Several of the surviving passengers of the Costa Concordia cruise ship have filed a wrongful death lawsuit in Miami, Florida, where the parent corporation of Costa Cruises, Carnival Cruise Lines has its headquarters. According to the lawyers for the plaintiffs in the Miami lawsuit, the case could soon be amended to include hundreds of plaintiffs, seeking compensatory and punitive damages in an amount of $450 million dollars. Punitive damages are only awarded when there is proof of egregious, outrageous conduct on the part of defendants, and are not only difficult to obtain but not covered by insurance, certainly a concern for any corporation.
The lawsuit filed in Florida seeks damages on at least four causes of action, maritime negligence, gross negligence, intentional infliction of emotional distress, and negligent retention. The last cause of action is based on the fact that it is alleged that Costa Concordia was negligent in continuing to employ someone, Captain Francesco Schettino, who was not competent to meet the duties and obligations as the ship’s captain.
As most of the world knows by now, on January 13, 2012, a cruise ship carrying 3,000 passengers and over 1,000 crew members crashed into rocks and rolled onto its side off an island on Italy’s Tuscan coast. 16 people died and at least 16 are still missing. It is rumored that the ship’s captain Schettino diverted from the ship’s intended path to allow one of the crew members to wave to family members onshore, at which time the ship struck rock and flipped onto its side. Schettino apparently abandoned ship prior to the passengers disembarking and is now being held on house arrest for causing the fatal accident and abandoning the ship.
There are some major difficulties with the lawsuit against Carnival, however. To begin with, the fine print on the tickets purchased and signed by the passengers has a “choice of forum” clause which requires that the lawsuits be filed in Italy. This provision is particularly onerous for several reasons, including the financial and practical problems of commencing a lawsuit in Genoa, Italy. (where Costa Concordia is based). Italian law requires that plaintiffs post a judiciary tax that is a certain percentage of potential damages, and even more significantly, the Costa ticket contains a clause that its liability for death or injury to a passenger is limited to approximately $71,000, an amount which pales in comparison to the amount that could be awarded to the family member of the decedent of a fatal accident in the United States. In the United States, a wrongful death claim could potentially include damages for pain and suffering, loss of parental guidance, and pecuniary loss, which could be huge if the person killed had a substantial income and was supporting a family.
Another issue with commencing lawsuits in Florida or other U.S. forums is that crew members likely have contracts which require that they first submit to arbitration before instituting litigation. Traditionally, arbitration awards, issued by purportedly objective judges, are much smaller than amounts decided upon by juries, who would be much more likely to consider the emotional and devastating impact of the injuries to passengers and their surviving family members.
In an effort to ward off litigation, Costa Concordia has offered the passengers a sum of 11,000 euros, or $14,400, as total compensation for all personal injury, property and financial damages, which is without question a paltry amount, particularly for those who were grievously injured or to family members of those who died.
Another lawsuit, filed by crew member Gary Lobaton, was commenced in an Illinois Court on January 26. This suit alleges that Costa Concordia was negligent due to an unsafe evacuation of passengers and crew and seeks 100 million in damages. The Lobaton lawsuit is seeking class action status on behalf of all passengers and crew members. If past history is any guide regarding the pending cases, maritime experts note that the U.S. Supreme Court has upheld the choice of forum clauses in the past, which is obviously not good news for plaintiffs and their attorneys. If the Costa cruise had touched port in any U.S. city, there would be a jurisdictional basis to file the cases in the U.S., but the ship left port near Rome and was headed for Barcelona and Majorca when the tragedy occurred.
In an 11th U.S. Circuit Court appellate case last August, the Court sustained a forum clause in a case in which a California plaintiff who broke her leg on a Regent Seven Seas cruise ship would be required to sue in Paris rather than Fort Lauderdale, Florida, pursuant to a clause in her passenger ticket. One other possibility to resolve the multitude of claims would be for Carnival and Costa to set up a claims fund similar to that developed by BP after the Gulf of Mexico spill, which would involve plaintiffs agreeing to accept an award from the fund in lieu of a case against the cruise line. The advantages are for the company in avoiding jury trials and to the passengers in obtaining a settlement without protracted litigation.