carnival cruise lines v shute

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Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)

Clauses in non-negotiated form contracts that designate a certain forum for any related legal disputes generally allow that forum to exercise personal jurisdiction over the parties, barring any issues regarding a lack of notice or “fundamental fairness.”

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.

• 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.

• 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.

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.

U.S. Supreme Court

Carnival Cruise Lines, Inc. v. Shute

No. 89-1647

Argued Jan. 15, 1991

Decided April 17, 1991

499 U.S. 585

After 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. 499 U. S. 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 407 U. S. 12 -13, does not support the Court of Appeals' determination that a nonnegotiated 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

Page 499 U. S. 586

containing a forum clause like the one here at issue benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be sued. Pp. 499 U. S. 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 407 U. S. 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 essentially local 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. 499 U. S. 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. 499 U. S. 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. 499 U. S. 595 -597.

897 F.2d 377 (CA9 1990), reversed.

BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. 499 U. S. 597 .

Page 499 U. S. 587

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• Case Briefs
• Civil Procedure

Carnival Cruise Lines, Inc. v. Shute

499 U.S. 585, 111 S. Ct. 1522 (1991)

Quick Summary

Eulala and Russel Shute (plaintiffs) filed a lawsuit against Carnival Cruise Lines, Inc. (defendant) in Washington after Eulala Shute got injured on a cruise. The cruise line moved to dismiss the case, citing a clause in their ticket contracts that required all disputes to be handled in Florida, where Carnival headquarters is located. Lower courts had mixed judgments, and the case went to the Supreme Court.

Facts of the Case

The Shutes (plaintiffs) purchased tickets for a Carnival Cruise Lines ship (defendant) through a travel agent in Washington state. After purchasing the tickets, they received paper tickets containing a form contract, which included a clause requiring all legal disputes to be handled in Florida.

During the cruise, Eulala slipped on a deck mat and got injured. They filed a lawsuit against Carnival in Washington, but the cruise line argued that pursuant to the contract, the case should be heard in Florida, and Washington district court lacked personal jurisdiction.

Procedural History

The District Court supported Carnival’s claim for insufficient contacts for personal jurisdiction in Washington and granted its motion to dismiss. The Court of Appeals reversed the decision, ruling that significant contacts with Washington existed and it would not abide by the forum selection clause. Carnival then appealed, and the case went to the Supreme Court.

I.R.A.C. Format

Can a forum selection clause in a non-negotiated contract, stating that all disputes will be brought in a specific forum, allow that forum to exercise personal jurisdiction over the parties?

Rule of Law

A forum selection clause in a non-negotiated contract can allow a specified forum to exercise personal jurisdiction unless issues of notice and fundamental fairness arise.

Reasoning and Analysis

The majority opinion emphasized that a forum selection clause could help reduce uncertainty about where to bring litigation arising from a contract. It held that it would be unfair for Carnival to face cases nationwide and that the clause helps reduce potential litigation costs, resulting in lower ticket prices for passengers.

The court ruled in favor of Carnival, stating that such forum selection clauses are generally enforceable, barring any notice or fairness issues.

Concurring Opinions

Justices Rehnquist, White, O’Connor, Scalia, Kennedy, and Souter concurred with the majority, seeing the utility of the forum selection clause in reducing confusion and potential litigation costs.

Dissenting Opinions

Justices Stevens and Marshall disagreed with the majority’s reasoning that reduced insurance premiums and litigation costs validate forum selection clauses’ reasonability.

Key Takeaways

• Forum selection clauses in non-negotiated contracts allow the specified forum to assert jurisdiction, barring any notice or fundamental fairness issues.
• Such clauses help reduce potential litigation costs and uncertainty regarding where to bring litigation.

Relevant FAQs of this case

What is implied by judicial fairness in forum selection clauses context.

Judicial fairness involves courts evaluation on whether a forum selection clause is fairly applied to both parties; considering aspects like inconvenience and contract clarity.

What differentiates typical contracts with forum selection clauses?

They usually contain standardized terms compared to other contracts with more flexible terms.

Was this case brief helpful?

• [justia] Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)
• [google.scholar] Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)

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Supreme Court of the United States - 499 U.S. 585, 113 L. Ed. 2d 622, 111 S. Ct. 1522, 1991 U.S. LEXIS 2221, SCDB 1990-063

Contributed by 🤖LSDBot🤖

A couple sued a cruise line for negligence, but the cruise line argued that the forum-selection clause in the tickets required the case to be litigated in Florida. The Supreme Court ultimately upheld the clause's enforceability.

The issue is whether or not a forum-selection clause in a non-negotiable form contract for a commercial cruise ticket is enforceable and violates the Limitation of Vessel Owner's Liability Act.

The legal conclusion of the court is that the forum-selection clause in the non-negotiated form contract for a commercial cruise ticket is enforceable if it is reasonable and can benefit both parties. The Court ruled in favor of Carnival Cruise Lines.

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• Carnival Cruise Lines and the Shutes are in a legal dispute because the Shutes filed a lawsuit against Carnival Cruise Lines for negligence.
• Carnival Cruise Lines has a forum-selection clause in their tickets that requires all disputes to be litigated in a court located in Florida.
• The dispute is about whether this clause is enforceable.
• The Court of Appeals reversed the District Court's decision and ruled that the clause would deprive the Shutes of their right to a fair trial.
• The Supreme Court found that the forum-selection clause was enforceable and ruled in favor of Carnival.
• The Court did not address whether the Shutes had sufficient notice of the clause before entering the contract.
• Hey! This is the holding for Pennoyer v. Neff. It probably isn't the holding for the brief you're looking at. Join LSD+ for full access.
• A named property within the court's jurisdiction is attached to satisfy an unrelated claim, despite the owner of said property being a non-resident of the state.
• A named property within the court's jurisdiction is attached as the basis for the suit (e.g., to quiet title), despite the owner of said property being a non-resident of the state.
• An individual is sued who is a resident of the state, or who has been served with process while physically located within the state.
• jurisdiction - Neff is neither a resident, nor was served while within the state. Service by publication may be valid for an
• proceeding, where the owner would be made aware of the suit due to their property being seized, but not for
• jurisdiction - the action was on the basis of a suit to receive payment owed, and did not relate directly to a property within the state.
• jurisdiction, as the Oregon property was not attached to the initial suit, but rather was added in after the suit happened - note that Neff did not even purchase the property until after the suit had concluded.
• Accordingly, the Oregon court did not have jurisdiction over the initial suit between Neff and his lawyer.
• Enforcement of a judgment without jurisdiction denies due process!
• Additionally, although judgments rendered by other states are entitled to full faith and credit, if that state did not have jurisdiction to render the judgment, it loses such entitlement.
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Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. . Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua

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Carnival Cruise Lines, Inc. v. Shute

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Carnival cruise lines, inc. v. shute.

