May 02, 2013
Crusan v. Carnival Corp.
Response to Motion to Dismiss
In this brief, the proposed class of Plaintiffs from the Carnival Triumph debacle respond to Carnival’s Motion to Dismiss Plaintiffs’ Class Action Complaint. As expected, Carnival heavily relied on the various waivers in its passenger ticket contract in its attempt to avoid liability. In this response, the Plaintiffs argue that the various ticket contract provisions are either void or inapplicable. Additionally, Plaintiffs argue that their complaint is adequately pled under the law.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 13-CV-20816-KMW
MATT CRUSAN and MELISSA CRUSAN,
husband and wife, on behalf of themselves
and other similarly situated passengers,
onboard the Carnival Triumph
PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE CLASS ACTION COMPLAINT
Plaintiff, Matt Crusan and Melissa Crusan, on behalf of themselves and other similarly situated passengers onboard the Carnival Triumph, file their Response in Opposition to Defendant Carnival Corp. Motion to Dismiss. D.E. 13, and for good cause state as follows.
CARNIVAL’S MOTION TO DISMISS SHOULD BE DENIED IN ITS ENTIRETY. CARNIVAL’S ARGUMENTS REGARDING THE CLASS ACTION WAIVER AND CLASS STATUS ARE NOT PROPERLY DECIDED AT THE MOTION TO DISMISS STAGE. ALTERNATIVELY, THIS HONORABLE COURT SHOULD DETERMINE THAT CARNIVAL’S CLASS ACTION WAIVER CONTAINED IN THE PASSENGER TICKET CONTRACT (OF ADHESION) IS VOID PURSUANT TO 46 USC 30509. CARNIVAL’S REMAINING BOILERPLATE ARGUMENTS AS TO THE ADEQUACY OF THE PLAINTIFFS’ VARIOUS CAUSES OF ACTION ALL FAIL BECAUSE THE INSTANT COMPLAINT IS LADEN WITH DETAILED FACTS IN LINE WITH TWOMBLY AND IQBAL.
I. FACTUAL BACKGROUNd.
The well pled allegations of the Plaintiffs complaint frame the issues for this Honorable Court. Of course, at the Motion to Dismiss stage, said factual allegations are to be as true.
On or about February 10, 2013, Plaintiffs were paying passengers on defendant’s vessel, Triumph, which was in navigable waters. [Complaint, D.E. 1, 7].
That day, while the cruise ship was at sea, the Triumph’s engine room caught fire. The fire disabled the ship’s propulsion system along with other necessary machinery. Id., 9. Thus, the vessel was left without power and other necessities to make the vessel reasonably safe for passengers, including climate control, plumbing, waste water disposal, and refrigeration for food storage. The vessel was left adrift at the mercy of the sea with no way to maneuver. Id., 9.
From February 10, 2013 until February 15, 2013, Plaintiffs and all other Triumph passengers were harmed and/or injured as a result of the engine room fire by way of being stranded in the middle of the ocean (for five days) without necessary services and supplies (including food and working toilets). During this time, Plaintiffs and all other Triumph passengers were forced to sleep on deck and/or in other communal areas on the vessel, relieve themselves into buckets, bags, showers and sinks. These accumulated buckets and bags of human waste were left out in the open in public passenger spaces. Id., 10.
Because no refrigerators were working onboard, Plaintiffs and all other Triumph passengers were given spoiled or rotting food that was unfit for reasonably safe human consumption. Passengers were also forced to live in squalid conditions that created a severe risk of injury, illness and/or disease. Id., 10.
Due to the lack of working plumbing and sanitation systems on the vessel, sewage and/or putrid water felled with urine and feces leaked onto floors, walls and ceiling. This sewage and/or human waste sloshed around the vessel as the vessel listed while drifting and/or while under tow. Conditions became increasingly unbearable each day due to the lack of working ventilation system on the vessel, leading to noxious odors and gasses that caused numerous passengers to vomit and/or become nauseous. At all times material, Plaintiffs and all other similarly situated persons were fearful for their lives while they were trapped aboard defendant’s vessel. Id., 10.
