January 14, 2020 Practice Points

    Possibly Piercing Limitation of Liability

    A Labor Day 2019 boat fire resulting in 34 deaths will likely serve as a template for those interested in learning about how to litigate the typical limitation case.

    By David Y. Loh

    In Re Truth Aquatics, Inc., Glen Richard Fritzler and Dana Jeanne Fritzler, et al.

    On or about September 2, 2019 (over Labor Day Weekend), the motor vessel Conception—which was operating as a dive boat at the time—suffered a catastrophic fire which resulted in the deaths of 34 individuals. In an effort to reduce their potential exposure, the owners of the vessel quickly filed on September 5, 2019, a complaint for exoneration from or limitation of liability pursuant to the Shipowner’s Limitation of Liability Act, 46 U.S.C. Sec. 30501, et seq. The Limitation of Liability Act was initially instituted in 1851 and was designed to protect this country’s maritime industry by allowing vessel interests to of course contest liability, but even if the vessel was found to be at fault, vessel interests would able to limit their liability to the value of the vessel post-casualty, plus any outstanding freight owed for the voyage in question, provided they lack “privity or knowledge” of the cause of loss or injury. The Limitation of Liability Act has been invoked in many well-known maritime disasters such as the Titanic and Deepwater Horizon.

    The exact cause of the fire is not known to a legal certainty but according to the claim filed on January 13, 2020, by one of the claimants, the following is a brief list of what appear to be the main arguments to be relied on to establish “privity or knowledge” on the part of the owners:

    1. Vessel was unseaworthy due to inadequate and defective fire alarm and fire detection systems;
    2. Vessel was unseaworthy because there were only two (2) methods of egress from the deck where all the passengers were sleeping, which was insufficient under the circumstances.
    3. The fire occurred at approximately 3:15 am and all crew members were asleep. According to the NTSB initial report, federal law required a night watch which was not complied with at the time of the fire.

    The U.S. Coast Guard has yet to issue its own report in connection with this casualty. Both the NTSB and USCG reports are not admissible at trial, but their findings will provide the claimants with a roadmap on how to conduct discovery and what arguments might bear fruit.

    This case will likely serve as a template for those interested in learning about how to litigate the typical limitation case. We will continue to monitor these and other cases involving limitation of liability.

    David Y. Loh is a partner with KMA Zuckert in New York City, New York.

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