WEBVTT - Lawsuits Over Baltimore Bridge Collapse & South Carolina's Map 0:00:03.200 --> 0:00:08.120 This is Bloomberg Law, with June Brusso from Bloomberg. 0:00:07.680 --> 0:00:14.640 Radio Cruiser undertaking the complicated work of removing mangled steel 0:00:14.720 --> 0:00:17.720 and concrete at the site of the deadly collapse of 0:00:17.800 --> 0:00:22.360 Baltimore's Francis Scott Key Bridge after a container ship lost 0:00:22.440 --> 0:00:26.759 power and crashed into a supporting column, killing six workers 0:00:27.200 --> 0:00:32.600 and throwing the Eastern US transportation network into chaos. Officials 0:00:32.640 --> 0:00:35.879 say that in those murky waters, divers can't see a 0:00:35.880 --> 0:00:39.360 foot in front of them, and with all that mangled, 0:00:39.440 --> 0:00:43.239 intertwined steel above and below the water, the site is 0:00:43.280 --> 0:00:46.880 a safety risk. Here's Marylyn, Governor Wes Moore. 0:00:47.680 --> 0:00:50.720 You're looking at three four thousand tons of steel that's 0:00:50.720 --> 0:00:53.040 sitting on top of the ship, and so beginning to 0:00:53.360 --> 0:00:56.200 in sections be able to create that pathway, create open 0:00:56.280 --> 0:00:59.960 channels so we can actually get boats, get tugs inside 0:01:00.080 --> 0:01:01.400 the area. 0:01:01.520 --> 0:01:04.319 And two channels have been opened near the side of 0:01:04.319 --> 0:01:08.480 the collapse bridge to make way for smaller vessels and 0:01:08.600 --> 0:01:11.600 as the crews continue to work. The owner of the 0:01:11.600 --> 0:01:15.600 ship filed a lawsuit on Monday, denying responsibility for the 0:01:15.640 --> 0:01:19.479 collapse and trying to limit its legal liability to forty 0:01:19.520 --> 0:01:22.760 three point seven million dollars the current value of the 0:01:22.800 --> 0:01:26.000 ship and its cargo, in a case that credit rating 0:01:26.040 --> 0:01:31.200 agency Morning Star DBRs predicts could become the most expensive 0:01:31.280 --> 0:01:35.040 marine insured laws in history. Joining me is Michael Stirley, 0:01:35.319 --> 0:01:38.240 a maritime law expert at the University of Texas at 0:01:38.240 --> 0:01:41.679 Austin School of Law. Michael, who do you anticipate will 0:01:41.720 --> 0:01:43.240 be filing lawsuits here? 0:01:44.080 --> 0:01:47.160 The short answer is, anybody who did something wrong is 0:01:47.280 --> 0:01:50.160 likely to be sued here, or anybody who can plausibly 0:01:50.200 --> 0:01:52.680 be claimed to have done something wrong is likely to 0:01:52.680 --> 0:01:53.440 be sued here. 0:01:54.400 --> 0:01:57.200 So of course the victims and the families of the 0:01:57.320 --> 0:02:01.240 victims are going to sue. But what about the state 0:02:01.400 --> 0:02:05.480 or county or whoever for the cost of rebuilding the bridge, 0:02:05.640 --> 0:02:09.079 which could cost experts say four hundred million dollars or more. 0:02:10.200 --> 0:02:12.720 Oh, I'd be surprised if get that small, but I 0:02:12.760 --> 0:02:15.480 read recently that the inflation adjusted value of the original 0:02:15.560 --> 0:02:19.800 construction was roughly twice that. I mean, broadly speaking, you'd 0:02:19.800 --> 0:02:23.799 see claims coming from three main points. You have the 0:02:23.840 --> 0:02:27.239 property damage claims. Anybody whose property was damaged as a 0:02:27.240 --> 0:02:30.080 result of this accident. Most obviously that's going to be 0:02:30.120 --> 0:02:32.600 the owner of the bridge, which understands the state of Maryland, 0:02:32.880 --> 0:02:36.680 so they will certainly be doing The federal government has 0:02:36.720 --> 0:02:39.120 indicated that it's going to be paying the rebuilding costs, 0:02:39.400 --> 0:02:42.520 so they may have the subrogated claims, basically stepping into 0:02:42.520 --> 0:02:45.640 the shoes of the state of Maryland saying we paid 0:02:45.919 --> 0:02:49.280 reimburss Us for what we paid for your your damage. 