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

Clauses in non-negotiated form contracts that designate a certain forum for any related legal disputes generally allow that forum to exercise personal jurisdiction over the parties, barring any issues regarding a lack of notice or “fundamental fairness.”

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.

  • 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.

  • 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.

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.

U.S. Supreme Court

Carnival Cruise Lines, Inc. v. Shute

No. 89-1647

Argued Jan. 15, 1991

Decided April 17, 1991

499 U.S. 585

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

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Carnival Cruise Lines, Inc. v. Shute

Supreme court of the united states, 1991, 499 u.s. 585, listen to the opinion:.

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Edited Opinion

BLACKMUN, J.

In this admiralty case we primarily consider whether the United States Court of Appeals for the Ninth Circuit correctly refused to enforce a forum selection clause contained in tickets issued by petitioner Carnival Cruise Lines, Inc., to respondents Eulala and Russel Shute.

The Shutes, through an Arlington, Wash., travel agent, purchased passage for a 7-day cruise on petitioner's ship, the Tropicale. Respondents paid the fare to the agent, who forwarded the payment to petitioner's headquarters in Miami, Fla. Petitioner then prepared the tickets and sent them to respondents in the State of Washington. The face of each ticket, at its left-hand lower corner, contained this admonition:

SUBJECT TO CONDITIONS OF CONTRACT ON LAST PAGES IMPORTANT! PLEASE READ CONTRACT - ON LAST PAGES 1, 2, 3" App. 15.

The following appeared on "contract page 1" of each ticket:

"TERMS AND CONDITIONS OF PASSAGE CONTRACT TICKET"

3. (a) The acceptance of this ticket by the person or persons named hereon as passengers shall be deemed to be an acceptance and agreement by each of them of all of the terms and conditions of this Passage Contract Ticket.

8. It is agreed by and between the passenger and the Carrier that all disputes and matters whatsoever arising under, in connection with or incident to this Contract shall be litigated, if at all, in and before a Court located in the State of Florida, U.S.A. to the exclusion of the Courts of any other state or country.

The last quoted paragraph is the forum selection clause at issue.

Respondents boarded the Tropicale in Los Angeles, Cal. The ship sailed to Puerto Vallarta, Mexico, and then returned to Los Angeles. While the ship was in international waters off the Mexican coast, respondent Eulala Shute was injured when she slipped on a deck mat during a guided tour of the ship's galley. Respondents filed suit against petitioner in the United States District Court for the Western District of Washington, claiming that Mrs. Shute's injuries had been caused by the negligence of Carnival Cruise Lines and its employees.

Petitioner moved for summary judgment, contending that the forum clause in respondents' tickets required the Shutes to bring their suit against petitioner in a court in the State of Florida. Petitioner contended, alternatively, that the District Court lacked personal jurisdiction over petitioner because petitioner's contacts with the State of Washington were insubstantial. The District Court granted the motion, holding that petitioner's contacts with Washington were constitutionally insufficient to support the exercise of personal jurisdiction.

We begin by noting the boundaries of our inquiry. First, this is a case in admiralty, and federal law governs the enforceability of the forum selection clause we scrutinize. Second, we do not address the question whether respondents had sufficient notice of the forum clause before entering the contract for passage. Respondents essentially have conceded that they had notice of the forum selection provision. Brief for Respondent 26 ("The respondents do not contest the incorporation of the provisions nor [sic] that the forum selection clause was reasonably communicated to the respondents, as much as three pages of fine print can be communicated."). Additionally, the Court of Appeals evaluated the enforceability of the forum clause under the assumption, although "doubtful," that respondents could be deemed to have had knowledge of the clause.

Within this context, respondents urge that the forum clause should not be enforced because, contrary to this Court's teachings in The Bremen, the clause was not the product of negotiation, and enforcement effectively would deprive respondents of their day in court. Additionally, respondents contend that the clause violates the Limitation of Vessel Owner's Liability Act. We consider these arguments in turn.

[R]espondents' passage contract was purely routine, and doubtless nearly identical to every commercial passage contract issued by petitioner and most other cruise lines. In this context, it would be entirely unreasonable for us to assume that respondents - or any other cruise passenger - would negotiate with petitioner the terms of a forum-selection clause in an ordinary commercial cruise ticket. Common sense dictates that a ticket of this kind will be a form contract the terms of which are not subject to negotiation, and that an individual purchasing the ticket will not have bargaining parity with the cruise line. But by ignoring the crucial differences in the business contexts in which the respective contracts were executed, the Court of Appeals' analysis seems to us to have distorted somewhat this Court's holding in The Bremen.

In evaluating the reasonableness of the forum clause at issue in this case, we must refine the analysis of The Bremen to account for the realities of form passage contracts. As an initial matter, we do not adopt the Court of Appeals' determination that a nonnegotiated forum-selection clause in a form ticket contract is never enforceable simply because it is not the subject of bargaining. Including a reasonable forum clause in a form contract of this kind well may be permissible for several reasons: first, a cruise line has a special interest in limiting the fora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several different fora. Additionally, a clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum, and conserving judicial resources that otherwise would be devoted to deciding those motions. See Stewart Organization, 487 U.S., at 33 (concurring opinion). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like that at issue in this case 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.

We also do not accept the Court of Appeals' "independent justification" for its conclusion that The Bremen dictates that the clause should not be enforced because "[t]here is evidence in the record to indicate that the Shutes are physically and financially incapable of pursuing this litigation in Florida." We do not defer to the Court of Appeals' findings of fact. In dismissing the case for lack of personal jurisdiction over petitioner, the District Court made no finding regarding the physical and financial impediments to the Shutes' pursuing their case in Florida. The Court of Appeals' conclusory reference to the record provides no basis for this Court to validate the finding of inconvenience. Furthermore, the Court of Appeals did not place in proper context this Court's statement in The Bremen 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." The Court made this statement in evaluating a hypothetical "agreement between two Americans to resolve their essentially local disputes in a remote alien forum." In the present case, Florida is not a "remote alien forum," nor - given the fact that Mrs. Shute's accident occurred off the coast of Mexico - is this dispute an essentially local one inherently more suited to resolution in the State of Washington than in Florida. In light of these distinctions, and because respondents do not claim lack of notice of the forum clause, we conclude that they have not satisfied the "heavy burden of proof," ibid. required to set aside the clause on grounds of inconvenience.

It bears emphasis that forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness. In this case, there is no indication that petitioner set Florida as the forum in which disputes were to be resolved as a means of discouraging cruise passengers from pursuing legitimate claims. Any suggestion of such a bad faith motive is belied by two facts: petitioner has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports. Similarly, there is no evidence that petitioner obtained respondents' accession to the forum clause by fraud or overreaching. Finally, respondents have conceded that they were given notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity. In the case before us, therefore, we conclude that the Court of Appeals erred in refusing to enforce the forum selection clause.

The judgment of the Court of Appeals is reversed.

It is so ordered.

JUSTICE STEVENS, with whom JUSTICE MARSHALL joins, dissenting.

Forum selection clauses in passenger tickets involve the intersection of two strands of traditional contract law that qualify the general rule that courts will enforce the terms of a contract as written. Pursuant to the first strand, courts traditionally have reviewed with heightened scrutiny the terms of contracts of adhesion, form contracts offered on a take-or-leave basis by a party with stronger bargaining power to a party with weaker power. Some commentators have questioned whether contracts of adhesion can justifiably be enforced at all under traditional contract theory because the adhering party generally enters into them without manifesting knowing and voluntary consent to all their terms.

The common law, recognizing that standardized form contracts account for a significant portion of all commercial agreements, has taken a less extreme position, and instead subjects terms in contracts of adhesion to scrutiny for reasonableness. . . .