Carnival caused and/or worsened all of the above by failing to arrange the disembarkation of passengers in the nearest port of call after the Triumph lost power and/or by choosing to tow the passengers to a dramatically further port of call for several days. More specifically, at the time of the fire, the vessel was roughly 150 miles from port in Progreso, Mexico and roughly 500 miles from a port in Mobile, Alabama. Carnival initially decided to return to Mexico, but later decided to travel all the way to Mobile, Alabama. This decision was motivated solely by financial gain and Carnival’s convenience. Were Carnival to have been towed back to Mexico, Carnival would have needed a second tow back to the United States, at significant additional expense. Id., 13.
Furthermore, instead of taking the more than 3,000 passengers back to Galveston, Texas (where the cruise began), Carnival decided to go to Mobile, Alabama, because that is where the repair facility is. In so doing, Carnival subjected the passengers’ to further harm and inconvenience by putting them on a seven (7) hour bus ride back to Galveston. Id., 13.
These callous, intentional decisions subjected the Plaintiffs and all passengers similarly situated aboard the Triumph to five (5) days of deplorable, nightmarish conditions at sea. Such wanton, willful and outrageous conduct on the part of defendant exposes them to punitive damages, which the Plaintiffs seek herein. See Lobegeiger v. Celebrity Cruises, Inc., 2011 WL 3703329, 2011 U.S. Dist. LEXIS 93933 (S.D. Fla. Aug. 23, 2011). Id., 13.
Notably, prior to the underlying incident Carnival knew or should have known that the vessel Triumph was likely to cause injury, harm and damages to its passengers. More specifically, Carnival knew or should have known that the vessel Triumph was likely to experience mechanical and/or engine issues because of prior similar issues: 1) A cruise in mid-January 2013 on the Triumph was affected by propulsion issues; 2) on January 28th, 2013, there was an incident which resulted in damage to the Triumph’s ship’s propulsion system and generators. Despite said issues, Carnival knowingly embarked on the subject voyage. Id., 8.
At all times material, due to the negligence and/or gross negligence and/or intentional conduct of the Defendant, Plaintiffs and all others similarly situated were placed in an immediate risk of physical harm, including: disease, dehydration, illness, injury and/or death. Id., 11.
Defendant’s negligence and/or gross negligence and/or intentional conduct caused severe emotional distress to the Plaintiffs and all others similarly situated, such as fear and anxiety. These emotional injuries and/or damages have also resulted in physical manifestations, such as sickness, nausea, exhaustion, fatigue, headaches, insomnia, lack of sleep, poor sleep, and nightmares. Id., 11.
II. PROCEDURAL BACKGROUNd.
In light of the incident, the Plaintiffs on behalf of themselves and other similarly situated passengers onboard the Carnival Triumph, filed a Class Action Complaint against Carnival, alleging: Negligence (Count I), Negligent Infliction of Emotional Distress (Count II), and Intentional Infliction of Emotional Distress (Count III).
Because this action was filed recently (on February 18, 2013) and class discovery has not yet begun, much less been completed, the Plaintiffs have not yet filed their Motion for Class Certification. See Parker v. Time Warner Entertainment Co., 331 F. 3d 13 (2d Cir. 2003) (reversing the district court’s decision to deny class status before the Plaintiff filed a motion for certification, because discovery must be conducted before ruling on certification issues).
Nonetheless, on April 4, 2013, Carnival filed a Motion to Dismiss the Class Action Complaint. [D.E. 13]. Therein, Carnival argues: 1) that Plaintiffs cannot maintain the current action as a “class” action because of a contractual provision in Carnival’s passenger ticket contract; 2) that Plaintiffs’ class does not satisfy Fed. R. of Civ. P. 23; and 3) seeking dismissal, pursuant to Fed. R. Civ. P. 12(b)(6) of Counts I, II and III for failure to state a claim.
As shown below, Carnival’s Motion to Dismiss should be denied in its entirety.