0:02:49.639 --> 0:02:54.000 They will probably be minor property damage claims. Whatever vehicles 0:02:54.080 --> 0:02:56.000 ended up in the water, you know their owners will 0:02:56.000 --> 0:02:58.600 have property damage claims and relatively mine on the scheme 0:02:58.639 --> 0:03:00.920 of things. Then the second brought category you have as 0:03:00.960 --> 0:03:03.880 the personal injury claims. There were at least two workers 0:03:03.919 --> 0:03:06.440 who went into the water who survived, and then you 0:03:06.520 --> 0:03:09.799 had the six workers who went into the water tragically 0:03:09.800 --> 0:03:13.120 did not survive, So the be wrongful death claims from 0:03:13.120 --> 0:03:16.680 the families of the decedents and that it was only 0:03:16.720 --> 0:03:19.600 be personal injury claims from the two people who survived. 0:03:20.280 --> 0:03:23.360 There may be other people who claim negligent fiction of 0:03:23.360 --> 0:03:27.000 emotional distress who were in the zone of danger and 0:03:27.400 --> 0:03:32.560 suffered mental harm. Broadcasts of personal jury claimants. Typically these 0:03:32.600 --> 0:03:36.160 disasters tend to attract what are called economic laws claimant, 0:03:36.400 --> 0:03:39.680 people whose claims they suffered economic loss as a result 0:03:39.760 --> 0:03:44.040 of this disaster. Typically, those claims do not succeed unless 0:03:44.080 --> 0:03:47.640 the person also suffered some physical injury property damage. So, 0:03:47.800 --> 0:03:51.440 for example, this stake to recover for the economic loss 0:03:51.560 --> 0:03:54.800 and not collecting bridge tolls for the next however many 0:03:54.880 --> 0:03:57.560 years it takes to rebuild the bridge. Because they suffered 0:03:57.560 --> 0:04:00.920 property damage, they can also recover for their econom I'm across, 0:04:01.160 --> 0:04:05.040 but if you have businesses to say I'm getting less 0:04:05.080 --> 0:04:07.400 business because people can't cross the bridge to get to 0:04:07.440 --> 0:04:09.680 my business, you know they're going somewhere else because now 0:04:09.680 --> 0:04:12.560 they're going through the tunnel. But they didn't suffer any damage, 0:04:12.600 --> 0:04:15.720 any physical damage. Those claims are typically dismissed in the 0:04:15.760 --> 0:04:19.080 maritime law. How many people will be in those three categories, 0:04:19.760 --> 0:04:22.920 I don't have enough information, but the ape workers and 0:04:22.960 --> 0:04:25.599 the bridge owner are certainly going to be obvious claims. 0:04:26.040 --> 0:04:29.280 It looks like those woill be the big money amounts. 0:04:30.040 --> 0:04:32.839 So the owner of the ship is trying to limit 0:04:32.960 --> 0:04:37.440 liability to about forty two point seven million dollars and 0:04:37.480 --> 0:04:39.440 they claim that the collapse of the bridge was not 0:04:39.520 --> 0:04:41.800 due to any fault, neglect, or want of care of 0:04:41.839 --> 0:04:45.120 the companies, and they shouldn't be held liable first of all, 0:04:45.120 --> 0:04:47.279 and if they are held liable, then they shouldn't be 0:04:47.279 --> 0:04:49.719 for more than the current value of the ship and cargo. 0:04:50.160 --> 0:04:54.440 This is a common move by ship owners after catastrophic crashes. 0:04:54.600 --> 0:04:57.480 Isn't it tell us about that skewer? I'd say obscure 0:04:57.560 --> 0:05:00.279 for most of US law from eighteen fifty one that 0:05:00.400 --> 0:05:01.440 involves the Titanic. 0:05:01.760 --> 0:05:05.320 Well, I mean eighteen fifty one was obviously what sixty 0:05:05.440 --> 0:05:08.839 some years before the Titanic, although the law was famously 0:05:08.839 --> 0:05:11.919 invoked in the Titanic case. So Congress passed the statute 0:05:11.920 --> 0:05:15.280 in eighteen fifty one designed to encourage investment in shipping. 0:05:16.120 --> 0:05:19.400 Middle of the nineteenth century was before the era when 0:05:19.600 --> 0:05:23.560 the corporate form became common, so it was designed for 0:05:23.600 --> 0:05:28.520 an era when individuals and partnerships generally owned vessels, and 0:05:28.560 --> 0:05:32.400 the idea was that if an individual risked all of 0:05:32.440 --> 0:05:35.279 their assets by investing in the ship, that made it 0:05:35.520 --> 0:05:38.520 a less appealing investment. I mean, you could imagine today 0:05:38.560 --> 0:05:41.760 that if all of the shareholders of BP had to 0:05:41.839 --> 0:05:43.799 chip in to pay for the cost of the BP 0:05:43.920 --> 0:05:47.160 oil spill and the golf, that would make people less 0:05:47.160 --> 0:05:50.320 willing to invest in companies that base those kinds of risks. 