April 24, 2015 Articles

Uncharted Waters: Vicarious Liability of Cruise Liners in Light of Franza v. Royal Caribbean Cruises

Should a cruise line be held liable for its onboard medical personnel’s negligence while at sea?

By Angelique Pui-Ka So

Should a cruise line be held liable for its onboard medical personnel’s negligence while at sea? For a long time, the answer has been a resounding no, based on the long-standing precedent of Barbetta v. S/S BERMUDA STAR. As a result of the Barbetta rule, cruise companies have long been immune from legal liability arising from the acts of their medical personnel. Coupled with the contractual clauses embedded in cruise line tickets and a potential plaintiff’s difficulty in obtaining personal jurisdiction over oftentimes foreign-born medical personnel, the outcomes in cruise ship litigation have veered heavily toward the cruise lines. However, with the recent Eleventh Circuit ruling of Franza v. Royal Caribbean Cruises, Ltd., cruise line companies are no longer free from liability. This article examines Barbetta, Franza, and Franza’s short- and long-term implications on the cruise ship industry overall.

Barbetta v. S/S Bermuda Star
In 1988, the Fifth Circuit held that general maritime law does not impose vicarious liability on a vessel owner for the purported negligence of its onboard medical staff. Barbetta v. S/S. BERMUDA STAR, 848 F.2d 1364 (5th Circ. 1988). Therein, a husband and wife filed suit after an onboard physician failed to diagnose the wife’s preexisting diabetes despite treating her for several days during a cruise. Id. at 1365. The Barbettas alleged that not only did the cruise line fail to properly staff its vessel but that the cruise line was vicariously liable because the doctor’s negligent actions arose during the course and scope of his employment. Id. at 1366.

The Fifth Circuit held that while a carrier has the duty to employ a competent and duly qualified doctor if it chooses to do so, a doctor’s negligent treatment cannot be imputed onto the carrier itself. Id. at 1369. The court’s rationale is twofold. First, a carrier cannot control the physician-passenger relationship, and therefore should not be held liable for the physician’s action. Second, a cruise line does not possess the required expertise to supervise its onboard medical personnel. Id. As a cruise line vessel “is not a floating hospital,” the provision of any medical personnel onboard the vessel is merely for the convenience of its travelers. Id. at 1369–1370 (citing Amdur v. Zim Israel Nav. Co., 310 F.Supp. 1033, 1042 (S.D.N.Y.1969)). Cruise line passengers are not obligated to utilize these medical providers’ services while traveling onboard. Id. at 1372.

Appellants relied on a United States District Court for the Northern District of California opinion where the court declined to dismiss a case stemming from a medical malpractice suit against the vessel. Nietes v. American President Lines, Ltd., 188 F. Supp. 219 (D. Cal. 1959). Finding the carrier vicariously liable, the court considered these medical personnel not as independent contractors as the plaintiff claimed but rather as salaried crew members subject to the shipmaster’s control. Id. at 220. The medical personnel were also presumably under the direction of the company’s chief surgeon. Id. The Barbetta plaintiffs argued that the Eleventh Circuit should evaluate their claims in a similar fashion and utilize a fact-based approach to their analysis.

The Barbetta court declined to follow the Nietes ruling. It found Nietes’ central tenet contradictory, as it confused an employer’s ability to direct its employees’ general actions with an employer’s ability to direct an employee’s actions that could potentially lead to vicarious liability. Barbetta, 848 F.2d at 1371. Taking issue with a shipmaster’s ability to oversee medical treatment, the Barbetta court also questioned a chief surgeon’s ability to effectively control the onboard physician’s actions from ashore. Id. While a chief physician can broadly direct medical procedures or decide what medications to include in the infirmary, he or she cannot control the onboard physician’s actions “sufficiently immediate” to warrant the imposition of liability on the shipowner. Id. (citing Amdur, 310 F. Supp. at 1042–43).

