Heinz v. Grand Circle Travel

• Citation: 329 F.Supp.2d 896
• Decision Date: 04 August 2004
• Docket Number: No. CIV.A. 3:03CV-321-MO.,CIV.A. 3:03CV-321-MO.
• Court: U.S. District Court — Western District of Kentucky
• Parties: Ruth Heaton HEINZ Plaintiff v. GRAND CIRCLE TRAVEL Defendant

329 F.Supp.2d 896

Ruth Heaton HEINZ Plaintiff v. GRAND CIRCLE TRAVEL Defendant

No. CIV.A. 3:03CV-321-MO.

United States District Court, W.D. Kentucky, at Louisville.

August 4, 2004.

John J. Osterhage, M. Larry Lawrence, Warsaw, KY, for Plaintiff's.

Stephanie R. Miller, W. Scott Miller, Jr., Miller & Miller, Louisville, KY, Tom Muzyka, Clinton & Muzyka, PC, Boston, MA, for Defendant's.

MEMORANDUM OPINION

MOYER, United States Magistrate Judge.

Plaintiff Ruth Heaton Heinz filed this civil action, claiming that she was injured during a cruise organized by Defendant Grand Circle Travel, a foreign corporation with its principal place of business in Basel, Switzerland.¹ This matter is before the Court on Grand Circle Travel's motion to dismiss (DN 8). Grand Circle Travel seeks dismissal because Heinz failed to state a cognizable claim, failed to join indispensable parties, and filed her action in the wrong venue. Heinz filed a memorandum in opposition thereto (DN 10) to which Grand Circle Travel replied (DN 13). The Court will grant the motion to dismiss the case in order to enforce the forum-selection clause contained in the cruise ticket which Grand Circle Travel sold to Heinz.

I. BACKGROUND AND ARGUMENTS

A. Procedural Background

Plaintiff Ruth Heaton Heinz, an 83-year-old citizen of Kentucky, initiated this civil action invoking the Court's diversity jurisdiction. Her caption identifies only a single defendant: Grand Circle Travel. On July 1, 2003, the Office of the Secretary of State for the Commonwealth of Kentucky acknowledged receipt of a summons and complaint for Grand Circle Travel. Grand Circle Travel filed an answer (DN 2), an amended answer (DN 4), and thereafter moved for dismissal of the complaint pursuant to Fed.R.Civ.P. 12(b)(3), (6), and (7), and Fed.R.Civ.P. 19. Heinz filed her opposing memorandum, but the caption of her opposing memorandum is not in compliance with the applicable procedural rule. See Fed.R.Civ.P. 10(a).² In fact, the caption of her responsive memorandum fails to identify Grand Circle Travel as a defendant. To the extent that Heinz is attempting to amend her complaint to name additional parties, she has failed to comply with the appropriate rule for doing so. See Fed.R.Civ.P. 15(a). Thus, the Court will review Heinz's response only to the extent that it provides a substantive response to Grand Circle Travel's dispositive motion.

B. Factual Background

Heinz was a passenger aboard the Blue Danube II, which is a passenger ship owned by the Swiss Circle Cruise, not Grand Circle Travel, with whom she booked her cruise. On August 3, 2002, while the ship was on the Rhine River in Germany, Heinz sustained an injury when the ship's automatic doors failed. The doors closed on Heinz, knocking her to the floor and injuring her shoulder and arm. In her complaint, she claims that the ship was unseaworthy, that Grand Circle Travel caused an unreasonable, unsafe condition to exist, and that Grand Circle Travel failed to warn her of the ship's condition.

According to the Grand Circle Cruise Lines Passenger Ticket Contract (hereinafter "Passenger Contract") (DN 8, Def.'s Mot., Ex. A), a person, who "accept[s] this ticket ... and/or travel[s] under this ticket," is bound by its provisions with respect to any "claims for ... injury." With respect to personal injury sustained by a passenger, Grand Circle Travel "is not liable for any ... injury ... which may be occasioned by reason of any act or omission beyond its control, including, without limitation, any ... negligent act or failure to act ... of any third party." Passenger Contract, ¶ 3(a). The Passenger Contract also provides that all claims brought in connection with the contract must be litigated in Basel, Switzerland. Passenger Contract, ¶ 5. And, it identifies the Strasbourg Convention on the Limitation of Liability as the governing law. Passenger Contract, ¶ 6.

C. Arguments³

In a sparsely argued memorandum, Grand Circle Travel maintains that venue is not proper in this district because the Passenger Contract selects Basel, Switzerland, as the venue for any legal disputes. When Heinz accepted the ticket, it claims, she accepted the terms and conditions of the Passenger Contract, including the forum-selection clause set forth therein.

