Carnival Cruise Lines, Inc. v. Shute
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| Carnival Cruise Lines, Inc. v. Shute | ||||||||||||
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| Argued January 15, 1991 Decided April 17, 1991 |
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| Holding | ||||||||||||
| The Court 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. | ||||||||||||
| Court membership | ||||||||||||
| Chief Justice: William Rehnquist Associate Justices: Byron White, Thurgood Marshall, Harry Blackmun, John Paul Stevens, Sandra Day O'Connor, Antonin Scalia, Anthony Kennedy, David Souter |
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| Case opinions | ||||||||||||
| Majority by: Blackmun Joined by: Rehnquist, White, O'Connor, Scalia, Kennedy, Souter Dissent by: Stevens Joined by: Marshall |
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| Laws applied | ||||||||||||
| Forum selection clause | ||||||||||||
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.
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[edit] Facts
The plaintiffs, Eulala and Russel Shute, were passengers on a cruise ship operated by the defendant, Carnival Cruise Lines, Inc. The Shutes had bought tickets in Washington and signed a contract, with a forum selection clause mandating that injured parties would sue in Florida, to the exclusion of all other jurisdictions. The plaintiffs boarded the cruise in California, and one was injured in international waters off the coast of Mexico. The plaintiffs then filed a lawsuit in Washington, in violation of the contract clause.
The defendant sought summary judgment based on:
- the forum selection clause, and
- a lack of minimum contacts between the defendant and the forum state
The trial court dismissed based solely on the lack of sufficient contacts. The United States Court of Appeals for the Ninth Circuit reversed because the cruise line had reached into Washington via advertising, and held that but for the defendant's solicitation, there would be no cause of action. The Court of Appeals also held that forum selection clause was void because of unequal bargaining power between the parties, and because it would be an undue hardship for the Shutes to have to go all the way to Florida to sue. This decision was appealed to the Supreme Court based on that court's Admiralty jurisdiction.
[edit] Question presented
The Supreme Court limited the issue to whether the forum selection clause was enforceable.
[edit] Opinion of the Court
The Court, in an opinion by Justice Blackmun, held the Shutes to their deal. The Court noted that Florida is not a random jurisdiction - Carnival is headquartered there and does much business there, and Washington does not necessarily make sense in the context of an accident off the coast of Mexico on a ship that left from California. The hardship on the plaintiffs mattered little, as they had signed the contract, and no one forced them to go on a cruise. On the other hand, it made sense for the cruise industry, which carries passengers from all over, to have a single forum for lawsuits. The cruise line will thereby avoid defending itself in many different courts, which will save money, which will translate to cheaper tickets.
[edit] Dissent
Justice Stevens filed a dissenting opinion, joined by Justice Marshall. Stevens dissents for several reasons including objections to contracts of adhesion created by parties who have unequal bargaining power, the fact that the notice of the forum selection clause was not made available to the purchaser until after payment was tendered and a lack of an opportunity for refunds at the point when the forum selection clause was disclosed.
Stevens attached a copy of the original ticket to his dissent to show how only the most meticulous passenger would notice the clause and that notice might be in contention.
