UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 1:20-cv-22202-KMM

IN RE CARNIVAL CORP. SECURITIES

LITIGATION.

 /

ORDER

THIS CAUSE came before the Court upon Defendants Carnival Corp., Carnival plc, and 

Arnold Donald’s (collectively, “Carnival” or “Defendants”) Motion to Dismiss the Second 

Amended Complaint and Incorporated Memorandum of Law. (“Mot.”) (ECF No. 79). Lead 

Plaintiffs New England Carpenters Pension and Guaranteed Annuity Funds (“New England 

Carpenters”) and Massachusetts Laborers’ Pension and Annuity Funds (“Massachusetts 

Laborers”) (collectively, “Lead Plaintiffs”) and Named Plaintiff Michael W. Slaunwhite 

(“Slaunwhite” and together with Lead Plaintiffs, “Plaintiffs”) filed a Memorandum of Law in 

Opposition to Defendants’ Motion to Dismiss the Second Class Action Complaint. (“Resp.”) (ECF 

No. 82). Defendants filed a Reply Memorandum of Law in Further Support of Defendants’ Motion 

to Dismiss the Second Amended Complaint. (“Reply”) (ECF No. 85). The Motion is now ripe 

for review. 

I. BACKGROUND1

This case arises under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 

(“Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and Securities Exchange Commission (“SEC”) 

Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5. SAC ¶ 24. Defendant Carnival Corp. 

1

 The following background facts are taken from the Second Amended Class Action Complaint 

(“SAC”) (ECF No. 74) and are accepted as true for purposes of ruling on this Motion to Dismiss. 

Fernandez v. Tricam Indus., Inc., No. 09-22089-CIV-MOORE/SIMONTON, 2009 WL 10668267, 

at *1 (S.D. Fla. Oct. 21, 2009). 

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operates the world’s largest cruise company, and its common stock is listed and traded on the New 

York Stock Exchange (“NYSE”). Id. ¶ 31. Defendant Carnival Corp.’s “three largest global 

segments, Carnival Cruise Line, Princess Cruises, and Holland America, sail itineraries throughout 

the world with a collective fleet of fifty ships.” Id. ¶ 38. Defendant Carnival plc, together with 

Carnival Corp. “formed a dual-listed company called Carnival, operate[d] as a single economic 

enterprise with a single senior executive management team and identical Board of Directors.” Id.

¶ 33. Carnival plc’s American Depositary Shares (“ADS”) are listed and traded on the NYSE. Id.

¶ 32. Defendant Donald is the president and chief executive officer (“CEO”) of Carnival and a 

Director of both Carnival Corp. and Carnival plc. Id. ¶ 34. Plaintiffs in this consolidated class 

action lawsuit purchased Carnival common stock between September 16, 2019 and March 31, 

2020 (the “Class Period”). Id. at 5, ¶¶ 28–30.

“[P]rior to the Class Period, Carnival routinely touted its commitment to health and safety.” 

Id. ¶ 49. During the Class Period, Carnival’s website advertised that its ships “operate[d] in full 

compliance with—and in many cases exceed[ed]—all U.S. and international safety regulations.” 

Id. ¶ 54. Carnival’s commitment to health and safety was also documented on its Form 10-K filed 

January 28, 2020 (“2019 10-K”), wherein it stated:

We are committed to providing a healthy environment for all of our guests and 

crew. We collaborate with public health inspection programs throughout the 

world, such as the Centers for Disease Control and Prevention (“CDC”) in the 

U.S. and the SHIPSAN Project in the EU to ensure that development of these 

programs leads to enhanced health and hygiene onboard our ships. Through our 

collaborate efforts, we work with the authorities to develop and revise guidelines, 

review plans and conduct on-site inspections for all newbuilds and significant 

ship renovations. In addition, we continue to maintain our ships by meeting, and 

often exceeding, appliable public health guidelines and requirements, complying 

with inspections, reporting communicable illnesses and conducting regular crew 

training and guest education programs. 

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Id. ¶ 303 (emphasis in original). In the years leading up to the Class Period, “and before the 

outbreak of COVID-19[,]” the CDC published best practices to advise cruise operators facing 

outbreaks of infectious diseases: Guidance for Cruise Ships on Influenza-Like Illness (“ILI”) 

Management (“ILI Guidance”). Id. ¶ 52. However, despite its “purported compliance” with 

applicable health and safety guidelines, “Carnival has routinely failed to adequately contain 

outbreaks of ILI and other infectious diseases on its ships.” Id. ¶¶ 14, 55. 

Further, in the decade preceding the Class Period, “Carnival has been embroiled in 

environmental and safety scandals that have tarnished its reputation for maintaining stringent 

health, safety, and sustainability practices.” Id. ¶ 58. These scandals resulted in Carnival making 

“repeated efforts to shore up its safety and security protocols,” including the formation of a Health, 

Environmental, Safety & Security Committee (the “HESS Committee”), which “is comprised of 

at least three independent directors and meets at least four times annually.” Id. ¶ 59. 

The HESS Committee is governed by Carnival’s HESS Policy, which imposes several 

requirements upon Carnival’s management team in furtherance of Carnival’s commitment to 

“protecting the health, safety and security of [its] passengers, guests, employees and all others 

working on [its] behalf, thereby promoting an organization that strives to be free of injuries, illness 

and loss.” Id. ¶¶ 60–62, 150. “These specific principles and implementation tasks presented to 

investors what appeared to be a robust management infrastructure around health and safety issues.” 

Id. ¶ 63. Carnival took other actions to publicly demonstrate its commitment to health and safety, 

such as filing a report on June 18, 2019 discussing its commitment to health and safety and creating 

a chief ethics and compliance officer position in August 2019. Id. ¶¶ 64–65. “As the outbreak of 

COVID-19 would eventually demonstrate, however, Carnival’s purported policies and protocols 

concerning health and safety were far different than its public statements.” Id. ¶ 66. 

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At the outset of the Class Period, on September 16, 2019, “Carnival represented that it had 

made significant enhancements to its purported health and safety protocols.” Id. ¶ 67. One such 

enhancement was the creation of the Incident Analysis Group (“IAG”), which “would make 

recommendations to enhance Carnival’s HESS policies, procedures, and training; recommend 

corrective action and preventative plans; and share lessons to prevent recurrence of issues.” Id. 

Carnival appointed “a career professional in transportation management and safety” to lead the 

IAG. Id. ¶ 68. Carnival represented that these efforts “constituted a significant enhancement to 

Carnival’s HESS infrastructure in response to the outbreaks of infectious disease and other HESS 

incidents [Carnival] faced in prior years.” Id. ¶ 69. 

Defendants “further touted [their] health and safety capabilities” during a conference call 

on September 26, 2019, when Carnival announced its financial results for the third quarter of 2019. 

Id. ¶ 72. According to Plaintiffs, “Defendants’ statements were untrue and created the misleading 

impression for investors that Carnival had proper protocols in place to ensure compliance with 

applicable health and safety guidelines and minimize the financial impact of infectious disease 

outbreaks on its cruise ships.” Id. ¶ 73. “The true financial impact of Carnival’s 

misrepresentations became critically apparent to investors as [Carnival] was forced to materially 

augment its risk factors to address the impact of the COVID-19 outbreaks on its ships, reputation, 

and financial outlook, and to seek to raise over $9 billion in cash during March of 2020.” Id. 

Plaintiffs contend that the COVID-19 pandemic revealed that Carnival “lacked proper 

policies, procedures, controls, or processes to prevent cruise ships from embarking on new voyages 

after it learned that passengers and crew were exposed to COVID-19” and “lacked proper health 

and safety policies and procedures to prevent passengers from embarking on cruises on ships 

where infection had already been detected.” Id. ¶¶ 75–76. Additionally, Carnival “failed to follow 

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existing internal and CDC protocols, notwithstanding its public statements to the contrary.” Id.

¶ 78. These failures “were not the result of an internal change in Company policy or infrastructure 

that occurred in January, February, or March 2020,” as there were no changes to those policies or 

the Company’s infrastructure during that period. Id. ¶ 79. “Rather, Carnival’s failures reflected a 

lack of effectively functioning health and safety protocols, procedures, and operational capabilities 

that existed at the beginning of the Class Period.” Id. 

Carnival publicly downplayed the risk of COVID-19 in a January 2020 news article and 

continued to tout its dedication to health and safety in its 2019 10-K. Id. ¶¶ 83, 88. However, just 

days before filing its 2019 10-K and unknown to investors, Carnival “came into possession of 

information that allowed Defendants to uniquely understand the gravity of COVID-19 even before 

the [World Health Organization (“WHO”)] and United States government declared the outbreak a 

public health emergency.” Id. ¶ 87. Carnival was in such a unique position because one of 

Carnival’s vendors—based in Wuhan, China—alerted Carnival’s chief experience and innovation 

officer John Padgett (“Padgett”) of “the scale and severity of COVID-19” and Padgett, in turn, 

shared that information with Defendant Donald. Id. Additionally, a former employee (“FE1”) of 

Carnival “confirmed that Carnival had early access to information about the effects of the 

coronavirus on Carnival’s business.” Id. ¶ 89. Carnival continued to publicly downplay the risk 

of coronavirus on its ships in the days that followed. Id. ¶¶ 93–94. 

Thereafter, passengers and crewmembers would indeed become ill aboard Carnival’s ships. 

Id. ¶¶ 95–96, 103. “On Saturday, February 1, 2020, Hong Kong’s government informed Carnival 

that a Diamond Princess passenger [who disembarked on January 25, 2020] had tested positive 

for COVID-19 at a hospital in Hong Kong.” Id. ¶ 102. The next day, Diamond Princess crew 

members began exhibiting COVID-19 symptoms. Id. ¶ 103. Despite these developments, 

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Diamond Princess passengers were encouraged to “enjoy themselves” and partake in normal ship 

activities. Id. ¶ 107.

“Because there was insufficient [personal protective equipment (“PPE”)] aboard the 

Diamond Princess, crewmembers often wore the same pair of gloves to deliver food to dozens of 

cabins at a time. Crewmembers collected dirty dishes and used linen without PPE.” Id. ¶ 111. 

Passengers aboard the Diamond Princess were not given masks or PPE after Carnival learned of 

the confirmed case. Id. ¶ 123. News outlets began publishing articles criticizing Carnival’s 

actions, or lack thereof. Id. ¶¶ 118–19, 125, 129–30. As ultimately reported by Bloomberg 

Businessweek on May 21, 2020, 712 people on the Diamond Princess tested positive for 

COVID-19; 40 of those passengers were eventually admitted to intensive care, and 12 died. Id. ¶

125. 

As COVID-19 began to spread on the Diamond Princess and other Carnival ships, 

Defendant Donald personally directed Carnival’s response. Id. ¶¶ 124–26. A former employee

(“FE3”)—who “was integrally involved in mediating the COVID-19 outbreaks on board the 

Diamond Princess and other Carnival ships in early February”—explained that, as early as late 

January 2020, Carnival “held daily meetings, which included everyone from the C-suite (including 

Donald) to active crew members working on board the ships.” Id. ¶ 125. “FE3 stated that ‘no 

protocols or policies were in place to deal with COVID,’ particularly shore-side, and any protocols 

that existed on board Carnival’s ships were ‘not sufficient enough to deal with a pandemic, 

otherwise we wouldn’t have had to go through what we did.’” Id. ¶ 132.

Meanwhile, “Carnival encouraged its sales staff to continue selling cruises in order to 

maximize profits in the face of a clear danger to its passengers and crew.” Id. ¶ 134 (emphasis in 

original). When customers inquired with Carnival about canceling their cruise tickets, “sales staff 

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were told to offer them incentives, such as a double cruise in the future, to keep them on the hook 

if they did not cancel.” Id. ¶ 138. “Sales staff were also instructed to tell cancelling customers 

that, due to administrative issues, their refunds would take an increasingly long time to process.” 

Id. 

