May 18, 2012
Royal Caribbean Cruises, Ltd. v. Ricardo Andino
Reply Brief in Support of Motion to Increase Limitation Fund
In this reply brief, our experienced maritime lawyers have petitioned the Court to increase the funds available for recovery after a cruiseship passenger was injured on a jetski shore excursion. After the injury, Royal Caribbean filed a limitation of liability arguing that the funds recoverable by the Plaintiff should be limited by the maritime law doctrine of limitation of liability. In this reply brief, our attorneys argue that the funds available to the Plaintiff should be increased by virtue of the Flotilla Doctrine. By arguing for the application of the Flotilla Doctrine our firm aimed to increase the funds available for recovery to the value of the cruise ship itself and all other vessels making up Royal Caribbean’s fleet on coco-cay.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-24327-CIV-COOKE
ROYAL CARIBBEAN CRUISES LTD.
as owner of the unnamed 2010 and 2011
Seadoo GTI-130 Vessels, for Exoneration from
or Limitation of Liability
RICARDO ANDINO, as parent and natural
Guardian of CHRISTINA CLAUDIO, a minor
Defendant/Counter-Claimant/ Third-Party Plaintiff (“Claimant”)
PLAINTIFF’S REPLY IN SUPPORT OF MOTION TO INCREASE LIMITATION FUND
COMES NOW, Claimant, RICARDO ANDINO, as parent and Natural guardian of CHRISTINA CLAUDIO, a minor, and pursuant to the Federal Rules of Civil Procedure, and Supplemental Admiralty and Maritime Claims Rule F(7), hereby files this Reply in Support of his Motion to Increase RCCL’s Limitation Fund. In particular, the fund that Royal Caribbean Cruises (“RCCL”) deposited with the Court to initiate this action is insufficient and in violation of the Flotilla Doctrine; it does not include RCCL’s interest in the value of all vessels engaged in a common enterprise and venture at Coco Cay, Bahamas.
As shown below, the limitation fund should be increased to encompass the value of all vessels at Coco Cay (“RCCL’s common flotilla”), including but not limited to all Seadoos and/or other jet ski’s on the Coco Cay tour and the cruise ship, Majesty of the Seas. As grounds thereof, Claimant alleges as follows:
A.Increasing the limitation fund under the Flotilla Doctrine is warranted. First, there was a contractual relationship between RCCL and the Claimants. Second, both the jet skis and the cruise ship at Coco Cay were engaged by a common party (RCCL) in the same enterprise (to entertain passengers of the subject cruise) at a common location (Coco Cay). Third, the Majesty of the Seas and the jet skis shared common ownership and were subject to single command.
As a preliminary matter, in it’s Response to Plaintiff’s Motion [D.E. 28], RCCL does not dispute that pursuant to Fed. R. Civ. P. Supp. F(7), a Claimant (Christina Claudio) can petition the Court to require the ship-owner (RCCL) to increase the limitation fund to include the value of all vessel’s in its flotilla. See Foret v. Transocean Offshore (USA), Inc., 2011 U.S. Dist. LEXIS 96679 (E.D. La. 2011):
Procedurally, courts have permitted [claimants] to invoke the flotilla doctrine in a variety of ways. Where a limitation fund already exists, Rule F(7) of the Supplemental Rules for Certain Admiralty and Maritime Claims permits Plaintiffs to file a Motion to Increase the Limitation Fund, when the amount tendered is less than the value of the [combined group of] vessel(s). Section 183 [the Limitation Act] notwithstanding, the “flotilla doctrine” provides one way to challenge a ship-owner’s claim of a limitation of liability defense. Courts in the Fifth Circuit determine whether vessels together constitute a flotilla by applying the “single venture test.”. The single venture tests sets forth three requirements; for vessels to be considered a flotilla they must (1) be owned by the same person, (2) contractually engage in a common enterprise, (3) under single command.
Id. see also In re Waterman S.S., 794 F. Supp. at 603-04 (E.D. La. 1992):
The determination of this motion requires an interpretation of the “single venture theory” or “flotilla doctrine” which provides that all vessels engaged in a common venture should be considered one vessel for limitation purposes. Under this theory, the value of all vessels engaged in the venture must be surrendered to determine the value of the limitation fund. The Fifth Circuit, in Wirth Ltd. v. S/S Acadia Forest explained the theory: Likewise, courts construing the ship-owners Limited Liability Act, 46 U.S.C.A. §§ 181-89, have held that when vessels are engaged in a common transportation enterprise they should often be considered one vessel for limitation purposes.
