Law Homework Help

1. Read the attached case and analyze it. Provide a brief summary of what you learned and how you would apply what you learned as a manager.

United States Supreme CourtCARNIVAL CRUISE LINES, INC. v. SHUTE(1991)No. 89–1647Argued: January 15, 1991Decided: April 17, 1991After the respondents Shute, a Washington State couple, purchased passage on a ship owned by petitioner, a Florida–based cruise line, petitioner sent them tickets containing a clause designating courts in Florida as the agreed–upon fora for the resolution of disputes. The Shutes boarded the ship in Los Angeles, and, while in international waters off the Mexican coast, Mrs. Shute suffered injuries when she slipped on a deck mat. The Shutes filed suit in a Washington Federal District Court, which granted summary judgment for petitioner. The Court of Appeals reversed, holding, inter alia, that the forum–selection clause should not be enforced under The Bremen v. Zapata Off–Shore Co., 407 U.S. 1 , because it was not “freely bargained for,” and because its enforcement would operate to deprive the Shutes of their day in court in light of evidence indicating that they were physically and financially incapable of pursuing the litigation in Florida.Held:The Court of Appeals erred in refusing to enforce the forum–selection clause. Pp. 590–597.(a) The Bremen Court’s statement that a freely negotiated forum–selection clause, such as the one there at issue, should be given full effect, 407 U.S. at 12–13, does not support the Court of Appeals’ determination that a non–negotiated forum clause in a passage contract is never enforceable simply because it is not the subject of bargaining. Whereas it was entirely reasonable for The Bremen Court to have expected the parties to have negotiated with care in selecting a forum for the resolution of disputes arising from their complicated international agreement, it would be entirely unreasonable to assume that a cruise passenger would or could negotiate the terms of a forum clause in a routine commercial cruise ticket form. Nevertheless, including a reasonable forum clause in such a form contract well may be permissible for several reasons. Because it is not unlikely that a mishap in a cruise could subject a cruise line to litigation in several different fora, the line has a special interest in limiting such fora. Moreover, a clause establishing ex ante the dispute resolution forum has the salutary effect of dispelling confusion as to where suits may be brought and defended, thereby sparing litigants time and expense and conserving judicial resources. Furthermore, it is likely that passengers purchasing tickets[499 U.S. 585, 586]containing a forum clause like the one here at issue benefit in the form of reduced fares reflecting the savings that thecruise line enjoys by limiting the fora in which it may be sued. Pp. 590–594.(b) The Court of Appeals’ conclusion that the clause here at issue should not be enforced because the Shutes are incapable of pursuing this litigation in Florida is not justified by The Bremen Court’s statement that “the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in determining the reasonableness of

the forum clause.” Id., at 17. That statement was made in the context of a hypothetical “agreement between two Americans to resolve their essentially local disputes in a remote alien forum.” Ibid. Here, in contrast, Florida is not such a forum, nor –given the location of Mrs. Shute’s accident –is this dispute an essentiallylocal one inherently more suited to resolution in Washington than in Florida. In light of these distinctions, and because the Shutes do not claim lack of notice of the forum clause, they have not satisfied the “heavy burden of proof,” ibid. required to set aside the clause on grounds of inconvenience. Pp. 594–595.(c) Although forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, there is no indication that petitioner selected Florida to discourage cruise passengers from pursuing legitimate claims or obtained the Shutes’ accession to the forum clause by fraud or overreaching. P. 595.(d) By its plain language, the forum selection clause at issue does not violate 46 U.S.C. App. 183c, which, inter alia, prohibits a vessel owner from inserting in any contract a provision depriving a claimant of a trial “by court of competent jurisdiction” for loss of life or personal injury resulting from negligence. Pp. 595–597.