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More Bodies Brought Ashore From Sunken Ferry; Criminal and Civil Troubles for Some of Ship's Crew; Supreme Court Allows Affirmative Action Ban by Voters; U.S. Adds Military Exercises in Eastern Europe; Waiting Period for Attorneys to Contact Families Expires in Flight 370 Case; Netflix to Raise Prices

Aired April 22, 2014 - 15:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BROOKE BALDWIN, CNN ANCHOR: Bottom of the hour, you're watching CNN. I'm Brooke Baldwin.

And with talk about this rescue mission for the capsized ferry here in the frigid waters of the Yellow Sea, it is now honing in on the ship's cafeteria, because that is where these rescue divers believe many of those passengers were gathered when that ferry started to sink.

The death toll stands at 121. It is expected to dramatically rise.

Here is CNN's Nic Robertson reporting from Jindo, South Korea.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: More bodies, more solemn sad processions to waiting ambulances, the pace of police boats bringing ashore the grim cost of this tragedy is picking up, many of the victims wearing life vests.

For just a few families, the arrival of each boat brings the waiting closer to an end. For so many more, the uncertainty continues.

The company which operated the ferry posted a public apology on their website saying, in part, "We prostrate ourselves before the victims' families and beg for forgiveness. We apologize to all the people who are grieving for the loss of their loved ones."

The search for survivors in these waters is dangerous. Divers must first swim down over a hundred feet, following guide ropes to reach the ship. Aboard the vessel, low visibility and debris make it nearly impossible to navigate.

Rescuers focus their search on the third and fourth levels inside lounge and cabin areas, where they believe many of the students are located.

So far, nine crew members in all have been arrested, including these four who appeared in court on Tuesday outside the court, answering questions about the sinking, one crew member saying, "After the ship began to list, they were trying to stabilize it and stop it capsizing."

Another says the captain issued a distress signal, then tried to deploy the lifeboats, but they couldn't reach them.

The captain, who has defended his actions, faces possible life in prison if convicted of the charges against him.

Nic Robertson, CNN, Jindo, South Korea.

(END VIDEOTAPE)

BALDWIN: Nic was talking about the crew. You have the families, of course, of these ferry victims, many of them parents of those young high school students, absolutely in anguish, as they face a long road ahead when it comes to compensation for their loss.

Hundreds of families' lives are now forever changed, so what about the legal route here? Maritime trial attorney Jack Hickey joins me from Miami, and Jack represents 20 passengers who were on board the Costa Concordia cruise line when that crashed off of Italy in 2012.

So, Jack, how does one determine liability in this disaster specifically off of South Korea? The captain, crew, ferry company?

JACK HICKEY, MARITIME TRIAL ATTORNEY: Well, you know, as far as civil liability, yes, the ferry company, but as far as criminal liability against this captain, that's really under the Korean law.

International law doesn't really provide a very specific prohibition on the captain getting off the vessel before the vessel goes down or before all the other passengers.

But, you know, the captain is the master of the vessel. He's master and in charge of the safety of every single passenger on board. How can you administer your duties as master of all the safety of everybody, without being there? And you have to be there.

And what's interesting is, in the Korean system, the legal system in Korea, it is a civil law system different from ours. They have judges making almost all the decisions, not juries, but in certain criminal cases since 2008, they have actually had advisory juries on certain criminal matters.

It will be interesting to see whether there's an advisory jury on the criminal case against the captain in this situation.

BALDWIN: Did you think in a situation like this -- we know what's happening with the Costa Concordia. That captain is on trial and could face prison for the rest of his life.

But in this case, might this be something that takes the litigious route, be it civil or criminal, or might we see a settlement?

HICKEY: Well, you know, the criminal case, because, frankly, there's been so much media attention, if I had to guess on the criminal side, they're going to be pretty harsh.

It's not going to be a situation -- if we had to guess, it's -- I don't think it's going to be a situation where there's going to be a quick plea on that side.

If it were a plea, it would be certainly only if the captain agreed to a very stiff sentence. So that's criminally.

Civilly, it is, again -- it's a different system from ours, and I think it's pretty clear, given the circumstances here and the lack of connection with the United States, for example, that the litigation is going to stay in Korea.

And under this civil law system, there are schedules for compensation, and it will take some time, but the compensation just, you know, it depends on the formulas in the schedules.