499 U.S. 585, 111 S. Ct. 1522 (1991)

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The case involves Eulala and Russel Shute, who purchased a cruise from Carnival Cruise Lines through a travel agent in Washington. The ticket issued by Carnival contained a forum selection clause mandating that any disputes be litigated in Florida. During the cruise, Eulala Shute was injured, and the Shutes filed a lawsuit in Washington. Carnival moved for summary judgment, arguing that the forum selection clause required litigation in Florida. The District Court ruled in favor of Carnival based on insufficient contacts with Washington for personal jurisdiction, but the Court of Appeals reversed, finding adequate contacts due to Carnival's solicitation of business in Washington. The Court of Appeals also ruled the forum selection clause unreasonable because it was not freely bargained for and could potentially deprive the Shutes of their day in court due to financial and physical incapability.

The primary issue is whether the forum selection clause within the cruise ticket contract, which mandates all disputes to be litigated in Florida, is enforceable against the Shutes, who filed their lawsuit in Washington.

The Supreme Court held that the forum selection clause is enforceable, reversing the judgment of the Court of Appeals.

Justice Blackmun, delivering the opinion of the Court, clarified that the enforceability of forum selection clauses is governed by federal law in admiralty cases. The Court did not address whether the Shutes had sufficient notice of the forum clause, as it was assumed for the purpose of analysis. The reasoning emphasized that forum selection clauses are subject to judicial scrutiny for fundamental fairness but found no evidence of bad faith, fraud, or overreaching by Carnival. The Court acknowledged the practical considerations of such clauses in form contracts, noting that they help prevent litigation in multiple fora and potentially lower costs for passengers. The Court distinguished this case from The Bremen due to the non-negotiated, routine nature of cruise ticket contracts, concluding that the differences did not render the clause unenforceable. Additionally, the Court found that the clause did not violate the Limitation of Vessel Owner's Liability Act since it did not limit Carnival's liability or prevent judicial resolution of claims. The judgment was based on the principles of efficiency, the prevention of jurisdictional disputes, and the absence of fundamental unfairness in applying the clause.

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In-Depth Discussion

The Supreme Court's reasoning in Carnival Cruise Lines, Inc. v. Shute is grounded in the principles of contract law, federal admiralty jurisdiction, and the policy considerations underpinning the enforceability of forum selection clauses within the context of maritime commerce. Justice Blackmun's opinion navigates through several critical areas to underpin the Court's decision:

• Admiralty Jurisdiction and Federal Law

The Court begins by establishing that, as an admiralty case, federal law governs the enforceability of the forum selection clause. This sets the stage for a uniform application of legal principles across jurisdictions, given the international and interstate nature of maritime commerce.

• Notice and Consent

The Court did not delve deeply into whether the Shutes had adequate notice of the forum selection clause, as this was not contested. The respondents conceded they had notice of the clause, shifting the analysis toward the clause's inherent fairness and enforceability rather than focusing on procedural aspects of contract formation.

• Enforceability of Forum Selection Clauses

Central to the Court's reasoning is the acknowledgment of the prima facie validity of forum selection clauses, as established in The Bremen v. Zapata Off-Shore Co. The Court emphasizes that such clauses, while historically viewed with skepticism, are now recognized for their utility in providing predictability and security in contractual relationships, especially in the context of international and interstate commerce.

• The Bremen Distinguished

The Court distinguishes the present case from The Bremen, noting that unlike the contract in The Bremen, which was negotiated between two business entities, the contract in question was a standard form contract not subject to negotiation. Despite this difference, the Court does not find it sufficient to invalidate the forum selection clause, recognizing that non-negotiated clauses in consumer contracts can still be enforceable if they meet certain fairness criteria.

• Fairness and Reasonableness

The Court scrutinizes the fairness of enforcing the forum selection clause against the backdrop of the circumstances of the case. It rejects the argument that the clause is inherently unfair because it was not the product of negotiation. Instead, it points to the practical realities of cruise line operations and the benefits that forum selection clauses confer, such as limiting the potential jurisdictions for litigation, which can reduce legal and operational costs. These savings, the Court suggests, can be passed on to consumers in the form of lower prices.

• Public Policy Considerations

The Court also addresses public policy by highlighting the benefits of forum selection clauses in terms of judicial efficiency and reducing litigation costs. Such clauses eliminate jurisdictional disputes and provide clarity to the parties about where disputes will be resolved, thereby conserving judicial resources and reducing the burden on the courts.

• Fundamental Fairness

Despite acknowledging that the clause was part of a standard form contract and not subject to negotiation, the Court finds no evidence of bad faith or overreaching by Carnival. It notes that the clause does not limit Carnival's liability nor does it preclude judicial resolution of disputes, thus not violating fundamental principles of fairness.

• Statutory Compliance

Finally, the Court examines the forum selection clause in light of the Limitation of Vessel Owner's Liability Act, concluding that the clause does not contravene this statute since it does not seek to limit the cruise line's liability or avoid judicial scrutiny of claims.

In sum, the Supreme Court's decision to enforce the forum selection clause reflects a balancing act between recognizing the realities of commercial practices in the cruise industry and ensuring that such practices do not infringe upon fundamental principles of fairness and statutory rights. The Court's analysis underscores the importance of forum selection clauses in facilitating orderly and predictable dispute resolution in commerce, especially in sectors involving complex logistical and operational considerations like maritime travel.

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Dissent (JUSTICE STEVENS)

Justice Stevens, joined by Justice Marshall in dissent, challenges both the majority's assumptions about notice and the broader enforceability of forum selection clauses under federal admiralty law and statutory provisions. Stevens's dissent is rooted in three main concerns:

• Notice and Fairness

Stevens criticizes the majority's presumption that passengers are adequately notified of the forum selection clause, suggesting that the fine print and placement of the clause on the ticket make it unlikely for passengers to be aware of it before purchase. This argument hinges on the notion of informed consent in contract law, implying that passengers cannot genuinely agree to terms they are unlikely or unable to read and understand fully.