As a vessel is not statutorily obligated to provide an onboard physician, a vessel’s duty is discharged when it exercises reasonable care to provide “such aid and assistance as ordinarily prudent persons would render under similar circumstances.” Id. (citing Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 632 (1959)). If a cruise line chooses to provide a medical professional aboard its vessel, its obligation only extends to the hiring of a competent and duly qualified doctor. Id. at 1371–72. The Fifth Circuit distinguished Barbetta from a line of case law allowing a Jones Act seaman to file a medical malpractice suit against a vessel’s physician. Id. at 1369, fn. 1 (citing De Zon v. American President Lines, Ltd., 318 U.S. 660 (1943)). Because the Jones Act provides for a “statutorily recognized” relationship between a seaman and his employer, these medical malpractice claims are not predicated on fault or liability, therefore making it entirely appropriate for a seaman to raise a medical malpractice suit against an onboard physician. Id. Ultimately, the court concluded that the Barbettas’ vicarious liability claim failed, as general maritime law does not impose vicarious liability against a cruise liner when a physician provides negligent medical treatment to its passengers.

The Barbetta ruling became the well-settled majority rule. E.g. Cummiskey v. Chandris, S.A., 895 F.2d 107 (2d Cir. N.Y. 1990); Hilliard v. Kloster Cruise, Ltd., 1990 U.S. Dist. LEXIS 21035 (E.D. Va. 1990); Royal Caribbean Cruises, Ltd. v. Jackson, 921 F. Supp. 2d 1366 (S.D. Fla. 2013); Farrell v. Royal Caribbean Cruises, Ltd., 2013 U.S. Dist. LEXIS 8136 (S.D. Fla. Jan. 2, 2013); Hung Kang Huang v. Carnival Corp., 909 F. Supp. 2d 1356 (S.D. Fla. 2012); Hill v. Celebrity Cruises, Inc., 2011 U.S. Dist. LEXIS 128744 (S.D. Fla. 2011).

Yet several district courts, many within the purview of the Eleventh Circuit, chose to follow the Nietes holding and imposed vicarious liability on a cruise liner for its medical staff’s negligent actions. See, e.g., Huntley v. Carnival Corp., 307 F. Supp. 2d 1372 (S.D. Fla. 2004); Mack v. Royal Caribbean Cruises, Ltd., 361 Ill. App. 3d 856 (Ill. App. Ct. 2005); Fairley v. Royal Cruise Line, Ltd., 1993 AMC 1633 (S.D. Fla. 1993); Carlisle v. Carnival Corp., 864 So. 2d 1 (Fla. Dist. Ct. App. 2003). Courts recognized that a cruise ship passenger has no other meaningful choice but to seek treatment from an onboard doctor if the individual was in medical distress at sea. Huntley, 307 F. Supp. 2d at 1374; Fairley, 1993 AMC at 1639. Analogizing a cruise liner to a “floating hotel,” these liners have a “captive audience” that is unable to freely contract with anyone for medical services. Fairley, 1993 AMC at 1639. However, some courts rejected the distinction made between Jones Act seamen and cruise passengers and questioned why one group may assert a medical malpractice claim against a negligent doctor but another cannot. Huntley, 307 F. Supp. 2d at 1374; Mack, 361 Ill. App. 3d at 870; Carlisle, 864 So. 2d 1 at 5. These cruise lines “reap the benefits” of having a physician onboard, as they can discharge their duty for reasonable care without airlifting a sick passenger to port or rushing the vessel to port to allow an ill passenger to disembark. Mack, 361 Ill. App. 3d at 869; Fairley, 1993 AMC at 1639. Moreover, the installation of a state-of-the-art infirmary, with trained medical staff aboard its vessel, may incentivize certain passengers to choose that particular cruise line in the increasingly competitive cruise market. Id. These policy considerations were echoed and reiterated in the Eleventh Circuit’s opinion of Franza.

