ENDERSON v. CARNIVAL CRUISE LINES, INC., (W.D.N.C. 2001)

CARL HORN, III, Chief U.S. Magistrate Judge.

THIS MATTER is before the Court on the "Defendants' Motion to Dismiss" (document #8) and "Memorandum in Support" (document #9), both filed December 28, 2000. The Plaintiff has not filed a responsive brief and the time for filing a response expired weeks ago.

The parties have consented to Magistrate Judge jurisdiction under 28 U.S.C. § 636 (c), and this motion is now ripe for disposition.

Having carefully considered the parties' arguments, the record, and the applicable authority, the undersigned will grant the Defendants' motion and dismiss the Complaint.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This action, seeking damages in excess of $100,000 for negligence and breach of contract, was brought by Wesley H. Enderson and Linda Enderson, who are husband and wife and citizens of Conover, Catawba County, North Carolina.

The Defendants, Carnival Cruise Lines, Inc., and Carnival Corporation (collectively "Carnival"), are Panamanian corporations sharing a principal place of business in Miami, Dade County, Florida, and operating other offices in California and Colorado, but having no office in North Carolina or any other state. Carnival is not licensed to do business in North Carolina, nor does it pay business taxes, keep a bank account, or even maintain a telephone number in this state.

Carnival advertises its cruises through advertising agencies, all located outside of North Carolina, that purchase advertising on television, but only on a nationwide basis, that is, on network television without regard for geographic region; and purchase newspaper advertising in nearly 200 geographic markets, including North Carolina. The same basic advertisement is placed in the various newspapers around the country with the name, address, and other information for local travel agencies placed in the newspaper advertisement in exchange for sharing the advertisement's cost.

Carnival also markets cruises by sending sales representatives to designated multi-state geographic markets. These representatives, however, call on independent travel agents but do not deal with the general public or maintain offices, bank accounts or telephone numbers in the State of North Carolina on behalf of Carnival.

All travel agents who arrange cruise reservations on Carnival's vessels are independent contractors or brokers who act on behalf of the passengers and are not affiliated with the Defendant. Nor does Carnival contract with local travel agents in the State of North Carolina for exclusive rights to make reservations for passengers aboard Defendant's vessels or with any insurance carrier for exclusive rights to offer trip insurance for Defendant's passengers.

Sometime prior to January 16, 2000, the Plaintiffs booked a seven day cruise aboard Carnival's "MS INSPIRATION" through their travel agent, American Express World, and were issued a Passage Ticket Contract ("ticket") containing the following "forum selection clause" (emphasis added):

Section 18. It is agreed by and between the Guest and Carnival that all disputes and matters whatsoever arising under, in connection with or incident to this Contract or the Guest's cruise, shall be litigated, if at all, in and before a Court located in Miami Dade County, Florida, U.S.A. to the exclusion of the Courts of any other county, state or country.

The Plaintiffs were given notice of the forum selection clause in at least four ways. First, the front cover of the ticket, actually a blue booklet, has the following heading in bold, bright blue, capital letters: "IMPORTANT NOTICE TO GUESTS." Under that heading appears the following text:

THE GUEST TICKET CONTRACT IN THIS BOOKLET CONTAINS CONDITIONS ON NUMBERED PAGES 1 THROUGH 11 IN THE REAR PORTION OF THIS BOOKLET. YOUR ATTENTION IS DIRECTED TO THESE CONDITIONS, CERTAIN OF WHICH CONTAIN IMPORTANT LIMITATIONS ON THE RIGHTS OF GUESTS TO ASSERT CLAIMS AGAINST THE CRUISE LINE, VESSEL OR THEIR AGENTS OR EMPLOYEES. PLEASE READ THE CONTRACT AND THESE TERMS AND RETAIN THE CONTRACT FOR FUTURE REFERENCE.