• Impact of Non-Negotiated Clauses

Stevens argues that even if passengers were aware of the forum selection clause, its enforceability should still be questioned under traditional principles of federal admiralty law. He cites the Limitation of Liability Act to argue that such clauses, which limit shipowners' liability and affect the venue for disputes, undermine public policy interests in promoting safety and accountability. Stevens views these clauses as products of unequal bargaining power that diminish passengers' rights and protections against negligence.

• Historical and Legal Precedent

The dissent traces the historical treatment of exculpatory clauses in passenger contracts, noting a longstanding judicial skepticism toward provisions that exempt carriers from liability for negligence. Stevens points to precedents that have invalidated clauses limiting carriers' responsibility, emphasizing a fundamental legal principle against enforcing terms that conflict with public policy or the interests of justice. He suggests that forum selection clauses, by potentially limiting passengers' ability to seek redress, are akin to these historically disfavored provisions.

Stevens's dissent also addresses the practical burdens imposed on passengers by enforcing forum selection clauses, such as the increased difficulty and expense of litigating in a distant forum. This concern reflects a broader critique of the majority's reasoning, arguing that it undervalues the deterrent effect of legal accountability for negligence and overlooks the power dynamics inherent in the passenger-carrier relationship.

Finally, Stevens challenges the majority's reliance on The Bremen v. Zapata Off-Shore Co., distinguishing it on the grounds that it involved a commercial contract between parties of equal bargaining power, unlike the consumer contract at issue. He argues that the principles governing commercial contracts should not be uncritically applied to passenger tickets, which are standard-form contracts not subject to negotiation.

In summary, Justice Stevens's dissent articulates a principled opposition to the majority's decision, grounded in concerns over notice, fairness, the protection of passengers' rights, and adherence to legal and historical precedents that have guarded against the enforcement of clauses that limit carriers' liability for negligence.

We understand that the surprise of being called on in law school classes can feel daunting. Don’t worry, we've got your back! To boost your confidence and readiness, we suggest taking a little time to familiarize yourself with these typical questions and topics of discussion for the case. It's a great way to prepare and ease those nerves..

• What are the material facts of Carnival Cruise Lines, Inc. v. Shute? The Shutes purchased a cruise from Carnival Cruise Lines, which included a forum selection clause in the ticket contract specifying that any litigation must be pursued in Florida courts. After Eulala Shute was injured on the cruise, they filed a lawsuit in Washington state. Carnival moved to dismiss based on the forum selection clause. The Supreme Court had to determine the enforceability of this clause.
• What is the legal issue the Supreme Court had to resolve in this case? The core legal issue was whether the forum selection clause in the cruise ticket contract, which required disputes to be litigated in Florida, was enforceable against the Shutes, who filed their lawsuit in Washington.
• What is a forum selection clause, and how does it function in contractual agreements? A forum selection clause is a provision in a contract that designates a specific geographic location or court where any disputes arising under the contract must be resolved. It functions to provide predictability and certainty for the parties regarding the jurisdiction in which any litigation will occur, potentially simplifying legal proceedings and reducing costs.
• Why did the Shutes challenge the enforceability of the forum selection clause? The Shutes challenged the clause on the grounds that it was not freely bargained for, as it was part of a standard form contract, and enforcing it would cause them undue hardship by requiring litigation in a distant forum, effectively depriving them of their day in court.
• On what grounds did the Supreme Court decide to enforce the forum selection clause? The Supreme Court enforced the clause, emphasizing that it was part of a standard commercial agreement and that such clauses are generally presumed to be valid. The Court reasoned that the clause served practical business needs, did not reflect bad faith by Carnival, and did not fundamentally deprive the Shutes of their rights, especially considering they were aware of the clause.
• How does the Court distinguish this case from The Bremen v. Zapata Off-Shore Co.? The Court distinguished this case from The Bremen, which involved a freely negotiated contract between two commercial entities with equal bargaining power, by noting that the Carnival contract was a standard form contract not subject to negotiation. However, the Court still found the forum selection clause enforceable, emphasizing the practical considerations over the negotiation aspect.
• What does Justice Stevens argue in his dissent? Justice Stevens argued that the majority underestimated the importance of notice and the practical barriers the forum selection clause posed to litigants. He emphasized historical and legal precedents that protect individuals from clauses that limit liability or access to justice, asserting that such provisions should be scrutinized more critically, especially when they result from unequal bargaining power.
• How does the concept of 'fundamental fairness' play into the Court's decision? The concept of fundamental fairness underlies the Court's analysis of whether enforcing the forum selection clause would unjustly burden the Shutes or unjustly benefit Carnival. The Court concluded that the clause did not violate principles of fundamental fairness, given its practical business justification and the fact that the Shutes had notice of the clause.
• What implications does this decision have for consumers entering into contracts with businesses? This decision underscores the enforceability of forum selection clauses in standard form contracts, indicating that consumers may be bound by such clauses even when they have little to no opportunity to negotiate the terms. It highlights the importance of consumers being aware of and understanding the implications of such clauses in contracts they enter into.
• Why is the Socratic method particularly effective (or not) in exploring the nuances of this case? The Socratic method is effective in exploring this case because it encourages deep analysis and critical thinking about complex legal principles and judicial reasoning. It helps students understand the rationale behind the Court's decision, examine the dissenting perspective, and consider the broader implications of the case on contract law and consumer rights. However, it may be challenging for students who are less comfortable with verbal engagement or who may need more time to process information before responding to complex legal questions.

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CARNIVAL CRUISE LINES, INC. v. SHUTE et vir, 499 U.S. 585

Respondents were residents of the State of Washington, and they boarded petitioner's ship in California. Respondent wife was injured while the ship was in international waters off the coast of Mexico. Respondents filed an action in the U.S. District Court in Washington, which granted petitioner's motion for summary judgment, since the contract between respondents and petitioner provided that all suits were to be brought in Florida. The appellate court reversed the order granting summary judgment. On certiorari, the court held that because respondents had notice of the forum clause, because petitioner's principal place of business was in Florida, and since there was no bad faith motive for the choice of a Florida forum, Florida was not an inconvenient forum. Since the choice of forum did not limit petitioner's liability in any way, petitioner did not violate the Limitation of Vessel Owner's Liability Act, 46 U.S.C.S. App. § 183c. Thus, the choice of forum clause in the contract was ...

