– Shute was injured while on the cruise off the coast of Mexico, brought suit against Carnival, but Carnival had a clause in their tickets that all litigation would be handled in Florida…there principal place of business.
o Assented to the provisions of the contract of the forum-selection.
– But should not be enforced because it was not a product of negotiation and would deprive them of their day in court.
– District court – petitioner’s contract was not sufficient to warrant personal jurisdiction.
– Appellate court reversed the decision – but for the advertisements in Washington, the Shutes wouldn’t have taken the cruise.
o Forum clause was not freely bargained for as an independent Justification
– Shutes are physically and financially incapable of having the suit in Florida….deprive them of their day in court.
– From Bremen court took the reasonableness factors “automatically” because the parties are not business parties and did not negotiate the terms of the clause….Form contract…universal to all passengers.
– Supreme Court – granted certiorari if the district court could hear the case.
– Should the forum selection contract be enforced?
– In order for a clause to be unreasonable for the Shutes they must not have assented to the deal and must not have understood the terms of the contract and must show a heavy burden of proof that these things were lacking…It also must be considered in light of the purpose, social context and effect of the forum-clause.
– Supreme Court
o Rejects that a non-negotiated forum clause is never enforceable simply because it is not the subject of bargaining.
– (commercial setting and purpose)
– Cruise ship has special interest to where suits can be heard because they carry passengers from all over the place.
– Settles confusion on where the suit can be heard…admiralty and in the water….saves both sides time and money.
– Passengers benefit in reduced fares reflecting the savings that the cruise line enjoys by limiting the forum.
– Also rejects (appellate court) that the forum was so unreasonable because Florida is not an alien-nation…occurred off the coast of Mexico.
– Shutes do not claim lack of notice…meaning that they saw, and assented to the terms of the forum-selection.
– Picking Florida was fair, headquarters and where most of their ships dock from…no fraud or overreaching…and were given notice of the forum selection.
– Reversed in favor of the cruise line.
o Too vague for the layman to understood the forum clause.
o Wouldn’t read the paragraph until after purchasing the non-refundable tickets…people would have to lose money to not go on the trip.
o Doesn’t like common law way of reasonableness and public policy guiding there decisions.