954 F.2d 763 (D.C. Cir. 1992), 90-7155, Milanovich v. Costa Crociere, S.p.A.

Docket Nº:90-7155.
Citation:954 F.2d 763
Party Name:Gregory MILANOVICH, et ux., Appellants, v. COSTA CROCIERE, S.P.A., et al., Appellees.
Case Date:February 04, 1992
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 763

954 F.2d 763 (D.C. Cir. 1992)

Gregory MILANOVICH, et ux., Appellants,


COSTA CROCIERE, S.P.A., et al., Appellees.

No. 90-7155.

United States Court of Appeals, District of Columbia Circuit.

February 4, 1992

Argued Jan. 3, 1992.

Page 764

Appeal from the United States District Court for the District of Columbia (Civil Action No. 89-00866).

Allen M. Hutter, Washington, D.C., for appellants.

George Mencio, Jr., for appellees. Daniel S. Pearson, Miami, Fla., and Mitchell H. Stabbe, Washington, D.C., also entered appearances, for appellees.

Before WALD, SILBERMAN and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

Appellants Gregory Milanovich and Marjorie Koch-Milanovich appeal the grant of summary judgment to appellees Costa Crociere, S.p.A., an Italian cruise line corporation, and Costa Cruises, Inc., a New York corporation serving as Costa Crociere's general sales agent. For reasons given below, we vacate the judgment and remand for further proceedings on appellants' claim.


    Appellants Gregory Milanovich and Marjorie Koch-Milanovich, a husband and wife residing in the District of Columbia, booked passage for a one-week Caribbean cruise on an Italian flag vessel owned by appellee Costa Crociere, S.p.A. The cruise disembarked from San Juan, Puerto Rico on February

    Page 765

    6, 1988. On the morning of February 7, while the ship was in international waters, the deck chair upon which Mr. Milanovich was sitting collapsed, allegedly causing him serious injury.

    On December 13, 1988, the Milanoviches made a written demand for damages on appellee Costa Cruises, Inc. Three months later, on March 31, 1989, appellants filed a personal injury action in the United States District Court for the District of Columbia. The suit was filed one year and fifty-three days after the date of the accident. The cruise company promptly moved for summary judgment claiming that the suit was time-barred by a provision of the passage ticket establishing a one-year time limit for bringing personal injury actions. Appellants opposed summary judgment arguing that another provision of the ticket invoked Italian law as the "ruling law of the contract," and that under Italian law the one-year limitation was unenforceable. 1 They submitted uncontroverted expert testimony that under Articles 1341 and 1342 of the Italian Civil Code, provisions expressly referenced in the passage ticket, 2 liability limiting provisions in certain kinds of "adhesion" contracts, of which a passenger ticket is one, are unenforceable against the non-drafting party unless that party gives specific written assent to such provisions. Without such written approval, they contended, the one-year limitation period in this case was unenforceable. 3

    The district court disagreed. The court reasoned that federal maritime law governed this contract, and that under federal maritime choice-of-law rules, the governing law of the contract is determined by a "center of gravity" analysis, not by the contractual intent of the parties alone. Milanovich v. SJK Enterprises, Inc., 747 F.Supp. 1, 2 (D.D.C.1990). Because of the preponderance of U.S. contacts--appellants are U.S. citizens, the cruise was advertised in the U.S., the tickets were purchased and delivered in the U.S., and the ship left from and returned to a U.S. port--the court held that U.S. law, not Italian law, provided the rule of decision regarding the validity of the one-year limitation clause. Id. at 3. Applying U.S. law, the court found that this provision had been effectively incorporated into the contract and was legally enforceable. 4

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    In a supplemental memorandum and order, the district court considered, and rejected, appellants' argument that the district court had failed to appreciate the significance of the Supreme Court's decision in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), in which the Court enforced a contractual choice-of-forum clause in a maritime towage contract. 5 The district court reasoned that

    [i]t is doubtful if the Supreme Court anticipated an extension of the rule of The Bremen so far from the [commercial] circumstances of that case as to allow a passenger ticket for a pleasure cruise to dictate, as a matter of contract alone, the terms and conditions upon which a shipowner would be liable to its passengers for personal injury.... The proposition may be tested by asking whether, were the situation reversed and the limitations clause less favorable to the Milanoviches under Italian law than under the applicable provision of U.S. maritime law, would it nevertheless be enforced under the rule of The Bremen in the circumstances of this case.

    Id. at 5, 92 S.Ct. at 1911 (emphasis in original). Implicitly answering that question in the negative, the district court reiterated that American law, not Italian law, governed this contract and that appellants' suit was time-barred. On appeal, the Milanoviches challenge the district court's refusal to enforce the choice-of-law provision contained in their passage ticket. 6


    The Milanoviches' cruise ticket is a maritime contract and thus the substantive law to be applied in this case is the general federal maritime law, including maritime choice-of-law rules. See Hodes v. S.N.C. Achille Lauro Ed Altri-Gestione, 858 F.2d 905, 909 & n. 2 (3d Cir.1988) (citing The Moses Taylor, 71 U.S. (4 Wall) 411, 427, 18 L.Ed. 397 (1886)), cert. dismissed, Hodes v. Lauro Line s.r.l., 490 U.S. 1001, 109 S.Ct. 1633, 104 L.Ed.2d...

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