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News Roundup: Cruise Ship Lawsuits

August 26, 2011

The case of a Florida man that died of a heart attack while on a cruise; Royal Caribbean shareholders file suit against the company; Carnival and Charleston are still locked in a legal battle.

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Settlement Awarded in Cruise Ship Death Case

The family of a Florida man who died of a heart attack while on a gambling cruise has reached a confidential settlement with the defunct cruise line that was named in the personal injury lawsuit.

Fiping “Phil” Racoma, 77, was sailing on a daylong casino cruise on the Palm Beach Princess on October 7, 2009 when he suffered a heart attack near a craps table at 3:25 p.m.

Racoma’s daughter, Leilani Racoma-Lessnau, and his widow filed a lawsuit against the cruise line that operated the ship. In the suit, they claimed that Racoma could have been saved if the ship had been carrying a defibrillator and if the ship’s primary engine had been active.

Racoma’s death occurred just before the cruise line filed for bankruptcy due to monetary, employment, and mechanical problems that plagued the company.

Although the cruise line company filed for bankruptcy, Racoma family attorney Craig Goldenfarb said that damages could be recovered through the cruise line’s insurance policy.

Although the details of the settlement are private, Goldenfarb stated that the award will help Racoma’s widow.

Royal Caribbean Accounting Error Results in Class Action Suit

Royal Caribbean shareholders have filed a class action lawsuit against the cruise line over an accounting error.

Royal Caribbean Chairman Richard Fain said that the company’s internal accounting team found an error that was made in 2009. The error resulted in inflated earning statements.

The errors and revised financial statements were revealed last month. According to Royal Caribbean, the company’s second-quarter earnings per share of 47 cents was updated to 43 cents, while the full-year of 2011 earnings would be decreased by 20 cents.

The class action lawsuit, which was filed in U.S. District Court in Miami, says that Royal Caribbean shares dropped 13 percent on July 28, the same day that the company went public with the accounting error. It also claims that the company made “a series of materially false and misleading statements related to the Company’s business and operations,” and that the July 28 announcement “revealed for the first time that it was performing below expectations.”

The lawsuit was filed on behalf of shareholders that purchased stock between Jan. 27 and July 28, 2011.

Carnival and City of Charleston Locked in Legal Battle

Carnival Cruise Lines is still engaged in a legal battle with Charleston, South Carolina residents and environmental groups that allege the cruise line violates city sign and zoning ordinances.

The Southern Environmental Law Center filed a lawsuit against Carnival in Charleston County Court of Common Pleas on June 13. The suit is filed on behalf of the Coastal Conservation Society, Preservation Society of Charleston, and some of the area’s neighborhood associations.

The suit asserts that Carnival’s cruise ships are a public nuisance and break local environmental laws; it also claims that Carnival’s ships should follow the same zoning laws as hotels and other large buildings. Further, the lawsuit challenges Carnival’s use of Union Pier, stating that the company should be blocked from using it.

Carnival responded to the suit earlier this month, requesting that a judge dismiss the lawsuit. Attorneys for the company say that state law does not allow local government to establish zoning laws that could conflict with the South Carolina State Ports Authority.

In addition, Carnival claims that passenger ships have used Union Pier for more than 100 years, while local zoning regulations were enacted in 1996 or later.

Both parties are waiting to hear the judge’s decision on the matter.

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