On February 12, 2020, the CDC published its Interim Guidance for Ships on Managing 

2019 Novel Coronavirus (“COVID-19 Guidance”). Id. ¶ 141. The CDC COVID-19 Guidance 

included recommendations for treating passengers suspected of having COVID-19; managing

passenger care when an infection was confirmed; imposing symptom, temperature, and potential 

exposure checks before passengers boarded ships; and crew management. Id. 

On February 24, 2020, Carnival announced the cancellation of all its cruises to mainland 

China through mid-March 2020, and the suspension of its Diamond Princess cruises to mainland 

China through mid-April 2020, which Carnival downplayed as “merely due to the spread of 

COVID-19 and increasing restrictions related to China alone, not to the clear danger posed by 

cruising in the midst of a rapidly spreading pandemic.” Id. ¶ 147. 

On February 26, 2020, Carnival issued its Schedule 14A Proxy Statement, which omitted 

any reference to the risks of COVID-19 but continued to tout Carnival’s commitments to health 

and safety. Id. ¶¶ 148–51. On February 27, 2020, Carnival filed its 2019 Annual Report, which 

included a short section discussing the risks of COVID-19 but did not disclose that Carnival’s lack 

of a comprehensive plan to contain outbreaks of the coronavirus on its ships posed a severe 

long-term risk to its business. Id. ¶¶ 152–53. 

On March 4, 2020, “Carnival told passengers on the Grand Princess ship, which was then 

sailing from San Francisco to Hawaii, that the CDC was investigating a cluster of COVID-19 cases 

in Northern California—including the death of one man—that was linked to [its] previous Grand 

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Princess cruise[.]” Id. ¶ 154. “[P]rior to boarding the Grand Princess on February 11, 2020, 

passengers were merely asked to sign a form stating that they were not sick; passengers were not 

questioned further about their travel history or potential exposure to the coronavirus, and none was 

examined.” Id. ¶ 155. “[N]one of the passengers or crew members who transitioned from the first 

Grand Princess voyage to the second were examined in any capacity until March 5, 2020—nearly 

two weeks after the second voyage began.” Id. ¶ 160 (emphasis in original). Passengers who had 

sailed on the first Grand Princess voyage were instructed to remain in their cabins until they could 

be medically cleared, and Carnival advised its passengers that more cleaning and sanitation would 

be done. Id. ¶ 164. Even still, on March 5, 2020, passengers continued to utilize the ship’s various 

amenities and participate in activities without restriction. Id. ¶ 165. 

“By March 6, 2020, the onboard medical center was overwhelmed with calls and visits. 

The Grand Princess was running low on surgical masks and its crew was not isolated, with many 

sharing cabins and bathrooms.” Id. ¶ 167. The next day, Carnival decided to hold the ship at sea

“approximately 50 miles off the coast of San Francisco. That same day, a critically ill passenger 

was evacuated from the ship.” Id. ¶ 168. The Grand Princess was eventually allowed to dock at 

the Port of Oakland on March 9, 2020.2

 Id. ¶ 169.

On March 8, 2020, the U.S. State Department and the CDC issued guidance stating “U.S. 

citizens, particularly travelers with underlying health conditions, should not travel by cruise ship. 

CDC notes increased risk of infection of COVID-19 in a cruise ship environment.” Id. ¶ 211. 

2

 Similar events unfolded on the Costa Luminosa, id. ¶¶ 171–82, the Ruby Princess, id. ¶¶ 183–93, 

the Coral Princess, id. ¶¶ 194–210, and the Zaandam, id. ¶¶ 218–228. For instance, on the Coral 

Princess, passengers reported no additional or enhanced medical or health screening procedures. 

Id. ¶ 195. And, on the Ruby Princess, “[a]t all times during the cruise . . . passengers were allowed 

access to the pools, gym, and buffets aboard the ship.” Id. ¶ 190.

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On March 13, 2020, Carnival announced that it was pausing its operations. Id. ¶ 216. On 

March 16, 2020, Carnival issued a Form 8-K “disclosing that Carnival had notified its lenders 

under a revolving credit agreement . . . that it intended to borrow approximately $3 billion ‘in order 

to increase its cash position and preserve financial flexibility.’” Id. ¶ 230. After the market closed 

that same day, Carnival filed an amendment to its Form 8-K stating that it “could no longer provide 

an earnings forecast and that it expected the fiscal year to end in a net loss.” Id. ¶ 231. 

Shares of Carnival common stock declined by over 12 percent, from a closing price of 

$14.57 on March 16, 2020 to a closing price of $12.71 on March 17, 2020. Carnival ADS also

declined by over 12 percent, from a closing price of $12.91 on March 16, 2020 to a closing price 

of $11.33 on March 17, 2020. “Market commentators clearly linked Carnival’s precipitous stock 

decline to its March 16 disclosures.” Id. ¶ 233. Yet, “Defendants continued to misrepresent the 

effectiveness of their health and safety protocols in response to the COVID-19 outbreak.” Id. ¶

234. Subsequent Carnival SEC filings and disclosures, coupled with further negative publicity, 

resulted in further significant stock decreases. Id. ¶¶ 246–58. “From the first day of the Class 

Period to the last day of the Class Period, after investors learned the truth about Carnival’s false 

statements, the price of Carnival’s common stock declined by more than 73%, and the price of 

Carnival’s ADS had declined by more than 74%, wiping out approximately $27 billion in 

shareholder value.” Id. ¶ 259. 

On December 17, 2020, Plaintiffs filed the Consolidated Class Action Complaint alleging 

violations of Section 10(b) of the Exchange Act and SEC Rule 10b-5 thereunder (Count I); and 

Section 20(a) of the Exchange Act (Count II). See generally (“Consolidated Compl.”) (ECF No. 

52). Defendants filed a Motion to Dismiss on January 18, 2021. (ECF No. 61). The Court granted 

Defendants’ Motion to Dismiss in part on May 28, 2021, dismissing Plaintiffs’ Consolidated Class 

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Action Complaint without prejudice. (“Order”) (ECF No. 71). On July 2, 2021, Plaintiffs filed 

their Second Amended Class Action Complaint alleging the same two counts. See generally SAC. 

Now, Defendants move to dismiss the Second Amended Class Action Complaint—again 

with prejudice—for failure to state a claim. See generally Mot.

II. LEGAL STANDARDS

A. Securities Fraud

“To state a claim for securities fraud under Rule 10b-5, a plaintiff must allege the following 

elements: (1) a material misrepresentation or omission; (2) made with scienter; (3) a connection 

with the purchase or sale of a security; (4) reliance on the misstatement or omission; (5) economic 

loss; and (6) a causal connection between the misrepresentation or omission and the loss, 

commonly called loss causation.” Carvelli v. Ocwen Fin. Corp., 934 F.3d 1307, 1317 (11th Cir. 

2019) (quoting Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1236–37 (11th Cir. 2008) (internal 

quotation marks omitted)).

“Additionally, to state a claim under Section 20(a), the Plaintiff must allege that: (1) 

[Carnival] committed a primary violation of the securities laws; (2) [Defendant Donald] had the 

power to control the general business affairs of [Carnival]; and (3) [Defendant Donald] ‘had the 

requisite power to directly or indirectly control or influence the specific corporate policy which 

resulted in primary liability.’” Douglas v. Norwegian Cruise Lines, No. 20-21107-CIV, 2021 WL 

1378296, at *3 (S.D. Fla. Apr. 12, 2021) (citing In re KLX, Inc. Sec. Litig., 232 F. Supp. 3d 1269, 

1274 (S.D. Fla. 2017)). If a plaintiff fails to plead a violation of Section 10(b), a claim under 

Section 20(a) necessarily fails as well. See id.

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B. Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint for 

failing to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “To survive a 

motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a 

claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 

and internal quotation marks omitted). This requirement “give[s] the defendant fair notice of what 

the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 

(2007) (internal citation and alterations omitted). The court takes the plaintiff’s factual allegations 

as true and construes them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 

F.3d 1282, 1284 (11th Cir. 2008).

A complaint must contain enough facts to plausibly allege the required elements. Watts v. 

Fla. Int’l Univ., 495 F.3d 1289, 1295–96 (11th Cir. 2007). A pleading that offers “a formulaic 

recitation of the elements of a cause of action will not do.” Iqbal, 556 U.S. at 678 (quoting 

Twombly, 550 U.S. at 555). “[C]onclusory allegations, unwarranted deductions of facts or legal 

conclusions masquerading as facts will not prevent dismissal.” Oxford Asset Mgmt., Ltd. v. 

Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002).

C. Rule 9(b) and Private Securities Litigation Reform Act

A claim of securities fraud is subject to a “triple-layered pleading standard.” Carvelli, 934 

F.3d at 1317. To survive a motion to dismiss, a securities fraud claim brought under Rule 10b-5 

must satisfy “not only the run-of-the-mill federal notice-pleading requirements, see Federal Rule 

of Civil Procedure 8(a)(2), but also the heightened pleading standards found in Federal Rule of 

Civil Procedure 9(b) and the special fraud pleading requirements imposed by the Private Securities 

Litigation Reform Act of 1995 [(“PSLRA”)], 15 U.S.C. § 78u-4.” Id. at 1317–18. Failure to meet 

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any of the three standards will result in a complaint’s dismissal. Id. at 1318 (citing Corsello v. 

Lincare, Inc., 428 F.3d 1008, 1012 (11th Cir. 2005)).

The Eleventh Circuit has explained that Rule 9(b), in the securities fraud context, “requires 

a plaintiff to allege specifically (1) which statements or omissions were made in which documents 

or oral representations; (2) when, where, and by whom the statements were made (or, in the case 

of omissions, not made); (3) the content of the statements or omissions and how they were 

misleading; and (4) what the defendant received as a result of the fraud.” Id. at 1318 (citing 

FindWhat Inv. Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011)). 

“The PSLRA—with some overlap—requires a complaint to ‘specify each statement 

alleged to have been misleading’ and the ‘reason or reasons why the statement is misleading.’” Id.

(quoting 15 U.S.C. § 78u-4(b)(1)(B)). The PSLRA “also requires, ‘with respect to each act or 

omission alleged,’ that a complaint ‘state with particularity facts giving rise to a strong inference 

that the defendant acted with the required state of mind.’” Id. (quoting § 78u-4(b)(2)(A)). The 

Eleventh Circuit has explained that the required state of mind “is an ‘intent to defraud or severe 

recklessness on the part of the defendant.’” Id. (quoting FindWhat, 658 F.3d at 1299)). “[A] 

‘strong inference’ is one that is ‘cogent and at least as compelling as any opposing inference one 

could draw from the facts alleged.’” Id. (quoting Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 

U.S. 308, 324 (2007)). “Although scienter may be inferred from an aggregate of factual 

allegations, it must be alleged with respect to each alleged violation of the statute.” Id. (citing 

FindWhat, 658 F.3d at 1296).

D. Judicial Notice

In analyzing a motion to dismiss in a securities fraud case, the Court may consider the full 

text of documents incorporated by reference into the complaint and other documents as to which 

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the Court may take judicial notice. In re KLX, Inc. Sec. Litig., 232 F. Supp. 3d 1269, 1275 (S.D. 

Fla. 2017) (citing Tellabs, Inc., 551 U.S. at 308). Specifically, a district court may consider the 

full text of securities filings alleged to contain misstatements. Bryant v. Avado Brands, Inc., 187 

F.3d 1271, 1276–81 (11th Cir. 1999) (“After a thorough review of the relevant case law, we 

approve of the Second Circuit’s practice of judicially noticing relevant documents legally required 

by and publicly filed with the SEC at the motion to dismiss stage.”). Documents incorporated by 

reference may be considered—without necessitating the conversion of a motion to dismiss into a 

motion for summary judgment—if they are both central to a plaintiff’s claim and undisputed. Day 

v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005); see also Harris v. Ivax Corp., 182 F.3d 799, 802 

n.2 (11th Cir. 1999) (noting that the PSLRA contains a provision that directs a district court to 

consider not only “‘any statement cited in the complaint’ but also ‘any cautionary statement 

accompanying the forward-looking statement, which are [sic] not subject to material dispute, cited 

by the defendant.’ The usual rules for considering 12(b)(6) motions are thus bent to permit 

consideration of an allegedly fraudulent statement in its context” (citing PSLRA § 102(b), 15 

U.S.C. § 78u–5(e))). Here the Court considers the full contents of Carnival’s securities filings, 

press releases, and other items referenced in the Second Amended Class Action Complaint.