The second doctrinal principle implicated by forum selection clauses is the traditional rule that "contractual provisions, which seek to limit the place or court in which an action may . . . be brought, are invalid as contrary to public policy." Although adherence to this general rule has declined in recent years, particularly following our decision in The Bremen v. Zapata Off-Shore Co., the prevailing rule is still that forum selection clauses are not enforceable if they were not freely bargained for, create additional expense for one party, or deny one party a remedy. . . . `

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carnival cruise lines inc. v. shute (1991)

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carnival cruise lines inc. v. shute (1991)

US SUPREME COURT DECISIONS

Carnival cruise lines, inc. v. shute, 499 u. s. 585 (1990), 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

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 chanrobles.com-red chanrobles.com-red

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 . chanrobles.com-red chanrobles.com-red

Page 499 U. S. 587

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Shute v. Carnival Cruise Lines, Inc., 804 F. Supp. 1525 (S.D. Fla. 1992)

804 F. Supp. 1525 (1992)

Eulala SHUTE and Russel Shute, Plaintiffs, v. CARNIVAL CRUISE LINES, INC., Defendant.

No. 91-2639-CIV.

United States District Court, S.D. Florida.

August 14, 1992.

Thomas Backmeyer, Hoppe, Backmeyer & Stokes, P.A., Miami, Fla., for plaintiffs.

John Hickey, Hickey & Jones, P.A., Miami, Fla., for defendant.

MARCUS, District Judge.

THIS CAUSE comes before the Court upon Defendant's Motion to Dismiss. The United States District Court for the Western District of Washington (the "Washington district court") transferred this case to the Southern District of Florida by Order dated October 3, 1991. See Order, No. C86-1204D (W.D.Wash. Oct. 3, 1991). Defendant moves to dismiss, primarily on the grounds that the Ninth Circuit's orders affirming a prior order of dismissal disposed of this case. This Court heard oral argument on Defendant's motion and directed supplemental briefing as to the power of the Washington district court to modify its judgment. In view of the Ninth Circuit's mandate, we are constrained to find that this Court lacks the power to resuscitate this case and we are without power to hear it; accordingly, Defendant's motion to dismiss must be GRANTED.

The extensive procedural history of this case provides the backdrop from which the motion to dismiss arises. This suit in admiralty, which alleges that Eulala Shute suffered various personal injuries as a result of Defendant's negligence, was filed in the Western District of Washington in August 1986. Defendant moved for summary judgment on two grounds: (1) that the *1526 district court lacked personal jurisdiction over the Defendant, and (2) that the forum selection clause in the passenger ticket contract required that any suit against Defendant be brought in Florida. See Order, No. C86-1204D (W.D.Wash. June 25, 1987). In the alternative, Defendant moved to transfer the case to the district court in Florida based upon the forum selection clause. Id. The district court characterized Defendant's motion as one for "summary judgment dismissal," and granted the motion based upon lack of in personam jurisdiction over the Defendant. The district court did not reach the question of the forum selection clause.

Plaintiffs appealed to the Ninth Circuit Court of Appeals, which found that personal jurisdiction over the Defendant existed, and held that the forum selection clause was unenforceable. See Shute v. Carnival Cruise Lines, Inc., 863 F.2d 1437 (9th Cir. 1988), withdrawn, 872 F.2d 930 (9th Cir. 1989). The Court of Appeals subsequently withdrew its opinion, and certified the personal jurisdiction issue to the Washington Supreme Court. Shute v. Carnival Cruise Lines, Inc., 872 F.2d 930 (9th Cir. 1989). The Washington Supreme Court, in turn, held that jurisdiction over Defendant existed under Washington's long arm statute, see Shute v. Carnival Cruise Lines, Inc.,   113 Wash. 2d 763 , 783 P.2d 78 (1989), and the Ninth Circuit reissued its opinion. Shute v. Carnival Cruise Lines, Inc. v. Shute, 897 F.2d 377 (9th Cir.1990), rev'd, ___ U.S. ___, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991).

Defendant then petitioned for and was granted certiorari to the United States Supreme Court. ___ U.S. ___, 111 S. Ct. 39, 112 L. Ed. 2d 16 (1990). The Supreme Court reversed the Ninth Circuit, holding that the forum selection clause was valid and enforceable. Carnival Cruise Lines, Inc. v. Shute, ___ U.S. ___, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991). The Supreme Court did not address the issue of personal jurisdiction. Id. The Supreme Court remanded to the Ninth Circuit, which entered two orders on June 10, 1991. One Order stated as follows:

The judgment of the district court is affirmed for the reasons set forth in Carnival Cruise Lines, Inc. v. Shute, ___ U.S. ___, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991).

Shute v. Carnival Cruise Lines, Inc., 934 F.2d 1091. The second order stated:

APPEAL FROM the United States District Court for the Western District of Washington (Seattle).
THIS CAUSE came on to be heard on the Transcript of the Record from the United States District Court for the Western District of Washington (Seattle) and was duly submitted.
ON CONSIDERATION WHEREOF, It is now here ordered and adjudged by this Court, that the judgment of the said District Court in this cause be, and hereby is AFFIRMED.

934 F.2d 1091 (9th Cir.1991). The mandate of the Court was issued August 7, 1991. Notably, the Ninth Circuit did not remand the case to the district court, but rather affirmed the judgment of that court. The judgment affirmed, of course, was of "summary judgment dismissal," albeit on different grounds than prompted the district court to dismiss. Plaintiffs did not move the Ninth Circuit to revisit its orders of June 10, 1991.

Subsequently, on September 13, 1991, the Plaintiffs moved the district court to transfer the action to this district. Defendant objected to the motion to transfer, arguing that the case was dismissed, and that the district court lacked the power to transfer a case in which final judgment had been affirmed by the court of appeals. See Memorandum in Opposition to Motion for Change of Venue, Exhibit B to Plaintiffs' Opposition to Defendant's Motion to Dismiss, No. 91-2639-CIV-MARCUS (S.D.Fla. Apr. 27, 1992). The district court rejected Defendant's argument, and transferred the case to this district. See Order, No. C86-1204D (W.D.Wash. Oct. 3, 1991).

Once the case was transferred here, Defendant moved to dismiss, essentially renewing its argument that the district court in Washington lacked the power to transfer the case to this district, and suggesting *1527 that this court likewise lacks jurisdiction to entertain the lawsuit. Plaintiffs have responded to the motion, arguing that a transferee court should not properly revisit the propriety of the transfer, and that, at all events, the district court in Washington did have jurisdiction to effectuate the transfer. Because we conclude that the judgment of the Ninth Circuit ended this case, this case must be dismissed.

Generally speaking, an order of transfer should be examined by the transferee court only under the most compelling of circumstances. See In re Cragar Indus., Inc., 706 F.2d 503, 505 (5th Cir.1983); Stringfellow v. S.D. Warren Company v. Lape Indus. Fiberglass, Inc., No. 91-CV-644, 1991 WL 239993, at *1 (W.D.Mich. Oct. 15, 1991). Plaintiffs state that "the general rule, and apparently the universal rule, is that while a transferee court has the power to review an order of transfer, it should do so only under the most impelling and exceptional circumstances." Plaintiffs' Opposition to Defendant's Motion to Dismiss at 7. We observe that the Eleventh Circuit has not squarely addressed a transferee's court's power to consider whether a transferred case is properly before it. In Roofing and Sheet Metal Servs., Inc. v. La Quinta Motor Inns, Inc., 689 F.2d 982, 983 (11th Cir.1982) the Court of Appeals addressed a different question, and held that it did not have jurisdiction to review a transfer order entered by a district court of another circuit. Id. at 984-989. In so ruling, the Eleventh Circuit observed as follows:

As the District of Columbia Circuit has said, when a case is transferred between circuits, "it is well established that a transferee court cannot directly review the transfer order itself". Although the Second and Ninth circuits have expressed a contrary view, ... we know of no case in which either circuit, or any other, has in fact reviewed a transfer order issued by a district court in another circuit.

Id. at 986 (citations omitted) (footnotes omitted) (quoting Starnes v. McGuire, 512 F.2d 918, 924 (D.C.Cir.1974) (en banc)).

The Tenth Circuit has recently written as follows:

An action may be transferred under § 1404(a) at any time during the pendency of the case, even after judgment has been entered. Once transferred the action retains its procedural identity. The transferee court's powers are coextensive with those of the transferor court; it may issue any order or render any judgment that could have been made in the transferor court had the transfer never taken place.
[T]raditional principles of law of the case counsel against the transferee court reevaluating the rulings of the transferor court, including its transfer order. Nevertheless,
law of the case is an amorphous concept. As most commonly defined, the doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.... Law of the case directs a court's discretion, it does not limit the tribunal's power.
Arizona v. California,   460 U.S. 605 , 618, 103 S. Ct. 1382, 1391, 75 L. Ed. 2d 318 (1983) (citations omitted). A prior ruling of a transferor court therefore may be reconsidered when the governing law has been changed by the subsequent decision of a higher court, when new evidence becomes available, when clear error has been committed or to prevent manifest injustice.

Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1517 (10th Cir. 1991) (citations omitted). See Hayman Cash Register Co. v. Sarokin, 669 F.2d 162, 169-170 (3d Cir.1982) ("In applying law of the case principles to transfer decisions, we are not entirely removing the question of the propriety of the transfer order from the transferee court."). As the Supreme Court wrote in Christianson v. Colt Indus. Operating Corp.,   486 U.S. 800 , 108 S. Ct. 2166, 100 L. Ed. 2d 811 (1988):

*1528 [T]he law-of-the-case doctrine "merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power." Messinger v. Anderson,   225 U.S. 436 , 444 [, 32 S. Ct. 739, 740, 56 L. Ed. 1152] (Holmes, J.) (citations omitted). A court has the power to revisit prior decisions of its own or of a coordinate court in any circumstance, although as a rule courts should be loathe to do so in the absence of extraordinary circumstances such as where the initial decision was "clearly erroneous and would work a manifest injustice." Arizona v. California, [ 460 U.S. 605 , 618 n. 8 [, 103 S. Ct. 1382, 1391 n. 8, 75 L. Ed. 2d 318] (1983) (citations omitted)] Thus, even if the Seventh Circuit's decision [transferring case to the Federal Circuit] was law of the case, the Federal Circuit did not exceed its power in revisiting the jurisdictional issue, and once it concluded that the prior decision was "clearly wrong" it was obliged to decline jurisdiction.

Christianson, 486 U.S. at 817, 108 S. Ct. at 2178.

A primary concern is that transferee courts that do not respect a transferor court's determination that transfer is appropriate "threaten to send litigants into a vicious circle of litigation," Christianson, 486 U.S. at 817, 108 S. Ct. at 2178, and that "jurisdictional ping-pong" will result from the reconsideration of orders of transfer, see Moses v. Business Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir.), cert. denied, ___ U.S. ___, 112 S. Ct. 81, 116 L. Ed. 2d 54 (1990). Here, Defendant does not contend that the case should properly be retransferred to Washington, and we do not reconsider the transferor court's conclusion that transfer would be more appropriate than dismissal. Rather, we find that we lack the power to resuscitate the case in light of the Ninth Circuit's judgment and mandate.

The district court, in ruling on the initial motion for summary judgment, and after finding a lack of personal jurisdiction, could have transferred the case to Florida rather than dismiss. See Cote v. Wadel, 796 F.2d 981, 984-85 (7th Cir.1986) ("[U]nder 1404(a) as under 1406(a), the transferring court need not have personal jurisdiction over the defendants."); Dubin v. United States, 380 F.2d 813, 815 (5th Cir.1967). Instead, the district court dismissed the case. That dismissal was ultimately affirmed in the Ninth Circuit's June 10, 1991 orders. Though we have been unable to find a case directly on point, in Trahan v. First Nat'l Bank of Ruston, 720 F.2d 832 (5th Cir.1983) the Fifth Circuit considered whether the district court had the power to modify its judgment after that judgment had been affirmed. The Fifth Circuit framed the issue on appeal as "whether, after our affirmance of the trial court's judgment, that court was empowered to modify the judgment is such a manner as to alter the substantive relief granted by it." Id. at 832. The Court analyzed the question in these terms:

In formulating its original judgment, the trial court had a choice between two modes of relief: an award of damages measured by the value of the converted stock on some reasonable date after conversion or return of the stock. It chose the latter. After its judgment was affirmed, it sought to revert to a version of the former. We search without success for any provision of rule or law empowering it to do so.

Id. at 833. [1] In the instant case, the relief granted by the district court, dismissal, was affirmed; transferring the case thus impermissibly modifies the judgment affirmed, and improperly resurrects a case the Ninth Circuit declared deceased.

Plaintiffs argue that under Rule 60(b) (6) [2] of the Federal Rules of Civil Procedure, *1529 the Washington district court had the power to modify its judgment once the circuit court had ruled, and that, in essence, is what it did. It is clear that under certain circumstances relief may be granted under Rule 60(b) even after an appellate court has issued its mandate. See, e.g. LSLJ Partnership v. Frito-Lay, Inc., 920 F.2d 476, 478-79 (7th Cir.1990); Ritter v. Smith, 811 F.2d 1398, 1403-04 (11th Cir.), cert. denied, 483 U.S. 1010, 107 S. Ct. 3242, 97 L. Ed. 2d 747 (1987). The record before us, however, is devoid of any suggestion that the Washington district court acted pursuant to its powers under Rule 60(b) (6) or that Plaintiffs moved for such relief. "Rule 60(b) (6) is an extraordinary remedy...." Ritter v. Smith, 811 F.2d at 1400. "The mandate of an appellate court to a district court must be scrupulously adhered to by the district court on remand as the law of the case in all but the most extraordinary of situations." Id. at 1404. The Washington district court did not purport to modify its judgment of dismissal, and did not cite Rule 60(b) in it order of transfer. Significantly, that court did not specify such "extraordinary" circumstances as would justify Rule 60(b) (6) relief.

In addition, Plaintiffs' did not move to modify the judgment of dismissal pursuant to Rule 60(b), and, to the contrary disclaimed that their motion was one to amend the judgment. See Plaintiffs' Reply to Opposition to Change of Venue, No. C86-1204D (W.D.Wash. Sept. 11, 1991), at 2 ("Even if this were a request that the court amend its judgment...."). Finally, though a judgment may be modified pursuant to Rule 60(b) (6) after affirmation on appeal, it is clear that a district court may not "flout[] the mandate" of the higher court. See LSLJ Partnership, 920 F.2d at 478, Ritter, 811 F.2d at 1404. Undoubtedly, the Circuit Court could have remanded for consideration of whether transfer or dismissal was appropriate. Instead, it affirmed the judgment of dismissal. We do not see how modification of the judgment of dismissal under the circumstances of this case could comport with the Ninth Circuit's mandate.

Though the result here is harsh, we believe it is compelled because we are without power to now hear this case. We add that Plaintiffs could have taken various steps to protect the viability of their action. First, upon receipt of the motion requesting transfer or dismissal, Plaintiffs could have dismissed their suit and filed in this district, where venue and jurisdiction properly lay, or consented to the motion to transfer. Second, Plaintiffs could have filed a protective suit in this district. See Cote, 796 F.2d at 985 ("Elementary prudence would have indicated to her lawyer that he must file a protective suit in Michigan...."). Third, Plaintiffs could have petitioned the Ninth Circuit to reconsider its ruling. See Fed. R.App.P. 40 ("A petition for rehearing may be filed within 14 days after entry of judgment unless the time is shortened or enlarged by order or by local rule."); 9th Cir.R. 40 (retaining 14 day period); Fed. R.App.P. 41 ("The timely filing of a petition for rehearing will stay the mandate until disposition of the petition unless otherwise ordered by the court."). Instead, Plaintiffs allowed the entry of the Ninth Circuit's judgment and issuance of the mandate to occur without seeking reconsideration. It appears that any of these steps may have preserved Plaintiffs' claim, and allowed it to proceed to resolution on the merits.

In sum, because the dismissal of this case was affirmed by the Ninth Circuit, and because the judgment of dismissal was not and could not, consistent with the mandate of the Ninth Circuit, be modified to resurrect the case, Defendant's motion to dismiss must be and is GRANTED.

*1530 Defendant's Motion to Compel Plaintiff's Attendance at Deposition is DENIED AS MOOT.

DONE AND ORDERED.

[1] The dissent in Trahan did not suggest that the district court had unbridled discretion to revise its judgments after affirmation. Rather, the dissent felt that due to a variety of circumstances, the modification of the judgment attempted by the district court conformed to the intent of the appellate court's mandate.

[2] Rule 60(b) provides as follows:

On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.

Fed.R.Civ.P. 60(b).

