DMC Category: Developed

This case note has been prepared by David Jensen of Healy & Baillie, LLP in New York. Healy & Baillie are the International Contributors to the website for the USA

Facts
The case arose when the plaintiffs filed a class-action suit against Norwegian Cruise Lines ("NCL"), contending that NCL was violating anti-discrimination provisions embodied in Title III of the ADA. NCL depart from and return to United States ports, most of NCL’s passengers are U.S. citizens, and NCL’s tickets are governed by U.S. law. However, NCL’s vessels are registered in other nations. The class-action represented disabled persons who purchased tickets in 1998 and 1999 for roundtrip cruises on NCL vessels.

The plaintiffs contended that NCL was not complying with ADA provisions requiring the accommodation of disabled persons by "reasonable modifications in policies, practices and procedures" and the removal of architectural and communication barriers. The plaintiffs sought a declaratory judgment and an injunction. While the United States District Court for the Southern District of Texas concluded that the ADA applies to foreign-flag vessels in U.S. waters, the Court of Appeals for the Fifth Circuit reversed. According to the Fifth Circuit, the ADA does not apply to foreign-flag vessels at all because it "does not contain a specific provision mandating its application to foreign-flag vessels."

The Supreme Court’s Ruling
Five Justices of the Supreme Court, led by Justice Kennedy, reversed the Fifth Circuit’s ruling as "inconsistent with the Court’s case law and with sound principles of statutory interpretation." The Court concluded that the Fifth Circuit’s application of the clear statement rule was too "broad" and "would apply to every facet of the business and operations of foreign-flag ships." The Court concluded that cruise ships were within the ADA’s definitions of "public accommodation" and "specified public transportation." Thus, the ADA’s basic requirements - that is, "reasonable modifications in policies, practices, or procedures" to accommodate the disabled and removal of architectural and structural barriers to the extent "readily achievable" - presumptively applied to cruise ships in U.S. waters, whether foreign-flag or domestic. While the Court agreed that certain of the plaintiffs’ claims were not viable, the Court rejected the Fifth Circuit’s view that no ADA claims were viable against foreign-flag cruise ships.

The five-Justice majority noted that the ADA’s "readily achievable" standard would likely preclude any applications of the statute that conflicted with international law, such as the International Convention for the Safety of Life at Sea (SOLAS). A vessel modification that would place the ship in violation of an international legal obligation "would create serious difficulties for the vessel and would have a substantial impact on its operation, and thus would not be ‘readily achievable.’" Beyond this point, however, the Justices - already closely divided on the question of whether the clear statement rule precluded any application of the ADA to foreign-flag ships - diverged on the question of exactly what requirements the ADA places on foreign-flag cruise ships. Because none of the Justices’ viewpoints commanded a majority of the Court’s votes, the balance of the decision is not binding on future court decisions. Nonetheless, the Justices’ divergent views are almost certain to be influential in future decisions on the matter.

Concurring Justices
Three of the five Justices forming the majority -- Kennedy, Stevens and Souter -- felt that under the clear statement rule neither the ADA nor any other generally applicable statute applied to "the internal order and discipline of the vessel" absent a clear expression of congressional intent. However, the application of the clear statement rule only reached "matters of internal order and discipline." In their view, whether any particular ADA requirement applies to foreign-flag ships hinges on the extent to which interests of the United States or its citizens are at stake versus those that are "internal to the ship." Many of the Title III claims at issue -- whether cruise lines could charge higher fares to handicapped travelers, impose companion requirements, or require waiver of medical liability, for example -- "have nothing to do with a ship’s internal affairs." In contrast, claims seeking modification to "physical features" of the ship (such as coamings) would likely interfere with internal order. To the extent the ADA was found to impose "internal order" requirements after its "readily achievable" standard was construed to consider conformity with international obligations, the concurring Justices felt that the clear statement rule would preclude such requirements. However, these Justices (joined on this point by Justice Thomas) reasoned that any ADA requirements that do not themselves implicate a vessel’s internal order should apply with full force and effect. According to these four Justices, the clear statement rule is simply an inference that Congress does not intend to regulate extraterritorially.