III. DISCUSSION 

Defendants argue that the Second Amended Class Action Complaint should be dismissed 

because it (1) fails to allege any actionable misrepresentations or omissions, Mot. at 8–22; and (2) 

fails to allege scienter, id. at 22–28.

3 These arguments are addressed in turn below. 

3

 Defendants also challenge loss causation, Mot. at 28–30, and argue that if the Second Amended 

Class Action Complaint is not dismissed, the Class Period should be shortened, id. at 30. However, 

again finding that the Second Amended Class Action Complaint fails to allege actionable 

misrepresentations or omissions made with scienter, the Court does not reach these arguments. 

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A. Misrepresentations and/or Omissions.

Defendants argue that the Second Amended Class Action Complaint “adds no allegations 

describing new safety regulations or internal protocols during the Class Period. Instead, the SAC 

adds many paragraphs elaborating on the same supposed violations of the same supposed 

regulations aboard the same vessels discussed in the prior complaint.” Id. at 8. For these reasons, 

Defendants contend that (1) the Second Amended Class Action Complaint does not adequately 

allege that Defendants’ statements affirming Carnival’s compliance with regulatory requirements 

or implementation of safety protocols were false or misleading; (2) the Second Amended Class 

Action Complaint does not adequately allege that Defendants had unique or special access to 

information regarding the risks COVID-19 posed to Carnival’s business and that Defendants failed 

to issue warnings based on such information; and (3) Plaintiffs have abandoned their theory that 

Defendants misled investors about Carnival’s commitment to passenger health and safety. Id. at 

8–22. Plaintiffs oppose each of Defendants’ arguments; maintaining that the Second Amended 

Class Action Complaint sufficiently alleges that Defendants’ statements were false. Resp. at 

15–24. 

“A misrepresentation or omission is material if, ‘in the light of the facts existing at the 

time,’ a ‘reasonable investor, in the exercise of due care, would have been misled by it.’” Carvelli, 

934 F.3d at 1317 (quoting FindWhat, 658 F.3d at 1305). “In other words, materiality depends on 

whether a ‘substantial likelihood’ exists that a ‘reasonable investor’ would have viewed a 

misrepresentation or omission as ‘significantly alter[ing] the total mix of information made 

available.’” Id. (quoting S.E.C. v. Morgan Keegan & Co., 678 F.3d 1233, 1245 (11th Cir. 2012)

(per curiam)) (internal citation and quotation marks omitted). “The question of materiality is not 

subject to a bright-line test, but instead depends on the specific circumstances of each case, 

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including the totality of information available to investors.” Id. (citing Matrixx Initiatives, Inc. v. 

Siracusano, 563 U.S. 27, 30, 37–45 (2011)). “The materiality requirement aims to strike a balance 

between protecting investors and allowing companies to distribute information without perpetual 

fear of liability—in essence, to ensure that not every minor misstatement provides litigation fodder 

for disgruntled investors.” Id. 

1. Alleged False and Misleading Statements4

Plaintiffs allege Carnival made the following material misrepresentations. See generally

SAC.

Statements from Carnival’s Website: Carnival Corporation & plc’s values are 

found in our Health, Environmental, Safety and Security Policy, which describes 

our commitments to: 1. Protecting the health, safety and security of our passengers, 

guests, employees and all others working on our behalf, thereby promoting an 

organization that always strives to be free of injuries, illness and loss. 2. Protecting 

the environment, including the marine environment in which our vessels sail and 

the communities in which we operate, striving to prevent adverse environmental 

consequences and using resources efficiently and sustainably. 3. Complying with 

or exceeding all legal and statutory requirements related to health, environment, 

safety, security and sustainability throughout our business activities. 4. Assigning 

health, environment, safety, security (HESS) and sustainability matters the same 

priority as other critical business matters. . . . Management . . . will: Ensure 

compliance with this Policy within each of Carnival’s Corporate and Operating 

Line organizations. Identify managers who are responsible for HESS and

sustainability performance and ensure that there are clear lines of accountability. 

Develop, implement and monitor effective and verifiable management systems to 

realize our HESS and sustainability commitments. Identify, document, assess and 

conduct periodic reviews of the principal HESS and sustainability risks affecting 

our business and implement practical measures to manage the identified risks 

effectively. Provide HESS and sustainability support, training, advice, and 

information, as appropriate, to passengers, guests, employees, and others working 

on behalf of the Company. Promptly report and properly investigate all HESS 

incidents and take appropriate action to prevent recurrence. The safety and security 

of our guests is our top priority. Our ships operate in full compliance with—and 

in many cases exceed—all U.S. and international safety regulations. 

SAC ¶¶ 291–92, 294.

4

 Bold and italic text reflects Plaintiffs’ emphasis in the Second Amended Class Action Complaint. 

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September 16, 2019 Press Release: With over 100 ships sailing to more than 700 

ports around the world, it’s imperative that we are thorough and diligent when it 

comes to the health, safety and security of our guests and crew, and protecting the 

environments and destinations where we operate, which are top priorities for all of 

us. 

Id. ¶ 296. 

September 26, 2019 Earnings Call: On the leadership front, we are excited to 

announce that Peter Anderson has joined us as Head of Ethics and Compliance. 

That’s a new role that is bringing together functions and people that were 

previously distributed across the corporation and complementing that with new 

talents, roles and processes to help take us to best-in-class and broad-based 

compliance. Peter, whose background is a former federal prosecutor along with a 

wide breadth of experience, including as a court-appointed monitor will report 

directly to me.

Id. ¶ 72.

January 28, 2020 2019 10-K: Our commitments to the safety and comfort of our 

guests and crew and protecting the environment are paramount to the success of 

our business. We are committed to operating a safe and reliable fleet and protecting 

the health, safety and security of our guests, employees and all others working on 

our behalf. We continue to focus on further enhancing the safety measures onboard 

all of our ships. We are dedicated to fully complying with, or exceeding, all legal 

and statutory requirements related to health, environment, safety, security and 

sustainability throughout our business. . . . [Carnival provides] regular health, 

environmental, safety and security support, training, guidance and information to 

guests, employees and others working on our behalf . . . . [Carnival has developed 

and implemented] effective and verifiable management systems to fulfill our 

health, environmental, safety, security and sustainability commitments. . . . [The 

Company reports and investigates] health, environmental, safety and security 

incidents and take[s] appropriate action to prevent recurrence. . . . We are 

committed to providing a healthy environment for all of our guests and crew. We 

collaborate with public health inspection programs throughout the world, such 

as the [CDC] in the U.S. and the SHIPSAN Project in the EU to ensure that 

development of these programs leads to enhanced health and hygiene onboard 

our ships. Through our collaborative efforts, we work with the authorities to 

develop and revise guidelines, review plans and conduct on-site inspections for 

all newbuilds and significant ship renovations. In addition, we continue to 

maintain our ships by meeting, and often exceeding, applicable public health 

guidelines and requirements, complying with inspections, reporting 

communicable illnesses and conducting regular crew training and guest education 

programs. . . . In response to the ongoing coronavirus outbreak, China has 

implemented travel restrictions. As a result, we have suspended cruise operations 

from Chinese ports between January 25th and February 4th, canceling nine 

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cruises. . . . World events impacting the ability or desire of people to travel may 

lead to a decline in demand for cruises. We may be impacted by the public’s 

concerns regarding the health, safety and security of travel, including government 

travel advisories and travel restrictions, political instability and civil unrest, and 

other general concerns. Additionally, we may be impacted by heightened 

regulations around customs and border control, travel bans to and from certain 

geographical areas, government policies increasing the difficulty of travel and 

limitations on issuing international travel visas[.]

Id. ¶¶ 301–03, 307, 309. 

January 28, 2020 Press Statement: Although the risks to our guests, crew, and 

business around the world is very low, we are closely monitoring the 

situation . . . . Our medical experts are coordinating closely with the [CDC] and 

the [WHO] to implement recommended screening, prevention and control 

measures for our ships.

Id. ¶ 298.

January 31, 2020 Press Statement: Although the risk to our guests and crew is low, 

we are closely monitoring the evolving situation with respect to Coronavirus. Our 

medical experts are coordinating closely with the [CDC] and the [WHO] to 

implement enhanced screening, prevention and control measures for our ships, 

guests and crew. 

Id. ¶ 312.

February 4, 2020 Press Statement: The safety, security, and well-being of all guests 

and crew is our absolute priority. The review of the arriving guests and crew, by 

Japanese health authorities, is standard practice after a guest tested positive for 

coronavirus and we are working closely with the local authorities to provide 

detailed records to facilitate their review. 

Id. ¶ 108.

February 12, 2020 Press Statement: Carnival Corporation & plc is closely 

monitoring the evolving situation with respect to Coronavirus. The safety of guests 

and employees, compliance and protecting the environment are top priorities for 

the company. The company’s medical experts are coordinating closely with the 

[CDC] and the [WHO] to implement enhanced screening, prevention and control 

measures for its guests, crew and ships. The company’s global team is working 

tirelessly to support guests impacted by voyage disruptions during this 

unprecedented time.

Id. ¶ 314.

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February 18, 2020 Press Statement: We have protocols, standards and practices 

for every possible issue you might imagine, including coronavirus.

Id. ¶ 315.

February 26, 2020 Definitive Proxy Statement on Schedule 14A (the “February 

2020 Proxy Statement”): The HESS Committees review and recommend policies 

relative to the protection of the environment and the health, safety and security of 

employees, contractors, guests and the public. The HESS Committees also 

supervise and monitor health, environmental, safety, security and sustainability 

policies and programs and review with management significant risks or exposures 

and actions required to minimize such risks. . . . Our HESS Committees are 

responsible for oversight of risk associated with the health, environment, safety 

and security of employees, contractors, guests and the public. . . . The HESS 

Committees and our management team review all significant risks or exposures 

and associated mitigation actions. Each of the Group Chief Executive Officers, 

each brands’ President, the Chief Maritime Officer and senior maritime 

representatives attend the meetings of the HESS Committees. In addition, 

Carnival Corporation & plc’s HESS Policy describes our commitments to: 

protecting the health, safety and security of our passengers, guests, employees and 

all others working on our behalf, thereby promoting an organization that strives to 

be free of injuries, illness and loss; . . . complying with or exceeding all legal and 

statutory requirements related to health, environment, safety, security and 

sustainability throughout our business activities; and assigning health, 

environment, safety, security and sustainability matters the same priority as other 

critical business matters.

Id. ¶¶ 317–18.

February 27, 2020 Annual Report (“2019 Annual Report”): In response to the 

ongoing coronavirus outbreak, China has implemented travel restrictions. As a 

result, we have suspended cruise operations from Chinese ports between January 

25th and February 4th, canceling nine cruises. We also expect that travel 

restrictions will result in cancellations from Chinese fly-cruise guests booked on 

cruises embarking in ports outside China. We estimate that this will impact our 

financial performance by $0.03 to $0.04 per share. If the travel restrictions in China 

continue until the end of February, we estimate that this will further impact our 

financial performance by an additional $0.05 to $0.06 per share. Five percent of 

our capacity was scheduled to be deployed in China in fiscal year 2020. If these 

travel restrictions continue for an extended period of time, they could have a 

material impact on our financial performance.

Id. ¶ 320.

February 28, 2020 Publicly Disseminated Video Featuring Chief Medical Officer:

[We have] enhanced our pre-boarding and onboard health protocols. Our 

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advanced sanitation response protocols serve as our foundational basis and 

comprehensive practice, developed in conjunction with the U.S. CDC, and several 

other health authorities. . . . In light of the global spread of coronavirus or 

COVID-19, we are also taking extra precautions. . . . [A]ll guests will be required 

to go through thermal screening and/or be checked with non-contact 

thermometers in many of our embarkation ports to detect signs of fever. Our crew 

members are also being screened and providing us a clean bill of health before they 

are permitted to embark the ship. . . . [G]iven the global spread of COVID-19, we 

have implemented even more measures to prevent the spread of disease onboard. 