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Carnival Cruise Lines Inc. v. Shute

United States Supreme Court

499   U.S.   585

Carnival Cruise Lines Inc.  v.  Shute

No. 89-1647  Argued: Jan. 15, 1991. --- Decided: April 17, 1991

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 , 92 S.Ct. 1907, 32 L.Ed.2d 513 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. 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 12 -13, 92 S.Ct., at 1914-1915, 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 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. 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 17, 92 S.Ct., at 1917. 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. 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. 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. 1528-1529.

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. ----.

Richard K. Willard, Washington, D.C., for petitioner.

Gregory J. Wall, Seattle, Wash., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

Notes [ edit ]

This work is in the public domain in the United States because it is a work of the United States federal government ( see 17 U.S.C. 105 ).

Public domain Public domain false false

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Carnival Cruise Lines, Inc. v. Shute

Supreme Court of the United States - 499 U.S. 585, 113 L. Ed. 2d 622, 111 S. Ct. 1522, 1991 U.S. LEXIS 2221, SCDB 1990-063

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Facts & Holding Carnival Cruise Lines, Inc. v. Shute case brief facts & holding

Facts: carnival cruise lines and the shutes are in a legal..., holding: the court's final holding is that the forum-selection clause in..., deepdive highlight a legal term to see the definition.

This admiralty dispute involves the enforceability of a forum-selection clause in tickets issued by Carnival Cruise Lines. The clause requires any disputes arising from the contract to be litigated in a court located in Florida. The Supreme Court granted certiorari to determine whether the District Court should hear the tort claim against the petitioner. The Court did not address whether respondents had sufficient notice of the forum clause before entering the contract for passage. The Court of Appeals erred in automatically deciding that the forum-selection clause was unenforceable because respondents were not business persons and did not negotiate the terms of the clause with petitioner. A non-negotiated forum-selection clause in a form ticket contract may be enforceable if it is reasonable.

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Justice Stevens dissents from the Court's decision to enforce a forum-selection clause in a passenger ticket issued by Carnival Cruise Lines. He argues that such clauses are unjust, unreasonable, and against public policy, and that they weaken the passenger's right to claim damages resulting from the carrier's negligence. Contracts of adhesion, such as passenger tickets, are subject to scrutiny for reasonableness under traditional contract law. Even if passengers were given clear notice of the forum-selection clause before purchasing their tickets, Justice Stevens believes that the clause is unenforceable under federal admiralty law and the Limitation of Vessel Owner's Liability Act.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

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CARNIVAL CRUISE LINES, INC., Petitioner v. Eulala SHUTE, et vir.

  • Supreme Court

499 U.S. 585

111 S.Ct. 1522

113 L.Ed.2d 622

No. 89-1647.

Argued Jan. 15, 1991.

Decided April 17, 1991.

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 , 92 S.Ct. 1907, 32 L.Ed.2d 513 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. 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 12 - 13 , 92 S.Ct., at 1914-1915, 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 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. 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 17, 92 S.Ct., at 1917. 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. 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. 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. 1528-1529.

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. ----.

Richard K. Willard, Washington, D.C., for petitioner.

Gregory J. Wall, Seattle, Wash., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

In this admiralty case we primarily consider whether the United States Court of Appeals for the Ninth Circuit correctly refused to enforce a forum-selection clause contained in tickets issued by petitioner Carnival Cruise Lines, Inc., to respondents Eulala and Russel Shute.

* The Shutes, through an Arlington, Wash., travel agent, purchased passage for a 7-day cruise on petitioner's ship, the Tropicale. Respondents paid the fare to the agent who forwarded the payment to petitioner's headquarters in Miami, Fla. Petitioner then prepared the tickets and sent them to respondents in the State of Washington. The face of each ticket, at its left-hand lower corner, contained this admonition:

"SUBJECT TO CONDITIONS OF CONTRACT ON LAST PAGES IMPORTANT! PLEASE READ CONTRACT—ON LAST PAGES 1, 2, 3" App. 15.

The following appeared on "contract page 1" of each ticket:

"TERMS AND CONDITIONS OF PASSAGE CONTRACT TICKET

"3. (a) The acceptance of this ticket by the person or persons named hereon as passengers shall be deemed to be an acceptance and agreement by each of them of all of the terms and conditions of this Passage Contract Ticket.

"8. It is agreed by and between the passenger and the Carrier that all disputes and matters whatsoever arising under, in connection with or incident to this Contract shall be litigated, if at all, in and before a Court located in the State of Florida, U.S.A., to the exclusion of the Courts of any other state or country." Id., at 16.

The last quoted paragraph is the forum-selection clause at issue.

Respondents boarded the Tropicale in Los Angeles, Cal. The ship sailed to Puerto Vallarta, Mexico, and then returned to Los Angeles. While the ship was in international waters off the Mexican coast, respondent Eulala Shute was injured when she slipped on a deck mat during a guided tour of the ship's galley. Respondents filed suit against petitioner in the United States District Court for the Western District of Washington, claiming that Mrs. Shute's injuries had been caused by the negligence of Carnival Cruise Lines and its employees. Id., at 4.

Petitioner moved for summary judgment, contending that the forum clause in respondents' tickets required the Shutes to bring their suit against petitioner in a court in the State of Florida. Petitioner contended, alternatively, that the District Court lacked personal jurisdiction over petitioner because petitioner's contacts with the State of Washington were insubstantial. The District Court granted the motion, holding that petitioner's contacts with Washington were constitutionally insufficient to support the exercise of personal jurisdiction. See App. to Pet. for Cert. 60a.

The Court of Appeals reversed. Reasoning that "but for" petitioner's solicitation of business in Washington, respondents would not have taken the cruise and Mrs. Shute would not have been injured, the court concluded that petitioner had sufficient contacts with Washington to justify the District Court's exercise of personal jurisdiction. 897 F.2d 377 , 385-386 (CA9 1990). *

Turning to the forum-selection clause, the Court of Appeals acknowledged that a court concerned with the enforceability of such a clause must begin its analysis with The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), where this Court held that forum-selection clauses, although not "historically . . . favored," are "prima facie valid." Id., at 9-10, 92 S.Ct., at 1913. See 897 F.2d, at 388 . The appellate court concluded that the forum clause should not be enforced because it "was not freely bargained for." Id., at 389. As an "independent justification" for refusing to enforce the clause, the Court of Appeals noted that there was evidence in the record to indicate that "the Shutes are physically and financially incapable of pursuing this litigation in Florida" and that the enforcement of the clause would operate to deprive them of their day in court and thereby contravene this Court's holding in The Bremen. 897 F.2d, at 389 .

We granted certiorari to address the question whether the Court of Appeals was correct in holding that the District Court should hear respondents' tort claim against petitioner. 498 U.S. 807 -808, 111 S.Ct. 39, 112 L.Ed.2d 16 (1990). Because we find the forum-selection clause to be dispositive of this question, we need not consider petitioner's constitutional argument as to personal jurisdiction. See Ashwander v. TVA, 297 U.S. 288 , 347 , 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring) (" 'It is not the habit of the Court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case,' " quoting Burton v. United States, 196 U.S. 283 , 295 , 25 S.Ct. 243, 245, 49 L.Ed. 482 (1905)).

We begin by noting the boundaries of our inquiry. First, this is a case in admiralty, and federal law governs the enforceability of the forum-selection clause we scrutinize. See Archawski v. Hanioti, 350 U.S. 532 , 533 , 76 S.Ct. 617, 619, 100 L.Ed. 676 (1956); The Moses Taylor, 4 Wall. 411, 427, 18 L.Ed. 397 (1867); Tr. of Oral Arg. 36-37, 12, 47-48. Cf. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 , 28 -29, 108 S.Ct. 2239, 2243-2244, 101 L.Ed.2d 22 (1988). Second, we do not address the question whether respondents had sufficient notice of the forum clause before entering the contract for passage. Respondents essentially have conceded that they had notice of the forum-selection provision. Brief for Respondents 26 ("The respondents do not contest the incorporation of the provisions nor [ sic ] that the forum selection clause was reasonably communicated to the respondents, as much as three pages of fine print can be communicated" ). Additionally, the Court of Appeals evaluated the enforceability of the forum clause under the assumption, although "doubtful," that respondents could be deemed to have had knowledge of the clause. See 897 F.2d, at 389 , and n. 11.

