Carnival Cruise Lines, Inc. v. Shute
Encyclopedia
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 clause
s so long as the clause is not unreasonably burdensome to the party seeking to escape it.
s, 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 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.
. 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.
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
held that United States federal courts will enforce forum selection clause
Forum selection clause
A forum selection clause in a contract with a conflict of laws element allows the parties to agree that any litigation resulting from that contract will be initiated in a specific forum...
s so long as the clause is not unreasonably burdensome to the party seeking to escape it.
Facts
The plaintiffPlaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
s, Eulala and Russel Shute, were passengers on a cruise ship
Cruise ship
A cruise ship or cruise liner is a passenger ship used for pleasure voyages, where the voyage itself and the ship's amenities are part of the experience, as well as the different destinations along the way...
operated by the defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
, Carnival Cruise Lines
Carnival Cruise Lines
Carnival Cruise Lines is a British-American owned cruise line, based in Doral, Florida, a suburb of Miami in the United States. Originally an independent company founded in 1972 by Ted Arison, the company is now one of eleven cruise ship brands owned and operated by Carnival Corporation & plc...
, Inc. The Shutes had bought tickets in Washington and signed a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
, with a forum selection clause mandating that injured parties would sue in Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
, to the exclusion of all other jurisdictions. The plaintiffs boarded the cruise in California, and one was injured in international waters
International waters
The terms international waters or trans-boundary waters apply where any of the following types of bodies of water transcend international boundaries: oceans, large marine ecosystems, enclosed or semi-enclosed regional seas and estuaries, rivers, lakes, groundwater systems , and wetlands.Oceans,...
off the coast of Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
. The plaintiffs then filed a lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
in Washington, in violation of the contract clause.
The defendant sought summary judgment
Summary judgment
In law, a summary judgment is a determination made by a court without a full trial. Such a judgment may be issued as to the merits of an entire case, or of specific issues in that case....
based on:
- the forum selection clause, and
- a lack of minimum contactsMinimum contactsMinimum contacts is a term used in the United States law of civil procedure to determine when it is appropriate for a court in one state to assert personal jurisdiction over a defendant from another state...
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
United States Court of Appeals for the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit is a U.S. federal court with appellate jurisdiction over the district courts in the following districts:* District of Alaska* District of Arizona...
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
Admiralty law
Admiralty law is a distinct body of law which governs maritime questions and offenses. It is a body of both domestic law governing maritime activities, and private international law governing the relationships between private entities which operate vessels on the oceans...
jurisdiction.
Question presented
The Supreme Court limited the issue to whether the forum selection clause was enforceable.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.Dissent
Justice Stevens filed a dissenting opinion, joined by Justice MarshallThurgood Marshall
Thurgood Marshall was an Associate Justice of the United States Supreme Court, serving from October 1967 until October 1991...
. 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.
See also
- List of United States Supreme Court cases, volume 499
- List of United States Supreme Court cases
- Lists of United States Supreme Court cases by volume
- List of United States Supreme Court cases by the Rehnquist Court