III.STANDARD OF REVIEW.
When ruling on a motion to dismiss, the Court must accept as true all of the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89 (2007).
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Court reaffirmed the “notice pleading” principle codified in Federal Rule of Civil Procedure 8, asserting that a complaint must offer more than a formulaic recitation of the elements of a cause of action. Three weeks after issuing Twombly, the Supreme Court put its decision in context with its ruling in Erickson v. Pardus, 551 U.S. 89 (2007). Quoting Twombly and Conley v. Gibson, 355 U.S. 41 (1957), the Court in Erickson held:
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that a pleader is entitled to relief.” Specific facts are not necessary; the statement need only “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41 (1957)). In addition, when ruling on a defendant’s motion to dismiss, a judge must accept as true all of the factual allegations in the complaint. Bell Atlantic Corp. Supra., at 555-556.
Id.,at 93-94. (Emphasis added) (Other internal citations omitted).
As this Honorable Court recently explained in the matter of Rocha v. Carnival Corporation, Case No: 10-22799-CV-LENARD/TURNOFF (S.D. Fla. 2011) [D.E. 26] even after Twombly, “it remains black-letter law today that in the ordinary case a complaint need not provide detailed factual allegations in order to withstand 12(b)(6) scrutiny.” “Twombly neither eliminated nor marginalized the liberal pleading rules.” Id., at 3-4, citing Caytrans BBC, LLC v. Equipment Rental & Contractors Corp., 2009 WL857554, at *2 (S.D. Ala. Mar. 25, 2009) and Wilchombe v. TeeVee Toons, Inc., 555 F. 3d 949, 958 (11th Cir. 2009).
A. IT IS PREMATURE TO RAISE A CLASS ACTION WAIVER CONTAINED IN A TICKET CONTRACT AT THE MOTION TO DISMISS STAGe.
This Court has consistently refused to consider cruise passenger ticket defenses on motions to dismiss because at this stage there is no evidence that any of the class representatives read and understood the terms and conditions included in the ticket. See, e.g., Suter v. Carnival Corp., 2007 WL 4662144 (S.D. Fla. 2007).
In Suter, the cruise line argued that any claim of apparent agency as to a shipboard doctor should be dismissed because the ticket contract informed the passenger to the contrary. This court held that the ticket provision could not be given effect at the dismissal stage. See Suter v. Carnival Corp., 2007 WL 4662144, *6 – 7:
Suter argues that Carnival “held out” Dr. Mahomed to the public as an officer and crew member of the Spirit, in addition to being the Ship’s doctor. In opposition, Carnival maintains that Suter’s reliance on any “holding out” by Carnival that Dr. Mahomed was its agent was unreasonable because Suter’s passenger ticket disclosed that the shipboard doctor was an independent contractor and not Carnival’s agent. In support, Carnival relies on a line of cases in which courts granted summary judgment in favor of hospitals challenging claims of apparent authority over doctors who practiced in those facilities.
In contrast, Defendant here presents a motion to dismiss, not a motion for summary judgment and thus, the Court must determine whether the facts alleged, taken as true, form the basis for a valid claim. Moreover, the pleading does not show that Suter read and understood the terms and conditions included in her ticket. Consequently, Carnival’s argument is premature.
Id. (emphasis added); see also Lobegeiger v. Celebrity Cruises, Inc., 2011 WL 3703329 (S.D. Fla. 2011)(Emphasis added):
The Court is equally unpersuaded by Celebrity’s argument that the disclaimer contained in the passenger ticket contract precludes a finding that a plaintiff’s belief in this regard is reasonable In Suter, the undersigned rejected this same argument, concluding it was premature at the motion to dismiss stage. See Suter, 2007 WL 4662144, at *6–7. Celebrity’s argument is similarly premature at this stage of the litigation.
Accordingly, the class action waiver defense should be considered only after discovery has been undertaken.
B.CARNIVAL’S RELIANCE UPON ARBITRATION CASES IS MISPLACED.
