Federal Judge Threatens Carnival Corp With US Port Ban

Federal Judge Threatens Carnival Corp With US Port Ban
Federal Judge Threatens Carnival Corp With US Port Ban

Federal Judge Threatens Carnival Corp With US Port Ban – On Wednesday April 10, 2019, U.S. District Judge Patricia Seitz Federal Judge threatened to temporarily block Carnival Corporation from docking cruise ships at ports in the United States as punishment for a possible probation violation. Such a ban of United States  cruise ports would be catastrophic for the cruise line disrupting their business in the United States, Caribbean and Alaska. Carnival Corp with a fleet of 102 ships from all their brands, visit more than 700 ports around the world, most of them home ported in the United States.

Judge Seitz, made a not so thinly veiled threat to Carnival Corp chairman Micky Arison and president Donald Arnold to put them in jail for a couple days for their willful disobience with the Judge’s order, when she said,  “If I could, I would give all the members of the executive committee a visit to the detention center for a couple of days. It’s amazing how that helps people come to focus on reality.” The case has been ongoing since 2013, USA v Princess Cruise Lines (16-20897)

Federal Case History

John C. Cruden Assistant Attorney GeneralAccording to the Department of Justice, “On December 1, 2016, Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up.  Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship.

The plea agreement was announced today by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida.”

John C. Cruden was confirmed by the U.S. Senate on December 16, 2014 as the Assistant Attorney General (AAG) for the Environment and Natural Resources Division (ENRD).

Before becoming AAG, Mr. Cruden served as President, the Environmental Law Institute, a nationally-recognized bipartisan organization well-known for its work in educating, publishing, and researching environment, energy, and natural resource issues.

After serving as AAG, Cruden was elected President of the American College of Environmental Lawyers (ACOEL) and also became a principal in the D.C. offices of Beveridge and Diamond.

Mr. Cruden has a long history of public service at the Department of Justice and in the military. From 1991-1995 he was the Chief, Environmental Enforcement Section, ENRD and then from 1995 to 2011 a career Deputy Assistant Attorney General for ENRD.Alaska Cruise Ship Illegal Dumping

Cruden said, “The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia.

The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England.  The whistleblowing engineer quit his position when the ship reached Southampton, England.  The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie.  The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance.  The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on September 14, 2013,”

Princess Criminal Guilty Plea 

Judge Patricia Seitz

On April 20, 2017, Judge Patricia A. Seitz order Princess Cruise Lines to pay $30,002,800.00 after Princess plead guilty to the criminal complaint of conspiracy, which ended September 14, 2013; Act to prevent pollution from ships which ended April 30, 2013 and Obstruction of proceedings  which ended February 16, 2013.

Patricia Ann Seitz is a Senior United States District Judge of the United States District Court for the Southern District of Florida. Judge Seitz ordered the defendant corporation shall pay to the United States the following fines: $27,000,000 as to Count One and $500,000 as to each of Counts Two through Seven, for a total fine of $30,000,000. Judge Seitz ordered Princess to 5 years probabtion as to each of counts 1 through 7 to run concurrently.


The probation Conditions were as follows:

1) within thirty days from the date of this judgment the defendant organization shall designate an official of the organization to act as the organizatlons’s representative and to be the primary contact with the probation officer;
2) the defendant organization shall answer truthfully all inquiries by the probation officer and follow the instructions of the probation officer;
3) the defendant organization shall notify the probation ofticer ten days prior to any change in principal business or mailing address;
4) the defendant organization shall permit a probation officer to visit the organization at any of its operating business sites;
5) the defendant orxanization shall notify the probation officer within seventy-two hours of any criminal prosecution, major civil litigation, or admlnistrative proceeding against the organization’,
6) the defendant organization shall not dissolve, change its name or change the name under which it does business unless this judgment end all criminal monetary penalties imposed by this court are either fully satisfied or are equally enforceable against the defendant’s successors or assignees; and
7) the defendant organization shall not waste, nor without permission of the probation officer, sell, assign, or transfer its assets

