Cruise Ship Law

Cruise-industry giant Carnival Corp. is challenging state Attorney General Bill McCollum's investigation into its controversial fuel surcharge by claiming the extra passenger fee already was approved when Gov. Charlie Crist was attorney general.

Records reviewed by the Orlando Sentinel show representatives for Carnival approached then-Attorney General Crist's office in October 2006 seeking approval to charge a new fee that would help Carnival absorb skyrocketing fuel costs. At least one internal meeting on the issue was scheduled by lawyers in the Attorney General's Office on Oct. 5 that year.

McCollum's office said it has been deluged with complaints about the surcharge, which has turned out to be as much as $70 per passenger. But the Attorney General's Office "expressly approved" the fee nearly 18 months ago, Carnival lawyer Curtis J. Mase wrote in a letter to investigators leading the current probe by McCollum's office.

Mase also wrote that Carnival was told "that the approval came from the highest level" of Crist's office.

Five days after that Oct. 5, 2006, meeting, the Republican Party of Florida reported receiving checks totaling $250,000 from two Carnival subsidiaries: Holland America Line and Princess Tours.

Businesses across all industries were at the time pouring record amounts of money into the Republican Party, which was paying for television advertisements, campaign staff and more to help Crist get elected governor.

The twin $125,000 checks are the largest donations that Miami-based Carnival or any of its subsidiaries have made to the Florida GOP since 1996, the earliest year for which electronic records are available.

Carnival said Tuesday that the donations were unrelated to the conversations with Crist's office about the fuel surcharge. "Any contribution by any of our brands to the Republican Party of Florida has no correlation whatsoever to interactions with the AG's office," Carnival spokeswoman Jennifer de la Cruz said in an e-mail.

Paul Huck, a former deputy attorney general under Crist who was involved in the 2006 discussions, said Tuesday in an e-mail that any suggestion of a quid pro quo from Carnival was "offensive" to the lawyers involved in the issue. "I am confident that if such a bargain had been even hinted at during their communications with Carnival, Carnival would have been literally and figuratively shown the door," he said.

Surcharge conditions

Carnival representatives approached the Attorney General's Office about the fuel surcharge to make sure the fee would comply with a 1997 agreement between the state and major cruise lines regarding what they can charge on top of their advertised fares.

Huck said that, after meeting with Carnival, lawyers in the Attorney General's Office recommended to him that the cruise company be allowed to levy a fuel surcharge under three conditions: It had to be temporary; it had to be based on actual fuel-cost increases; and it had to be conspicuously disclosed to consumers before they purchased a ticket.

"The notion was to take into account the reality of increasing fuel prices but at the same time to ensure that the full and conspicuous disclosure of the surcharge was being made to the consumer before he or she made a decision to go ahead and buy a ticket," Huck said in his Tuesday e-mail. Huck eventually became Crist's general counsel in the governor's office but left to join a private law firm in February.

Huck said he authorized the decision and that, to his knowledge, Crist's approval was not sought. Crist said Tuesday that he did not recall any discussions with or about Carnival.

Retroactively applied

A spokeswoman for the Attorney General's Office, where McCollum succeeded Crist in January 2007, said this week that Carnival's surcharge went beyond the agreement reached with Crist's office in 2006.

That's because when Carnival ultimately announced the surcharge in November 2007 -- a $5 a day charge up to $70 per person or $140 per stateroom on all cruises departing as of Feb. 1 -- it required even customers who had already booked their trips to pay the new charge, though they were also given the option to cancel their reservations without penalty.

The Attorney General's Office says that violates even the conditions set in October 2006 because it wasn't adequately disclosed ahead of time to consumers. "We never agreed nor acquiesced in any way to a retroactive application to previously ticketed passengers," Robert Julian, a lawyer in the office's economic-crimes division, wrote in a Jan. 16 letter to Carnival.

Royal Caribbean Cruises Ltd., which followed Carnival in adopting a retroactive surcharge, has already settled with McCollum's office and agreed to refund $21 million in surcharges to customers charged even after they booked.

