California boat fire may put spotlight on Titanic's legal defense

[September 06, 2019]  By Tom Hals

(Reuters) - The company that owns a scuba dive boat that caught fire and sank off California killing 34 people, may seek to limit its liability by invoking a 19th Century law that has shielded vessel owners from costly disasters such as the sinking of the Titanic.

Federal investigators have interviewed https://www.reuters.com/article/us-california-fire/california-boat-fire-investigators-interview-captain-crew-idUSKCN1VP2D2 the only survivors from the fire aboard the Conception, the captain and four crew members, as well as Glen Fritzler, whose Truth Aquatics Inc owns and operates the vessel.

While no one has sued yet, wrongful death lawsuits by families of the victims were a near certainty, legal experts said.

Accidents that occur on land with a similar death toll could lead to more than $100 million in damages, lawyers said.

But on the water, maritime law applies, and any lawsuits will run up against a statute that allows the owner of a vessel and its insurer to escape or severely limit its liability in certain cases.

Experts in maritime law said Truth Aquatics will almost certainly file a petition under the Shipowner's Limitation of Liability Act of 1851. The law is routinely invoked for an accident on a waterway, whether it involves tug boats and barges in busy harbors or leisure boats at vacation hotspots.

Truth Aquatics declined to comment.

The law allows the owner of a vessel to petition a federal court to exonerate it from damages, or limit damages to the post-accident value of the ship, which would be zero in the case of the sunken Conception. An owner has roughly six months to file a petition and can do it before or after it is sued.

"It really is antithetical to most fair-minded people and jurists to allow this old defense to potentially let someone off scot free," said Daniel Rose, an attorney with the Kreindler & Kreindler firm which represents victims in maritime accidents.

The 1912 sinking of the Titanic on its maiden voyage, in which more than 1,500 people were killed, is a classic example of the law being successfully employed.

The ship's owner, White Star Lines, was able to limit its liability in lawsuits in the United States to $92,000, which was the value of the lifeboats that survived the accident.

The act requires an owner to show its actions did not cause the accident, or as 19th Century maritime law put it, that the owner lacked "privity or knowledge" of the incident. Owners rely on evidence that their ship was properly equipped, the crew well-trained and procedures were being followed.

In the case of the Titanic, the ship was state-of-the-art and deemed unsinkable, and White Star Lines played no part in the captain's navigation into an iceberg.

Circumstances have changed with modern communications, increasing the owner's role in a ship's operation and decreasing the owner's ability to limit liability under the act.

Rescue personnel return to shore with the victims of a pre-dawn fire that sank a commercial diving boat off the coast of Santa Barbara, California, U.S., September 2, 2019. REUTERS/Kyle Grillot/File Photo

"These days a master won't scratch himself without asking the owner's permission," said Martin Davies, who teaches admiralty law at Tulane Law School.

In the case of the Conception, a judge would look for evidence that showed the owner had "knowledge," or some involvement in the accident. The captain and four crew were on deck when the flames erupted early Monday morning and were able to escape in an inflatable life boat, investigators said. One crew member was sleeping below deck with the passengers.

"I think court would look to the competency of the crew, their background, education, what was put on board for firefighting equipment, what training the crew had, what training the passengers had," said Michael Karcher, a maritime law specialist with Karcher, Canning & Karcher in Dania Beach, Florida.

The owner will try to pin blame solely on the crew and try to show the accident cannot be linked to something the owner did or should have done, legal experts said.

The Truth Aquatics fleet is moored in Santa Barbara, California, and the Conception was on a three-day excursion to the Santa Cruz Islands.

Judges have been reluctant to apply the law outside purely maritime accidents, especially in high-profile accidents involving tourists, lawyers said.

"The courts are generally not in favor of it," said Karcher. "It’s a fairly high threshold."

The act was invoked in last year's duck boat accident near Branson, Missouri, which killed 17 people. Even though the judge has yet to rule on the petition to limit liability, many of the victims' claims have settled.

Kreindler attorney Rose said it was not unusual for an owner to try to strike settlements in headline-grabbing cases.

"In a case with egregious facts you don’t want to push too far because they risk raising the ire of the public and people in Congress who maybe take a look at the law anew," Rose said.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Grant McCool)

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