Franza v. Royal Caribbean Cruises, Ltd.
Royal Caribbean passenger Pasquale Vaglio fell and hit his head as he boarded a trolley while visiting a port-of-call in Bermuda. Franza v. Royal Caribbean Cruises, Ltd., 772 F.3d 1225, 1228-29 (11th Cir. 2014). When he returned to the vessel to seek medical assistance, the on-duty nurse failed to conduct a diagnostic cranial scan despite noting a lump and an abrasion on his head. Id. at 1229. The nurse opined that Mr. Vaglio may have suffered a concussion and suggested to his wife that she monitor him. The Vaglios were then sent back to their room. Id. When his condition worsened, it took the staff 20 minutes to procure a wheelchair to take Mr. Vaglio to the ship’s infirmary. Medical assistance was further delayed as ship personnel insisted on obtaining payment information before treatment. Court records showed that Mr. Vaglio was not evaluated by a doctor until four hours later, and six hours passed before he was transferred off the ship for treatment. Mr. Vaglio was finally airlifted back to the United States, where he passed away a week later. Id.

Patricia Franza, Vaglio’s daughter, filed suit predicated on two causes of action: actual agency and apparent agency. She alleged that the theory of actual agency was applicable, as Royal Caribbean was negligent by and through the acts of its employees or agents. Id. at 1230. She also contended that apparent agency applied as the medical professionals averred to the decedent that they were acting as Royal Caribbean’s employees and actual agents, and that the decedent relied on this belief—to his detriment. Id.

The United States District Court for the Southern District of Florida granted defendant Royal Caribbean’s motion to dismiss. Franza v. Royal Caribbean Cruises, Ltd., 948 F. Supp. 2d 1327 (S.D. Fla. 2013). Following the Barbetta rule, the district court found that the actual agency claim could not stand, as it was predicated on duties not recognized under general maritime law. Id. at 1333. As to the apparent agency claim, there was no evidence showing that the decedent relied on the medical professionals’ alleged agency relationships to Royal Caribbean to his detriment. Id. at 1332–33. In dismissing the complaint at the pleading stage, the district court did not address whether there were enough factual allegations to support a negligence claim, nor did it examine whether the defendant exerted the requisite control over these medical personnel to support an agency argument. Id.

In its review, the Eleventh Circuit traced the historical genesis of vicarious liability in maritime tort law. Importantly, the Supreme Court of the United States, as well as the Eleventh Circuit, have long prescribed an onboard agent’s negligence to his maritime principal. Id. at 1234–35. The Eleventh Circuit concluded that historical precedent supports the imposition of vicarious liability on cruise liners when medical professionals commit medical negligence. Id. at 1235–36. Unpersuaded and unconvinced by the bright-line rule set forth in Barbetta, the Eleventh Circuit held that whether an agency relationship exists between a cruise ship and a medical professional is a question of fact under general maritime law. Id.

The opinion next analyzed whether the appellant’s complaint supported a potential finding of agency. The court recognized that an agency relationship requires the following elements: (1) the principal acknowledges that the agent will be acting on its behalf; (2) the agent manifests an acceptance of the undertaking; and (3) a principal must exert control over the agent’s action. Id. at 1236 (citing Whetstone Candy Co. v. Kraft Foods, Inc., 351 F.3d 1067, 1077 (11th Cir. 2003)). There were sufficient facts alleged in the complaint to satisfy the first two elements of agency, as Royal Caribbean hired the medical professionals and paid for their work. The medical staff also wore uniforms bearing the Royal Caribbean’s insignia and logo. Further, Royal Caribbean represented to immigration authorities that these medical personnel were crew members, and that the doctor was the ship’s officer. Id.

There was ample evidence suggesting appellee exerted control over these medical personnel. The court outlined several considerations that would suggest control in the maritime context, including (1) evidence of the principal’s right to exercise control; (2) the method of payment for an agent’s services, whether it was by time or by job; (3) whether equipment used by the agent was supplied by the principal; and (4) whether the principal could fire the agent at will. Id. at 1237 (citing Langfitt v. Fed. Marine Terminals, Inc., 647 F.3d 1116, 1121 (11th Cir. 2011)). Again, Royal Caribbean’s assertion that the doctor and nurse were employed by the cruise line illustrated the cruise company’s right to control its medical staff. Id. The compensation structure adopted by Royal Caribbean suggested an agency relationship, as the cruise line controlled how the funds flowed from its passengers to the medical professionals. Id. The infirmary was stocked with supplies, medicines, and equipment provided by Royal Caribbean. While the court conceded that the complaint did not address the fourth element, it reasonably presumed that a company may fire its crew members if it chose to do so. Id.

