Court Refuses to Open ‘Loophole’ for Cruise Line Lawsuits

By | July 6, 2020

The 11th Circuit Court of Appeals reversed, vacated and remanded a decision by U.S. District Court Judge Ursula Ungaro that found the court had no jurisdiction to hear Carmela DeRoy’s lawsuit against Carnival Corp. That ruling, if upheld, would have allowed the claim to proceed to state court and a possible jury trial.

DeRoy’s attorney, M. Benjamin Murphey, filed the suit as an “in personam” action to get around a forum-selection clause in Carnival’s passenger agreement that requires federal courts to hear any disputes when federal jurisdiction applies to the claim.

The legal term refers to a court’s jurisdiction over a person, as opposed to property. Admiralty law is derived from the federal courts’ jurisdiction over seafaring vessels.

“It was a creative effort,” the 11th Circuit panel said in its opinion. “But DeRoy’s proposed loophole does not exist, so she cannot escape the forum-selection clause’s ironclad consequences.”

The injury that prompted the lawsuit is not mentioned until the 13th page of a 16-page complaint: DeRoy was injured when she tripped over a dip in the carpeting on the 6th deck of Carnival’s Valor cruise ship. Murphey said his client suffered an “orthopedic injury.”

Much of the rest of the complaint presents arguments as to why the U.S. Court for the Southern District of Florida has no jurisdiction.

“We all know the state of play,” Murphey said in a telephone interview. “If I’m going to have to fight somebody, I want to fight where the terms are best for me.”

The complaint that Murphey wrote on DeRoy’s behalf says that federal courts have for many years failed to understand that passengers don’t have to file claims against cruise lines under admiralty law. Court decisions have confused the concepts of forum, subject-matter jurisdiction, personal jurisdiction, claims presented and applicable law, the suit says.

Murphey’s law firm, Lawlor White & Murphey in Fort Lauderdale, represented some of the plaintiffs in those lawsuits. In DeRoy’s case the firm argued that the federal court lacked jurisdiction. DeRoy is a Florida resident and Carnival is headquartered in South Florida, so there’s no diversity, the suit argues. The court’s jurisdiction under admiralty law doesn’t apply because the suit was filed “in personam,” the complaint says.

The 11th Circuit didn’t agree. The panel’s opinion notes that DeRoy had also pursued a lawsuit in state court. The Florida Third District Court of Appeal, which has jurisdiction, has ruled that the forum-selection clauses in Carnival’s passenger agreements were enforceable in three previous decisions.

The appellate court said the U.S. Supreme Court concluded in a 1991 decision that “cruise lines have a special interest in clarifying where they can be sued, since their business involves transporting passengers through many jurisdictions.”

“In short, the forum-selection clause does not contain the loophole DeRoy urges,” the court said in conclusion. “To the contrary, it serves as a moat around the federal-court forum, ensuring that claims where federal jurisdiction could lie, if litigated at all, stay in federal court.”

About Jim Sams

Sams is editor of ClaimsJournal.com, the online resource and daily newsletter for property/casualty insurance claims professionals. ClaimsJournal is a member of the Wells Media Group. Sams can be reached at jsams@wellsmedia.com More from Jim Sams

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