staten Island Ferry operations, I understood . . . that the ferry service had a written rule that generally required the captain and assistant captain to be together in the operating pilot house while the [ferry was] underway.
A rule that served to insure passenger safety by providing for at least two people in the operating pilot house aware of the navigational situation.
I knew that this rule was not always being observed by all captains and assistant captains in good weather. I drafted revised Staten Island Ferry Standard Operating Procedures between 2001 and 2002 that restated this rule but did not take appropriate steps to insure -- did not take adequate steps to insure that the ferry's captains and assistant captains received the new document, trained them on the rule nor insured that they were complying with it.
As a result, this rule was not followed at the time of the accident involving the Barberi on October 15, 2003 and no crew member noticed in time that the boat was far off course.
Id. 47:2-48:4. Subsequently, Ryan further stated:
Your Honor, I knew the rules [were not] followed. I took measures to insure [that they were]. I drafted those SOPs. I didn't adequately -- I didn't get them out . . . the right way. I didn't train people in it. I didn't instruct people in it. I didn't get it dissimulated [sic] the right way. I never followed up and enforced that.
Citing Ryan's failure to enforce the rule requiring that there be two pilots in the pilothouse at all times, the plaintiffs argue that the City's negligence caused the collision. While the City contests this argument and seeks to avoid any legal liability, it also argues that the Limitation of Vessel Owner's Liability Act (the "Act"), 46 U.S.C.A. § 30505 (2007) (formerly 46 U.S.C. § 183(a)), limits its liability to the value of the vessel, assessed at $14.4 million. Congress passed the Act in 1851 "to encourage ship-building and to induce capitalists to invest money in this branch of industry." Norwich Co. v. Wright, 80 U.S. (13 Wall.) 104, 121 (1872). This was necessary because:
Given the primitive vessels and the hazards of the sea, the potential common law liabilities of the shipowner as principal made the shipping industry an unattractive investment. Greater liability would result in greater cost. Leaving the United States shipowner without protection would put him at a competitive disadvantage in the world shipping market.
In re Complaint of Tracey, 608 F. Supp. 263, 266 (D. Mass. 1985). The protection afforded by the Act only applies if the loss is "done, occasioned, or incurred, without the privity or knowledge of such owner." 46 U.S.C. § 183(a). The Supreme Court has ruled that, when a ship is owned by a corporation, liability may not be limited "where the negligence is that of an executive officer, manager or superintendent whose scope of authority includes supervision over the phase of the business out of which the loss or injury occurred." Coryell v. Phipps, 317 U.S. 406, 408 (1943). The parties agree that any negligence attributed to Ryan in his capacity as director of ferry operations is sufficient to defeat the City's effort to limit its liability to the value of the Barberi. Thus, if Ryan's failure to enforce a two-pilot rule constituted causally related negligence, the City may not limit its liability.
Before turning to the principal issue, I first address the City's threshold argument that the two-pilot rule is an internal rule and such rules are not admissible as evidence when they provide for a standard of care higher than that set by law. There are two problems with this position. First, the Federal Rules of Evidence provide that "[a]ll relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court . . . ." Fed. R. Evid. 402. There can be little doubt that the two-pilot rule is relevant for reasons that I discuss more fully below. The rule reflects the City's recognition of the dangers of leaving one captain alone in the pilothouse. Moreover, while not decisive of the issue whether the City was negligent, it is relevant to the analysis of legal issues relating to that determination. See William L. Prosser, Law of Torts 168 (4th ed. 1971) (rule made by defendant to govern the conduct of its employees "may be used against him as indicating his knowledge of the risk and the precautions necessary to meet it"). In addition, while there are exceptions to the general rule that relevant ...