FEMA Pays Exorbitant Price for Charter of Carnival Fascination After Hurricane Maria

According to WRLN in Miami, FEMA grossly overpaid Carnival Cruise Line to charter the Carnival Fascination to provide housing for FEMA workers following Hurricane Maria. 

According to documents obtained through the Freedom of Information Act (FOIA) by Daniel Rivero, WLRN states that FEMA agreed to pay Carnival $74,700,000 to provide accommodations aboard the Carnival Fascination to house federal aid workers and first responders in St. Croix.  

As WLRN explains, the FEMA-Carnival contract provides that the cruise line agreed to house 2,056 FEMA workers for the length of the four month contract. The average number of nightly passengers for the contract period was around 800 which, given the contract price, turns out to be $834 per person Carnival Fascinationper night, paid by U.S. taxpayers. That's a staggering rate or well over over $5,000 per week per passenger. 

WLRN calculated the market rate for a cruise on the Carnival Fascination between $370 and $1,200 per person per week, which is a fraction of the rate paid by FEMA. 

I also obtained a copy of the FEMA-Carnival charter agreement pursuant to a FOIA request earlier this year. It revealed that FEMA agreed to pay what turns out to be $18,675,000 a month for the Fascination

This exorbitant amount of taxpayer money is even higher than what FEMA paid Carnival in 2005, to charter three Carnival cruise ships following Hurricane Katrina. FEMA agreed to pay Carnival an average of only $13,111,111 a month (for a total of $192,000,000) to charter the Carnival Sensation, Carnival Ecstasy and Carnival's Holiday for 6 months (plus $44,000,000 for fuel and other expenses) following hurricane Katrina.

Plus, as I pointed out in the article FEMA Agreed to Pay Carnival $74,700,000 for Charter of Carnival Fascination, Carnival didn't pay any federal taxes on this income. 

In the WLRN article, cruise expert Professor Ross Klein pointed out that Carnival is registered in Panama and pays almost no U.S. income taxes which he believes is a larger concern for how the contract was handled.

“The US Government hired a foreign registered corporation that uses foreign registered vessels with foreign workers (working in the US but not paying US income tax). And because the corporation is offshore, and the ship is offshore, the company pays virtually no income tax on the contract. Now that is a sweet deal,” Professor Klein told WLRN.

What is even more disturbing is that, as WRLN points out, FEMA first (over) paid Carnival even before it disbursed funds to the survivors in the U.S. Virgin Islands hit by the hurricane. Numerous media sources are also now reporting that the death toll in Puerto Rico due to Hurricane Maria was drastically underestimated. The consensus is that that the actual number of deaths was around 5,000 citizens, compared to official estimates of less than 100.   

Have a thought? Please leave a comment below or join the discussion on our Facebook page. 

Photo credit: Chrismschurz - CC BY-SA 3.0, commons / wikimedia. 

Cruise Ship Law: Don't File Suit at the Last Minute in the Wrong Courthouse

Last week, the Third District Court of Appeal in Florida enforced the terms of a Royal Caribbean passenger ticket and dismissed a lawsuit filed at the last minute in the wrong courthouse.

The case was filed on behalf of a passenger against Royal Caribbean for personal injuries sustained in a cruise ship accident. The passenger hired a local law firm which filed suit a few days before the expiration of the one-year limitation period set forth in the ticket. But instead of filing in federal court as required by the terms of the ticket, her attorneys filed in state court in the Miami-Dade courthouse Roya; Caribbeanwhere most negligence cases can be pursued.

Royal Caribbean filed a motion to dismiss the case. The trial court denied the motion, and the cruise line appealed.

The appellate court reversed the trial court. The appellate court ruled that the cruise line had reasonably communicated the important terms and conditions of the ticket to the passenger before she boarded the cruise ship. The ticket stated in bold and capital letters that the ticket contained important terms and conditions, including a one year limitations period to file suit and a forum selection clause indicating that suit must be filed in United States District Court for the Southern District of Florida.

The appellate court held that it is irrelevant whether the passenger actually received or read the ticket contract, as long as the ticket contained conspicuous terms and conditions.  

The decision was consistent with the U.S. Supreme Court's decision in Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).  

The appellate court also ruled that Royal Caribbean had no obligation to remove the case to federal court after the lawsuit was mistakenly filed in the wrong state courthouse. Because of her counsel's error in filing suit in state court rather than federal court, and the running of the one year limitations period in the interim, the passenger was prohibited from filing suit against the cruise line in the right courthouse.

The only lawsuit the passenger can possibly pursue under these circumstances at this time is a legal malpractice claim against her attorneys.

Practice Tips for Passengers:

  • The cruise line must receive a written notice of your intention to seek compensation within six (6) months of your accident. Have your lawyer write the letter.
  • You must file your lawsuit within one (1) year of the accident.
  • The lawsuit must be filed in the location specified in your ticket.  Most cruise lines like Carnival, Celebrity, NCL and Royal Caribbean require that lawsuits be filed in federal court in Miami. 

Read the terms of your ticket!  The terms are legally enforceable.  

Have a comment?  Please leave a comment below or join the discussion on our Facebook page

 

Photo Credit: Wikipedia / Baldwin040 Creative commons 3.0

Top 10 Shocking Clauses In Your Cruise Contract

Writing this article, I’m reminded of Seth Meyers’s joke at the White House Correspondents’ Dinner - addressing the Senate: “I don't think you read bills anyways.  I think you guys vote on bills the same way the rest of us agree to updated terms and conditions on iTunes.”

Let’s be honest. Most of us don’t read the “fine print” of contracts and are often bound by terms and conditions we don’t understand or don’t even know exist.  And most of us assume that lawyers Cruise Ticket - Cruise Passenger Rightsdrafting these contracts use standard form, kitchen sink, same ole’ same legalese that appears in all of the contracts we encounter in day-to-day life. We assume we’ll be protected by the law.

