The case of insufficient infant recreational activities on a cruise

In this week’s article we return to considering the enforceability of forum selection clauses appearing in a cruise passenger’s contract of carriage. In addition, we will take a look at the factors to be considered in determining whether a local New York State court has personal jurisdiction over Miami based Carnival Cruise Line. The case is Sellers v. Carnival Cruise Line, 2015 N.Y. Misc. LEXIS 3550 (N.Y. Civ. 2015) which involves a Small Claims court action brought by an unhappy passenger.

Travel Law Update

EU Air Passenger Rights Report

In ECC-Net Air Passenger Rights Report 2015 at cecluxembourg.lu/wp-content/uploads/2015/12/Air-Passenger-Rights-2015-report.pdf it was noted that “About 870 million passengers travelled by air in 2014 in the EU and the number of people who are travelling is growing every year. Eurobarometer survey shows that 22% of the air transport suers had faced disruption in the last 12 months when travelling by air. The most common forms of disruption were long delays, baggage-related disruptions such as delayed, damaged or lost baggage, or cancellation. Except in case of extraordinary circumstances, passengers shall receive compensation amounting to 250E to 600E. However, a European Commission study found that airline data indicates that only between 5 and 10% of passengers entitled to compensation actually claim it. (This Report) examines the legal framework and the main problems currently faced by air travelers”.

Gay Passenger Sues Uber

In Kendall, Gay Passenger Sues Uber on Civil Rights Claims, The Recorder (12/3/2015) it was noted that “Uber Technologies, Inc. faces a new lawsuit, this one by a gay passenger claiming a driver kicked him out of a car for sharing a kiss with his date.

The civil rights lawsuit is the latest challenge seeking to hold the ride-hailing company responsible for the actions of drivers.

The suit on behalf of (Mr. X) says he summoned an Uber ride in March after dinner in West Hollywood. When a driver picked up the two men, the complaint says, they shared a ‘brief closed-mouth kiss’ in the back seat. The driver became ‘incensed’ and began yelling obscenities…and ordered (Mr. X) and his date out of the car, the complaint says. (Mr. X says he was charged $7.87 for the ride”.

Damaged Airline Baggage

In IFTTA New Content: USA: DOT reminds airlines on their obligations regarding damaged baggage, iftta.com (12/4/2015) it was noted that “Following a routine airport inspection at 16 airports nationwide in a two-week period in September 2015, the U.S. Department of Transportation issued a notice reminding airlines that they are required to compensate passengers for damage to wheels, straps, zippers, handles and other protruding parts of checked baggage beyond normal wear and tear. The notice also reminds airlines of their obligation to accepts all reports of mishandled baggage from consumers even if an airline’s agent believes the airline is not liable. The Aviation Enforcement Office intends to take enforcement action against airlines that are not in compliance by January 9, 2016. Source: DOT Briefing Room, DOT 118-15 of Nov. 25, 2015.

Hoverboards Seized In UK

In Gibbs, Great Scott! Over 15,000 hoverboards seized in UK, cnbc.com (12/3/2015) it was noted that “More than 15,000 ‘hoverboards’ have been confiscated at U.K. ports and airports in recent months, after being regarded as ‘unsafe’ for personal use. Officers from the U.K.’s Trading Standards have inspected over 17,000 self-balancing scooters since October 15, and seized 88 percent of these self-balancing scooters, over fears that could explode or catch fire”.

Ten Cybersecurity Tips

In Nelson, Top 10 Cybersecurity Tips for Businesses Following FTC v. Wyndham, Law Technology News (12/2/2015) it was noted that “The FTC’s required standard of care for cybersecurity is likely to evolve as new guidelines are issued and new cases are decided…Since 2002, the FTC has relied on Section 5 of the FTC Act to secure more than 50 settlements against businesses for allegedly deficient cybersecurity practices that failed to protect consumer data against hackers. Section 5 prohibits businesses from engaging in ‘unfair or deceptive acts or practices in or affecting commerce’ [see also: Travel Law: The Wyndham data breach case: Lessons to be learned in cybersecurity, eturnonews.com (9/16/2015]…Arguably the most important of all these resources in the FTC’s recent publication in June of 2015 titled: Start with Security, A Guide for Business, Lessons Learned from FTC Cases…The 2015 guide distills important facts from over 50 FTC cases into important lessons (including) 1. Start with Security…2. Control Access to Data Sensibly…3. Require Secure Passwords and Authentication…4. Store Sensitive Personal Information Security and Protect it During Transmission…5. Segment Your Networks and Try to Monitor Who is Trying to Get in and Out…6. Secure Remote Access to Your Network…7. Apply Sound Security Practices When Developing New Products…8. Make Sure York Service providers Implement Reasonable Security Measures…9. Put Procedures in Place to Keep Your Security Current and Address Vulnerabilities That May Arise…10. Secure Paper, Physical Media, and Devices”.

