Calix-Chacon v. Global Intern. Marine, Inc.

• Decision Date: 19 July 2007
• Docket Number: No. 06-30686.,06-30686.
• Citation: 493 F.3d 507
• Parties: Dilbert Ivan CALIX-CHACON, Plaintiff-Appellee, v. GLOBAL INTERNATIONAL MARINE, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

493 F.3d 507

Dilbert Ivan CALIX-CHACON, Plaintiff-Appellee, v. GLOBAL INTERNATIONAL MARINE, INC., Defendant-Appellant.

No. 06-30686.

United States Court of Appeals, Fifth Circuit.

July 19, 2007.

Robert T. Myers (argued), Young, Richaud & Myers, Metairie, LA, for Plaintiff-Appellee.

Randolph J. Waits (argued), Matthew Francis Popp, Emmett, Cobb, Waits & Henning, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before KING, DAVIS and BARKSDALE, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Defendant Global International Marine, Inc. appeals the judgement of the district court denying its motion to dismiss the action for maintenance and cure brought by seaman Dilbert Ivan Calix-Chacon. The district court refused to enforce the forum selection clause in the employment agreement between the parties on public policy grounds. Because we conclude that the public policy grounds relied on by the district court were improper, we vacate and remand for further proceedings to determine whether the forum selection clause is enforceable under the guidelines established in Bremen and its progeny.¹

I.

A.

Honduran native Dilbert Ivan Calix-Chacon ("Calix") was hired by Global International Marine, Inc. ("Global"), a U.S. corporation operating out of Houma, Louisiana, to work as a seaman on its ship, the M/V SAMSON. Global used the Honduran crewing agency Sitralmahr to hire Calix. Calix, who speaks limited English, signed an employment contract which was written in English for a term beginning December 19, 2005, and ending March 19, 2006.² The contract contained a choice of law clause providing that Honduran law would apply to the employment agreement, including recovery or compensation for injury, death, or medical expenses. It also included a forum selection clause providing that any claim arising out of the employment agreement or for injury would be brought exclusively in a court of competent jurisdiction in Honduras. Sitralmahr's owner, Felipe Rodriguez, submitted an affidavit stating that he explained the terms of the contract, including the forum selection clause, to Calix.

The M/V SAMSON is a U.S. flagged vessel that ordinarily operates in the Carribean. At the time Calix was hired, it was in dry dock in Louisiana undergoing routine maintenance and inspections for United States certification.

While doing maintenance aboard the SAMSON on January 31, 2006, Calix experienced severe stomach pain. He was diagnosed with an inflamed gall bladder and his gall bladder was removed at Terrebonne General Medical Center in Houma, Louisiana. After the gall bladder surgery doctors determined that Calix had an enlarged heart (cardiomegaly). His physician recommended an immediate heart transplant.

B.

Although Global paid for Calix's gall bladder surgery, it refused to pay for his heart transplant. Calix filed suit in district court seeking maintenance and cure including the cost of a heart transplant and ancillary care. Global responded with a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(3), asking the court to enforce the forum selection clause in the employment contract. The district court held an expedited hearing and denied Global's motion. The court concluded that the forum selection clause was unenforceable based on the Supreme Court's decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). The court concluded that the forum selection clause was not enforceable under Bremen because its enforcement would "contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision." Id. at 15, 92 S.Ct. 1907.

The district court concluded that both the general maritime law and the Shipowner's Liability (Sick and Injured Seamen) Convention of 1936, an international treaty ratified by the United States, express a strong public policy preventing the contractual abridgment of maintenance and cure liability. The court noted that the Convention codified the pre-existing federal common law of American maintenance and cure as binding international law for those who ratified it.

The district court then held an expedited trial on the merits of Calix's claim for maintenance and cure. The district court found that Calix's medical condition arose in the service of the vessel and that Global was obligated to provide cure to Calix. The court's judgment ordered Global to pay for all necessary past and future care as recommended by Calix's physician, including the immediate transfer of Calix to an accredited heart transplantation facility to await an available heart for a transplant. Counsel advised the court at oral argument that while this appeal was pending, Calix underwent a successful heart transplant operation. He is currently receiving followup care including round-the-clock nurses, and anti-rejection medication.

