Schlessinger v. Holland America, N.V.

• Decision Date: 09 June 2004
• Docket Number: No. B166213.,B166213.
• Citation: 16 Cal.Rptr.3d 5,120 Cal.App.4th 552
• Court: California Court of Appeals Court of Appeals
• Parties: Rose SCHLESSINGER et al., Plaintiffs and Appellants, v. HOLLAND AMERICA, N.V., Defendant and Respondent.

16 Cal.Rptr.3d 5

120 Cal.App.4th 552

Rose SCHLESSINGER et al., Plaintiffs and Appellants, v. HOLLAND AMERICA, N.V., Defendant and Respondent.

No. B166213.

Court of Appeal, Second District, Division 7.

June 9, 2004.

As Modified July 9, 2004.

Review Denied September 29, 2004.^*

Law Offices of Gary A. Schlessinger and Gary A. Schlessinger, Los Angeles, for Plaintiffs and Appellants.

Kaye, Rose & Maltzman, Lawrence W. Kaye, San Diego, Elsa M. Ward, Los Angeles, and Sook H. Lee for Defendant and Respondent.

PERLUSS, P.J.

Rose Schlessinger, Virginia Adams and Renée Ladenheirn sued Holland America N.V. (HAL) for damages caused by failure to warn and negligence after they became ill during a seven-day Alaskan cruise on a passenger ship operated by HAL. The trial court granted HAL's motion to dismiss the complaint based on a forum selection clause in the cruise ticket contract that required all disputes relating to the cruise to be litigated in courts located in the State of Washington. Schlessinger¹ appeals on the ground she had insufficient notice of the forum selection clause. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Cruise Contract Terms and Conditions

HAL's cruise contract provides: "All disputes and matters whatsoever arising under, in connection with or incident to this contract, the cruise, the cruisetour, the HAL land trip or the HAL air package shall be litigated, if at all, in and before the United States District Court for the Western District of Washington at Seattle, or, as to those lawsuits as to which the federal courts of the United States lack subject matter jurisdiction, in the courts of King County, State of Washington, U.S.A., to the exclusion of all other courts."

Although HAL's passengers do not receive their cruise contracts until the full cruise fare has been paid, at the relevant time sample contracts were available on HAL's web site. In addition, HAL provides travel agents with a cruise brochure for distribution to potential HAL passengers. The 2002 Alaska cruises brochure provides in part: "Transportation aboard the ships is provided solely by the shipowners and charterers and pursuant to the Cruise Contract that you will receive prior to embarkation. A copy of the form of cruise contract will be provided upon request or can be viewed on our Web site: www.hollandamerica.com. Please note that the contract includes a clause specifying certain courts in the State of Washington as the exclusive forum of resolving disputes." The same provision also appeared on HAL's web site.

2. Schlessinger's Cruise and Subsequent Complaint

Schlessinger booked a HAL cruise from Vancouver, Canada to Alaska through a travel agent on February 27, 2002. She made an initial deposit on May 20, 2002 and made her final payment on June 6, 2002. Her contract, along with those of her coplaintiffs, was mailed to her travel agent on July 9, 2002. The cruise departed on July 25, 2002. Schlessinger did not review HAL's web site or the cruise brochure before receiving her contract. The record contains no evidence that she reviewed the contract after receiving it or that she objected to any of the terms of the contract, including the forum selection clause, at any time before the cruise.

During the cruise, Schlessinger and a number of other passengers contracted an intestinal illness, apparently as a result of a Norwalk virus infection. Schlessinger and her coplaintiffs filed a putative class action lawsuit in Los Angeles County Superior Court, alleging HAL knew of the risk of an outbreak of Norwalk virus on its cruises. The first amended complaint, alleging causes of action for failure to warn and negligence, was filed on September 5, 2002. A virtually identical class action suit was filed in the United States District Court for the Western District of Washington on October 8, 2002.

3. HAL's Motion to Dismiss

Based on the forum selection clause in the cruise contract, HAL moved to dismiss the complaint pursuant to Code of Civil Procedure section 410.30, subdivision (a), which provides, "When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just."

Schlessinger opposed the motion, arguing that notice of the forum selection clause was untimely and that the clause was too inconspicuous to be enforceable. With her opposition papers Schlessinger filed a declaration stating she had never received the cruise brochure and had never viewed HAL's web site. She also declared the documents she received from her travel agent indicated she would not receive any refund if she cancelled her cruise within 23 days of the date of departure.

