• Julius "Sam" Hines

New Cruise Line Forum Selection Clause Case

The United States Court of Appeals for the Eleventh Circuit just handed down a new case on the enforceability of "forum selection" clauses in cruise passage contracts. The case seems to have involved a gambit of sorts by the plaintiff. Many cruise line forum selection clauses require injured passengers to sue in federal court in Miami, Florida if there is jurisdiction, and in Miami-Dade County state court if no federal jurisdiction exists. In DeRoy v. Carnival Corporation, the plaintiff actually filed suit in federal court, but asked the court to dismiss her own case for lack of subject matter jurisdiction. This was to clear the way for a parallel suit filed in state court. "Tell me there is no jurisdiction in federal court," the plaintiff essentially asked, "so I can pass that along to the judge in my state court case."

For those readers who haven't taken a course in this stuff, federal courts have limited jurisdiction compared to the broader jurisdiction of state courts. You have to explain why you have the right to sue in federal court. In maritime cases, two forms of federal jurisdiction are typically considered: "Diversity jurisdiction," which applies to suits between citizens of different states involving more than a certain dollar value, and admiralty jurisdiction. The federal courts were given exclusive jurisdiction over admiralty cases shortly after the American Revolution, but under something referred to as the "Saving to Suitors" clause, a plaintiff can still opt for a "common law" remedy instead of an admiralty remedy. These principles give plaintiffs a fair bit of control over where a case is filed and how it proceeds--at least in the absence of a contractual forum selection clause.

Getting back to the DeRoy case, diversity jurisdiction was not available because both DeRoy and the defendant were citizens of Florida. What about admiralty jurisdiction? In her complaint, DeRoy insisted that she was invoking the Savings to Suitors clause and demanding a common law remedy, not an admiralty remedy. So no federal court jurisdiction, right?

Not according to the Eleventh Circuit. The appellate panel looked at the facts of the complaint to determine whether there was any federal court jurisdiction. Since the lawsuit involved an injury to a passenger aboard a vessel, it fell "comfortably within the admiralty jurisdiction of the district court." The fact that the plaintiff had refused to invoke admiralty jurisdiction did not mean it didn't exist.

The court also refused to "effectively repudiate a valid forum-selection clause by allowing a plaintiff to circumvent it by refusing to acknowledge the correct basis for federal jurisdiction over her case." The court cited various Florida state court decisions "requiring other lawsuit to proceed in federal court where jurisdiction exists." In effect, the court interpreted the cruise line's forum selection clause as requiring the plaintiff to plead admiralty if available as a basis for federal court jurisdiction. Viewed this way, the clause amounts to a partial waiver of a plaintiff's rights under the Savings to Suitors clause, since it requires cases to be brought in admiralty if admiralty is the only available basis for federal court jurisdiction (as will likely be the case for suits by Florida residents against cruise lines considered to be citizens of Florida).

Although obviously a victory for cruise lines, DeRoy's significance seems limited to cases in which diversity jurisdiction is not present. Given the nature of the cruise industry (at least as it existed before the global pandemic), many suits will involve citizens of different states. Assuming those suits are for damages in excess of $75,000 (the current monetary threshold for diversity jurisdiction), such cases could be brought in (or removed to) federal court irrespective of admiralty jurisdiction.

53 views0 comments

Recent Posts

See All

I am pleased and honored to announce that my friend and former colleague Ryan Gilsenan will be joining my firm. Hines Law LLC will become Hines & Gilsenan LLC. Ryan and I go back to the old Buist Moor