Articles Tagged with “Carnival Corporation”

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In 2010, a fire broke out in the engine room of the Carnival Splendor, disabling the large cruise ship, leaving thousands of passengers and crew-members stranded at sea for days. In early 2012, the Costa Concordia ran aground after its captain committed the unthinkable, which caused the death of 32 people. Despite these avoidable tragedies, and the public relations storm it found itself in at the time, Carnival Cruise Lines is reporting steady revenues and earnings.

carnival-triumph rip.jpgFor 2010, Carnival reported revenues of $14.4 billions. In 2011 and 2012, revenues increased to $15.7B and $15.3B respectively. While posting very strong revenues, the company’s earnings are just as strong, posting earnings of $2.42B in 2011, followed by $1.88B in 2012.

Tragedies and public relations disasters affect Carnival, and the entire cruise industry, relatively mildly compared to other businesses. Empirical data shows that the public at large, and cruise line customers have a very short collective memory when it comes to vacationing on a luxurious cruise ship. Since 2006, North American cruise passengers have steadily increased from 9.13 to 9.72 million in 2011. Worldwide in 2010, it is estimated that cruise ships were visited by 14.3 million passengers.

The question begging to be answered is, even if the public’s collective memory fades so rapidly that it does not affect traffic and consumption, why aren’t cruise lines taking a financial hit for their serious miscues? Answer is simple: Cruise lines do not respond to anyone or anything.

Let’s look at the thousands of passengers who were stranded aboard the Carnival Triumph for 5 days in the middle of the Gulf of Mexico. The only thing Carnival can reasonably fear is that they lost 3,143 customers for life. That is a drop in their books. The cruise line industry responds to nobody because cruise companies have handcuffed their passengers in disclaiming the cruise line’s responsibility for everything that happens on their ship, except their own negligence (46 U.S.C.A. § 30509 expressly invalidates any contract provision aiming to limit a ship’s liability for its own negligence to its passengers, but is limited to cruises visiting a U.S. port.)

Cruise lines know that their ticket-contract provisions are essentially “almighty” and have been interpreted and declared legal and binding by competent courts. Prior to embarking on the Carnival Triumph, all passengers received a ticket which contains the following:

“Carnival shall not be liable to the passenger for damages for emotional distress, mental suffering/anguish or psychological injury of any kind under any circumstances, except when such damages were caused by the negligence of Carnival and resulted from the same passenger sustaining actual physical injury, or having been at risk of actual physical injury, or when such damages are held to be intentionally inflicted by Carnival.”

Carnival also disclaims that the ship is not responsible for, and entitled to do anything its Captain decides in the event of a “breakdown of the vessel”. The ticket also contains a “Class Action Waiver” which provides that passengers waive the right to form a class action to seek recovery. In cases where the passengers only claim is a ruined vacation, class actions may be the only form of effective remedy. The legal validity of the clauses is still an open question.

Under what circumstances could a Carnival Triumph passenger sue Carnival?
Carnival can be sued if its ship committed an act of negligence that resulted in a passenger’s physical injury. For instance, if a passenger slips on urine in the middle of a hallway, and ends up fracturing a hip, Carnival can be held responsible. A passenger, who becomes physically ill from the poor conditions or contracts an illness, will also likely have a valid claim against Carnival. But the hundreds of passengers, who were “merely” subjected to sleeping on the floor with hundreds of other people in hallways flooded with urine smells and worse, will have a much more difficult time asserting claims. Although claims for so-called negligent infliction of emotional distress are allowed in certain circumstances, they are generally limited to situations where the passenger was within the “zone of danger” of physical harm and suffered an emotional injury with some physical manifestation or psychological diagnosis.