But Carnival has so far refused to back down. Carnival's lawyers say the company has met all the criteria outlined under Crist's administration.

The company has, for instance, pointed out in correspondence with the state that its brochures warned customers of the possibility of fuel surcharges. It has also told the Attorney General's Office that it intends to eliminate the surcharge once the price of crude oil drops below $70 a barrel.

Carnival spokeswoman de la Cruz said the cruise operator intends to eliminate the charge once fuel has spent 30 days trading below $70 a barrel on the New York Mercantile Exchange. Light, sweet crude oil closed at $101.22 a barrel Tuesday.

Carnival has already suggested to McCollum's office that it could send refunds to passengers who had already paid in full for their trips when the surcharge was announced, according to the state. But McCollum's office has insisted that any refunds must also apply to customers who had paid deposits only.

Carnival says it would forfeit $40 million if it has to refund the surcharge to all previously booked passengers.

Orlando Sentinel
By Jason Garcia, Sentinel Staff Writer
March 26, 2008

Posted by Lipcon Law Firm at 3:29 PM | Permalink

Cruise lines are more focused on making a profit than protecting passengers, says a veteran maritime attorney, who says vacationers must take steps to protect themselves from the crimes and tragedies that could befall them at sea.

"More than 12 million people a year take cruises. What they don't know is that the cruise lines only focus on their own bottom line, not on keeping passengers safe," says Charles Lipcon, author of "Unsafe on the High Seas -- Your Guide to a Safer Cruise," available in bookstores and online at http://www.unsafeonthehighseas.com ($14.95).

"This book reveals all of the dirty secrets the cruise lines don't want you to know about," says Lipcon, a leading expert in maritime law for over 30 years.

Lipcon explains the cruise lines make a profit of over $1 billion per year, but do not pay a dime of federal income tax due to the "flags of convenience" they fly. He says because their vessels are not registered in the United States, cruise lines can avoid being subject to U.S. labor and tax laws.

According to Lipcon, out of the 206 crimes aboard cruise ships that were actually reported from 2003 to 2006, 86 percent were [cruise ship] sexual assaults. Lipcon says children as young as 12 have been lured into the bowels of the ship and sexually assaulted by crew members.

Lipcon advises passengers to stay in public areas, set rules for their children, use all locks on the cabin door and only drink beverages they have witnessed being prepared.

If passengers do become a victim of a cruise ship crime, Lipcon recommends taking pictures of the crime scene and the victim, demand that gloves and booties be worn by anyone entering the crime scene, and to immediately contact the FBI.

Above is a copy of our press release that was listed on hundreds of web sites on March 19, 2008.

Posted by Lipcon Law Firm at 5:22 PM | Permalink

By SIOBHAN MORRISSEY
TIME.com, in partnership with CNN

No one goes on an adventure tour with the thought that he won't make it back alive. The whole point is to push the envelope and live to tell the tale. It's unclear what Markus Groh thought when he signed up for a late February dive that could put him face-to-face with killer sharks spanning 18 feet in length — without a cage to separate him from the man-eaters. He surely didn't expect to end up dead. But the 49-year-old attorney from Austria, died on Feb. 24 after being bitten in the leg while swimming with the sharks in the Bahamas.

Every year hundreds of people die while living life to the fullest — battling white-water rapids, climbing the world's tallest mountain peak, descending to the depths of the ocean. These extreme sports are inherently dangerous and you take your chances. Or do you? "One of the things about these high-risk activities is that if you're going to participate in them you assume a certain kind of risk," says Prof. Lyrissa Lidsky, who teaches tort law at the University of Florida. In the case of Groh, the question is whether the tour operator failed to use reasonable care when he took a group of tourists diving for sharks without using cages. "Is the thing that killed him something that you normally associate with shark watching?" Lidsky asks, "Or, is it something that could have been avoided had the company used reasonable care?"