Within this context, respondents urge that the forum clause should not be enforced because, contrary to this Court's teachings in The Bremen, the clause was not the product of negotiation, and enforcement effectively would deprive respondents of their day in court. Additionally, respondents contend that the clause violates the Limitation of Vessel Owner's Liability Act, 46 U.S.C.App. § 183c. We consider these arguments in turn.

Both petitioner and respondents argue vigorously that the Court's opinion in The Bremen governs this case, and each side purports to find ample support for its position in that opinion's broad-ranging language. This seeming paradox derives in large part from key factual differences between this case and The Bremen, differences that preclude an automatic and simple application of The Bremen 's general principles to the facts here.

In The Bremen, this Court addressed the enforceability of a forum-selection clause in a contract between two business corporations. An American corporation, Zapata, made a contract with Unterweser, a German corporation, for the towage of Zapata's oceangoing drilling rig from Louisiana to a point in the Adriatic Sea off the coast of Italy. The agreement provided that any dispute arising under the contract was to be resolved in the London Court of Justice. After a storm in the Gulf of Mexico seriously damaged the rig, Zapata ordered Unterweser's ship to tow the rig to Tampa, Fla., the nearest point of refuge. Thereafter, Zapata sued Unterweser in admiralty in federal court at Tampa. Citing the forum clause, Unterweser moved to dismiss. The District Court denied Unterweser's motion, and the Court of Appeals for the Fifth Circuit, sitting en banc on rehearing, and by a sharply divided vote, affirmed. In re Complaint of Unterweser Reederei GmbH, 446 F.2d 907 (1971).

This Court vacated and remanded, stating that, in general, "a freely negotiated private international agreement, unaffected by fraud, undue influence, or overweening bargaining power, such as that involved here, should be given full effect." 407 U.S., at 12 - 13 , 92 S.Ct. at 1914-1915 (footnote omitted). The Court further generalized that "in the light of present-day commercial realities and expanding international trade we conclude that the forum clause should control absent a strong showing that it should be set aside." Id., at 15, 92 S.Ct., at 1916. The Court did not define precisely the circumstances that would make it unreasonable for a court to enforce a forum clause. Instead, the Court discussed a number of factors that made it reasonable to enforce the clause at issue in The Bremen and that, presumably, would be pertinent in any determination whether to enforce a similar clause.

In this respect, the Court noted that there was "strong evidence that the forum clause was a vital part of the agreement, and [that] it would be unrealistic to think that the parties did not conduct their negotiations, including fixing the monetary terms, with the consequences of the forum clause figuring prominently in their calculations." Id., at 14, 92 S.Ct., 1915 (footnote omitted). Further, the Court observed that it was not "dealing with an agreement between two Americans to resolve their essentially local disputes in a remote alien forum," and that in such a case, "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 17, 92 S.Ct., at 1917. The Court stated that even where the forum clause establishes a remote forum for resolution of conflicts, "the party claiming [unfairness] should bear a heavy burden of proof." Ibid.

In applying The Bremen, the Court of Appeals in the present litigation took note of the foregoing "reasonableness" factors and rather automatically decided that the forum-selection clause was unenforceable because, unlike the parties in The Bremen, respondents are not business persons and did not negotiate the terms of the clause with petitioner. Alternatively, the Court of Appeals ruled that the clause should not be enforced because enforcement effectively would deprive respondents of an opportunity to litigate their claim against petitioner.

The Bremen concerned a "far from routine transaction between companies of two different nations contemplating the tow of an extremely costly piece of equipment from Louisiana across the Gulf of Mexico and the Atlantic Ocean, through the Mediterranean Sea to its final destination in the Adriatic Sea." Id., at 13, 92 S.Ct., at 1915. These facts suggest that, even apart from the evidence of negotiation regarding the forum clause, it was entirely reasonable for the Court in The Bremen to have expected Unterweser and Zapata to have negotiated with care in selecting a forum for the resolution of disputes arising from their special towing contract.

In contrast, respondents' passage contract was purely routine and doubtless nearly identical to every commercial passage contract issued by petitioner and most other cruise lines. See, e.g., Hodes v. S.N.C. Achille Lauro ed Altri-Gestione, 858 F.2d 905 , 910 (CA3 1988), cert. dism'd, 490 U.S. 1001 , 109 S.Ct. 1633, 104 L.Ed.2d 149 (1989). In this context, it would be entirely unreasonable for us to assume that respondents—or any other cruise passenger—would negotiate with petitioner the terms of a forum-selection clause in an ordinary commercial cruise ticket. Common sense dictates that a ticket of this kind will be a form contract the terms of which are not subject to negotiation, and that an individual purchasing the ticket will not have bargaining parity with the cruise line. But by ignoring the crucial differences in the business contexts in which the respective contracts were executed, the Court of Appeals' analysis seems to us to have distorted somewhat this Court's holding in The Bremen.

In evaluating the reasonableness of the forum clause at issue in this case, we must refine the analysis of The Bremen to account for the realities of form passage contracts. As an initial matter, we do not adopt the Court of Appeals' determination that a nonnegotiated forum-selection clause in a form ticket contract is never enforceable simply because it is not the subject of bargaining. Including a reasonable forum clause in a form contract of this kind well may be permissible for several reasons: First, a cruise line has a special interest in limiting the fora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several different fora. See The Bremen, 407 U.S., at 13 , and n. 15, 92 S.Ct., at 1915, and n. 15; Hodes, 858 F.2d, at 913 . Additionally, a clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions. See Stewart Organization, 487 U.S., at 33 , 108 S.Ct., at 2249 (concurring opinion). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like that at issue in this case 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. Cf. Northwestern Nat. Ins. Co. v. Donovan, 916 F.2d 372 , 378 (CA7 1990).

We also do not accept the Court of Appeals' "independent justification" for its conclusion that The Bremen dictates that the clause should not be enforced because "[t]here is evidence in the record to indicate that the Shutes are physically and financially incapable of pursuing this litigation in Florida." 897 F.2d, at 389 . We do not defer to the Court of Appeals' findings of fact. In dismissing the case for lack of personal jurisdiction over petitioner, the District Court made no finding regarding the physical and financial impediments to the Shutes' pursuing their case in Florida. The Court of Appeals' conclusory reference to the record provides no basis for this Court to validate the finding of inconvenience. Furthermore, the Court of Appeals did not place in proper context this Court's statement in The Bremen 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." 407 U.S., at 17 , 92 S.Ct., at 1917. The Court made this statement in evaluating a hypothetical "agreement between two Americans to resolve their essentially local disputes in a remote alien forum." Ibid. In the present case, Florida is not a "remote alien forum," nor—given the fact that Mrs. Shute's accident occurred off the coast of Mexico—is this dispute an essentially local one inherently more suited to resolution in the State of Washington than in Florida. In light of these distinctions, and because respondents do not claim lack of notice of the forum clause, we conclude that they have not satisfied the "heavy burden of proof," ibid., required to set aside the clause on grounds of inconvenience.

It bears emphasis that forum-selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness. In this case, there is no indication that petitioner set Florida as the forum in which disputes were to be resolved as a means of discouraging cruise passengers from pursuing legitimate claims. Any suggestion of such a bad-faith motive is belied by two facts: Petitioner has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports. Similarly, there is no evidence that petitioner obtained respondents' accession to the forum clause by fraud or overreaching. Finally, respondents have conceded that they were given notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity. In the case before us, therefore, we conclude that the Court of Appeals erred in refusing to enforce the forum-selection clause.

Respondents also contend that the forum-selection clause at issue violates 46 U.S.C.App. § 183c. That statute, enacted in 1936, see ch. 521, 49 Stat. 1480 , provides:

"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation, contract, or agreement are hereby declared to be against public policy and shall be null and void and of no effect."

By its plain language, the forum-selection clause before us does not take away respondents' right to "a trial by [a] court of competent jurisdiction" and thereby contravene the explicit proscription of § 183c. Instead, the clause states specifically that actions arising out of the passage contract shall be brought "if at all," in a court "located in the State of Florida," which, plainly, is a "court of competent jurisdiction" within the meaning of the statute.