These include distribution of personal hand sanitizer to each guest onboard. . . . We 

have enhanced sanitation protocols for all staterooms and high-traffic public 

areas, with more frequent disinfection being applied. As part of our standard 

cleaning protocols, we routinely use a disinfectant that kills coronavirus within 

30 seconds. 

Id. ¶¶ 322–23.

March 13, 2020 Press Statement: [W]e have implemented higher and higher levels 

of screening, monitoring and sanitation protocols to protect the health and safety 

of our guests, crew and the communities we serve. . . . Carnival has not had a 

diagnosed case linked to our operation.

Id. ¶ 325. 

March 18, 2020 Press Statement: [N]umber one, our highest responsibility and our 

top priorities are compliance, environmental protection, and the health, safety, and 

well-being of our guests. . . . [N]o ship inherently has any virus or illness on it, 

it’s obviously people and so whatever happened on the ships originally came in 

from people coming on the ship and so what we’ve done is we have great protocols 

already. We’ve enhanced those protocols, we’re working very closely with the 

[CDC] and the [WHO] and other global medical experts to make certain. We have 

a long history of effectively managing and containing spreads of illnesses on the 

ships themselves, we’ve been set up for that, we have medical facilities on the ships 

who identify early, we pre-screen before people come on the ships, and then we can 

show the facts on the actual number of cases of confirmed COVID, and there’s no 

evidence whatsoever that community spread was dramatically enhanced by 

people going on cruise ships. . . . In fact, if you think about a cruise ship, just for 

a second, if you think about a cruise ship and you compare it to other forms of 

travel, we do temperature screenings, we do medical records, you don’t do that 

when you go to a movie theater or get on a train or you’re in an airport terminal or 

subway terminal. We have much more natural social distancing, often people 

who haven’t cruised think of cruises as these congested places. You know that 

there’s much more space and social distancing than normally happens on a 

cruise.

Id. ¶ 328. 

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March 22, 2020 Press Statement: If you look at the actual number of cases, you 

know cruise ships are not a source for coronavirus. We have hundreds of cruise 

ships out there, very few had cases on them. The one that had the most cases was 

very early on when no one understood hardly anything. . . . But a cruise ship is 

not a theater. It is not an arena. It’s more like Central Park. There’s lots of 

natural social distancing, the ships are large. People are not always gathered 

and clumped together. . . . We identify, people get sick, there’s a medical clinic 

onboard, we isolate, OK, and so in effect, you control the spread, whereas when 

you’re in a restaurant or you’re in a public library, in a school, that does not happen. 

So all I’m suggesting is a cruise ship is not a riskier environment, people perceive 

it that way, but the reality is it’s not. 

Id. ¶ 329. 

March 24, 2020 Website Statement: Carnival Cruise Line’s highest responsibilities 

include the health and safety of our guests and crew. Coronavirus is a fluid 

situation, and we continue to work closely with public health experts and the Cruise 

Lines International Association (CLIA), to monitor, screen and implement best 

practices to protect the health of our guests and crew as it relates to COVID-19 

(coronavirus). Our monitoring, screening and operational protocols are designed 

to be flexible so that we can effectively adapt to changes as they occur.

Id. ¶ 331. 

2. Carnival’s Statements Affirming Compliance with Regulatory Requirements

and/or Implementation of Safety Protocols Were Not False or Misleading.

Defendants argue that the Second Amended Class Action Complaint again fails to 

adequately allege Defendants’ statements affirming Carnival’s compliance with relevant 

regulatory requirements or implementation of safety protocols were false or misleading. Mot. at 8. 

Specifically, Defendants contend that (1) Plaintiffs fail to allege that Carnival violated CDC 

requirements; (2) Plaintiffs fail to allege that Carnival violated its own internal policies; and 

(3) Carnival’s statements affirming regulatory compliance are not actionable. Id. at 8–18. 

Plaintiffs argue that the Second Amended Class Action Complaint (1) “identifies the 

guidelines Carnival claimed to comply with (or exceed) on its ships, including its own internal 

protocols and the ILI and COVID-19 Guidance”; (2) alleges with particularity Defendants’ 

non-compliance with the stated guidelines; (3) demonstrates Carnival’s non-compliance with its 

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own health and safety protocols, “including the purportedly ‘enhanced’ measures it implemented 

in response to COVID-19[, which also demonstrates] Carnival’s failure to comply with these 

standards even before the COVID-19 pandemic”; and (4) cures any deficiencies in the 

Consolidated Complaint regarding the actionability of Carnival’s misrepresentations about its 

“commitments” to passenger health and safety. Resp. at 15–18.

a. Plaintiffs Fail to Adequately Allege Violations of CDC Guidance.

Defendants argue that, as an initial matter, the COVID-19 and ILI Guidance cited by 

Plaintiffs “were not binding regulations that could be ‘violated.’”5 Mot. at 8–9. Next, Defendants

assert that Plaintiffs’ arguments regarding Carnival’s failure to (1) require social distancing aboard 

cruises or when disembarking, (2) provide and require the proper use of PPE by its passengers and 

crew aboard cruises or when disembarking, (3) implement “enhanced” cleaning measures, (4) 

cease onboard activities and shore excursions, (5) perform adequate pre-boarding temperature 

checks and screenings, (6) offer refunds to customers, and (7) carry sufficient medical supplies 

onboard its ships were previously raised in the Consolidated Complaint and rejected by the Court 

in its May 28, 2021 Order, and that the Second Amended Class Action Complaint fails to cure any 

of the prior complaint’s deficiencies. Id. at 8–15.

Plaintiffs argue in response that (1) “Defendants’ contention that the ILI and COVID-19 

Guidance did not apply to 5 of the 8 ships alleged in the SAC” is inapposite because Carnival 

“assured investors that [its] ships complied with ‘all U.S. and international safety regulations,’” 

5

 Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not 

subject to reasonable dispute because . . . it can be accurately and readily determined from sources 

whose accuracy cannot be reasonably questioned.” Fed. R. Evid. 201(b)(2). Here, the Court finds 

it prudent to judicially notice guidance—specifically, the CDC’s ILI and COVID-19 

Guidance—that Plaintiffs reference and excerpt in the Second Amended Class Action Complaint, 

and that Defendants attach to their Motion. See (ECF Nos. 79-2, 79-3); see also McClain v. 

Iradimed Corp., 111 F. Supp. 3d 1293, 1299–30 & n.6 (S.D. Fla. 2015). 

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see Resp. at 16 n.4; and (2) the Second Amended Class Action Complaint (a) identifies the 

guidelines Carnival claimed to comply with or exceed with particularity, (b) identifies the specific 

actions Carnival did not take pursuant to the guidelines, and (c) alleges with particularity 

Carnival’s non-compliance with the guidelines, id. at 16–17.

To begin, the Second Amended Class Action Complaint alleges violations of the same two 

non-binding regulations as Plaintiffs’ previous complaint: the ILI Guidance and the COVID-19 

Guidance. Compare SAC ¶¶ 17, 123, 229, 305, 316, 324 (alleging various violations of the CDC’s 

ILI and COVID-19 Guidance, with Consolidated Compl. ¶¶ 140, 225, 247, 250 (same). Plaintiffs’ 

argument that the binding effect of the CDC’s Guidance on the Diamond Princess, Westerdam, 

Coral Princess, Zaandam, and Ruby Princess is irrelevant because Carnival “assured investors 

that [its] ships complied with ‘all U.S. and international safety regulations’” is not a compelling

one.

6

 Resp. at 16 n.4; but see (ECF No. 79-3) at 2 (“This document provides guidance for ships 

originating from, or stopping in, the United States[.]”) (emphasis added). Such an argument 

requires the Court to read Defendants’ statements to mean that all of Carnival’s ships comply with 

“every single jurisdiction’s unique (and sometimes conflicting) rules.” Reply at 6. That is not a 

practical reading of Defendants’ statements. A more reasonable interpretation is that Carnival’s 

ships comply with the relevant regulations of the jurisdictions in which they operate. Nor do

Plaintiffs specifically allege in the Second Amended Class Action Complaint that Defendants 

assured investors that all of its ships worldwide complied with the CDC’s non-binding Guidance. 

Id.; see generally SAC.

6

 The actionability of such general statements is discussed in further detail below. See infra

III.A.2.c.

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Additionally, despite Plaintiffs’ arguments to the contrary, the Second Amended Class 

Action Complaint does not adequately plead violations of the then-existing CDC 

regulations—even if those regulations had applied to all eight of the ships specified. For example, 

Plaintiffs state that Carnival violated the CDC’s Guidance by failing to provide PPE to all 

passengers and crew or to require social distancing of those on board. SAC ¶¶ 123, 215, 305; 

Resp. at 17. But the guidance at that time did not require, or even recommend, the masking and 

distancing of healthy passengers. (ECF No. 79-3) at 3–4 (recommending that “the sick person

wear a facemask before leaving their cabin” and “passengers and crew who are suspected of 

having 2019-nCOV infection [isolate] in their cabins . . . until symptoms are improved”)

(emphasis added). 

In their Response, Plaintiffs do not cite to any allegations from the Second Amended Class 

Action Complaint that sick or exposed passengers and crew failed to isolate or wear masks and 

socially distance when outside their cabins. Resp. at 5,7 (citing SAC ¶¶ 106–07, 156, 166, 180, 

190, 192, 205, 223–24). Moreover, the Second Amended Class Action Complaint alleges that 

Carnival instituted a ship-wide quarantines on several ships, which actually exceeded the CDC 

Guidance in place in the Spring of 2020. SAC ¶¶ 166, 181, 207, 225–27, 244 (noting the 

imposition of ship-wide quarantines on the Grand Princess, Costa Luminosa, Coral Princess, and

Zandaam). 

Plaintiffs also allege that Carnival violated CDC Guidance by failing to maintain an 

adequate stockpile of PPE and medical supplies. SAC ¶¶ 185, 209, 225, 244; Resp. at 17. But, 

again, the Guidance only recommended that ships maintain a “sufficient” stock of PPE and medical 

supplies for their “day-to-day needs,” (ECF No. 79-2) at 6; (ECF No. 79-3) at 8, and the Second 

Amended Class Action Complaint alleges that Carnival acted to restock its ships when supplies 

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began running low. SAC ¶¶ 209, 225, 244. Therefore, Carnival’s actions as alleged did in fact

comply with the CDC’s Guidance. See (ECF No. 79-3) at 8 (“Have contingency plans for rapid 

resupply during outbreaks.”). 

The foregoing are just two (of several) examples of Plaintiffs’ (1) conclusory allegations 

of regulatory violations where none exist and (2) contradicting themselves—as well as the 

judicially noticed CDC Guidance—within the Second Amended Class Action Complaint. See 

Campos v. INS, 32 F. Supp. 2d 1337, 1343 (S.D. Fla. 1998) (concluding that a court reviewing a 

motion to dismiss “need not accept factual claims that are internally inconsistent, facts which run 

counter to facts of which the court can take judicial notice, conclusory allegations, unwarranted 

deductions, or mere legal conclusions asserted by a party”). Consequently, Plaintiffs’ allegations 

related to Defendants’ supposed noncompliance with the then-existing CDC Guidance do not meet 

the heightened pleading standard required for securities fraud claims. Carvelli, 934 F.3d at 

1317–18 (describing a triple-layered pleading standard for claims brought under Rule 10b-5 and 

noting that “[f]ailure to meet any of the three standards will result in a complaint’s dismissal”).