There are other factors to consider. "It's the first fatality that we have reported involving a dive where the host is specifically bringing in the animal by chumming [feeding the sharks with chopped up fish]," says George Burgess, director of the International Shark Attack File at the University of Florida. "Putting people in the water with these large animals is a risk. It's not a matter of whether an attack like this was going to happen, it was when."

Diving with dangerous sharks without a cage appeals to the thrill seeker, Burgess says, adding, "It is taking further and further steps farther and farther toward danger." The tour, provided by Scuba Adventures of Riviera Beach, Fla., promoted its dives as great hammerhead and tiger shark expeditions. Although the company issued a blanket "no comment" when contacted by TIME, its literature made clear the divers would be in the water without any cages while the sharks were being fed — a practice banned in Florida.

"To insure the best results we will be 'chumming' the water with fish and fish parts," the Scuba Adventures website stated. "Consequently, there will be food in the water at the same time as the divers. Please be aware that these are not 'caged' dives, they are open water experiences. We will have crew members in the water at all times to insure diver safety."

Rodney Barreto, chairman of the Florida Fish and Wildlife Conservation Commission, maintains there's no way the crew could ensure the safety of the divers. "That's not a controlled environment," Barreto says. "There's no way you know whether a three-foot shark or a 13-foot shark is coming." In 2001, the commission outlawed the practice of fish feeding off the coast of Florida. Because the tour operator could not legally attract sharks with chum in the state where he is based, he went to the Bahamas, Barreto says. "We're not discouraging people to go diving," Barreto adds. "We're telling them to be responsible and obey the law. One of the reasons they went to the Bahamas is they were doing something outside the law."

Jason Margulies, a prominent maritime attorney in Miami, agrees with Barreto. "It seems to me, that this guy was trying to sidestep the Florida ban on shark feeding by proceeding to Bahamian waters," Margulies says. "He knew the dangers. He was going the extra mile to do this." A statement from the Bahamas Ministry of Tourism said in part, "Shark feeding excursions are legal in the Bahamas."

Whether Groh's family could prevail if they took the case to civil court depends a lot upon what law applies — Florida law or federal admiralty law. According to Margulies, admiralty law would apply if the vessel transported passengers between a port in the United States and a foreign country. The federal law would allow a negligence claim; Florida law would bar such a claim. Florida holds that waivers signed by a person participating in high-risk activity such as skydiving or shark watching are valid because they are knowingly engaging in risky activity, Margulies says.

If Florida law prevails, all recourse may not be lost for Groh's family. Lidsky explains that a lot depends upon the wording of the waiver. Sometimes a court will void the contract as a matter of public policy because the contract fails to spell out the risk, she says.

Still, she says, the best bet is to avoid risky behavior in the first place. But if the thrill seeker in you won't allow for that, at a minimum check out the tour operator's safety record and whether the company adheres to proper safety standards. This particularly applies when traveling abroad. Don't take for granted that a tour operator in a foreign country is going to apply the same safety standards as regulated in the United States, she says. Lastly, you may win your lawsuit but collect nothing because the tour operator either has no assets or is uninsured, she adds. Then again, if you want to see a shark close up, you just might want to visit an aquarium.

Posted by Lipcon Law Firm at 9:03 AM | Permalink

IN RE: COMPLAINT OF WEEKS MARINE, INC. AS OWNER OF THE WEEKS 263 LOADLINE DECK BARGE, WEEKS 272 CARFLOAT AND WEEKS 524 GANTRY CRANE, FOR EXONERATION FROM OR LIMITATION OF LIABILITY; SOUTH JERSEY PORT CORPORATION, Appellant in No. 06-3586; IN RE: COMPLAINT OF WEEKS MARINE, INC. AS OWNER OF THE WEEKS 263 LOADLINE DECK BARGE, WEEKS 272 CARFLOAT AND WEEKS 524 GANTRY CRANE, FOR EXONERATION FROM OR LIMITATION OF LIABILITY, S.T. HUDSON ENGINEERS, INC., Appellant in No. 06-4639

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
2008 U.S. App. LEXIS 6384
March 27, 2008, Opinion Filed

PROCEDURAL POSTURE: Appellant pier owner challenged orders of the United States District Court for the District of New Jersey granting summary judgment to appellees, an engineer, a pile driving company, and a construction manager, in actions arising out of the collapse of the owner's piers allegedly caused by pile driving at an upstream construction site where appellees were working. The engineer appealed the denial of its motion for Fed. R. Civ. P. 11 sanctions.