The appellee relied on the decedent’s passenger ticket to argue that the travel document’s contractual clauses limit the ship’s liability for medical services rendered during the cruise. Id. They argued that the medical staff were acting as independent contractors and therefore any negligent actions undertaken cannot be imputed on the company. The Eleventh Circuit rejected this argument, noting that (1) Ms. Franza did not attach the ticket to the complaint, (2) the complaint did not discuss the ticket or its provisions, and (3) Royal Caribbean’s assertion that the medical professionals were independent contractors did not make them so. Id.

The Eleventh Circuit justified its unwillingness to adopt the bright-line rule set forth in Barbetta, as technological advancement has transformed the state of cruise ships today. Id. at 1239. As the court stated, “new conditions sometimes give rise to new conceptions of maritime concerns.” Id. (citing The Thomas Barlum, 293 U.S. 21, 43 (1934)). Describing these modern vessels as “floating cities” with state-of-the-art infirmaries and urgent care centers onboard, the court then began to outline why Barbetta no longer made sense given today’s technologically connected world. Id. 

The court first rejected the notion that a physician and patient’s relationship by its very "nature" precludes vicarious liability. Id. (citing Barbetta, 848 F.2d at 1369). Healthcare providers are now often involved in agency relationships with their principals, as a principal may impact a doctor’s judgment through various means. Id. The court listed numerous ways a principal may exert control, such as its hiring criteria, training schemes, supervision structures, and disciplinary measures. Id. at 1240–41.  

The Eleventh Circuit also took issue with the argument that a cruise line passenger ultimately controls his relationship with the medical professionals onboard the vessel. This ‘freedom to choose’ argument was articulated in a Judicial Court of Massachusetts opinion:

The passengers may employ the ship's surgeon, or some other physician or surgeon who happens to be on board, or they may treat themselves if they are sick, or may go without treatment if they prefer; and, if they employ the surgeon, they may determine how far they will submit themselves to his directions, and what of his medicines they will take and what reject, and whether they will submit to a surgical operation or take the risk of going without it. The master or owners of the ship cannot interfere in the treatment of the medical officer when he attends a passenger. He is not their servant, engaged in their business, and subject to their control as to his mode of treatment.

Id. at 1241–42 (citing O'Brien v. Cunard S.S. Co., 28 N.E. 266 (Mass. 1891)).          

The court remained unconvinced, listing several scenarios which would make this ‘freedom of choice’ argument unpersuasive. For example, the court questioned whether an unconscious man in medical distress would have any meaningful choice in whom he sees. Further, the court doubted whether a passenger at sea has any meaningful choice other than to submit to the onboard physician when there is no land in sight. Id. at 1242. Even if a sick passenger was given the option to be airlifted to an onshore medical facility, he may be reluctant to seek medical assistance in a foreign land. Id.

The court also was also skeptical that a cruise line lacked the expertise to supervise the medical professionals aboard its vessels. Id. at 1243. The court rejected the oft-repeated assertion in Barbetta that “a ship is not a floating hospital,” and instead observed that large cruise ships often boast medical facilities with fully stocked supplies, medications, and equipment onboard. Id. The court thus reasoned that this demonstrates “some institutional knowledge of medicine” by these cruise ship companies. Id. The court did not find any particular feature that makes a cruise line company unique so to warrant an exception from the general maritime rule of vicarious liability. Id. at 1247.

The third prong of the court’s analysis stemmed from the Barbetta assertion that a shipowner cannot exercise “sufficiently immediate” control over its onboard physician to warrant vicarious liability. Id. The Eleventh Circuit again advocated for a fact-specific analysis, as there may be times where control by a principal would be possible. For example, there may be instances where these cruise lines may be in close proximity to agents, like when treatment occurs pre-departure or when the ship is still relatively close to port. Id. More importantly, advanced technology now enables vessels to be in constant communication with principals and other medical professionals onshore. Id. at 1248.