Respondents appear to acknowledge this by asserting that although the forum clause does not directly prevent the determination of claims against the cruise line, it causes plaintiffs unreasonable hardship in asserting their rights and therefore violates Congress' intended goal in enacting § 183c. Significantly, however, respondents cite no authority for their contention that Congress' intent in enacting § 183c was to avoid having a plaintiff travel to a distant forum in order to litigate. The legislative history of § 183c suggests instead that this provision was enacted in response to passenger-ticket conditions purporting to limit the shipowner's liability for negligence or to remove the issue of liability from the scrutiny of any court by means of a clause providing that "the question of liability and the measure of damages shall be determined by arbitration." See S.Rep. No. 2061, 74th Cong., 2d Sess., 6 (1936); H.R.Rep. No. 2517, 74th Cong., 2d Sess., 6 (1936). See also, Safety of Life and Property at Sea: Hearings before the House Committee on Merchant Marine and Fisheries, 74th Cong., 2d Sess., pt. 4, pp. 20, 36-37, 57, 109-110, 119 (1936). There was no prohibition of a forum-selection clause. Because the clause before us allows for judicial resolution of claims against petitioner and does not purport to limit petitioner's liability for negligence, it does not violate § 183c.

The judgment of the Court of Appeals is reversed.

It is so ordered.

Justice STEVENS, with whom Justice MARSHALL joins, dissenting.

The Court prefaces its legal analysis with a factual statement that implies that a purchaser of a Carnival Cruise Lines passenger ticket is fully and fairly notified about the existence of the choice of forum clause in the fine print on the back of the ticket. See ante, at 587-588. Even if this implication were accurate, I would disagree with the Court's analysis. But, given the Court's preface, I begin my dissent by noting that only the most meticulous passenger is likely to become aware of the forum-selection provision. I have therefore appended to this opinion a facsimile of the relevant text, using the type size that actually appears in the ticket itself. A careful reader will find the forum-selection clause in the 8th of the 25 numbered paragraphs.

Of course, many passengers, like the respondents in this case, see ante, at 587, will not have an opportunity to read paragraph 8 until they have actually purchased their tickets. By this point, the passengers will already have accepted the condition set forth in paragraph 16(a), which provides that "[t]he Carrier shall not be liable to make any refund to passengers in respect of . . . tickets wholly or partly not used by a passenger." Not knowing whether or not that provision is legally enforceable, I assume that the average passenger would accept the risk of having to file suit in Florida in the event of an injury, rather than canceling—without a refund—a planned vacation at the last minute. The fact that the cruise line can reduce its litigation costs, and therefore its liability insurance premiums, by forcing this choice on its passengers does not, in my opinion, suffice to render the provision reasonable. Cf. Steven v. Fidelity & Casualty Co. of New York, 58 Cal.2d 862, 883, 27 Cal.Rptr. 172, 186, 377 P.2d 284, 298 (1962) (refusing to enforce limitation on liability in insurance policy because insured "must purchase the policy before he even knows its provisions").

Even if passengers received prominent notice of the forum-selection clause before they committed the cost of the cruise, I would remain persuaded that the clause was unenforceable under traditional principles of federal admiralty law and is "null and void" under the terms of Limitation of Vessel Owners Liability Act, ch. 521, 49 Stat. 1480 , 46 U.S.C.App. § 183c, which was enacted in 1936 to invalidate expressly stipulations limiting shipowners' liability for negligence.

Exculpatory clauses in passenger tickets have been around for a long time. These clauses are typically the product of disparate bargaining power between the carrier and the passenger, and they undermine the strong public interest in deterring negligent conduct. For these reasons, courts long before the turn of the century consistently held such clauses unenforceable under federal admiralty law. Thus, in a case involving a ticket provision purporting to limit the shipowner's liability for the negligent handling of baggage, this Court wrote:

"It is settled in the courts of the United States that exemptions limiting carriers from responsibility for the negligence of themselves or their servants are both unjust and unreasonable, and will be deemed as wanting in the element of voluntary assent; and, besides, that such conditions are in conflict with public policy. This doctrine was announced so long ago, and has been so frequently reiterated, that it is elementary. We content ourselves with referring to the cases of the Baltimore & Ohio &c. Railway v. Voigt, 176 U.S. 498 , 505 , 507 [20 S.Ct. 385, 388, 44 L.Ed. 560 (1900) ], and Knott v. Botany Mills, 179 U.S. 69 , 71 [21 S.Ct. 30, 30-31, 45 L.Ed. 90 (1900) ], where the previously adjudged cases are referred to and the principles by them expounded are restated." The Kensington, 183 U.S. 263, 268, 22 S.Ct. 102, 104, 46 L.Ed. 190 (1902).

Clauses limiting a carrier's liability or weakening the passenger's right to recover for the negligence of the carrier's employees come in a variety of forms. Complete exemptions from liability for negligence or limitations on the amount of the potential damage recovery, 1 requirements that notice of claims be filed within an unreasonably short period of time, 2 provisions mandating a choice of law that is favorable to the defendant in negligence cases, 3 and forum-selection clauses are all similarly designed to put a thumb on the carrier's side of the scale of justice. 4

Forum-selection clauses in passenger tickets involve the intersection of two strands of traditional contract law that qualify the general rule that courts will enforce the terms of a contract as written. Pursuant to the first strand, courts traditionally have reviewed with heightened scrutiny the terms of contracts of adhesion, form contracts offered on a take-or-leave basis by a party with stronger bargaining power to a party with weaker power. Some commentators have questioned whether contracts of adhesion can justifiably be enforced at all under traditional contract theory because the adhering party generally enters into them without manifesting knowing and voluntary consent to all their terms. See, e.g., Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harv.L.Rev. 1173, 1179-1180 (1983); Slawson, Mass Contracts: Lawful Fraud in California, 48 S.Cal.L.Rev. 1, 12-13 (1974); K. Llewellyn, The Common Law Tradition 370-371 (1960).

The common law, recognizing that standardized form contracts account for a significant portion of all commercial agreements, has taken a less extreme position and instead subjects terms in contracts of adhesion to scrutiny for reasonableness. Judge J. Skelly Wright set out the state of the law succinctly in Williams v. Walker-Thomas Furniture Co., 121 U.S.App.D.C. 315, 319-320, 350 F.2d 445 , 449-450 (1965) (footnotes omitted):

"Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all of the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld."

See also Steven, 58 Cal.2d, at 879-883, 27 Cal.Rptr. at 183-185, 377 P.2d, at 295-297; Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960).

The second doctrinal principle implicated by forum-selection clauses is the traditional rule that "contractual provisions, which seek to limit the place or court in which an action may . . . be brought, are invalid as contrary to public policy." See Dougherty, Validity of Contractual Provision Limiting Place or Court in Which Action May Be Brought, 31 A.L.R.4th 404, 409, § 3 (1984). See also Home Insurance Co. v. Morse, 20 Wall. 445, 451, 22 L.Ed. 365 (1874). Although adherence to this general rule has declined in recent years, particularly following our decision in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), the prevailing rule is still that forum-selection clauses are not enforceable if they were not freely bargained for, create additional expense for one party, or deny one party a remedy. See 31 A.L.R.4th, at 409-438 (citing cases). A forum-selection clause in a standardized passenger ticket would clearly have been unenforceable under the common law before our decision in The Bremen, see 407 U.S., at 9 , and n. 10, 92 S.Ct., at 1912-13, and n. 10, and, in my opinion, remains unenforceable under the prevailing rule today.

The Bremen, which the Court effectively treats as controlling this case, had nothing to say about stipulations printed on the back of passenger tickets. That case involved the enforceability of a forum-selection clause in a freely negotiated international agreement between two large corporations providing for the towage of a vessel from the Gulf of Mexico to the Adriatic Sea. The Court recognized that such towage agreements had generally been held unenforceable in American courts, 5 but held that the doctrine ofthose cases did not extend to commercial arrangements between parties with equal bargaining power.

The federal statute that should control the disposition of the case before us today was enacted in 1936 when the general rule denying enforcement of forum-selection clauses was indisputably widely accepted. The principal subject of the statute concerned the limitation of shipowner liability, but as the following excerpt from the House Report explains, the section that is relevant to this case was added as a direct response to shipowners' ticketing practices.

