Cruise Passenger Protection Act: A Proposed Step Toward Uniform Passenger Legal Rights

HIGHLIGHTS:

• The Cruise Passenger Protection Act of 2017, a U.S. Senate bill introduced as S.1502 on June 29, 2017, proposes a broad range of notice, procedural and oversight provisions for the cruise line industry. The bill is designed to inform passengers in more detail about their rights to make claims, as well as to facilitate greater involvement by law enforcement agencies investigating shipboard incidents.
• Among other things, the bill requires that the time for filing passenger claims against the owner of a cruise vessel must be at least three years, in contrast to the one-year and two-year current legal limitations now in most passenger tickets.
• However, the bill does not resolve the most significant current legal uncertainty with the limitation of liability provisions of cruise tickets sold in the U.S., which is whether and how the Athens Convention will apply to cruises between non-U.S. ports for which tickets are sold in the U.S.

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The Cruise Passenger Protection Act of 2017, introduced as S.1502 on June 29, 2017, by Sen. Richard Blumenthal (D-Conn.) and Sen. Edward Markey (D-Mass.), proposes a broad range of notice, procedural and industry oversight provisions. The bill is designed to inform passengers in more conspicuous detail about their rights to make claims, as well as to facilitate greater involvement by law enforcement agencies investigating shipboard incidents. The bill does not seek many material changes to passengers' statutory or common law legal rights against cruise lines, but rather appears aimed at uniformity of passenger protections across state lines. However, it would require substantial changes to passenger ticket provisions now widely used by cruise lines selling into the U.S. market, as well as comprehensive disclosures in print and electronic media ads. Perhaps unintentionally, it may create jurisdictional complexities and awkward choices for the cruise lines with respect to liability limitation disclosures in their ticket provisions.

Bill Highlights

The principal features of S.1502 are as follows:

• The bill applies to all cruise vessels "authorized to carry over 250 passengers" but defines passengers as being only U.S. citizens. This provision is atypical of U.S. jurisdictional language, which generally focuses only on where passengers embark or where tickets are sold, and it establishes a citizenship test that may present factual and enforcement difficulties.
• The bill requires that the time for filing passenger claims against the owner of a cruise vessel must be at least three years, in contrast to the one-year and two-year current legal limitations now in most passenger tickets.
• All liability limitation and refund provisions must comply with U.S. Department of Transportation (DOT) "standards," must be clear and conspicuous, uniform, concise and not complex, and a summary of these provisions must be published on all cruise line websites and in print and electronic advertisements in the U.S. Such disclosure standards would also pre-empt state law (i.e., various court decisions on what constitutes adequate notice and disclosure).
• The bill would create a federal DOT clearinghouse for passenger complaints about delays, shipboard service and conditions, or misleading advertising, with a toll-free number for reporting problems and referral to federal enforcement authorities for appropriate action. No new rights of action or offenses are defined, other than a $25,000 per day civil penalty for not following the bill's new ticket provisions and disclosure requirements.
• The bill further requires that DOT determine which elements of the current Cruise Lines International Association (CLIA) "Passenger Bill of Rights" are legally enforceable, with a requirement that the cruise lines must disclose to passengers how they may obtain legal relief. Enforceability of certain CLIA terms may vary in different jurisdictions, along the lines of state common law, but the bill does not attempt to harmonize these proposed passenger legal rights on a national basis.
• The bill also provides for a federal Advisory Committee, enhanced procedures for prompt reporting of shipboard incidents to law enforcement officials, federal support for shipboard crime victims (including assistance on how to pursue claims), on-board video surveillance, certain shipboard crime prevention devices (e.g., passenger cabin door peepholes), detailed requirements for on-board medical staff and crew lifesaving training, medical assistance to sexual assault victims, on-board "sea marshals" certified by and under jurisdiction of the U.S. Coast Guard, and creation of a publicly accessible incident database. A number of these features touch upon and present possible conflicts as to matters regulated under the International Maritime Organization Safety of Life at Sea (SOLAS) convention, flag-state law, port-state law and on various sovereignty issues.

Challenges and Considerations

While many of the bill's features could present significant regulatory compliance challenges, the only obvious substantive legal changes would be the three-year statute of limitations on passengers' breach of contract and tort claims, and the establishment of a uniform standard for disclosure of liability limitations in passenger ticket contracts. A potential major problem is that the bill does not resolve the most significant current legal uncertainty with the limitation of liability provisions of cruise tickets sold in the U.S., which is whether and how the Athens Convention will apply to cruises between non-U.S. ports for which tickets are sold in the U.S.

The most common (but far from uniform) practice in cruise tickets used in U.S. markets with respect to limitation of actions is a requirement that the passenger give notice of certain claims – such as loss or damage to baggage – before leaving the ship, and give notice of injury and other personal claims within six months to one year as a pre-condition to subsequent suits. Most cruise tickets currently provide for a one-year statute of limitations on wrongful death and injury claims arising in the U.S., with no cap on liability, consistent with existing U.S. law at 46 U.S. Code Section 30501. The bill would extend the time for filing suits to three years, without addressing the current prohibition against any liability cap. What the bill does not address is the lack of standards for disclosure and enforceability of liability caps legally available to cruise lines for voyages not touching a U.S. port.

For cruises sold in the U.S. but not calling U.S. ports, the ship owner generally may invoke the Athens Convention, which provides that the owner may limit liability to 250,000 Special Drawing Rights (SDRs) or 400,000 SDRs, depending on the facts. (The SDR is a unit value based on a defined "basket" of fluctuating values for major traded currencies, including the U.S. dollar, Euro, U.K. pound, Japanese yen and Chinese renminbi/yuan.) The problem in the U.S. is that state statutory and common law generally requires conspicuous disclosure but provides no clear standard as to what explanation will be sufficient to inform the passenger what the limits are.

The Athens Convention is hard to explain in layman's terms. It is challenging to say what it is, what it does, what an SDR is and how to find or calculate SDR value in less than a fairly lengthy paragraph without using at least some legal terms. Comparison of cruise ticket formats used by major lines selling into the U.S. market illustrate the difficulty of crafting adequate simple disclosure language. A uniform legal standard possibly could give cruise lines more certainty as to what disclaimer language will be clear to passengers and legally enforceable.    

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Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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