ALBANY — The legal struggle over the deadly 2005 capsizing of the Ethan Allen tour boat on Lake George ended Thursday when the state's highest court dismissed a lawsuit over the state's inspection of the boat.

The Court of Appeals unanimously ruled that because the state "owes no special duty" to the victims, their allegations that state inspectors failed to certify safe passenger capacity on the ship must be dismissed.

Twenty passengers died and others were injured when the Ethan Allen capsized on Oct. 2, 2005. The boat was carrying 47 tourists, mostly senior citizens, and one crew member on a leaf-peeping tour.

"What this means for New Yorkers is when the state is certifying with inspectors and doing inspections ... you have no protection," said James Hacker, the Latham-based attorney for the family members of the victims who sued the state.

"When the state is inspecting, it should be held accountable," Hacker said

An investigation by the National Transportation Safety Board determined the boat's capacity should have been capped at 14 passengers. Federal investigators found the small tour vessel was grossly overloaded and unbalanced when it made a sharp turn and capsized. Tests determined the combined weight of the 48 adults aboard was more than four times the weight the boat could carry.

In 2006, federal investigators suggested the boat was an accident waiting to happen for decades.

Inspectors from the state Office of Parks, Recreation and Historic Preservation approved the vessel to carry up to 48 passengers regularly since 1979, basing their findings on the original 1977 certification by the U.S. Coast Guard. That did not take into account modifications made to the Ethan Allen in 1989 when a wooden canopy replaced the canvas canopy.

A State Parks spokesman said the agency would not comment on the decision.

The Court of Appeals noted inspectors' comments on relying on the Coast Guard's 26-year-old certification for capacity.

"For instance, one inspector agreed that the number was 'rubber stamped' based on the capacity from the prior certificate of inspection and another referred to the passenger capacity certified by the Coast Guard as 'gospel,' " the justices wrote.

The state argued it was not liable to be sued because the inspectors were performing a classic governmental function and, as such, were exempt due to "sovereign immunity." State workers are generally shielded from legal liability when working within their discretion.

The Court of Appeals also acknowledged the tragic outcome.

"Although the law is clear, the upshot is that, regardless of any negligence on the part of the state, the victims of this disastrous wreck are essentially left without an adequate remedy," the ruling stated.

The justices observed that a 2011 bill introduced in the state Assembly to require public vessels to carry marine protection and indemnity insurance "might have been able to provide a modicum of relief" for the Ethan Allen victims.

This case against the state was the last suit resulting from the fatal accidents. Lawsuits were settled against Shoreline Cruises, which owned the Ethan Allen; the boat's captain, Richard Paris; as well the Canadian tour company that organized the Lake George tour.

Shoreline and Paris pleaded guilty to misdemeanor counts of violating navigation law. Lawsuits against other defendants have either been settled or dismissed.

In September 2010, the families of the victims settled a lawsuit in U.S. District Court alleging and the Lake George Steamboat Company The Mohican, owned by the steamboat company, caused a wake that tipped the Ethan Allen and sent the passengers into the water.

The final case against the state would have resolved questions that have gone unanswered about the Ethan Allen, Hacker said.

"That's the end of the line for this case," Hacker said. "We're not going to have a final closure."

rgavin@timesunion.com • 518-434-2403 • @RobertGavinTU