Case Title: Carnival Cruise lines, Inc. v. Shute
Citation: 499 U.S. 585, 111 S. Ct. 1522 113 L. Ed. 2d 622 (1991)
Facts: The plaintiffs, Eulala and Russel Shute, were passengers on a cruise ship operated by the defendant, Carnival Cruise Lines, Inc. Shute purchased passage for a seven day cruise on the Tropicale, through a Washington travel agent 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 which then sailed to Purto Vallarta, Mexico before returning to Los Angeles. While the ship was in international waters, Plaintiff Eulala Shute was injured from slipping on a deck mat. The plaintiff then filed a suit in Washington, in violation of the contract clause.
The defendant sought summary judgment based on: 1. The forum selection clause, and 2. 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.
Main Issue: Whether the Supreme Court should enforce a forum-selection clause forcing individuals to submit to jurisdiction in a particular state.
Court decision: The Supreme Court Justice Blackmun held the Shutes to the contract printed on the back of their ticket.
Holding: Supreme Court ruled to enforce the forum selection clause but Justice Stevens and Justice Marshall filed a dissenting opinion 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 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.
Rationale: The court held the Shutes to the contract printed on their ticket. The Court noted that Florida is not a random jurisdiction because Carnival was headquartered there and does much of their 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 bought the tickets, 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 the Court believes will translate to cheaper tickets.