The issue: Can travelers take a grievance to court If they've signed a binding arbitration contract?
Randy and Janice Lane, 56, were psyched for their seven-day cruise to Mexico in April 2009. They traveled from Tulsa to Long Beach, Calif., and boarded a Carnival cruise liner, bound for Cabo San Lucas. Shortly after departing, the Miami-based cruise line canceled its scheduled Mexican stops after the Centers for Disease Control and Prevention issued a travel health warning. The Lanes were offered a stop in San Francisco instead. But they wanted a refund and sued Carnival.
But a U.S. district court judge in Florida ruled last November that the Lanes’ claim was restricted by a binding arbitration clause in their ticket contract. The plaintiffs appealed.
Older Americans have a special interest in the case. First, nearly half of the 14 million cruise passengers last year were over 50, according to the Cruise Lines International Association. Second, a growing number of employment, credit card, nursing home and phone service contracts require people to waive their access to courts in favor of binding arbitration. Carnival contends arbitration is more practical and less expensive than a lawsuit. AARP disagreed, and filed a friend-of-the-court brief in the case.
“They should not be able to avoid responsibility for their acts by hiding behind a contract that, by design, limits passengers’ access to the court system,” said D. Michael Campbell, a Florida attorney who has filed a class action suit on behalf of affected passengers. Julie Nepveu, senior attorney for AARP Foundation Litigation, agreed: “That is what these arbitration clauses do—take away our day in court so we can’t complain when we are cheated.”
Carnival said it had no choice. “While we sincerely apologize to all of our guests that had vacations disrupted as a result of H1N1 Travel Health Warning, the circumstances resulting in the cancellation of Mexican ports of call were completely beyond our control,” Tim Gallagher, Carnival’s vice president of public relations, said. “We had no choice but to turn [our ships] from Mexican ports. It would have been irresponsible of us to do otherwise.”
What it means to you: Read the fine print. Binding arbitration clauses may make it impossible for you to go to court. If you cannot resolve a dispute directly, contact the Better Business Bureau or your state attorney general.
Emily Sachar is a journalist and author based in Brooklyn, N.Y.