Will OceanGate’s Waiver Save Them From Lawsuits?

Who could have possibly foreseen something going wrong with a Titan sub? Well, the lawyers, that’s who. But will all of this legal paperwork save Ocean Gate, the company, from ruinous lawsuits?
And will the estate of the victims be able to recover anything? Well, before the Ocean Gate disaster, CEO Stockton Rush was bullish on the submersible that he built to visit the Titanic. He scoffed at the complex navigation systems used by other commercial subs.

Rush was proud that he patched together off the shelf items from Camping World and charged people $250,000 a piece to travel 2 miles under the sea.

And despite some obvious red flags, five people were willing to accept extraordinary risks in order to see the Titanic’s ruins. And they’ve now joined the exclusive club that they were so fascinated with. And there’s no question that they knew that this was dangerous. They signed liability waivers that warned them that the trip could expose them to death.

Now, as many people assumed, everyone who paid to take the voyage signed a waiver of liability with a choice of law clause. The Ocean Gate waiver that the passengers were required to sign says the disputes would be governed by the laws of the Bahamas. Quote Any disputes related to or arising from either the operation or this release shall be governed by the laws of the Bahamas.

Now, the Bahamas judicial system is based on English common law, and whether families can sue depends on how the country handles liability waivers. The language of the waiver makes it clear that the participants are engaged in activity that could lead to death. Quote, This vessel will be subject to extreme pressure, and any failure of the vessel while I am on board could cause severe injury or death. It discloses that the Titan quote has not been approved or certified by any regulatory body and may be constructed in materials that have not been widely used in human occupied submersibles.

The waiver says that support vehicles are also not designed for passengers and could become more dangerous in rough seas. And the waiver says that these risks cannot be eliminated. Quote, I understand that such risks simply cannot be eliminated from any operation.

The risks include, without limitation, loss of footing, slips and falls on deck, particularly in inclement weather, harm from falling objects on non passenger vessels, drowning and malfunction, or failure of the submersible leading to death or serious injury. And the participants had to acknowledge the statement as a condition of going on the trip. Quote in signing this document, I acknowledge that if I die, am hurt, or incur property damage during my participation in the expedition, I may be found by a court of law to have waived my right to maintain a lawsuit. Now, in the US, liability waivers only cover ordinary negligence.

If a company’s act constitutes gross negligence or intentional harm, the liability waiver just simply doesn’t apply. And here, ordinary negligence encompasses mistakes due to inattention or general incompetence, just simply to maintain industry standards. In contrast, gross negligence occurs when someone purposefully fails to use reasonable care to ensure someone’s safety.

For there to be gross negligence, you need to show that the defendant was more than careless, that they were reckless and engaged in behavior that might even appear to be deliberate.

Now, the hallmark of gross negligence is that the defendant showed a total lack of care and disregard for the safety of others. And here that is definitely a distinct possibility. We’ll talk about this in detail later, but here, deep sea exploration specialist Rob McCallum told Rush in writing before the disaster that he sounded just like the makers of the Titanic. Quote in your race to the Titanic, you are mirroring that famous catch cry she is unsinkable. Rush emailed him back, saying, quote we have heard the baseless cries of you are going to kill someone way too often. I take this as a serious personal insult. But McCallum wrote back to Rush again in March of 2018, saying, ” I think you are potentially placing yourself and your clients in a dangerous dynamic”. Who knew how right he was going to be?
So clearly at least one person thought that Rush had a complete disregard for the safety of other people, though that was an opinion that was shared by David Lockridge, a former employee of OceanGate, and the members of the Marine Technology Society.

And when considering whether there was gross negligence, a court considers whether a rational person in the same situation would have known that there was foreseeable harm. And witnesses say that in the years after Lockridge and McCallum issued their warnings, the Titan showed signs of shoddy design.
The Titan was severely damaged after it was struck by lightning in 2018. Rush said that the lightning strike damaged 70% of its internal systems, forcing the company to delay a planned voyage to the Titanic. And that’s really just the tip of the iceberg. Lightning can do weird things. That pushed our testing back, and we ended up having to cancel that.

