The decision issued Tuesday by a three-judge Court of Appeals panel overturns a trial judge's ruling that the city had immunity in the 2003 death of 31-year-old Mark Tostado of Huntington Beach.
Lake Havasu is a popular destination for boaters on holiday weekends, sometimes attracting large crowds that see revelers engaging in rowdy behavior.
Carbon monoxide levels on the lake can rise to dangerous levels when the air is stagnant and boat engine exhaust accumulates. The colorless, odorless gas can be lethal in high concentrations.
Tostado's death in Bridgewater Channel on May 25, 2003 came after health officials warned the city of hazards posed by high carbon monoxide concentrations but before the City Council approved boating restrictions and launched an educational campaign.
The Court of Appeals panel's ruling sends the case back to Mohave County Superior Court. The lawsuit was filed by Tostado's mother, Juanita Tostado of Holbrook, Ariz.
Governments in Arizona enjoy immunity under state law for some actions. But a key conclusion in the Court of Appeals decision is that the city wasn't entitled to immunity because it did not take any real action in April 2003 when it postponed a decision on possible boating restrictions while commissioning additional testing.
"The city's choice to postpone the decision of whether to enact an ordinance, no matter how fully deliberated, is materially different than actually deciding whether to enact an ordinance," Judge Sheldon Weisberg wrote in the panel's decision.
A local emergency room physician, Dr. Michael Ward, had arranged to have federal health officials test carbon monoxide levels in the channel over the 2002 Labor Day holiday after being approached by a concerned city fire official.
After receiving the results of National Institute for Occupational Safety and Health testing that found high levels of carbon monoxide, Ward presented them to city officials. A newspaper reported on the results in February 2003.
The City Council in April 2004 approved ordinances that prohibited boats from idling in the channel and providing money for enforcement, public education and an air-quality monitoring system.
Because those ordinances weren't enacted until after Tostado's death, they aren't a defense to the lawsuit's claims that the city failed to take steps to fix dangerous conditions and to warn people about those conditions, the Court of Appeals panel's ruling said.
The city, in asking the trial judge to rule in its favor, had argued that it was entitled to immunity under state law and that it did not owe a duty to Tostado.