United States District Court, S.D. New York
April 21, 2005.
IRENE VALENTI and JOSEPH VALENTI, Plaintiffs,
NORWEGIAN CRUISE LINE, Defendant.
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant NCL (Bahamas) Ltd., sued in this action as "Norwegian
Cruise Line" ("NCL"), has moved pursuant to Rule 12(b) and
12(c),*fn1 Fed.R.Civ.P., to dismiss the complaint of
plaintiffs Irene and Joseph Valenti (the "Valentis") based upon
the forum selection clause contained in the ticket purchased by
the Valentis for a cruise on the Norwegian Dawn. For the
reasons set forth below, the motion is granted.
On November 10, 2004, the Valentis filed a complaint alleging
that on November 27, 2003, Irene Valenti suffered personal
injuries arising out of the negligence of the crew of the NCL
ship. More specifically, it is alleged that Irene Valenti "was
caused to sustain injury as a result of a negligent condition
then and there existing on the steps leading to the dining room."
(Compl. ¶ 6.)
The instant motion was filed on January 6, 2005. It was heard
and marked fully submitted on January 26, 2005. The Facts
The following facts are drawn from the complaint and the
affidavits of the parties. It is well established that when
evaluating a motion to dismiss a complaint based on the existence
of a forum selection clause, the Court may consider materials
outside the pleadings. See New Moon Shipping Co., Ltd. v. MAN
B & W Diesel AG, 121 F.3d 24, 30 (2d Cir. 1997); Lurie v.
Norwegian Cruise Lines, Ltd., 305 F. Supp. 2d 352, 357 (S.D.N.Y.
2004) (stating that in making its determination concerning the
application of a forum selection clause, the court may consider
the parties' supporting affidavits and declarations but it may
resolve a disputed fact in a manner adverse to the plaintiff only
after an evidentiary hearing); J.B. Harris, Inc. v. Razei Bar
Indus., Ltd., 37 F. Supp. 2d 186, 188-89 (E.D.N.Y. 1998),
aff'd 181 F.3d 82 (2d Cir. 1999).
NCL maintains its principal place of business and corporate
headquarters at Airport Corporate Center, 7665 Corporate Center
Drive, Miami, Florida 33126. (See Declaration of Jane E.
Kilgour of January 5, 2005 ("Kilgour Decl."), at ¶ 2.)
The ticket issued by NCL has two components. The top portion of
the ticket ("the Lifted Ticket") is perforated so that it can be
removed by NCL personnel at the time that the passenger first boards the ship. (See id. ¶ 5.) The bottom portion of
the ticket is retained by the passenger. (See id.) This
retained portion of the ticket contains the 28-paragraph Contract
of Passage. (See id.)
The Lifted Ticket is marked "Cruise Ticket/Do Not Separate
Until Pier Check-in" in its upper right corner and "To Be
Presented for Passage" on its bottom edge. (See id. Ex. A.)
The Lifted Ticket reveals that NCL issued the Lifted Ticket and
Contract of Passage to the Valentis in Miami on October 24, 2003
for a round-trip cruise from New York City on the cruise ship
Norwegian Dawn which commenced on November 23, 2003. (See
id. Ex. B.)
The following legend appears on both the Lifted Ticket and also
on the portion of the ticket retained by the Valentis after
The Passenger's attention is specifically directed to
the terms and conditions of this contract set forth
below. These terms and conditions affect important
legal rights and the passenger is advised to read
(Id. Ex. A.) This legend is printed in white lettering against
a dark blue background with a bold blue margin. (See id. ¶
7.) At the top of the Contract of Passage, the following legend is
printed in bold-face type in a text box with a broad border:
Passengers are advised to read the terms and
conditions of the Passenger Ticket Contract set forth
below. Acceptance of this Passenger Ticket Contract
by Passenger shall constitute the agreement of
Passenger to these Terms and Conditions.
(Id. Ex. A at 1.)
