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LURIE v. NORWEGIAN CRUISE LINES

February 25, 2004.

BETH LURIE and MARK LURIE, Plaintiffs, -against- NORWEGIAN CRUISE LINES, LTD. and M/V NORWEGIAN STAR, Defendants


The opinion of the court was delivered by: PETER LEISURE, District Judge Page 2

OPINION AND ORDER

Plaintiffs Beth and Mark Lurie, residents of New York, brought this action under the Court's diversity jurisdiction seeking damages for unlawful imprisonment and breach of contract. Plaintiffs' claims arise from their alleged mistreatment at the hands of defendant Norwegian Cruise Lines, Ltd. ("NCL"), a Florida corporation with its principle place of business in Miami, Florida, while on board NCL's cruise ship, Norwegian Star. NCL now moves to dismiss this case based on a forum selection clause contained in the passenger ticket contract issued to plaintiffs for their cruise that requires claims against NCL to be brought in Bade County, Florida. Plaintiffs oppose this motion and, as an alternative to dismissal, request that the Court transfer the action to the United States District Court for the Southern District of Florida. For the reasons stated below, the Court finds that the forum selection clause is valid and enforceable and orders transfer rather than dismissal.

  I. Background

  This case arises from a series of unfortunate incidents that occurred aboard NCL's passenger cruise ship, Norwegian Star, in late February 2003. On or about January 23, 2003, plaintiffs, Beth Lurie and her husband Mark Lurie, purchased tickets for a week-long Hawaiian cruise aboard this ship, scheduled to depart on February 23, 2003 from Honolulu, Hawaii. Defendants arranged for this cruise through Cruise Value Center, a discount travel agency located in East Brunswick, New Jersey. On or about February 21, plaintiffs flew from New York to Honolulu and, after spending two nights in a hotel, boarded the Norwegian Star on February 23. Trouble surfaced, however, on February 28, when the ship docked in Maui, Hawaii. The Luries claim they were forcefully prevented Page 3 from disembarking with the rest of the passengers at Maui and unlawfully detained in a locked room, incommunicado, by defendants. Plaintiffs further allege that later that day, subsequent to their detention, they were ejected from the cruise by NCL and forbidden from returning to the ship, in breach of NCL's contractual obligation to provide a seven-day luxury cruise.

  While the bare allegations regarding the events of February 28 are certainly unusual, the circumstances surrounding those events are even more intriguing. As it turns out, Beth Lurie is a paralegal in the bankruptcy department of Jenkins & Gilchrist Parker Chapin LLP, a law firm representing certain employees of NCL in a class action against NCL pending in this District. That class action involves claims by the employees that they were not paid overtime and other wages required by law. According, to Ms. Lurie, she had only a general knowledge of that lawsuit before embarking on the cruise, similar to what one could glean from reading a legal newspaper. At some point during the cruise, however, she received an email from a partner at Jenkins & Gilchrist asking that she investigate the suspicious number of opt out forms submitted by crew members aboard the Norwegian Star. At that point, she apparently questioned three crew members about whether they were being improperly influenced to opt-out of the class action. According to Ms. Lurie, "the reason we were forcibly ejected from the ship and held incommunicado for hours was to terrorize us, and prevent anyone from learning how Norwegian was not only mistreating its employees, but how it interfered with their right to participate in a pending class action before this Court." (Lurie Decl. ¶ 4.)

  NCL, not surprisingly, offers a different account, suggesting that Ms. Lurie planned all along to use the trip for the purpose of investigating the treatment of Page 4 employees on the Norwegian Star. NCL claims that both Ms. Lurie and her husband were observed interviewing crew members who were not plaintiffs in the pending class action. According to NCL, the Luries "were openly asking those crew members about, their work conditions, to wit: if they were receiving fair treatment, if they were being given time sheets, and if they were sure [that] they wanted to be excluded from the . . . class action." (Kilgour Decl. at ¶ 7.) NCL claims that if the Luries were, in fact, detained and then removed from the ship, "the vessel's Master took reasonable action within his authority to deter and prevent plaintiffs from both continuing to disrupt the efficient operation of the vessel and undermining the maintenance of order and discipline of the crew at sea." (Def. Mem. at 3.)

