Bloomberg News

Carnival Sued in Miami Over Fatal Costa Concordia Shipwreck

February 07, 2012

Jan. 28 (Bloomberg) -- Carnival Corp., the world’s largest cruise line owner, was sued in Miami over the Jan. 13 wreck of the Costa Concordia off the coast of Italy.

The complaint, which names six plaintiffs, four Americans and two Italians, was filed yesterday in state court in Miami, said attorney Marc J. Bern, who provided Bloomberg with a copy. The filing couldn’t be independently confirmed with the court.

The plaintiffs were “in terror of catastrophic injury, death, drowning, having been placed in a situation where common sense said the vessel was sinking but the orders from the crew were to return to their cabins,” according to the complaint.

Bern said he’s working with an Italian consumer-law group, Codacons, as well as the New York firm of Proner and Proner. He said he expects to later sue on behalf of about 1,000 passengers of the Costa Concordia.

Carnival Cruise lines, based in Miami, and Costa Cruise Lines, based in Hollywood, Florida, are named as defendants in the complaint. Vance Gulliksen, a spokesman for Carnival, said, “Since this is pending litigation, we are not in a position to comment at this time.”

A crew member of the ship filed a complaint Jan. 26 in federal court in Chicago seeking at least $100 million in damages. The crew member, Gary Lobaton, seeks class-action status to represent all victims of the disaster off Giglio island.

The Carnival ship, carrying 4,200 passengers and crew for a Mediterranean cruise, struck rocks and ran aground leaving at least 17 people dead.

Insurance Costs

Insurance costs for the accident may reach $1 billion once environmental damage and injuries are tallied, Moody’s Investors Service said Jan. 23. Most of the losses will be incurred by reinsurers, Moody’s said. Jefferies International Ltd. put the total at $850 million in a separate report.

Hours after the vessel left a port near Rome, the ship’s captain, Francesco Schettino, deviated from the planned route and steered close to the island, according to Italian investigators. Carnival’s Costa Crociere unit suspended Schettino, who was placed under house arrest on Jan. 17 for allegedly causing the shipwreck.

Schettino told prosecutors that company officials requested him to perform a maneuver known as a “salute,” which led the cruise liner to sail close to the island, according to the newspaper La Repubblica. Carnival knew of the danger of sailing so close to shore and knew the Schettino had performed such maneuvers in the past, according to the complaint.

Duty Breached

“By retaining Francesco Schettino, despite this practice, defendants have breached their duty of care,” according to the complaint.

Carnival’s Genoa-based Costa Crociere unit said that while a “touristic navigation” five miles from the coast of Giglio was planned for the Concordia on its cruise, it was up to the captain to ensure the safety of the route.

The 51-year-old captain allegedly left the ship after the accident ripped a hole in the hull and before the last passenger was evacuated. Schettino ignored repeated orders from a Coast Guard official to get back on the cruise liner and allegedly took a taxi into town before being arrested.

Schettino is accused of manslaughter and abandoning the ship, which his lawyer, Bruno Leporatti, has denied.

Witnesses described a chaotic rescue. The deputy mayor of Giglio, Mario Pellegrini, said it took him 20 minutes to find a senior officer on the ship and that he helped passengers to lifeboats after he was unable to find senior crew members to coordinate with.

Alarm System

The ship didn’t have an adequate alarm system to warn crew and passengers that it was taking on water, according to the complaint.

Costa Crociere has offered passengers assistance to return home and plans to refund all expenses, including the cruise fare, the unit said. Costa is also discussing other damage claims with consumer associations.

Carnival has said the accident will cut fiscal 2012 earnings by about $85 million to $95 million, or 11 cents to 12 cents a share. The company said it anticipates additional costs to the business.

Carnival cruises depart mostly from the U.S., the Bahamas and the Caribbean, according to the line’s website. Its Costa Crociere unit operates mostly in southern Europe. Carnival owns 10 cruise lines including Princess, Seabourn, Holland America, Cunard and P&O.

The Costa Concordia was insured by companies including Assicurazioni Generali SpA, RSA Insurance Group Plc and XL Group Plc.

The case is Scimone v. Carnival Cruise Lines, Circuit Court of the 11th Judicial Circuit (Miami).

--With assistance from Erik Larson in London, Marco Bertacche in Milan, Andy Fixmer and Anthony Palazzo in Los Angeles and Alessandra Migliaccio in Rome. Editors: Peter Blumberg, Sylvia Wier

To contact the reporters on this story: Sophia Pearson in Wilmington, Delaware, at spearson3@bloomberg.net; Susannah Nesmith in Miami at susannahnesmith@yahoo.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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