May 7, 2015 will be the 100th birthday of the sinking of the cruise liner The Lusitania.  It was one hell of a big boat, and it was a good deal more elegant both on its inside and outside than are the many storied cruise boats of our current age. Even a columnist as distinguished as George Will (Washington Post) wrote about it. See Austin American-Statesman, May 3, 2015. Mr. Will wrote that the sinking of the Lusitania was a tragedy, but not the cause of others; in other words, not the cause of significant events. Maybe so. That has been contested now for nearly a century. One thing is certain however. It plaid a significant role in the reparations controversies between Germany and the United States after the conclusion of the war, and it general several significant litigated cases, e.g., with respect to war risk exclusions in life insurance policies, among others. Life insurers even made a claim to the commission adjudicating reparations. 
In any case, the ship was on a voyage from New York to Liverpool.  The ship sailed more or less directly NE; when it got a little past Ireland, it was to turn left; get to the ocean near Liverpool, and turn right.  The ship was not zigging and not zagging.  The sinking happened 12 or so miles off the southern, coast of Ireland, more or less.  There were a large number of fatal casualties, of which 125+ were Americans. The ship sank approximately 300± feet of water, where it has resided for the last century.  
It was torpedoed by a German U-Boat, as the result of a change in German maritime war policy. The one torpedo coming from the U-Boat may have triggered a second explosion, and especially as a result of that second explosion, the ship sank very quickly—18± minutes or so. (The second explosion happened, no doubt; the only question about it is what caused it.)
There is a substantial literature on the disaster—a few books, some articles, many newspaper stories, and now bunches of stuff on the Internet. As one might expect some of the literature is excellent; some is respectable; some is ok; while some is shit, especially the ones deploying the rhetoric of conspiracy theories and nothing or not much else. Like respectable evidence, for example. (Here’s an example: Did Winston Churchill arrange the sinking of the boat—him and his Mason and Jewish buddies?)
 Just as one would expect, the literature is creeping up, now that the 100th birthday is approaching. Erik Larson’s DEAD WAKE: THE LAST CROSSING OF THE LUSITANIA   (Crown Publishers, 2015) has been well reviewed by both NYT, Book Review, Sunday March 8 and WSJ on the previous day. The book has been a best-seller for more than several weeks, and had the #1 spot in Sunday NYTs at least twice. (On May 17, 2015, I was still there, ranked #5 On June 21, 2015, it was listed as #8 on the NonFiction Best Seller List, and by July 12, 2015 it had gone back up to #5. Or was it #4?  On September 6, 2015, it was #7.) In the Review section of the Saturday-Sunday WSJ, available on August 29, 2015, the book was #4 on the “Nonfiction E-Book” Best Seller List for the period ending on August 23. Of course, most interesting things get old and “peter out” eventually, but this one is hanging on for a long time, as these things go. It was still listed on September 6th.) Perhaps it is worth knowing that the phrase “dead wake” means the stage of a wake from a ship where the existing of the wake is almost over.) According to the January 3, 2016 NYT Book Review DEAD WAKE was still on the best seller list: 14th after 31 weeks on the list. It had dropped off the WSJ’s list long before. 

A second book was also published recently, though not with the same “buzz”; for example it was not reviewed in the Sunday NYT, and it has not been a best seller. Greg King and Penny Wilson, LUSITANIA: TRIUMPH, TRAGEDY AND THE END OF THE EDWARDIAN AGE (2015). Neither book has anything significant to say about insurance and the King-Wilson book says nothing at all on the subject.