OVERVIEW: The company moved to dismiss the owner's strict liability claim, asserting that federal maritime law preempted state law and that pile driving was not an abnormally dangerous activity to which strict liability attached. The district court converted the motion to one for summary judgment and granted it. The engineer sought summary judgment claiming that the owner was precluded from pursuing an action against it premised on the pier insurer's assignment of its subrogation rights. The engineer also sought Fed. R. Civ. P. 11 sanctions. The district court granted the motion, noting that the owner asserted that its damages totaled $ 6.3 million and it had recovered $ 7.3 million from a settlement with the insurer. The district court found that although the insurer's transfer of the subrogation rights to the owner was permissible under state law, further recovery by the owner pursuant to the subrogation rights would constitute impermissible double recovery. The district court also denied the engineer's request for sanctions. On appeal, the court discerned no error in the district court's rulings and affirmed substantially for the reasons set forth in the district court's written opinions.



OUTCOME: The court affirmed the district court's judgments.

Posted by Lipcon Law Firm at 10:35 AM | Permalink

NEW HAMPSHIRE INSURANCE CO., Plaintiff-Appellee, v. C'EST MOI, INC., Defendant-Appellant.

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
2008 U.S. App. LEXIS 5836
March 20, 2008, Filed

PROCEDURAL POSTURE: Defendant insured, a corporation that owned a vessel, appealed from a judgment of the United States District Court for the Central District of California, which granted summary judgment in favor of plaintiff insurer, holding that uberrimae fidei applied and that the insured misrepresented material facts on its insurance application.



OVERVIEW: The insured obtained marine coverage for a yacht from the insurer. Subsequently, the yacht sank in calm waters while docked. The insurer determined that the likely cause was a malfunctioning bilge pump. It then sued the insured to rescind the insurance policy, and the district court granted summary judgment in favor of the insurer. On appeal, the court held that uberrimae fidei was a well-entrenched doctrine that protected not merely the insurer but also the integrity of the risk pool. Only an unambiguous statement in the policy, purporting to supersede the doctrine in express terms would be sufficient to accomplish that purpose. There was no such clause in the policy at issue. Affirming, the court held that the district court correctly found that there was no factual dispute as to whether the insured made material misrepresentations in the insurance policy application. The fact that the insurer demanded answers to specific questions in the application was sufficient to establish materiality as a matter of law. The application asked for the yacht's purchase price and present insurer and the insured misrepresented both facts.



OUTCOME: The court affirmed the district court's judgment

Posted by Lipcon Law Firm at 10:34 AM | Permalink

TALIK, APPELLEE, v. FEDERAL MARINE TERMINALS, INC., APPELLANT.

SUPREME COURT OF OHIO
2008 Ohio 937; 2008 Ohio LEXIS 556
March 13, 2008, Decided

PROCEDURAL POSTURE: Appellant employer sought review of a judgment from the Court of Appeals for Cuyahoga County (Ohio), which reversed a trial court decision in favor of the employer. The court of appeals held that the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C.S. § 901 et seq., did not preempt appellee employee's claim against the employer, alleging employer intentional tort (EIT) based upon substantial certainty.



