Wednesday, September 25, 2002
Court Strikes Down Cruise Ship’s Limitation of Liability Printed on Ticket
By ALLISON LOMAS, Staff Writer
A clause limiting Princess Cruises’ liability in a case involving the wrongful death of a passenger is not enforceable, a three-judge panel of the Ninth Circuit Court of Appeals ruled yesterday in Pasadena.
The husband of plaintiff Bobbie Jo Wallis disappeared from the Grand Princess cruise ship as it sailed toward Athens, Greece in July 1999. Six days after he disappeared from the ship his decomposing body washed up on the shore near Lavrio, Greece about 55 kilometers southeast of Athens.
The opinion, written by Judge William A. Fletcher, rejected the liability limiting clause printed on the back of the passenger’s ticket that capped the company’s liability at approximately $60,000. The panel reversed the decision of U.S. District Judge William J. Rea of the Central District who granted Princess’ motion for summary judgment on the liability limitation issue.
The appellate court applied a two-prong “reasonable communicativeness” test to determine whether the passage contract sufficiently communicated the liability limitation so as to reasonably inform a passenger of its terms.
Although the court was satisfied that the physical representation of the limitation was clearly printed on the ticket, it found the contract’s reliance on the Convention Relating to the Carriage of Passengers and Their Luggage by Sea of 1976, or the Athens Convention, insufficient to communicate the liability limitation to the average passenger.
The liability limiting clause failed the second prong of the test in which the court “examines more subjective, ‘extrinsic factors indicating the passenger’s ability to become meaningfully informed’” including the “incentive under the circumstances to study the provisions of the ticket.”
Fletcher pointed to the fact that the clause did not specify a limitation of the liner’s liability. He also noted that it was unclear from the terms of the contract whether the liability would in fact be limited by the Athens Convention, which was never ratified by the U.S., or other U.S. laws creating a disincentive for the average passenger to undergo the complicated process of determining the company’s potential liability under the convention.
The court was particularly wary of the fact that “it would require some legal and financial sophistication” as well as an uncommon motivation to determine the actual liability of the cruise line.
Fletcher noted that the clause itself referred to the year in which the convention was amended, not enacted, making it difficult for a lay person to locate the referenced provisions.
Once a passenger found the amended convention, Art. 7 would state that the carrier’s liability “shall in no case exceed 46,666 units of account per carriage.” The passenger would then have to look to Art. 9 to find that a “unit of account” is equal to a “Special Drawing Right as defined by the International Monetary Fund.”
The final calculation of the carrier’s liability would require the passenger to predict the date of the judgment and find a financial source tracking the daily conversion rate for the SDR. It is by this process that the carrier’s liability was limited to approximately $60,000.
“We are persuaded that the average passenger has little incentive to invest sufficient effort to approximate the value of what she would be led to regard [by the language of paragraph 16 itself] as only a potentially binding term of the Passage Contract,” said Judge Thatcher.
Christiane Elyn Cargill-Smith of the firm Wright Robinson Osthimer & Tatum, attorney for Wallis, declined comment.
Princess Cruises’ attorney, Elsa M. Ward of the firm Kaye, Rose & Maltzman, was unavailable for comment yesterday.
Copyright 2002, Metropolitan News Company