Carnival Settles Class Action Over Ill-Fated Millennium Cruise

A class of Carnival Cruise Lines passengers whose voyage to celebrate the millennium was interrupted by equipment failure has settled a lawsuit against the Miami-based company with a unique result — more than $5 million worth of free trips.

“They’re actually getting more than a 100 percent recovery because we now obtained for them a full seven-day cruise,” said class attorney David Mishael of Miami. “This is a win-win for class members.”

Under the settlement, about 2,460 passengers from the last Carnival Paradise cruise of 1999 will receive a free one-week cruise embarking from any U.S. port outside Alaska. The total value of the cruises is $5.7 million. Mishael and D. Michael Campbell, a Winter Haven, Fla., attorney who filed the original suit, were awarded attorney fees of $1.75 million, bringing the total settlement value to almost $7.5 million. Vouchers for the free trips are scheduled to be mailed in December and must be used within two years.

Carnival did not admit liability under the settlement. “We are pleased to have reached a resolution in the matter,” Carnival spokeswoman Jennifer de la Cruz wrote in an e-mail Tuesday. Defense attorney Curtis Mase of Mase Lara & Eversole in Miami declined comment.

The ill-fated cruise left Miami on what was scheduled to be a Caribbean itinerary including Puerto Rico, Tortola and St. Thomas on Dec. 26, 1999, to commemorate the change to a new century. An engine failed eight hours into the voyage, and the crew changed the destinations to the Bahamas and Cozumel, Mexico, according to court documents.

When the ship arrived at Freeport, 90 passengers left the ship under the company’s vacation guarantee, which stipulates that dissatisfied customers are entitled to a refund plus return air fare if they got off the ship at its first port of call outside the United States.

The 2,460 remaining passengers completed the voyage, returning to Miami on Jan. 2, 2000. Passenger Milagros Acosta filed a complaint in May 2000 alleging the cruise line was aware of engine trouble before leaving. The lawsuit claimed a violation of Florida’s Deceptive and Unfair Trade Practices Act and asked for class certification.

Campbell contended Carnival steered the ship to Freeport to persuade the lion’s share of passengers to stay on the cruise and not claim a refund.

“If they came back to Miami, they’d have to let everybody off the ship,” he said.

The issue revolved around timing. A cruise line is allowed to change an itinerary due to mechanical failure or bad weather after a ship leaves port. But if a ship’s crew spots mechanical problems before leaving, it can be held liable for not living up to its end of the ticket contract.

“A cruise line passenger ticket is a contract between the cruise line and the passenger,” said Robert Force, a professor at Tulane University’s law school who specializes in maritime law. “Sometimes, the cruise line has to alter the itinerary considering the safety of the passengers and the vessel, and that would not be a breach. But if the company knew it had a vessel that was defective and could not deliver on the itinerary, that would be a breach of contract.”

The lawsuit hinged on proving Carnival knew about the faulty engine before the ship left port. The Paradise is equipped with a Finnish-made Azipod propeller system that acts as both a rudder and a propulsion device, steering and propelling the ship at the same time.

“The seminal issue was their knowledge of the condition of the Azipod drive unit when they left the Port of Miami,” Campbell said.

Plaintiff attorneys struck gold when they found a report generated by Azipod maker ABB Group indicating the engine’s alarm systems were going off before the ship left port, Mishael said.

“We had to argue that they should have been given an option for reimbursement prior to departure,” he said. “It was a tough burden to prove. It took years to find that report.”

Campbell added, “If Carnival would have paid attention to those alarms, they would have known that catastrophic failure was imminent.”

Miami-Dade Circuit Judge Jose M. Rodriguez certified the class in August with Acosta as the class representative and signed the settlement agreement Oct. 31.

Excluded from the class are the 90 passengers who disembarked in Freeport and anyone who filed an individual lawsuit against Carnival related to the cruise.

“Once at sea, where are they going to go?” Mishael asked. Carnival “had a captive audience.”