0:05:50.480 --> 0:05:53.720 Now the corporate form obviously takes away that risk. You know, 0:05:53.760 --> 0:05:56.800 if you buy shares in BP, the value of your 0:05:56.839 --> 0:06:00.600 share is at risk. But worst case scenario is your 0:06:00.600 --> 0:06:03.039 share value goes down to nothing. You know, the company 0:06:03.240 --> 0:06:06.360 goes into liquidation. But the rest of your assets are 0:06:06.360 --> 0:06:09.520 not subject to those cranes. And what the eighteen fifty 0:06:09.560 --> 0:06:13.440 one Limitation Act essentially does is treat every ship as 0:06:13.480 --> 0:06:17.040 though it were an individual corporation. So if you can imagine, 0:06:17.200 --> 0:06:19.919 you know, suppose that this shipowner, instead of owning this 0:06:20.000 --> 0:06:24.239 ship and other assets as well, owned nothing but the ship, 0:06:24.600 --> 0:06:27.280 and then the ship is in a terrible accident, takes 0:06:27.279 --> 0:06:30.600 out a bridge, facing massive lawsuits. If the ship were 0:06:30.600 --> 0:06:34.839 in fact a single corporation, the corporation with clear bankruptcy 0:06:35.480 --> 0:06:38.000 say that our only asset is the ship. You know, 0:06:38.080 --> 0:06:42.000 total value, you know, forty million dollars. Liquidate the corporation, 0:06:42.560 --> 0:06:45.360 take our assets and distribute them pro rat among the claimants. 0:06:45.560 --> 0:06:48.880 Shareholders lose the value of their investment, but that's the 0:06:48.920 --> 0:06:52.640 extent of it. Essentially, what the Limitation Act does is 0:06:52.680 --> 0:06:56.200 the same thing. It says, even though the shipowner owns 0:06:56.240 --> 0:06:59.160 other assets. It will be allowed to limit its liability 0:06:59.200 --> 0:07:04.039 under circumstances to the value of the asset involved in 0:07:04.120 --> 0:07:08.160 the accident. Now, as you say this is very common, 0:07:08.640 --> 0:07:11.440 I've previously predicted that the chances of a limitation action 0:07:11.880 --> 0:07:14.120 being filed here were somewhere north of ninety nine point 0:07:14.200 --> 0:07:16.920 nine nine percent. It didn't take long for that prediction 0:07:17.000 --> 0:07:21.560 to be to be justified. Chippotas routinely do this, and 0:07:21.600 --> 0:07:24.400 they routinely do it even in circumstances where they know 0:07:24.480 --> 0:07:27.200 they don't qualify for limitation. You know, if you look 0:07:27.240 --> 0:07:30.280 at the look at the BP oil spill again, you 0:07:30.320 --> 0:07:32.720 know Transotion was the owner of the vessel there. They 0:07:32.760 --> 0:07:35.760 filed a limitation petition. The district court held they were 0:07:35.760 --> 0:07:39.600 not taught to limit their liability, but Transition still got 0:07:39.600 --> 0:07:41.960 a major benefit out of doing that. You look at 0:07:41.960 --> 0:07:46.559 the Alfarro disaster, the Bestlona there filed a limitation proceeding. Again, 0:07:46.600 --> 0:07:49.560 they were held not entitled limitation, but they still got 0:07:49.560 --> 0:07:54.640 a benefit. What the limitation action does is centralize all 0:07:54.640 --> 0:07:58.280 the litigation in one court. Now Here, we've got the 0:07:58.320 --> 0:08:01.760 bridge owner a personally claimants that we've got at least 0:08:02.720 --> 0:08:07.440 nine obvious claimants, but for the limitation proceeding, they could 0:08:07.920 --> 0:08:12.120 possibly file in nine different courts, and very likely they 0:08:12.200 --> 0:08:14.080 might be filing in the state court. You know, the 0:08:14.080 --> 0:08:16.680 state of Maryland may well prefer to sue in its 0:08:16.720 --> 0:08:19.480 own courts rather than going to federal court. Personal linjay 0:08:19.520 --> 0:08:23.360 lawyers often prefer state court over federal court, and depending 0:08:23.440 --> 0:08:26.080 on where the eight workers live, they may file in 0:08:26.200 --> 0:08:29.240 eight different state courts. So the vessel owner would be 0:08:29.680 --> 0:08:33.200 in the position of having to defend you nine different suits, 0:08:33.200 --> 0:08:35.600 but all arising out of the same incident, all involving 0:08:35.640 --> 0:08:40.320 the same facts in nine different forms, and having to 0:08:40.360 --> 0:08:43.280 go through everything nine different times, and having the risk 0:08:43.320 --> 0:08:47.240 of inconsistent results. By filing this petition, all of the 0:08:47.280 --> 0:08:50.800 litigation is channeled into the federal District Court for the 0:08:50.800 --> 0:08:53.880 District of Maryland. If you read the petition that inevitably 0:08:53.880 --> 0:08:57.920 includes the boilet plate provision, asking the court to require 0:08:57.960 --> 0:09:00.520 all claims to be filed in that court and enjoining 0:09:00.559 --> 0:09:04.520 litigation anywhere else. So even if they don't get limitations, 0:09:04.640 --> 0:09:06.520 the best of owner at least gets the benefit of, 0:09:07.200 --> 0:09:09.920 at least for the time being, having everything in this 0:09:10.000 --> 0:09:13.280 one court, and what's more, in one court sitting in admiralty, 0:09:13.440 --> 0:09:14.800 which generally means no jury. 0:09:15.040 --> 0:09:18.160 What would plaintiffs have to do in order to overcome 0:09:18.240 --> 0:09:21.160 that liability limit? What do they have to show? 0:09:21.679 --> 0:09:23.559 But they have to show basically that the owner was 0:09:23.600 --> 0:09:27.280 at fault. You know, the statutory language is the falter 0:09:27.440 --> 0:09:30.520 knowledge of the owner. I think there are several limitation 0:09:31.160 --> 0:09:34.760 provisions in maritime law that use somewhat different language falter privity, 0:09:34.920 --> 0:09:37.160 falter knowledge. I think falter knowledge is the language in 0:09:37.160 --> 0:09:39.760 this statue. So they have to show that the owner 0:09:40.640 --> 0:09:45.240 did something wrong. Now, what's a bit unusual. The counterintuitive 0:09:45.280 --> 0:09:49.000 there is that they have to show the personal fault 0:09:49.040 --> 0:09:51.200 of the owner. And of course the owner is a corporation. 0:09:51.320 --> 0:09:54.320 The corporation acts only to its agents. But the way 0:09:54.360 --> 0:09:58.160 the law has been developed, they have to show the 0:09:58.200 --> 0:10:01.320 fault of basically se your management. They have to show 0:10:01.360 --> 0:10:05.440 that shore side management is at fault here, not simply 0:10:05.480 --> 0:10:07.880 that people onboard the vessel did something wrong. 0:10:08.240 --> 0:10:09.560 What about mechanical failure. 0:10:10.040 --> 0:10:13.360 Well, mechanical failure could be a late defect that the 0:10:13.400 --> 0:10:15.960 owner is not it fought for, or it could be 0:10:16.080 --> 0:10:19.040 the result of a failure to maintain the vessel properly, 0:10:19.080 --> 0:10:21.760 which the owner, is it fault? For often when a 0:10:21.760 --> 0:10:25.680 ship loses power, it's some problem with the bunker fuel. Now, 0:10:25.679 --> 0:10:27.800 if it's a problem with the bunker fuel, the owner 0:10:27.840 --> 0:10:29.920 is going to going to bring in the bunker fuel 0:10:29.960 --> 0:10:32.680 supplier and say it's your fault that this happened. But 0:10:32.760 --> 0:10:34.840 the claimants are certainly going to say to the owner, 0:10:35.200 --> 0:10:36.960 you know, you should have taken better care to make 0:10:37.000 --> 0:10:39.000 sure you got good bunker fuel, and then there'll be 0:10:39.040 --> 0:10:41.640 a fight about whether or not the owner was responsible 0:10:41.640 --> 0:10:41.880 for that. 0:10:42.360 --> 0:10:46.040 Is it a difficult hurdle for plaintiffs to overcome this 0:10:46.960 --> 0:10:47.920 liability limit. 0:10:48.559 --> 0:10:52.880 Most limitation actions result in limitation not being granted. So 0:10:53.160 --> 0:10:56.120 most limitations and vessel owners know this, they still file 0:10:56.200 --> 0:10:59.120 the limitation claims to get the benefit of the concursis 0:10:59.120 --> 0:11:01.439 to get the benefit of having all of the claims 0:11:01.440 --> 0:11:04.000 filed in the same court. Even if they don't get limitation, 0:11:04.080 --> 0:11:06.640 they still get a major benefit from the concursives. In 0:11:06.679 --> 0:11:11.320 most cases, the court finds that the owner did something wrong, 0:11:11.480 --> 0:11:15.240 they could have avoided the accident. The owner's management did 0:11:15.280 --> 0:11:18.239 something wrong and therefore they're not entoitled in the liability. 