Carnival Cruise Line pushes back on controversial policy

P assengers aboard a Carnival cruises vessel are regularly informed by the captain regarding the day's itinerary, but not all aboard the ship are fans of the bothersome announcements at times or the controversial policy associated with it.

Carnival, which recently debuted its first "solar eclipe" cruise and was forced to issue refunds to its passengers after a slew of dropped trips , aim to make passengers' vacations go as smoothly as possible. They are responsible for disseminating timely updates to passengers, particularly as many scheduled activities and excursions are coordinated through the cruise program rather than being independently arranged by each passenger.

Adherence to the cruise line's directives is essential to ensure passengers' safety and organization of logistical scheduling.

• Carnival Cruises explain reason for balcony ban after guest told to remove item
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Safety and emergency announcements are exclusively broadcasted into passenger cabins on Royal Caribbean and Carnival ships.

However, these announcements are also transmitted in common areas near cabins, which may cause disturbance for some passengers.

"Do we really need the Cruise Director coming over the loudspeaker 3 or 4 times each day to READ to us the daily schedule of events? Nothing of note was ever added, just advised us what time Bingo was, what the shops were selling and info that is on the app and in the paper fun time copy of the program. We don't listen, since we have meticulously read the daily program. Less than 5% of the ship listen," a person wrote to Carnival Brand Ambassador John Heald.

"Thank you for your opinion and I hope perhaps that if you don't want to listen to the announcements, well, please don't. Saying that 'less than 5% of the ship' you are on do not like to listen to the announcements is also an opinion and unless you have asked every single one of the 6,000 people on board then obviously that figure is a bit silly," he wrote.

DON'T MISS: Carnival Cruise debuts first 'solar eclipse cruise' - and everyone is excited

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The ship directors try to make sure all announcements are appreciated and needed and target points where the passengers' sleep won't be majorly impactful.

The brand ambassador made it clear that the cruise line always tries to be respectful of its passengers.

"Ultimately, you are always going to disturb someone. I don't mean in the cabins as we only make announcements inside the staterooms when there is something we feel the entire ship needs to hear. What I do mean is that, with speakers in the guest corridors, you may disturb someone who is still asleep at 10:30 a.m. or disturb someone having a nap in the sun or simply disturb someone who was seeking a little peace and quiet," he shared.

However, the captain or cruise director's deciding when to utilize the ship's public address system remains controversial for some passengers, as it can disrupt their activities and disturb their rest.

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CARNIVAL CRUISE LINES, INC., Petitioner v. Eulala SHUTE, et vir.

• Supreme Court

499 U.S. 585

111 S.Ct. 1522

113 L.Ed.2d 622

No. 89-1647.

Argued Jan. 15, 1991.

Decided April 17, 1991.

After 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 , 92 S.Ct. 1907, 32 L.Ed.2d 513 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 , 92 S.Ct., at 1914-1915, does not support the Court of Appeals' determination that a nonnegotiated 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 containing a forum clause like the one here at issue benefit in the form of reduced fares reflecting the savings that the cruise 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, 92 S.Ct., at 1917. 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 essentially local 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. 1528-1529.

897 F.2d 377 (CA9 1990), reversed.

BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. ----.

Richard K. Willard, Washington, D.C., for petitioner.

Gregory J. Wall, Seattle, Wash., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

In this admiralty case we primarily consider whether the United States Court of Appeals for the Ninth Circuit correctly refused to enforce a forum-selection clause contained in tickets issued by petitioner Carnival Cruise Lines, Inc., to respondents Eulala and Russel Shute.

* The Shutes, through an Arlington, Wash., travel agent, purchased passage for a 7-day cruise on petitioner's ship, the Tropicale. Respondents paid the fare to the agent who forwarded the payment to petitioner's headquarters in Miami, Fla. Petitioner then prepared the tickets and sent them to respondents in the State of Washington. The face of each ticket, at its left-hand lower corner, contained this admonition:

"SUBJECT TO CONDITIONS OF CONTRACT ON LAST PAGES IMPORTANT! PLEASE READ CONTRACT—ON LAST PAGES 1, 2, 3" App. 15.

The following appeared on "contract page 1" of each ticket:

"TERMS AND CONDITIONS OF PASSAGE CONTRACT TICKET

"3. (a) The acceptance of this ticket by the person or persons named hereon as passengers shall be deemed to be an acceptance and agreement by each of them of all of the terms and conditions of this Passage Contract Ticket.

"8. It is agreed by and between the passenger and the Carrier that all disputes and matters whatsoever arising under, in connection with or incident to this Contract shall be litigated, if at all, in and before a Court located in the State of Florida, U.S.A., to the exclusion of the Courts of any other state or country." Id., at 16.

The last quoted paragraph is the forum-selection clause at issue.

Respondents boarded the Tropicale in Los Angeles, Cal. The ship sailed to Puerto Vallarta, Mexico, and then returned to Los Angeles. While the ship was in international waters off the Mexican coast, respondent Eulala Shute was injured when she slipped on a deck mat during a guided tour of the ship's galley. Respondents filed suit against petitioner in the United States District Court for the Western District of Washington, claiming that Mrs. Shute's injuries had been caused by the negligence of Carnival Cruise Lines and its employees. Id., at 4.

Petitioner moved for summary judgment, contending that the forum clause in respondents' tickets required the Shutes to bring their suit against petitioner in a court in the State of Florida. Petitioner contended, alternatively, that the District Court lacked personal jurisdiction over petitioner because petitioner's contacts with the State of Washington were insubstantial. The District Court granted the motion, holding that petitioner's contacts with Washington were constitutionally insufficient to support the exercise of personal jurisdiction. See App. to Pet. for Cert. 60a.

The Court of Appeals reversed. Reasoning that "but for" petitioner's solicitation of business in Washington, respondents would not have taken the cruise and Mrs. Shute would not have been injured, the court concluded that petitioner had sufficient contacts with Washington to justify the District Court's exercise of personal jurisdiction. 897 F.2d 377 , 385-386 (CA9 1990). *

Turning to the forum-selection clause, the Court of Appeals acknowledged that a court concerned with the enforceability of such a clause must begin its analysis with The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), where this Court held that forum-selection clauses, although not "historically . . . favored," are "prima facie valid." Id., at 9-10, 92 S.Ct., at 1913. See 897 F.2d, at 388 . The appellate court concluded that the forum clause should not be enforced because it "was not freely bargained for." Id., at 389. As an "independent justification" for refusing to enforce the clause, the Court of Appeals noted that there was evidence in the record to indicate that "the Shutes are physically and financially incapable of pursuing this litigation in Florida" and that the enforcement of the clause would operate to deprive them of their day in court and thereby contravene this Court's holding in The Bremen. 897 F.2d, at 389 .