Carnival relies exclusively upon cases involving class action waivers contained within arbitration provisions, which, by definition, involve a negotiated waiver of any form of trial. See, e.g., Nitro Lift Tech, LLC v. Howard, ___ U.S. ___ 2012 WL 5895686 (2012); AT&T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740 (2011); Pendergast v. Sprint Nextel Corp. (“Pendergast II”), 691 F.3d 12 24 (11th Cir. 2012); Cruz v. Singular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011).
These cases are not controlling because each of them involved application of the Federal Arbitration Act (FAA) which preempts state court decisions which hold that arbitration class action waivers are unconscionable, and also reflects a “liberal federal policy favoring arbitration.” Moses H. Cohn Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). There is no such liberal policy favoring class action waivers outside of the context of arbitration provisions. To the contrary, there is a liberal policy against limitation of trial by jury for in personam admiralty actions pursuant to the Savings to Suitors Clause of 28 U.S.C.A. §1331(1) and 46 U.S.C. §30509.
Carnival’s lone authority outside the context of arbitration class action waivers is a Georgia District Court decision, Palmer v. Converges Corp., 2012 WL 425256 (M.D. Ga. 2012). In that case, the plaintiffs argued (as the Plaintiffs do herein), that courts will only enforce class waiver provisions in the context of enforceable arbitration agreements under the Federal Arbitration Act. The waivers have been enforced within the FAA’s framework of arbitration agreements because of a trade off – the possibility of bringing a class action is relinquished to take advantage of the simplicity, informality, and expedience of arbitration.
In Palmer, the district court noted that while this was correct, it nevertheless held that “there is no logical reason to distinguish a waiver in the context of an arbitration agreement from a waiver in the context of any other contract.” 2012 WL 425256 at *2. Instead, the district court held, class action waivers are upheld “because they are contractual provisions that do not affect any substantive rights.” Id. (citing Jenkins v. First Am. Cash Advance of Georgia, LLC, 400 F.3d 868, 878 (11th Cir. 2005)). The Palmer argument fails because Jenkins explains precisely why class action waivers should not be enforced outside the context of arbitration agreements. First, Jenkins itself involved an arbitration class action waiver. Second, in deciding whether to enforce the waiver provision in Jenkins, the Eleventh Circuit conducted an unconscionability analysis, and found that the waiver was not unconscionable because the arbitration agreements expressly allowed the borrower to recover attorney’s fees and expenses if she prevailed. Jenkins, at 878.
C.CARNIVAL’S PASSENGER TICKET CLASS ACTION WAIVER IS VOID AS A MATTER OF LAW PURSUANT TO 46 U.S.C. § 30509.
Furthermore, Carnival’s arguments regarding class action waiver fails because said waiver violates 46 U.S.C. §30509. That statute provides in pertinent part:
Provisions limiting liability for personal injury or death:
In general. – The owner, master, manager or agent of a vessel transporting passengersbetween ports in the United States, or between a port in the United States and a port in a foreign county may not include in a regulation or contract a provision limiting–
the liability of the owner, master, or agent for personal injury or death caused by the negligence or fault of the owner or the owner’s employees or agents; or
(B) the right of a claimant for personal injury or death to a trial by court of competent jurisdiction.
Voidness. – A provision described in paragraph (1) is void.
Carnival’s class action waiver violates Subsections (1)(A) and (B) of §30509 because, on its very face, it is a contractual provision (contained in a contract of adhesion) which: dramatically limits the liability of the shipowner for injury caused by its negligence and limits the right of a claimant for personal injury or death to a trial by court of competent jurisdiction.
The primary purpose of class action litigation is to allow multiple claimants to pursue litigation collectively where it would otherwise be economically unfeasible to litigate their claims individually. In the absence of the right to pursue their claims as a class, the present claimants will likely be deprived of their opportunity to present their claims for personal injury “to a trial by court of competent jurisdiction.” Accordingly, the class action waiver is void.
