991 F. Supp. 781 (E.D. La. 1998)
Plaintiff Paula Smith filed this suit for injuries she allegedly sustained in Montego Bay, Jamaica while a passenger aboard the S/S ENCHANTED SEAS, a cruise vessel operated by defendant Commodore Cruise Line, Limited.1 After removing the suit from Louisiana state court based on diversity of citizenship, Commodore moved for dismissal pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure for improper venue, or in the alternative, for transfer pursuant to 28 U.S.C. § 1406.2
Commodore contends that the forum selection clause contained in the passenger ticket contract with Smith provides for exclusive venue in the United States District Court for the Southern District of New York.3 Smith disputes the enforceability of the clause on the grounds that Congress overruled the Supreme Court decision in Carnival Cruise Lines, Inc. v. Shute, that Smith did not freely bargain for the forum selection clause, and that Smith did not have notice of the clause.4
The forum selection clause is found in paragraph 27 of Commodore's Passage Contract.5 The front of the Passage Contract provides in bold that each passenger should carefully examine all the conditions of this contract, particularly the conditions on pages 4-12.6 On page 4 of the contract, the following is stated in bold that acceptance of this contract by the passenger shall constitute an acceptance by the passenger of all the terms and conditions set forth herein.7
Commodore submitted the affidavit of Stephen Field, formerly Commodore's Vice President of Insurance and Claims, attesting that the standard Passage Contract is an identical form of the Passage Contract which was issued and delivered to Paula Smith for the cruise in question.8 A duplicate original would have been given to Ms. Smith.9 Smith did not submit any evidence to controvert the affidavit.10
Whether Congress overruled the Supreme Court decision in Carnival Cruise Lines, Inc. v. Shute by amending 46 U.S.C. § 183c?11
The Limitation of Vessel Owner's Liability Act, 46 U.S.C. § 183c, prohibits contractual clauses which unduly limit a vessel owner's liability for negligence.12 In Shute, the Supreme Court held that forum selection clauses in cruise line passenger tickets are valid under this statute.13 Subsequent amendments to the statute have returned it to the exact language in effect at the time of that decision.14
No. Although § 183c was amended twice after the Shute decision, with 'any' being inserted and then deleted before the phrase 'court of competent jurisdiction,' the end result of the amendments is that the statute now reads exactly as it did when the Supreme Court rendered the decision in Shute.15 Consequently, the analysis in Shute controls.16 The forum selection clause in the passenger contract remains valid under the statute as interpreted in that case.17
Congress did not overrule Shute, and the decision remains controlling authority for the enforceability of the forum selection clause.18
Whether Smith received adequate notice of the forum selection clause in the passenger ticket contract?19
Under Shute, forum selection clauses are prima facie valid and will be enforced unless the resisting party shows insufficient notice of the forum selection clause.20 Courts examine both the facial clarity of the contract and the passenger's opportunity to be apprised of the contractual terms at issue.21 The plaintiff has the burden of showing that the forum selection clause should not be enforced.22
Yes. The court finds that these contract terms are sufficiently clear and apparent to adequately apprise a passenger of the forum selection clause.23 The bold notices on the front and page 4 of the contract direct attention to the terms.24 The clause itself is clearly stated in paragraph 27.25
Smith failed to introduce any evidence to establish that she did not accept a passage ticket contract from Commodore.26 Her conclusory allegations are insufficient to rebut the affidavit attesting to delivery of the contract.27 Notice can be imputed to a passenger who has not personally received the ticket.28 Smith's alleged inability to understand the clause does not warrant disregarding it because the clause is clear and apparent.29
Smith received adequate notice of the forum selection clause.30
Whether the forum selection clause is fundamentally unfair to Smith?31
Under Shute, forum selection clauses are prima facie valid and will be enforced unless the resisting party shows that the clause is fundamentally unfair.32 The passenger bears a heavy burden of persuading the court that the contractual forum is inconvenient.33 Enforcement will not be denied absent a showing of bad faith, overreaching, or grave inconvenience.34
No. Smith has failed to allege any circumstances more onerous than those found insufficient in other cases against Commodore before judges of this district.35 The forum selection clause does not take away Smith's right to a trial by a court of competent jurisdiction.36 New York is not a remote alien forum.37 Enforcement of the forum selection clause will not gravely or unduly inconvenience Smith.38
There is no evidence that defendant included the clause due to bad faith or overreaching.39 There is no evidence that Commodore selected New York for the forum as a means of discouraging passengers from pursuing claims.40
The forum selection clause is not fundamentally unfair to Smith.41
Whether the forum selection clause is unenforceable because Smith did not freely bargain for it?42
Forum selection clauses are prima facie valid under Shute even when included in form contracts that are not the product of individual negotiation.43 Inclusion of a forum selection clause in a form contract is permissible, and the lack of a negotiated contract does not render the clause unenforceable.44
No. It is well-established that inclusion of a forum selection clause in a form contract is permissible.45 The lack of a negotiated contract does not render the forum selection clause unenforceable under the standards set forth in Shute.46 The court finds that the lack of a negotiated contract does not render the forum selection clause unenforceable.47
The forum selection clause is not unenforceable due to lack of free bargaining.48