Melnik v. Cunard Line Ltd.

Citations: 875 F. Supp. 103; 1994 U.S. Dist. LEXIS 16765; 1994 WL 758890Docket: 5:94-cv-00774

Court: District Court, N.D. New York; November 4, 1994; Federal District Court

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Cunard Line Limited (Cunard) filed a motion to transfer a personal injury lawsuit, initiated by plaintiff Margaret Kearney Melnik, to the Southern District of New York, citing a forum selection clause in Melnik's cruise ticket. This clause mandates that all disputes related to the passage contract be litigated exclusively in New York City courts. Melnik's claim arises from an incident on June 27, 1993, where she was injured by a golf ball that escaped from a driving range on Cunard's Queen Elizabeth II, leading to a claim of negligence and a demand for $1 million in damages.

The case was initially filed in New York State Supreme Court but was removed to federal court due to complete diversity between the parties—Melnik being a New York citizen and Cunard a British corporation. Melnik contends that Cunard, as an alien corporation, can be sued in any district, implying that any venue change should adhere to Section 1404(a) of the U.S. Code, which allows for transfers based on convenience. However, Cunard argues that maritime law governs the case, as the cruise ticket constitutes a maritime contract, and thus the forum selection clause should be enforced. 

The court must determine whether Melnik's jurisdictional arguments impact the applicability of the forum selection clause and whether maritime law necessitates its enforcement, despite the diversity jurisdiction under which the case was removed.

A plaintiff injured aboard a ship has multiple legal avenues, including filing a suit in federal court under admiralty jurisdiction (28 U.S.C. § 1333(1)) or pursuing a case in state or federal court under diversity jurisdiction due to the saving to suitors clause. This clause allows federal district courts to maintain exclusive jurisdiction in admiralty cases while preserving other remedies. The main benefit of a diversity suit is the option for a jury trial, as opposed to admiralty cases. Melnik's lawsuit can be based on either jurisdiction, with her claims meeting federal diversity jurisdiction requirements (28 U.S.C. § 1332(a)(2)). It is established that personal injury cases on ships fall under admiralty jurisdiction (Id. § 1333(1)). 

Melnik argues that by choosing state court and not invoking federal admiralty jurisdiction, she avoids maritime law. However, regardless of her chosen forum, maritime law applies to her case. Citing multiple precedents, it is noted that federal maritime law governs the legal principles relevant to her situation, including the enforcement of forum selection clauses in cruise contracts. Cunard asserts that the forum selection clause in Melnik's ticket mandates litigation in New York, while Melnik contends this clause is unenforceable because such clauses are generally disfavored by courts and she did not read the contract. Additionally, she raises concerns about her financial ability to litigate in New York and the impact on her disabled son who witnessed the incident. The Supreme Court has upheld the validity of forum selection clauses in cruise ticket contracts.

In Carnival Cruise Lines, Inc. v. Shute, the Supreme Court upheld the enforceability of a forum selection clause in a passage contract, requiring plaintiffs to litigate in Florida, despite their personal injury claim being filed in Washington. The Court reasoned that the clause was reasonable and enforceable, rejecting the notion that its enforceability was contingent on prior bargaining between the cruise line and the passenger. The case is significant as it establishes that a nearly identical forum selection clause is enforceable against passengers, regardless of their bargaining power.

The Court did not address whether the plaintiffs had adequate notice of the clause, noting only their concession regarding its communication. Melnik, the plaintiff, argues she did not receive sufficient notice since she did not read the clause. However, established case law states that a passenger's failure to read a ticket does not exempt them from contractual limitations. The key inquiry is whether Melnik's ticket adequately communicated that it contained binding contract terms. 

Cunard's ticket prominently labeled "Passenger Ticket. Passage Contract" and included clear instructions to read the terms, along with visible contract lines. Melnik's claims of confusion due to the ticket's pagination and fine print were countered by the ticket’s reasonable notice of its terms. Previous cases supported that similar notice formats were deemed sufficient, affirming the binding nature of the contract regardless of the passenger's reading habits.

The Cunard ticket's format is similar to that discussed in Hollander v. K-Lines Hellenic Cruises, where passengers were deemed to have notice of the forum selection clause due to a prominent notice on the ticket cover. In contrast, Silvestri v. Italia Societa per Azioni di Navigazione found insufficient notice due to the inconspicuous placement of a relevant statement on the ticket. Melnik was found to have adequate notice of the forum selection clause. To challenge this clause based on inconvenience, Melnik faces a "heavy burden of proof," as established in M/S Bremen v. Zapata Off-Shore Co. and Shute, with courts having previously rejected similar claims when the alternative forum was not deemed remote. Melnik argues that litigation in the Southern District would impose financial hardships and logistical challenges due to her responsibilities as a single mother and the need to transport expert witnesses from the Northern District. While acknowledging her difficulties, the court concluded that she did not meet the burden to invalidate the forum selection clause. However, the court conditionally granted the transfer to the Southern District, allowing for the use of videotaped depositions of Melnik's expert witnesses in the Northern District, should the parties agree within 14 days. The court noted that Cunard informally agreed to this stipulation. The ruling did not address Cunard's alternative grounds for transfer under 28 U.S.C. §§ 1406(a) and 1404(a). Additionally, Cunard withdrew its motion for summary judgment regarding Melnik's notice of her claim.