Drone Registration System

In Wingfield, Regulators Propose a Drone Registration System, nytimes.com (10/19/2015) it was noted that “In the United States, drones have interfered with aircraft trying to put out wildfires. They have buzzed dangerously close to jets taking off at airports and have irritated fans at sports events by hovering over stadiums. Now federal regulators, hoping to discourage mischief and negligence among drone pilots, are proposing a new system to require owners to register their unmanned aircraft…It is not clear…whether drones registered with the government will have to physically be labeled with the equivalent of a vehicle license plate-using a sticker, perhaps-or whether drones will be configured to electronically broadcast a unique registration number…Anyone who fails to register a drone could face civil fines up to $27,500 and, if warranted, criminal penalties up to $150,000 or up to three years in jail, or both, according to a spokesman for the Federal Aviation Administration”.

Uber And UK Corporation Taxes

In Sheffield, Uber London Ltd under fire for paying no corporation tax on profits made in 2014, independent.co.uk (10/20/2015) it was noted that “Uber said its low rate of tax was due to the legal practice of offsetting previous losses…Uber in London paid no UK corporation tax on the 866,302lb profits it made in the U.K. in 2014, according to the company’s accounts.. The accounts show that the company paid zero UK corporation tax on profit and loss in 2014. The company’s corporation tax was effectively cancelled out by deductions they got for the cost of exercising share schemes with employees. Employees that made use of the share schemes will have paid income tax and National Insurance of up to 47 per cent, accountants say, and Uber will have received a deduction on corporation tax from the scheme resulting in the zero figure”.

Aviation Disasters

In Pounian Green, Will Federal Preemption Grant Immunity to Aviation Manufacturers?, New York Law Journal, p. 4 (10/19/2015) it was noted that “The U.S. Court of Appeals for the Third Circuit will soon hand down a major decision than may extinguish the right of aviation disaster victims to recover from manufacturers that produce and sell dangerous airplanes, helicopters or aircraft components. In Sikkelee v. Precision Airmotive Corp., No. 14-4193 (3d Cir. Argued June 24, 2015), the court will decide whether the Federal Aviation Administration’s mere certification of aircraft or aircraft components provides immunity to aviation manufacturers against most products liability claims. While the FAA certifies all aircraft, the agency has limited resources and is not responsible for design; its review is not comprehensive and, indeed, much of the certification is performed by the manufacturer itself. FAA certification does not mean that the airplane is safe or that it necessarily meets the federal minimum standards. At best, certification is a spot check based on information provided by the manufacturer to the FAA as of a given date. There is a long history of accidents caused by design or manufacturing defects in certified aircraft, and the FAA frequently issues airworthiness directives to mandate changes after learning about defects not discovered during the certification process”.

Travel Law Article: The Sellers Case

In the Sellers case, supra, the Court noted that “Plaintiff Lance Sellers…a resident of New York City (NYC) brought this action in the Small Claims Part of the Civil Court to recover damages he allegedly suffered while on a cruise with Carnival Cruise Line (wherein) he claimed that Carnival did not provide sufficient recreational activities for his infant child during the cruise.

The Forum Selection Clause

Defendant moved to dismiss on the grounds that the forum selection clause in the cruise contract mandated that any lawsuit be brought in the Florida courts [see Travel Law, Section 1.03[5](generally, forum selection clauses in cruise passenger contracts are enforced under appropriate circumstances)] and that this Court lacked in personal jurisdiction over defendant…this Court found that it need not enforce the forum selection clause as it was unreasonable to expect plaintiff to bring a small claim in Florida in view of the expenses, which could conceivably be greater than the actual claim [see Scarella v. America Online, Inc., 11 Misc. 3d 19 (App. Term. 1st Dept. 2005); Oxford v. Amoroso, 172 Misc. 2d 772 (Yks. Cty. Ct. 1997)]. Indeed, pursuant to New York City Civil Court Act (CCA) 1802 there shall be a simple, informal and inexpensive procedure for the prompt determination of matters in the Small Claims Part, and requiring that a claimant in the Small Claims Part go to Florida to pursue his claim would defy the objective of the establishment of that Part”.