It was back in 2018. Sub expert Karl Stanley took a trip on board the Titan in 2019 and reported hearing cracking sounds in the hull. And after the trip, Stanley emailed Rush with his concerns that the carbon fiber hull might not be able to withstand the deep dives. In fact, he wrote that during his trip it quote, sounded like a flaw defect in one area, being acted on by the tremendous pressures and being crushed, damaged. In 2020, the hull had to be rebuilt because of the cyclic fatigue that reduced its death rating to just 3000 meters. Which was well short of what was needed to get to the Titanic.

And both Lockridge and McCallum thought that the window was a major mistake because it would be exposed to around 6000 pounds per square inch of water pressure, which is the equivalent of about two tons of water at that depth. However, in the summer of 2021, rush told YouTuber Alan Estrada that the window was made of plexiglass and that he was comfortable with that because it was, quote, seven inches thick and weighs 80 pounds. Acrylic is great because before it cracks or fails, it starts to crackle. So you get a huge warning if it’s going to fail. And I’ll let my friend over at real engineering explain why. This is bonkers. So if the window couldn’t withstand the pressure and the people in the sub could hear the window cracking, it’s probably too late.

The entire submersible was at risk of imploding before it could surface, and several former passengers on the Titan said that they thought it was completely unsafe.

One passenger said that during the Titan’s descent a fluorescent glow stick was used instead of the lights to save energy. He compared the dives to riding in a, ” car that you drunkenly drove into the ocean, steered by a video game controller”.

And former passenger Arthur Loibl said that on his 2021 voyage, the bracket of the stabilization tube, which is the thing that actually balances the sub, tore and was hastily reattached with zip ties. Simpsons writer Mike Reese said that communication failures happened on all three of the dives that he went on in 2022. But the problems continued. Also in 2022, the Titan lost control and started spinning in circles at the bottom of the Atlantic, when it was just 300 meters from the Titanic wreckage.

And something happened to the thrusters that made the Titan unable to move forward or backwards. This harrowing moment was captured on a BBC documentary.

YouTuber Jake Kohler took a trip on the Titan just days before its doom tripped, and he said that the communication system went down during a routine test dive. The trip was cancelled due to weather, but Kohler felt like the vessel might have imploded if the dive had went ahead. One of the passengers who was killed in the Titan disaster was Paul Henri Nargeolet, who was a Titanic expert. He had worked closely with the organization that manages the titanic wreckage site.

And Jessica Sanders, who heads the titanic organization, said that she regretted giving Nargeolet the green light to go on the expedition. She said that Rush had told potential passengers that the Titan sub was, quote, way safer than flying in a helicopter or even scuba diving, or even crossing the street.
And note here that there’s a big conflict between what the waiver said about the expedition being dangerous and deadly and what Rush was confidently telling potential passengers. Gross negligence means that the person has fallen so far below a reasonable standard of care that their actions are considered reckless or even deliberate.

So it’s legally acceptable to engage in hazardous activities, but that doesn’t mean someone can’t ignore obvious risks. So if Bahamian law upholds the liability waivers, it’s likely the families will pursue litigation in their respective countries, regardless of what the choice of law provision says. But that doesn’t mean that this would be an easy case to bring, because courts in many jurisdictions tend to uphold liability waivers if they are specific, and this one was very specific.

As a general rule, clauses limiting liability are valid and enforceable under common law unless they violate public policy or the damage was the result of willful or wanton conduct on the part of the defendant.

Some jurisdictions have statutory exceptions to this general principle. Generally, a pre-injury release will only be enforced if, in clear and conspicuous language, it explicitly indicates the intent to release the provider from liability for injury caused by that party’s own conduct or negligence.

Each jurisdiction applies different factors when assessing a public policy exception, but most of them focus on two things. If the terms of the waiver are clear and unambiguous, then a court first considers whether the party being released provides a necessity or other essential service, and second, whether the agreement is inherently fair and not unconscionably risky.

Recreational activities like skydiving or scuba diving are generally not public necessities or essential services. So when it comes to the first factor, courts tend to favor the released parties. When it comes to the second factor, whether the waiver is inherently fair, courts weigh the respective bargaining powers of the parties.

Did one party have more leverage than the other? Was the injured party coerced into inherently risky behavior? Did the owner or operator withhold information from the passengers? Did the passengers understand how hazardous the trip would be? Usually, liability waivers are presented as something you have to sign, or else you can’t participate in that activity. Some courts find this problematic because it’s a take it or leave it proposition and the participant doesn’t have the ability to negotiate.

