Factual Scenario
David and Carol Smith, through a Phoenix, Arizona, travel agent, purchased passage for a 7-day cruise on the Happy-People Cruise Ship, Tropicale. They paid the fare to the agent, who forwarded it to Happy-People’s headquarters in Miami, Florida. The cruise line then prepared the tickets and sent them to the Smiths in the State of Arizona. The tickets contained two provisions: (1) that acceptance of the tickets would create a contract between Happy-People and the Smiths, and (2) there was a forum selection clause requiring any dispute arising from the cruise to be litigated in the state of Florida, The Smiths accepted the tickets and later boarded the Tropicale in Los Angeles, California. The ship sailed to Puerto Vallarta, Mexico, and then returned to Los Angeles. While the ship was in international waters off the Mexican coast, Carol Smith was injured when she slipped on a deck mat during a guided tour of the ship's galley. When the Smiths returned home they filed a lawsuit against the Happy-People Cruise Line in the United States District Court in Phoenix, Arizona. Their claim is that Carol Smith's injuries were the result of the negligence of the employees of Happy-People. The cruise line moved to transfer the case to the United States District Court in Miami Florida. Their basis for the motion to transfer was the forum selection clause in the ticket.
You are the judge in the federal court in Phoenix hearing the motion, and you must decide whether the forum selection clause gives Happy-People Cruise Line the right to have the case transferred to Miami.
Questions:
- Fully summarize the law related to forum selection clauses in contracts and their enforceability. This law is discussed on pages 49 through 51 of the e-textbook, and specifically, review the case of Atlantic Marine Construction Co. v. U.S. District Court on pages 49 and 50 of the e-textbook. If you wish to review additional sources you can do an Internet search for the case of Carnival Cruise Line vs. The Shutes, 499 U.S. 585 (1991).
- Analyze the facts in the factual scenario and decide if the motion to transfer should be granted based on the law you reviewed under question 1 above. Again, in your answer to this question, it is not enough to simply say whether they have been met or not. You must provide specific reasons based on the facts for your ruling.