A bit more about insurance is to be found in the Jules Witcover, SABOTAGE AT BLACK TOM: IMPERIAL GERMANY’S SECRET WAR IN AMERICA – 1914-1917 (1989). See p. 284. Of particular interest in this book the way insurers played a role in the case before the Mixed Claims Commission–the one that lasted from 1914 until 1939 at the earliest–that arose in part out of the explosion at Black Tom Island in New York harbor.  That is an interesting tale, but it is not one to be retold in
One of the most interesting speculations was that the ship was carrying a good deal of ammunition for the British. That mystery was resolved some years ago—it was carrying a lot of it–and I will tell a bit of that part of the story later. A related speculation has been what did the Germans know about this and when did they come to know it. Finally, there is the more legalistic controversy about the international law of Germany’s justification for doing what it did, given what the British were doing about Atlantic shipping. (That speculation is purely abstract and hyper-academic, since Germany threw in—or was forced to throw in–the towel on this matter by the Treaty of Versailles.
There has not been a good deal of discussion of insurance—indeed, hardly any, except for several discussions in the texts of the Mixed Claim Commission, and they will be discussed later.  For example, the ship itself, was worth more than $10m in the dollars of that day, and I have not been able to locate or obtain the war risk insurance policy issued by the Liverpool and London [or “London and Liverpool”] War Risk Insurance Association. [Footnote #1] covering it covering Cunard and at least some of the ships it owned. Not much is known now about form maritime policies at that time about special war risk policies then,* nor have I found the actual policy covering the Lusitania. Nor has much of anyone else;  in fact, one court observed that it was not provided with a copy of the policy. (Or, maybe it would be better to say that the court expressed surprise at not receiving it.) (*The truth is, of course, that war risk insurance has been around especially for ships of the sea, for centuries, though is is now even more so for aviation disasters.  (It was apparently one of the important issues in the so-called  “The Alabama Cases” which was a dispute between the U.S. and England arising out of the latter’ activities on behalf of the South in the American Civil War. Sometimes parts of very old policies can be found. Today, war risk insurance often includes terrorism coverage.  Centuries ago they often covered a predecessor of terrorism, to wit: piracy. Contemporary terrorism can now be covered, or not.) 
I cannot even find “knock offs” of the policy on any of the many historical antique auction houses findable on the Net. In contrast, there is at least one good fragment of an insurance story to be found on the Internet, and I will share it, as we go along.
I intend to tell the story, to the extent that it is a story, in short little essays.  Given the character of the tale, I don’t think there are many who would want it read it all at once. And I will be telling a couple of stories related to insurance that are not really insurance or not really an insurance matter closely related to this stunning beautiful ship.

Not all of the essays will be about insurance cases directly arising out of the Lusitania disaster.  One will involve an insurance case arising out of the attack on Pearl Harbor years later. One will involve a workers compensation case, which is an insurance sort of case, though it may or may not have involved an actual insurance company. In addition, (1) there is related law pertaining to probate matters, and there will be brief mention of it, since the problems arose out of the Lusitania, and (2) there is a related case  pertaining to recovery for wages. 

There is also a story involving what we would now call wrongful death cases and how they were handled by an international commission.  That is too big a story (or whole set of stories) to tell, though there is one specific piece of it that involves issues raised by life insurers.  That story will very be mentioned much later, and–interestingly–it involves the awarding of legal fees. [Footnote #2]
There is an amount of material available on amounts paid to survivors and to the relatives of those killed that have inheritance rights.  There is also a good story—although the evidence is thin—regarding some things one of the passengers had in his possession that was most assuredly insured, but with respect to which there is almost no available discussion.
This introductory blog, is now long enough, so I will not tell even one of the insurance stories.  I will start in  Part II. It will be about the Wreck Commission. and its Report–really its decision. It will be followed by Part III which will concern a decision by an American court as to Cunard’s liability in what is called a “Limitation Case,” under the law of admiralty and an 1851 statute.. 

Part IV.A is a simple case in which coverage is sought under a life insurance policy. Part IV.B is another life insurance case that years later cited the case discussed in IV.B but had a very different result. Part IV.A may say more about the times than it does about the role of insurance in the “small picture” of the disaster, and it certainly reveals something about the changing bases of legal argument in American courts. Part V is a combination insurance probate case, while Part VI is a pure insurance case, though one resulting from the Lusitania tragedy. 
The contract of insurance in question in Part IV.A was a life insurance  policy on Alfred G. Vanderbilt who was drowned as a result of the sinking of the ship. I will discuss the case first, and then say a couple of words about the insured.

Some of these “Parts” will concern the litigation regarding whether the ship owner or some of its employees were negligent and if so whether they caused the disaster.  Other parts will discuss some of the litigation consequences that followed the disaster. Some of them will pertain to insurance matters. They and some of the others will be found both in the series of blogs Quinn’s Commentaries on Insurance Law and in the blog Quinn’s Commentaries on Lawyers and Lawyering. 