But still more courts conclude that if a person voluntarily participates in an extreme activity, unequal bargaining power won’t actually invalidate the waiver. So, for example, courts have concluded that whitewater rafting and skydiving are both personal choices and not essential services, so there’s no real bargaining advantage.

A person can’t really be compelled to participate in those particular activities, though there are courts that view it differently. The Oregon Supreme Court, for example, found that an unequivocal release signed by a plaintiff injured in a snowboarding accident violated public policy.

The snowboarder could have avoided all the risks by not using the defendant’s facility, but the court still concluded that the owner of the resort was in a superior bargaining position because the plaintiff had, quote, no meaningful alternative to defendant’s take it or leave it terms. If he wanted to participate in downhill snowboarding, though, that is a minority position. Now, the thing about devastating injuries and catastrophic events is that they can happen at any time, often without warning.

So if you or a loved one is seriously injured in a submarine accident or more likely a car accident or a medical malpractice accident or anything else, you can call my law firm, the Eagle Team. We can help. A free consultation is just a phone call away, and the link is in the description.

Now back to the submarine shenanigans, though. In an interesting twist of fate, lawyer David Concannon was scheduled to be on the Ocean Gate expedition, but he actually canceled because of a client matter. Concannon is an experienced diver who had been to the Titanic before, and he is listed as an advisor to OceanGate. He also has an experience suing companies who are engaged in hazardous underwater operations, even when the plaintiff signed liability waivers. And Concannon actually settled a case against a dive shop and the Professional Association of Diving Instructors, or Patty, despite the fact that the diver signed a liability waiver.

And that shows us how Ocean Gate might be liable if the applicable law was similar to Montana’s negligence law. When Linnea Mills died in a diving accident in Glacier Park in 2020, her family sued the dive shop Gull Drive and Patty for negligence, wrongful death and infliction of emotional distress.
Mills was 18 years old when she signed up for an advanced diving class. The class was supposed to cover situations like high altitude diving and cold water diving with a dry suit. However, the instructors didn’t have a permit for the dive, which took place at the national park after the park had closed.

The dive shop instructors were certified by Patty but did not have much experience in the diving situations that they were supposed to be teaching, and instructors pressed forward with the dive without doing a gear check. They gave Mills a dry suit without an inflator nose, and she also had a regulator unsuitable for cold water use.

A GoPro video of one of the other students showed Mills struggling with the pressure in her suit when she was 60ft down, and the video revealed that Mills couldn’t breathe and had too much weight on her to actually ascend. Mills was crushed by the pressure of the water. And this wasn’t Gull dive’s first fatality. In 2019. Gull Dive rented scuba equipment to a person not certified to scuba dive, and the man immediately drowned upon entering the water.

Gull Dive and Patty argued that the disclaimer form that Mills signed absolved them from liability. However, a judge disagreed. Montana’s law allowed waivers and releases to be enforceable except when there is gross negligence or defective equipment.

Those things can’t be waived because Montana’s law quote, does not preclude an action based on the negligence of the provider if the injury, death, or damage is not the result of an inherent risk of the sport or recreational opportunity. When the judge ruled that the case should go to trial, the defendant settled. But of course, the Ocean Gate disaster didn’t take place in a lake in Montana. It took place in the middle of the Atlantic.

And when a passenger or sea worker dies aboard a ship, family members can file a lawsuit under the provisions of the Death on the High Seas Act, known as DOSA. That act applies to cases involving vessels and aircraft that go beyond the three nautical mile limit off the coast of the United States and its territories. A plaintiff has a cause of action if the sea worker died due to an unseaworthy vessel or through other provable negligence on the part of the shipowner.

The vessel in question must have been engaged in what could be recognized as a maritime activity. And in addition to maritime employees, dosa also covers civilian passengers of a maritime vessel.

To succeed in a DOSA claim, the plaintiff has to prove that the vessel wasn’t seaworthy, and a plaintiff can prove a lack of seaworthiness if the vessel had significant mechanical defects or was otherwise incapable of handling the situations such vessels could reasonably be expected to encounter while at sea.
A plaintiff can also prove unseaworthiness if the owner of the vessel behaved negligently in connection with their responsibilities as a ship owner. And here, the facts suggest that Ocean Gate may have reached his duty to provide a seaworthy vessel for the crew and passengers.