Special Conditions of Probation

  • $10,000,000, paid by electronic fund transfer as follows:
  • (i) $7,000,000 to the National Fish and Wildlife Foundation (NFW F), attention Chief Financial Officer, 1 133 15th Street, NW , Suite 1100, W ashington, DC 20005, and
  • (ii) $3,000,000, of the total $10,000,000 community service funds, to the South Florida National Park Trust, attention, Executive Director, 1390 South Dixie Highway #2203, Coral Gables, Florida 33134.
  • (2) The defendant corporation shall not commit any further violations of the International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1978 (MARPOL 73/78), federal, state, or Iocal Iaw, and shall conduct all of its operations in accordance with environmental laws of the United States.
  • (3)Required Compliance Program: The defendant corporation agreed to develop, adopt, establish, implement, and fund the environmental remedial measures set forth in the Environmental Compliance Plan (ECP), during the term of probation, consistent with sentencing policies set forth in j 8D1 .4. The defendant corporation has appointed Christopher Donald as the senior level qualified compliance officer with the responsibility for im plementing and overseeing the ECP. As set forth in greater detail in the ECP, the entire ECP, which is part of the plea agreement, is part of the Special Conditions of Probation and shall remain under the supervision of the Court during the term of probation.
  • (4) The defendant corporation and its parent corporations also agree that any violation of the ECP and its terms by the defendant corporation, its parent corporations, or any of its related entities and vessels covered by the ECP, may be grounds for the revocation of probation.
  • (5) The defendant corporation, Carnival Corporation and Carnival plc (defendant corporation’s parent) have agreed to fully fund and implement the ECP across all related entities with vessels that carry a Certificate of Financial Responsibility, issued pursuant to the OiI Pollution Act of 1990, as well as those vessels themselves.
  • (6) The defendant corporation and its parent corporations agree to retain the services of an outside independent Third Party Auditor (TPA) and  Court Appointed Monitor (CAM) acceptable to the government to perform the duties set forth in the ECP and to report to the Court and Office of Probation.
    (i) As of the date of sentencing, April 19, 2017, the TPA and CAM, acceptable to the government, are respectively: ABGS Consulting, lnc., 16855 North Chase Drive, Houston, Texas 77060, whose point of contact is vice-president, Thomas M. Nolan; and Steven P. Solow , Esqa, Katten M uchin Rosenman LLP., 2900 K Street NW , North Tower, Suite 200, Washington, DC 20007-51 18.
    (ii) All reports prepared by the TPA and the CAM shall be submitted to the U.S. Probation Officer. The corporate representative shall subm it its report, if any, to the U.S. Probation Officer, TPA and CAM , describing aII steps taken to address any issues in the TPA and/or CAM’S report, along with the original TPA or CAM report within 30 days after it is provided.
  • (7) The plea agreement together with all of the obligations and terms thereof, is binding as to the defendant corporation and its parent, the respective subsidiaries, assignors and successors, or their successors-in-interest, if applicable.
  • (8) The defendant corporation shall provide the United States Probation Office and the government with immediate notice of any name change, corporate reorganization, sale or purchase of vessels subject to the ECP, signing or termination of ship m anagem ent contracts, or similar action affecting the plea agreement or the ECP.
  • (9) No change in name, change in corporate or individual control, corporate reorganization, change in ownership, merger, change of Iegal status, sale or purchase of vessels, signing or term ination of ship management contracts, or similar action shall alter the responsibilities of the defendant corporation under the plea agreement, provided, however, that the defendant corporation and its parent corporations will have no continuing obligations under the plea agreement or the ECP for any ship sold or bareboat chadered to a person or entity not affiliated with defendant corporation, its parent or subsidiaries.
  • (10) The defendant corporation shall not engage in any action to seek to avoid the obligations and conditions set forth in the plea agreement.
  • (11) Disclosure of Business/Financial Records: The defendant corporation shall make full and complete disclosure of its business finances/financial records to the U.S. Probation Officer, CAM and/or TPA as requested. The defendant corporation shall submit to an audit of its business financial records as requested by the U.S. Probation Officer, CAM and/or TPA.
  • (12) Permissible Search: The defendant corporation shall submit to a search and/or inspection of any of its properties and places of business conducted at a reasonable time and in a reasonable manner by the U.S. Probation Officer, CAM and/or TPA, and shall permit the U.S. Probation Officer, CAM and/or TPA to accom pany any Iaw enforcement or regulatory olicial during any enforcement or inspection of its propedies or places of business.
  • (13) Required Notification – Breach of Compliance: The defendant corporation is to inform the U.S. Probation Officer, CAM and TPA of any breach of the ECP involving the defendant company. A description of the nature, date and time of the breach of compliance shall be provided to the U.S. Probation Officer, CAM and TPA within three days of the breach.
  • (14) Required Records Retention: In addition to the record retention requirements set forth in the applicable portions of the Code of Federal Regulations, the defendant corporation shall keep the records required to be retained pursuant to regulatory provisions for the period specified in the applicable regulation or for a period of five years whichever is longer.
  • (15) The Probation Office shall assist the CAM and/or TPA by requesting courtesy supervision in the districts that are listed in paragraph three of Attachment C to the plea agreement, Docket Entry 2-3.

Judge Patricia Seitz said that she’ll make a decision in June, and she wants company chairman Micky Arison and president Donald Arnold to attend that hearing. “The people at the top are treating this as a gnat,”

Despite the plea agreement, prosecutors say ships have dumped grey water into Alaska’s Glacier Bay National Park, prepared ships in advance of court-ordered audits to avoid unfavorable findings, falsified records and dumped plastic garbage into the ocean. The company has acknowledged these incidents in court filings.

Prosecutors said internal emails shared among Carnival’s subsidiaries discussed the practice. An email from Carnival’s German-based cruise line AIDA Cruises said, “It would be really important to go onboard on August 12 for one week in order to have time to manage issues before the audits and avoid findings.”

They said a similar email from Carnival’s Seattle-based Holland America Line mentioned “prevent audit findings” as a goal in early 2018.

The court filings said the monitor found that Carnival and its subsidiaries repeatedly falsified records, as recently as September 2018, when an engineer on Holland America’s Westerdam ship falsified maintenance records to make it appear he had cleaned and tested equipment when he had not. The same ship, according to court filings, dumped 26,000 gallons of grey water into Glacier Bay National Park in September 2018.

On January 18, 2007, Alaska filed a lawsuit against Princess Cruises, stating, “On or about July 12, 2001, in the District of Alaska, the defendant Princess
Cruise Lines knowingly and unlawfully failed to operate its vessel the Dawn Princess at a slow, safe speed when near two humpback whales (Megaptera
novaenglia) in the area of Glacier Bay, Alaska, in violation of Title 50, Code of Federal Regulations, Section 224.103(b)(3) and Title 16, United States Code,
Sections 1538(a)(1)(B), 1540(b)(1). ”

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