The hospitality industry is at the top of the list of industries
impacted by the ongoing COVID-19 crisis. With travel having
largely come to a standstill, hotels, cruise lines, and airlines
are all feeling the pinch and finding their footing in a world
gripped by a global pandemic. The hospitality industry,
however, like many other industries, has also begun to face
COVID-19-related class actions. A lawsuit filed on June 24, 2020 in
the United States District Court for the Western District of
Washington accuses cruise line Holland America and its parent
company, Carnival, of exposing over one thousand cruise ship
passengers to COVID-19 on a ship that sailed out of Argentina this
past March. Plaintiffs claim that Holland America and
Carnival were aware of the COVID-19 outbreaks that occurred on
other cruise ships, including ships operated by Carnival subsidiary
Princess Cruise Lines, and failed to take proper screening measures
and other precautionary measures prior to boarding the ship on
March 7, 2020. Plaintiffs also claim that after Defendants
knew of a virus outbreak on the ship, yet they allowed passengers
to gather in large groups for group events with no social
distancing measures in place. This proposed class action
lawsuit in Washington is one of a growing number of similar
lawsuits filed in other jurisdictions across the country, including
numerous recent lawsuits filed in the District of Florida against
other cruise lines. But passenger class actions are merely one type
of class action that cruise lines are currently defending. On March
12, 2020, the first federal securities class action lawsuit related
to COVID-19 against a cruise line was filed in the United States
District Court for the Southern District of Florida against
Norwegian Cruise Line. Plaintiffs claim that Norwegian told
its staff to lie to prospective customers about the severity of the
COVID-19 outbreak. Norwegian’s stock dipped by 50% when this
was disclosed in numerous local news reports in Florida. These
lawsuits are merely an example of the types of class action
lawsuits that are expected to be brought against the hospitality
industry in the months and years ahead. In order to defend
against the merits of these claims, the defendants may be able to
point to the fact that both scientists and the public continue to
constantly learn new information about COVID-19—even months after
the outbreak began. The scientific community’s understanding
of COVID-19 and the guidelines in place today are very different
than those in place in March. The defendants, therefore, may
have an argument that, under the circumstances that existed in
March 2020, they acted reasonably based on the information
available at the time. Additionally, the defendants may argue
that COVID-19 is an airborne virus; therefore, determining how and
where someone caught the virus is impossible. This may be
difficult, however, if a plaintiff proves that her symptoms
developed while she was on a confined cruise ship because there are
fewer places where she could have become infected with the virus.
Further, to defend against the class allegations, the defendants
may argue that a class action is not the proper means of litigating
these cases, specifically claims brought by passengers, because
individual questions predominate over issues brought by the
class. The court may have a series of “mini trials” to decide
whether to certify the case as a class action. Specifically,
the court will have to assess each proposed class member’s personal
medical history and the cause and extent of each individual
plaintiff’s damages. However, even if individual
determinations are necessary for damages, a court, in some
jurisdictions, may still decide to a class action on
liability-only, especially if it is adequately pleaded as an
“issue-class.” Cruise lines are not alone in having to prepare and
respond to COVID-19-related class action lawsuits. As the
entire hospitality industry tries to regain its footing in this
changed reality, the industry is likely to face many class action
lawsuits alleging both a failure to take proper measures at the
outset of the pandemic as well as a failure to adequately protect
customers and accurately represent the potential risks to customers
as the industry re-opens. Businesses must prepare now and
carefully consider potential legal exposure as they re-open their
doors to customers in the days and weeks ahead.