  At this stage of the litigation, however, the Court need not determine which party has presented a more accurate version of what took place aboard the Norwegian Star. While these events are sure to be hotly litigated at the merits stage, the Court's focus here is on the limited issue of whether to enforce the forum selection clause contained in the Luries' passenger ticket contract. That clause states as follows:
This Contract shall be governed in all respects by the laws of the State of Florida and the laws of the United States of America. It is hereby agreed that any and all claims, disputes or controversies whatsoever arising from or in connection with this Contract and the transportation furnished hereunder shall be commenced, filed and litigated, if at all, before a court of proper jurisdiction located in Bade County, Florida, U.S.A.
(Kilgour Decl., Ex. A; Lurie Decl., Ex. A.) Relying on this clause, NCL moves to dismiss this action as being filed in an improper forum. Plaintiffs, on the other hand, argue that the clause is unenforceable because they were not given adequate notice of the terms of the contract and did not have a reasonable opportunity to reject the contract without penalty. Plaintiffs further argue that the terms of the forum selection clause Page 5 should not apply here because NCL's conduct was deliberate and because plaintiffs' claim for false imprisonment does not arise out of the terms of the contract between the parties. Finally, plaintiffs argue that should the Court decide to enforce the forum selection clause, the appropriate remedy would be to transfer the case to the Southern District of Florida in the interests of justice. The Court finds that because the plaintiffs had reasonable notice of the forum, selection clause, and because the clause does not violate principles of fundamental fairness, the forum selection provision is valid and enforceable as to the plaintiffs. Rather than dismissing the action, however, the Court finds that the appropriate remedy here is to transfer the action to the United States District Court for the Southern District of Florida.

  II. Discussion

  As an initial matter, a passenger ticket contract is a maritime contract and therefore governed by the general maritime law of the United States. See, e.g., Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 590 (1991); The Moses Taylor, 71 U.S. 411, 427 (1867); Vavoules v. Kloster Cruise Ltd., 822 F. Supp. 979, 982 (E.D.N.Y. 1993) (Weinstein, J.) (compiling cases). The fact that plaintiffs have invoked the Court's diversity jurisdiction in their complaint does not change the analysis; regardless of the choice of forum or basis of subject matter jurisdiction, disputes relating to maritime contracts and injuries sustained aboard a ship are governed by federal maritime law. See, e.g., Melnik v. Cunard Line Ltd., 875 F. Supp. 103, 106 (N.D.N.Y. 1994); Vavoules, 822 F. Supp. at 982-8,3.

  NCL brings its motion to dismiss "pursuant to Fed.R.Civ.P. 12(b) and 12(c), and case law." (Def.'s Mem. at 1.) This studious circumspection is not the result of a Page 6 lack of research, however, as the proper procedural mechanism for requesting dismissal based on a forum selection clause is an open question in the Second Circuit. See New Moon Shipping Co., Ltd, v. Man B & W Diesel AG, 121 F.3d 24, 28-29 (2d Cir. 1997); Glyphics Media, Inc. v. M.V. Conti Singapore, 2003 WL 1484145 at *3 (S.D.N.Y. 2003). The difficulty with this question arises from the fact that a forum selection clause cannot oust a federal court of personal or subject matter jurisdiction or render venue improper. Nor can it accurately be said to nullify a plaintiff's valid substantive claim. As a result, there is no consensus among the circuits or within the Second Circuit on the proper procedure for enforcing such provisions. Id at 28 (citing the varying procedural devices employed by different courts to enforce forum selection clauses, including Rule 12(b)(1), 12(b)(3), and 12(b)(6)). Indeed, "there is no easy answer to the enforcement procedure question because there is no existing mechanism with which forum selection enforcement is a perfect fit." Id at 29 (citing Patrick J. Borchers, Forum Selection Agreements in the Federal Courts after Carnival Cruise: A Proposal for Congressional Reform, 67 Wash. L. Rev. 55(1992)).