0:11:18.880 --> 0:11:21.200 Whether that happens here is going to depend on what 0:11:21.240 --> 0:11:24.199 the facts are. I certainly don't know enough of the facts, 0:11:24.200 --> 0:11:27.400 and I suspect nobody yet knows enough of the facts 0:11:27.400 --> 0:11:29.680 to know how that's going to play out. But the 0:11:29.760 --> 0:11:32.640 process will continue and the court will figure out whether 0:11:32.679 --> 0:11:34.160 or not the owner did something wrong here. 0:11:34.559 --> 0:11:37.120 Coming up next on the Bloomberg Lawn Show, I'll continue 0:11:37.160 --> 0:11:41.480 this conversation with Michael Stirley of the University of Texas 0:11:41.480 --> 0:11:44.520 at Austin's School of Law, and we'll talk about the 0:11:44.640 --> 0:11:48.920 insurance coverage. I'm June Grosso and you're listening to Bloomberg. 0:11:51.280 --> 0:11:54.520 Two channels with different damps have been opened near the 0:11:54.559 --> 0:11:58.320 side of the collapse Francis Scott Keybridge in Baltimore Harbor 0:11:58.720 --> 0:12:02.160 to make way for small vessels. During a briefing today, 0:12:02.200 --> 0:12:06.240 authority said the weather was hindering the work. Brigadier General 0:12:06.360 --> 0:12:09.680 John Lloyd said the divers are working in low visibility 0:12:09.920 --> 0:12:12.640 and hazardous conditions on the bridge wreckage. 0:12:13.040 --> 0:12:16.679 The same complexity and challenges, even more. 0:12:16.559 --> 0:12:19.559 So, are below the water as well. 0:12:19.320 --> 0:12:21.680 And I think that's what's going to make it such 0:12:21.679 --> 0:12:23.640 a challenge in removing this wreckage. 0:12:23.760 --> 0:12:26.360 It's not only what you see above the water, but 0:12:26.440 --> 0:12:27.160 below the water. 0:12:27.240 --> 0:12:31.480 As well. Transportation Secretary Pete Buddha Judge has said there's 0:12:31.559 --> 0:12:35.320 no timeline for reopening the busy port of Baltimore because 0:12:35.360 --> 0:12:37.000 of the complexity of the work. 0:12:37.480 --> 0:12:39.400 It's not just that you have to remove the wreckage, 0:12:39.400 --> 0:12:40.760 it's that you have to do it in a way 0:12:40.800 --> 0:12:44.280 that doesn't cause portions of the bridge that are there 0:12:44.360 --> 0:12:47.199 across the water to shift. They've been under a lot 0:12:47.200 --> 0:12:50.640 of compression and tension. They could behave almost like a 0:12:50.760 --> 0:12:53.080 spring if they are not expertly managed. 0:12:53.360 --> 0:12:56.640 As the recovery continues and parts of the ship remain 0:12:56.840 --> 0:12:59.600 stuck at the sign of the accident, the owner of 0:12:59.640 --> 0:13:02.560 the ship that rammed into the bridge is seeking to 0:13:02.600 --> 0:13:06.640 limit its liability for the accident. The company, Grace Ocean, 0:13:06.760 --> 0:13:10.120 filed a lawsuit in federal court on Monday, claiming the 0:13:10.160 --> 0:13:13.840 collapse of the bridge was not due to any fault, neglect, 0:13:14.040 --> 0:13:16.840 or want of care, and that it shouldn't be held 0:13:16.920 --> 0:13:20.160 liable for any loss or damage from the disaster. But 0:13:20.440 --> 0:13:23.080 if it is held liable, it shouldn't be for more 0:13:23.120 --> 0:13:25.720 than the current value of the ship and its cargo. 0:13:26.240 --> 0:13:29.319 I've been talking to maritime law expert Michael Stirley of 0:13:29.440 --> 0:13:33.200 the University of Texas at Austin School of Law. So 0:13:33.440 --> 0:13:37.520 Bloomberg Intelligence reports that the ship alone has about three 0:13:37.559 --> 0:13:44.679 billion dollars of reinsurance coverage just generally, does reinsurance kick in? 0:13:44.800 --> 0:13:47.520 Does it cover the costs if the owner's suit for 0:13:47.760 --> 0:13:49.280 limited liability fails? 