Attempting to “triumph” in their quest to hold Miami based Carnival Corporation liable for the Costa Concordia disaster, lawyers in Texas have used a special maritime procedure available under the supplemental admiralty and maritime rules of the Federal court, to arrest and seize the passenger cruise ship the Triumph, which was visiting a Texas port. The complaint makes for interesting reading. It sets forth public information that the lawyers obtained from SEC filings by Carnival.
The lawyers have pled that the two (2) Defendants named in the action, Carnival plc, and Utopia Cruises, Inc., were the alter ego of each other. The reason these allegations were made was because the technical owner of the cruise ship, the Triumph, is Utopia Cruises, Inc. However, the real owner in fact is Carnival as Utopia was a corporation formed solely to hold paper ownership of the vessel, and is not really an active corporation at all. I would note that I’ve been handling maritime cases for thirty years, and Carnival has never argued that the technical owner of the ship is the correct Defendant and tried to escape liability on that basis. Carnival has always admitted to being the true owner/operator of the Carnival passenger cruise ships.
This particular lawsuit also alleges specific acts of negligence on the part of Carnival relating to the Costa Concordia. As has previously been discussed, the Costa Concordia was owned and operated by Costa Cruise Lines, which is an Italian corporation. Carnival does own Costa Cruise Lines. Costa is a subsidiary of Carnival. However, there are no allegations in this lawsuit that Costa Cruises and Carnival are the alter ego of each other. Instead, this particular lawsuit alleges specific acts of negligence on the part of Carnival relating to the Costa Concordia. The allegations focus on the development and enforcement of safety programs on all of the fleet of vessels under the Carnival umbrella, meaning any of the vessels owned by corporations that Carnival has purchased.
In the complaint there is a list of the portfolio of cruise ship companies that Carnival has purchased, and they include Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
The specific acts of negligence against Carnival allege that Carnival is responsible for the safety programs, including training programs, involving the Costa Concordia. The lawsuit alleges that Carnival allowed “deplorable safety practices, poor training and lack of efficient evacuation procedures onboard the M/S Costa Concordia” to exist.
Whether the lawyers in this case will “triumph” in this case will depend on how the Federal District judge views the relationship of Carnival to the incident in question, and whether the Defendant moves to dismiss the case also on grounds of forum non conveniens. The primary Defendant in this case is clearly Costa as the owner and operator of the Costa Concordia, as well as the captain of the Costa Concordia. These Defendants are Italian, and the passenger tickets issued to all the passengers on the Costa Concordia identify Costa as the operator, and require lawsuits to be filed in Genoa, Italy. In addition, Carnival’s primary place of business is Miami, Florida.
In addition, the lawsuit makes reference to the applicability of the Death on the High Seas Act, which is a United States Federal statute governing deaths that occur on the high seas. This particular Federal legislation has been held to apply to incidents occurring in the territorial waters of a foreign country. The problem with the applicability of the Death on the High Seas Act is its harsh and archaic limitation on the amount of damages, limiting the survivors to a claim for their pecuniary losses only. Many times this amount is negligible. In other words, the amount of money the cruise ship company is responsible for is minimal compared to the harms and losses it has caused. There are attempts to amend the Death on the High Seas Act because of this harshness and unfairness. So far, the legislature has not amended the Death on the High Seas Act as the cruise ship industry has lobbied hard to prevent that. Even the BP oil spill disaster, which involved the Death on the High Seas Act, did not result in an amendment to the Death on the High Seas Act.
While this particular lawsuit in Texas alleges the Death on the High Seas Act, it also attempts to supplement the Death on the High Seas Act with Italian law. There is case law that states if the Death on the High Seas Act is applicable, it cannot be supplemented. One must either choose to pursue the case for a cause of action based on foreign law, which the Death on the High Seas Act will permit, but if the Death on the High Seas Act is applicable, the limitation on the amount of damages applies. This is a complicated issue of maritime law, one that we have previously faced. There are several reported decisions dealing with this issue out of the Southern District of Florida.
We will continue to keep an eye on this particular lawsuit and what the judge decides to do with the case. In the meantime, Carnival worked out a confidential agreement with the lawyers so that the vessel, which was full of passengers, could sail on its scheduled cruise.
My Miami based law firm is currently assisting passengers and crewmembers who are involved in the Costa Concordia incident, and we continue to be safety advocates for all those injured or killed at sea.