This assumption is the inspiration for this blog.  I remember when I was writing my undergraduate thesis at the University of Florida.  The irony was that I finally read the ticket-passenger contract to a cruise I had taken 6 months earlier.  Oops.  As I was reading the contract for my research, I remember thinking to myself, I really should have looked at this before I boarded the ship.  Again, oops.

So, I’ve decided to prepare my list of the top 10 shocking contractual provisions in cruise line tickets. (I strongly advise picking up the contract and reading it in its entirety before stepping aboard).

The selected clauses are taken directly from Royal Caribbean Cruise Line’s (“RCCL”) website. The following clauses are the Top 10 Shocking Clauses taken from RCCL’s Ticket-Passenger Contract for its passengers, excluding the Brilliance of the Seas.

1. We Don’t Care If You Have Read or Signed the Contract

“Purchase or use of this Ticket Contract, whether or not signed by the Passenger, shall constitute the agreement by Passenger, on behalf of himself and all other persons traveling under this Ticket Contract (including any accompanying minors or other persons for whom the Ticket Contract was purchased), to be bound by the terms and conditions of this Ticket Contract.”

2. No Jury Trials for You!

“This agreement requires the use of arbitration for certain disputes and waives any right to trial by jury to resolve those disputes.”

3. We’re Not Responsible for the Ship Doctor’s Malpractice

“Carrier assumes no liability whatsoever for any treatment, failure to treat, diagnosis, misdiagnosis, actual or alleged malpractice, advice, examination or other services provided by such persons or entities.”

4. We’re Not Responsible for the Excursions We Sell, Even if We Make Millions in Profits

“Even though Carrier may collect a fee for, or otherwise profit from, making such arrangements and offers for sale shore excursions, tours, hotels, restaurants, attractions, elements of the RCT Land Tour packages that are provided by independent contractors and other similar activities and Cruise Ticket - Cruise Passenger Rightsservices taking place off the Vessel for a profit, it does not undertake to supervise or control such independent contractors or their employees, nor maintain their conveyances or facilities, and makes no representation, whether express or implied, regarding their suitability or safety.”

5. Our Agents Can Kill You, But We’re Still Not Responsible

“In no event shall Carrier be liable for any loss, delay, disappointment, damage, injury, death or harm whatsoever to Passenger which occurs on or off the Vessel or the Transport as a result of any acts, omissions or negligence of any independent contractors.”

6. Live in Oregon and Injured on Cruise Ship in Mexico? You Have to Sue in Miami

“It is agreed by and between Passenger and Carrier that all disputes and matters whatsoever arising under, in connection with or incident to this agreement, Passenger’s cruise, cruisetour, RCT Land Tour or transport, shall be litigated, if at all, in and before the United States District Court for the Southern District of Florida located in Miami-Dade County, Florida, U.S.A.”

7. Injured on a Cruise? You Lose Your Right to Sue Us If You Don’t Send Us a Letter in 6 Months and Sue Us in 1 Year

“The limits for personal injury/illness/death claims: no suit shall be maintainable against carrier, the vessel or the transport for personal injury, illness or death of any passenger unless written notice of the claim, with full particulars, shall be delivered to carrier at its principal office within six (6) months from the date of the injury, illness or death and suit is commenced (filed) within one (1) year from the date of such injury, illness or death and process served within 120 days after filing, notwithstanding any provision of law of any state or country to the contrary.”

8. If You’re Injured or Killed on a Ship Which Doesn’t Call on a U.S. Port, the Maximum Compensation is $70,000

“On cruises which neither embark, disembark nor call at any port in the United States, Carrier shall be entitled to any and all liability limitations, immunities and rights applicable to it under the “Athens Convention relating to the carriage of passengers and their luggage by sea” of 1974 (“Athens Convention”). The Athens Convention limits that Carrier’s liability for death or personal injury to a Passenger to no more than 46,666 special drawing rights as defined therein (approximately U.S. $70,000, which amount fluctuates, depending on daily exchange rate as printed in the Wall Street Journal).”

9. Don’t Even Think of Filing a Class Action Lawsuit

“Passenger hereby agrees that except as provided in the last sentence of this paragraph, Passenger may bring claims against Carrier only in Passenger’s individual capacity. Even if the applicable law provides otherwise, Passenger agrees that any arbitration or lawsuit against Carrier . . . shall be litigated by Passenger individually and not as a member of any class. . .”

10. We Can Search Your Cabin and Kick You Off The Ship If The Captain Says So

Caitlin Burke - Cruise Law News“Carrier may also change accommodations, alter or cancel any activities of, deny service of alcohol to, confine to a stateroom or quarantine, search the stateroom, property or baggage of any Passenger, change a Passenger's RCT Land Tour, disembark or refuse to embark the Passenger and/or any Passenger responsible for any minor Passenger, or restrain any Passenger at any time, without liability, at the risk and expense of the Passenger, when in the sole opinion of Carrier or Captain . . .”

Some of these terms and conditions are valid and enforceable, other clauses are not. Cruise Law News has reported on several of these issues in the past:

Fox News Focuses on Dangerous Cruise Ship Medical Care

Cruise Ship Statute of Limitations? - One Year for Adults!  Three Years for Minors

This article was written by a "guest blogger" for Cruise Law News, Caitlin Burke.  Ms. Burke just finished her first year at law school at the University of Miami. Ms. Burke is a graduate from the University of Florida. She majored in Recreation, Parks and Sport Management. Ms. Burke wrote a senior honor's thesis entitled a "Qualitative Study of Victimization and Legal Issues Relevant to Cruise Ships."