Id. (emphasis added).
Furthermore, [D.E. 28] RCCL also does not dispute that pursuant to the Flotilla Doctrine, a ship-owner is required to increase the value of a limitation fund to encompass the value of all vessels engaged in a common enterprise, if the following elements are satisfied:
the injured party claimant and the vessel owner have a contractual relationship; 2) the group of vessels in the flotilla are engaged in a common enterprise; 3) the vessels are owned by the same entity; and 4) the vessels are under single command.
Therefore, at issue before this Honorable Court is only whether these elements in fact have been met. If the Court finds that they have, the limitation fund should be increased to encompass the value of all vessels at Coco Cay (“RCCL’s common flotilla”), including but not limited to all jet ski’s on the Coco Cay tour and the cruise ship, Majesty of the Seas.
As shown below, at all relevant times: 1) RCCL was in a contractual relationship with the Claimants (Christina Claudio and Ricardo Andino); 2) the jet skis and the cruise ship were owned by the same entity – Royal Caribbean Cruises, Ltd.; 3) the jet skis and the cruise ship, Majesty of the Seas, were engaged in a common enterprise at Coco Cay – entertainment of cruise passengers for a fee; and 4) the jet skis and the cruise ship were under single command.
i. There was a contractual relationship between the claimants and RCCL (the owner of all vessels in the Flotilla participating at the Coco Cay tour).
The relationship between RCCL and the Claimants was contractual in nature in the following ways: First, both Christina Claudio and her father Ricardo Andino were paying passengers on RCCL’s cruise. As paying passengers, the Claimants were owed duties under the contract of carriage – the passenger ticket contract. See Palmer v. Norwegian Cruise Line, 741 F. Supp. 2d 405 (E.D. NY 2010), citing Carnival Cruise Lines, Inc., v. Shutte, 499 U.S. 585 (1991):
It is well-established that a ticket for passage on a cruise ship constitutes a maritime contract and is governed by United States maritime law. Carnival CruiseLines, Inc. v. Shutte, 499 U.S. 585, (1991). Applying this law, numerous cases from both the Second Circuit and various district courts have held that a passenger’s ticket may constitute a contract with a carrier even when the passenger neither purchases nor sees that ticket.
Second, it was only by virtue of Claimants’ status as paying passengers on the Majesty of the Seas that they were transported to Coco Cay and permitted to use one of RCCL’s jet skis. In other words, but for the cruise, the Claimant would not have been permitted to use one of RCCL’s jet skis. Indeed, since Coco Cay is wholly private, owned and controlled by RCCL; the island is exclusively reserved for RCCL passengers – and closed to the public. Hence, Coco Cay operates exclusively as an extension of the cruise ship. See RCCL’s own description of Coco Cay, D.E. 20, Exhibit “A” (“Reserved exclusively for Royal Caribbean guests, this tropical paradise has been recently updated”). For instance, during the day, the RCCL passengers are able to engage in activities aboard the cruise ship, aboard the beach of Coco Cay, or within the waters shared by the cruise ship and Coco Cay. RCCL passengers cannot leave the immediate area of the cruise ship and Coco Cay and similarly, the public (non-RCCL passengers and employees) cannot access the immediate area of the cruise ship and Coco Cay.
Third, RCCL offered, marked and sold the jet ski excursion to the Claimants on the ship. Therefore, at all times material, the subject jet ski excursion ended and began on the ship. [D.E. 15,16-18].
All in all, the contract between the Claimants and RCCL was for a cruise vacation. The excursion on the jet skis at Coco Cay was one of the amenities provided by RCCL during that cruise. Therefore, the subject incident arose out of a contractual relationship between RCCL and Claimants for the cruise and jet ski tour.
In its Response in Opposition [D.E. 28], RCCL concedes that claimants, as passengers, were subject to RCCL’s cruise ticket contract. In doing so, RCCL concedes that there was a contractual relationship between RCCL – the owner of all vessels at Coco Cay (the jet skis and cruise ship) – and claimants. This concession is dispositive of the first element.
In an effort to qualify its concession, in the Response [D.E. 28] RCCL also asserts that the “wave jet tour was not the subject of that contract.” RCCL’s statement is both factually and legally inaccurate.