Second, inside the booklet cover, on the face of the ticket's first page, appears the following legend in bold, capital letters:

IMPORTANT NOTICE TO GUESTS

THIS DOCUMENT IS A LEGALLY BINDING CONTRACT ISSUED BY CARNIVAL CRUISE LINES TO, AND ACCEPTED BY, GUEST SUBJECT TO THE IMPORTANT TERMS AND CONDITIONS APPEARING ON THE FOLLOWING 11 PAGES. THE PROVISIONS ON THE FOLLOWING PAGES OF THIS CONTRACT ARE INCORPORATED AS THOUGH FULLY REWRITTEN ON THE FACE OF THIS CONTRACT.

NOTICE: THE ATTENTION OF GUEST IS ESPECIALLY DIRECTED TO CLAUSES 1 AND 15 THROUGH 20, WHICH CONTAIN IMPORTANT LIMITATIONS ON THE RIGHTS OF GUESTS TO ASSERT CLAIMS AGAINST CARNIVAL CRUISE LINES, THE VESSEL, THEIR AGENTS AND EMPLOYEES, AND OTHERS.

Third, the Plaintiffs were on notice of the forum selection clause through the "Welcome Aboard" brochure. The ticket contract is issued in a packet containing several items, including luggage tags and the "Welcome Aboard" brochure. In the Table of Contents on the back of the first page of the brochure, the first item is entitled "Things to Know Before Sailing" which reads as follows:

CONDITIONS OF CONTRACT

If you look at the cover of your ticket booklet, you will see an "Important Notice to Guests." This notice directs your attention to the terms and conditions of your contract. It is important to read this and become acquainted with the specific conditions and limitations of your passage.

Fourth, a similar "Things to Know Before You Go" section is contained in Carnival's travel brochure, available to any prospective guest on a Carnival Cruise, and, in the 1999-2001 edition, states in bold, capital letters:

CRUISE PASSAGE IS SUBJECT TO THE TERMS AND CONDITIONS SHOWN ON THE CARNIVAL CRUISE LINES' "TERMS AND CONDITIONS OF PASSAGE CONTRACT TICKET" (COPIES AVAILABLE UPON REQUEST), INCLUDING THE PROCEDURE FOR THE RESOLUTION OF DISPUTES WHICH MUST TAKE PLACE IN THE STATE OF FLORIDA.

On January 16, 2000, the Plaintiffs sailed on the "MS INSPIRATION" from San Juan, Puerto Rico destined to Aruba and then returning to San Juan. On or about January 22, 2000, while on ship, Mr. Enderson developed appendicitis, was treated initially in the ship's infirmary, and underwent emergency surgery on January 23, 2000, at a Puerto Rican hospital.

On October 10, 2000, the Plaintiffs filed this action in the Western District of North Carolina alleging both negligence and breach of contract for Carnival's failure to provide adequate medical facilities and treatment on ship and to promptly transport him to a hospital.

On December 28, 2000, the Defendants moved to dismiss under Fed.R.Civ.P. 12(b)(2) (improper venue) and 12(b)(3) (lack of personal jurisdiction). This motion has been briefed as set forth above and is ripe for determination.

II. DISCUSSION

Forum selection clauses are prima facie valid, that is, they should be enforced when made in arms-length transactions absent some compelling reason to disregard them. See. e.g., M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9-12 (1972); Sterling Forest Assoc. v. Barnett-Range Corp., 840 F.2d 249, 251 (4th Cir. 1988); and Perkins v. CCH Computax, Inc., 333 N.C. 140, 146, 423 S.E.2d 780, 784 (1992) ("the validity and enforceability of forum selection clauses in North Carolina is consistent with the North Carolina rule that recognizes the validity and enforceability of choice of law and consent to jurisdiction provisions . . . [and therefore we] hold that forum selection clauses are valid in North Carolina").