0:13:49.720 --> 0:13:52.880 Well, there are two kinds of insurance that are relevant here. 0:13:53.160 --> 0:13:55.560 A number of news agencies have been reporting that the 0:13:55.600 --> 0:13:57.680 ship had only I think it was ninety million dollars 0:13:57.720 --> 0:14:01.319 of insurance. That's talking about its hullm machinery insurance, which 0:14:01.360 --> 0:14:04.440 they're kind of properly insurance. That's the insurance that the 0:14:04.520 --> 0:14:08.520 vessel owner has to reimburse it if the vessel is 0:14:08.720 --> 0:14:11.480 lost or damage, and the vessel owner is citing that 0:14:11.640 --> 0:14:14.920 in the limitation petition to show what the value of 0:14:14.920 --> 0:14:17.920 the ship is, which is releatant limitation proceding. The insurance 0:14:17.960 --> 0:14:21.480 that you're talking about is liability insurance, which is probably 0:14:21.520 --> 0:14:25.120 the more important insurance here, and that's the insurance that 0:14:25.160 --> 0:14:28.640 the vessel owner has to cover its liabilities if it's 0:14:28.640 --> 0:14:31.520 not liable to a third party. And typically the case 0:14:31.640 --> 0:14:33.720 like this, the vessel will be entered in what's known 0:14:33.760 --> 0:14:35.960 as a P and I club, which is basically a 0:14:36.040 --> 0:14:38.760 kind of mutual insurance company where the vessel owners get 0:14:38.800 --> 0:14:41.920 together and pull their risks. I've read the news reports 0:14:42.000 --> 0:14:44.480 that this vessel was entered with Britannia, one of the 0:14:44.560 --> 0:14:47.400 major P and I clubs, and typically the vessel owner 0:14:47.440 --> 0:14:50.360 will have a certain retention amount what most people would 0:14:50.360 --> 0:14:52.160 think of it as a deductible, So the vesselan will 0:14:52.160 --> 0:14:55.040 be responsible for the first some level I don't know 0:14:55.040 --> 0:14:59.040 what the individually negotiated for each case, say the first 0:14:59.080 --> 0:15:01.840 ten million dollars be the vessel owner's responsibility. Then the 0:15:01.880 --> 0:15:03.680 P and I club will pick up the neck, you know, 0:15:03.800 --> 0:15:06.600 whatever the club is arranged, and then beyond that you 0:15:06.680 --> 0:15:09.200 go into reinsurance. There are about a dozen P and 0:15:09.240 --> 0:15:11.240 I clubs in the world, the International Group of P 0:15:11.320 --> 0:15:14.080 and I Clubs, and they pull the risk among themselves, 0:15:14.120 --> 0:15:16.360 and then beyond that they go into reinsurance in the 0:15:16.760 --> 0:15:20.000 secondary market. If the vessel owner is allowed to limit 0:15:20.040 --> 0:15:22.720 its liability, then the vessel owner and it's P and 0:15:22.760 --> 0:15:25.480 I club will be able to avoid taking advantage of that. 0:15:25.680 --> 0:15:28.320 If they're not god of the limit liability, then you've 0:15:28.320 --> 0:15:30.400 got a big insurance fund that's going to cover a 0:15:30.400 --> 0:15:32.720 lot of the losses here one point to make those 0:15:32.840 --> 0:15:36.840 The limitation, by its terms, permits the vessel owner to 0:15:36.880 --> 0:15:40.280 limit its liability. That has been interpreted to allow both 0:15:40.280 --> 0:15:43.480 the vessel owner and what's known as a bareboat charterer 0:15:43.680 --> 0:15:47.120 to limit liability. A bareboat charter is someone who doesn't 0:15:47.120 --> 0:15:49.840 actually own the vessel, but operates as though they were 0:15:49.880 --> 0:15:53.200 the owner. Sometimes throwing some Latin here called them the 0:15:53.200 --> 0:15:55.400 owner pro hot Beechey. I mean, if you think about 0:15:55.400 --> 0:15:58.440 it in a more familiar consumer context. You know, if 0:15:58.440 --> 0:16:00.840 you buy a car, obviously it's your car, you know 0:16:00.920 --> 0:16:02.920 you own it. But if you lease your car, so 0:16:03.040 --> 0:16:05.240 you get a three year lease, technically you don't own 0:16:05.320 --> 0:16:07.960 the car, but you act like you own the car. 0:16:08.200 --> 0:16:10.880 It's for all intents and purposes, you are operating it 0:16:10.920 --> 0:16:12.840 as though you own the car. That's essentially what a 0:16:12.840 --> 0:16:15.640 bareboat charter is that you have leased the vessel for 0:16:16.000 --> 0:16:19.160 a fixed time period, but you operate it. You do 0:16:19.280 --> 0:16:21.560 all of the you know, you hire the crew, you 0:16:21.760 --> 0:16:24.520 arrange provisions, you make all the decisions, you run up 0:16:24.520 --> 0:16:26.880 like you own it. So the Limitation Act protects the 0:16:26.920 --> 0:16:32.880 owner and that bareboat charterer. This limitation petition claims limitations 0:16:32.920 --> 0:16:36.040 on behalf of both the owner and the vessel manager. 