Another Easy Case, Some More Bad Law: Carnival Cruise Lines and the New Contactual Personal Jurisdiction
49 Pages Posted: 1 Feb 2013
Date Written: 1992
Perhaps the adage about hard cases making bad law should be revised to cover easy cases.
Following quickly on the heels of the 1989-90 “tag” jurisdiction debacle of Burnham v. Superior Court, the Supreme Court, in the 1990-91 Term, decided another easy personal jurisdiction case and made some more bad law. In Carnival Cruise Lines, Inc. v. Shute, the Court said, in effect, that federal courts should enforce a forum-selection cause even if the clause looks like, acts like, and is, part of an adhesive consumer contract.
Carnival Cruise Lines was an easy case. It was based on the humblest, most uncomplicated, garden-variety slip-and-fall tort ever to grace the federal courts. It involved a pure, paradigmatic adhesive consumer contract, complete with non-negotiable, tiny, boilerplate print. Nonetheless, in spite of the utter simplicity of its facts, seven Justices managed to get Carnival Cruise Lines wrong.
Carnival Cruise Lines made bad law. In holding that particular forum-selection cause enforceable, the Supreme Court gave its broad stamp of approval to forum-selection clauses generally as a method for establishing jurisdiction. However, in spite of their persistently touted virtues, forum-selection clauses can be unfair and insidious. The result in Carnival Cruise Lines was unfair because under existing precedent, and as a matter of pure contract law, courts should not enforce adhesive consumer forum-selection clauses. Yet, this is precisely what the Supreme Court did.
Furthermore, at both the practical and theoretical levels, adhesive forum-selection clauses are anathema to long-standing jurisdictional principles that defer to a plaintiff's choice of forum balanced against a defendant's due process rights. As a practical matter, these clauses cause unwitting plaintiffs to forfeit legitimate legal claims due to the plaintiffs' frequent inability to mount a case in a distant, inconvenient courtroom. As a theoretical matter, engrafting contract principles onto forum-access rules tips the procedural balance in favor of well-heeled, savvy defendants; thus, what repels us as a matter of contract law should repel us as a matter of jurisdictional theory.
This Article discusses three separate problems with the Carnival Cruise Lines decision. First, and most narrowly, the Article analyzes the decision as a badly-reasoned application of the doctrine of contract unconscionability. The Carnival Cruise Lines facts presented a pure illustration of an adhesive consumer contract; the Ninth Circuit judges correctly recognized this; and the Supreme Court majority incomprehensibly ignored blatant unconscionability in favor of honoring contractual jurisdictional principles. Second, the Court in Carnival Cruise Lines (coupled with other recent Supreme Court jurisdictional cases) is now tacitly encouraging highly-skilled, high-stakes forum shopping. Considering that federal courts have long recognized the so-called “evils of forum shopping,” the Court's recent jurisdictional rulings implicitly reject this view and inspire manipulative litigant behavior that taints traditional due process notions of justice and fair play. In the realm of jurisdictional jurisprudence, now contract and consent trump the Constitution and contacts. Moreover, the jurisdictional rulings foster asymmetrical stakes and burdens on plaintiffs and defendants, upsetting the usual litigation calculus.
Third, and most broadly, the Carnival Cruise Lines decision will now problematically serve as the basis for an entirely separate line of personal jurisdiction theory. Over the last forty-five years, the Court has developed an extraordinarily complex due process jurisprudence of personal jurisdiction, initiated in International Shoe Co. v. Washington. Now, the Court has embarked on a separate, contractual decisional line for evaluating the threshold personal jurisdiction issue. This Article predicts that just as due process personal jurisdiction analysis has become hopelessly bogged down in ever more arcane fact interpretation, so too will the new contractual analysis become hopelessly bogged down in arcane contractual construction. Ultimately, the promise of contractual personal jurisdiction and its fraternal twin, contractual choice of law, will prove illusory.
At a minimum, the Supreme Court should reconsider its narrow ruling regarding the enforceability of adhesive consumer forum-selection clauses to bring these cases within traditional unconscionability principles. At best, the Court should reevaluate the relationship between constitutional and contractual personal jurisdiction, as well as the different principles undergirding each assertion of personal jurisdiction. If the Court now disfavors plaintiff-favoring rules, it must indicate why replacing those rules with defendant-favoring principles is any better or more justified. Furthermore, if the Court continues to muddle both constitutional and non-constitutional personal jurisdiction theory, then Congress and state legislatures may choose to (and perhaps should) address at least the non-constitutional bases of personal jurisdiction.
Keywords: Carnival Cruise Lines, forum selection clauses, Supreme Court, personal jurisdiction, contractual forums, bad law
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