Carnival Could Escape Large Damages Payments From COVID-19 Deaths

Carnival (NYSE: CCL) (NYSE: CUK) and other cruise lines could be largely off the hook for monetary damages related to the deaths of passengers from COVID-19, Bloomberg reports this morning. A federal judge in Los Angeles ruled lawsuits related to cruise ship coronavirus deaths should be handled in federal courts, where the Death on the High Seas Act of 1920 applies, potentially setting a precedent that sharply curtails awards.

The Death on the High Seas Act covers situations where the "death of an individual is caused by wrongful act, neglect, or default occurring on the high seas beyond 3 nautical miles from the shore of the United States," allowing certain family members to bring action for "a fair compensation for the pecuniary loss sustained." Bloomberg says the damages are usually limited to lost wages that would have supported the relatives bringing the suit. In the case of retirees, that may consist solely of burial costs.

A light blue surgical mask lying on a sandy beach surrounded by seashells

Image source: Getty Images.

The federal judge's ruling relates to a lawsuit launched in late May by the family of a 71-year-old California man who died of COVID-19 on March 4 after a cruise to Mexico on Carnival's Princess Line.

The latest development comes two weeks after a pair of California federal judges dismissed lawsuits by cruise line passengers who caught COVID-19 on board various ships, but survived. Despite cruise ship shares dropping on Tuesday on renewed coronavirus lockdown fears, Carnival's shares are up 2% in midday trading, possibly buoyed by the legal news.

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Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

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