First, it is factually inaccurate because a closer look at a standard RCCL passenger ticket contract shows that land portions of any cruise tour (such as the jet ski tour at Coco Cay) are contemplated in the passenger ticket contract between RCCL and its passengers. See RCCL Cruise/CruiseTour Ticket Contract, attached hereto as Exhibit “1.”
The Introduction section of the ticket contract provides that the “Ticket Contract describes the terms and conditions that will apply to the relationship between the Passenger and the Carrier (as defined in section 2.b). Section 2.b. defines Carrier as “(i) the vessel, (ii) the vessel’s operator; and … the officers, directors, employees, agents, crew or pilots of the identified in the preceding sentence.” It further sets forth that “[t]he exclusions or limitation of liability of Carrier … shall also apply to and be for the benefit of …. Owners and operators of all shoreside properties at which the vessel or transport may call.” (Emphasis added). Finally, paragraph 17 of the contract provides that the “Agreement also covers … shore excursions, land and hotel packages.
Thus, the cruise ticket not only specifically provides for the cruise and activities at “shoreside properties” (Coco Cay is a shoreside property of RCCL); it also specifically addresses activities of shoreside excursion operators other than RCCL. Bottom line: It is clearly a contract between the Claimants and RCCL which specifically contemplates activities both aboard the ship and incidental to the cruise (such as the subject tour).
Second, RCCL’s assertion is legally inaccurate pursuant to binding Eleventh Circuit precedent and long standing maritime jurisprudence. The land excursion at Coco Cay (including the jet-ski tour) offered to passengers aboard the Majesty of the Seas was, as a matter of law, part and parcel of the cruise. See Doe v. Celebrity Cruises, et. al., 394 F. 3d 891 (11th Cir. 2004) (holding that for purposes of cruise, there is no distinction in terms of liability whether a tort occurs inside the ship or at a scheduled port of call). Relying on the Supreme Court in Norfolk Southern Railroad v. Kirby, 343 U.S. at 25 (“[T]he shore is now an artificial place to draw a line”), the Eleventh Circuit held:
… Ports-of-call not only add to the enjoyment of a cruise but form an essential function of the cruise experience… Plainly, individuals choose cruise ship vacations because they want to visit unfamiliar places ashore. Cruises to Alaska, the New England States, Bermuda or the Caribbean offer fundamentally different experiences, not generally because of any material difference between ships, but often because of where the ship elects to stop. . See Isham v. Pacific Far East Line, Inc.., 476 F. 2d 835, 837 (9th Cir. 1973) (“where a passenger or cruise vessels puts into numerous ports, these stopovers are sine qua non of the cruise”). When a passenger selects a particular cruise, ports-of-call or stopovers provide these passengers with the “cruise experience” for which they are paying … there was little practical difference between the port-of-call and other parts of the ship.
Id. (Emphasis Added). 
ii. The jet skis and the cruise ship at Coco Cay are owned by the same entity: Royal Caribbean Cruises, Ltd.
In order to determine whether the different vessels in question constitute a “flotilla,” Courts have traditionally looked to see whether they are owned by the same entity or person. See Foret v. Transocean Offshore (USA), Inc., 2011 U.S. Dist. LEXIS 96679 (E.D. La. 2011) citing Cenac Towing Co., Inc. v. Terra Resources Inc., 734 F. 2d 251, 254 (5th Cir. 1984):
The single venture tests sets forth three requirements; for vessels to be considered a flotilla they must (1) be owned by the same person, (2) contractually engage in a common enterprise, (3) under single command.
Id. (emphasis added). See also Brown & Root Marine Operators, Inc. v. Zapata Off-Shore Company, 377 F. 2d 724, 727 (5th Cir. 1967):
.. the Court below found that the three vessels were owned by the same persons, that is by Brown & Root; that they were contractually engaged in a common enterprise; and that they were under a single command … Under these conditions we find no error in the holding that [these vessels] constituted a flotilla which must be surrendered or have its value stipulated for Section 183 limitation of liability.
Id. (emphasis added).
Here it is undisputed that Royal Caribbean Cruises, Ltd. owns and controls the fleet of jet skis at Coco Cay. Moreover, it is undisputed that Royal Caribbean owns and controls the Majesty of the Seas, the other vessel in the flotilla. As such, the flotilla doctrine applies because the jet skis and the cruise ship, at the time of the incident, shared common ownership.
iii. The jet skis and the cruise ship at Coco Cay were engaged in a common enterprise.
