Today Carnival issued a press release which reported profits of $1,100,000,000 for the third quarter ending August 31, 2009. The cruise line collected revenues from passengers of over $4,000,000,000 in the last three months.

This announcement of Carnival’s over-a-billion-dollars-in-profits comes two days after the Carnival dominated "Alaska" Cruise Association filed a lawsuit against Alaska over the $50-a-passenger tax.

Four days ago, the environmental group "Friends of the Earth" gave Carnival a "D-" on the cruise line environmental scorecard.

What a week for Carnival!  A failing pollution grade, over $1,000,000,000 in quarterly profits, and a lawsuit initiated in Alaska over a $50 tax.

What is wrong with this picture?      

 

 

The cruise industry has picked a fight with Alaska over the $50 tax designed to protect the state. The lawsuit, which is posted online, indicates that the lawsuit was filed by a trade organization called, interesting enough, the "Alaska Cruise Association."

"Alaskan Cruise Association" – Made in Miami, Florida 

There is nothing remotely "Alaskan" about the "Alaska Cruise Association" (ACA).  The ACA is comprised of nine cruise lines, none of which are based in Alaska.  Six of the cruise lines – Carnival, Celebrity, Norwegian, Regent Seven Seas, Royal Caribbean, and Silverseas – are based in Miami or Fort Lauderdale. The other three line, Holland America, Princess, and Windstar Cruises, are all owned by Miami-based Carnival or its subsidiaries.

Even the main lawyer listed on the lawsuit papers, Seattle lawyer Stephen Rummage, is not even admitted to practice law in Alaska. He must petition the court in Alaska for special permission to enter the courthouse in Alaska to argue the case. You can guarantee that the bulk of the ACA’s lawyer’s fees will be paid by money which can be traced back to Miami. 

Revenge is Sweet

The Miami cruise lines do not like to be regulated and are certainly not used to being taxed.  It is like trying to put a leash on a mean dog.  Someone is going to be bitten.  Yet, Alaska has every right to impose reasonable taxes to protect its pristine environment from the out-of-state polluters like Carnival and Royal Caribbean.   

The lawsuit is revenge against Alaska by Carnival and other cruise lines in South Florida.  Unlike Florida and the struggling islands in the Caribbean which for years have rolled over and played dead for the pollution spewing cruise industry, Alaska has enacted a number of measures to protect the state from  the foreign flagged cruise lines’ predatory practices.  Earlier in the year, it was widely reported that the cruise industry was having difficulty convincing the legislators to abolish strict water pollution standards which were approved by Alaskan voters in 2006. 

Like Father, Like Son?

Soon thereafter, Mickey Arison of Carnival began threatening to punish Alaska for the pollution regulations and having the audacity to levy a $50 tax on the passengers who sail on his cruise ships. Any time I hear the word "tax" and "Mickey Arison" in the same sentence, I can’t help but to think about Mickey’s father, Ted Arison.  He collected billions of dollars from tax paying U.S. passengers and lived the good life in Miami but he registered his Miami based cruise line and his cruise ships in Panama to avoid all U.S. taxes.  In 1990, he abandoned Miami, denounced his U.S. citizenship, and returned to Israel with his billions in a ploy to avoid estate and inheritance taxes.

So here we are again, with the younger Arison leading the charge of the Miami consortium of foreign flagged cruise ships pretending to be an "Alaskan" non-profit organization with Alaska’s best interests at heart. A wolf in sheep’s clothing. This is pay back by the Miami cruise lines, and business as usual for the latest tax avoiding Miami billionaire.    

 

Photo credit:

Business Week   –    Photo of Mickey Arison         

       

KTUU Channel 2 in Anchorage Alaska reports that the cruise industry has filed suit to avoid paying Alaska’s head count tax.  In an article entitled "Sources: Cruise Ship Industry Files Suit Over Head Tax," Channel 2 reports that cruise lines are trying to avoid the $46 infrastructure tax levied at Alaska ports which the cruise ships use. The cruise industry will undoubtedly argue that the State of Alaska does not have the authority to levy taxes against foreign flagged cruise ships. 

The lawsuit has been a long time coming.  For the past year, Mickey Arison has been threatening to use Carnival’s army of lawyers to sue Alaska to avoid the tax.  There is a tradition in the Arison family of avoiding taxes.  His father, Ted Arison, earned billions running his cruise empire from Miami.  After retirement, the senior Arison denounced his U.S. citizenship and returned to Israel to try and prevent the United States from collecting estate and inheritance taxes.  