The remaining two Justices from the majority opinion -- Ginsburg and Breyer -- felt that Title III of the ADA did not apply to foreign-flag vessels at all, but they did not attach independent significance to the "clear statement rule." According to the two Justices, the clear statement rule only applies to the extent there are "conflicts with international legal obligations." In their view, the clear statement rule is an application of a larger "non-interference principle" and has no application when a legal requirement does not produce "international discord." Justices Ginsburg and Breyer relied in part on prior Supreme Court decisions that had construed statutes to avoid foreign or international law conflicts to reason that the Court’s construction of the "readily achievable" ADA exception "served" the goal of "non-interference." In contrast with the other three Justices joining Justice Kennedy’s majority opinion, the Justices Ginsburg and Breyer concluded that whether an ADA requirement pertained to "internal order" was irrelevant: the only aim of the clear statement rule was avoiding international law conflicts, and the ADA applied to the extent that no such conflict resulted.

Dissenting Justices
Justice Scalia’s dissent, joined by Chief Justice Rehnquist, Justice O’Connor, and (in part) by Justice Thomas, characterized the clear statement rule as a "rule of international law that the law of the flag ship ordinarily governs the internal affairs of a ship." The clear statement rule applies to laws that "in any way affect the operation or functioning of the craft," but not to laws that are "ancillary to its operation at sea." The dissenting Justices agreed that the "purpose" of the clear statement rule is to avoid conflicts with international and foreign law.

However, the dissenting Justices felt that once a law reaches the internal order of a ship, the clear statement rule applies to make that law inapplicable, even if in a particular instance no conflict of law results. In other words, the clear statement rule should apply to all laws that reach the subject matter of "internal order," regardless of whether they conflict with international obligations or foreign law. The dissenting Justices placed importance on the power of the flag jurisdiction to affirmatively regulate the internal conduct of the ship; "even if Title III makes ample provision for a safety exception to the barrier-removal requirements, what it considers necessary for safety is not necessarily what other nations or international treaties consider necessary." A U.S. statute simply should not reach the internal affairs of a foreign-flag ship. The dissenting Justices thus found it unnecessary to attempt to construe the ADA in a manner that would avoid international conflicts; the "presumption that Title III does not apply to foreign-flag ships without a clear statement from Congress" was sufficient to dispose of the case.

The dissenting Justices disagreed, however, on the extent to which the clear statement rule should operate to invalidate the ADA. Justices Scalia and O’Connor and Chief Justice Rehnquist felt that the ADA could not be selectively applied; the question was simply "whether Congress in fact intended that its enactment cover foreign-flag ships." "Since some applications of Title III plainly affect the internal order of foreign-flag ships, the absence of a clear statement renders the statute inapplicable--even though some applications of the statute, if severed from the rest, would not require clear statement."

Justice Thomas, in contrast, felt that certain portions of Title III could be severed from the rest of the statute. According to Justice Thomas, the clear statement rule should preclude any application of a statute that "pertain[s] to internal affairs" of foreign-flag ships. However, any application that does not pertain to internal affairs is not within the rule. Otherwise stated, Justice Thomas agreed with the other dissenting Justices that the clear statement rule precluded application of a general statute to the internal affairs of a ship, but disagreed that this defect made the statute wholly inapplicable. Because Justice Thomas thus felt that some applications of the ADA - which did not pertain to internal order issues - were valid, he joined the portion of the opinion of Justices Kennedy, Stevens and Souter requiring application of the clear statement rule on a case-by-case basis. But Justice Thomas did not join in the majority’s call to construe the ADA’s readily achievable standard so as to avoid any clear statement rule issues.

Comment
The actual ruling in Spector is thus rather limited; the Court clearly held that the Fifth Circuit’s articulation of the clear statement rule - that it invalidated in whole any law that addressed the internal order of a foreign-flag ship - was wrong. Further, the Court definitively held that the "readily achievable" standard of the ADA should be construed to avoid requiring structural modifications that would place a vessel in violation of international conventions such as SOLAS.

While it is clear the Court rejected the position that the clear statement rule should apply to totally invalidate any law that implicates internal order, however the Court made no clear holding with respect to how the rule should operate. It does appear that the rule has continued vitality in U.S. law as only Justices Ginsburg and Breyer felt that it had no application apart from avoiding international conflicts. Moreover, it is evident that the clear statement rule should apply on a case-by-case basis. The Court gave no clear guidance, however, as to when and how the rule should be applied going forward.

It is important to note that the scope of this decision extends beyond the ADA and beyond cruise ships, and similar statutory construction issues could come into play in any number of contexts and in respect of any foreign-flag vessel. Indeed, in his concurring opinion Justice Kennedy suggests that the clear statement rule should not act to invalidate Title II of the Civil Rights Act of 1964, which generally prohibits discrimination in places of public accommodation, indicating that the Justices were well aware that the Court’s ADA decision would have ramifications for the application of other general statutes in respect of foreign-flag vessels

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