0:16:36.560 --> 0:16:39.000 I will be very curious to see whether the court 0:16:39.080 --> 0:16:42.520 allows the vessel manager to lim a liability that's not 0:16:42.600 --> 0:16:46.040 an obvious obvious beneficiary is a limitation Act. It's interesting 0:16:46.040 --> 0:16:47.120 to see how that plays out. 0:16:47.400 --> 0:16:50.040 Until I started doing research, I didn't realize how many 0:16:50.360 --> 0:16:54.480 maritime accidents there have been in recent years. A dive 0:16:54.560 --> 0:16:57.400 boat caught fire off the coast of southern California in 0:16:57.400 --> 0:17:00.880 twenty nineteen and killed the thirty four pus. So the 0:17:01.000 --> 0:17:04.840 litigation has not yet been resolved there. So are we 0:17:04.880 --> 0:17:08.200 anticipating this is going to take years and years and years. 0:17:08.400 --> 0:17:09.879 I don't know how long it's going to take to 0:17:09.880 --> 0:17:13.000 resolve the Conception Fire case, but yes, there is a 0:17:13.000 --> 0:17:15.760 lot of litigation going on there. The Conception Fire actually 0:17:15.840 --> 0:17:19.639 prompted Congress to amend the Limitation Act for one of 0:17:19.680 --> 0:17:21.879 the very few times in its history. You know, the 0:17:21.920 --> 0:17:25.240 statute was amended after the Titanic. For the most part, 0:17:25.280 --> 0:17:27.760 it hasn't changed a whole lot since eighteen fifty one. 0:17:27.920 --> 0:17:32.480 But in December twenty two, I think it was, Congress 0:17:32.520 --> 0:17:36.560 had a very minor amendment to exclude what it called 0:17:36.640 --> 0:17:39.760 covered small passenger vessels from the scope of the Limitation Act, 0:17:39.920 --> 0:17:42.520 basically to say that the next time that a disaster 0:17:42.720 --> 0:17:45.359 like the conception happens, the vessel owner can't claim the 0:17:45.359 --> 0:17:48.600 benefit of limitation. So every once in a while Congress 0:17:48.640 --> 0:17:52.359 does respond to very high profile accidents when the mandments 0:17:52.359 --> 0:17:53.800 of the Limitation Act. 0:17:53.600 --> 0:17:58.320 And so the case is involving this bridge collapse will 0:17:58.359 --> 0:17:59.720 take years and years. 0:18:00.119 --> 0:18:02.480 I would be surprised if this has resolved quickly, but 0:18:02.560 --> 0:18:05.159 you never know. I mean, most cases in fact settle 0:18:05.280 --> 0:18:07.439 so as we learn more about the accident, that the 0:18:07.440 --> 0:18:10.120 parties learned more about the accident, If it becomes obvious 0:18:10.160 --> 0:18:12.240 that the vessel owner did something wrong, and if it 0:18:12.359 --> 0:18:14.760 fault and won't be allowed to limit liability, then a 0:18:14.840 --> 0:18:18.040 settlement may happen more quickly. I wouldn't be surprised if 0:18:18.080 --> 0:18:21.960 the personal injury claimant end up settling fairly quickly, even 0:18:22.000 --> 0:18:24.680 if the litigation overpaying for the replacement of the bridge 0:18:24.720 --> 0:18:27.440 goes on much longer. In the VP oil spill case, 0:18:27.480 --> 0:18:30.000 for example, there were I think it's there are eleven 0:18:30.359 --> 0:18:33.800 Transocean Workers employees who were killed in the accident. Those 0:18:33.880 --> 0:18:36.800 cases settled very quickly, Transocean took care of its employees 0:18:36.920 --> 0:18:40.119 that didn't need to go into extended litigation. You know, 0:18:40.359 --> 0:18:42.120 the big fight was over who is going to pay 0:18:42.160 --> 0:18:44.720 for the clean up costs, not the personal injury claims. 