For Carnival, ‘Death on the High Seas’ Protects Bottom Line (3)

Carnival Corp. is poised to dramatically curb monetary damages for passengers killed by the coronavirus under the latest court decision to side with the company.

If a ruling Monday by a Los Angeles federal judge is followed by others, it could offer the cruise line something of a safe harbor under the Death on the High Seas Act. The century-old federal law limits payouts for survivors to “pecuniary” damages such as how much the deceased contributed through wages or housework. One maritime lawyer said that in the case of retirees, who make up a large portion of Carnival’s customers, the recovery may amount to little more than burial costs.

The subject of the ruling was a 71-year-old man who died in April after allegedly contracting Covid-19 while cruising on the Coral Princess. His family was trying to keep its wrongful-death lawsuit in state court, where they were seeking punitive damages as well as recovery for other losses. But the judge said the only way to proceed was under federal law.

The ruling comes as Carnival and other major cruise lines including Royal Caribbean Cruises Ltd. are seeking a nod from the U.S. Centers for Disease Control and Prevention to return to sailing after the CDC’s “no sail” order expires at the end of the month. The industry, one of the most heavily battered by the virus, is putting in place new rules to entice vacationers back onto its boats, announcing through a trade group this week that it will require Covid-19 tests for guests and crew. Masks will be mandatory whenever social distancing isn’t possible.

Read More: Carnival Knew It Had a Virus Problem, But Kept the Party Going

Carnival’s Princess Cruise Lines Ltd. declined to comment on pending litigation. Shares in the company were up by as much as 4.44% after markets opened in New York and had leveled to $14.53 at 10:35 a.m. Before Wednesday, the stock had declined 72% this year.

“Princess Cruises has been sensitive to the difficulties the Covid-19 outbreak has caused to our guests and crew,” spokesperson Negin Kamali said in an email. “Our response throughout this process has focused on the well-being of our guests and crew within the parameters dictated to us by the government agencies involved and the evolving medical understanding of this new illness.”

Princess Cruise Lines already scored a significant victory in another case by convincing a judge that mere exposure to Covid-19 doesn’t give passengers grounds to sue for emotional distress.

In the case in which the court ruled Monday, the family of Wilson Maa tried to argue that the federal law didn’t apply because he died after returning to shore -- not while at sea.

1920 Law

But U.S. District Judge Dale Fischer agreed with Carnival’s argument that where he died was irrelevant because the alleged negligence occurred “on the high seas beyond 3 nautical miles from the shore of the United States.”

“It is clear from the face of the complaint,” the judge wrote in Monday’s ruling, that the deceased passenger “contracted Covid-19 on the ‘high seas.’”

Lawyers for Maa’s estate didn’t immediately respond to a request for comment.

“Basically, the question to the widow is, ‘What did it cost you to lose your husband?’” said Charles Naylor, a lawyer who specializes in maritime injury and death. “‘If it didn’t cost you anything, we don’t owe you a nickel.’”

Naylor, who in his own practice is not taking on Covid-19 cases, said the 1920 law is “very out of step with modern wrongful-death statutes.”

Naylor said that if the ruling survives a likely appeal, the vast majority of Covid-19 cases among cruise line passengers will proceed under the 1920 law, “which will strictly limit the damages.”

In another Los Angeles case over the virus outbreak on the Coral Princess, a North Carolina passenger contends Carnival had detailed knowledge of the threat posed by a contagion, but jeopardized public health when the ship “seeded the shores of California” with infected passengers.

That passenger says in her recently filed revised complaint that the Coral Princess has had “significant viral outbreaks at least eight times since 2004.”

The wrongful-death case is Maa v. Carnival Corp. & Plc, 20-cv-6341, U.S. District Court, Central District of California (Los Angeles).

(Updates share price in fifth paragraph.)

To contact the reporter on this story:
Christopher Yasiejko in Wilmington, Delaware, at cyasiejko1@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Blumberg, Anthony Lin

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