Carnival Cruise Lines, Inc. v. Shute
499 U.S. 585 (1991)

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U.S. Supreme Court

Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1990)

Carnival Cruise Lines, Inc. v. Shute

No. 89-1647

Argued Jan. 15, 1991

Decided April 17, 1991

499 U.S. 585

Syllabus

After the respondents Shute, a Washington State couple, purchased passage on a ship owned by petitioner, a Florida-based cruise line, petitioner sent them tickets containing a clause designating courts in Florida as the agreed-upon fora for the resolution of disputes. The Shutes boarded the ship in Los Angeles, and, while in international waters off the Mexican coast, Mrs. Shute suffered injuries when she slipped on a deck mat. The Shutes filed suit in a Washington Federal District Court, which granted summary judgment for petitioner. The Court of Appeals reversed, holding, inter alia, that the forum-selection clause should not be enforced under The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, because it was not "freely bargained for," and because its enforcement would operate to deprive the Shutes of their day in court in light of evidence indicating that they were physically and financially incapable of pursuing the litigation in Florida.

Held: The Court of Appeals erred in refusing to enforce the forum-selection clause. Pp. 499 U. S. 590-597.

(a) The Bremen Court's statement that a freely negotiated forum-selection clause, such as the one there at issue, should be given full effect, 407 U.S. at 407 U. S. 12-13, does not support the Court of Appeals' determination that a nonnegotiated forum clause in a passage contract is never enforceable simply because it is not the subject of bargaining. Whereas it was entirely reasonable for The Bremen Court to have expected the parties to have negotiated with care in selecting a forum for the resolution of disputes arising from their complicated international agreement, it would be entirely unreasonable to assume that a cruise passenger would or could negotiate the terms of a forum clause in a routine commercial cruise ticket form. Nevertheless, including a reasonable forum clause in such a form contract well may be permissible for several reasons. Because it is not unlikely that a mishap in a cruise could subject a cruise line to litigation in several different fora, the line has a special interest in limiting such fora. Moreover, a clause establishing ex ante the dispute resolution forum has the salutary effect of dispelling confusion as to where suits may be brought and defended, thereby sparing litigants time and expense and conserving judicial resources. Furthermore, it is likely that passengers purchasing tickets

Page 499 U. S. 586

containing a forum clause like the one here at issue benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be sued. Pp. 499 U. S. 590-594.

(b) The Court of Appeals' conclusion that the clause here at issue should not be enforced because the Shutes are incapable of pursuing this litigation in Florida is not justified by The Bremen Court's statement that

"the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in determining the reasonableness of the forum clause."

Id. at 407 U. S. 17. That statement was made in the context of a hypothetical "agreement between two Americans to resolve their essentially local disputes in a remote alien forum." Ibid. Here, in contrast, Florida is not such a forum, nor -- given the location of Mrs. Shute's accident -- is this dispute an essentially local one inherently more suited to resolution in Washington than in Florida. In light of these distinctions, and because the Shutes do not claim lack of notice of the forum clause, they have not satisfied the "heavy burden of proof," ibid. required to set aside the clause on grounds of inconvenience. Pp. 499 U. S. 594-595.

(c) Although forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, there is no indication that petitioner selected Florida to discourage cruise passengers from pursuing legitimate claims or obtained the Shutes' accession to the forum clause by fraud or overreaching. P. 499 U. S. 595.

(d) By its plain language, the forum selection clause at issue does not violate 46 U.S.C. App. § 183c, which, inter alia, prohibits a vessel owner from inserting in any contract a provision depriving a claimant of a trial "by court of competent jurisdiction" for loss of life or personal injury resulting from negligence. Pp. 499 U. S. 595-597.

897 F.2d 377 (CA9 1990), reversed.

BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. 499 U. S. 597.

Page 499 U. S. 587

Primary Holding
Forum selection clauses in form ticket contracts are enforceable unless a clause eradicates the carrier's liability completely or prevents a claimant from having a case heard in a court of competent jurisdiction.
Facts
Shute slipped and fell on a deck mat on a Carnival cruise ship off the coast of Mexico. She brought a personal injury claim in Washington, where she was a resident. The ticket that she had purchased contained a passenger contract with a forum selection clause, providing that Florida would be the forum for any disputes arising from the contract. (Carnival was headquartered in Florida.) Carnival received summary judgment from the trial court, since it did not have minimum contacts with Washington that were related to the subject of the lawsuit, and thus the court did not have personal jurisdiction. However, the appellate court ruled that personal jurisdiction was proper because Carnival had solicited business in Washington, which sufficed to meet the minimum contacts test.

Opinions

Majority

  • Harry Andrew Blackmun (Author)
  • William Hubbs Rehnquist
  • Byron Raymond White
  • Sandra Day O'Connor
  • Antonin Scalia
  • Anthony M. Kennedy
  • David H. Souter

A forum selection clause may be useful in resolving uncertainty about where litigation arising from a contract may be brought. It would be unfair for Carnival to be brought into courts around the nation, which could happen if the clause were not enforced. The additional potential costs of litigation would be transferred to Carnival's passengers, so people such as the Shutes benefited from the reduction in ticket price permitted by limiting litigation to one forum. The clause did not limit the cruise line's liability for negligence.

Dissent

  • John Paul Stevens (Author)
  • Thurgood Marshall

Forum selection clauses should not be deemed reasonable simply because they allow a carrier to reduce its insurance premiums and litigation costs, and avoid transferring them to passengers. Federal admiralty law traditionally would have held that these clauses could not be enforced.

Case Commentary

This case contrasted with another contract involving a forum-selection clause and the operation of a ship. In that case, the complex negotiations between sophisticated parties produced a result to which they could be bound, whereas this standard contract of adhesion was given to unsophisticated passengers without the opportunity to negotiate or any incentive to read the terms.

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