Carnival Cruise Lines v.

Shute

Annotation

Primary Holding

Forum selection clauses in form ticket contracts are enforceable unless a clause
eradicates the carrier's liability completely or prevents a claimant from having a case
heard in a court of competent jurisdiction.

Facts

Shute slipped and fell on a deck mat on a Carnival cruise ship off the coast of Mexico.
She brought a personal injury claim in Washington, where she was a resident. The
ticket that she had purchased contained a passenger contract with a forum selection
clause, providing that Florida would be the forum for any disputes arising from the
contract. (Carnival was headquartered in Florida.) Carnival received summary judgment
from the trial court, since it did not have minimum contacts with Washington that were
related to the subject of the lawsuit, and thus the court did not have personal
jurisdiction. However, the appellate court ruled that personal jurisdiction was proper
because Carnival had solicited business in Washington, which sufficed to meet the
minimum contacts test.

Opinions

Majority

 Harry Andrew Blackmun (Author)

 William Hubbs Rehnquist
 Byron Raymond White
 Sandra Day O'Connor
 Antonin Scalia
 Anthony M. Kennedy
 David H. Souter

A forum selection clause may be useful in resolving uncertainty about where litigation
arising from a contract may be brought. It would be unfair for Carnival to be brought into
courts around the nation, which could happen if the clause were not enforced. The
additional potential costs of litigation would be transferred to Carnival's passengers, so
people such as the Shutes benefited from the reduction in ticket price permitted by
limiting litigation to one forum. The clause did not limit the cruise line's liability for
negligence.

Dissent
  John Paul Stevens (Author)
 Thurgood Marshall

Forum selection clauses should not be deemed reasonable simply because they allow a
carrier to reduce its insurance premiums and litigation costs, and avoid transferring
them to passengers. Federal admiralty law traditionally would have held that these
clauses could not be enforced.

Case Commentary

This case contrasted with another contract involving a forum-selection clause and the
operation of a ship. In that case, the complex negotiations between sophisticated
parties produced a result to which they could be bound, whereas this standard contract
of adhesion was given to unsophisticated passengers without the opportunity to
negotiate or any incentive to read the terms.