Canada Ordered to Pay Winston-Salem Company Over $19 Million

On Monday, July 21st, Judge Rosemary Collyer for the United States District Court for the District of Columbia ordered the Canadian government and the Royal Canadian Mounted Police (RCMP) to pay a Winston-Salem company over $19 million in damages for breaching a contract arising out of the 2010 Vancouver Winter Olympics. The plaintiff, Cruise Connections Charter Management, Inc. (Cruise Connections), entered into a contract with the RCMP to provide cruise ships as floating hotels for security personnel during the games. Judge Collyer concluded the RCMP breached the contract on September 26, 2008, and then formally terminated it on November 17, 2008 by declaring default. Cruise Connections is represented by Strauch Green & Mistretta, P.C., and the trial team consisted of Jack Strauch, Stan Green, and Jessie Fontenot.

In the buildup to the Winter Olympics, the Canadian government was faced with a dilemma: it needed to bring in additional security personnel for the Games to protect the thousands of visitors and athletes, but there was a shortage of hotel rooms in the city. The government decided it could solve its housing shortage by using cruise ships, which would be anchored at Vancouver’s Ballentyne Pier. The government began a competitive bidding process in 2008 to find a broker who could secure the ships. Cruise Connections won the contract and began negotiating with multiple cruise lines, including Holland America and Royal Caribbean. After months of work and planning, the government terminated the contract amid a dispute over who was responsible for paying a potentially large sum of government taxes while the ships were anchored at the pier.

“The RCMP agreed to pay the taxes, knew it had done so, but completely reneged on the deal,” said Jack Strauch. Stan Green also commented, “RCMP’s blatant disregard for both the contract and our clients’ efforts to live up to their end of the bargain was shocking.”

At the onset of the litigation, the RCMP successfully argued to have Cruise Connections’ case dismissed, claiming immunity under the Foreign Sovereign Immunities Act. However, Cruise Connections appealed that decision to the D.C. Circuit Court of Appeals and was successful. The D.C. Circuit found that since the Canadian government had engaged in commercial activities that had a direct effect in the United States, it was not immune to a lawsuit in the United States related to those activities.

After receiving the Court’s ruling, Green remarked, “It has been a long fight. We have litigated this case for years and intend to fight for and protect our client’s win should RCMP attempt an appeal.”

The attorneys at Strauch Green & Mistretta, P.C., provide experienced representation and premier legal services to clients throughout the United States and serve as national counsel to companies listed within the Fortune 500.