As to the second cause of action regarding Franza’s apparent agency argument (apparent agency allows a plaintiff to sue for the purported negligence of an independent contractor who reasonably appears to be acting as a principal’s agent. The theory serves to bar a principal from denying the existence of an agency relationship. Franza v. Royal Caribbean Cruises, Ltd., 772 F.3d 1225, 1249–50 (11th Circ. 2014)), the court found that the theory was applicable in this context. The court articulated its apparent agency test, which requires the showing of three elements: (1) a representation by the principal to the plaintiff, (2) which causes the plaintiff to reasonably believe that the agent is authorized to act on behalf of or for the principal’s benefit, which then (3) justifiably induce the plaintiff to rely on this representation, to the plaintiff’s detriment. Id. at 1252.

The Eleventh Circuit reversed the dismissal of this cause of action, and found that there was enough evidence to support an apparent agency claim. The court re-articulated many of the points addressed in its discussion of actual agency and determined that Royal Caribbean could have plausibly represented to the decedent that these medical personnel were working on behalf of the company. The court found Royal Caribbean billed for their services directly and presented to the public that the medical staff were crew members of the vessel. The court also noted that the second element of the test was satisfied, as the complaint alleged that Royal Caribbean intended its passengers to perceive the medical professionals as agents working on behalf of the cruise line. Lastly, by following the nurse’s ill-advised medical advice and the onboard physician’s untimely medical assessment, the court concluded that the decedent relied upon these medical personnel to his detriment. Id.

The Eleventh Circuit also found that the complaint properly pled a maritime negligence claim, noting that the plaintiff properly established (1) a duty to protect the plaintiff from injury, (2) breach of said duty, (3) the breach actually and proximately caused the plaintiff’s injuries, and (4) plaintiff suffered harm as a result of the breach. Id. at 1253. As the duty a cruise line owes its passenger is a question of fact, the first element was clearly satisfied. Id. at 1254. The extent to which the defendant breached this purported duty was set forth in the complaint for purposes of a motion to dismiss, thus satisfying the second prong of the test. The decedent’s condition worsened, and he died as a result of the purported negligence of the medical professionals, thereby satisfying the third prong. Lastly, damages were incurred as his estate incurred medical bills and other expenses. In total, the Eleventh Circuit found that these allegations could plausibly support a prima facie claim of negligence. Id. at 1253–54.  

Legal Considerations in the Post-Franza World
In January 2015, the Eleventh Circuit denied the appellee’s motion for a rehearing. Given the case’s potential impact on the cruise line industry, it is likely Franza will be appealed. However, its effect is already felt. Motions for reconsideration and rehearing of complaints similar in scope are already underway and have been granted in light of this decision. See, e.g., Ure v. Oceania Cruises, Inc., 2014 US Dist. LEXIS 165649 (district court granting plaintiffs’ motion for reconsideration in light of Franza).

By rejecting the long-standing exception for medical negligence in this maritime context, the Eleventh Circuit in Franza shifted the legal playing field. Prior to the Franza decision, the only viable cause of action was claims concerning the negligent hiring and retention of the cruise line’s medical staff. Medical malpractice claims are more likely to now survive the pleading stage, as the issue of agency is consistently held to be a factual question.

Franza may also have broader legal implications, as it may allow passengers to raise claims against a cruise line for negligent actions undertaken during an onshore excursion trip. While untested, the ruling may extend to other independent contractors working on behalf of the cruise line industry, such as excursion tour operators or spa staff. Franza appears likely to become binding precedent in a district where much of the cruise line litigation is already heard. This is because many cruise ships’ forum selection clauses require claims brought by a passenger to be filed within the Southern District of Florida.

Cruise lines are no longer absolved from the medical malpractice actions brought forth by medical staff. In an effort to mitigate potential liability, cruise lines may choose to adopt an intermediary, such as a medical management company, to help assess and improve the quality of medical services provided aboard its vessels. From a legal standpoint, an intermediary may also soften the blow of litigation, as they may absorb some of the potential liability. Regardless of the final outcome, careful consideration must be given to the impact this decision and the impact it may have on the cruise line industry.

Angelique Pui-Ka So – April 24, 2015