We granted certiorari to address the question whether the Court of Appeals was correct in holding that the District Court should hear respondents' tort claim against petitioner. 498 U.S. 807 -808, 111 S.Ct. 39, 112 L.Ed.2d 16 (1990). Because we find the forum-selection clause to be dispositive of this question, we need not consider petitioner's constitutional argument as to personal jurisdiction. See Ashwander v. TVA, 297 U.S. 288 , 347 , 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring) (" 'It is not the habit of the Court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case,' " quoting Burton v. United States, 196 U.S. 283 , 295 , 25 S.Ct. 243, 245, 49 L.Ed. 482 (1905)).

We begin by noting the boundaries of our inquiry. First, this is a case in admiralty, and federal law governs the enforceability of the forum-selection clause we scrutinize. See Archawski v. Hanioti, 350 U.S. 532 , 533 , 76 S.Ct. 617, 619, 100 L.Ed. 676 (1956); The Moses Taylor, 4 Wall. 411, 427, 18 L.Ed. 397 (1867); Tr. of Oral Arg. 36-37, 12, 47-48. Cf. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 , 28 -29, 108 S.Ct. 2239, 2243-2244, 101 L.Ed.2d 22 (1988). Second, we do not address the question whether respondents had sufficient notice of the forum clause before entering the contract for passage. Respondents essentially have conceded that they had notice of the forum-selection provision. Brief for Respondents 26 ("The respondents do not contest the incorporation of the provisions nor [ sic ] that the forum selection clause was reasonably communicated to the respondents, as much as three pages of fine print can be communicated" ). Additionally, the Court of Appeals evaluated the enforceability of the forum clause under the assumption, although "doubtful," that respondents could be deemed to have had knowledge of the clause. See 897 F.2d, at 389 , and n. 11.

Within this context, respondents urge that the forum clause should not be enforced because, contrary to this Court's teachings in The Bremen, the clause was not the product of negotiation, and enforcement effectively would deprive respondents of their day in court. Additionally, respondents contend that the clause violates the Limitation of Vessel Owner's Liability Act, 46 U.S.C.App. § 183c. We consider these arguments in turn.

Both petitioner and respondents argue vigorously that the Court's opinion in The Bremen governs this case, and each side purports to find ample support for its position in that opinion's broad-ranging language. This seeming paradox derives in large part from key factual differences between this case and The Bremen, differences that preclude an automatic and simple application of The Bremen 's general principles to the facts here.

In The Bremen, this Court addressed the enforceability of a forum-selection clause in a contract between two business corporations. An American corporation, Zapata, made a contract with Unterweser, a German corporation, for the towage of Zapata's oceangoing drilling rig from Louisiana to a point in the Adriatic Sea off the coast of Italy. The agreement provided that any dispute arising under the contract was to be resolved in the London Court of Justice. After a storm in the Gulf of Mexico seriously damaged the rig, Zapata ordered Unterweser's ship to tow the rig to Tampa, Fla., the nearest point of refuge. Thereafter, Zapata sued Unterweser in admiralty in federal court at Tampa. Citing the forum clause, Unterweser moved to dismiss. The District Court denied Unterweser's motion, and the Court of Appeals for the Fifth Circuit, sitting en banc on rehearing, and by a sharply divided vote, affirmed. In re Complaint of Unterweser Reederei GmbH, 446 F.2d 907 (1971).

This Court vacated and remanded, stating that, in general, "a freely negotiated private international agreement, unaffected by fraud, undue influence, or overweening bargaining power, such as that involved here, should be given full effect." 407 U.S., at 12 - 13 , 92 S.Ct. at 1914-1915 (footnote omitted). The Court further generalized that "in the light of present-day commercial realities and expanding international trade we conclude that the forum clause should control absent a strong showing that it should be set aside." Id., at 15, 92 S.Ct., at 1916. The Court did not define precisely the circumstances that would make it unreasonable for a court to enforce a forum clause. Instead, the Court discussed a number of factors that made it reasonable to enforce the clause at issue in The Bremen and that, presumably, would be pertinent in any determination whether to enforce a similar clause.

In this respect, the Court noted that there was "strong evidence that the forum clause was a vital part of the agreement, and [that] it would be unrealistic to think that the parties did not conduct their negotiations, including fixing the monetary terms, with the consequences of the forum clause figuring prominently in their calculations." Id., at 14, 92 S.Ct., 1915 (footnote omitted). Further, the Court observed that it was not "dealing with an agreement between two Americans to resolve their essentially local disputes in a remote alien forum," and that in such a case, "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, 92 S.Ct., at 1917. The Court stated that even where the forum clause establishes a remote forum for resolution of conflicts, "the party claiming [unfairness] should bear a heavy burden of proof." Ibid.

In applying The Bremen, the Court of Appeals in the present litigation took note of the foregoing "reasonableness" factors and rather automatically decided that the forum-selection clause was unenforceable because, unlike the parties in The Bremen, respondents are not business persons and did not negotiate the terms of the clause with petitioner. Alternatively, the Court of Appeals ruled that the clause should not be enforced because enforcement effectively would deprive respondents of an opportunity to litigate their claim against petitioner.

The Bremen concerned a "far from routine transaction between companies of two different nations contemplating the tow of an extremely costly piece of equipment from Louisiana across the Gulf of Mexico and the Atlantic Ocean, through the Mediterranean Sea to its final destination in the Adriatic Sea." Id., at 13, 92 S.Ct., at 1915. These facts suggest that, even apart from the evidence of negotiation regarding the forum clause, it was entirely reasonable for the Court in The Bremen to have expected Unterweser and Zapata to have negotiated with care in selecting a forum for the resolution of disputes arising from their special towing contract.

