2/24/2013
Cruise Ship Wrecked

Cruise Ship Wrecked

Liability and lawsuits arising out of the Costa Concordia.

By Kathleen B. Carr , Elizabeth Duffy

One year after the cruise ship Costa Concordia ran into a rocky reef and partially sank just off the coast of the island of Giglio, Italy, the vessel remains perched there, propped up by the rocks that prevented the vessel from completely sinking into oblivion. The vessel allegedly approached too close to shore in the interest of creating a “spectacle” for the inhabitants and tourists on Giglio and to impress the vessel’s passengers.

The vessel certainly created a spectacle, and remains so today:  the wreck of this nearly 1,000-foot monstrosity appears frozen in time at a permanent list and partially submerged, looks like a small island when viewed from Google Earth, and presents one of the most complicated wreck removal challenges in history.

Over the past year, as predicted, numerous lawsuits have been filed as a result of this tragic disaster. Passenger suits have been pursued in various jurisdictions, vessel attachment proceedings have been attempted, and criminal investigations and proceedings have been underway with regard to the captain’s and vessel owner’s conduct.

Carnival Corporation and plc, corporate parent of Costa Crociere S.p.A. (“Costa”), the Italian-registered owner of the Italian-flagged Costa Concordia, has been accused of having knowledge of, and, in fact, promoting, the vessel’s dangerous shoreline approach. The vessel’s captain, Francesco Schettino (dubbed “Captain Coward” by the press), has been excoriated as a result of his astonishing apparent mishandling of the crisis.

Schettino stands accused of manslaughter of 32 people, causing a shipwreck, and abandoning ship. Costa has been pointing the finger at Schettino, blaming him for the incident. Meanwhile, Schettino has been pointing the finger right back at the vessel owner, reportedly blaming Costa for the incident and suing for wrongful discharge.

Criminal Proceedings

A preliminary criminal hearing has gone forward in Tuscany to determine whether charges will be brought against Schettino and others in connection with the disaster. The hearing was closed to the public.

According to Lloyd’s List, a report prepared by several experts attributed most of the fault to Schettino and focused on his failure to order a prompt evacuation (the evacuation order was not issued until about an hour after the vessel first ran into rocks and sustained a gaping gash in the hull).

The “black box” recordings of the incident reportedly indicate that Schettino called the company’s emergency line multiple times after the initial impact. Post-incident investigations reportedly revealed a slew of transgressions that occurred before, during, and after the vessel’s initial impact, including miscommunications at the helm, inattention by Schettino, delayed orders to abandon ship, and disorganized and improperly trained crewmembers. Surprisingly, however, the Costa Concordia crew earned the Lloyd’s List’s “Seafarer of the Year” award for the “bravery and professionalism” displayed during the casualty.

Schettino maintains that Costa’s management was aware that a Costa cruise ship previously had approached close to Giglio. The mayor of Giglio reportedly encouraged such close approaches to “salute” the island. Costa has denied this claim and referred to the route as “unauthorized, unapproved, and unknown to Costa.”  Lloyd’s List tracking data reportedly shows that the Costa Concordia previously had approached within 230 meters of the Giglio coast on Aug. 14, 2011.

The Italian court currently is assessing whether Schettino and others should be formally charged. That determination reportedly will be made in the near future.

U.S. Litigation

So far, plaintiffs seeking recourse through U.S. state and federal courts have been having difficulties establishing rights to maintain their claims in those courts.

In one case filed in the U.S. District Court for the Southern District of Texas, Stumpf v. Carnival plc, et al., a German passenger brought claims for negligence and gross negligence relating to the death of his wife and his own damages. He brought suit against both Carnival plc and Utopia Cruises, Inc., alleging that Utopia Cruises, the named owner of the cruise ship Carnival Triumph, in reality, was the alter ego of Carnival plc. On that basis, plaintiff sought a writ of maritime attachment of the Carnival Triumph.

After the case initially was dismissed for faulty pleading, the plaintiff re-filed with more detailed allegations, and the court granted the writ of attachment, apparently delaying the departure of a cruise aboard the Carnival Triumph. As part of his basis for seeking the attachment, the plaintiff argued that the court lacked personal jurisdiction over the defendants. After the plaintiff agreed to the defendants’ motion to vacate the attachment, the defendants moved to dismiss based on lack of personal jurisdiction, based on the plaintiff’s own previous argument that the court lacked personal jurisdiction. The plaintiff did not oppose the motion, and the court dismissed the case.

Several other groups of plaintiffs have filed a number of lawsuits, including class-action claims and multi-plaintiff claims filed jointly on behalf of hundreds of plaintiffs. Cases have been filed in various jurisdictions including Florida, California, New York, Illinois, and Texas, brought on behalf of foreign passengers as well as U.S. citizens. Plaintiffs have sued various Carnival entities, including Carnival Corporation & plc and Costa Crociere S.p.A., and have asserted claims for negligence, gross negligence, breach of contract, and breach of the Athens Convention, among others.