In order for a ship-owner to limit liability for breaches incidental to a contract, all vessels which take part in the undertaking must be surrendered. In other words, all vessels engaged in a “common enterprise” must either be surrendered or have its value stipulated for Section 183 limitation of liability. Brown, 377 F. 2d 724, 727 (5th Cir. 1967).
Contrary to RCCL’s assertions, the fact that the vessels are not physically bound together is irrelevant; the test is ‘devotion to a single venture.’ In the Matter of Falcon Workover Company, Inc., 1998 WL 760397 (E.D. La. 1998) emphasis added); see also In re Falco Workover Co., 1999 U.S. Dist. LEXIS 5994 (E.D. La. 1999) Brown & Root Marine Operators v. Zapata Off-Shore Co., 377 F. 2d 724, 727 (5th Cir. 1967). (“While it is true, as noted by Falcon, that the Flotilla doctrine will apply when the vessels are physically bound together … the doctrine is by no means limited to such factual circumstances. The test is “devotion to a single venture.”).
The jet-skis and Majesty of the Seas are interdependent. In United States Dredging Corp. v. Krohmer, 264 F. 2d 339 (2d Cir. 1959), the factor determining that vessels constituted a flotilla was their interdependence. In that case, some of the vessels in the flotilla wholly depended on the other vessels in the flotilla, for fuel, transportation of the crew and supplies. The Court ultimately held that the attending vessels were necessary to the performance of the contract in which the dredge was engaged and therefore, with the dredge, constituted a flotilla under 46 U.S.C. §183.
The exact same scenario is present here. The jet skis in question are wholly dependent on RCCL cruise ships to operate and function in the manner that they are utilized by RCCL.
In fact, because Coco Cay is a private Island, exclusively reserved for RCCL passengers – and closed to the public; RCCL cruise ships are the only mechanism to transport people and supplies into and out of Coco Cay to operate the jet skis in question. For instance: 1) the passengers of the ship that participated in the subject jet ski tour were brought there by the cruise ship; 2) the cruise ship brought fuel to Coco Cay to power the jet skis; 3) the cruise ship brought personnel to Coco Cay to help entertain the passengers; 4) the cruise ship brought food to feed the passengers and RCCL employees in Coco Cay; and 5) the cruise ship brought engineers to help repair the jet skis.
Thus, as in Krohmer the jet skis completely depend on the other vessel in the flotilla – the cruise ship, Majesty of the Seas – for fuel, transportation of people (passengers and crew) and supplies to function.
Part of the cruise package. In addition to their interdependence, the fact that all of the jet skis and the cruise ship were engaged in the entertainment of RCCL passengers during the cruise, also shows that all vessel’s at Coco Cay were engaged in a common enterprise. In other words, the identifiable common enterprise is, the cruise itself and the jet ski tour which was part and parcel of the cruise. Both the jet skis and the Majesty of the Seas provide Royal Caribbean passengers with a recreational outing.
Moreover, as set forth above, it was only by virtue of Claimants’ status as paying passengers on the Majesty of the Seas that they were transported to Coco Cay and permitted to use one of RCCL’s jet skis. Indeed, since Coco Cay is a private island wholly owned and controlled by RCCL; the island (and the use of RCCL’s jet-skis) is exclusively reserved for RCCL passengers – and closed to the public. Hence, Coco Cay operated exclusively as an extension of the cruise ship.
Defendant’s arguments are unsupported. With regard to the third element, in its Response, RCCL makes the unsupported assertion that “[t]he cruise itself, and the wave jet tour were separate and distinct undertakings.” RCCL’s response, however, is devoid of any facts in support of its assertion. Plaintiff, on the other hand (as outlined above) has presented to the Court sufficient facts to show that at all times material all of the jet skis and the cruise ship, Majesty of the Seas, were interdependent and engaged in a common enterprise at Coco Cay.
It is also worth noting that in 2001 counsel for RCCL in this matter, authored a law review article published in the University of San Francisco Maritime Law Journal, titled “Islands in the Sun: Cruise Line Liability for Watercraft Operations on Private Islands,” 13 U.S.F. Mar. L.J. 209. At page 6, the article includes a discussion concerning “Increasing the Limitation Fund,” providing as follows: “As for cruise line liability on private islands, if it can be shown the personal watercraft rented on the islands were merely part of the cruise package, then the cruise ship itself could be included in the security amount.” Id., at pg. 6 (emphasis added).
iv. The jet skis and the cruise ship at Coco Cay were under single command.