The district court issued a Rule 54(b) certificate to allow an immediate appeal. Global appeals.

II.

"[T]he enforcement of a forum selection clause is an issue of law, and we review the district court's conclusions of law de novo." MacPhail v. Oceaneering Int'l, Inc., 302 F.3d 274, 278 (5th Cir.2002). We also review de novo a district court's determination that a contract clause is unenforceable based on public policy grounds. Id. Because this is a case in admiralty, federal law governs whether the forum selection clause in Calix's employment contract with Global is enforceable. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 590, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991).³

III.

A.

In analyzing the enforceability of the forum selection clause in Calix's employment contract we begin with the Supreme Court's decision in M/S Bremen v. Zapata Off-Shore Co 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). In Bremen a tugboat owner (a German corporation) entered into a contract with Zapata (a Texas corporation) to tow Zapata's oil rig from Louisiana to Italy. The contract provided that "[a]ny dispute arising [out of the contract] must be treated before the London Court of Justice." Id. at 2, 92 S.Ct. 1907.

While the tug and tow were in the Gulf of Mexico they encountered a storm which resulted in damage to the rig which was then brought to Florida. Zapata later filed suit against the German company in admiralty in federal court in Tampa seeking damages for negligent towage and breach of contract. The German company sought to enforce the forum selection clause and challenged the jurisdiction of the U.S. court asking the court to dismiss the suit based on lack of jurisdiction or forum non conveniens.

The district court held the contract's forum selection clause unenforceable and this court affirmed. The Supreme Court reversed and held that in maritime actions forum selection clauses are to be enforced unless the forum selection clause is fundamentally unfair and therefore unreasonable. The court established four bases for concluding that a forum selection clause is unreasonable:

(1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement "will for all practical purposes be deprived of his day in court" because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state.

Haynsworth v. Corporation, 121 F.3d 956, 963 (5th Cir.1997), citing Carnival Cruise Lines v. Shute, 499 U.S. 585, 595, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991), and Bremen, 407 U.S. at 12-13, 92 S.Ct. 1907.

The Supreme Court next addressed the enforceability of forum selection clauses in Carnival Cruise Lines v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). In this case Russell and Eulala Shute purchased cruise tickets through a Washington travel agency for a 7 day Carnival Cruise Lines cruise. The agent forwarded the Shutes' payment to Carnival's headquarters and Carnival sent the Shutes their tickets. The forum selection clause was on the back of the tickets and required that all suits relating to the cruise be litigated in Florida. The Shutes boarded the ship destined for Puerto Vallarta, Mexico in Los Angeles. While in international waters off Mexico, Eulala Shute was injured when she slipped on a deck mat during a guided tour of the ship's galley. The Shutes sued in federal court in the State of Washington. The district court granted Carnival's motion to dismiss for lack of personal jurisdiction due to insufficient contacts with the State of Washington. The Ninth Circuit reversed. In addition to the personal jurisdiction question the Ninth Circuit also concluded that because the forum selection clause "was not freely bargained for" it was invalid.

The Supreme Court reversed and held that the clause in question was enforceable though not the product of bargaining, because it was unreasonable to assume that a cruise line would negotiate with a passenger over a provision in a passage contract. The court followed the Bremen analysis and held that, as a general rule, forum selection clauses in cruise ship passage contract tickets are valid and should be enforced unless enforcement is shown to be unreasonable. The court declined to deny enforcement against a routine consumer cruise ticket holder based on the passenger's argument that the provisions incorporated in the printed ticket were not negotiated agreements between parties of equal bargaining power. Rather the court gave broad approval of forum selection clauses despite the lack of equal bargaining position and the fact that the provision was not negotiated.

The case which is most factually analogous to today's case is a decision by this court in Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216 (5th...