As the Supreme Court noted in Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), Congress enacted §30509 “in response to passenger-ticket conditions purporting to limit the shipowner’s liability for negligence or to remove the issue of liability from the scrutiny of any court by means of a clause providing that ‘the question of liability and the measure of damages shall be determined by arbitration.’” Shute, 499 U.S. at 596. (Emphasis added.) Because the express purpose of congress in enacting §30509 was to preclude inserting, inter alia, arbitration provisions in a passenger ticket contract, allowing a class action waiver, typically enforceable only in conjunction with an arbitration agreement, would likewise violate §30509.
Furthermore, admiralty law, particularly the Savings to Suitors Clause, has always treated the right to a jury trial, at least as to in personam actions in admiralty, as a remedy, not some mere procedural device. See, e.g., Lewis v. Lewis and Clark Marine, Inc., 531 U.S. 438, 454, 121 S.Ct. 993, 1004, 148 L.Ed.2d 931 (2001). There, the Supreme Court noted that “[t]racing the development of the clause since the Judiciary Act of the 1789, it appears that the clause was designed to protect remedies available at common law.” The Court concluded that “[t]rial by jury is an obvious, but not exclusive, example of the remedies available to suitors.” Id. at 454-455.
To this point, in Johnson v. Royal Caribbean Cruises, Ltd., 449 Fed. Appx. 846 (11th Cir. 2011), the Eleventh Circuit held that a cruise line personal injury waiver was void pursuant to 46 U.S.C. §30509:
Johnson was a passenger on the Oasis of the Sea cruise ship owned by Royal. One of the attractions of this ship was the FlowRider—a simulated surfing and body boarding activity. Before purchasing a ticket to participate in the FlowRider attraction, Johnson was instructed to sign her name to an electronic “Onboard Activity Waiver” (“the waiver”). When she signed her name to the waiver, Johnson agreed to release Royal and its employees from actions “arising from any accident [or] injury … resulting from … [her] participation in any or all of the shipboard activities [she] has selected.” [R. 93–1].
The waiver at issue in this case is only enforceable if it does not run afoul of 46 U.S.C. § 30509, which prohibits “the owner … or agent of a vessel transporting passengers between … a port in the United States and a port in a foreign country” from including in a “contract a provision limiting the liability of the owner … or agent for personal injury or death caused by the negligence or fault of the owner or the owner’s employees or agents.” 46 U.S.C. § 30509(a)(1)(A). Any such provision is rendered void and will not be enforced. 46 U.S.C. § 30509(a)(2).
The waiver at issue is clearly a contract with a provision that limits “the liability of the owner … for personal injury or death caused by the negligence or fault of the owner or the owner’s employees or agents.” 46 U.S.C. § 30509(a)(1)(A). Royal is also undoubtedly “the owner … of a vessel transporting passengers between.. a port in the United States and a port in a foreign country.” 84946 U.S.C. § 30509(a)(1)(A). Congress has spoken on this very type of waiver and has unequivocally prohibited it and rendered it void. 46 U.S.C. § 30509(a)(2). The statute contains no exceptions regarding the type of activity—whether recreational, ultra hazardous, or otherwise—in which the passenger is partaking when the injury occurs nor where the particular provision is found—whether on the back of a ticket or in a separate, signed, electronic document as here. See 46 U.S.C. § 30509.
Id.; see also Smolnikar v. Royal Caribbean Cruises Ltd. ,787 F. Supp. 2d 1308, 1316 – 17(S.D. Fla. 2011) (Jordan, J.):
A provision in a passenger contract or disclaimer form attempting to limit a carrier’s liability as described above is deemed void. See § 30509(a)(2) I therefore apply § 30509(a)(1)(A) pursuant to its plain language, which expressly forbids Royal Caribbean from limiting or disclaiming liability stemming from a passenger’s allegations of direct negligence against it. (Emphasis added).
