Royal Caribbean Cruise Lines 2010 Annual Report Download - page 37

2010 ANNUAL REPORT 34
PART I
other cruise lines as defendants in five actions, one of
which is a pending class action, being brought against
Park West Galleries, Inc., doing business as Park West
Gallery, PWG Florida, Inc., Fine Art Sales, Inc., Vista
Fine Art LLC, doing business as Park West At Sea
(together, “Park West”), and other named and unnamed
parties. Royal Caribbean Cruises Ltd. and Celebrity
Cruises Inc. had previously been dismissed from these
actions on the basis that the claims against them were
not timely filed and/or properly pled. The actions are
being brought on behalf of purchasers of artwork at
shipboard art auctions conducted by Park West on
the named cruise lines alleging that the artwork Park
West sells is not what it represents to its customers
and that Royal Caribbean Cruises Ltd., Celebrity Cruises
Inc. and other named cruise lines are complicit in
the activities of Park West, including engaging in a
conspiracy with Park West in violation of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”),
and are being enriched unjustly from the sale of the
artwork. The actions seek refund and restitution of all
monies acquired from the sale of artwork at shipboard
auctions, recovery for the amount of payments for the
purchased artwork, damages on the RICO claims in an
indeterminate amount, and other permitted statutory
damages and equitable relief. We will vigorously
oppose any attempt by plaintiffs to rename either
Royal Caribbean Cruises Ltd. or Celebrity Cruises Inc.
as defendants and, if we are so renamed, we believe
we have meritorious defenses to the claims against us
which we will vigorously pursue. Under the current
facts and circumstances, we no longer consider this
matter to be a material proceeding.
Commencing in September 2009 and through August
2010 demands for arbitration were made under our
collective bargaining agreement covering Celebrity
Cruises’ crewmembers on behalf of twenty nine current
and/or former Celebrity Cruises’ cabin stewards and
others similarly situated. These demands, all brought
by the same counsel, contend that between 2001
and 2005 Celebrity Cruises improperly required the
named cabin stewards to share guest gratuities with
assistant cabin stewards. The demands seek payment
of damages, including penalty wages, under the U.S.
Seaman’s Wage Act of approximately $0.6 million for
the named crewmembers and estimates damages in
excess of $200.0 million, for the entire class of other
similarly situated crewmembers. In the fourth quarter
of 2010, all but five of the demands were dismissed
for failure to file the claims timely and the other five
are pending determination. Counsel has brought an
action in the United States District Court for the
Southern District of Florida seeking to overturn these
arbitration awards, and is also appealing the dismissal
of a similar action brought in October 2009 on behalf
of ten crew members and others similarly situated in
the United States District Court for the Southern District
of Florida making the same contentions and seeking
the same damages as the arbitration demands. We
believe we have meritorious defenses to the pending
arbitration demands and actions which we intend to
vigorously pursue. Under the current facts and cir-
cumstances, we no longer consider this matter to be
a material proceeding.
We are routinely involved in other claims typical within
the cruise vacation industry. The majority of these
claims are covered by insurance. We believe the out-
come of such claims, net of expected insurance recov-
eries, will not have a material adverse impact on our
financial condition or results of operations.