Smooth Sailing: Another Securities Class Action Against A Cruise Line Dismissed

On May 27, 2021, the United States District Court for the Southern District of Florida dismissed a securities class action against Carnival Corp. ("Carnival"), which operates the world's largest cruise company, relating to the company's health and safety disclosures made prior to and as the COVID-19 pandemic spread.  This decision follows a dismissal of another securities fraud class action against a major cruise operator six weeks earlier by the same court.

Like in the prior case against Norwegian, the Carnival  court dismissed the suit upon finding the plaintiffs failed to plead the existence of any statements that were materially false or misleading, and failed to sufficiently allege scienter.  In so doing, it applied traditional principles of federal securities laws to the anything-but-traditional circumstances created by the COVID-19 pandemic.