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Cruise Line Unable to Stop Florida Class Action by Doctors Alleging Underpayment for Services

A court in Miami ruled that a group of doctors who worked aboard Celebrity Cruises, Inc.’s cruise ships were allowed to pursue their breach of contract case as a class action lawsuit. The 3d District Court of Appeal concluded that, for each doctor in the purported class, the case boiled down to one fundamental dispute:  whether or not the cruise line was contractually entitled to exclude medicine sales from the revenue calculations that determined the doctors’ pay. Because of this high degree of similarity regarding the liability question for each doctor, the case was appropriate for a class action.

The lead doctor in the suit, Jerry Rankin, M.D., was one of several doctors providing medical services aboard Celebrity Cruises, Inc.’s cruise ships. The doctors’ independent contractor agreements spelled out how the doctors were to be paid, which was on a commission basis. The contract stated that the doctors were entitled to a portion of the “total medical revenues.” The agreement did not specify what was (or was not) included within the auspices of “total medical revenues.”

Rankin eventually launched a class action lawsuit against the cruise line. Among other things, Rankin and about 40 other doctors accused the cruise line of breach of contract. Celebrity, they claimed, had underpaid them by omitting from its calculation of “total medical revenues” the revenue the cruise line took in from the sale of medications aboard its ships. After hearing the relevant evidence and arguments, the trial court decided to certify a class of doctors that included independent contractor physicians who worked for Celebrity from September 2004 to December 2009 and whose contracts called for pay based upon “total medical revenue” without any explicit exclusion pertaining to medication sales.

The cruise line appealed but was unsuccessful. Celebrity argued that the doctors who were allegedly underpaid did not meet the legal standards for a class, but the appeals court was not persuaded. In cases like Rankin’s, the lead plaintiff must show that there exists a “reasonable methodology for generalized proof of class-wide impact.”

The issues that the parties would contest were ones that were common to all the doctors in the class. Each doctor had a written contract with Celebrity, and each agreement had nearly identical terms with regard to payment. Had each doctor negotiated an agreement orally, and had each unwritten contract contained different payment terms for different doctors, the doctors’ pursuit of a class action likely would have failed.

In the end, the deciding issue would be the same for all of the doctors, according to the court. A trial court would determine whether, based upon the terms of the written independent contractor agreements the cruise line signed, Celebrity was entitled to exclude medicine sales from its medical revenue calculations and pay the doctors based solely upon medical procedure income, or whether the cruise line was required to pay the doctors based upon procedures and medicine sales revenues. Resolving that disagreement would resolve the case for all of the doctors.

The court acknowledged that the calculations of the money owed would be slightly different for each doctor, but it stated that these minor variations in terms of damages were not enough to disqualify the doctors from class status, especially when given the high degree of commonality regarding the issue of liability.

Some business disputes, including breach of contract cases, may also present an opportunity for the party suing to pursue a class action. Whether your case is a class action or involves just your business and the other side, you should retain capable legal counsel to assist you. The knowledgeable and diligent Florida commercial litigation attorneys at Stok Kon + Braverman are here to help. Our attorneys have the experience and skills to aid you in guarding your business interests.

Contact us online or by calling (954) 237-1777 to schedule your consultation.

More blog posts:

Default Judgment Blocks Arguments About Liability in Florida Contract Dispute Case, Florida Business Lawyers Blog, Nov. 11, 2015

Company’s Lack of Bad Intent Allows It to Escape Contempt in Florida Breach of Contract Case, Florida Business Lawyers Blog, May 27, 2015

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