In addition, plaintiffs have asserted claims against Carnival officers and the vessel’s architect, Joseph Farcus, alleging that defective design made the ship unstable and “susceptible to tilting.” Other alleged vessel defects include the lack of free-fall lifeboats and the fact that the vessel is single-hulled rather than double-hulled.

Defendants have responded to the lawsuits with motions to dismiss based on (1) the forum selection clause contained in the ticket, and (2) forum non conveniens, an argument that Italy is the best forum for adjudication because the ship was owned and operated by an Italian company and sailed under an Italian flag; the crew were all employees of that Italian company; the accident happened in Italian waters; and Italian authorities have conducted an investigation.

The forum selection clause language included in the standard Costa passenger ticket requires that all claims “arising out of, concerned with, or incident to” non-U.S. voyages must be brought in the courts of Genoa, Italy. Plaintiffs’ objections to application of the forum selection clause have included fact-based arguments relating to notice, along with arguments that defendants’ recklessness and gross negligence voided the ticket contract pursuant to the Athens Convention, and that the ticket contract is void pursuant to federal maritime law. (See Aneid-Saba, et al. v. Carnival Corp., et al.).

With regard to the forum non conveniens issue, a Florida federal court already has agreed with the defendants and dismissed the case (Giglio Sub, et al. v. Carnival Corp., et al.) on the grounds that the burden posed to the court and the defendants in litigating the case in Florida heavily outweighed the plaintiffs’ reasons for their forum choice, and that the Italian courts offer an adequate alternative.

In that case, the fact that the plaintiffs were exclusively Italian residents and business owners of Giglio made that case particularly susceptible to the defendants’ motion. The case was filed as a class action on behalf of a putative class of more than 1,000 “fishermen, property owners, business owners, and wage earners on Giglio Island, as well as those working on and around the island” who claimed damages that arose from the wreck. In the court’s 41-page decision dismissing the case, Judge Rosenbaum noted, “Italy has by far the strongest interest in the case.” The plaintiffs appealed the court’s decision to the Eleventh Circuit. The plaintiffs-appellants’ brief was due Jan. 31, 2013.

The majority of other cases pending in American courts have been brought by or on behalf of passengers. Most of the lawsuits include at least some U.S. citizens. In response to motions to dismiss on forum non conveniens grounds, plaintiffs argued forcefully that the distinction between the Giglio Sub plaintiffs and the passenger plaintiffs from other countries, including the U.S. (and also including Florida residents), sets the cases apart and that the passenger plaintiffs’ forum choice is entitled to greater weight under existing case law.

Beyond the geographic differences, plaintiffs assert that “unlike the evidence of damages suffered by the business owners in Giglio, evidence of the passenger plaintiffs’ damages exists all over the world, including the U.S., and evidence regarding design defects and corporate-level gross negligence will be found predominantly, if not exclusively, in the U.S.”

In September 2012, some of the plaintiffs filed a motion to centralize the litigation pending in California, Florida, and Illinois, but later withdrew the motion. The cases remain pending in those jurisdictions for multiple reasons, including an outstanding motion to dismiss, awaiting arguments, and/or action by the courts.

At least two of the larger cases now pending in the U.S. District Court for the Southern District of Florida initially were filed in Florida state court. Defendants removed the cases to federal court, pursuant to the Class Action Fairness Act of 2005, and based on 28 U.S.C. § 1331 and the laws and treaties of the U.S., on the basis that they raise substantial questions of federal common law. Plaintiffs in turn filed motions to remand to the state court, asserting that the cases do not include the required number of plaintiffs to qualify as class actions and that the underlying claims are largely state-law claims of negligence and do not implicate a federal question. Those motions remain pending.

What’s Next?

At this stage, the procedural issues of where the respective liabilities arising out of the Costa Concordia disaster will be litigated first need to be sorted out before the courts address the merits of the various liability claims. The results of the impending decision by the Italian court in the ongoing criminal proceeding will shed further light on the extent of culpability likely to be found with respect to Captain “Coward” Schettino and the Carnival defendants.    


Kathleen B. Carr is a partner at the CLM member firm Edwards Wildman Palmer LLP, with a specialty in admiralty and maritime law. A former 100-ton passenger vessel captain, Carr has handled complex litigation matters for over 19 years, including admiralty, maritime, and insurance coverage disputes. She can be reached at (617) 951-3326, kcarr@edwardswildman.com.  

Elizabeth M. Duffy is an associate at the CLM member firm Edwards Wildman Palmer LLP, where she practices in the insurance and reinsurance department. She can be reached at (617) 239-0868, eduffy@edwardswildman.com.



Kathleen B. Carr is a partner at Edwards Wildman Palmer LLP, with a specialty in admiralty and maritime law. A former 100-ton passenger vessel captain, Carr has handled complex litigation matters for over 18 years, including admiralty, maritime, and insurance coverage disputes. She can be reached at (617) 951-3326, kcarr@edwardswildman.com.

Elizabeth Duffy is an associate at Edwards Wildman Palmer LLP, where she practices in the insurance and reinsurance department. She can be reached at eduffy@edwardswildman.com.

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