Miami Jury Awards Carnival $24 Million For Pod Failures, Finds Rolls Royce Committed Fraud

The following is a press release from Hess Marketing on behalf of the Fowler Rodriguez law firm:

Fowler Rodriguez Valdes-Fauli, an internationally recognized maritime law firm obtained a $24 million dollar verdict for Carnival Cruise Lines against Rolls-Royce.  Rolls Royce was found guilty of fraud by a unanimous jury.  Rolls Royce marketed its Mermaid pod propulsion system to Carnival for operation on their largest and most prestigious ship, the Queen Mary II.  The jury found that at the time Rolls Royce presented its pod to Carnival, Rolls-Royce knew that the pod was defective and not fully developed.

Lead counsel for Carnival, George Fowler, argued that Rolls-Royce rushed into the market to defeat their competitors and sold an untested product that failed throughout the cruise industry.  Furthermore, Fowler argued that Rolls Royce made money not only on the sales of the pods, but each time the bearings on the pods had to be replaced.  He argued that Rolls Royce refused to pay for any of the replacement costs and made money off the repairs, which forced Carnival
to file suit.

Carnival - Rols Royce - Pod FailureIn his opening statement, Fowler expressed surprise as to why Rolls Royce would allow this matter to go to trial.  When the case was over, the judge and jury echoed Fowler’s initial concerns.  The judge said the jurors asked her why the case ever went to trial.  “The first question they had was why didn’t these people settle when they have to work together,” she said.  U.S. District Judge Patricia Seitz said she saw the trial possibly as a “bellweather for lawsuits” filed by other cruise lines that found fault with Rolls-Royce’s pod system.

At trial, Rolls-Royce argued problems with Carnival’s propulsion system were isolated incidents and that the Mermaid pods were not faulty.  However, Carnival demonstrated that four sets of bearings were replaced on four pods from 2003 to 2008.  A Carnival witness testified that the pod was so poorly engineered that the bearings could be made out of kryptonite and still be rendered useless.  Rolls Royce also argued that Carnival knew they were purchasing a risky, developmental
product when they purchased the Mermaid pods.

Micky Arison, the Chairman of Carnival Corporation, testified at trial that the notion that he would take a risk on one of his company’s most prestigious ships was ludicrous.  He had trusted and relied on Roll-Royce’s assertions that the pods were going to function properly; he said he took people at their word and did his business deals “on a handshake.”  When asked by Rolls Royce counsel, the well-known criminal lawyer, Roy Black, whether he considered himself a “shrewd” businessman, Arison made the courtroom chuckle.  He responded that he preferred to be considered a good scout of basketball talent, alluding to the fact that he successfully recruited Lebron James to his winning Miami Heat basketball team.

Arnaldo Perez, Carnival Corporation’s General Counsel, explained that Carnival had trusted in the Rolls-Royce brand and its claim that the Mermaid pod was a “proven, well-tested product.”  It was a highy contentious case that took nearly three weeks to try. Fowler and Black each took two hours for their closing arguments.

Similar problems on other ships in the Cruise industry:

In 2003, Fowler Rodriguez Valdes-Fauli filed suit on behalf of Royal Caribbean Cruises and Alstom Power Conversion after the Mermaid pods forced four Celebrity ships out of service on multiple occasions.  The case never went to trial. Almost a year ago exactly, on January 11, 2010, Royal Caribbean and Rolls Royce reached a confidential settlement on the courthouse steps. At a celebratory dinner following the settlement, Richard Fain, the Chairman and CEO Royal Caribbean, presented Fowler Rodriguez Valdes-Fauli with a beautiful model ship as a token of their appreciation.

Last month, Fowler Rodriguez Valdes-Fauli filed suit on behalf of Crystal Cruises alleging similar Mermaid problems on the Crystal Serenity.

Co-counsel for Carnival, Antonio Rodriguez, said, “We are very pleased with the jury and their decision.  This was an important case for Carnival and it was made possible by the international firm’s personnel functioning as one team.”  Mary Hoelle, Frank Quesada, & Michael Rosen, from the firm’s Miami office, acted as trial attorneys in support of the firm’s lead counsel from New Orleans, Messrs. Fowler and Rodriguez.  The support team also included attorneys A.T. Chenault, Michael Harowski, Cristi Fowler Chauvin, Luis Llamas, Sara Weber, & Thomas Oppenheimer.

Photo credit:    Hess Marketing /  Fowler Rodriguez Valdes-Fauli

 

Related information:  We previously reported on the setlement between Royal Caribbean Cruises and Rolls Royce in our article -  Royal Caribbean - Rolls Royce Settlement - For $65 Million I'll Say I Love You

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Comments (1) Read through and enter the discussion with the form at the end
Joe McCollum - March 8, 2012 2:26 PM

I am glad to see that RRM can be held accountable for some of the problems they have caused the marine industry. It is so true in that RRM avoids accountability and responds by selling you more parts and services.

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