The judge invited the lawyers to submit a new complaint with more evidence. Instead, they filed an appeal.
In reversing the Miami judge's decision, a three-judge panel of the Eleventh US Circuit Court of Appeals in Atlanta said the complaint contained enough information to survive the motion to throw the case out and permit further investigation of the underlying facts.
"The facts alleged in the complaint are plausible and raise a reasonable expectation that discovery could supply additional proof of Carnival's liability," the appeals panel said.
The appeals court noted that Carnival had argued that Liz Marie's death was unforeseeable, and that a company has no duty to warn of an unforeseeable danger.
But the judges added that the complaint charges that "Carnival was aware of gang-related violence and crime, including public shootings, in St. Thomas generally and near Coki Beach specifically."
The appeals court said Carnival's lawyers could raise the issue of whether the danger was foreseeable later in the case in a motion for summary judgment or during a trial.
The appeals court action remands the case to the federal court in Miami.