Conception Boat Fire Tragedy: The Legal Issues
People in California and even across the country received a shock this past Labor Day. Newspapers and television news sites showed images of the charred shell of the 75-foot dive boat Conception, along with the grim news that 34 people were killed in the horrific boat fire. The hull of the Conception sunk and is currently at the bottom of the Pacific Ocean off the coast of Santa Cruz Island, near Santa Barbara.
Recovery efforts were barely a few days old when the owners of the dive boat filed a federal lawsuit seeking to exonerate themselves from any and all liability related to the Conception fire. The suit, filed in the Central District of California, has people angry and confused as to why the Conception owners chose this route to deal with the tragedy.
The answer might be found in an obscure federal statute dating back over 150 years. The law is knowns as the Limitation of Liability Act of 1851. While most people have never heard of this law, maritime law experts are familiar with it and note that almost every modern country has similar laws on their books.
The Limitation of Liability Act is found in 46 U.S.C. sections 30501 through 30512. Under the laws requirements, a shipowner who receives notice of a pending claim --in this case, 34 wrongful deaths and associated injuries for the survivors--has six months to file an "exoneration motion" in federal court. Observers have noted that while the law gives six months, it was very unusual for the Conception's owners to file their exoneration motion so quickly in this case--less than three days after Conception sunk.
Once an exoneration motion is filed, the party filing the motion gives notice to all potential claimants of the legal filing. This in essence requires claimants to file their claims in the same federal court. In effect, it helps to consolidate the various claims into one courtroom, rather than having claimants who might live in different parts of the state or country try to adjudicate their claims in other court locations.
The exoneration motion includes a declaration that potential claims cannot exceed the current value of the destroyed ship. Here, the Conception owners filed a declaration concluding that the Conception was a total loss and is now worth nothing.
This is where things get tricky. The Conception owners are effectively arguing that they should not be liable for any of the wrongful deaths or injuries in the fire because the Conception is worthless, and the 1851 law is meant to protect shipowners from paying out in excess of the ship's value.
Legal scholars across the country have argued that the exoneration motion really is a tactic the Conception's insurance carrier required the owners to take. The boat was insured, and the exoneration motion was a pre-emptive legal filing required by the boat's insurers to try and limit potential payouts to the Conception's policy limits. Thirty-four people were killed. The amounts of potential payouts could be in the hundreds of millions of dollars range. Having the Court attempt to grant the exoneration motion really could be a ploy to have future payouts restricted to the insurance policy limits. The potential in this case for liability beyond the policy limits is very high. In the event the Court grants the exoneration motion, the Conception's insurance carrier could still pay the policy limits but rely on the exoneration order to not have to pay beyond those limits.
Time will tell if the exoneration motion will be granted. Many legal observers believe the catastrophic loss of life would lead the Court to deny the motion--especially if it can be shown that the Conception owners knew or should have known of the hazards or lack of escape routes in advance. Federal agencies have served search warrants on the dive company that operated Conception. The investigation will continue to unfold.
All can agree this was a horrible tragedy the likes of which California has not seen before.
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