In a significant decision likely to affect future COVID-19 litigation against the cruise industry, on October 20, 2020, a California federal district court refused to certify a proposed class-action against Princess Cruise Lines in relation to passengers’ claims arising out of the COVID-19 outbreak on the Grand Princess cruise ship because of a class-action waiver clause contained in the passenger contract. In March of this year, the Grand Princess gained notoriety as a COVID-19 outbreak struck the ship. Passengers on the Grand Princess filed claims of negligence, gross negligence, negligent infliction of emotional distress, and intentional infliction of emotional distress against Princess Cruise Lines and its corporate parent, Carnival Corporation, as a result of their exposure to the COVID-19 outbreak.

Princess Cruises argued that the class certification request should be denied because the passenger contract contained a class-action waiver. Applying federal maritime law, the district court applied a two-prong “reasonable communicativeness test” to determine if the passengers were bound by the class-action waiver contained in the passenger contract. The first prong focused on the physical characteristics of the ticket to determine if the waiver was sufficiently conspicuous and readable. The second prong focused on the circumstances surrounding the purchase and retention of the ticket, including the passenger’s familiarity with the ticket, the time and incentive under the circumstances to study the ticket, and any other notice the passenger may have received outside of the ticket.

As for the first prong, the district court found that the waiver was sufficiently conspicuous because (1) the booking email contained an attached pdf with an important notice stating that the passenger was agreeing to the passenger contract and containing a link to the contract; (2) the booking email contained a link to a login page that required entry of personal information prior to sailing and this page displayed the passenger contract, which the passenger could scroll through or print out before checking the box indicating acceptance of the passenger contract’s terms and conditions. On the page which contained the box for the passenger to check to indicate their acceptance of the passenger contract’s terms and condition, the passenger contract was displayed and it began with a conspicuous notice at the top that requested the passenger to carefully read the contract terms, and stated that the terms affected and limited the passenger’s rights. Among other things, this notice specifically referred to the section of the passenger contract which contained the class-action waiver. Agreeing with Princess Cruise Lines, the district court rejected the passengers’ arguments that the passenger contract was “buried” in the email and found that the class-action waiver was sufficiently conspicuous.

As to the second prong, the district court found that the passengers were able to, at any point, print out the contract and review its terms and that they were provided with the contract and indicated their assent thereto at least 2 months prior to sailing. The district court also found there was no evidence of bad faith-motive, fraud, or other factors affecting the “fundamental fairness” of the passenger contract; there was no evidence of unconscionability; and that the class-action waiver contained in the passenger contract was not void as a matter of public policy.

This decision is likely to carry implications for the future enforcement of class-action waivers contained in cruise passenger contracts. In order to ensure that any class- action waiver contained in a passenger contract is enforceable, cruise operators should ensure that their booking process provides passengers with sufficient and conspicuous notice of the passenger contract and that any class-action waiver contained in the passenger contract is itself sufficiently conspicuous. Moreover, cruise operators should make sure that passengers have ample time prior to sailing to review the terms of the passenger contract.

The case name is Robert Archer et al. v. Carnival Corporation and PLC et al., 2:20cv4203-RGK-SK (C.D. Cal. Oct. 20, 2020).