In sum, Plaintiffs’ addition of seventy-seven (77) paragraphs’ worth of “detailed 

allegations” purportedly “demonstrating that Carnival was not in compliance with the relevant 

public health guidelines” in the Second Amended Class Action Complaint do not solve the 

underlying and incurable issues with the previous complaint. See Resp. at 8; see also Order at 28 

(“The Consolidated Complaint suggests that far more stringent requirements should have been in 

effect ship-wide than existed in real time.”). Instead, Plaintiffs continue to (1) allege violations of 

regulations not binding on or applicable to five of the eight ships mentioned; (2) allege violations 

of rules and protocols that were not in place at the early stages of the COVID-19 pandemic; or

(3) inadequately plead violations of the then-existing guidance. See generally SAC. 

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Accordingly, for the foregoing reasons, as well as those previously stated in the Court’s 

prior Order, Carnival’s statements regarding its compliance with the CDC’s Guidance were not 

false or misleading. See Order at 27–28.

b. Plaintiffs Fail to Adequately Allege Violations of Internal Protocols or 

Policies.

Defendants next argue that Carnival’s conduct in early 2020 did not violate any internal 

Carnival policies, and thus their statements regarding Carnival’s implementation of enhanced 

screening and sanitation protocols in February and March of 2020 were not misrepresentations. 

Mot. at 15 (citing SAC ¶¶ 315, 322, 323, 325. Defendants also maintain that the Second Amended 

Class Action Complaint’s new allegations attributed to FE3 are similarly not actionable because 

they constitute his personal beliefs “in hindsight” and not first-hand observations. Id. at 16. 

Additionally, Defendants argue that Plaintiffs’ remaining allegations concerning Carnival’s

internal policies, goals, and initiatives are (1) recycled from the prior complaint and (2) not 

misleading. Id. at 16–17. 

Plaintiffs argue in their Response that the Second Amended Class Action Complaint 

sufficiently demonstrates Carnival’s noncompliance with its own health and safety protocols, 

“including the purportedly ‘enhanced’ measures it implemented in response to COVID-19.”7

 

7

 Plaintiffs fail to specifically respond to Defendants’ arguments that (1) Plaintiffs’ allegations 

pertaining to Carnival’s enhanced screening measures are inadequate, and (2) Defendants’ 

statements regarding the existence of the HESS Committee and Carnival’s medical experts 

coordinating with the CDC and WHO are not misleading. See Resp. at 15–24; see also Mot. at 

15–17. As a result, the Court deems these points forfeited by Plaintiffs and only addresses 

Plaintiffs’ arguments regarding enhanced sanitation measures. See Melford v. Kahane & Assocs., 

371 F. Supp. 3d 1116, 1126 (S.D. Fla. 2019) (“[A] ‘litigant who fails to press a point by supporting 

it with pertinent authority, or by showing why it is sound despite a lack of supporting authority or 

in the face of contrary authority, forfeits the point. The court will not do his research for 

him.” (citing Phillips v. Hillcrest Medical Center, 244 F.3d 790, 800 n.10 (10th Cir. 2001)).

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Resp. at 17. Specifically, Plaintiffs assert that Carnival failed to (1) disinfect, sanitize, or 

decontaminate the Coral Princess before boarding began on March 5, 2020, (2) clean or sanitize 

the Ecstasy; (3) provide hand sanitizer to Zaandam passengers or undertake increased cleaning 

measures on that ship; and (4) sanitize Costa Luminosa before boarding passengers on March 5, 

2020, despite a passenger from the previous voyage being evacuated with COVID-19 symptoms. 

Id. (citing SAC ¶¶ 196, 213, 215, 244, and 175). Additionally, Plaintiffs argue that their new 

allegations regarding FE3 addresses the Court’s earlier ruling by alleging that “Carnival had “no 

protocols or policies . . . in place to deal with COVID” despite its statements to the contrary.8 Id.

at 21 (citing SAC ¶ 132).

In reply, Defendants maintain that (1) as a threshold matter, Plaintiffs’ allegations fail 

because they do not explain what, exactly, the ‘enhanced’ cleaning protocols entailed;

9 and (2) 

Plaintiffs’ allegations that certain vessels were “not cleaned or sanitized” at all “strain credulity, 

cite no authority, and once again lack the ‘specificity’ required by Rule 9(b) and the PSLRA.” 

Reply at 10. Defendants also argue that Plaintiffs (1) do not describe what FE3’s personal 

involvement in Carnival’s COVID response entailed; (2) fail to allege what FE3 observed about 

Carnival’s cleaning protocols and why they were inadequate; (3) rely on FE3’s criticisms, which 

“reflect hindsight bias, and not firsthand knowledge.” Id. at 13.

As an initial matter, the Court cannot and does not weigh the credibility of Plaintiffs’ 

allegations—it must generally accept as true factual allegations contained in the Second Amended 

8

 Plaintiffs raise this argument in a section of their Response addressing Defendants’ materially 

false and misleading statements about COVID-19’s impact on Carnival. Resp. 18–24. However, 

the Court finds it is more appropriately addressed here given Defendants’ arguments in their 

Motion. See Mot. at 16. 

9

 The Court discusses the actionability of these statements below. See infra III.A.2.c.

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Class Action Complaint. See Fernandez, 2009 WL 10668267, at *1. However, as noted 

previously, a court reviewing a motion to dismiss “need not accept factual claims that are internally 

inconsistent, facts which run counter to facts of which the court can take judicial notice, conclusory 

allegations, unwarranted deductions, or mere legal conclusions asserted by a party.” Campos, 32 

F. Supp. 2d at 1343. 

With that in mind, the Court finds that Plaintiffs have failed to adequately allege violations 

of Carnival’s internal safety protocols. First, the Second Amended Class Action Complaint is 

internally inconsistent as to Carnival’s enhanced sanitation measures. For instance, Plaintiffs 

initially allege that the Carnival failed to “undertake additional cleaning measures on Zaadam,” 

SAC ¶ 229, but later allege that a Zaadam “passenger reported that he did not notice crew members 

taking any additional cleaning measures until two weeks later,” id. ¶ 244 (emphasis added). 

Additionally, Plaintiffs allege elsewhere that Carnival did increase sanitation efforts. See id. ¶¶ 

163–64 (“The following day, Carnival increased its sanitary precautions on the Grand 

Princess . . . [and] noted ‘As a precaution, we are also conducting additional enhanced 

environmental disinfection onboard in addition to our regular stringent cleaning and sanitation 

protocols.’”).

Next, the allegations regarding enhanced cleaning protocols that are not contradictory lack 

the requisite specificity for securities fraud claims. Plaintiffs’ Costa Luminosa and Coral Princess 

allegations simply allege that Carnival failed to sanitize or “professionally clean” the two ships 

before passengers boarded. See id. ¶ 175 (alleging that “no efforts were made to sanitize or 

otherwise professionally clean the [Costa Luminosa]” before Carnival allowed new passengers 

aboard); id. ¶ 196 (“Carnival also did not take measures to disinfect, sanitize, or otherwise 

decontaminate the Coral Princess ship before boarding began on March 5, 2020[.]”). However, 

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Carnival’s statements regarding its “enhanced” sanitation protocols did not state (1) what those 

protocols entailed or (2) when they would occur. Id. ¶ 323 (“We have enhanced sanitation 

protocols for all staterooms and high-traffic public areas, with more frequent disinfection being 

applied. As part of our standard cleaning protocols, we routinely use a disinfectant that kills 

coronavirus within 30 seconds.”). 

Additionally, passengers aboard the Ecstasy “reporting” that the ship was not cleaned or 

sanitized is similarly unspecific. Id. ¶¶ 213, 215 (alleging that “passengers reported that the ship 

was not cleaned or sanitized[, which] flew in the face of the CDC’s COVID-19 Guidance”). 

Plaintiffs’ allegation that passengers aboard the Zaandam stated that Carnival’s extra precautions, 

including giving out hand sanitizer, were not “evident” is also insufficient. Id. ¶ 244. Regardless 

of whether Carnival’s vague statements are even actionable, which is discussed below, these 

allegations in the Second Amended Class Action Complaint fail to specifically allege that Carnival 

did not implement enhanced cleaning protocols. See Carvelli, 934 F.3d at 1317–18 (describing a 

triple-layered pleading standard for claims brought under Rule 10b-5 and noting that “[f]ailure to 

meet any of the three standards will result in a complaint’s dismissal”); see also Hartel v. GEO 

Group, Inc., Case No. 20-81063-CIV-SMITH, 2021 WL 4397841, at *11 (S.D. Fla. Sept. 23, 

2021) (finding that the plaintiffs failed to allege facts demonstrating that the defendant’s statements 

about “deploy[ing] specialized sanitation teams to sterilize high-contact areas of its facilities or 

develop intensive schedules and procedures for the cleaning and disinfecting of facility spaces” 

were false).

Further, the Second Amended Class Action Complaint’s new allegations attributable to

FE3, who was “involved in mediating the COVID-19 outbreaks on board the Diamond Princess

and other Carnival ships in early February,” do not cure the deficiencies of the prior complaint.

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SAC ¶ 125; see Order at 23 (“Plaintiffs fail to show with any specificity that enhanced cleaning 

measures were not conducted”). Plaintiffs—through FE3—allege that Carnival had “no protocols 

or policies . . . in place to deal with COVID.” Id. ¶ 132. However, as Defendants point out, the 

Second Amended Class Action Complaint does not (1) describe what role FE3 as a Program 

Manager actually played in Carnival’s COVID response, other than that he was pulled into daily 

meetings in early February, or (2) “allege what (if anything) FE3 observed about Carnival’s 

cleaning protocols, nor why they were purportedly inadequate.” Reply at 13. 

While Plaintiffs have generally described a basis for FE3’s knowledge, the Court 

nonetheless finds FE3’s allegations insufficient to establish the absence of COVID-19 protocols 

at Carnival. See Miyahira v. Vitacost.com, Inc., Case No. 10-80644-CIV-RYSKAMP/VITUNAC, 

2011 WL 13136262, at *5 (S.D. Fla. Dec. 8, 2011) (“The Eleventh Circuit requires a plaintiff to 

provide the basis of a confidential witness’s knowledge, including (1) the position(s) held, (2) the 

proximity to the offending conduct, and (3) relevant time frame. The particularity of the 

allegations informs the Court of the weight to afford the allegations contained in confidential 

witness statements.”) (citing Mizarro v. Home Depot, Inc., 544 F.3d 1230, 1239–40 (11th Cir. 

2008) (internal citations omitted)). 

The Second Amended Class Action Complaint does not sufficiently allege facts that 

qualify FE3 to opine on the existence—or adequacy and effectiveness—of Carnival’s sanitation

protocols. Id. at *12 (“Because the amended complaint does not provide sufficient details to impart 

the necessary indicia of reliability to these confidential witnesses’ accounts, these confidential 

witnesses’ accounts are insufficient to establish [the existence of the alleged problems].”). For 

example, FE3 “did not believe that Carnival had an outline it could follow” during a pandemic. 

SAC ¶ 132 (emphasis added). This allegation states FE3’s personal and unsubstantiated belief, 

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not a fact based on personal knowledge. Furthermore, FE3’s conclusory allegation—with the 

added benefit of hindsight—that “any protocols that existed on board Carnival’s ships were ‘not 

sufficient enough to deal with a pandemic, otherwise we wouldn’t have had to go through what 

we did’” is nothing more than a subjective generalization. See Miyahira, 2011 WL 13136262, at 

*5 (“A pleading is insufficient when the allegations are based on ‘subjective generalizations’ or 

‘tales from the trenches’ by confidential witnesses.”). And, last, FE3’s allegation that Carnival 

had “no protocols or policies . . . in place to deal with COVID,” SAC ¶ 132, are contradicted by 

Plaintiffs’ allegations elsewhere in the Second Amended Class Action Complaint, id. ¶¶ 163–64 

(stating the Grand Princess “increased its sanitary precautions,” conducted “enhanced 

environmental disinfection,” “cancelled large gatherings,” and instituted a ship-wide quarantine in 

response to a former passenger testing positive for COVID-19).

