Dive boat company petitions to limit liability under maritime protection law

The diving boat MV Conception burns off the coast of Santa Cruz island, California. Photo released by the Santa Barbara Sheriff's Office.

Expectant defendants in the horrifying case of the California dive boat fire have petitioned the U.S. District Court to limit their liability exposure under the Shipowners' Liability Act of 1851, 46 U.S. Code § 30505, et seq.  (Hat tip to my Torts I-II alumna, Mara D. Fox, UMass Law J.D. anticipated 2021, for heads up on this story from KTLA 5 Los Angeles (see also L.A. Times).)

Bringing this filing to light is not to knock the petitioners.  Their legal move is smart and routine.  But it raises to light one of the many historic and arguably anachronistic legal liability limitations that are allowing seagoing corporations effective immunity from tort, and therefore impunity in practices regarding physical safety, worker rights, and environmental protection, as just recently rounded up by Hasan Minhaj on Patriot Act.

Deepwater Horizon families visit Congress, 2010. (Nancy Pelosi CC BY 2.0.)

The Shipowners' Liability Act played its part after the sinking of the Titanic, as KTLA coverage observed, and more recently in the 2010 disaster when the Deepwater Horizon exploded in the Gulf of Mexico (movie; recent coverage; documentary by BBC, James Fox, NatGeo, PBS; report on litigation settlements).  A 2011 Senate bill would have amended the Shipowners' Liability Act, Death On the High Seas Act, and Jones Act to restore wrongful death claims; the bill died in committee.

An excellent overview of the liability act can be found in the background of a comment by Christopher S. Morin, The 1851 Shipowners' Limitation of Liability Act: A Recent State Court Trend to Exercise Jurisdiction over Limitation Rights, 28:2 Stetson L. Rev. 419 (1998).  Morin, a U.S. Navy veteran and now a Florida attorney, explained (at 422, footnotes omitted):

The primary impetus for enacting the Limitation Act was to promote American shipbuilding, commerce, and investment in the merchant marine industry, placing the United States shipping industry on a more competitive footing with those foreign countries already benefiting from forms of limitation. Before comprehensive insurance protection, it was important for investors and owners to have the security that their liability would not exceed the value of their investment—namely the value of the vessel. Thus, in its most basic form, the Limitation Act permitted vessel owners and bareboat charterers to limit their liability to the vessel's post-accident value.

The act was successful for its time, Morin wrote.  But "[m]ore recently, many"—"[c]ourts, lawmakers, and environmentalists alike"—"have criticized the Limitation Act as an outdated and unnecessary tool in the modern insured maritime industry" (p. 423, footnotes omitted).

Here from the Free Law Project is In re Truth Aquatics, Inc., No. 2:19-cv-07693 (C.D. Cal. filed Sept. 5, 2019).

Minhaj: With tort impunity, cruise lines externalize risk, costs to workers, passengers, environment

One of my favorite comedians—saw him perform Homecoming King at intimate Cherry Lane in NYC in 2016—Hasan Minhaj (self-described "second brown John Oliver") has taken on the wide range of problems associated with cruise lines' foreign flagging and legal impunity at sea, threatening the safety and well-being of passengers with legal impacts including virtual immunity from tort liability.  (Patriot Act s4e04.)

Instrumental in this deplorable state of affairs for our part, in U.S. law, is the Death on the High Seas Act (DOHSA), 46 U.S.C. §§ 30301–30308.  On its face the act simply invites maritime wrongful death actions into U.S. courts.  However, the act's "shortcomings" have been documented in legal scholarship for a long time; the devil is in the details, specifically, damages, which are limited by § 30303 to "fair compensation for the pecuniary loss sustained."  Note, "pecuniary," not the familial wrongful death intangibles recoverable in domestic tort law, and maybe zero for, say, an elderly retired person.  Minhaj reports that attempts to amend the law have been torpedoed in Congress.

But DOHSA is just one piece of the big, messy picture of maritime liability, or non-liability, for cruise lines.  Most civil wrongs involving passengers are sexual assaults, which can come under the lax, overwhelmed, or de facto non-existent jurisdiction of the vessel's flag home.  Same for the abusive conditions to which cruise ship workers are subject, from working hours that would never be tolerated on land, on through to the minuscule compensations available for debilitating injury, such as loss of limb.  And all that's to say nothing of the devastating environmental impact of cruise ship polluting and dumping that occurs beyond the reach of regulators.

Minhaj aptly paints the ugly picture of what happens when an industry escapes the norm-setting and deterrence mechanisms of domestic tort law.  As he suggests, the relatively affordable cost of a cruise as a vacation option—and I confess, I've gone, I've loved it, and I'd like to go again—is born disproportionately by an oppressed workforce, injured passengers, and the voiceless marine environment.