Legal E-Bulletin - June 2005: ADA Applies to Foreign Cruise Ships in US Waters

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Legal E-Bulletin - June 2005

ADA Applies to Foreign Cruise Ships

This month, in Spector v. Norwegian Cruise Line Ltd., _ U.S. _ (June 6, 2005), a divided Supreme Court ruled that the Americans with Disabilities Act (ADA) applied to foreign-flagged cruise ships sailing in US waters. This decision is a victory for cruise passengers with disabilities who have endured unequal service as cruise companies are unable to hide behind a foreign flag of convenience.

Cruise ships are public accommodations

Passengers with disabilities had sued Norwegian Cruise Lines under Title III of the ADA. Title III prohibits discrimination on the basis of disability by public accommodations.1 The statute has a non-exhaustive list of examples of public accommodations but does not specifically list cruise ships.2 A lower court had seized on this omission by ruling that the ADA did not apply to foreign flagged ships in US waters since the court interpreted prior Supreme Court admiralty cases as requiring clear Congressional intent for a law to apply to foreign ships. Since the statute does not mention cruise ships, much less foreign cruise ships, the court reasoned that there was no congressional intent for the ADA to apply to them. The Supreme Court disagreed with this conclusion.

Justice Kennedy, in writing for the majority, likened cruise ships to “floating resorts” and concluded that cruise ships easily fell under the definition of a public accommodation. He first noted that Norwegian Cruise Lines was based in the US, served mostly US residents, that the terms and conditions of the tickets stated that disputes were to be governed by US laws, and that the cruise company extensively marketed its services in the United States. The fact that the cruise ship is registered under another country does not automatically exempt it from the ADA.

Justice Kennedy noted that prior Supreme Court admiralty cases set out that US laws are presumed to apply to foreign ships in American waters if the interests of U.S. citizens are at stake. This general rule has one narrow exception: General laws do not apply to foreign ships if they attempt to regulate matters that involve the internal order and discipline of the ship without a clear statement of congressional intent. This is known as the “internal affairs” exception. The Supreme Court ruled that the ADA applies to foreign ships sailing in US waters in so far as it does not interfere the internal affairs of the ship.

This is where the water gets murky

Deciding what qualified under this exception divided the court as no majority can be reached on this issue. The justices all had different ideas on what interfered with a ship’s “internal affairs”.

The passengers had alleged that the cruise line:

charged them higher fares and required them to pay special surcharges
maintained inaccessible evacuation programs
required them to waive any potential medical liability and to have a traveling companion when passengers without disabilities were not subject to this requirement
reserved the right to remove passengers with disabilities whose “whose presence endangered the ‘comfort’ of other passengers”.
Failed to make reasonable modification to their policies, practice, and procedures as required by the ADA to enable a person with a disability an equal opportunity to enjoy the service.
Failed to remove physical barriers to access

Justice Kennedy, joined by two other justices, noted that addressing the first five allegations would not interfere with the internal affairs and management of a ship. However, he expressed skepticism about removing the physical access barriers on board as it could require permanent significant changes to the ship’s structure. He wrote that such a requirement would likely interfere with a ship’s internal affairs; expressing concern that it might be impossible for a ship to comply with all the structural requirements of different jurisdictions. However, he acknowledged that Title III only requires barrier removal if it’s readily achievable. Title III defines “readily achievable” as “easily accomplishable and able to be carried out without great difficulty and expense” and must take into account the impact on the operation of the facility.3 Justice Kennedy concluded that Title III does not require barrier removal that would conflict with international legal obligations or threaten the safety of the crew and passenger. However, it is up for a lower court to decide whether Title III would require a modification that interferes with the internal affairs of the foreign ship.

Justice Ginsburg, joined by Justice Breyer, argued that the “internal affairs” rule is limited to whether American law would regulate foreigners in such a way that would conflict with international law. She agreed that Title III does not require ships to make structural changes that would interfere with their international legal obligations. She disagreed with Justice Steven’s plurality opinion that foreign ships did not have to make any structural changes that impacted its “internal affairs” unless these changes impacted their international legal obligations.

Justice Thomas agreed that Title III of the ADA applied to foreign cruise ships only to the extent that it did not interfere with their internal affairs. He concluded that structural changes would interfere with the internal affairs of the ship and directed the lower court to explore whether the other non-structural claims would fall under the “internal affairs” exception.

Justice Scalia, joined by two other justices, dissented from the holding of the court. He stated that the requirements mandated by Title III would interfere with a foreign ship’s operations; even the non-structural changes like discriminatory pricing. He concluded that Title III does not apply to foreign ships since there was no explicit congressional intent for its application.

So what does this mean for the cruise companies and the public?

Foreign cruise ships can be sued under the ADA. However, the ADA does not apply to them to the same extent that it would apply to an American flagged ship because of this “internal affairs” exception. A court would have to analyze whether a change that would normally be mandated by the ADA would interfere with a foreign ship’s “internal affairs”. 4

Norwegian Cruise Lines has viewed this decision as not requiring them to make structural changes to their ships.5 Still, the complaints about physical access had been limited to two older ships, and one is no longer in service while the other is about to be decommissioned. The newer ships are said to include structural modifications for passengers with disabilities. 6

1. 42 U.S.C. § 12182(a) - Prohibition of discrimination by public accommodations - General rule
No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.

2. 42 U.S.C. § 12181(7).

3. 42 U.S.C. § 12181(9):
The term readily achievable means easily accomplishable and able to be carried out without much difficulty or expense. In determining whether an action is readily achievable, factors to be considered include -
(A) the nature and cost of the action needed under this chapter;
(B) the overall financial resources of the facility or facilities involved in the action; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such action upon the operation of the facility;
(C) the overall financial resources of the covered entity; the overall size of the business of a covered entity with respect to the number of its employees; the number, type, and location of its facilities; and
(D) the type of operation or operations of the covered entity, including the composition, structure, and functions of the workforce of such entity; the geographic separateness, administrative or fiscal relationship of the facility or facilities in question to the covered entity.

4. If you hadn’t kept a scorecard: 3 justices think the ADA applied to the non-structural complaints. 3 justices don’t. 1 is non-committal. With respect to structural changes: Three justices are skeptical that it doesn’t interfere with the internal affairs. Four justices believe it automatically interferes with a ship’s internal affairs. Two only cares whether the changes interfere with international legal obligations.

5. Ivanovich, David. “Cruise ruling backs access for disabled.” Houston Chronicle 7 Jun 2005 http://www.chron.com/cs/CDA/printstory.mpl/business/3214176.

6. Richey, Warren. “Disability requirements extended to foreign cruise ships.” Christian Science Monitor 7 Jun 2005 http://www.csmonitor.com/2005/0607/p25s01-usju.html.

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