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Maritime Law

Enforcement of Federal Law on Foreign-Flagged Ships in U.S. Waters

Michael Orlando | November 13, 2004

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The U.S. Supreme Court recently granted certiorari to the U.S. Court of Appeals for the Fifth Circuit in a case involving whether a foreign-flagged cruise line might be forced to retrofit its ships and change its procedures to accommodate disabled passengers to comply with the Americans With Disabilities Act. The Fifth Circuit decision is in direct conflict with an Eleventh Circuit ruling. In essence, both cases cite and rely on the same U.S. Supreme Court decisions, but interpret them in opposite ways, thus concluding with opposite results. Again, maritime practitioners are left to scratch their heads. At least we should get a direct answer on this circuit split in relatively short order.

On September 28, 2004, the U.S. Supreme Court granted certiorari to the U.S. Court of Appeals for the Fifth Circuit in Spector v Norwegian Cruise Line, Ltd., 536 F3d 641 (5th Cir 2004). This decision conflicts with the Eleventh Circuit's ruling in Stevens v Premier Cruises, 215 F3d 1237 (11th Cir 2000), reh'g denied, 284 F3d 1187 (11th Cir 2002).

In Spector, two classes of plaintiffs, disabled and companion, sued Norwegian Cruise Line (NCL). The disabled plaintiffs sued under Title III of the Americans With Disabilities Act (ADA) (42 U.S.C. § 12182, et seq. (2000), claiming they were denied access to emergency evacuation equipment and evacuation-related programs and public facilities, including restrooms, restaurants, swimming pools, elevators, and cabins with a balcony or windows, by physical barriers onboard NCL's liners. Concomitantly, the companion plaintiffs alleged discrimination for being denied access, based on their known association with the disabled plaintiffs, to the ships' facilities and amenities. Both plaintiff classes sought declaratory judgment and injunctive relief requiring NCL to remove certain permanent and temporary barriers that obstructed access to the ship's facilities. They also claimed reasonable attorney fees and costs.

In the district court proceedings, NCL filed a Fed R Civ P 12(b)(6) motion for dismissal for failure to state a claim. The trial court ruled that Title III of the ADA applied to foreign-flagged cruise ships (as NCL did not dispute that and did not raise the issue on appeal), but it dismissed the plaintiffs' injunctive relief request for removal of the physical barriers, finding that the federal government had not promulgated the necessary regulations as required by §§ 12186 (a)-(b) of Title III of the ADA. The trial court also refused to dismiss the companion plaintiffs' associational discrimination allegation for failure to state a claim and further ruled that the plaintiffs were not entitled to attorney fees and court costs. After ruling, the district court certified the matter for interlocutory appeal and the Fifth Circuit accepted the certification.

The Fifth Circuit ruled on January 12, 2004, that the ADA does not apply to foreign cruise ships, even when those ships are in U.S. waters. Although it did not reach the other issues decided in the district court—whether the federal government had a duty to promulgate regulations and whether the nondisabled plaintiffs stated a claim for associational discrimination—the court did hold that there was nothing in the ADA indicating congressional intent that Title III of the ADA be applied extraterritorially.

The ADA provides that "no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation." Discrimination against disabled individuals on "specified public transportation services provided by a private entity that is primarily engaged in the business of transporting people and whose operations affect commerce" is also prohibited with both "public accommodations" and "specified public transportation services" subject to Title III's barrier removal requirements.

Reviewing Precedent

The gist of the difference in opinions between the Fifth Circuit and the Eleventh Circuit involves the respective Circuits' differing methodology of statutory interpretation and their reading of Supreme Court precedent. In reaching its conclusion that the Title III of the ADA, absent clear congressional intent, does not apply to foreign-flagged cruise ships, the Fifth Circuit relied on the Supreme Court's decisions in Benz v Campania Naviera Hidalgo, S.A., 335 U.S. 138 (1957), and McCulloch v Sociedad Nacional de Marineros de Honduras, 372 U.S. 10 (1963). The Fifth Circuit Court started with the proposition that a ship voluntarily entering the territorial waters of another country subjects itself to that country's laws, but the country is under no obligation to exercise its legal authority over the ship to the fullest extent of the law. In other words, the country's legal jurisdiction over the ship is discretionary, not mandatory. Citing Benz, the Spector court held that in order for foreign-flagged vessels entering the U.S. waters to be subject to U.S. law, "there must be present the affirmative intention of Congress clearly expressed." 335 U.S. at 147.

Benz involved a labor dispute by foreign seaman employed under foreign articles while the vessel was temporarily in an American port. The issue was whether the Labor Management Relations Act of 1947 applied to the dispute. The court concluded that it did not because Congress had not "fashioned itself to resolve labor disputes between nations of other countries operating ships under foreign laws." Id. at 142. Similarly, in McCulloch, the court found that the National Labor Relations Act did not apply to foreign-flagged ships employing alien seamen because Congress had not expressed its clear intent for the NLRA to do so. Although Benz involved a foreign-flagged ship temporarily in U.S. waters, and McCulloch involved a fleet of foreign-flagged ships regularly plying U.S. waters, the Supreme Court found this distinction unavailing.