Recently, Leesfield & Partners very successfully resolved a cruise passenger claim after our client fell due to conditions caused by a fire on board a different ship that had left the vessel stranded in the middle of the ocean, thereby creating an unstable platform for walking.
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Several days ago, the Carnival Triumph, operated by Carnival Cruise Lines, became inoperative after a fire broke out in one of the engine rooms. On board, 3,143 passengers and 1,086 crew members are stranded with limited food, no air conditioning, only a few working toilets.

stranded carnival triumph.jpgAccording to a CNN report, passengers who are now enduring their third day adrift at sea are commonly seeing “sewage running down the walls and floors.” Carnival has asked all people on board to defecate in bags and urinate in showers. If hungry, passengers have to mustard waiting in line for over three and half hours to eat cold meals. Due to the lack of air conditioning and gaining bad smells throughout the ship, more and more people are sleeping out on the decks.

Photograph courtesy of NBC News – The Today Show

This latest event on a Carnival cruise ship should not come as a surprise. Back on November 8, 2010, the Carnival Splendor endured the same fate. A 7-day cruise to Mexico turned nightmarish for its 3,299 passengers and 1,167 crew members after a fire broke out in the engine room. The ship was approximately 150 miles south of San Diego, CA. It took hours for Carnival crew members to extinguish the fire, and several people were injured in the panic.

Carnival Splendor Tug Boat.jpgMuch like passengers aboard the Carnival Triumph are experiencing now, passengers of the Carnival Splendor had very little to eat for days, and suffered through 96 hours of extremely poor hygienic conditions.

Several months after the Splendor fire, it was finally determined that the fire emerged from the aft engine room, and that second engine room of the ship failed to start, which should have allowed to maintain power throughout the ship.

The Carnival Triumph is scheduled to be towed back to the United States and arrive in Mobile, AL on Thursday. The Carnival Splendor was also towed by a tug boat, back to San Diego, CA.

Carnival so far is reporting that all passengers are safe and no injuries were sustained as a result of the fire. Carnival’s statement is eerily similar to the statement made in the aftermath of the Carnival Splendor fire, yet it was inaccurate. Carnival Cruise, like any other cruise line, is held to the same standard of providing a safe environment for its passengers at all times, whether an emergency occurs during the cruise or not.

Could stranded passengers hold Carnival accountable for this preventable mess?
The answer is probably not. the fire aboard the Splendor gave Carnival the opportunity to find out what to do if such circumstances were to happen again. Carnival has jumped in front of the problem this time around. Carnival will refund all passengers aboard the Triumph, and will refund the cruise tickets of all passengers scheduled to sail aboard the Triumph for weeks to come. Accepting a refund does not waive a passenger’s rights to file a lawsuit against Carnival, but it certainly hinders the perception that passengers were not taken care of by the cruise line.

Secondly, and most importantly, the emergency aboard the Triumph does not change the existing thresholds in order to sue any cruise line. For one, a passenger will have to show that they have sustained a personal injury. Without provable and legitimate damages, a lawsuit will be dismissed within weeks of being filed. Second, even if a passenger sustains legitimate injuries, they must prove that their injuries were caused by Carnival’s negligence. Alleging that passengers have a claim for damages against the cruise line simply because their cruise/vacation were ruined by the fire is not enough.
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The District Court for the Southern District of Florida just issued an Order granting Carnival Corporation’s motion to dismiss a personal injury claim stemming from the Costa Concordia tragedy of January 2012.

costa concordia 100.jpgThis decision marks the first of its kind pertaining to a personal injury claim brought in Florida against the cruise line. In this case, several plaintiffs from Massachusetts filed a lawsuit in the Souther District of Florida against the operator and owner of the Costa Concordia (Costa Crociere, Costa Cruise Lines, Carnival Corporation, and Carnival Plc).

Judge Dimitrouleas rendered a 23-page decision which dismissed the plaintiffs’ personal injury claims, asserting in no uncertain terms that the Court was “thoroughly convinced that dismissal in favor of an Talian forum is proper.” The Court motivated its decision after “having carefully considered the balance of the factors against the strong pesumption in favor of Plaintiffs’ choice of forum.” In the end, every single factor weighed in by the Court tilted in favor of the Defendant.

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