[Footnote #1] I have obtained a document entitled “THE LIVERPOOL AND LONDON WAR RISKS INSURANCE ASSOCIATION LIMITED.” The edition I obtained bears Reference Code: C/WRA, Acc. No.: MM.2009.5, and it is identified as having been “Listed by John Moore, Assistant Curator and Sarah Starkey, Curator of Maritime Archives. There is a very brief description of the “club,” and an indication that the “state” was carrying some of the reinsurance at some points of time, though it looks like that started after the sinking being discussed here. So for s the Lusitania policy is concerned, there is a section entitled “Registers of Membership Policies”; it covered the relevant coverage periods, e.g., 1914-1916. There is another sub-section entitled “Time Policy Books, and this too appears to include the relevant years, though not the subsection “Voyage Policy Books.” (Unfortunately, “voyage books” are described as giving “brief details of the routes of voyages made by insured vessel[.]  I have not gotten further than this, however, at least not yet.

[Footnote #2] What will not be discussed is the Montana case in which its supreme court affirmed a citizens conviction under a state Sedition Act for giving at least one speech in which he denounced WWI and stated that the German sinking of the ship was defensible. State v. Kahn, 182 P. 107 (1919) or the Idaho case in which the supreme court of that state refused to disbar a lawyer for negative attitude toward that war and for and fee charging the government had asked be forgone. In re Clifton, 196 P. 670 (Idaho 1921). Nor will there by discussion of the several reported cases concerning citizenship-termination, except to say that the United States does not perform well when it passes “Sedition Acts.” See Rhuberg v. U.S., 255 F. 865 (9th Cir. 865, 869-70 (9th Cir. 1919), Sandberg v. U.S., 257 F. 643 (9th Cir. 1019)(correct and well-reasoned), Schurmann v. U.S. 264 F. 917 (9th Cir. 1920)(perhaps one of the most poorly reasoned judicial opinions in American history), and U.S. v. Herberger, 272 F. 278 (W.D. Wash., 1921)(wrong, thorough, well-reasoned, and even philosophical)


It might be worth mentioning in passing–though perhaps not–that Canard was no complete stranger when it came to litigation involving passengers.  In 1909 the Municipal Court of the City of New York, Borough of Manhattan, First District, the court issued an opinion involving the Lusitania, vaguely. It seems that Cyrille Eggermont was booked as a passenger on the Lusitania. Cunard, however, lost his luggage, refused to let him board–(one wonders why)–but booked him on another line, and arrangement Cyrille accepted.  Cyrille sued Canard anyway, even though there was a $25.00 limit on lost bag damages. Eggermont v. Cunard S.S. Co. Limited, 119 N.Y.S. 1110 (December 1909)(Prince, J.)

Cyrille lost, but not until after the court made a good deal of fun of his counsel, Cornelius O’Connor. Here is some of what it said: 

“The learned counsel for the plaintiff, in a brief which is verily a literary production, ingeniously, and yet by the invocation of what are undoubtedly elementary principles of law, argues that plaintiff is not bound by the contract of carriage by him entered into with the defendant, that the defendant may not urge the limited liability therein fixed, and the plaintiff is entitled to the full value of the lost trunk. He contends that, when when the defendant refused the plaintiff passage on the Lusitania, it committed a breach of contract, that the plaintiff then had a right to rescind the contract and hold the defendant as bailee, under the common law, for the full value of the trunk and its contents; and that the defendant may not urge the contract which is breached as establishing the limited liability.”

The trouble is, said the judge, that though the principles are unassailable, they do not fit the facts. If Cyrille was going to rescind the contract he had to actually do so.  He could not accept a voyage on a different ship, provided as the defendant’s expense, and then rescind.  

And the court continued: “In eloquent language counsel pictures the hardship which plaintiff, a man of small means, must suffer by limiting the recovery to $25. To this argument can be made only the now trite answer, that there was the contract of the parties, that it is the duty of courts to determine the rights of the parties under the contracts of the parties; that is the duty of the courts to determine the rights of the parties under the contracts which they make, not to make new contracts for them, and to declare the law as they fine it,not to change or strain the law to make it fit a particular hard case.”

Sound familiar? Certainly because of the case itself.  According to WestLawNext, no other case has ever cited it for anything.

Maybe but there is a piece of this case which is not so clear. Cyrille is awarded his $25.00, but from it is deducted $15.00, “the amount of the defendant’s counterclaim.” The counterclaim is $15.00 in costs recovered by Cunard against the plaintiff in a previous action. What’s going on there? Was there some secret reason why Cunard wouldn’t let him on the Lusitania? Hummm.

As a result of this anomaly I find myself wondering why Cunard was being represented by such a “white show” “blue stocking” firm as Lord, Day, and Lord.  


*Michael Sean Quinn, Ph.D., J.D., c.p.c.u. . . .
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