The first of what could be several fuel charge-related lawsuits against the cruise lines was filed earlier this week in Miami. Coral Gables, Fla., attorney Harley Tropin submitted the complaint, which seeks class action status, on behalf of New York resident Jason Ablelove. It charges several large cruise lines, including Royal Caribbean Cruises Ltd., Carnival Corp. and Norwegian Cruise Line, with colluding to fix unreasonably high fuel surcharges.
I contacted Tropin yesterday to request a copy of the complaint and to speak with his client. Ablelove was out of the country and couldn’t be reached, but Tropin was kind enough to send me the lawsuit. It’s devastating, and the cruise lines would be smart to settle this one quickly and make nice with Florida’s Attorney General, which is investigating whether Royal Caribbean and Carnival Corp. properly disclosed fuel surcharges.
According to the suit, anyone who purchased tickets after Jan. 1 from the cruise companies paid an unreasonably high fuel surcharge illegally set by the companies. Here are a few highlights:
The Fuel Surcharges were unprecedented in the North American market. In large part, this is because of a 1997 settlement between certain Defendants, including Carnival and Royal Caribbean, and the Florida Attorney General.
Pursuant to that settlement, these Defendants paid a fine and agreed to revise their advertising policies to settle allegation that they misled consumers about cruise costs. Under the settlement agreement, the cruise lines could no longer charge customers any fees in addition to the advertised initial ticket price, except those fees actually passed on by the company to a government agency.
Defendants, despite their prior settlement with the Florida Attorney General, concertedly and deceptively implemented a fuel surcharge herein described.
The suit also notes the suspicious timing of the fee implementation and suggest the cruise lines were working together:
On November 5, 2007, Carnival Corporation announced a fuel surcharge of $5 per person per day … shortly before [then] the smaller luxury operator Regent Seven Seas Cruises announced that it would implement a fuel surcharge of $7.50 per person, per day, for its 2008 sailings. On November 12, Oceana Cruises announced it too would implement a $7 per person, per day surcharge … on November 14, Silversea Cruises announced a $10, per person, per day surcharge … etc.
That’s a violation of anti-trust laws, the lawsuit says.
Defendants engaged in a continuing agreement, understanding, and conspiracy in restraint of trade to artificially raise, fix, maintain and/or stabilize the price of Fuel Surcharges in the United States and throughout North America in violation of Section 1 of the Sherman Act, 14 U.S.C. 1.
They’re also a violation of Florida state law:
Defendants’ misled, and continue to mislead consumers into believing the Fuel Surcharges are proportionately related to their fuel costs. Rather, these Fuel Surcharges are the result of unlawful concerted action among the Defendants.
Finally, it suggests that cruise lines were not acting alone. It names several “unnamed co-conspirators.” Whether or not those are travel agents, who helped collect these fees, is open to debate:
On information and belief, certain cruise line operators, trade groups and/or other entities, unnamed herein and referred to as John Does I-X, willingly conspired with Defendants in their unlawful conduct at all relevant times. The allegations contained herein against named Defendants are hereby averred against these unnamed co-conspirators.
I’ve noted the troublesome nature of cruise line fuel surcharges in the past. Personally, I think it’s only a matter of time before the cruise lines cave in and send everyone a rebate check.