BALDWIN: I want to go back to a word you used at the top of that answer, harsh. South Korea's president likened the actions of the captain and crew to murder.

When you talk about criminality in this type of case, do you think murder, manslaughter charges could be likely in this scenario?

HICKELY: Well, you know, when you talk about murder, when you talk about taking somebody's life, you do talk about, you know, first- degree, second-degree, manslaughter and down from there.

This certainly could be -- this certainly could rise to a situation of manslaughter, which is really -- the definition of that is not that he had premeditated intent to do bad things to people, to actually kill people, but that his actions were so grossly negligent that he had to have foreseen that bad things, and in fact death, would have come to people.

And this may be a case like that and -- where manslaughter is appropriate, and I say that, because here we have a string of failures, not just one thing, but a string of failures, starting with the fact that they veered off course, being three hours late, were the initial reports.

Secondly is that third mate at the helm. And maybe a tricky -- and the latest reports were that the vessel may be -- may have been in a tricky area navigationally, speaking. And then --

BALDWIN: That's right. We don't know definitely. We don't know yet, but those were all the initial reports, but certainly we have some questions.

You know, nine people detained now as we were hearing from our reporter in Jindo on the ground, saying they keep seeing these bodies wrapped in white sheets coming back to land, and you just think of the families.

Jack Hickey, let's leave it there, maritime trial attorney. Thank you so much for joining me -- HICKEY: Thank you, Brooke.

BALDWIN: -- and your expertise. I really appreciate it.

Now to this, could affirmative action soon be a thing of the past? Our legal expert says today's Supreme Court ruling was very bad if you support those policies.

And later, families will likely never forgive Malaysia Airlines for what happened to their loved ones on board Flight 370.

Soon, they'll have a new way to take out their frustration and anger on the airline.

(COMMERCIAL BREAK)

BALDWIN: A decision today at the U.S. Supreme Court could radically change who gets to attend college in our country. This was a six-two decision. The court upheld a ban passed by voters in the state of Michigan that prevents the use of racial preferences in college admissions.

Jeff Toobin is our senior legal analyst and author of "The Oath," all about the U.S. Supreme Court, good enough to join us from Omaha, Nebraska, today.

So, Jeff Toobin, I know that you're saying here that for anyone who supports affirmative action, this is a bad decision. Tell me why.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, this is really a case about who decides whether there should be affirmative action.

What the justices said in their opinion today is the states can decide essentially any way they want.

If the voters decide, as they did in Michigan, that they don't want affirmative action anymore at their state university, they can do that. Presumably, state legislatures can do the same thing.

So what this suggests is that opponents of affirmative action can go state by state, by voter referendum, by state legislature vote, and say, look, we don't want it anymore, and the universities themselves have no say.

It can be up to the states, and they can exclude it. And that's what happens in Michigan now. And it could happen elsewhere as well.

BALDWIN: So, it's up to the states.

And it's always interesting to look at the breakdown here, because we know Justice Breyer usually votes more on the liberal side, but sided with conservatives this time.

Why do you think?

TOOBIN: Well, I -- he wrote a separate opinion, and he basically said, look, we have said, we the Supreme Court have said that affirmative action is permissible. Universities can consider race as one factor among many.

But we have not said that they have to do that. It's up to them. It's up to the university, and in turn, it's up to the state where the university is to decide whether they want to engage in affirmative action.

So he was not saying affirmative action was a bad thing. He was simply saying, look, states can take it or not. Michigan decided not, and other states presumably, given the way the polls show, other states may well do the same thing.

You know, Michigan's a pretty liberal state --

BALDWIN: That's what I was wondering.

TOOBIN: Well, 58 percent of the voters in Michigan said, no affirmative action. That, I think, suggests that the anti-affirmative action side, at least, has the public on its side at the moment.

BALDWIN: Jeff Toobin, thank you so much for hopping in front of a camera for us today. We appreciate it.

TOOBIN: All right.

BALDWIN: The U.S. is adding to military exercises in eastern Europe, and it is certainly no coincidence this is going on the same time, of course, as the unrest in Ukraine.

Here is the press secretary at the Pentagon.

(BEGIN VIDEO CLIP)

REAR ADMIRAL JOHN KIRBY, PENTAGON PRESS SECRETARY: They know each other. This isn't the first time that the 173rd has done exercises with these countries. So there's a relationship there.