For the reasons above, Plaintiffs again fail to show with any specificity that enhanced 

cleaning measures were not conducted. See Order at 23. That Carnival’s safety protocols “would 

not ultimately prove to be effective to combat the coronavirus” is “hindsight knowledge [that] 

cannot be used to assert securities fraud.”). See id. at 22. Therefore, Plaintiffs’ Second Amended 

Class Action Complaint fails to sufficiently allege that Defendants violated any internal protocols 

or policies, or that their statements regarding “enhanced” sanitation measures were false or 

misleading. See generally SAC. 

c. Carnival’s Statements Affirming Regulatory Compliance and Internal

Protocols Are Not Actionable.

Finally, Defendants argue that “[e]ven if the new allegations did describe conduct that 

violated a regulatory requirement (or a CDC ‘recommendation’), they would not render Carnival’s 

statements about regulatory compliance actionable” based on the Second Circuit’s opinion in 

Singh v. Cigna Corporation, which wassubsequently adopted by the Eleventh Circuit. Id. at 17–18

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(citing Singh v. Cigna Corporation, 918 F.3d 57 (2d Cir. 2019); Carvelli v. Ocwen Fin. Corp., 934 

F.3d 1307, 1320–22 (11th Cir. 2019)).

Plaintiffs contend in their Response that “[s]tatements about a company’s compliance with 

guidelines and protocols are actionable where defendants did not comply with those standards,” 

regardless of whether the regulations are “binding.” Resp. at 15–16 (citing In re Equifax Inc. Sec. 

Litig., 357 F. Supp. 3d 1189, 1227–29 (N.D. Ga. 2019)). Plaintiffs also argue that Carnival’s 

affirmation of its compliance with internal policies are actionable. Id. at 16.

In reply, Defendants argue that Plaintiffs appear to concede that Carnival’s generic 

statements about regulatory compliance are not actionable under Singh and Carvelli. See Reply at 

11. Similarly, Defendants assert that vague statements about enhanced sanitation protocols are 

inactionable. Id. at 10. Additionally, Defendants reiterate that “[e]ven if Plaintiffs did identify a 

few isolated instances of regulatory noncompliance—and they do not—it would not render any of 

Defendants’ statements misleading. As Plaintiffs’ own cases show, only allegations of systemic 

noncompliance, including regulatory determinations of noncompliance, are sufficient to state a 

claim.” Id. at 6–11 (citing In re Equifax Inc. Sec. Litig., 357 F. Supp. 3d at 1221). 

Plaintiffs identify several of Defendants’ statements in the Second Amended Class Action 

Complaint that they allege are false and misleading. SAC ¶¶ 290–332. Examples of these 

statements include: (1) “Carnival Corporation & plc’s values are found in our Health, 

Environmental, Safety and Security Policy, which describes our commitments to . . . [c]omplying 

with or exceeding all legal and statutory requirements related to health, environment, safety, 

security[,]” id. ¶ 291; (2) “Our medical experts are coordinating closely with the U.S. Centers for 

Disease Control and Prevention (CDC) and the World Health Organization (WHO) to implement 

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enhanced screening, prevention and control measures for our ships, guests and crew[,]” id. ¶ 312; 

and (3) “We have enhanced our pre-boarding and onboard health protocols[,]” id. ¶ 322.

However, Defendants’ commitments to regulatory compliance and statements regarding 

“enhanced” safety measures fall squarely within the definition of “puffery” elucidated by the 

Eleventh Circuit in Carvelli: “generalized, vague, nonquantifiable statements of corporate 

optimism.” 934 F.3d at 1318–20 (noting that other federal appellate courts have recently deemed 

puffery in the securities fraud context to include “proclamations that a company ‘expects to 

continue to allocate significant resources’ to regulatory compliance, ‘generalized statements about 

a company’s transparency, quality, and responsibility,’ and a description of company products as 

being ‘unmatched’ in ‘reliability, quality and connectivity’”); Norwegian Cruise Lines, 2021 WL 

1378296, at *6–7 (finding that a cruise line defendant’s statements that employees “comply with 

all applicable laws and regulations” and that company had “taken several proactive measures to 

protect the health and safety of its guests and crew” during the COVID-19 pandemic were vague, 

corporate puffery, and not actionable). 

Further, the Court agrees with Defendants that this case is distinguishable from those cited 

by Plaintiffs because, here, the Second Amended Class Action Complaint does not adequately 

allege that such violations were “systemic.” See Reply at 11; see also In re Equifax Inc. Securities 

Litigation, 357 F. Supp. 3d at 1228–29. Plaintiffs’ argument that “the COVID-19 outbreaks on its 

ships, coupled with Carnival’s widespread non-compliance with health and safety guidelines” 

demonstrate that it failed to comply with regulatory requirements even before the COVID-19 

pandemic” is not compelling. Resp. at 18 (citing SAC ¶¶ 55, 66, 244). 

Only one of the paragraphs cited in Plaintiffs’ Response attempts to lay out Carnival’s 

purported widespread noncompliance with health regulations. See SAC ¶ 55. Therein, Plaintiffs 

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allege in a conclusory fashion that “Carnival has routinely failed to adequately contain outbreaks 

of ILI and other infectious diseases on its ships.” Id. In support, Plaintiffs state that (1) in the 

three years leading up to the Class Period, Carnival reported to the CDC sixteen (16) outbreaks of 

viral illnesses on its ships ranging from norovirus to E. coli; (2) “[i]n 2019, half of the 

CDC-identified outbreaks of ILI aboard cruise ships occurred on Carnival-owned ships”; and (3)

in July 2019, the CDC gave Carnival’s Fantasy—a ship not named anywhere else in the Second 

Amended Class Action Complaint—“one of the worst sanitation ratings in the Company’s 

history—an ‘unsatisfactory’ 77 out of 100 possible points.” Id. None of these allegations is 

sufficient to support the widespread regulatory noncompliance Plaintiffs allege. 

Here, the Second Amended Class Action Complaint fails to allege Carnival’s “systemic 

organizational disregard for” health and safety guidelines with the requisite specificity. Id.; Resp. 

at 18; SAC ¶ 55. Unlike the defendant in In re Ocwen Fin. Corp. Sec. Litig., Plaintiffs do not 

allege any enforcement action taken by the CDC in response to Carnival’s purported violations. 

No. 14-81057-CIV-WPD, 2015 WL 12780961, at *3 (S.D. Fla. Dec. 22, 2015) (referring to new 

allegations in the plaintiff’s amended complaint regarding consent orders entered into by the 

defendants with regulators). 

That Carnival had sixteen (16) “outbreaks” in a three-year period with a fleet of over 100 

ships, does not suggest widespread regulatory noncompliance—particularly when the Second 

Amended Class Action Complaint does not provide the number of outbreaks Carnival’s 

competitors had over the same time period for context. SAC ¶ 55. For instance, in In re Equifax 

Inc. Securities Litigation, upon which Plaintiffs rely in their Response, the court found that even 

if Equifax’s statements conveyed that it made an effort to comply with data security laws, 

regulations, and standards, “they would still be false or misleading. A reasonable investor would 

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understand these statements to assure that the company was making actual, good faith efforts to 

maintain a data security protocol that complied with these standards. The state of Equifax’s 

cybersecurity reflected a ‘systemic organizational disregard for cybersecurity.’” 357 F. Supp. 3d 

at 1228 (citing to allegations in the plaintiffs’ amended complaint) (emphasis added). 

The Second Amended Class Action Complaint does not adequately allege a “systemic 

organizational disregard for [compliance].” Id. For similar reasons, Plaintiffs’ allegations that in 

2019 Carnival had half of the CDC-identified outbreaks in 2019 and the Fantasy received a 

sanitation rating of 77 out of 100 are also insufficient to allege widespread health and safety 

noncompliance. Id. 

And, to the extent Defendants’ statements regarding the distribution of hand sanitizer to 

passengers as an enhanced sanitation measure were misleading, the Court finds them immaterial 

and inactionable because “the alleged [misrepresentations are] ‘so obviously unimportant to a 

reasonable investor that reasonable minds could not differ on the question of their importance.’” 

Luczak v. Nat’l Beverage Corp., 812 F. App’x 915, 924 (11th Cir. 2020); see also Carvelli, 934 

F.3d at 1317 (“A misrepresentation or omission is material if, ‘in the light of the facts existing at 

the time,’ a ‘reasonable investor, in the exercise of due care, would have been misled by it.’” 

(quoting FindWhat, 658 F.3d at 1305)). A reasonable investor would not view this 

“misrepresentation . . . as ‘significantly alter[ing] the total mix of information made available.’” 

Carvelli, 934 F.3d at 1317 (quoting Morgan Keegan & Co., 678 F.3d at 1245). This finding 

“strike[s the] balance between protecting investors and allowing companies to distribute 

information without perpetual fear of liability” described by the Eleventh Circuit in Carvelli. See

id. (“The question of materiality is not subject to a bright-line test, but instead depends on the 

specific circumstances of each case, including the totality of information available to investors.”). 

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Accordingly, Carnival’s statements affirming its compliance with regulatory guidance and 

internal protocols and policies are not actionable.

3. Carnival Did Not Fail to Warn of the Risks of COVID-19.

a. Defendants’ January 2020 Statements

Defendants argue that “[t]he SAC identifies no new misleading statements or omissions in 

January 2020.” Mot. at 19. Specifically, Defendants contend that (1) Plaintiffs’ recycled 

allegation that Carnival’s 2019 10-K was misleading because it failed to disclose the likely impact 

of COVID-19 on the Company’s business and passengers has already been rejected, and Plaintiffs’ 

new allegation that the 2019 10-K violated Item 10510 is redundant; (2) Plaintiffs repeat their 

allegation that Carnival misled investors when it purportedly told the press in January 2020 that 

the risks of COVID-19 to its guests, crew, and global business were “low,” which the Court did 

not find persuasive in its prior Order; (3) Plaintiffs’ repeated allegation regarding FE1’s need to 

find new suppliers due to the situation in China was previously rejected as insignificant, and FE1’s 

recollection “that a single unspecified and undated fulfillment order from Italy did not arrive 

because of a COVID-19 shutdown” is just as insignificant; (4) Plaintiffs reraise their previously 

rejected allegation—nearly verbatim—that Defendants “uniquely underst[ood] the gravity of 

COVID-19 even before the WHO and United States government declared the outbreak a public 

health emergency,” because Padgett spoke to a battery manufacturer in Wuhan; and (5) Plaintiffs 

reallege that various travel bulletins and guidance undermine Carnival’s January 2020 statements, 

but these documents should be rejected again. Mot. at 19–20.

10 Regulation S-K provides that “[w]here appropriate, provide under the caption ‘Risk Factors’ a 

discussion of the material factors that make an investment in the registrant or offering speculative 

or risky.” 17 C.F.R. § 229.105 (“Item 105 Risk Factors”).

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In their Response, Plaintiffs assert that the Second Amended Class Action Complaint (1) 

alleges that Defendants were in possession of material information in January 2020 that 

contradicted their public representations downplaying the risks of COVID-19, Resp. at 18–19 

(citing SAC ¶¶ 40, 45, 87, 89); (2) adds allegations further corroborating that Carnival had unique, 

early insight into the scale and severity of the global COVID-19 crisis, especially the risks it posed 

to its business, id. at 19; and (3) expressly alleges a claim that the Court did not previously 

consider—namely, that Defendants failed to include a COVID-19 risk factor in Carnival’s 2019 

10-K in violation of Regulation S-K, Item 105, id. at 20 (citing SAC ¶ 311), the omission of which 

also made the “Risk Factors” section of Carnival’s 2019 10-K misleading, id. at 20–21. 

Defendants argue in reply that “Plaintiffs (once again) ignore the fact that the Court relied 

on ‘the COVID-19 specific warnings provided in Carnival’s 2019 10-K’ in dismissing the prior 

complaint.” Reply at 12. Defendants reiterate that Plaintiffs’ allegations about passenger 

demographics and European Union guidance are recycled verbatim from the prior complaint and 

should again be rejected. Id. at 12–13.

As an initial matter, after a review of the Second Amended Class Action Complaint and 

determining the allegations to be exactly—or nearly—identical to those in the prior complaint, the 

Court does not find it a prudent or efficient use of judicial resources to reexamine in depth each 

allegation that has already been considered and found lacking. Compare SAC ¶¶ 40, 45, 84–87, 

89, 298–311, with Consolidated Compl. ¶¶ 37, 42, 80–81, 94–96, 218–31; see generally (ECF No. 