In contrast, respondents' passage contract was purely routine and doubtless nearly identical to every commercial passage contract issued by petitioner and most other cruise lines. See, e.g., Hodes v. S.N.C. Achille Lauro ed Altri-Gestione, 858 F.2d 905 , 910 (CA3 1988), cert. dism'd, 490 U.S. 1001 , 109 S.Ct. 1633, 104 L.Ed.2d 149 (1989). In this context, it would be entirely unreasonable for us to assume that respondents—or any other cruise passenger—would negotiate with petitioner the terms of a forum-selection clause in an ordinary commercial cruise ticket. Common sense dictates that a ticket of this kind will be a form contract the terms of which are not subject to negotiation, and that an individual purchasing the ticket will not have bargaining parity with the cruise line. But by ignoring the crucial differences in the business contexts in which the respective contracts were executed, the Court of Appeals' analysis seems to us to have distorted somewhat this Court's holding in The Bremen.

In evaluating the reasonableness of the forum clause at issue in this case, we must refine the analysis of The Bremen to account for the realities of form passage contracts. As an initial matter, we do not adopt the Court of Appeals' determination that a nonnegotiated forum-selection clause in a form ticket contract is never enforceable simply because it is not the subject of bargaining. Including a reasonable forum clause in a form contract of this kind well may be permissible for several reasons: First, a cruise line has a special interest in limiting the fora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several different fora. See The Bremen, 407 U.S., at 13 , and n. 15, 92 S.Ct., at 1915, and n. 15; Hodes, 858 F.2d, at 913 . Additionally, a clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions. See Stewart Organization, 487 U.S., at 33 , 108 S.Ct., at 2249 (concurring opinion). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like that at issue in this case benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be sued. Cf. Northwestern Nat. Ins. Co. v. Donovan, 916 F.2d 372 , 378 (CA7 1990).

We also do not accept the Court of Appeals' "independent justification" for its conclusion that The Bremen dictates that the clause should not be enforced because "[t]here is evidence in the record to indicate that the Shutes are physically and financially incapable of pursuing this litigation in Florida." 897 F.2d, at 389 . We do not defer to the Court of Appeals' findings of fact. In dismissing the case for lack of personal jurisdiction over petitioner, the District Court made no finding regarding the physical and financial impediments to the Shutes' pursuing their case in Florida. The Court of Appeals' conclusory reference to the record provides no basis for this Court to validate the finding of inconvenience. Furthermore, the Court of Appeals did not place in proper context this Court's statement in The Bremen 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." 407 U.S., at 17 , 92 S.Ct., at 1917. The Court made this statement in evaluating a hypothetical "agreement between two Americans to resolve their essentially local disputes in a remote alien forum." Ibid. In the present case, Florida is not a "remote alien forum," nor—given the fact that Mrs. Shute's accident occurred off the coast of Mexico—is this dispute an essentially local one inherently more suited to resolution in the State of Washington than in Florida. In light of these distinctions, and because respondents do not claim lack of notice of the forum clause, we conclude that they have not satisfied the "heavy burden of proof," ibid., required to set aside the clause on grounds of inconvenience.

It bears emphasis that forum-selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness. In this case, there is no indication that petitioner set Florida as the forum in which disputes were to be resolved as a means of discouraging cruise passengers from pursuing legitimate claims. Any suggestion of such a bad-faith motive is belied by two facts: Petitioner has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports. Similarly, there is no evidence that petitioner obtained respondents' accession to the forum clause by fraud or overreaching. Finally, respondents have conceded that they were given notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity. In the case before us, therefore, we conclude that the Court of Appeals erred in refusing to enforce the forum-selection clause.

Respondents also contend that the forum-selection clause at issue violates 46 U.S.C.App. § 183c. That statute, enacted in 1936, see ch. 521, 49 Stat. 1480 , provides:

"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation, contract, or agreement are hereby declared to be against public policy and shall be null and void and of no effect."

By its plain language, the forum-selection clause before us does not take away respondents' right to "a trial by [a] court of competent jurisdiction" and thereby contravene the explicit proscription of § 183c. Instead, the clause states specifically that actions arising out of the passage contract shall be brought "if at all," in a court "located in the State of Florida," which, plainly, is a "court of competent jurisdiction" within the meaning of the statute.

Respondents appear to acknowledge this by asserting that although the forum clause does not directly prevent the determination of claims against the cruise line, it causes plaintiffs unreasonable hardship in asserting their rights and therefore violates Congress' intended goal in enacting § 183c. Significantly, however, respondents cite no authority for their contention that Congress' intent in enacting § 183c was to avoid having a plaintiff travel to a distant forum in order to litigate. The legislative history of § 183c suggests instead that this provision was enacted in response to passenger-ticket conditions purporting to limit the shipowner's liability for negligence or to remove the issue of liability from the scrutiny of any court by means of a clause providing that "the question of liability and the measure of damages shall be determined by arbitration." See S.Rep. No. 2061, 74th Cong., 2d Sess., 6 (1936); H.R.Rep. No. 2517, 74th Cong., 2d Sess., 6 (1936). See also, Safety of Life and Property at Sea: Hearings before the House Committee on Merchant Marine and Fisheries, 74th Cong., 2d Sess., pt. 4, pp. 20, 36-37, 57, 109-110, 119 (1936). There was no prohibition of a forum-selection clause. Because the clause before us allows for judicial resolution of claims against petitioner and does not purport to limit petitioner's liability for negligence, it does not violate § 183c.

The judgment of the Court of Appeals is reversed.

It is so ordered.

Justice STEVENS, with whom Justice MARSHALL joins, dissenting.

The Court prefaces its legal analysis with a factual statement that implies that a purchaser of a Carnival Cruise Lines passenger ticket is fully and fairly notified about the existence of the choice of forum clause in the fine print on the back of the ticket. See ante, at 587-588. Even if this implication were accurate, I would disagree with the Court's analysis. But, given the Court's preface, I begin my dissent by noting that only the most meticulous passenger is likely to become aware of the forum-selection provision. I have therefore appended to this opinion a facsimile of the relevant text, using the type size that actually appears in the ticket itself. A careful reader will find the forum-selection clause in the 8th of the 25 numbered paragraphs.

