California Dive Boat Owners Seek to Head Off Lawsuits After Tragic Fire

The owners of the dive boat where 34 people perished in a fire off Southern California filed a lawsuit Thursday to head off potentially costly litigation, a move condemned by some observers as disrespectful to the families of the dead.

Truth Aquatics Inc., which owned the Conception, filed the action in U.S. District Court in Los Angeles under a pre-Civil War provision of maritime law that allows it to limit its liability.

Investigators are still searching for what caused the blaze that wrecked the boat, which remains upside down at the bottom of the sea near the Channel Islands.

The time-tested legal maneuver has been successfully employed by owners of the Titanic and countless other crafts — some as small as Jet Skis — and was widely anticipated by maritime law experts. Still, the fact it was filed just three days after the deadly inferno Monday came as a surprise to legal observers.

Families of the deceased, who are not named in the complaint, will be served with notice that they have a limited time to challenge the company’s effort to clear itself of negligence or limit its liability to the value of the remains of the boat, which is a total loss.

“They’re forcing these people to bring their claims and bring them now,” said attorney Charles Naylor, who represents victims in maritime law cases. “They have six months to do this. They could let these people bury their kids. This is shocking.”

Professor Martin J. Davies, the maritime law director at Tulane University, said the cases always follow accidents at sea and always look bad, but they are usually initiated by insurance companies to limit losses.

“It seems like a pretty heartless thing to do, but that’s what always happens. They’re just protecting their position,” Davies said. “It produces very unpleasant results in dramatic cases like this one. … The optics are awful.”

The U.S. law dates to 1851, but it has its origins in 18th century England, Davies said. It was designed to encourage the shipping business. Every country with a shipping industry has something similar on the books.

In order to prevail, the company and owners Glen and Dana Fritzler have to show they were not at fault in the disaster.

They asserted in the lawsuit that they “used reasonable care to make the Conception seaworthy, and she was, at all relevant times, tight, staunch, and strong, fully and properly manned, equipped and supplied and in all respects seaworthy and fit for the service in which she was engaged.”

Even if the captain or crew are found at fault, the Fritzler’s and their insurance company could avoid paying a dime under the law, experts said.

All of those who died were in a bunkroom below the main deck. Officials have said the 33 passengers and one crewmember had no ability to escape the flames.

Crew members told investigators they made several attempts to rescue the people who were trapped before abandoning ship, the National Transportation Safety Board said. None of the survivors has spoken publicly.

The court filing not only seeks to protect the boat owners from legal exposure, but also will require any lawsuits to be filed in the same federal court.

A judge will hold a non-jury trial to see if the company can successfully show it wasn’t at fault. If that’s the case, any claimants would only be entitled to the value of the remains of the ship, which the suit said is a total loss with zero value.

There’s a long history of ship owners successfully asserting this protection. The case involving the White Star Line, the owners of the Titanic, went all the way to the U.S. Supreme Court, which held that a foreign owner could assert protection of the Limitation Act, attorney James Mercante said.

In that case, plaintiffs eventually withdrew their lawsuits and filed them in England, where the company was based. British law, even though it also limited damages, provided a bigger payout than the value of the remaining lifeboats.

While the law can shield owners from damages, over 90% of cases where injury and death are involved are settled before trial, Mercante said.

Attorney A. Barry Cappello, who is in discussions with another firm to represent family members of the Conception victims in court, said there’s a strong case to show negligence in the boat fire and that good lawyers can find a way around the admiralty law in federal court.

“The law is so antiquated and so skewed in favor of the ship owners that damages for wrongful death type cases is very limited unless one can prove exceptions,” Cappello said.

Cappello recently prevailed in a case in which a company that rented a paddleboard to a man who drowned in Santa Barbara Harbor had asserted the liability protection. A judge ruled the admiralty law didn’t extend to such crafts, though the company has appealed.

Davies said from what he’s heard of the disaster, there’s a realistic prospect the owner might prevail if the boat was properly equipped and the cause of the fire remains mysterious.

If the owner loses, there’s the potential of unlimited liability.

“That’s why the fight is always about limitation because if you’ve got unlimited liability, well, … 30 dead people is a whole lot of money,” Davies said.

Related:

• 9 Missing, 25 Dead in Southern California Dive Boat Fire