CIVIL PROCEDURE CLASS 36

1. CIVIL PROCEDURE CLASS 36 Professor Fischer Columbus School of Law The Catholic University of America November 18, 2002

2. WRAP-UP OF LAST CLASS • We discussed two more important Supreme Court cases:Shaffer v. Heitner, a case concerning the extent to which personal jurisdiction can be validly based on the presence of D’s property within the forum state; and Burnham, which considered the extent to which personal jurisdiction can be validly based solely on personal service within the forum state (tag jurisdiction or transient jurisdiction)

3. WHAT WILL WE DO TODAY • Continue with personal jurisdiction unit. • We will consider general jurisdiction by discussing the Helicopteros case. • We will learn more about jurisdiction by consent by discussing Carnival Cruise Lines v. Shute. • Time permitting, I will spend a few minutes talking about jurisdiction on the Internet.

4. GENERAL JURISDICTION • What is the difference between general and specific jurisdiction?

5. Helicopteros Nacionales de Colombia v. Hall • Wrongful death action resulting from helicopter crash in Peru that killed US citizens. Respondents brought suit in TX against, among others, Helicol, Columbian operator of helicopter, on the basis of pilot error • Helicol moves to dismiss for lack of personal jurisdiction. • Trial court denies motion: and respondents win jury award of over $1,000,000 • Texas Supreme Court finds there was jurisdiction over Helicol.

6. U.S. Supreme Court • Must determine whether the Texas court had personal jurisdiction over Helicol

7. Helicol’s Contacts With Texas • Describe Helicol’s contacts with Texas • Were these enough for specific jurisdiction, according to the Supreme Court?

8. Helicol’s Contacts With Texas • Sent representative to contract with TX company for transportation contract in Peru. • Purchased most of its helicopters from TX company • Sent pilots, management, and maintenance personnel to TX for training • Received payments from TX bank accounts for transportation contract

9. Supreme Court Only Rules on General Jurisdiction • Specific jurisdiction was not argued by P • How does it rule?

10. Supreme Court Only Rules on General Jurisdiction • Helicol lacked “the kind of continuous and systematic general business contacts with TX necessary to satisfy due process” • This seems to indicate a very high standard for general jurisdiction to be found. • Leaves a lot unsettled on general jurisdiction

11. Brennan’s Dissent • What is the basis for the dissent?

12. Mrs. Shute Goes to Court • Why did Mrs. Eulala Shute (and her husband sue Carnival Cruise Lines? • Where did she and her husband bring suit?

13. Procedural History • Describe the procedural history of this action before the Supreme Court’s opinion. • CCL moves for summary judgment on basis of forum selection clause/no p.j. (no minimum contacts) • District Court grants this motion, Court of Appeals for the Ninth Circuit reverses (minimum contacts with Washington due to solicitation of business in Washington) • U.S. Supreme Court grants certiorari.

14. Supreme Court Must Consider • 1. Argument that forum selection clause bars jurisdiction over Carnival in Washington state. • 2. Constitutional argument that CCL’s contacts with Washington are not enough to support jurisdiction.

15. What law applies? • Admiralty case – so federal law applies.

16. Arguments that the Forum Selection Clause Unenforceable • What are the Shutes’ arguments in support of their contention that the forum selection clause is unenforceable? • Did any of them convince Justice Blackmun, who wrote the Supreme Court’s majority opinion? If so, which arguments?

17. Arguments that the Forum Selection Clause Unenforceable • Based on The Bremen, clause not the product of business negotiation. In the Bremen, the Supreme Court held that a freely negotiated forum selection clause between international parties should be enforced as long as it is not the product of fraud, undue influence, and overweening bargaining power. Also, it is an inconvenient forum and • Clause violates The Limitation of Vessel Owner’s Liabilitty Act, 46 U.S.C. App. 183c.

18. Justice Blackmun’s Reasoning • Blackkmun: some nonnegotiated forum-selection clauses can be enforceable • Cruise ships have special interest in limiting for a where they can be sued • Such a clause spares expense of pretrial motions to determine correct forum and conserving judicial resources • Passengers benefit in light of reduced fares that reflect savings cruise line enjoys by limiting forum where it can be sued. • Do you buy any of these?

19. More of Blackmun’s Reasoning • Shutes have not satisfied the heavy burden of proof required to set aside the clause on grounds of inconvenience (they had notice and Florida is not a remote alien forum especially given where accident took place) • NO evidence of bad faith or overreaching • Since Shutes had notice of contract, they could have rejected it.

20. Clause violates The Limitation of Vessel Owner’s Liability Act, 46 U.S.C. App. 183c. • "It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss or injury,

21. Clause violates The Limitation of Vessel Owner’s Liabilitty Act, 46 U.S.C. App. 183c. • or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent [499 U.S. 585, 596]   jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation, contract, or agreement are declared to be against public policy and shall be null and void and of no effect."

22. Dissent • Who wrote the dissent? • Who joined in it? • Describe the reasoning in the dissent. Do you agree with it? Why or why not?

23. Dissent • Inadequate notice • Unenforceable under under traditional principles of federal admiralty law, and is "null and void" under the terms of Limited Liability Act, 49 Stat. 1480, as amended, 46 U.S.C. App. 183c, which was enacted in 1936 to invalidate expressly stipulations limiting shipowners' liability for negligence.

24. Carnival Cruise Lines: Narrow Sense • Congress overturned this case in a narrow sense by amending the federal statute interpreted in the case (See Section 3006 of the Oceans Act of 1992, P.L. 102-587).

25. Forum Selection Clauses: Jurisdiction By Express Consent • Remember that it is possible to consent to jurisdiction • Consequently, lack of personal jurisdiction is one of the waivable defenses under Rules 12(g) and 12(h)(1) • Contrast this with lack of subject matter jurisdiction, which can never be waived.

26. Forum Selection Clauses After Carnival • Prior to Carnival, some courts refused to enforce forum selection clauses that barred jurisdiction in other courts. Now, forum-selection clauses generally have a strong presumption of enforceability, especially where there is equal bargaining power between the parties and they are represented by counsel. • The burden is on the person challenging the enforcement of the clause to show it was unreasonable or unfair in the circumstances. This is a difficult burden, even where the clause is in a standard-form contract.