"During the course of the hearings on the bill (H.R. 9969) there was also brought to the attention of the committee a practice of providing on the reverse side of steamship tickets that in the event of damage or injury caused by the negligence or fault of the owner or his servants, the liability of the owner shall be limited to a stipulated amount, in some cases $5,000, and in others substantially lower amounts, or that in such event the question of liability and the measure of damages shall be determined by arbitration. The amendment to chapter 6 of title 48 of the Revised Statutes proposed to be made by section 2 of the committee amendment is intended to, and in the opinion of the committee will, put a stop to all such practices and practices of a like character. " H.R.Rep. No. 2517, 74th Cong., 2d Sess., 6-7 (1936) (emphasis added); see also S.Rep. No. 2061, 74th Cong., 2d Sess., 6-7 (1936).

The intent to "put a stop to all such practices and practices of a like character" was effectuated in the second clause of the statute. It reads:

"It shall be unlawful for the manager, agent, master, or owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner, master, or agent from liability, or from liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation, contract, or agreement are declared to be against public policy and shall be null and void and of no effect." 46 U.S.C.App. § 183c (emphasis added).

The stipulation in the ticket that Carnival Cruise sold to respondents certainly lessens or weakens their ability to recover for the slip and fall incident that occurred off the west coast of Mexico during the cruise that originated and terminated in Los Angeles, California. It is safe to assume that the witnesses whether other passengers or members of the crew—can be assembled with less expense and inconvenience at a west coast forum than in a Florida court several thousand miles from the scene of the accident.

A liberal reading of the 1936 statute is supported by both its remedial purpose and by the legislative history's general condemnation of "all such practices." Although the statute does not specifically mention forum-selection clauses, its language is broad enough to encompass them. The absence of a specific reference is adequately explained by the fact that such clauses were already unenforceable under common law and would not often have been used by carriers, which were relying on stipulations that purported to exonerate them from liability entirely. Cf. Moskal v. United States, 498 U.S. 103 , 110 -113, 111 S.Ct. 461, ----, 112 L.Ed.2d 449 (1990).

The Courts of Appeals, construing an analogous provision of the Carriage of Goods by Sea Act, 46 U.S.C.App. § 1300 et seq., have unanimously held invalid as limitations on liability forum-selection clauses requiring suit in foreign jurisdictions. See, e.g., Hughes Drilling Fluids v. M/V Luo Fu Shan, 852 F.2d 840 (CA5 1988), cert. denied, 489 U.S. 1033 , 109 S.Ct. 1171, 103 L.Ed.2d 229 (1989); Union Ins. Soc. of Canton, Ltd. v. S.S. Elikon, 642 F.2d 721 , 724-725 (CA4 1981); Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 , 203-204 (CA2 1967). Commentators have also endorsed this view. See, e.g., G. Gilmore & C. Black, The Law of Admiralty 145, and n. 23 (2d ed. 1975); Mendelsohn, Liberalism, Choice of Forum Clauses and the Hague Rules, 2 J. of Maritime Law & Comm. 661, 663-666 (1971). The forum-selection clause here does not mandate suit in a foreign jurisdiction, and therefore arguably might have less of an impact on a plaintiff's ability to recover. See Fireman's Fund American Ins. Cos. v. Puerto Rican Forwarding Co., 492 F.2d 1294 (CA1 1974). However, the plaintiffs in this case are not large corporations but individuals, and the added burden on them of conducting a trial at the opposite end of the country is likely proportional to the additional cost to a large corporation of conducting a trial overseas. 6

Under these circumstances, the general prohibition against stipulations purporting "to lessen, weaken, or avoid" the passenger's right to a trial certainly should be construed to apply to the manifestly unreasonable stipulation in these passengers' tickets. Even without the benefit of the statute, I would continue to apply the general rule that prevailed prior to our decision in The Bremen to forum-selection clauses in passenger tickets.

I respectfully dissent.

The Court of Appeals had filed an earlier opinion also reversing the District Court and ruling that the District Court had personal jurisdiction over the cruise line and that the forum-selection clause in the tickets was unreasonable and was not to be enforced. 863 F.2d 1437 (CA9 1988). That opinion, however, was withdrawn when the court certified to the Supreme Court of Washington the question whether the Washington long-arm statute, Wash.Rev.Code § 4.28.185 (1988), conferred personal jurisdiction over Carnival Cruise Lines for the claim asserted by the Shutes. See 872 F.2d 930 (CA9 1989). The Washington Supreme Court answered the certified question in the affirmative on the ground that the Shutes' claim "arose from" petitioner's advertisement in Washington and the promotion of its cruises there. 113 Wash.2d 763, 783 P.2d 78 (1989). The Court of Appeals then "refiled" its opinion "as modified herein." See 897 F.2d, at 380 , n. 1.

See 46 U.S.C.App. § 183c:

"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss or injury. . . ."

See 46 U.S.C.App. § 183b(a):

"It shall be unlawful for the manager, agent, master, or owner of any sea-going vessel (other than tugs, barges, fishing vessels and their tenders) transporting passengers or merchandise or property from or between ports of the United States and foreign ports to provide by rule, contract, regulation, or otherwise a shorter period for giving notice of, or filing claims for loss of life or bodily injury, than six months, and for the institution of suits on such claims, than one year, such period for institution of suits to be computed from the day when the death or injury occurred."

See also 49 U.S.C. § 11707(e) ("A carrier or freight forwarder may not provide by rule, contract, or otherwise, a period of less than 9 months for filing a claim against it under this section and a period of less than 2 years for bringing a civil action against it under this section").

See, e.g., The Kensington, 183 U.S. 263 , 269 , 22 S.Ct. 102, 104, 46 L.Ed. 190 (1902) (refusing to enforce clause requiring that all disputes under contract for passage be governed by Belgian law because such law would have favored the shipowner in violation of United States public policy).

All these clauses will provide passengers who purchase tickets containing them with a "benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting [its exposure to liability]." See ante, at 594. Under the Court's reasoning, all these clauses, including a complete waiver of liability, would be enforceable, a result at odds with longstanding jurisprudence.

"In [ Carbon Black Export, Inc. v. The Monrosa, 254 F.2d 297 (CA5 1958), cert. dism'd, 359 U.S. 180 , 79 S.Ct. 710, 3 L.Ed.2d 723 (1959),] the Court of Appeals had held a forum-selection clause unenforceable, reiterating the traditional view of many American courts that 'agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to public policy and will not be enforced.' 254 F.2d, at 300 -301." The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 6 , 92 S.Ct. 1907, 1911, 32 L.Ed.2d 513 (1972).

The Court does not make clear whether the result in this case would also apply if the clause required Carnival passengers to sue in Panama, the country in which Carnival is incorporated.

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Carnival Cruise Lines, Inc. v. Shute

499 U.S. 585, 111 S. Ct. 1522 (1991)

Quick Summary

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Eulala and Russel Shute (plaintiffs) filed a lawsuit against Carnival Cruise Lines, Inc. (defendant) in Washington after Eulala Shute got injured on a cruise. The cruise line moved to dismiss the case, citing a clause in their ticket contracts that required all disputes to be handled in Florida, where Carnival headquarters is located. Lower courts had mixed judgments, and the case went to the Supreme Court.

Facts of the Case

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The Shutes (plaintiffs) purchased tickets for a Carnival Cruise Lines ship (defendant) through a travel agent in Washington state. After purchasing the tickets, they received paper tickets containing a form contract, which included a clause requiring all legal disputes to be handled in Florida.

During the cruise, Eulala slipped on a deck mat and got injured. They filed a lawsuit against Carnival in Washington, but the cruise line argued that pursuant to the contract, the case should be heard in Florida, and Washington district court lacked personal jurisdiction.

Procedural Posture and History

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The District Court supported Carnival’s claim for insufficient contacts for personal jurisdiction in Washington and granted its motion to dismiss. The Court of Appeals reversed the decision, ruling that significant contacts with Washington existed and it would not abide by the forum selection clause. Carnival then appealed, and the case went to the Supreme Court.

I.R.A.C. Format

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Can a forum selection clause in a non-negotiated contract, stating that all disputes will be brought in a specific forum, allow that forum to exercise personal jurisdiction over the parties?

Rule of Law

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A forum selection clause in a non-negotiated contract can allow a specified forum to exercise personal jurisdiction unless issues of notice and fundamental fairness arise.