The timing of the lawsuit in Alaska is odd.  Yesterday, an environmental organization called the Friends of the Earth issued what they are calling the Cruise Ship Environmental Report Card.  The report card grades the cruise lines’ impact on the air and water.  I first learned of the report in an article entitled which cruise lines are the biggest polluters? written by travel expert Anita Dunham – Potter. Carnival received a "D-" and Royal Caribbean received a "F."      

The tar-like bunker fuels these cruise ships burn are nasty.  And the sewage and waste waters discharged  into the water are gross.  Unlike Florida which is beholden to the cruise industry with its anything goes mentality, states like Alaska and California have demonstrated an environmental commitment to the quality of the air and water in their states’ jurisdiction.  The cruise industry already does not pay U.S. taxes because they register their companies and flag their cruise ships in places like Liberia and Panama.  To quibble over a nominal tax designed to protect Alaska and its infrastructure is just the same old greed that this industry is known for.       

The Cruise Line International Association (CLIA) responded to the bad grades of its members by attacking the environmental group.  In its new PR website called "Cruise Industry Facts," CLIA proclaimed: "fortunately, Friends of the Earth has no authority in the matter."

That pretty much sums up the cruise industry’s attitude.  Environmental group – no authority.  We scoff at the notion that you can monitor or grade us.  State of Alaska – no authority.  You can’t tax us.  You can’t control us.  We will use the tax-free $30 billion we collect from U.S. tax-paying passengers each year to sue to avoid your measly tax, and then we will crap in your pristine waters.      

 

Photo credit      Friends of the Earth, via @ExpertCruiser 

 

For the past many years, I have watched cruise lines respond to each disappearance at sea by blaming the passenger.

Selling Dreams of Carefree Vacations

Cruise lines like Carnival and Royal Caribbean spend hundreds of millions of dollars a year to create the illusion of carefree vacation getaways where hard working Americans can relax, let their guard down, and forget the worries of city life. Passenger “disappearances” are inconsistent with the cruise industry’s marketing image which sells tickets.

When a passenger “disappears,” there are a number of possible explanations.  Was foul play involved?  Did the passenger act carelessly due to alcohol?  Was the intoxication due to the cruise line’s negligence in over-serving the passenger to make the targeted profits for the cruise?  Or was the disappearance due to a plan by the passenger to end his or her life?

The possibilities are many but the cruise lines’ conclusions are few. Cruise ships are quick to attack the passengers’ character and to steer blame away from themselves when a passenger goes overboard.

Merrian Carver – Royal Caribbean Cover Up, Stonewalling, and the Big Lie

When 40 year old Boston resident Merrian Carver “disappeared” from the cruise ship Mercury operated by Royal Caribbean’s subsidiary brand Celebrity Cruises, the cruise line tried its best to cover the incident up. It didn’t report Merrian missing to either the FBI or the Alaskan State Troopers, even though the cabin attendant reported her missing early in the cruise. Merrian’s Dad, insurance executive Ken Carver, began a serious investigation. Royal Caribbean responded by lying to Mr. Carver and disposing of evidence.  Mr. Carver didn’t go away and the story went public.  The The Arizona Republic published an excellently researched and written story.  In response, the cruise line reached into its bag of tricks and pulled out a good excuse: ” . . . there is very little a cruise line, a resort or a hotel can do to prevent someone from committing suicide.”

Aside of the speculation fueled by the cruise line’s lawyers and PR team, there was no competent evidence whatsoever for Royal Caribbean’s self serving announcement to the media. If it was a suicide, why did Royal Caribbean work so hard to cover the incident up and lie to Mr. Carver?  Indeed, there is now an issue whether a crew member was involved in Merrian’s death.

George Smith IV – Attack the Victim

I witnessed the same type of corporate thuggery while representing Jennifer Hagel whose husband George Smith of Greenwich Connecticut disappeared under suspicious circumstances during the couple’s honeymoon cruise on Royal Caribbean’s Brilliance of the Seas. For months the Hagel and Smith families patiently waited for information explaining the circumstances surrounding the disappearance of the healthy and handsome 26 year old man.

