The near absolute enforcement of forum selection clauses and choice-of-law clauses in ticket agreements by America’s high courts creates a loophole for cruise lines to deny proper compensation to injured passengers. By binding passengers to bring suit in foreign courts, many of which limit the damages cruise lines are obligated to pay those injured due to onboard negligence, cruise lines cut their losses at the expense of their injured party. American courts must restrict their broad adherence to international forum selection and choice-of-law clauses and begin to scrutinize the venues these clauses argue for, as many foreign courts enforce laws that directly contradict American public policy.
While the complexity of maritime law holds back its general popularity—even among lawyers—leisure cruising is exploding in popularity among Americans post-COVID, increasing the risk of onboard accidents and the necessity for maritime law’s practice. In 2023, the cruise industry marked a strong positive trend in passenger traffic that even surpassed pre-COVID levels, with over 17 million passengers having been sourced from the United States in 2023. While the risk of an onboard deadly injury—one in 6.25 million—is low, life-altering accidents from both slip-and-falls due to wet puddles or elevation changes and infections due to diseases like Norovirus or COVID-19 are more common. Slip-and-falls, the most common cruising accident, can lead to serious foot, knee, hip, back, or head trauma. Often times, these accidents are caused due to the negligence of cruise ship staff or policy, opening them up to litigation from injured parties looking for medical bill compensation, which can get quite expensive. To minimize these payouts, many popular cruise lines have figured out a legal loophole by using foreign courts.
To illustrate this loophole, imagine the following: You, having saved up money all year, decide to buy a ticket for a week-long cruise to the Canary Islands. While the cruise line is headquartered in Italy, the cruise ship itself is operating from a port in Fort Lauderdale, Florida—where you also happen to live for the sake of the scenario. From this port, you board the ship and prepare to party your way into international waters. All is going well until, one night, a janitor forgets to mop a section of the starboard side of the deck, leaving behind a puddle of water with no warning sign. You, heading back to your room after a filling steak dinner, slip and fall over this puddle. You break several bones, require multiple invasive surgeries, and suffer from lasting chronic pain. You are never the same again, so naturally, you sue the cruise line to cover your medical bills and emotional suffering; a payout potentially in the millions. Your attorney attempts to bring your lawsuit to a local district court in Fort Lauderdale, where you live and where the boat departed from; however, your case is dismissed in court on the grounds of forum non conveniens, or due to improper jurisdiction. This is because the cruise line snuck two clauses into the fine print of your ticket agreement that obligate all civil disputes to be argued in Italian courts and decided by Italian law, even though you never set foot in Italy. The contractual obligation to attend this foreign court is called a forum selection clause and the obligation to abide by foreign law is called a choice-of-law clause.
The transfer of civil injury cases to international courts can lower the amount of damages injured parties can win from lawsuits. In the United States, Americans are protected by 46 U.S.C. § 30509, a law preventing all ships from putting provisions in their ticket agreements that would limit their liability for causing personal, emotional, psychological, or sexual injuries.
- For instance, a cruise ship can not legally write a clause in a ticket agreement stipulating that, if one were to be injured and sue, their maximum available payment for damages would be capped at $500,000.
However, other countries abide by other laws. Italy, for example, abides by the Athens Convention, an international agreement between 25 nations, capping cruise lines’ payouts for personal injury due to negligence at around $568,000. These 25 nations host several popular cruise lines, with many operating in America, including Costa Cruises, Mediterranean Shipping Company (MSC), and Viking River Cruises. These cruise lines will use their forum selection clauses to dismiss lawsuits from an American court, move the lawsuit to the court of their headquarters country, and then use their choice-of-law clauses to apply the Athens Convention’s payment cap, limiting compensation to their injured parties. These clauses are together used to form a loophole for cruise lines to escape damages they otherwise may have had to forfeit in American courts under § 30509.
The bar for invalidating forum selection and choice-of-law clauses is high. In precedent set under the landmark M/S Bremen v. Zapata Off-Shore Co. Supreme Court case, forum selection clauses can only be overturned on the grounds of four ‘Bremen factors’; (1) if the ticket agreement is created through “fraud or overreaching”; (2) if the injured party is “deprived of his day in court” by a dysfunctional forum; (3) if enforcing the clause is “unreasonable and unjust”; and (4) if enforcement of the clause is to “contravene a strong public policy of the forum in which the suit is brought.” Precedent has shown choice-of-law clauses to be strongly adhered to by high courts.
In 2021, the 11th Circuit Court of Appeals, which has appellate jurisdiction over Florida, the harbor state of the most important cruise line ports in America, recently upheld the enforcement of forum selection and choice-of-law clauses to international courts, despite hearing arguments concerning their potential for loophole usage to evade American public policy. In the class action lawsuit Turner v. Costa Crociere, the plaintiff (injured party) alleged that negligence onboard the Costa Luminosa during the 2020 pandemic led to an outbreak of COVID-19 that infected at least 75 passengers. Costa Crociere, the defendant cruise line, moved to dismiss the lawsuit from a court in Florida—where they departed from—due to its forum selection and choice-of-law clauses mandating Italy as its jurisdiction for disputes. The 11th Circuit, despite hearing the plaintiff’s claims of unfairness against the jurisdiction transfer from Florida, sided with Costa Crociere and dismissed the case, arguing that selections to a “forum that is inconvenient for the plaintiff” do not trigger § 30509(a). Furthermore, it argued that § 30509(a) does not prohibit forum selection clauses that may outsource a case to a jurisdiction “that would impose a limitation on liability.”
This reasoning contradicts the 4th Bremen factor set by the Supreme Court: that forum selection clauses can not contradict strong public policy of the original jurisdiction. Because the Athens Convention caps all liability payouts at $568,000, courts that enforce it contravene American public policy that outlaws such liability limits for under § 30509. By exporting the case to a foreign court following the Athens Convention, this forum selection clause contravenes the public policy of all American courts following federal public policy, which should, therefore, invalidate it. Similarly, this choice-of-law clause should also be invalidated since it violates federal law, and by extension, the law of the state it was moved from.
The Supreme Court’s most recent brush with forum selection and choice-of-law clauses in Great Lakes Insurance SE v. Raiders Retreat Royalty Co., LLC, while strict on intra-state clauses, holds a silver lining for victims of international jurisdictional transfers. Authoring an opinion for a unanimous court, Justice Kavanaugh argues that, while exceptions to enforcing these clauses are “narrow,” enforcements can be nullified if “the chosen law would contravene a controlling federal statute [or] conflict with an established federal maritime policy.” Kavanaugh’s opinion lends credibility to arguments against international forum selection and choice-of-law clauses as being loopholes to the federal statute § 30509 and violating protections for negligently injured passengers on cruise lines.
While international forum selection and choice-of-law clauses are important in maintaining strong maritime trade and commerce relations with other nations, ceding lawsuit jurisdiction transfers to foreign courts that cap liability payments hurts those injured on cruise lines and undermines American law. Americans injured onboard cruise ships can not be left out to dry in unforgiving courts that limit the amount of compensation they are entitled to receive for negligence conducted against them. Doing so directly betrays 46 U.S.C § 30509’s consumer protections in civil court. While the 11th Circuit Court disregards these clauses as loopholes to American law, Justice Kavenaugh’s recent SCOTUS opinion opens the door for further argument and, with any luck, a legal interpretation passing more scrutiny on foreign courts.
