Jurisdiction, Justice, and Choice of Law for the Twenty-First Century: Case One -- Choice of Forum Clauses

61 Pages Posted: 4 Feb 2013

Date Written: January 1, 1995

Abstract

In this symposium issue, a group of federal courts and conflicts scholars were presented with a hypothetical set of facts, and asked to sit as the Eleventh Circuit Court of Appeals on review from the lower district court’s decision. The case involves interpretation, application, and enforceability of a forum selection clause in federal court, under state law principles.

The facts are as follows: Ski Vacations is a New York corporation which operates ski resort primarily in upstate New York and Vermont, and has recently opened a small facility in Colorado. Plaintiff, an Atlanta, Georgia resident, responded to a local newspaper ad promoting inexpensive Colorado ski vacations. An Atlanta agency had placed the ad, responding to Ski Vacations's form mailings advertising special package deals and good commissions as part of its start-up campaign. Plaintiff booked, paid a deposit on a package trip, and received a confirmation letter from Ski Vacations's Colorado office containing information about the resort. Included in the information was a notice entitled "Conditions of Contract." Condition 3 indicated that any and all disputes arising out of Ski Vacations's provision of services or goods, including any tort claims, must be brought in Vermont state court and are to be governed by Vermont law.

Plaintiff went on the Colorado ski trip, paying the balance due upon arrival and signing a Conditions of Contract" form identical to the one received in the mail. While on the slopes, Plaintiff was injured and is now a quadriplegic. Emergency treatment was rendered in Colorado. Soon after, Plaintiff returned to Georgia and continues to reside there. Plaintiff brought negligence and strict liability claims in Georgia state court against Ski Vacations for allegedly allowing the use of inappropriate equipment and to ski on an inappropriate and poorly designed slope.

Assume significant differences between Georgia, Colorado, and Vermont law on one or more important substantive law issues; also assume Vermont law is most favorable to defendant Ski Vacations on each of these issues. Assume choice of forum clauses which oust Georgia of jurisdiction were not traditionally honored under Georgia law as against public policy. Recent mid-level cases, however, have approved forum clauses, indicating some confusion or uncertainty about the current state of Georgia law on this issue. Assume that Georgia normally enforces contract choice of law clauses unless against public policy, but has not squarely ruled whether choice of law can be pre-negotiated for tort actions via contract terms. Assume Georgia is a vested rights jurisdiction that does not apply renvoi.

Defendant Ski Vacations removed Plaintiff's suit to federal court on the basis of diversity and, citing the forum selection clause, moved to dismiss for lack of personal jurisdiction and/or improper venue. Assume the federal district court sitting in Atlanta granted this motion, holding that the issue was governed by federal law and that Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988), and Carnival Cruise Lines, Inc.,v.Shute, 499 U.S. 585 (1991), indicate federal policy to enforce such clauses. Plaintiff appeals the dismissal.

As the federal Appeals Court sitting en banc in 11th Circuit, how should we rule on this appeal? The scholars were asked to address two issues: (1) By what law, state or federal, should the court determine the validity of the forum selection clause?, and (2) regardless of whether the court applies federal or state law, should the court honor the forum selection clause on the stated facts? Those who decide that the issue is properly governed by state law were instructed to should assume that there is enough room in Georgia precedents to allow a ruling either way on these facts.

Summing up the decision on the Erie issue, under rationales or variations on rationales, a majority of the "Court" rules that Georgia law controls whether the forum selection clause indicating suit in Vermont is valid (Professors Burbank, Mullenix, Silberman, Solimine and Weintraub). On the second issue ― whether the clause should be enforced, and the case dismissed ― a four vote plurality finds that the clause should not be enforced (Professors Borchers, Mullenix, Silberman, and Weintraub), with two more "judges" remanding for further inquiry as to the content of state law on this issue (Professors Burbank and Redish).

Keywords: Forum selection clauses, federal jurisdiction, choice of law, Erie doctrine, Hanna v. Plumer, Erie, Carnival Curise Lines v. Shute

Suggested Citation

Mullenix, Linda S., Jurisdiction, Justice, and Choice of Law for the Twenty-First Century: Case One -- Choice of Forum Clauses (January 1, 1995). New England Law Review, Vol. 20, p. 517, 1995; U of Texas Law, Public Law Research Paper No. 320. Available at SSRN: https://ssrn.com/abstract=2210900

Linda S. Mullenix (Contact Author)

University of Texas School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1375 (Phone)

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