But when their frustration forced them to the press for answers, the cruise industry’s response was quick and brutal. Michael Crye, representing the International Council of Cruise Lines ( the predecessor to today’s Cruise Line International Association – “CLIA”) told an AP reporter investigating the story ” . . . its difficult if someone chooses to do harm to themselves . . .”

Carefully Planned Hit and Run Attacks By Cruise Line PR Departments

These type of statements are not random or insensitive rants from low level employees. The cruise lines’ PR departments carefully craft the announcements and issue them only after being run through their legal departments. The Merrian Carver “suicide” theory was issued by the Royal Caribbean corporate communications director only after being reviewed by the cruise line’s outside legal counsel. When the cruise industry faced embarrassment over Royal Caribbean’s mis-handling of George Smith’s death, out trotted Mr. Crye – the vice president of the cruise trade organization and himself a lawyer. Mr. Crye issued the he-did-it-to-himself statement on behalf of the entire cruise industry (CLIA’s motto is “one industry – one voice“), without a shred of evidence justifying such a conclusion.

Amber Malkuch – Holland America Lines’ Attack Is Business as Usual  

The recent disappearance of Washington resident Amber Malkuch shows that little has changed. Amber was 45 when she sailed on the Holland America Line (“HAL”) cruise ship Zaandam. On August 3, 2009, Amber disappeared. The usual protocol when a passenger disappears should be for the FBI or the state law enforcement authorities to board the vessel at the next port and to conduct an investigation. The period of time leading up to the cruise ship’s arrival at the next port is critical because the cruise line controls the scene of the disappearance, the witnesses and all of the evidence. Before the authorities can conclude whether the “disappearance” resulted from an accident (due to the ship’s negligence, or the passenger’s carelessness or intoxication, or a combination of factors), foul play or suicide, they must first review the evidence and interview passengers and crew members.

But on August 4, 2009, before the Alaskan State Troopers concluded their investigation, a member of HAL’s PR department and CLIA’s PR team, Sally Andrews, announced to the media that Amber probably took her own life. The “suicide” conclusion was picked up by all of the major news outlets and reported prominently on FOX News and other news stations.

This surprised not only Amber’s friends and family, but it dumbfounded the Alaskan State Troopers who had yet to review photographs and video, conduct interviews or analyze toxicology reports. The Anchorage Daily News reported “Troopers Miffed at Cruise Line’s Rush to Judgment.” The Seattle Post Intelligencer quoted a representative of the Alaskan State Troopers saying:

We’re the people actually looking into the exact cause of death . . . We’re the ones doing the interviews and looking at the evidence . . . And if we haven’t been able to make a determination, how can the cruise line who isn’t trained?”

Who Do You Trust?  The Alaskan State Troopers or the Cruise Line?

Does Holland America Line care about what the evidence reveals?  In the world of cruise line PR (perception vs. reality), what matters most to the cruise lines seems to be the public’s perception that cruise ships are safe rather than the reality that perhaps they are not.

Determining the cause of passenger overboards is the role of experts – the U.S. Coast Guard, the F.B.I., and other law enforcement authorities – not the cruise lines’ PR departments.

We suggest read: Is a Cruise Ship the Perfect Place to Commit a Crime?  

 

Photo credits:

Kendall Carver – photo of Merrian Carver

Kevin Wolf (AP) – photo of Maureen Smith, Michaeil Crye, Jennifer Hagel

Seattle Post Intelligencer – photo of Amber Malkuch

Over the course of 26 years practicing maritime law, I have seen some remarkably bad conduct by cruise lines. Covering up crimes, abandoning injured passengers in foreign ports, or quickly concluding that "missing passengers" committed "suicide" are just a few examples.  I have kept a list of what I consider the most outrageous moments in cruise line history.  The lying and scheming I have witnessed over the years is pretty impressive.

Much of the trouble lies with the foundation of the cruise industry.  All of the cruise lines incorporate their businesses in foreign countries, like Liberia – a lawless and unstable African country where a civil war rages every few years and the rebels take their AK-47’s to the streets. They also register their vessels in places like the Bahamas or Panama where the "regulatory" authorities are more than willing to look the other way as long as the cruise lines fill their coffers with U.S. dollars. The cruise line mentality of avoiding U.S. taxes, U.S labor and wage laws, and U.S. safety regulations often leads to reckless and inexcusable behavior.

