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News Analysis - Lawsuits Target Carnival Corp. in the U.S. But Will They Succeed?September 12, 2012 By: Susan Young
Legally speaking, the odds for jurisdictional success are questionable.
Yet, dozens of lawsuits have been filed in U.S. courts of law against Carnival Corporation, parent of Costa Cruises, by cruise guests injured or traumatized by the Costa Concordia accident earlier this year, as well as by the families of those killed in the Jan. 13 accident near Giglio, Italy.
In that maritime accident, 32 people died. Thousands of others were safely rescued or managed to get off the ship on their own.
During the evacuation, the ship's captain - based on the continuing investigation and a recent bridge transcript provided by Italian authorities - failed to tell cruise guests or the Italian Coast Guard about the seriousness of the ship's damage.
His alleged failure to declare an emergency and evacuate the ship in a timely manner lost valuable minutes that possibly could have saved lives.
In addition, more than 1,000 businesses on Giglio say they've been negatively impacted by the accident and are also seeking justice on U.S. shores.
While Carnival Corp. is Costa's parent company, Costa is based in Europe, although the line does have a U.S. sales office in South Florida.
But the legal issues are a bit sticky. Generally, when a customer boards a cruise ship, he or she has already voluntarily signed cruise documents that legally state where any lawsuit can be filed.
If the cruiser doesn't sign, he or she is not allowed to board the ship. The process is somewhat similar to an airline's contract of carriage, which is a document stating the rules and policies a customer accepts prior to boarding any airline.
"The passenger ticket issued by the cruise line is generally considered to be the legally binding contract between the cruise line and the passenger," says Jim Walker, a Miami-based maritime attorney who operates CruiseLawNews.com.
The detail in such contracts is typically buried in myriad pages of fine print. Agents know that cruisers eagerly anticipating an exciting vacation rarely even glance at the documents, even if prompted to do so.
"In my view, it's largely a one-sided document that is drafted by the cruise line defense lawyers to protect the cruise lines' interests," Walker notes. He explains that cruise documents include a "forum selection" clause, meaning that the line indicates the locale where any lawsuits arising out of the cruise must be filed.
Walker says many cruise lines, including Carnival Cruise Lines, Celebrity Cruises, Norwegian Cruise Line and Royal Caribbean International select Miami, while Princess Cruises lists Los Angeles and Holland America Line lists Seattle.
But in Costa's case, the cruise documents signed by passengers before boarding say that any legal issues must be adjudicated in Genoa, Italy, the brand's home base.
"To use a sports analogy, this gives the cruise lines a home court advantage," says Walker, noting that these types of clauses are usually legally enforced, even though it may be inconvenient and expensive for the passengers to travel to the location picked by the cruise lines.
In addition, Walker says that among the terms and conditions typically benefitting the lines are a shorter period to file a lawsuit - one year, versus the usual limitations of three to four years.
The most recent filings within U.S. state and federal courts contend that Carnival Corp., Costa's parent firm, is based in Miami and ultimately responsible for any safety transgressions, recklessness of the captain, or negligence of the ship's crew in sailing too close to Giglio.
But will they ever see a day in court in the U.S.? Or, will their legal action be thrown out of court, with the victims having to shift their effort to an Italian court of law?
Curt Anderson, legal affairs writer, The Associated Press, wrote a detailed story about this issue last night, based on the latest happenings.
Agents can go here for Anderson's analysis of the issues and comments from legal experts on both sides: http://hosted2.ap.org/OREUG/f7ded15e4d4846268a17b79c1c4b7cb8/Article_2012-09-11-Cruise%20Aground-Lawsuits/id-3b693314bb404e4989baf9f6b5261ae3
Walker also has posted several interesting blogs about jurisdictional issues related to cruise line lawsuits. Agents will find them at: www.cruiselawnews.com/2010/08/articles/passenger-rights/cruise-forum-selection-clauses-do-you-speak-french and www.cruiselawnews.com/2010/02/articles/passenger-rights/cruise-ship-accident-and-injury-law-miami-florida-forum-selection-clauses.
Lawyers for the victims believe they have a valid case in U.S. courts. For its part, Carnival Corp. has repeatedly said it won't comment on any pending litigation beyond what is in the court filings.
In those documents, Carnival Corp. has pointed to Costa as a separate corporate entity and stressed that lawsuits should be filed in Italy. In addition, the cruise company said it doesn't own Costa Concordia and doesn't manage Costa's day-to-day activities.
Carnival Corp. does have a strong public reputation for a "hands off" approach to all its cruise brands. Agents know it typically allows individual brand executives to handle all day-to-day operations and decisions impacting that brand.
At times, Carnival Corp. brands even compete against each other, as in the case of Holland America Line and Princess Cruises, both huge players in the Alaska market.
Carnival Corp. dedicates its time to overall corporate operations including corporate financing, cruise ship orders and development of foreign investment in cruise terminals or destination facilities.
"In the Costa Concordia case, the U.S. passengers face a difficult uphill battle to pursue a case in the U.S. against either Costa or Carnival," acknowledges Walker.
He cites these facts: The cruise ship is registered in and flies the flag of Italy. Costa is incorporated in Italy. It has its principal place of business in Genoa, Italy where the cruise ticket specifies the lawsuit must be brought. The accident happened in Italian waters, the captain is Italian, and the Italian Coast Guard is investigating. And, there is also a criminal proceeding in Italy.
"Based on these considerations, it is unlikely that the passengers will be successful in suing Costa here in Florida or other states in the U.S.," Walker believes.