Heinz argues that the issue is governed by 28 U.S.C. § 1404, which allows a court to transfer a case to another federal forum.⁴ Heinz admits that she received her ticket, including the Passenger Contract, one to two weeks prior to departure. She claims, however, that she had "no time to review the ticket for its clauses such as the forum selection clause involved here." (DN 10, Heinz Aff., ¶ 9). She also maintains that the transfer would not be proper because she did not negotiate the terms of the Passenger Contract, which included the forum-selection clause. She argues that had she forfeited her ticket, the costs would have been "extreme."⁵ Finally, she claims that were the Court to transfer her case, it would be the end of her case due to her limited ability to travel.

II. ANALYSIS

The first question the Court must address is under what authority it may consider and rule upon the dispositive motion. Grand Circle Travel seeks to dismiss the action, arguing improper venue, failure to state a claim, and failure to join proper parties under Fed.R.Civ.P. 12(b)(3), (6), and (7), respectively. The courts of appeal are split with respect to the proper authority a district court may invoke when dismissing an action where a party invokes a contract's forum-selection clause. 5B Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Fed. Prac. & Proc. § 1352 (3d ed.2004); see also Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d 531, 535 (6th Cir.2002) ("We recognize that the circuits are not in agreement about whether a claim that an action is filed in a forum other than that designated in a contract's forum selection clause may be raised in a Rule 12(b)(3) motion.").⁶ One district court opined that "precisely how this court should dispose of the case [where a party seeks to enforce a forum-selection clause] turn[s] out to involve complicated questions that have puzzled the courts," noting that the issue is "vexing" to say the least. Licensed Practical Nurses, Technicians and Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc., 131 F.Supp.2d 393, 395, 402 (S.D.N.Y.2000). Even the United States Supreme Court has recognized that "[t]here is no obviously correct way to characterize the right embodied in [a contract's] forum-selection provision...." Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 500, 109 S.Ct. 1976, 104 L.Ed.2d 548 (1989).

While many appellate courts have addressed the issue under Rule 12(b)(3) (dismissal for improper venue), see 5B Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Fed. Prac. & Proc. § 1352 (3d ed.2004), the Sixth Circuit has specifically rejected the argument that venue is improper and that the action should be dismissed under Rule 12(b)(3) merely because the case was filed in a forum other than that designated in a contract's forum-selection clause. Kerobo, 285 F.3d at 535. The forum-selection clause, the appellate court noted, "do[es] not dictate the forum." Id. at 535. Rather, the clause "should be enforced as a matter of contract law [which does] not [involve the] issue of proper venue." Id. at 535.

The Kerobo Court ultimately analyzed the enforceability of the forum-selection clause under 28 U.S.C. § 1404, which allows a district court to "transfer any civil action to any other district or division where it might have been brought." That particular statutory provision cannot govern the enforceability of the selection clause at issue here, as Heinz would have this Court believe, because the contractually agreed upon forum, Basel, Switzerland, is not within any United States district court. Royal Bed and Spring Co., Inc. v. Famossul Industria e Comercio de Moveis Ltda., 906 F.2d 45, 51 (1st Cir.1990) (holding that "since we are dealing with a forum-selection clause that refers to a forum outside of the United States, and not within the scope of the statute, section 1404(a) does not apply"). Thus, upon first blush, there appears to be "no existing mechanism with which forum selection enforcement is a perfect fit." Davies, Martin, Forum Selection Clauses in Maritime Cases, 27 Tul. Mar. L.J. 367, 369 (Sum.2003) (quoting New Moon Shipping Co. v. MAN B. & W. Diesel A.G., 121 F.3d 24, 29 (2d Cir.1997)).

The Kerobo Court seemed to suggest that dismissal might be appropriate under Rule 12(b)(1) (which grants dismissal for lack of subject matter jurisdiction), noting that the Supreme Court used "language, not of venue, but of jurisdiction and contract interpretation." 285 F.3d at 535 (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)) (emphasis added). In fact, dismissal for lack of subject matter jurisdiction would be consistent with Justice O'Connor's understanding of the implication of a valid foreign forum-selection clause. See Vimar Seguros y Reaseguros v. Reaseguros, S.A. v. M/V Sky Reffer, 515 U.S. 528, 542, 115 S.Ct. 2322, 132 L.Ed.2d 462 (1995) (O'Connor, J., concurring) ("Foreign arbitration clauses of the kind presented here do not divest domestic courts of jurisdiction, unlike true foreign forum selection clauses...."). However, neither the Sixth Circuit nor the Supreme Court has dismissed a case for lack of subject matter jurisdiction in order to enforce a foreign forum-selection clause. Compare Gibson v. Am. Bankers Ins. Co., 289 F.3d 943, 948 (6th Cir.2002) (stating in dicta that "forum selection clauses in contracts do not deprive courts of jurisdiction"). Until either court does so, this Court declines to invoke Rule 12(b)(1) to support its authority to dismiss the case for lack of subject matter jurisdiction.⁷ More importantly, however, this Court does have jurisdiction over the subject...