  While the Second Circuit has declined to adopt a particular procedural device under the Federal Rules of Civil Procedure for seeking dismissal based on a forum selection clause, it is clear that a district court has the authority to order such a dismissal. This authority is rooted in the Court's inherent authority to "decline jurisdiction" as a means of enforcing a valid forum selection clause in a contract. See New Moon, 121 F.3d at 28; GMAC Commercial Credit, LLC v. Dillard Dep't Stores, Inc., 198 F.R.D. 402, 405 (S.D.N.Y. 2001); Licensed Practical Nurses, Technicians and Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc., 131 F. Supp.2d 393, 407-08 Page 7 (S.D.N.Y. 2000); see also, Graydon S. Sterling, Forgotten Equity: The Enforcement of Forum Clauses, 30 J. Mar. L. & Com. 405 (1999) (advocating enforcement of forum selection clauses through the equitable remedy of specific performance). If it determines that the forum selection clause is valid and enforceable, however, the Court is not limited to dismissal as a remedy. A district court may elect to transfer an action to a forum permitted by the applicable clause rather than dismiss the case whether such transfer is moved by the defendant, Carron v. Holland America Line-Westours Inc., 51 F. Supp.2d 322, 326 (E.D.N.Y. 1999), the plaintiff, Pomer v. Kloster Cruise Ltd., 1994 WL 774503 at *2 (W.D. Wash. 1994), or, after giving the parties an opportunity to be heard, sua sponte by the court, Licensed Practical Nurses, 131 F. Supp.2d at 406-07.

  Because forum selection clauses in maritime contracts are presumably valid, the burden is on the plaintiff who files suit outside the contractually designated forum to overcome this presumption. New Moon, 121 F.3d at 29 (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)). "This burden is analogous . . . to that imposed on a plaintiff to prove that the federal court has subject matter jurisdiction over his suit or personal jurisdiction over the defendant." Id. Where, as here, a motion to enforce the clause is filed at the initial stage of litigation, the Court views the facts in the light most favorable to the plaintiff. Id; Carron, 51 F. Supp.2d at 325. The Court is not limited to the pleadings in making its determination and may consider the parties' supporting affidavits and declarations; however, a disputed fact may be resolved in a manner adverse to the plaintiff only after an evidentiary hearing. New Moon, 121 F.3d at 29; Carron, 51 F. Supp.2d at 325; see also Fed. R. Civ. Pro. 12(d). Page 8

  The actual passenger ticket contract at issue in this case consists of a top section, known as the "Cruise Ticket," which is perforated so that it can be removed from the rest of the passenger ticket contract upon boarding, and the "Contract of Passage," which contains 28 numbered paragraphs, including the forum selection clause. NCL issued a single passenger ticket contract for Mark and Beth Lurie, so that both passengers were traveling on the same ticket. Both the Cruise Ticket and Contract of Passage portions of the passenger ticket contract contain prominent notices alerting the passenger to the terms of the Contract of Passage. (Kilgour Decl. ¶¶ 12-17; Exs. A-B.) In support of their motion, defendants submitted a declaration by Jane E. Kilgour, the manager of the NCL's Passenger & Crew Claims Department, stating that the Luries' passenger ticket contract was issued on January 24, 2003 in Miami, Florida and mailed shortly thereafter to the Luries' travel agent. (Kilgour Decl. ¶ 8.)

  In response, plaintiffs submitted a declaration by Beth Lurie stating that she had no recollection of receiving the passenger ticket contract until after she arrived in Honolulu just prior to boarding the Norwegian Star. (Lurie Decl. ¶ 2.) Ms. Lurie further states that she "was informed that once we purchased our cruise tickets, they were non-refundable." (Id.) NCL countered this declaration with declarations by Kelly McIntyre, the operations manager at Cruise Value Center, and Marilyn David, the travel agent at Cruise Value Center who contacted NCL for reservations and tickets on behalf of the Luries. Both Ms. McIntyre and Ms. David state that Cruise Value Center received the Luries5 passenger ticket contract via mail from NCL on January 28, 2003. (McIntyre Decl. ¶ 3; David Decl. ¶ 3.) Ms. McIntyre and Ms. David further state that on February 6, 2003 the Luries' passenger ticket contract was sent by Cruise Value Center via Air Page 9 Bourne Express to Ms. Lurie at Jenkins & Gilchrist, although it was addressed to "Beth Friedman," which, as it turns out, is Ms. Lurie's maiden name and the name she uses professionally. (McIntyre Decl. ¶ 4; David Decl. ¶ 4; February 11, 2004 Hr'g Tr. at 47 (hereinafter "Tr.").) Annexed to both Ms. McIntyre's and Ms David's declarations is a copy of an Air Bourne Express delivery confirmation, indicating that the ...


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