OVERVIEW: The employee worked as a longshoreman for the employer, and he was injured when a stack of pipes that he was loading collapsed on his leg. It was undisputed that the employee was covered by the LHWCA, and as a worker in the "twilight zone," he had the option of obtaining benefits under the LHWCA or Ohio workers' compensation because his employer participated in both programs under R.C. 4123.35 and 33 U.S.C.S. § 932(a). The employee received benefits under the Ohio workers' compensation fund. He thereafter filed his "substantial certainty" EIT action, which resulted in a grant of summary judgment to the employer based on the preemption of 33 U.S.C.S. § 905(a). The court of appeals reversed that decision, finding that there was no preemption to the EIT claim. On further review, the court noted that Congress did not expressly preempt the intentional tort standard in Ohio, based on the language of the LHWCA. However, conflict preemption applied in order to avoid inconsistency with the central purpose underlying the LHWCA of creating a uniform compensation system. Accordingly, the court concluded that the LHWCA preempted the substantial certainty EIT claim pursuant to § 905(a).



OUTCOME: The court reversed the judgment of the court of appeals and remanded the matter to that court for consideration of the employee's second assignment of error.

Posted by Lipcon Law Firm at 10:31 AM | Permalink

CAPE ANN TOWING, Plaintiff-Appellant, versus M/Y "UNIVERSAL LADY", in rem, BP ENTERPRISES OF FLORIDA, LLC, Defendants-Appellees.

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
2008 U.S. App. LEXIS 5237
March 11, 2008, Decided

PROCEDURAL POSTURE: Appellant towing company sought review of a judgment from the United States District Court for the Southern District of Florida, which denied the company's in rem claim for a salvage award of $ 487,500 against appellees, a vessel and its owner, and instead awarded the company $ 2,706 on the basis of quantum meruit for marine towing services that the company rendered to the vessel during a hurricane.



OVERVIEW: The district court held that the company was not entitled to a salvage award because it failed to show the existence of a maritime peril from which the vessel could not have been saved without assistance. On appeal, the court held that the district court did not err in its determination that the vessel was not in a situation of reasonable apprehension of maritime peril. Notwithstanding the company's assertions that the weather was still perilous and the vessel was positioned next to and above broken concrete pilings, the evidence showed that the weather had dramatically improved from the earlier hurricane conditions and that the vessel was located in a marina, afloat, and secured by a rope to another boat. The company presented no credible evidence that the pilings had damaged or posed further risk of damage to the vessel's hull. The evidence also showed that the center of the hurricane had already passed through the area. The court also found no merit to the company's argument that the district court should have awarded compensation on a per foot of vessel charge typically used in salvage situations, as the company had not established that it acted as a salvor to the vessel.



OUTCOME: The court affirmed the district court's judgment.

Posted by Lipcon Law Firm at 10:30 AM | Permalink

Jack Oltman et al., Petitioners, v. Holland America Line Usa, Inc. et al., Respondents.

SUPREME COURT OF WASHINGTON
2008 Wash. LEXIS 211
March 13, 2008, Filed

PROCEDURAL POSTURE: Petitioners, cruise ship passengers and a family member, filed suit against respondent cruise line alleging several causes of action. The King County Superior Court, Washington, granted summary judgment for the cruise line. The Washington Court of Appeals affirmed. Petitioners appealed.



OVERVIEW: Two cruise ship passengers became ill on a cruise ship. They filed suit against the cruise line in the King County Superior Court. The wife of one of the passengers asserted a claim for loss of consortium. The trial court did not err in refusing to strike the cruise ship's untimely answer and affirmative defenses, and in refusing to strike the declaration of the cruise line's attorney that contained citations to unpublished trial court decisions. The trial court held that a forum selection clause in the cruise contracts required that suit be brought in the United States District Court for the Western District of Washington. The Court of Appeals affirmed. The Supreme Court of Washington concluded that the wife's loss of consortium claim was not subject to the forum selection clause; she did not sign the cruise contract, nor did she agree to its terms. As to the passengers, the forum selection clause was valid and enforceable. The passengers could not file their suit in state court under the savings to suitors clause and thereby deprive the federal court of jurisdiction.



OUTCOME: The summary judgment in favor of the cruise line was affirmed on all issues except the loss of consortium claim. The summary judgment on the loss of consortium claim was reversed, and this claim was remanded to the trial court for further proceedings.

Posted by Lipcon Law Firm at 10:00 AM | Permalink