Here, like the waiver the Eleventh Circuit declared void in Johnson (and Judge Jordan in in Smolnikar), Carnival’s class action waiver is clearly a contract with a provision that “limits the liability of the owner for personal injury or death caused by the negligence or fault of the owner or the owner’s employees or agents.” 46 U.S.C 30509(a)(1)(A). Carnival is also undoubtedly “the owner of a vessel transporting passengers between a port in the United States and a port in a foreign country. 46 U.S.C. § 30509(a)(1)(A). Congress has spoken on this type of waiver and has unequivocally prohibited it and rendered it void. Johnson, 449 Fed. Appx. 846 (11th Cir. 2011). This Honorable Court should do precisely the same thing.
In its Motion, Carnival asserts the class action waiver clause is not voided by § 30509, because according to Carnival, the clause is nothing more than a mere “procedural device that does not limit Carnival’s liability or Plaintiffs’ [substantive] right to trial by a competent court.” [D.E. 13, at p.4-5]. Carnival’s argument is ridiculous, and should not be accepted by this Honorable Court because there is no question this class action waiver is limiting, if not eliminating, the Plaintiffs’ substantive right to file suit against Carnival and receive compensation for their injuries. Considering the unique circumstances of this case, enforcing the class waiver clause here would have the effect of limiting Carnival’s liability for one of the most horrible cruise disasters in recent history.
Carnival asserts in its Motion to Dismiss that “[u]nder general maritime law, once a term in a cruise ticket contract is reasonably communicated to the passenger it is enforceable.” [D.E. 13, at p.4]. This is an incorrect statement of law. Simply because a passenger ticket contract is communicated to the passenger does not mean that all terms of the contract will be enforceable. See, e.g., The Bremen, 407 U.S. at 15 (“A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum.”); Homen v. Tepuy II, 2006 WL 3626301 (S.D. Fla. 2006); Pods, Inc. v. Paysource, Inc., 2006 WL 1382099 (M.D. Fla. 2006). Citing to Supreme Court case law, Carnival argues that “[t]he terms of a ticket contract are ‘presumptively enforceable’ absent a ‘strong showing’ from plaintiffs that enforcement of the terms would be unreasonable.” [D.E. 13, at p.4]. Carnival has misinterpreted the Supreme Court’s rulings, because the “presumption of enforceability” and the requirement that plaintiffs make a “strong showing” to avoid enforcement are rules of law applicable only in the forum selection clause context. See The Bremen v. Zapata Off Shore Co., 407 U.S. 1 (1972); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).
In fact, the majority of Carnival’s argument rests on the assumption that all clauses in passenger ticket contracts are governed by the rules relating to forum selection clauses. Once again, Carnival is incorrect. Hoping to avoid the effects of 46 U.S.C. § 30509, Carnival argues that “[t]he class action waiver should be analyzed under the same framework [as a forum selection clause] because it is a procedural device” and does not affect Plaintiffs’ “substantive right.” [D.E. 13, at p.4]. In other words, Carnival argues that the class action waiver clause has no effect on Carnival’s substantive liability. However, a clause barring all class actions in any forum is certainly not the same as a forum selection clause, and should not be viewed as such.
Under certain circumstances, present in this case, enforcement of a class action waiver directly limits the Plaintiff’s substantive rights and the Defendant’s corresponding liability. To this point, the U.S. Supreme Court has expressly recognized the underlying justification for class action lawsuits, and that public policy strongly supports the need for class actions for certain types of claims. In many cases, class actions are not essential because each plaintiff is free to file an individual lawsuit against the common defendant and receive just compensation. In such cases, a contractual provision barring class actions would likely operate as a procedural device and would have little effect on the plaintiffs’ substantive rights. Yet Carnival makes the blanket assertion that class action waivers cannot ever limit plaintiffs’ substantive rights, regardless of the particular facts of each case. Carnival is once again incorrect.