Reasoning and Analysis

Reasoning and analysis icon

The majority opinion emphasized that a forum selection clause could help reduce uncertainty about where to bring litigation arising from a contract. It held that it would be unfair for Carnival to face cases nationwide and that the clause helps reduce potential litigation costs, resulting in lower ticket prices for passengers.

A conclusion icon

The court ruled in favor of Carnival, stating that such forum selection clauses are generally enforceable, barring any notice or fairness issues.

Concurring Opinions

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Justices Rehnquist, White, O’Connor, Scalia, Kennedy, and Souter concurred with the majority, seeing the utility of the forum selection clause in reducing confusion and potential litigation costs.

Dissenting Opinions

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Justices Stevens and Marshall disagreed with the majority’s reasoning that reduced insurance premiums and litigation costs validate forum selection clauses’ reasonability.

Court Directions

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The case was concluded with the Supreme Court’s judgment, agreeing with the forum selection clause’s enforceability, and the dispute was to be handled in Florida as per the ticket contract.

Key Takeaways

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  • Forum selection clauses in non-negotiated contracts allow the specified forum to assert jurisdiction, barring any notice or fundamental fairness issues.
  • Such clauses help reduce potential litigation costs and uncertainty regarding where to bring litigation.

carnival cruise lines inc. v. shute (1991)

Relevant FAQ of this case

What is implied by judicial fairness in forum selection clauses context.

Judicial fairness involves courts evaluation on whether a forum selection clause is fairly applied to both parties; considering aspects like inconvenience and contract clarity.

What differentiates typical contracts with forum selection clauses?

They usually contain standardized terms compared to other contracts with more flexible terms.

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  • [justia] Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)
  • [google.scholar] Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)

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IMAGES

  1. Carnival Cruise Lines and Flowers Case Brief.docx

    carnival cruise lines inc. v. shute (1991)

  2. Carnival Cruise Lines v. Shute 1991 .docx

    carnival cruise lines inc. v. shute (1991)

  3. Carnival.doc

    carnival cruise lines inc. v. shute (1991)

  4. The Cruise Ship Way (Carnival Cruise Lines, Inc. v. Shute)

    carnival cruise lines inc. v. shute (1991)

  5. Carnival Cruise Line, Inc. v. Shute Case Brief Summary

    carnival cruise lines inc. v. shute (1991)

  6. Carnival Cruise Lines Inc. v. Shute.docx

    carnival cruise lines inc. v. shute (1991)

VIDEO

  1. Carnival Cruise Line to resume cruises August 1st

COMMENTS

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

    Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) Argued: January 15, 1991 Decided: April 17, 1991 Annotation Primary Holding

  2. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), was a case in which the Supreme Court of the United States held that United States federal courts will enforce forum selection clauses so long as the clause is not unreasonably burdensome to the party seeking to escape it. [1] Background

  3. Carnival Cruise Lines, Inc. v. Shute

    Plaintiff Carnival Cruise Lines, Inc. opposes a suit by a passenger injured on one of their cruise ships, because the cruise tickets contained an agreement that all matters relating to the cruise would be litigated before a Florida court. Every Bundle includes the complete text from each of the titles below:

  4. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute. Media. Oral Argument - January 15, 1991; Opinion Announcement - April 17, 1991; Opinions. Syllabus ; View Case ... Decided by Rehnquist Court . Lower court United States Court of Appeals for the Ninth Circuit . Citation 499 US 585 (1991) Argued. Jan 15, 1991. Decided. Apr 17, 1991. Advocates. Richard K ...

  5. U.S. Reports: Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991

    MLA citation style: Blackmun, Harry A, and Supreme Court Of The United States. U.S. Reports: Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585. 1990.Periodical.

  6. Shute v. Carnival Cruise Lines, Inc.

    Id. The Supreme Court remanded to the Ninth Circuit, which entered two orders on June 10, 1991. One Order stated as follows: The judgment of the district court is affirmed for the reasons set forth in Carnival Cruise Lines, Inc. v. Shute, ___ U.S. ___, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). Shute v.

  7. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), was a case in which the Supreme Court of the United States held that United States federal courts will enforce forum selection clauses so long as the clause is not unreasonably burdensome to the party seeking to escape it.

  8. Contract Law Walks the Plank: Carnival Cruise Lines, Inc. v. Shute

    1 Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). Professor Linda S. Mullenix is also contributing to this Symposium a critique of the Shute case, concentrating on its proce-dural-law aspects. In this piece, I will confine myself to considering the contract law ramifi-cations of the decision.

  9. Carnival Cruise Lines, Inc. v. Shute: The Titanic of Worst Decisions

    Carinval Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). Irrefutably, Carnival Cruise Lines wins the distinction as the worst Supreme Court deci-sion in this Symposium issue, having garnered the scathing opprobrium of not one, but two law professors (the only such deserving decision in this issue).

  10. Conflict of Laws -- Textbook : Carnival Cruise Lines Inc. v. Shute

    1991-04-17 499 U.S. 585 (1991) CARNIVAL CRUISE LINES, INC. v. SHUTE ET VIR No. 89-1647. Supreme Court of the United States. Argued January 15, 1991. Decided April 17, 1991 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Richard K. Willard argued the cause for petitioner.

  11. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute Supreme Court of the United States, 1991 499 U.S. 585. Listen to the opinion: Tweet Brief Fact Summary. The Shutes bought a cruise ticket. The contract - which was attached to the ticket - stated that the forum for litigation would be Florida. The Shutes sued in Washington district court.

  12. Carnival Cruise Lines, Inc. v. Shute

    Since Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), forum selection clauses typically enjoy robust enforcement at both the state and federal levels.

  13. 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 ...

  14. Shute v. Carnival Cruise Lines, Inc., 804 F. Supp. 1525 (S.D. Fla. 1992)

    Defendant moved for summary judgment on two grounds: (1) that the *1526 district court lacked personal jurisdiction over the Defendant, and (2) that the forum selection clause in the passenger ticket contract required that any suit against Defendant be brought in Florida. See Order, No. C86-1204D (W.D.Wash. June 25, 1987).

  15. CARNIVAL CRUISE LINES, INC. v. SHUTE, 499 U.S. 585 (1991)

    CARNIVAL CRUISE LINES, INC. v. SHUTE (1991) Argued: January 15, 1991 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.

  16. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute Download PDF Check Treatment Summary holding that forum-selection clause in cruise passengers' form contract was reasonable and enforceable where there was "no indication" that the designated forum was chosen to "discourag [e] cruise passengers from pursing legitimate claims" Summary of this case from Thakkar v.

  17. Carnival Cruise Lines Inc. v. Shute

    Court Documents Opinion of the Court Dissenting Opinion Stevens United States Supreme Court 499 U.S. 585 Carnival Cruise Lines Inc. v. Shute No. 89-1647 Argued: Jan. 15, 1991. --- Decided: April 17, 1991 Syllabus

  18. Carnival Cruise Lines, Inc. v. Shute Case Brief for Law School

    Carnival Cruise Lines, Inc. v. Shute (1991) Supreme Court of the United States - 499 U.S. 585, 113 L. Ed. 2d 622, 111 S. Ct. 1522, 1991 U.S. LEXIS 2221, SCDB 1990-063 tl;dr: A couple sued a cruise line for negligence, but the cruise line argued that the forum-selection clause in the tickets required the case to be litigated in Florida.

  19. Contract Law Walks the Plank: Carnival Cruise Lines v. Shute

    Recommended Citation Charles L. Knapp, Contract Law Walks the Plank: Carnival Cruise Lines v. Shute, 12 Nev. L.J. 553 (2012). Available at: htp://repository.uchastings.edu/faculty_scholarship/330 This Article is brought to you for free and open access by UC Hastings Scholarship Repository.

  20. CARNIVAL CRUISE LINES, INC., Petitioner v. Eulala SHUTE, et vir

    Decided April 17, 1991. 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.

  21. Carnival Cruise Lines, Inc. v. Shute

    Carnival Cruise Lines, Inc. v. Shute 499 U.S. 585, 111 S. Ct. 1522 (1991) Quick Summary Eulala and Russel Shute (plaintiffs) filed a lawsuit against Carnival Cruise Lines, Inc. (defendant) in Washington after Eulala Shute got injured on a cruise.