Lack Of Personal Jurisdiction

“Defendant subsequently moved for reconsideration based upon its argument that the Court lacked in personal jurisdiction over defendant [see Travel Law, Section. 1.03[4](discussion of the assertion personal jurisdiction in U.S. Courts over all purveyors of travel services)]…Carnival submitted an affidavit…averring that Carnival is a Panamanian corporation with its principal place of business in Miami, Florida, and that Carnival has no office or business address in the State of New York. (Carnival) further avers that plaintiff booked the cruise through National Leisure Group (NLG) which served as plaintiff’s travel agent, and that NLG contacted Carnival’s reservation office in Miami and requested that a cruise be booked on behalf of Sellers. Carnival then confirmed plaintiff’s reservation with NLG and emailed plaintiff’s electronic cruise documents, including the cruise contract to NLG. The Court notes that the cruise contract did not guarantee leisure activities for children. Following the confirmation, plaintiff could access his cruise documents by going onto Carnival’s website”.

Jurisdiction In Small Claims Court

“Two New York statutes delineate the long arm jurisdiction of the Small Claims Part of the Civil Court. CCA 1801 provides that the term ‘Small Claims’ means a money action not in excess of $5,000, ‘provided that the defendant either resides, or has an office for the transaction of business or a regular employment’ within NYC. CCA 404(a) provides that the Civil Court may exercise jurisdiction when a plaintiff’s cause of action arises from any of the following acts performed by a non-resident of NYC…(1) Transaction of any business within NYC or contracts anywhere to supply goods or services in NYC…(2) commission of a tortious act within NYC…or (3) ownership, use or possession of any real property situated within NYC…this Court will only rule on the business transaction criteria (and) will apply (CCA) 404(a) (which) should be given a broad construction to include the bases for jurisdiction in both the Civil Court and its Small Claims Part”.

Jurisdictional Factors

“Plaintiff, as the party seeking to assert personal jurisdiction, bears the burden of proving that the Civil Court has jurisdiction over the defendant…Plaintiff has not met the business transaction criterion for jurisdiction. First, Carnival’s alleged mailing address located in NYC and Seller’s receipt of a USPS Tracking receipt indicating that certified mail was delivered to that address, is insufficient to meet the business transaction criterion. It is well established that mailings, without more, are insufficient to establish that Carnival transacted business in NYC”.

Drinks Dockside Advertisements

“Plaintiff claims that this Court has jurisdiction over Carnival because he bought food and drinks ‘while docked in NYC waters’ and because ‘Carnival Cruise Line offers business transactions in NYC while docked in NYC’. However, these de minimus activities do not satisfy the business transaction criterion…Plaintiff’s contention that Carnival’s advertisements on the radio, T.V., online, and billboards in NYC subject it to this Court’s jurisdiction is also without merit since such advertisements do not satisfy the business transaction criterion.

It should be noted that plaintiff presented absolutely no evidence that his current claims arise from Carnival’s undated advertisements. In particular, the advertisements did not promise him any leisure activities for his infant child. Thus, Carnival’s alleged advertisements do not confer upon it the jurisdiction of this Court”.

Passive Websites Emails

“The fact that Sellers had online access to his cruise documents via Carnival’s website after his cruise was purchased through NLG also does not meet the business transaction criterion because ‘passive websites’ which ‘merely impart information without permitting a business transaction, are generally insufficient to establish personal jurisdiction [see Travel Law, Section 1.03[4][c](discussion of personal jurisdiction based upon business transactions on the Internet)]…Similarly, to the extent that Carnival allegedly ‘targeted’ an email to Sellers’ email address regarding its cruises, such email communication is not sufficient to establish personal jurisdiction…Furthermore, Carnival’s alleged ‘targeted’ email is dated March 2, 2015, which is after the cruise, and contains no promise of leisure activities for children. It is clear that the ‘targeted email’ has no nexus to plaintiff’s claim”.

Conclusion

“Since plaintiff has not proven any of the criteria for jurisdiction set forth in CCA 404(a), the Civil Court may not exercise jurisdiction over Carnival and the action is dismissed”.

The author, Justice Dickerson, has been writing about Travel Law for 39 years including his annually updated law books, Travel Law, Law Journal Press (2015) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2015), and over 350 legal articles. For additional travel law news and developments, especially in the member states of the EU, see IFTTA.org.

This article may not be reproduced without the permission of Thomas A. Dickerson.