A forum selection clause is generally binding and will be enforced unless enforcement is "unreasonable under the circumstances." Bremen, 407 U.S. at 10. A choice of forum provision may be found unreasonable if(1) its formation was induced by fraud or overreaching; (2) the complaining party "will for all practical purposes be deprived of his day in court" due to inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4) its enforcement would contravene a strong public policy of the forum state. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991) (forum selection clause in cruise line's passage contract ticket, requiring litigation of all disputes in Florida, was reasonable and enforceable). Accord Sterling Forest, 840 F.2d at 251; and Mercury Coal Coke v. Mannesmann Pipe and Steel, 696 F.2d 315, 318 (4th Cir. 1982).

The subject motion is controlled by the Supreme Court's decision inCarnival, supra, where the plaintiffs, a husband and wife from Washington State, booked passage on a Carnival cruise ship departing from and returning to California. While on ship, the plaintiff wife slipped and fell and subsequently brought suit for negligence in federal court in Washington State. As here, Carnival moved to dismiss for improper venue, relying on the forum selection clause contained in the plaintiff's ticket which read:

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.

499 U.S. 587-88. The only notice of the forum selection clause was "on the lower corner of the face of each ticket [which read] "SUBJECT TO CONDITIONS OF CONTRACT ON LAST PAGES IMPORTANT! PLEASE READ CONTRACT — ON LAST PAGES 1, 2, 3' App. 15." Id.

The Supreme Court reversed the Ninth Circuit Court of Appeals and ruled that the plaintiff's could only bring suit in Florida, explaining:

"The Ninth Circuit had "decided that the forum-selection clause was unenforceable because . . . [the plaintiff's] are not business persons and did not negotiate the terms of the clause with [Carnival]. 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 [Carnival]." Carnival, 499 U.s. at 592.

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. 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. 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.

Carnival, 499 U.S. at 593-94 (internal quotations and citations omitted).

The Court went to hold that:

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 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.

Carnival, 499 U.S. at 595 (emphasis added).

Although these Plaintiffs have not affirmatively admitted that they were given notice of the clause, neither have they responded to the subject motion; that is, they have not claimed that notice was insufficient or that the clause was fundamentally unfair or unreasonable.

Moreover, the undersigned finds that the notice actually given, as discussed above and which greatly exceeded the notice given in Carnival, and the clause itself were "fundamentally fair." Id. Accord Bremen, 407 U.S. at 10 (forum selection clause binding and enforceable unless "unreasonable under the circumstances"); Geller v. Holland America Line, 298 F.2d 618, 619 (passengers bound by terms of cruise ticket contract even though they never opened the ticket envelope); and Petrey v. Cunard Line Ltd., 1993 A.M.C. 2166, 2167 (D.S.C.) (applying Carnival "fundamental fairness" standard: found adequate notice of clause limiting time to sue for personal injury), aff'd, 9 F.3d 1544 (4th Cir. 1993).

In short, for the same reasons and, indeed, on facts that equal or exceed those in Carnival, the forum selection clause contained in the Plaintiffs' ticket is valid and must be enforced. Therefore, the Defendants' motion to dismiss will be granted.

the increased notice given here, the only other significant difference between Carnival and the instant case — that is, these North Carolina Plaintiffs are much closer to Florida than were the Washington plaintiff's in Carnival — also weighs in favor of enforcing the clause.

As in Carnival supra the undersigned declines to rule on the constitutionality of exercising personal jurisdiction over these Defendants. See 499 U.S. at 589 ("[B]ecause we find the forum-selection clause to be dispositive of this question, we need not consider petitioner's constitutional argument as to personal jurisdiction. . . . It is not the habit of the Court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case") (internal citations omitted).

III. ORDER

NOW, THEREFORE, IT IS ORDERED:

1. The "Defendants' Motion to Dismiss" (document #8) is GRANTED and the Complaint is DISMISSED.

2. The Clerk is directed to send copies of this Memorandum and Order to counsel for the parties.

SO ORDERED