When Rush was developing the Titan, he started with an existing vessel called the Cyclops One that was constructed with engineers at the University of Washington. The engineers used an off brand PlayStation Three controller to drive the sub. However, Cyclops One was only built to withstand depths of 500 meters. Nevertheless, Rush decided to keep most of the design elements of the Cyclops for the Titan, but engineered it to go eight times deeper.

When Rob McCallum visited the company’s shop in Washington, he thought the PlayStation controller was ridiculous. Quote and now you have the hand controller talking to a Wi Fi unit, which is talking to a black box, which is talking to the subs thrusters.

There were multiple points of failure. Rush said that the whole system ran on bluetooth, and Rush ignored all the feedback. And in particular, he decided that the Titan’s cylindrical midsection would be made of carbon fiber instead of titanium. Carbon fiber is a great material. It’s better than titanium. It’s better than a lot of other materials.

The Titan was completed in 2018, but experts had concerns about whether the sub could withstand the rigors of deep sea exploration. My friend over at Real Engineering explained why carbon fiber was a problematic choice.

Carbon fiber composites aren’t really known for their compressive strength. They work best in tension, great for aeroplanes that are pressurized from the inside, where the pressure inside the fuselage works to expand the circular cross section, putting the fibers in tension. For a submarine, the pressure will work to compress the hull, placing the fibers primarily in compression. This immediately set off alarm bells in my mind when I heard of the missing submarine.

You should absolutely check out the rest of Real Engineering’s video on it. It’s really incredible. But he explains that the carbon fiber is great for buoyancy, and that Rush thought that this would help the sub float right to the surface, whereas steel and titanium hulls require foam layers. But Rush wanted to avoid the foam layers to cut costs.

“This is where OceanGate had no idea whether it was up to the task or not. And we know this because they admit it in their own blog post justifying their decision to not test the vehicle with a regulatory body”.

OceanGate’s former director of marine operations, David Lockridge, wrote a report in which he concluded that the craft needed more testing and stressed the potential dangers to passengers of the Titan. As the submersible reached extreme depths, lockridge thought that the carbon fiber hull would come apart. After repeated dives, Lockridge met with Rush and other company executives and laid out his concerns. And he also claimed that the Titan had other significant design flaws.

For example, the viewport was only certified to work in depths up to 1300 meters. And to reach the Titanic, the Titan would need to go 4000 meters under the Ocean’s surface. And there are private agencies that expect and certify submersibles. But Lockridge said that OceanGate didn’t want to pay for independent certifications.

The company fired Lockridge and then sued him for disclosing confidential information. Ocean Gate said that Lockridge was not an engineer, and that the company’s own testing of the hull’s strength was better than the independent testing that Lockridge had recommended. But Lockridge was not the only voice sounding an alarm about the Titan’s. Design director James Cameron has designed submersibles himself and visited the Titanic many times. He said that the carbon fiber construction of the Titan was, quote, fundamentally flawed, and that everyone in deep sea exploration knew about it.

And a few months after Lockridge was fired, 38 members of the Manned Underwater Vehicles Committee of the Marine Technology Society wrote Rush a letter stating that in their unanimous opinion, he was misleading the public and risking a catastrophic outcome. Quote Your marketing material advertises that the Titan design will meet or exceed DNVGL safety standards, yet it does not appear that OceanGate has the intention of following DNVGL class rules. Your representations, at a minimum, are misleading to the public and breaches an industry wide professional code of conduct we all endeavor to uphold.

Now, obviously, this is an incredibly damning letter. Lawyers who file negligence lawsuits have to prove that the defendant didn’t follow the ordinary standard of care, or worse, knowingly didn’t follow a standard of care. And usually that means hiring an expert witness in the field who can articulate the norms of an industry and evaluate whether the defendant’s conduct met those norms.

And in this case, we have experts in the field saying that the Titan didn’t measure up to industry standards before the accident even occurred. And the experts concluded that Rush needed to start with a prototype that would be validated by third parties in order to protect all of these submersible occupants.
And in a 2019 blog post, Ocean Gate said, quote, bringing an outside entity up to speed on every innovation before it’s put into real world testing is anathema to rapid innovation. And Rush told Smithsonian Magazine that the industry was, quote, obscenely safe because they have all these regulations, but it also hasn’t innovated or grown because they have all these regulations.

