- Who could have possibly foreseen something going wrong with the Titan sub? Well, the lawyers, that's who. But will all of this legal paperwork save OceanGate, the company,
from ruinous lawsuits? And will the estate to the victims be able to recover anything? Well, before the OceanGate 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. - We only have one button, that's it. This is to other submersibles, what the iPhone was to the BlackBerry. - Rush was proud that he patched together off-the-shelf items from Camping World and charged people $250,000 a piece to travel two miles under the sea. - By taking off-the-shelf parts and sort of MacGyvering them together? - Yeah, pretty much.
(interviewer chuckles) - Does that not raise anybody's
eyebrows in the industry? - Oh yeah. Oh yeah.
(interviewer chuckles) Yeah. No, I'm definitely not... - 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 OceanGate 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 footings, 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 as simply to maintain
industry standards. In contrast, gross negligence occurs when
someone purposely 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, quote, "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 wasn't the opinion that was shared by David Lochridge, 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've known that there
was foreseeable harm. And witnesses say that in the years after Lochridge 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. - [Stockton] Lightning
can do weird things. That pushed our testing back and we ended up having to cancel. That 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 depth rating to just 3,000 meters, which was well short of what was needed to get to the Titanic. And both Lochridge and McCallum thought that the window
was a major mistake because it would be exposed to around 6,000 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. And 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 Real Engineering explain why this is bonkers. - [Speaker 1] An acoustic
monitoring system like this is akin to setting up a camera to warn you thunder is coming. You will see the lightning
before the thunder, but the time between them is minimal. - 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 Titans said that they thought
it was completely unsafe. One passenger said that during the Titan's descent and ascent, a
fluorescent glow stick was used instead of of the lights to save energy. He compared the dives to
riding in a, quote, "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. Simpson's 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 loss 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. And this harrowing moment was
captured on a BBC documentary. - Am I spinning?
(soft tense music) - [Speaker 2] Yes. - Oh my God. - And Scott is like, "Oh
no, we have a problem." - I was thinking we're not gonna make it. We can't go anywhere, but go in circles. - YouTuber, Jake Koehler,
took a trip on the Titan just days before its doomed trip, and he said that the communication system went down during a routine test dive. The trip was canceled due to weather, but Koehler 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 want in 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 is 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 unconscionable. 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 defense 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.
(Eagle squawks) 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 OceanGate 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 the case against a dive shop and the
Professional Association of Diving Instructors or PADI, despite the fact that the divers
signed a liability waiver. And that shows us how
OceanGate 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 PADI 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 PADI, but did not have much experience
in the diving situations that they were supposed to be teaching. And instructors pressed
forward with a 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 60 feet 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 PADI 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 these sport or recreational opportunity." When the judge ruled that
the case should go to trial, the defendant settled. But of course, the OceanGate
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 DOHSA. That act applies to cases
involving vessels in 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 ship owner. The vessel in question
must have been engaged in what could be recognized
as a maritime activity. And in addition to maritime employees, DOHSA also covers civilian
passengers of a maritime vessel. To succeed in a DOHSA claim, a 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 are the facts
to suggest OceanGate may have breached 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 1, 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 1 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 engineer 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 wifi 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
con system ran on Bluetooth. And Rush ignored all the feedback. And in particular, he decided that the Titans 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 Real Engineering explained why carbon fiber
was a problematic choice. - [Speaker 1] Carbon fiber composites aren't really known for
their compressive strength. They work best in tension, great for airplanes 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 hole, 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
holes require foam layers. But Rush wanted to avoid the
foam layers to cut costs. - [Speaker 1] This is
where things get iffy. 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 Lochridge, 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. Lochridge thought that
the carbon fiber hull would come apart after repeated dives. Lochridge 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 view
port was only certified to work in depths up to 1,300 meters. And to reach the Titanic, the Titan would need to go 4,000 meters under the ocean's surface. And there are private agencies that expect and certifies submersibles, but Lochridge said that
OceanGate didn't want to pay for independent certifications. The company fired
Lochridge and then sued him for disclosing confidential information. OceanGate said that
Lochridge was not an engineer and that the company's own
testing of the whole strength was better than the independent testing that Lochridge had recommended. But Lochridge 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. - You know, this is a mature art. And many people in the community were very concerned about this sub. And a number of the top players in the Deep Submergence,
engineering community, even wrote letters to the company saying that what they were
doing was too experimental to carry passengers, and that needed to be
certified and so-and-so. - And a few months after
Lochridge 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
DNV-GL safety standards, yet it does not appear that OceanGate has the intention of
following DNV-GL class rules. Your representations at a minimum are misleading to the public, and breaches in industry-wide
professional code of conduct we all endeavor to uphold." Now, obviously, this is an
incredibly damaging 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 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,
OceanGate said, quote, "bringing an outside entity up
to speed on every innovation before its 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, OceanGate might be covered by
the same exception to DOHSA, 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 steam ship 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 1,517 passengers. And it turned out that these
ship had a design flaw. The wall separating the bulkhead 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 ship owners from going bankrupt. The law gives ship owners the right to preemptively file a
claim in Federal Court before plaintiffs have
a chance to sue them. The claim limits plaintiffs
to the post-loss 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 salvage 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 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. OceanGate 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 Rush's sub carried only five people. US Regulation state, quote,
"Because of the unique design and operating characteristics as well as the inherent hazards
of underwater operation, an uninspected submersible
may be permitted in 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. - What they were doing for tourism would not be allowed in US waters. The Coast Guard would not allow it. It would not be allowed to
work in British coastal waters because it would've
required it to be certified. Same thing in Canada. And then turns out that they operated in international waters where no Coast Guard has jurisdiction. Well, you found two loopholes, and let's just say it wasn't very wise. - 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 signed will be enforceable or not. But one thing is for certain, Stockton Rush really
should have brushed up on his math and science skills, which you can do with
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