Q&A of the Day – Who Pays for OceanGate’s Titan Search and Rescue Process?
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
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Today’s Entry: Submitted via talkback asking about who pays for the Titan’s search and recovery expedition.
Bottom Line: In Friday’s Q&A I detailed how OceanGate’s CEO Stockton Rush had a long history of questionable decision making and a public aversion to regulation of the commercial sub industry. So much so, that due to my research into current regulations, and in studying the construction of the Titan vessel, it appears that Rush intentionally used carbon fiber as opposed to metals as the primary material, which no experts endorse, as a means of keeping the weight of the vessel low enough to avoid existing regulations on submersibles. And while it’s all but certain that those factors were behind the implosion of the vessel and the loss of life of those aboard – including Rush...you’ve raised an interesting point about search and rescue efforts. And it’s one that applies to all offshore search and rescue efforts – not just the unprecedented mission of various agencies and multiple countries.
Among the entities involved in the search and rescue efforts of the Titan were the US Coast Guard, The US Navy, The Canadian Coast Guard and numerous private entities. While the final price tag of the efforts is unknown, just the operational expense associated with the military craft involved is known to be several million dollars. As for whom will end up paying for it... If you’ve guessed on this one – there's a good chance you’re right. Here's how the process works in this and every search and rescue mission starting with the Coast Guard.
Under federal law all search and rescue efforts involving the Coast Guard are at taxpayer’s expense. There’s a provision which specifically states that the US Coast Guard may not seek reimbursement for its operations. So, taxpayers are clearly on the hook for that one. The Navy, however, doesn’t have the same provision – so the Navy could seek reimbursement from OceanGate for the cost of their operations. It’s also possible that private entities to make a legal appeal for cost recovery as well. That said it’s almost a certainty that there won’t be any recovery by any government agency or private entity involved in the discovery of the Titan and if for no other reason, that’s due to what’s almost certain to happen next.
The next most likely move by OceanGate is a bankruptcy filing dissolving the company which will seek relief from costs associated with the Titan’s search and rescue and any potential legal judgements sought by victims' families. Some have pointed to the passengers all having signed waivers indicating they understood the voyage could result in death, holding OceanGate harmless – meaning under normal circumstances there wouldn’t be legal standing for a legal relief order. However, if it’s found that OceanGate knowingly took risks to cut corners placing passengers in a disproportionally dangerous situation, as again there already appears to be ample evidence of that having been the case with Titan, it could lead to a judge invalidating the waivers opening the company to liability. There’s also the reality that the founder and CEO of OceanGate is dead and that the company’s brand is unrecoverable after this event.
There are two possibilities for some cost recovery but they’re slight. The first is the dissolution of the company. If OceanGate is dissolved in bankruptcy, and if they have assets in excess of existing liabilities, which is an unknown, the balance of the proceeds could go to those with what are deemed by a judge to be legitimate claims. The other would be through civil actions against surviving employees. If, for example, an investigation into surviving employees is undertaken and its shown that they were aware of, and actively participated in, improper behavior associated with the operation of the Titan, there would be the potential for judgements to be rendered against the employees responsible. That’s a lot of ifs and even then, there’s no certainty that those employees would have the financial wherewithal, either now or in the future, to meaningfully pay for the extensive costs of the search and recovery efforts and potential civil judgements against them. This takes us back to you...
Taxpayers almost always foot the bill for all search and rescue efforts by all federal agencies regardless of circumstances and the tragic effect is almost certainly not going to be any different. Independent of the apparent recklessness of Stockton Rush and his OceanGate team, it’s yet one more reason why it’s selfish to engage in careless behavior that puts people at risk in the ocean. Not only are people likely to get hurt or worse, but taxpayers' foot also the bill for what comes next.