But, yes, these exercises were conceived and added on to the exercise regimen as a result of what's going on in Ukraine.

(END VIDEO CLIP)

BALDWIN: So, Washington sending a message to Moscow.

Another message delivered this week, Vice President Joe Biden visiting Kiev at the same time a congressional delegation.

So to Washington we go, my colleague Jake Tapper, chief Washington correspondent, host of "THE LEAD."

So, Tapper, I know coming up on your show, you're talking to a congressman who is in Ukraine, part of this delegation.

JAKE TAPPER, CNN HOST, "THE LEAD": That's right. We interviewed the chairman of the House foreign affairs committee, Congressman Ed Royce in California, yesterday.

Today we're interviewing a Democrat from the House foreign affairs committee, also in Ukraine, who met with Ukrainian leaders, met with Vice President Joe Biden.

He recently tweeted that he's hoping for a unified and democratic Ukraine. Unified presumably means he wants Crimea returned to the Ukraine, so we'll press him on how exactly he thinks that will come about.

A lot of criticism from Republican quarters for the Obama administration for not adding lethal aid to this $50 million package for Ukraine.

We asked Ben Rhodes of the White House about that yesterday. He said he doesn't think it would make a difference right now because Russia has such a bigger military than Ukraine, even if they had additional weapons.

BALDWIN: I would love to hear his answer on how Crimea would reverse course. We'll stay tuned to that -- for that.

What else do you have coming up on the show?

TAPPER: We've got live reports from all over the world. We have South Korea. We have Washington state. President Obama will be touching down there, meeting with families from that natural disaster in Oso, Washington.

Also, of course, we'll be looking into the plane. And we have a special Earth Day trip to the South Pole that I know you're going to want to watch. The images are just spectacular. We did this interview a little while ago. It was --

BALDWIN: Not at the South Pole? You didn't actually --

TAPPER: I was here. The person we were interviewing was in the South Pole, but there was literally a 30-second delay.

BALDWIN: Oh, my goodness.

TAPPER: We've edited that down, but I don't know if you've tried to do an interview with somebody in the South Pole. There's a little delay, it turns out.

BALDWIN: Pause, pause, pause.

TAPPER: Exactly.

BALDWIN: Jake Tapper, we'll be looking for it.

Great TV yesterday in Boston yesterday, by the way.

TAPPER: Yes, indeed.

BALDWIN: Thank you so much. We'll see him at the top of the hour for "THE LEAD."

In the meantime, for a month and a half, lawyers have had to stay away from families who lost loved ones on Flight 370.

One family member has a message for any attorney who hopes to get in touch with her after this tragedy.

Her message is next.

(COMMERCIAL BREAK)

BALDWIN: Day 47 now since Malaysian Air Flight 370 vanished over the southern Indian Ocean, a somber milestone because it now allows attorneys to swoop in.

There's a federal law that bans early contact between attorneys and victims' families. They have to wait at least 45 days to give these families time to deal with the trauma, and now we're past that threshold.

But -- here's the but -- partner of passenger Philip Wood talked to CNN today and has a message to those lawyers and to the Malaysian government.

(BEGIN VIDEO CLIP)

SARAH BAJC, PARTNER OF MH370 PASSENGERS: The briefings have become more of a stand-up routine, you know, black comedy or maybe gallows comedy.

Our frustration is that there is no information given. The only thing that the Malaysian government has released so far has been opinion, basically.

So they have not released a single piece of data, and the families have basically lost their patience with it.

So we've been very busily organizing ourselves. We're up to almost 200 total family members combined together between the Chinese families, Malaysian families and families from other countries, such as Australia and India and, of course, the United States, and we're going to start to put a lot more political and perhaps even legal pressure on the government to release data for third-party assessments.

And now they are trying to put our family members in coffins again. There's not the slightest bit of evidence that this flight has even crashed. There's no wreckage. There's no sightings. There's nothing at all that could be deemed to be actual fact. It's only conjecture at this point.

We'll keep going back to wanting to start over with the investigation. What they are doing now, searching in the ocean, is like continuing to trying to bail out a boat when the hole in the boat hasn't even been found yet.