Paragraph 1 of the Contract of Passage states as follows:
This passenger ticket contract (hereafter "Contract")
constitutes a contract of passage between the
Carrier, Norwegian Cruise Line Limited d/b/a
Norwegian Cruise Line (hereafter referred to as
"Carrier"), and the passenger or purchaser (whether
or not signed by or on his behalf). All the terms and
provisions of all sides of this Contract, including
all of the following matter printed below, are a part
of this Contract to which the passenger and/or
purchaser, both on his/her behalf and on behalf of
any other person or persons, including children, for
whom this ticket is purchased, acknowledge and agree
to be bound thereby by accepting this Contract or
transportation from the Carrier. The fare includes
only the transportation as specified herein, full
board, ordinary ship's food, but does not include
spirits, wine, beer, sodas or mineral waters. This
Contract shall be the entire agreement between the
parties and supersedes all representations or
conditions contained in Carrier's advertisements,
notices, brochures or other literature and all
promises and agreements made or claimed to have been
made to or with the passenger or anyone representing
him by any party.
(Id.) Paragraph 28 of the Contract of Passage provides in pertinent
part as follows:
[A]ny 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 Dade
County, Florida, U.S.A.
(Id. Ex. A at 2.)
Irene Valenti has stated that prior to purchasing the NCL
tickets, she obtained and reviewed an NCL brochure that stated
that a purchaser would forfeit 50% of the purchase price if the
trip was cancelled within 29 days prior to the sailing date.
(See Affidavit of Irene Valenti ("Valenti Aff.") sworn to
January 14, 2005, at ¶ 6.)
The January 19, 2005 supplemental declaration of NCL's Jane
Kilgour states as follows:
NCL's standing policy is to provide full refunds to
passengers who object to the terms of the contract of
passage within a reasonable time after receiving
their ticket contracts.
* * *
Plaintiffs here did not reject the ticket contract
even though they had the tickets at their home for
almost a month before their cruise.
As such, although Plaintiffs received their tickets
within a period which carried a cancellation penalty, they could have received a full refund if they had
rejected the terms and conditions of the contract of
passage within a reasonable time.
(Supplemental Declaration of Jane E, Kilgour of January 19, 2005
("Kilgour Supp. Decl."), at 1-2.)
A. Choice of Law
In this case, the source of substantive law is federal maritime
law. See, e.g., Vavoules v. Kloster Cruise Ltd.,
822 F. Supp. 979, 982 (E.D.N.Y. 1993) (stating that "[i]t is now settled
that a passenger cruise ticket is a maritime contract and the
limitations law to be applied in a personal injury action is
federal maritime law") (citing Carnival Cruise Lines, Inc. v.
Shute, 499 U.S. 585, 590 (1991)). It is well-settled that in
federal maritime law, the contract of passage governs the rights
and liabilities between passengers and an ocean carrier. See,
e.g., The Majestic, 166 U.S. 375, 377-78 (1897); The Moses
Taylor, 71 U.S. (4 Wall.) 411, 427 (1886).
The fact that the Valentis have asserted that the Court has
subject matter jurisdiction pursuant to the diversity statute,
28 U.S.C. § 1332, is irrelevant to this choice of law analysis. See, e.g., Lurie v. Norwegian Cruise Lines, Ltd.,
305 F. Supp. 2d 352, 356 (S.D.N.Y. 2004). The Lurie Court stated:
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
Based on the foregoing, it is determined that this action
brought pursuant to NCL's duly issued Contract of Passage should
be treated under the general maritime law of the United States.
B. The Forum Selection Clause Is Enforceable
A forum-selection clause in a maritime contract is prima
facie valid unless there is some independent justification for
refusing to enforce it. M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 10 (1972); see also Carnival Cruise Lines, Inc. v.
Shute, 499 U.S. 585, 589 (1991). In Shute, the Supreme Court
held that a forum selection clause in a passenger ticket contract
is within the meaning of 46 App. U.S.C.A. § 183c, which outlines
permissive limitations on passengers' rights. Shute,
499 U.S. at 596.
The Shute court held that a forum selection clause in a form
passage contract is enforceable if: (1) it is "reasonably communicated" by the carrier to the passenger, see id. at
590, and (2) it stands up to judicial scrutiny as to
reasonableness and fundamental fairness. See id. at 593-95.
1. The Forum Selection Clause Was Reasonably Communicated To
The Second Circuit has held that a contractual term in a
passage contract is reasonably communicated where:
(1) . . . the physical characteristics of the ticket
itself reasonably communicate? to the passenger the
existence therein of important terms and conditions
that affected the passenger's legal rights, and (2) . . .
the circumstances surrounding the passenger's
purchase and subsequent retention of the
ticket/contract permitted the passenger to become
meaningfully informed of the contractual terms at
Ward v. Cross Sound Ferry, 273 F.3d 520
, 523 (2d Cir. 2001)
(internal quotations omitted); see also Lousararian v. Royal
Caribbean Corp., 951 F.2d 7
, 8-9 (1st Cir. 1991); Natale v.