So while on the face of it, this looks like the kind of thing that would be covered by the Death on the High Seas Act, it’s actually more complicated than that, because it’s not perfectly clear that the Titan was a vessel for the purposes of the act. And ironically, Ocean Gate might be covered by the same exception to dosa that White Star Line used to limit its exposure to the Titanic disaster itself.

So let’s go back to 1912, when the Titanic sank off the coast of Newfoundland in its maiden voyage. The luxury steamship was owned by White Star Line, which bragged that it was virtually unsinkable. Yet, as we all know, when the ship set sail, it swiftly ran into an iceberg, killing 1517 passengers. And it turned out that these ship had a design flaw. The walls separating the bulkheads extended only a few feet above the waterline, so water could pour in from one of the compartments into another.

Surviving family members sought compensation from White Star Line, but the company had a legal trick up its sleeve: the Limitation Act of 1851, which was enacted to help prevent shipowners from going bankrupt.

The law gives shipowners the right to preemptively file a claim in federal court before plaintiffs have a chance to sue them. The claim limits plaintiffs to the postloss value of the vessel and its cargo. If the vessel and cargo were completely lost, the value of the vessel cannot be calculated in the owner’s assets. In 1915, a judge found that white Star Line was not guilty and had no knowledge of the errors that led to the catastrophic loss.

And that meant that they didn’t have to compensate the families for the fatalities. And since the accident was considered the fault of the Titanic’s captain and crew, the company’s liability was limited to the total of passenger fares, the amount paid for cargo, and any salvaged materials that were recovered from the wreck, and the company settled for $664,000 to be divided among the survivors.

And the same Limitation Act exception might provide OceanGate with a way to avoid liability, since the post casualty value of the Titan is basically zero. But there’s also another wrinkle to this law. In 2019, a dive boat carrying 33 passengers and six crew members caught fire and sank off the coast of California, resulting in the deaths of 34 people.

Days after the boat sank, its owners filed a limitation action seeking to limit their liability to the value of the vessel, which was effectively zero. In response, Congress enacted the Small Passenger Vessel Act, which carves out certain small passenger vessels from being able to limit their liability to the value of their vessel.

This is an exception to the exception, and these smaller vessels can now be held liable for any and all losses arising from a maritime casualty. And the act defines a small passenger vessel as one carrying not more than 49 passengers on an overnight domestic voyage and not more than 150 passengers on any voyage that is, not an overnight domestic voyage.

The SPVA could apply to the Titan, but the law is new and has yet to be tested in court. And there are other open questions, like whether a submersible is considered a vessel for the purposes of the SPVA and whether American law would even apply in the first place, because there are lots of jurisdictional questions, too.

The United States and Canada have launched investigations into what happened to the Titan. However, it isn’t clear which country would have jurisdiction over the legal claims. Ocean Gate Expeditions, the company that owned and operated the Titan, is based in Everett, Washington. The company shut down its Everett operations after the accident, and the Titan was launched from a ship called the Polar Prince, which is flagged from Canada.

The people on board the submersible were from England, Pakistan, France and the United States. And of course, the wreck is in the middle of the Atlantic now.

The United States Coast Guard regulates passenger carrying submersibles, and submersibles with fewer than six passengers have not been subject to inspection, which is probably why Stockton, Russia’s sub carried only five people.

US. Regulations state, quote, that because of the unique design and operating characteristics, as well as the inherent hazards of underwater operation, an uninspected submersible may be permitted in the US. Passenger operations only if it is designed and constructed to a recognized industry standard.
That means it’s illegal to transport passengers in a sub that is experimental. Rush classified the passengers as mission specialists and classified their $250,000 fee as a donation in order to evade the implication that they were just ticket-buying passengers.

But industry experts knew that Stockton was trying to evade these regulations. William Conan is one of the experts who signed a letter urging Stockton Rush to follow the rules.

And although the Titan was developed and built in Washington State, the New Yorker reported that the company’s legal filings said that the sub would be, quote, owned by a Bahamian entity, will be registered in the Bahamas, and will operate exclusively outside of the territorial waters of the United States. And at this point, while we know that there will be lots of lawsuits, we don’t know who’s going to have jurisdiction, the status of the insurance of the Titan, or of the passengers, and we don’t know whether the waiver that they sign will be enforceable or not.

But one thing is for certain Stockton Rush really should have brushed up on his math and science skills.

 

BY: LegalEagle