They're just treating a symptom. They are not going back to the cause. And it's absolutely astounding to me that they haven't been willing to release that data.

Now, the general perception within the family group, nobody is interested in compensation lawsuits, and we're really quite sick of being hassled by attorneys trying to get us to sign to earn millions of dollars. You know, that's got to stop.

But we really do need advice in how to pressure Malaysian Airlines to open up what should be exposed information in a criminal investigation.

(END VIDEO CLIP)

BALDWIN: Now, we know that the Malaysian government plans to issue death certificates for passengers. but Sarah Bajc there says that neither she nor Philip's family has been contacted about it at all.

And we have information to us just into CNN this afternoon. This is coming in to us from Australia, as officials are working out what the next steps of this investigation will be here, the search for the plane and beyond.

So the planned focus is on the key three areas. First, you have the handling of debris, if and when they find it, who gets it, where will the debris from this wreckage remain, who handles it.

Then you have the issue of human remains, if and when they are found, who cares for them, who handles that.

And then this one, potentially widening the search area if the Bluefin's final hours come up empty. This is all according to from Martin Dolan. He is the chief commissioner of the Australian Transport Safety Bureau.

And, quick break, we will be right back.

(COMMERCIAL BREAK)

BALDWIN: All right. If you love -- guilty -- watching "House of Cards" and other shows and movies on Netflix, you have to pay attention to this.

Netflix's prices are about to go up. Yep, they are. The streaming video company says it plans to raise monthly subscriptions.

But here's the catch. The price hike will only affect new customers.

So let's bring in CNNMoney correspondent Zain Asher. She is live at the New York Stock Exchange with us.

And, Zain Asher, how much more money are we talking?

ZAIN ASHER, CNNMONEY CORRESPONDENT: Hey, Brooke. We're only talking $1 to $2, and I want to make it clear this is for new customers for the time being only.

But it's the first price increase Netflix has shown us since 2011. The point is they want to use this new money to invest in original shows like, for example, "Orange Is the New Black" and "House of Cards." And I must confess I have not seen a single episode of "House of Cards."

BALDWIN: What? What?

ASHER: I'm missing out. I know.

But, yeah, original content for Netflix is really a huge revenue booster.

And by the way, even though it's only $1 to $2, when you consider the fact that they have 48 million subscribers worldwide, it certainly does add up.

But for existing customers, I want to make this clear. You pay about $8 a month now. CEO Reed Hastings says that that's likely to continue for the time being.

He says that he will continue that price level for a generous period of time, but it does, of course, open the door for possible price increases for existing customers in the near future.

Brooke?

BALDWIN: OK. So if they want this extra money, they want to invest in new shows and, listen, that's fully understandable, but didn't Netflix report like some huge jump in profit?

I mean, how much more cash are they looking for?

ASHER: Right. So the reason why they are doing the price increase now is, quite simply, for lack of a better explanation, is because they can. They're coming from this huge position of strength.

You mentioned they did report earnings yesterday. They beat on profit, so they reported $50 million in profit.

You compare that to this time last year. They only reported 3 million. So, obviously, that's a significant increase. Last year, their stock price rose 270 percent, Brooke, as well.

But also, they've tested out price increases before. So they tested it out in Ireland. They increased prices by one euro, and it didn't have that much of a huge fallout, and so, as far as they're concerned, they probably will be able to get away with this price increase.

And, by the way, Netflix stock today rising six percent on the news, because obviously it does mean a larger amount of revenue.

BALDWIN: Since I have you with 20 seconds to spare, tell me how the markets are doing today, right before the Closing Bell here.

ASHER: Right. So it looks to be the sixth, straight day of gains on the S&P 500, biggest winning run we've had since October. It really is all about earnings, Brooke. I mentioned to you Netflix, but also Comcast as well.

And, by the way, if you look at the companies that reported earnings, almost 70 percent of the companies that have reported have actually beaten in expectations, partly because the forecasts are so low, so it really is all about earnings today.

Brooke?

BALDWIN: Zain Asher for us, and there it goes, just on cue, the Closing Bell.

If you want to check, of course, all the numbers each and every day, CNNMoney.com is the place to go.

I'm Brooke Baldwin. Thank you so much for being with me. I'll be back here same time, same place, tomorrow.

Let's go to Washington. "THE LEAD" with Jake Tapper starts now.