Thus, after finding that the ADA lacked an affirmative, clear expression of Congressional intent for the statute to apply to foreign-flagged ships, the Fifth Circuit in Spector held that Title III of the ADA did not so apply. Furthermore, the court noted, as per the Supreme Court's holding in EEOC v Arabian American Oil Co., 499 U.S. 244 (1991) ("ARAMCO"), that the extraterritorial application of U.S. laws, such that they might clash with the laws of other nations, potentially giving rise to international discord, was not to be presumed absent clear congressional intent. The issue in ARAMCO was whether Title VII could be extraterritorially applied to regulate the employment practices of U.S. employers employing U.S. citizens abroad. The court ruled that absent legislative intent, American law was presumptively meant to apply only within the jurisdiction of the United States. The Fifth Circuit therefore sustained the lower court's dismissal of the disabled plaintiffs' barrier removal claims and it reversed the district court's decision to the extent that the other Title III claims remained.

As mentioned earlier, the Fifth Circuit's decision in Spector is in direct conflict with the Eleventh Circuit's decision in Premier. In Premier, the Eleventh Circuit held that Title III of the ADA does apply to foreign-flagged vessels while in American waters, reversing the lower court's decision. In reaching this conclusion, the court focused on whether a cruise ship is a "public accommodation" as required by Title III of the ADA (this was not in dispute in Spector). Noting that Congress had provided a comprehensive definition of "public accommodation" and that it had made no distinctions in defining "public accommodations" with regard to physical location, the court concluded that "those parts of a cruise ship which fall within the statutory enumeration of public accommodations are themselves public accommodations for the purposes of Title III." Id. at 1241.

Addressing the issue of the extraterritoriality of a foreign-flagged ship in U.S. waters, the Premier court noted that the lower court's finding that Title III of the ADA did not apply to foreign-flagged vessels was founded upon its erroneous conclusion that foreign-flagged ships in U.S. waters are extraterritorial. The court noted that the Supreme Court had held in ARAMCO that Title VII did not apply to a U.S. company's worksite in Saudi Arabia, absent a clearly expressed congressional intention for Title VII to apply extraterritorially. However, the Eleventh Circuit ruled that, by definition, the meaning of extraterritorial means "beyond U.S. borders" and, therefore, foreign-flagged ships within U.S. waters are not extraterritorial and any application of Title III of the ADA to them would not improperly involve the regulation of conduct beyond U.S. borders.

The court then relied on the Supreme Court's holding in Cunard S.S. Co. v Mellon, 262 U.S. 100 (1923), wherein the Court ruled that the National Prohibition Act applied to foreign-flagged ships in U.S. waters because Congress intended the Prohibition Act to have broad reach and to apply "throughout the territorial limits of the United States." Id. at 128. Finding that Title III of the ADA had a similarly broad reach, the court found little problem in concluding that Title III applies to foreign-flagged ships in U.S. waters.

Interestingly, both the Fifth and the Eleventh Circuits' decisions rely, for the most part, on identical cases. The Fifth Circuit read Benz and McCulloch as restricting the application of U.S. laws, absent an expression of clear Congressional intent, solely to U.S. jurisdiction. The Eleventh Circuit read Benz and McCulloch more restrictively: A presumption exists against the application of American law to the "internal management and affairs" of a foreign-flagged ship in U.S. waters and noting that the presumption has usually been applied where the application of U.S. law would interfere with the relations between the ship's foreign owner and the ship's foreign crew.

Both Circuits also relied on the Supreme Court's ruling in Cunard. The Fifth Circuit read Cunard as not involving the application of U.S. law extraterritorially—as regulating only the commercial transport of liquor into U.S. ports. The Eleventh Circuit read Cunard as deciding, without invoking the presumptions about foreign-flagged vessels, that the Prohibition Act applied to foreign-flagged ships in U.S. waters. The Stevens case, though, makes one critical error, in ruling without any discussion that enforcement of the ADA would not involve internal management and affairs of a foreign-flagged vessel. Hence, the Fifth and Eleventh Circuits came to different conclusions regarding whether or not Title III of the ADA applies to foreign-flagged vessels sailing in U.S. waters, but the Fifth Circuit case would appear to be the better reasoned of the two. The differences of opinion between the Fifth and Eleventh Circuits are now slated to be resolved by the U.S. Supreme Court.


Considering that "virtually all cruise ships serving U.S. ports are foreign flag vessels," (See 56 Fed. Reg. 45,584, 45,600) the financial impact on the cruise ship industry is potentially enormous. Just as importantly to maritime lawyers, we should gain a lot of insight into future applications of U.S. law to foreign-flagged ships as soon as the Spector case is decided by the U.S. Supreme Court this term.

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