Of course, many passengers, like the respondents in this case, see ante, at 587, will not have an opportunity to read paragraph 8 until they have actually purchased their tickets. By this point, the passengers will already have accepted the condition set forth in paragraph 16(a), which provides that "[t]he Carrier shall not be liable to make any refund to passengers in respect of . . . tickets wholly or partly not used by a passenger." Not knowing whether or not that provision is legally enforceable, I assume that the average passenger would accept the risk of having to file suit in Florida in the event of an injury, rather than canceling—without a refund—a planned vacation at the last minute. The fact that the cruise line can reduce its litigation costs, and therefore its liability insurance premiums, by forcing this choice on its passengers does not, in my opinion, suffice to render the provision reasonable. Cf. Steven v. Fidelity & Casualty Co. of New York, 58 Cal.2d 862, 883, 27 Cal.Rptr. 172, 186, 377 P.2d 284, 298 (1962) (refusing to enforce limitation on liability in insurance policy because insured "must purchase the policy before he even knows its provisions").

Even if passengers received prominent notice of the forum-selection clause before they committed the cost of the cruise, I would remain persuaded that the clause was unenforceable under traditional principles of federal admiralty law and is "null and void" under the terms of Limitation of Vessel Owners Liability Act, ch. 521, 49 Stat. 1480 , 46 U.S.C.App. § 183c, which was enacted in 1936 to invalidate expressly stipulations limiting shipowners' liability for negligence.

Exculpatory clauses in passenger tickets have been around for a long time. These clauses are typically the product of disparate bargaining power between the carrier and the passenger, and they undermine the strong public interest in deterring negligent conduct. For these reasons, courts long before the turn of the century consistently held such clauses unenforceable under federal admiralty law. Thus, in a case involving a ticket provision purporting to limit the shipowner's liability for the negligent handling of baggage, this Court wrote:

"It is settled in the courts of the United States that exemptions limiting carriers from responsibility for the negligence of themselves or their servants are both unjust and unreasonable, and will be deemed as wanting in the element of voluntary assent; and, besides, that such conditions are in conflict with public policy. This doctrine was announced so long ago, and has been so frequently reiterated, that it is elementary. We content ourselves with referring to the cases of the Baltimore & Ohio &c. Railway v. Voigt, 176 U.S. 498 , 505 , 507 [20 S.Ct. 385, 388, 44 L.Ed. 560 (1900) ], and Knott v. Botany Mills, 179 U.S. 69 , 71 [21 S.Ct. 30, 30-31, 45 L.Ed. 90 (1900) ], where the previously adjudged cases are referred to and the principles by them expounded are restated." The Kensington, 183 U.S. 263, 268, 22 S.Ct. 102, 104, 46 L.Ed. 190 (1902).

Clauses limiting a carrier's liability or weakening the passenger's right to recover for the negligence of the carrier's employees come in a variety of forms. Complete exemptions from liability for negligence or limitations on the amount of the potential damage recovery, 1 requirements that notice of claims be filed within an unreasonably short period of time, 2 provisions mandating a choice of law that is favorable to the defendant in negligence cases, 3 and forum-selection clauses are all similarly designed to put a thumb on the carrier's side of the scale of justice. 4

Forum-selection clauses in passenger tickets involve the intersection of two strands of traditional contract law that qualify the general rule that courts will enforce the terms of a contract as written. Pursuant to the first strand, courts traditionally have reviewed with heightened scrutiny the terms of contracts of adhesion, form contracts offered on a take-or-leave basis by a party with stronger bargaining power to a party with weaker power. Some commentators have questioned whether contracts of adhesion can justifiably be enforced at all under traditional contract theory because the adhering party generally enters into them without manifesting knowing and voluntary consent to all their terms. See, e.g., Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harv.L.Rev. 1173, 1179-1180 (1983); Slawson, Mass Contracts: Lawful Fraud in California, 48 S.Cal.L.Rev. 1, 12-13 (1974); K. Llewellyn, The Common Law Tradition 370-371 (1960).

The common law, recognizing that standardized form contracts account for a significant portion of all commercial agreements, has taken a less extreme position and instead subjects terms in contracts of adhesion to scrutiny for reasonableness. Judge J. Skelly Wright set out the state of the law succinctly in Williams v. Walker-Thomas Furniture Co., 121 U.S.App.D.C. 315, 319-320, 350 F.2d 445 , 449-450 (1965) (footnotes omitted):

"Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all of the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld."

See also Steven, 58 Cal.2d, at 879-883, 27 Cal.Rptr. at 183-185, 377 P.2d, at 295-297; Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960).

The second doctrinal principle implicated by forum-selection clauses is the traditional rule that "contractual provisions, which seek to limit the place or court in which an action may . . . be brought, are invalid as contrary to public policy." See Dougherty, Validity of Contractual Provision Limiting Place or Court in Which Action May Be Brought, 31 A.L.R.4th 404, 409, § 3 (1984). See also Home Insurance Co. v. Morse, 20 Wall. 445, 451, 22 L.Ed. 365 (1874). Although adherence to this general rule has declined in recent years, particularly following our decision in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), the prevailing rule is still that forum-selection clauses are not enforceable if they were not freely bargained for, create additional expense for one party, or deny one party a remedy. See 31 A.L.R.4th, at 409-438 (citing cases). A forum-selection clause in a standardized passenger ticket would clearly have been unenforceable under the common law before our decision in The Bremen, see 407 U.S., at 9 , and n. 10, 92 S.Ct., at 1912-13, and n. 10, and, in my opinion, remains unenforceable under the prevailing rule today.

The Bremen, which the Court effectively treats as controlling this case, had nothing to say about stipulations printed on the back of passenger tickets. That case involved the enforceability of a forum-selection clause in a freely negotiated international agreement between two large corporations providing for the towage of a vessel from the Gulf of Mexico to the Adriatic Sea. The Court recognized that such towage agreements had generally been held unenforceable in American courts, 5 but held that the doctrine ofthose cases did not extend to commercial arrangements between parties with equal bargaining power.

The federal statute that should control the disposition of the case before us today was enacted in 1936 when the general rule denying enforcement of forum-selection clauses was indisputably widely accepted. The principal subject of the statute concerned the limitation of shipowner liability, but as the following excerpt from the House Report explains, the section that is relevant to this case was added as a direct response to shipowners' ticketing practices.