Regency Maritime Corp., No. 94 Civ. 0256 (LAP), 1995 WL 117611,
at *2-3 (S.D.N.Y. Mar. 17, 1995); Boyles v. Cunard Line Ltd.,
No. 93 Civ. 3472 (CES) 1994 WL 449251, at *2-4 (S.D.N.Y. Jan. 11,
The Ward court determined that a contractual term was
reasonably communicated where: (1) the ticket and passage
contract was received by the passenger at least several days
before the trip began and (2) the passenger was permitted to retain the
passage contract after boarding. Ward, 273 F.3d at 526.
Here, it is undisputed that the ticket was received shortly
after October 24, 2003, and the trip commenced on November 23,
2003. Moreover, it is undisputed that the Lifted Ticket and the
Contract of Passage carried multiple legends alerting the
passenger to the fact that the terms and conditions contained in
the Contract of Passage affected the passenger's legal rights.
Based on the foregoing, the forum selection clause was reasonably
communicated to the Valentis.
2. The Forum Selection Clause Was Fair and Reasonable
The Second Circuit has held that a forum selection clause does
not violate notions of fundamental fairness absent a showing of
fraud, overreaching, or an intent on the part of the carrier to
"`discourag[e] cruise passengers from pursuing legitimate
claims.'" Effron v. Sun Line Cruises, Inc., 67 F.3d 7, 10 (2d
Cir. 1995) (quoting Shute, 499 U.S. at 595).*fn2 The same NCL ticket contract and forum selection clause
involved in the present case was judged to be fair and reasonable
by the Lurie court, which stated:
The forum selection clause at issue here also
withstands the reasonableness and fairness analysis
established by [the Supreme Court]. NCL is a large
cruise line with its principle place of business and
corporate headquarters in Miami, Florida. Thus, the
factors addressed by the Court in Shute in
determining that the forum selection clause there was
reasonable are equally applicable to the clause in
NCL's form contract. Furthermore, plaintiffs' have
not made the strong showing of inconvenience
necessary to avoid enforcement of the clause; nor is
there evidence that NCL included the clause in the
passenger ticket contract in bad faith or through
fraud or overreaching.
Lurie, 305 F. Supp. 2d at 361.
The Valentis have argued that because they could not refuse the
passenger ticket contract without forfeiting 50% of their
payment, the forum selection clause is unfair and unreasonable. A
minority of courts have accepted this argument. See, e.g.,
Corna v. American Hawaii Cruises, Inc. 794 F. Supp. 1005, 1011
(D. Haw. 1992) (holding that a forum selection clause contained
in a passage contract was not fair and reasonable because
"plaintiffs did not have an option to reject the cruise contract
without forfeiting several thousands of dollars"). However, the
majority rule among those courts that have addressed the question
is that "[o]nce the plaintiffs (a) received the tickets in time
to read them, and (b) accepted the terms of those tickets by going on the cruise, they are bound by the terms
contained therein." Natale, 1995 WL 117611 at *3.
In Lurie, there was evidence presented that neither
plaintiffs nor their travel agent were aware of NCL's standing
policy that would have allowed them to reject the contract within
a cancellation fee period and receive a full refund. See
Lurie, 305 F. Supp. 2d at 358-59. Nevertheless, the court
enforced the forum selection clause against the plaintiffs. The
Valentis seek to distinguish Lurie by arguing that certain NCL
travel brochures state that they could not receive a full refund.
In fact, these brochures reiterate the Contract's cancellation
fee provision applicable to passengers who accept the contract.
Pursuant to the above-described NCL policies, it is established
that the Valentis had a right to a refund when they received the
tickets despite the penalty provision contained in the brochure.
The brochure, though an incomplete statement of the passenger's
rights, does not provide an independent justification for
vitiating the forum selection clause.
Based on the foregoing, it is determined that the NCL forum
selection clause is fair and reasonable.
Conclusion The NCL forum selection clause is found to be valid and
enforceable. Therefore, the action is dismissed in its entirety.
It is so ordered.