With respect to the “single command” requirement, courts have observed that “command” is not limited to onboard discretion. The matter of Offshore Specialty, 2002 U.S. Dist. LEXIS 8211 (E.D. La. 2002); The matter of Falcon Worker Co. Inc., 1999 U.S. Dist. LEXIS 5994 (E.D. La. 1999). Rather, a court may go “over the head of the captain of an individual boat in order to establish single command among “common management personnel.” The Matter of Offshore Specialty, 2002 WL 82798 (E.D. La. 1999).
As such, if two vessels share the same management personnel, this may satisfy the flotilla doctrine’s single command requirement, even if the captains of each vessel are not the same person. Foret v. Transocean Offshore (USA), Inc., 2011 U.S. Dist. Lexis 96679, at 22 (E.D. La. 2011); see also Foret at 25-26 (“single command is not, in fact limited to on-board discretion, but may instead be established by common management personnel”).
Here, it both the jet ski tour and the cruise ships shared RCCL management personnel. It is undisputed that the Majesty of the Seas was ultimately managed by RCCL personnel located at RCCL’s headquarters in Miami, Florida; the same is true of the jet skis. Further, on location, both the cruise ship and the jet skis were locally managed and operated (and in the passengers’ cases, under the supervisory control of) RCCL employees. This is also undisputed. See RCCL’s Verified Limitation Complaint, D.E. 1 at5: “An RCCL employee, Paul Delange (“DeLange”), was leading the subject ski tour aboard another jet ski.
Therefore, both the jet skis and the cruise ship were under single command.
The flotilla doctrine applies in this case. The jet skis at Coco Cay and the cruise ship, Majesty of the Seas, were a flotilla for purposes of limitation of liability. First, there was a contractual relationship between RCCL and the Claimants. Second, both the jet skis and the cruise ship at Coco Cay were engaged in the same enterprise: a) use of the jet skis was merely part of the cruise package, with all personal watercraft activities part and parcel of the cruise; and b) the jet skis depend entirely on RCCL cruise ships for their function (passengers and supplies). Finally, the jet skis shared a common owner (RCCL), and were subject to single command (RCCL).
Therefore, pursuant Supplemental Federal Rule of Civil Procedure F(7), the ad interim stipulation concerning the limitation fund should be increased to include the value of the Majesty of the Seas, and its pending freight.
 Where the owner is in a contractual relationship with the injured party and several vessels are involved in the performance of said contract, the entire flotilla (i.e. jet ski’s and the cruise ship) is regarded as one vessel for purposes of establishing the limitation fund, and the owner is required to surrender all vessels. See Complaint of Tom Quin Co., Inc., 806 F. Supp. 945 (M.D. Fla. 1993), citing Salz, 273 U.S. at 332.
See Sacramento Navigation Co. v. Salz, 273 U.S. 326 (1927) (If the vessel owner and the injured claimant were parties to a contract at the time of the loss leading to the limitation action, then the owner must include in the limitation fund the value of all vessels covered by the contract covered with the injured claimant); United States Dredging Corp. v. Krohmer, 264 F. 2d 339, 341 (2d Cir. 1959) (All of the limiting owners vessels necessary for the performance of the contract will make up the “flotilla” whose aggregate value will constitute the fund).
In fact, the “vessels covered by the contract covered with the injured claimants” in this case include, at a minimum, both the subject cruise ship, ‘Majesty of the Seas,’ and the subject jet ski.
Coco Cay’s status as RCCL’s private island shows that it is nothing more than an extension of an RCCL cruise ship. It is simply a location where the cruise ship drops anchor near what is essentially a sand bar. For example, the cruise ship never “docks” in the port of Coco Cay (as Coco Cay has no “port;” rather, it drops anchor near the “island,” (Coco Cay is a small land mass which is less than a mile wide from east to west and less than 200 yards from north to south which has no living accommodations for passengers). D.E. 15, 19. To get passengers to its private “island,” RCCL ferries them utilizing both lifeboats and/or a ferry it maintains in the island. The only amenities offered to the passengers at Coco Cay is a beach and adjacent beach activities and water sports. As such, the “visit” to Coco Cay amounts to nothing more than the cruise ship stopping near a large sandbar where passengers are offered the opportunity to participate in water sports activities. Id., 19.
In Bonner v. City of Prichard, 661 F. 2d 1206, 1209 (11th Cir. 1981) (en banc), this circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.