79-4) (showing the changes between the Second Amended Class Action Complaint and the 

Consolidated Class Action Complaint). Plaintiffs’ added allegations related to the information 

Defendants supposedly possessed in January 2020 do not cure the deficiencies previously found 

in the Consolidated Class Action Complaint. 

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For instance, FE1’s new recollection that one of Carnival’s Singaporean brokers 

“specifically cited the spread of COVID-19 as the reason for manufacturing slowing down” across 

Asia does not now render Plaintiffs’ allegation significant—especially since FE1 only worked for 

Carnival from February 2020 to May 2020. SAC ¶ 89. Nor does an undated non-delivery of an 

order from Italy. Id. Therefore, the Court adopts by reference the analysis and conclusions from 

its prior Order regarding Defendants’ January 2020 statements. See Order at 17–20. 

Moreover, Plaintiffs’ new argument that Carnival’s failure to warn about the risks from 

COVID-19 in its 2019 10-K violated Item 105 and rendered its other risk disclosures misleading 

is not compelling. Resp. at 20 (citing SAC ¶ 311). As the Court previously found, “[i]n January 

2020, pre-pandemic life was mostly unchanged with no travel restrictions, other than perhaps 

travel to and from China.” Order at 33. Despite their new allegations, Plaintiffs have not 

adequately pled that Defendants had knowledge of material information in January 2020 such that 

a failure to include a “specific COVID-19 risk factor” violated Item 105 or made the 2019 10-K 

misleading. 

Thus, the Court again finds that the COVID-19 specific warnings provided in Carnival’s 

2019 10-K were sufficient. See SAC ¶¶ 301–03, 307, 309 (alerting investors of suspended cruise 

operations from Chinese ports which resulted in the cancellation of nine cruises, and cautioning 

that “[w]orld events impacting the ability or desire of people to travel may lead to a decline in 

demand for cruises”); see also Carvelli, 934 F.3d at 1317 (“[M]ateriality depends on whether a 

‘substantial likelihood’ exists that a ‘reasonable investor’ would have viewed a misrepresentation 

or omission as ‘significantly alter[ing] the total mix’ of information made available.” (quoting 

Morgan Keegan & Co., 678 F.3d at 1245) (internal citation and quotation marks omitted)).

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Accordingly, the Court still does not find that the January 2020 statements, as pled, are 

materially false or misleading. 

b. Defendants’ February 2020 Statements.

Defendants argue the Second Amended Class Action Complaint “contains no allegations 

describing new misleading statements or omissions in February 2020, and there are no new 

allegations suggesting that Defendants gained unique insight into the scope of the pandemic that 

they failed to disclose.” Mot. at 20. Defendants contend that, just as in the prior complaint, 

Plaintiffs fail to acknowledge that (1) the CDC did not recommend against cruise travel until 

March 8, 2020, SAC ¶ 211; (2) the U.S. Department of State did not warn travelers of the dangers 

associated with COVID-19 on cruise ships generally until March 8, 2020, see id.; see also (ECF 

No. 79-9) at 1; (3) “[t]he WHO did not issue guidance for handling COVID-19 on cruise ships 

until February 24, 2020—and even then, the WHO did not recommend that operators cancel 

cruises[,]” see generally (ECF No. 79-10).11 Mot. at 20–21.

Plaintiffs argue that “[t]hroughout February 2020, Defendants touted their response 

to—and minimized the risks posed by—COVID-19 to Carnival’s business,” which Plaintiffs 

contend was misleading. Resp. at 21. Plaintiffs state that they have addressed the Court’s previous 

ruling finding that they failed to sufficiently allege that enhanced measures were not taken in three 

ways: (1) the Second Amended Class Action Complaint adds new allegations attributed to FE3 

11 Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not 

subject to reasonable dispute because . . . it can be accurately and readily determined from sources 

whose accuracy cannot be reasonably questioned.” Fed. R. Evid. 201(b)(2). Here, the Court finds 

it prudent to judicially notice guidance—specifically, guidance issued by the WHO and the U.S. 

State Department—that Plaintiffs reference and excerpt in the Second Amended Class Action 

Complaint, and that Defendants attach to their Motion. See (ECF Nos. 79-9, 79-10); see also 

McClain v. Iradimed Corp., 111 F. Supp. 3d 1293, 1299–30 & n.6 (S.D. Fla. 2015). 

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showing that Carnival had no COVID protocols or policies in place;12 (2) the Second Amended 

Class Action Complaint alleges that, “contrary to Defendants’ suggestion that Carnival had taken 

steps to prevent the spread of COVID-19 aboard its ships—Carnival’s COVID-19-related risks 

were compounding in February 2020”; and (3) the Second Amended Class Action Complaint 

alleges that these risks were amplified by Carnival’s failures to comply with existing guidance and 

its own internal protocols. Resp. at 21–22.

Plaintiffs’ first assertion that Defendants’ February 2020 statements are false because 

Carnival knew passengers were getting sick on its ships is recycled from its prior complaint and 

was previously rejected. The Court found in its May 28, 2021 Order that 

Plaintiffs’ arguments require the Court to infer that, because passengers would 

ultimately fall ill aboard Carnival’s ships—just as people did in other venues across 

the globe—Carnival was non-compliant with health and safety standards, and thus 

Carnival’s statements affirming its compliance with such standards were false or 

misleading. That inference is too tenuous to meet the heightened pleading standard 

applicable in the securities fraud context.

Order at 27; see also id. at 30 (concluding that Plaintiffs failed to show with the required specificity 

how Defendants were noncompliant with applicable guidelines, regulations, and their internal 

policies, including the HESS policy, “[t]hus, [] Plaintiffs’ reliance on any such non-compliance 

fails to show that Defendants’ stated commitments to health and safety were false or misleading”). 

The Court declines to depart from its prior ruling now. And, the Court has already found that the 

Second Amended Class Action Complaint fails to adequately allege Carnival’s noncompliance 

with existing guidance and its own internal protocol, and that Carnival’s statements are nonetheless 

inactionable. Supra III.A.2.a–c.

12 The Court addresses—and rejects—Plaintiffs’ first argument regarding FE3 above. See supra

III.A.2.b.

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Consequently, the Court does not find that, as pled, the February 2020 statements are 

materially false or misleading. 

c. Defendants’ March 2020 Statements

In their Motion, Defendants state that the Second Amended Class Action Complaint 

identifies the same allegedly misleading statements in March 2020 included in the Consolidated 

Class Action Complaint, including Defendant Donald’s opinion that “‘a cruise ship is not a riskier 

environment’ than other crowded venues because it provides guests with ‘space and social 

distancing’ and medical clinics”—allegations the Court previously rejected. Mot. at 21.

Defendants argue that “[j]ust as before, Plaintiffs’ failure to ‘reconcile the conflict’ between the 

alleged misstatements” and Defendants’ March 16, 2020 SEC filing warning investors that 

Carnival expected the fiscal year to end in a net loss “fatally undermines their allegations.” Id.

Defendants also request that the Court reconsider its earlier finding that Carnival Cruise Line’s 

March 13, 2020 statement was misleading. See id., n.10 (citing Order at 23–25).

Plaintiffs’ Response states that the issue of “whether the truth [of the risks posed by 

COVID-19] was made known to investors with sufficient intensity and credibility to render 

immaterial Defendants’ concrete representations to the contrary” in Carnival’s March 13, 2020 

press release is not one that can be resolved at the pleading stage. Resp. at 22–23. Plaintiffs also 

argue that Defendants continued to mislead investors throughout March 2020, including with 

Carnival’s March 18 and March 22 statements, which Plaintiffs assert are false. Id. at 23. Finally, 

Plaintiffs assert that Defendants provide no basis to revisit the Court’s determination that the 

statement was made by Carnival at the parent-company level. Id., n.15.

To begin, Plaintiffs provide no basis for the Court not to consider Defendants’ arguments 

in their Motion anew. Resp. at 22 n15. Accordingly, the Court reevaluates the March 13, 2020 

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statement—specifically that “Carnival has not had a diagnosed case linked to [its] operation”—and 

finds that it was not false. See (ECF No. 79-13) at 2. The press release states: “Carnival Cruise 

Line announced today that it is pausing operations immediately across its fleet of ships based in 

North America.” Id. (emphasis added). It also identifies Carnival Cruise Line as the source of 

the statement. Id. at 2–3. The Second Amended Class Action Complaint does not allege that any 

ship in the Carnival Cruise Line business segment had any diagnosed cases of COVID-19. See 

generally SAC.

And, just over an hour after Carnival Cruise Line’s statement, Defendant Carnival 

Corporation & plc, the parent company, issued its own separate press release acknowledging that 

four of its brands, including Carnival Cruise Line, were suspending voyages. See generally (ECF 

No. 79-14). Defendant Carnival’s release did not make similar claims regarding a lack of 

COVID-19 cases. Id. at 2.

However, even if Carnival Cruise Line’s statement was misleading, it was made on the 

same day that Carnival announced a voluntary suspension of voyages in response to the pandemic, 

as the Court previously observed. See Order at 25; (ECF Nos. 79-13, 79-14). Plaintiffs’ initial 

argument that the Court improperly determined that Carnival’s March 13, 2020 press release, 

although misleading, was not material because the market knew the relevant truth is not persuasive. 

Resp. 22–23. First, the case to which Plaintiffs cite addressed the issue in an order on class 

certification. See Aranaz v. Catalyst Pharm. Partners Inc., 302 F.R.D. 657 (S.D. Fla. 2014). 

Second, another court in this District has previously found that “[t]he issuance of a 

warning . . . on the very issue that [the plaintiffs] allege was withheld from investors by [the 

defendants] during the class period vitiates the ability of [the plaintiffs] to maintain a securities 

fraud case on these alleged omissions.” In re Republic Servs., Inc. Sec. Litig., 134 F. Supp. 2d 

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1355, 1363 (S.D. Fla. 2001) (citing Saltzberg v. TM Sterling/Austin Assoc., Ltd., 45 F.3d 399, 400 

(11th Cir. 1995)). As the Court previously found, Carnival’s 2019 10-K provided specific 

COVID-19 warnings to investors. Supra III.A.3.a; see also SAC ¶¶ 301–03, 307, 309. 

Additionally, Plaintiffs include a new allegation in their Second Amended Class Action Complaint 

regarding Defendants’ 2019 Annual Report published on February 27, 2020—almost three weeks 

before the March 13, 2020 press release. SAC ¶ 320. This statement provides further support that 

Carnival provided warnings that its business might be materially impacted by COVID-19. See id.

(“In response to the ongoing coronavirus outbreak, China has implemented travel 

restrictions. . . . If these travel restrictions continue for an extended period of time, they could 

have a material impact on our financial performance.”). 

Thus, the Court again fails to see how the March 13, 2020 statement, or any of the 

statements made thereafter, could reasonably have misled investors at that stage of the pandemic. 

Carvelli, 934 F.3d at 1317 (“A misrepresentation or omission is material if, ‘in the light of the 

facts existing at the time,’ a ‘reasonable investor, in the exercise of due care, would have been 

misled by it.’” (quoting FindWhat, 658 F.3d at 1305)); see also In re Republic Servs., Inc. Sec. 

Litig., 134 F. Supp. 2d at 1363 (“Investors were on notice of the exact problem that caused [the 

defendant] to lower earnings estimates, providing an alternative basis to dismiss the Complaint.”).

Finally, Plaintiffs still fail to reconcile the conflict between the later March 2020 

statements—which generally assert Defendant Donald’s view that cruise ships are safe places to 

be as compared to other crowded venues like movie theaters—and Carnival’s March 16, 2020 

Form 8-K/A, which stated:

Significant events affecting travel, including COVID-19, typically have an impact 

on booking patterns, with the full extent of the impact generally determined by the 

length of time the event influences travel decisions. The Corporation believes the 

ongoing effects of COVID-19 on its operations and global bookings will have a 

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material negative impact on its financial results and liquidity. The Corporation is 

taking additional actions to improve its liquidity, including capital expenditure and 

expense reductions, and pursuing additional financing. Given the uncertainty of 

the situation, the Corporation is currently unable to provide an earnings forecast, 

however we expect results of operations for the fiscal year ending November 30, 

2020 to result in a net loss. 