"During the course of the hearings on the bill (H.R. 9969) there was also brought to the attention of the committee a practice of providing on the reverse side of steamship tickets that in the event of damage or injury caused by the negligence or fault of the owner or his servants, the liability of the owner shall be limited to a stipulated amount, in some cases $5,000, and in others substantially lower amounts, or that in such event the question of liability and the measure of damages shall be determined by arbitration. The amendment to chapter 6 of title 48 of the Revised Statutes proposed to be made by section 2 of the committee amendment is intended to, and in the opinion of the committee will, put a stop to all such practices and practices of a like character. " H.R.Rep. No. 2517, 74th Cong., 2d Sess., 6-7 (1936) (emphasis added); see also S.Rep. No. 2061, 74th Cong., 2d Sess., 6-7 (1936).

The intent to "put a stop to all such practices and practices of a like character" was effectuated in the second clause of the statute. It reads:

"It shall be unlawful for the manager, agent, master, or owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner, master, or agent from liability, or from liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation, contract, or agreement are declared to be against public policy and shall be null and void and of no effect." 46 U.S.C.App. § 183c (emphasis added).

The stipulation in the ticket that Carnival Cruise sold to respondents certainly lessens or weakens their ability to recover for the slip and fall incident that occurred off the west coast of Mexico during the cruise that originated and terminated in Los Angeles, California. It is safe to assume that the witnesses whether other passengers or members of the crew—can be assembled with less expense and inconvenience at a west coast forum than in a Florida court several thousand miles from the scene of the accident.

A liberal reading of the 1936 statute is supported by both its remedial purpose and by the legislative history's general condemnation of "all such practices." Although the statute does not specifically mention forum-selection clauses, its language is broad enough to encompass them. The absence of a specific reference is adequately explained by the fact that such clauses were already unenforceable under common law and would not often have been used by carriers, which were relying on stipulations that purported to exonerate them from liability entirely. Cf. Moskal v. United States, 498 U.S. 103 , 110 -113, 111 S.Ct. 461, ----, 112 L.Ed.2d 449 (1990).

The Courts of Appeals, construing an analogous provision of the Carriage of Goods by Sea Act, 46 U.S.C.App. § 1300 et seq., have unanimously held invalid as limitations on liability forum-selection clauses requiring suit in foreign jurisdictions. See, e.g., Hughes Drilling Fluids v. M/V Luo Fu Shan, 852 F.2d 840 (CA5 1988), cert. denied, 489 U.S. 1033 , 109 S.Ct. 1171, 103 L.Ed.2d 229 (1989); Union Ins. Soc. of Canton, Ltd. v. S.S. Elikon, 642 F.2d 721 , 724-725 (CA4 1981); Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 , 203-204 (CA2 1967). Commentators have also endorsed this view. See, e.g., G. Gilmore & C. Black, The Law of Admiralty 145, and n. 23 (2d ed. 1975); Mendelsohn, Liberalism, Choice of Forum Clauses and the Hague Rules, 2 J. of Maritime Law & Comm. 661, 663-666 (1971). The forum-selection clause here does not mandate suit in a foreign jurisdiction, and therefore arguably might have less of an impact on a plaintiff's ability to recover. See Fireman's Fund American Ins. Cos. v. Puerto Rican Forwarding Co., 492 F.2d 1294 (CA1 1974). However, the plaintiffs in this case are not large corporations but individuals, and the added burden on them of conducting a trial at the opposite end of the country is likely proportional to the additional cost to a large corporation of conducting a trial overseas. 6

Under these circumstances, the general prohibition against stipulations purporting "to lessen, weaken, or avoid" the passenger's right to a trial certainly should be construed to apply to the manifestly unreasonable stipulation in these passengers' tickets. Even without the benefit of the statute, I would continue to apply the general rule that prevailed prior to our decision in The Bremen to forum-selection clauses in passenger tickets.

I respectfully dissent.

The Court of Appeals had filed an earlier opinion also reversing the District Court and ruling that the District Court had personal jurisdiction over the cruise line and that the forum-selection clause in the tickets was unreasonable and was not to be enforced. 863 F.2d 1437 (CA9 1988). That opinion, however, was withdrawn when the court certified to the Supreme Court of Washington the question whether the Washington long-arm statute, Wash.Rev.Code § 4.28.185 (1988), conferred personal jurisdiction over Carnival Cruise Lines for the claim asserted by the Shutes. See 872 F.2d 930 (CA9 1989). The Washington Supreme Court answered the certified question in the affirmative on the ground that the Shutes' claim "arose from" petitioner's advertisement in Washington and the promotion of its cruises there. 113 Wash.2d 763, 783 P.2d 78 (1989). The Court of Appeals then "refiled" its opinion "as modified herein." See 897 F.2d, at 380 , n. 1.

See 46 U.S.C.App. § 183c:

"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss or injury. . . ."

See 46 U.S.C.App. § 183b(a):

"It shall be unlawful for the manager, agent, master, or owner of any sea-going vessel (other than tugs, barges, fishing vessels and their tenders) transporting passengers or merchandise or property from or between ports of the United States and foreign ports to provide by rule, contract, regulation, or otherwise a shorter period for giving notice of, or filing claims for loss of life or bodily injury, than six months, and for the institution of suits on such claims, than one year, such period for institution of suits to be computed from the day when the death or injury occurred."

See also 49 U.S.C. § 11707(e) ("A carrier or freight forwarder may not provide by rule, contract, or otherwise, a period of less than 9 months for filing a claim against it under this section and a period of less than 2 years for bringing a civil action against it under this section").

See, e.g., The Kensington, 183 U.S. 263 , 269 , 22 S.Ct. 102, 104, 46 L.Ed. 190 (1902) (refusing to enforce clause requiring that all disputes under contract for passage be governed by Belgian law because such law would have favored the shipowner in violation of United States public policy).

All these clauses will provide passengers who purchase tickets containing them with a "benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting [its exposure to liability]." See ante, at 594. Under the Court's reasoning, all these clauses, including a complete waiver of liability, would be enforceable, a result at odds with longstanding jurisprudence.

"In [ Carbon Black Export, Inc. v. The Monrosa, 254 F.2d 297 (CA5 1958), cert. dism'd, 359 U.S. 180 , 79 S.Ct. 710, 3 L.Ed.2d 723 (1959),] the Court of Appeals had held a forum-selection clause unenforceable, reiterating the traditional view of many American courts that 'agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to public policy and will not be enforced.' 254 F.2d, at 300 -301." The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 6 , 92 S.Ct. 1907, 1911, 32 L.Ed.2d 513 (1972).

The Court does not make clear whether the result in this case would also apply if the clause required Carnival passengers to sue in Panama, the country in which Carnival is incorporated.

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