I have always thought that some cruise line shenanigans were so outrageous that they should earn a trophy.

One evening while watching MSNBC TV personality Keith Olbermann announce the "Worst Person in the World," an idea popped into my head. Why not recognize the cruise line demonstrating the worst in gross negligence and indifference towards passenger and crew member health and safety?

So with apologies to Mr. Olbermann and the MSNBC show "Countdown," CruiseLaw announces the "Worst Cruise Line in the World" award. There are 24 cruise lines who are members of the Cruise Line International Association. Several companies in this group are consistently strong contenders for the award. I will include some of the smaller lines who have done some terrible things as well.

The award is not limited just to the cruise lines, but will include cruise trade groups, cruise executives, cruise communities, and other individuals in the cruise industry.  We will consider nominations from passengers, crew members and the general public.  If you suffered a bad experience on a cruise ship which deserves special mention, send us your cruise line nominee. We will announce the winner once a month. 

Hopefully, some months we won’t have a reason to award anyone.

If you are retired or a child and die on a cruise ship due to the cruise ship’s negligence, the cruise line will consider your life to be worthless under current maritime law.

Your family will face a law called the Death on the High Seas Act, commonly known as “DOHSA.” In 1920, Congress passed DOHSA to provide for limited recovery when a seaman died at sea. Congress did not want widows to become destitute when their husbands died in international waters. So they passed DOHSA which provides that a widow can recover her husband’s wages and, perhaps, some money to bury him if his body was found.

DOHSA Provides No Recovery for Pain, Suffering, Grief, or Bereavement if You or Your Loved One Dies at Sea

Applied to cruise lines, DOHSA provides no recovery at all in many circumstances. Surviving family members may potentially recover only limited financial damages after proving the cruise line’s negligence caused the death. However, there is no recovery for the deceased passenger’s pain, agony and suffering before he dies. The surviving family members’ grief and bereavement are irrelevant. The children’s loss of their parent’s love, guidance and nurturing are of no consequence.

All of these damages may be recoverable if you die in a car accident or airplane accident en route to the port. But on the high seas, only financial losses such as lost wages or burial/funeral expenses are permitted.

For this reason, there is no basis for any recovery if the missing passenger is a retiree or a child. If the body of a retired passenger is not recovered, and there are no burial expenses, the family receives nothing. This is a hard pill for a grieving family to swallow. Most people who contact our office are dumbfounded when they learn this.

Cruise Lines Love DOHSA

Unlike companies ashore, cruise lines face virtually no financial exposure when their guests are killed or disappear. Even if the cruise line is clearly negligent or acts maliciously, DOHSA provides no recovery when the victim is a retiree or a child.  Cruise lines and their insurance companies profit greatly due to this ancient law.

Historically, DOHSA was applied to aviation disasters when airplanes crashed in international waters. The families of dead children or elderly (retired) parents were excluded from any recovery by virtue of DOHSA. But following the crash of a jet in the Atlantic full of US citizens (TWA flight 800), the American public became outraged by this injustice. In response, Congress excluded air travel from DOHSA. The same thing needs to happen with cruise travel.

Victims Fight for A Change

The International Cruise Victims organization (“ICV”) has been trying to amend DOHSA to permit the recovery of fair compensation when passengers die during cruises. A cruise safety bill pending before Congress originally contained a provision to amend DOHSA so that there is no difference if an American citizen dies ashore or at sea. The cruise industry spent millions of dollars lobbying Congress to eliminate the amendment. Ultimately, the cruise lines’ big bucks and PR machine won out.

As far as deaths on ships go, DOHSA is just the way it existed in 1920 – 89 years ago. In 1920, relatively few passengers cruised a year. Now the number is around 13,000,000. Congress never envisioned that DOHSA would bar all recovery for any of the million of retired passengers and children who cruise annually. The Cruise Line International Association (“CLIA”) doesn’t tell its 13,000,000 customers or 16,000 travel agents that it lobbies each year to make certain that DOHSA remains in place.

A cruise line is the only place in the world where a child or retired passenger’s life is of absolutely no consequence in the eyes of the law. Die on a cruise ship due to bad medical care or disappear under mysterious circumstances? The cruise lines have spent millions of dollars to make certain that your loved ones don’t get a dime.