0:18:44.840 --> 0:18:46.720 I have to say, this is a whole different legal 0:18:46.760 --> 0:18:50.840 area for me. I appreciate your insights. That's Michael Sterley 0:18:51.119 --> 0:18:54.280 of the University of Texas at Austin School of Law, 0:18:55.240 --> 0:18:58.080 coming up next on the Bloomberg Law Show. This year's 0:18:58.119 --> 0:19:01.639 congressional elections in South Carolina will be held under a 0:19:01.720 --> 0:19:04.840 map that a panel of three judges head rule was 0:19:04.960 --> 0:19:10.640 unconstitutional and discriminatory against black voters. Why because the Supreme 0:19:10.680 --> 0:19:13.760 Court hasn't issued a decision in the case, despite the 0:19:13.800 --> 0:19:17.760 fact that oral arguments took place back in October. In 0:19:17.840 --> 0:19:21.320 other legal news today, Donald Trump has sued two co 0:19:21.440 --> 0:19:25.399 founders of his newly public Trump Media and Technology Group, 0:19:25.840 --> 0:19:29.280 claiming they set the company up improperly and shouldn't get 0:19:29.320 --> 0:19:32.720 any stock in it. It's the latest legal skirmish over 0:19:32.800 --> 0:19:36.159 who gets how much of the hot but flailing meme stock. 0:19:36.760 --> 0:19:40.080 Trump alleges that the two violated an agreement about the 0:19:40.119 --> 0:19:43.919 setup and don't deserve their eight point six percent stake, 0:19:44.280 --> 0:19:48.919 currently valued at six hundred and six million dollars. The lawsuit, 0:19:49.359 --> 0:19:53.000 which was filed on March twenty fourth in Florida State Court, 0:19:53.359 --> 0:19:56.480 comes after the pair brought their own suit against the 0:19:56.520 --> 0:20:00.199 former president in Delaware Chancery court over the they are 0:20:00.320 --> 0:20:04.560 promised stake in the social media company. The legal fight 0:20:04.680 --> 0:20:08.639 is playing out amid wild swings in shares of Trump Media, 0:20:09.000 --> 0:20:11.919 which began trading last week after it merged with a 0:20:11.920 --> 0:20:15.800 special purpose acquisition company known as a SPACK. The stock 0:20:15.880 --> 0:20:19.600 dropped twenty one percent on Monday after Trump Media disclosed 0:20:19.640 --> 0:20:23.080 in a securities filing a fifty eight million dollar loss 0:20:23.359 --> 0:20:26.640 and a relative trickle of revenue for twenty twenty three, 0:20:26.960 --> 0:20:29.520 and reiterated a warning that it needed the money from 0:20:29.520 --> 0:20:33.359 the SPACK deal to keep operating. The judge in Delaware 0:20:33.400 --> 0:20:37.119 said he was gobsmacked to learn of Trump's Florida suit, 0:20:37.560 --> 0:20:41.080 which he filed instead of bringing counterclaims against the duo 0:20:41.600 --> 0:20:45.800 in his Delaware courtroom. He also said he'd consider possible 0:20:45.880 --> 0:20:49.760 sanctions against the former president in the Delaware case. I'm 0:20:49.840 --> 0:20:54.560 June Grosso, and you're listening to Bloomberg. This year's congressional 0:20:54.600 --> 0:20:58.040 elections in South Carolina will be held under a map 0:20:58.119 --> 0:21:02.119 that a panel of federal judges found was unconstitutional and 0:21:02.160 --> 0:21:05.760 discriminatory against black voters. The case is in the hands 0:21:05.760 --> 0:21:09.880 of the Supreme Court, which heard oral arguments last October. 0:21:10.160 --> 0:21:12.960 With no decision from the High Court, the failure of 0:21:13.000 --> 0:21:16.880 Republican legislators to redraw the map, and time running out 0:21:16.920 --> 0:21:20.080 ahead of voter deadlines, a federal court ruled that the 0:21:20.240 --> 0:21:24.000 unconstitutional map will be used. Joining me is elections law 0:21:24.040 --> 0:21:27.960 expert Richard Brefald, a professor at Columbia Law School. Rich 0:21:28.040 --> 0:21:29.919 tell us about the history of this case. 0:21:30.400 --> 0:21:34.200 Following the twenty twenty census, the Republican legislature of South 0:21:34.240 --> 0:21:36.840 Carolina redistricted. It didn't need to change the number of seats, 0:21:36.840 --> 0:21:39.359 but they moved them around in order to improve the 0:21:39.440 --> 0:21:42.440 prospects for the Republican Actually its congress from Nancy Mace, 0:21:42.480 --> 0:21:45.400 who represents the District one near Charleston, and what they 0:21:45.400 --> 0:21:49.040 did is they basically made her district more Republican and 0:21:49.119 --> 0:21:52.320