The Supreme Court, the Eleventh Circuit, and many other U.S. courts have explicitly held that there are certain circumstances where a class action waiver greatly affects substantive rights, particularly where each plaintiff stands to recover only a small amount in the lawsuit. See, e.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (“The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights”); In re Charter Co., 876 F.2d 866, 871 (11th Cir. 1989) (“[T]he effort and cost of investigating and initiating a claim may be greater than many claimants’ individual stake in the outcome, discouraging the prosecution of these claims absent a class action filing procedure.” Laster v. AT&T Mobility LLC, 584 F.3d 849, 854 (9th Cir. 2009)(overruled on other grounds) (“Class actions serve the important policy function of deterring and redressing wrongdoing, particularly where a company defrauds large numbers of consumers out of individually small sums of money. Class action waivers pose a problem because small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. In this way, the class action waiver allows the company to insulate itself from liability for its wrongdoing and the policy behind class actions is thwarted.”); Laster, 584 F.3d 849, at n.4 (“As the California Supreme Court has emphasized, ‘[s]ome courts have viewed class actions or arbitrations as a merely procedural right, the waiver of which is not unconscionable … But as[the cases] of this court have continually affirmed, class actions and arbitrations are, particularly in the consumer context, often inextricably linked to the vindication of substantive rights.’ Discover Bank, 30 Cal.Rptr.3d 76, 113 P.3d at 1109.”); Discover Bank v. Superior Court, 36 Cal.4th 148, 162-63 (Cal. 2005).
Put simply, “When the potential for individual gain is small, very few plaintiffs, if any, will pursue individual arbitration or litigation, which greatly reduces the aggregate liability a company faces.” Shroyer v. New Cingular Wireless Services, Inc., 498 F.3d 976 (9th Cir. 2007). And as the Seventh Circuit so aptly explained, “[t]he realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.” Carnegie v. Household Intern., Inc., 376 F.3d 656 (7th Cir. 2004) (emphasis added).
Enforcing the waiver here would thwart the underlying purpose of 46 U.S.C. § 30509, as well as the underlying principle that class action litigation stands for.
The class action waiver clause typically provides no benefit to Carnival in ordinary cases—which begs the obvious question: why would Carnival insert the clause into the ticket contract? The answer is quite simple: Carnival inserted the waiver clause with the specific intent of limiting its liability for massive cruise disasters and/or situations where it rips off its passengers on a smaller scale. Carnival seeks to use the waiver as an ace up its sleeve — a card that Carnival can play to limit its liability in extraordinary cases like the Triumph disaster. Enforcing the waiver clause in cases like this—where numerous plaintiffs claim relatively minor individual damages—would remove the incentive for each Plaintiff to file suit and significantly limit Carnival’s liability. This Honorable Court should not allow Carnival to reduce its liability for its own improper conduct through a contract of adhesion and instead should deem the class waiver clause void under 46 U.S.C. § 30509.
D.THE PLAINTIFFS HAVE NOT YET FILED A MOTION FOR CLASS CERTIFICATION AND CLASS DISCOVERY HAS NOT BEEN COMPLETED. AS A MATTER OF LAW, THEREFORE, CARNIVAL’S ARGUMENTS UNDER FED. R. CIV. P. 23 ARE IMPROPER AND PREMATURE AT THIS STAGE.
Because this action was filed recently (on February 18, 2013) and class discovery has not been completed, the Plaintiffs have not yet filed their motion for class certification.
Furthermore, at the pleading stage, all of Plaintiff’s factual allegations are taken as true. Herein, plaintiffs succinctly pled the requirements for class status under Rule 23.
In spite of this, Carnival’s Motion to Dismiss devotes eight (8) pages of the Motion, going through all of the different subsections of Fed. R. of Civ. P. 23 (i.e. numerosity, typicality, adequacy, commonality, predominance and typicality). Carnival raises these arguments before the Plaintiffs have had a chance to conduct class discovery and file a motion for class certification. Pursuant to controlling precedent, Carnival’s arguments are improper and premature at this stage. See Mills v. Foremost Ins. Co., 511 F. 3d 1300, 1309 (11th Cir. 2008):
Additionally, and more fundamentally, the district court’s class certification ruling was premature under the particular circumstances of this case precedent also counsels that the parties’ pleadings alone are often not sufficient to establish whether class certification is proper, and the district court will need to go beyond the pleadings and permit some discovery and/or an evidentiary hearing to determine whether a class may be certified.