New Technology = New Concerns For Hotels

Posted on December 5, 2012 04:20 by Philip M. Gulisano

Recently Forbes.com published an article exposing a security flaw in common keycard hotel room locks that permitted hackers with a digital device to effortlessly trigger the opening of the locking mechanisms. This, of course, would allow the hacker to have access to the personal belongings inside the room or, worse yet, unwanted access to the guests themselves.  The “security vulnerability” was said to be present in keycard locks built by a particular lock company and specifically in a model of lock that appears in at least four million hotel rooms worldwide. There are believed to be a number of “patches” to fix the issue, which vary in cost.

While the lock manufacturer in such an instance may certainly be responsible if its locks do not perform as intended, generally, a property owner or lessor, such as a hotel, has a duty to keep its guests safe from known or reasonably anticipated dangers. This begs the question of what is a hotel’s duty or obligation to its guests when it knows, or should know, that the locks present on the hotel room doors, which guests would reasonably anticipate are capable of keeping people out, are highly vulnerable to hackers.
 
To start, any hotel that has direct knowledge that its room door locking mechanisms, whichever they are, do not perform as intended and as relied upon by its guests, would be wise to immediately remedy the problem to ensure the safety and comfort of the guests.  One could easily imagine the horrific publicity and liability if it was discovered that guests were losing property, being assaulted or otherwise attacked in the confines of their presumptively safe hotel room if the hotel knew that the locks were easily by-passed. 
 
Often times, with new technology comes uncertainty with how it will perform and whether there will be “bugs” in the system.  However, almost by definition technology has faults that its possessors must investigate, anticipate and seek to minimize.  It would be wise for any hotel to understand what issues and/or risks exist with the technology it uses and develop a plan to minimize those risks and ensure its guests have a safe stay and come back again.

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Categories: Hospitality Law | Privacy | Retail | Technology

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ON YOUR MARK…., GET SET…., SHOP!

Posted on November 15, 2012 02:17 by Philip M. Gulisano

With the start of the holiday shopping rush just a week away, retailers should be mindful of their responsibility to keep customers safe when large crowds gather to take advantage of well-advertised and highly-anticipated sales. Customers, drawn by the promise of “doorbuster savings” and warned of limited quantities, do not always act in the most courteous manner when rushing to enter the store and running toward the products they desire.  Sadly, it has become all too common for injury, whether accidental or intentional, to occur as customers dash into and through stores during these special sales, and when a customer is injured during the clamor, a retailer can be held liable.

Although the law varies from state to state, in many states, a retailer’s duty to use reasonable care to protect customers from reasonably anticipated injuries includes foreseeing that large crowds might gather due to the advertised sales and that individuals might be injured due to the overcrowding, the congestion at the door, or the unruliness of the other customers.  Consequently, a retailer may be held liable to a customer who is injured due to pushing, crowding, trampling, or jostling by other customers when the retailer conducts a promotional activity or sale that will foreseeably cause crowds to gather and push.

At least one jury has determined that reasonable care when undertaking a special promotion that might cause people to run, push, and shove includes the retailer giving warnings of the dangers involved, taking steps to control or police the crowd, using loud speakers to warn the crowd not to run over people, and warning the elderly or children to stay out of the crowd.    Given the tragedies that have occurred in the past several years during “Black Friday Sales,” it is advisable for retailers to, at the very least, implement the above measures.  However, the above measures may not be sufficient given the particular circumstances of a retailer.  That is why each retailer should conduct a careful risk assessment evaluation that is tailored to its location and history.  This assessment will allow the retailer to develop and implement a plan that keeps its customers safe and happy during this holiday season. Now go shopping!

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The U.S. Supreme Court in Shute v. Carnival Cruise Lines, 499 U.S. 585 (1991) held the Shutes, who were injured on a Carnival Cruise ship in waters off Mexico, must file suit in Florida pursuant to the forum selection provision printed on the back of their ticket.   The Shutes filed suit in their home state of Washington.  The cruise ship departed from California.  Shute is still one of the most far reaching holdings enforcing adhesion-like forum selection provisions.  The Shutes also had a strong argument that they lacked notice of the forum selection/choice of law provisions.  

