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Saturday, January 28, 2012 - Page updated at 01:30 p.m.
Concordia lawsuits face rough sailing
By CURT ANDERSON
AP Legal Affairs Writer
MIAMI — While the parent company of the owner of the stricken Costa Concordia is based in Miami, passengers who want to file a lawsuit in U.S. courts over the cruise ship disaster will likely face choppy seas.
That's because of fine print on tickets purchased and signed by the 3,000-plus passengers before the ship capsized Jan. 13 off the coast of Italy, killing at least 16 and leaving another 16 missing. The ticket contract includes what's known as a "choice of forum" clause stating that lawsuits must be filed in Italy.
Maritime law experts say that similar attempts to sue in the U.S. despite these clauses have been turned away by the U.S. Supreme Court and that the expense of filing a lawsuit in a foreign court has deterred many plaintiffs in the past.
"It's well-settled law," said Jerry Hamilton, a maritime attorney who regularly defends cruise lines against lawsuits. "The Supreme Court has said those clauses are valid clauses. They will be upheld."
For a Costa cruise that touches any part of the U.S., the clauses say lawsuits should be filed in federal court in South Florida. Same for Carnival Cruises — which owns Costa — and many other major cruise lines. But for cruises such as the Concordia that involve only foreign travel, the Costa ticket says lawsuits must be brought in Genoa, Italy where much of the subsidiary's operations are based.
The clauses in the cruise industry are not as common in other forms of travel. Lawsuits against airlines, for example, can be brought virtually anyplace they do business for domestic flights; for international flights, lawyers can generally sue in the airline's home location or where the flight departed, among other venues.
Last August, the 11th U.S. Circuit Court of Appeals ruled in favor of a forum clause in a case involving Regent Seven Seas Cruises Inc. A California woman, Nina Seung, fell and broke her leg aboard a cruise ship sailing from Tahiti, then tried to sue in Fort Lauderdale federal court. Her ticket required foreign cruise lawsuits to be filed in Paris, and the appeals court rejected her challenge.
Seung, who was 74 at the time of her accident, said in court papers that the clause essentially barred the door for her.
"I do not have any savings of note right now, I am going further and further into debt each month and because I cannot work, I don't see how I can ever afford this," she said in an affidavit. "So if I am forced to go to Paris, France, I just will not be able to bring my claim."
Depending on each country's laws, passengers can be at a sharp disadvantage compared to the U.S. legal system. Italy, for example, requires plaintiffs to post a judiciary tax that is a certain percentage for larger amounts of damages, said attorney Bob Peltz, chairman of the Cruise Line Committee of the Maritime Law Association.
Other maritime lawyers say Italian law makes it more difficult for some people to recover damages for pain and suffering than in U.S. courts. The Costa ticket also contains a clause limiting its liability for the death or injury of a passenger to about $71,000, although that doesn't apply in cases of recklessness and legal experts say it could be successfully challenged.
Despite the hurdles, some attorneys are exploring a lawsuit against either Costa or Carnival in Miami. One lawyer, David Singer, said the theory is that Costa and Carnival are identical "in terms of who makes the decisions" and that could make Carnival a legitimate target.
"If one could establish that they are really alter egos for each other, that is one way of maybe keeping these cases in South Florida," Singer said.
An Italian consumer group, Codacons, has said it plans to forge ahead with a lawsuit in Miami. The group claims it could win between $164,000 and $1.3 million per passenger. As of Friday, no such lawsuit had been filed.
At least one lawsuit has been filed against Carnival and Costa in U.S. courts, by Peruvian crew member Gary Lobaton. That case, filed in Chicago federal court on Thursday, seeks class-action status to represent all passengers and 1,000 crew members. It blames the companies for negligence because of an unsafe evacuation and seeks at least $100 million in damages, attorney Monica Kelly said in an email Friday.
Peltz said that case has two big problems: The passengers are covered by the forum clause, and crew members likely have contracts requiring them to submit first to arbitration.
"I think they are going to have a difficult time," he said of the Chicago lawsuit.
Neither Costa nor Carnival would comment about potential lawsuits. Costa has said it will reimburse passengers for travel expenses and medical expenses. The company is also offering uninjured passengers about $14,460 each to compensate for lost luggage and psychological trauma, but they could still go to court.
Some attorneys say Costa may want to create a claims fund similar to that set up by BP after the Gulf of Mexico oil spill, in which people who accepted money agreed not to sue BP. Costa would not comment on that possibility, but legal experts say such funds have the advantage of quickly putting money into claimants' hands and make the company's losses more predictable than a jury trial.
"That would be a fair move as well as a very thoughtful public relations move," Singer said. "To keep these cases in Italy, this stuff is buried in the small, small, small print. Nobody likes that. It's a billion-dollar company and they're taking away your rights by burying these clauses in their tickets."
Another attorney, Gabrielle D'Alemberte, said cruise passengers should make sure to obtain and read their documents closely. If the forum clause mandates that lawsuits be filed in a foreign country, she recommended that passengers simply take a pen and cross out the words "I agree" on the document.
"While the agent has the right to deny you from boarding, most likely you will still be ushered aboard," she said. "Then if a tragedy does occur, you have a strong argument for filing your case in the United States."
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