The motion was heard on November 22, 2002. On January 29, 2003 the trial court issued a statement of decision granting HAL's motion and dismissing the action, concluding under applicable federal maritime law that a forum selection clause is enforceable provided the plaintiff has had an opportunity to read the ticket contract before departure.²

DISCUSSION

1. Governing Legal Standards

a. Standard of Review

A trial court's decision to enforce or not enforce a forum selection clause is reviewed for an abuse of discretion. (America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 9, 108 Cal.Rptr.2d 699; Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457, 52 Cal Rptr.2d 435; but see Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680-1681, 16 Cal. Rptr.2d 417 [substantial-evidence test].)

b. Enforceability of Provisions in the Cruise Contract

Legal rights and liabilities relating to conduct that allegedly injured a party aboard a ship on navigable waters fall exclusively within federal admiralty jurisdiction. (Kermarec v. Compagnie Generale (1959) 358 U.S. 625, 628, 79 S.Ct. 406, 3 L.Ed.2d 550 ["[Plaintiff] was injured aboard a ship upon navigable waters. It was there that the conduct of which he complained occurred. The legal rights and liabilities arising from that conduct were therefore within the full reach of the admiralty jurisdiction and measurable by the standards of maritime law. [Citations.] If this action had been brought in a state court, reference to admiralty law would have been necessary to determine the rights and liabilities of the parties."].) This choice-of-law principle has been specifically applied to forum selection clauses in commercial cruise contracts: Enforceability of a forum selection clause in a passenger cruise contract "is a case in admiralty, and federal law governs the enforceability of the forum-selection clause. . . ." (Carnival Cruise Lines, Inc. v. Shute (1991) 499 U.S. 585, 590, 111 S.Ct. 1522, 113 L.Ed.2d 622; accord, Hayman v. Sitmar Cruises, Inc. (1993) 14 Cal.App.4th 1499, 1504, 18 Cal.Rptr.2d 412 ["The validity of a passage contract provision is to be interpreted by the general maritime law of the United States, not state law."].)

Federal courts "employ a two-pronged `reasonable communicativeness' test . . . to determine under federal common law and maritime law when the passenger of a common carrier is contractually bound by the fine print of a passenger ticket. [Citations.] `[T]he "proper test of reasonable notice is an analysis of the overall circumstances on a case-by-case basis, with an examination not only of the ticket itself, but also of any extrinsic factors indicating the passenger's ability to become meaningfully informed of the contractual terms at stake."' [Citation.]" (Wallis v. Princess Cruises, Inc. (9th Cir. 2002) 306 F.3d 827, 835; Shankles v. Costa Armatori, S.P.A. (1st Cir.1983) 722 F.2d 861, 863-864; Carpenter v. Klosters Rederi (5th Cir.1979) 604 F.2d 11, 12-13; Silvestri v. Italia Societa Per Azioni di Navigazione (2d Cir.1968) 388 F.2d 11, 14-17.)³ Both California and federal law presume a contractual forum selection clause is valid and place the burden on the party seeking to overturn the forum selection clause.

(CQL Original Products, Inc. v. National Hockey League Players' Assn. (1995) 39 Cal.App.4th 1347, 1354, 46 Cal.Rptr.2d 412; The Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1, 15 [92 S.Ct. 1907, 32 L.Ed.2d 513].)

2. The Trial Court Did Not Err in Enforcing the Forum Selection Clause

Under the federal two-prong test for enforceability of a cruise contract forum selection clause, the trial court was well within its discretion to grant HAL's motion to dismiss. It was reasonable to conclude that the contract itself adequately disclosed the forum selection clause, which was printed in all capital letters, in black ink on a tan background, under the heading "IMPORTANT NOTICE TO PASSENGERS" on the first page of the passenger's copy of the contract. Schlessinger's contention that, because the forum selection clause was set forth separately and not in the numbered paragraphs under the heading "terms and conditions," it was not part of the contract is unpersuasive: The page of the cruise ticket containing the forum selection clause states "this document is a legally binding contract."

The trial court was also well within its discretion to conclude Schlessinger and her coplaintiffs failed to produce extrinsic evidence sufficient to overcome the strong presumption under maritime law that forum selection clauses are valid. (See The Bremen v. Zapata Off-Shore Co., supra, 407 U.S. at p. 15, 92 S.Ct. 1907; Carnival Cruise Lines, Inc. v. Shute, supra, 499 U.S. at pp. 590-595, 111 S.Ct. 1522 [party resisting the clause's application bears the burden of showing enforcement is unreasonable under the circumstances].) First, the fact that the forum selection clause may have been presented as a "take it or leave it" proposition, and not subject to negotiation, does not make the clause unenforceable. (Carnival Cruise Lines, at pp. 593, 601, 111 S.Ct. 1522; Net2Phone,...