In the recent running aground of the Italian Costa Concordia operated by Costa Crocier, which is controlled by Carnival, the ship departed near Rome.  Approximately 120 United States citizens were on board and two may still be missing.  With respect to notice of the forum selection and choice of law provisions, information is much easier to obtain now than it was when Shute was decided.  For example, Carnival now posts its ticket contract online.  Carnival’s contract includes a mandatory arbitration provision as well as a forum selection clause, limits on liability, and restricted statute of limitations periods.   Costa Crocier also posts their ticket contract online.  The Costa contract includes forum selection, arbitration and choice of law provisions at Section 2.    

For claims involving personal injury or death, the Costa contract includes a forum selection clause for Broward County, Florida for cruises that depart from, visit or return to a U.S. port.  In contrast, U.S. port related economic loss claims are subject to an arbitration provision.  Under the Costa contract, any cruise that does not depart from, visit or return to a U.S. port, all claims must be filed in Genoa, Italy, and Italian law applies.  The Costa contract also includes a jury waiver provision.  

When a district court applies a forum selection provision, it usually does so via 28 U.S.C. § 1404, whereas a state court would dismiss the case.  Italy is not a district to which a federal case can be transferred, so dismissal is likely remedy if court enforces forum selection provisions for U.S. citizen cases filed in their home state, or even in Florida.  See e.g., Albemarle Corp. v. Astrazeneca U.K, Ltd., 628 F.3d 643, 651 (4th Cir. 2010) (applying English law / federal common law to enforce forum selection clause via dismissal).  Albemarle also suggests that Costa Concordia related claims filed in the U.S. would still be analyzed under the four factor “unreasonableness” test set forth in M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1 (1972) (holding forum selection clause may be found unreasonable if “(1) [its] formation was induced by fraud or over-reaching; (2) the complaining party ‘will for all practical purposes be deprived of his day in court’ because of the grave inconvenience or un-fairness of the selected forum; (3) the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4) [its] enforcement would contravene a strong public policy of the forum state.”).     

Here, proponents of avoiding Costa Crocier’s forum selection clause and choice of Italian law may argue factors two, three and four.  An analysis of Italian law related to factor three is beyond the scope of this blog post!
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You’ll leave with more than a hangover…

Posted on October 28, 2011 05:03 by Jobby Mathew

For all of you attending Annual Meeting this week – you might want to take a fire extinguisher to the cocktail mixer. Lawyerist.com has an interesting story regarding a lawsuit against the manufacturers of Bacardi 151. It seems that Bacardi’s popularity as a novelty in certain cocktails is contributing to its potential liability. Should the manufacturer be held liable for the tricks of a bartender? Have you had a close call or witnessed a trick like this at a bar? Let us know. In the interim, wear a fire retardant jacket if you are standing to close to the bar.

 

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The recent spate of stage collapses resulting in injuries, death and property destruction highlights an important area of consideration for hospitality providers.  What are the providers duties in terms of guest safety and monitoring external conditions that may alter the usual conditions.  Of course, no hospitality provider wants their guests injured, but how far does their potential liability extend?  Natural disasters and acts of terrorism are frequent exclusions for coverage as well, further complicating this analysis.

To get the most up-to-date information on cutting-edge hospitality topics, look into the Strictly Hospitality Seminar, September 22-23, 2011 in Scottsdale, Arizona.  Download the brochure.

 

 

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Categories: Hospitality Law

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Sometimes in the hospitality industry, you can’t win for trying.  Hilton Hotels is learning this lesson the hard way.  Last week, a former guest commenced a class action suit in federal district court in California against the Hilton hotel group based on the fact that he was charged $.75 for a newspaper he received, but did not request.  The suit alleges that the newspaper charge was fraudulent because it was disclosed in small print on the key-card sleeve, which he admittedly received upon check-in, and because the paper charge was not itemized on his bill at check out.  The plaintiff, Rodney Harmon, asserts claims of Unfair Business Practices, Violation of the Consumer Legal Remedies Act,  and Unjust Enrichment. 

Of course the only winners in the suit, which seeks an injunction, monetary damages and legal fees, are the plaintiff’s attorneys who will seek huge class action counsel fees for a case that involves only nominal damages and questionable liability for the putative class.

It seems quite plausible that Hilton, in an attempt to accommodate guests who did not want a paper, came up with the system of providing a $.75 credit for those guests who affirmatively asked not to receive one.  The deed has not gone unpunished as now Hilton must defend claims that it was intentionally deceiving customers by not itemizing the paper charge bill.   It is these unique issues faced by the Hospitality industry that will be covered in depth at the upcoming Hospitality Seminar, Sept 22-23 in Scottsdale. Download the brochure describing the full breadth of topics covered and sign up today!

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