SAC ¶ 231. As a result, the Court finds no reason to depart from the conclusion of its prior Order 

on this issue. Order at 25.

Therefore, the Court does not find that, as pled, the March 2020 statements are materially 

false or misleading.

4. The Second Amended Class Action Complaint Does Not Adequately Allege That 

Defendants Misled Investors About Carnival’s Commitment to Health and Safety.

Lastly, Defendants argue that “[t]he SAC appears to have abandoned the claim that 

Defendants’ statements affirming Carnival’s commitment to the health and safety of its guests and 

crew were materially misleading.” Mot. at 22 (citing SAC ¶ 290) (neglecting to specifically 

identify Defendants’ “commitments” to health and safety as a category of false and misleading 

statements). However, to the extent the Second Amended Class Action Complaint continues to 

pursue this theory, Defendants argue it should be rejected for the reasons stated in the Court’s prior

Order. Id. Additionally, Defendants contend that “statements from cruise lines affirming their 

commitment to ‘the safety of our guests and crew’ are ‘extremely vague and constitute corporate 

puffery and thus, are not actionable.’” Id. (citing Norwegian Cruise Lines, 2021 WL 1378296, at 

*6).

Plaintiffs respond to Defendants’ arguments by simply stating that they “[have] cured any 

deficiencies identified in the [Court’s] Order. . . . Viewed in context, [Carnival’s] statements are 

actionable because they left investors with the misleading impression ‘that reasonably effective 

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steps were being taken to comply with applicable’ standards when, in reality, Carnival was 

noncompliant.” Resp. at 18 (citing SAC ¶¶ 291, 296, 301, 306). 

As the Court has previously explained, however, Plaintiffs fail to show with the required 

specificity how Defendants were noncompliant with applicable guidelines and regulations. Supra

III.A.2. Thus, Plaintiffs’ arguments that Defendants’ stated commitments to health and safety 

were false or misleading which are predicated on such noncompliance necessarily fail. SAC ¶¶ 

291, 301, 306; see, e.g., id. ¶ 296 (“With over 100 ships sailing to more than 700 ports around the 

world, it’s imperative that we are thorough and diligent when it comes to the health, safety and 

security of our guests and crew . . . are top priorities for all of us.”). As the Court previously 

observed:

[M]any of Defendants’ statements described Carnival’s ongoing efforts and 

initiatives in furtherance of its health and safety goals. For example, in the 

September 26, 2019 earnings call statement, Carnival announced that it had filled 

a key position described as “a new role that is bringing together functions and 

people that were previously distributed across the corporation and complementing 

that with new talents, roles and processes to help take [Carnival] to best-in-class 

and broad-based compliance.” Through that statement, Carnival in essence 

acknowledged that it had not quite reached broad-based compliance, but 

nonetheless affirmed its commitment to getting there. Certainly, any reasonable 

investor could appreciate that it would take time for the incumbent of this new 

position to make meaningful progress. That Carnival was not able to do so before 

the pandemic began to materialize does not persuade the Court that Carnival’s 

stated commitments to health and safety were materially false or misleading. 

Order at 30 (internal citation omitted). Moreover, as described in further detail above, the Court 

agrees with Defendants that vague and general statements committing to passenger and crew safety 

are puffery and therefore not actionable. Mot. at 22; Norwegian Cruise Lines, 2021 WL 1378296, 

at *6 (“[T]he challenged statements are extremely vague and constitute corporate puffery and thus, 

are not actionable.”).

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In sum, Plaintiffs have not satisfied the particularity requirements under Rule 9(b) or 

PSLRA. The Second Amended Class Action Complaint, thus, fails to plead a material 

misrepresentation or omission.

B. Scienter

Defendants argue that (1) Plaintiffs fail to allege that Defendants had contemporaneous 

knowledge of facts contradicting their statements about the risks of COVID-19; (2) Plaintiffs fail 

to allege that Defendants had contemporaneous knowledge of facts contradicting their statements 

about regulatory compliance; and (3) Defendants’ conduct during the Class Period was 

“fundamentally inconsistent with scienter.” Mot. at 23–28. 

Plaintiffs argue in their Response that (1) they allege Defendants possessed 

contemporaneous information that directly contradicted their public statements; (2) Defendants’ 

statements support a strong inference of scienter; (3) the Second Amended Class Action Complaint 

addresses the Court’s Order as to scienter; and (4) “[t]he SAC alleges a number of additional facts 

that, taken holistically, support an inference of scienter.” Resp. at 24–29. 

In reply, Defendants contend that “Plaintiffs’ theory of scienter is not as compelling as 

opposing inferences.” Reply at 14–15. Defendants also argue that the Second Amended Class 

Action Complaint fails to allege that Defendants had contemporaneous knowledge of facts 

contradicting their public statements. Id. at 15–19.

“Under the PSLRA, a plaintiff cannot ‘plead the requisite scienter element generally . . . .’” 

Brophy v. Jiangbo Pharms., Inc., 781 F.3d 1296, 1302 (11th Cir. 2015) (quoting Mizzaro, 544 

F.3d at 1238). In the Eleventh Circuit, “§ 10(b) and Rule 10b-5 require a showing of either an 

‘intent to deceive, manipulate, or defraud,’ or ‘severe recklessness.’” Id. (quoting Thompson v. 

RelationServe Media, Inc., 610 F.3d 628, 634 (11th Cir. 2010)) (internal citation and quotation 

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marks omitted). The PSLRA “requires, ‘with respect to each act or omission alleged,’ that a 

complaint ‘state with particularity facts giving rise to a strong inference that the defendant acted 

with the required state of mind.’” Carvelli, 934 F.3d at 1318 (quoting § 78u-4(b)(2)(A)). 

“To determine whether the plaintiff has alleged facts that give rise to the requisite ‘strong 

inference’ of scienter, a court must consider plausible, nonculpable explanations for the 

defendant’s conduct, as well as inferences favoring the plaintiff.” Tellabs, 551 U.S. at 323–24. 

“A complaint will survive [a motion to dismiss] only if a reasonable person would deem the 

inference of scienter cogent and at least as compelling as any opposing inference one could draw 

from the facts alleged.” Id. at 324 (emphasis added). 

To begin, the Court has not found any of Defendants’ statements to be actionable 

misrepresentations or omissions sufficient to sustain a claim for securities fraud. Carvelli, 934 

F.3d at 1317 (quoting Mizzaro, 544 F.3d at 1236–37). And, even if the statements were materially 

false or misleading, the Court nonetheless finds that Plaintiffs have not sufficiently alleged a strong 

inference that Carnival acted with (1) the intent to deceive, manipulate, or defraud its investors; or 

(2) severe recklessness. Brophy, 781 F.3d at 1302. 

First, the Court again finds that Carnival’s January 2020 statements reflect its commitment 

to and prioritization of health and safety, and its belief that the risk of COVID-19 was “low.” See

SAC ¶¶ 298, 301–03, 307, 309, 312. It remains plausible that Carnival is committed to and 

prioritizes health and safety aboard its ships, notwithstanding the impact that COVID-19 had—and 

continues to have—on its business and on the world economy. It is similarly plausible that 

Defendants did indeed believe in the early days of the pandemic that the risk to Carnival’s business 

and passengers was relatively low, as cases outside of China were only then beginning to rise.

As the Court observed in its May 28, 2021 Order:

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In January 2020, pre-pandemic life was mostly unchanged with no travel 

restrictions, other than perhaps travel to and from China. No mask mandates were 

in effect—nor were masks even recommended. While it is possible that in January 

2020 Defendants possessed some greater knowledge than the CDC or the WHO as 

to the devastation COVID-19 would ultimately cause, that argument does not give 

rise to the requisite strong inference of scienter to support a claim for securities 

fraud. 

Order at 33 (emphasis in original). Nothing in Plaintiffs’ Second Amended Class Action 

Complaint warrants the Court’s departure from its prior conclusion. 

Second, Plaintiffs’ reliance on Carnival’s February 2020 statements reiterating its 

commitment to and prioritization of health and safety and warning of the potential impact 

COVID-19 might have on its business fare no better. These allegations contain the exact same 

statements from Plaintiffs’ prior complaint—with the addition of a statement from Carnival’s 

February 27, 2020 Annual Report that do not even raise in their Response. See SAC ¶¶ 314–15, 

317–18, 320, 322–23; see generally Resp.. 

Third, as to the March 2020 statements, despite their efforts, Plaintiffs still fail to raise a 

plausible inference that Defendant Donald’s statements in mid-to-late March regarding his view 

on the general safety of cruise ships were made with scienter, especially considering Defendants’ 

actions of halting its voyages on March 13 and Carnival’s filing its March 16, 2020 Form 8-K/A 

notifying investors of the expected year-end loss. See SAC ¶¶ 231, 325, 328–29, 331. Carnival’s 

action to pause operations cuts against Plaintiffs’ argument that any of Carnival’s March 2020 

statements were made with scienter. Further, Defendants did indeed take measures to advance 

their health and safety goals, even if those efforts would ultimately prove to be unsuccessful in the 

face of a global pandemic. 

Finally, the Court agrees with Defendants’ argument that their conduct is inconsistent with 

scienter. Mot. at 27–28. Carnival bought back more than three million of its shares during the 

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Class Period. See (ECF No. 79-20) at 7; SAC ¶ 22 (alleging that Carnival did not suspend share 

repurchases until the end of the Class Period); In re Ocwen Fin. Corp. Sec. Litig., 2015 WL 

12780960, at *10 (“There is no evidence of suspicious stock sales or purchases by any of the 

Defendants in the Complaint. To the contrary, Ocwen launched a buyback program to repurchase 

outstanding shares during the relevant period, cutting against an inference of scienter.”); 

Henningsen v. ADT Corp., 161 F. Supp. 3d 1161, 1204 (S.D. Fla. 2015), aff’d sub nom. IBEW Loc. 

595 Pension & Money Purchase Pension Plans v. ADT Corp., 660 F. App’x 850 (11th Cir. 2016) 

(“Instead of selling stock, ADT bought its own stock during the relevant period. ‘Stock repurchase 

programs actually negate a finding of scienter.’”) (emphasis in original). 

Nor do Plaintiffs allege in the Second Amended Class Action Complaint that Carnival 

executives sold shares during the same time period. See generally SAC; see also Mizzaro, 544 

F.3d at 1253 (“In this case, the amended complaint says nothing about suspicious stock 

transactions by any of the individual defendants, an omission that weighs against inferring 

scienter.”). While “suspicious stock sales are not necessary to create a strong inference of 

scienter[,] . . . . [t]he presence or absence of such allegations must be assessed in light of all of the 

allegations found in the complaint.” See id. (citing Tellabs, 551 U.S. at 325). Carnival’s 

repurchasing shares and the absence of suspicious stock sales during the Class Period, combined 

with Carnival’s suspending voyages in March, negate a finding of scienter. 

On balance, the Court does not find the inference of scienter to be as compelling as the 

opposing inferences that one could draw from the facts alleged. See Tellabs, 551 U.S. at 324. 

IV. CONCLUSION

UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being 

otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that

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Defendants’ Motion to Dismiss the Second Amended Complaint and Incorporated Memorandum 

of Law (ECF No. 79) is GRANTED, and the Second Amended Class Action Complaint (ECF No. 

74) is DISMISSED WITH PREJUDICE. The Clerk of Court is INSTRUCTED to CLOSE THIS

CASE. All pending motions, if any, are DENIED AS MOOT. 

DONE AND ORDERED in Chambers at Miami, Florida, this ____ day of March, 2022. 

K. MICHAEL MOORE

UNITED STATES DISTRICT JUDGE

c: All counsel of record 

30th

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