Forgotten equity: The enforcement of forum clauses

Journal of Maritime Law and Commerce

Volumn 30, Issue 3, 1999, Pages 405-411

  Staring, Graydon S ^a,b  

^a Lillick and Charles LLP   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

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EID: 0033413560     PISSN: 00222410     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (44)

1. By forum clauses we mean those contract clauses by which the parties select an exclusive forum to resolve their disputes, and not mere service of suit clauses, by which a party agrees to personal jurisdiction in a non-exclusive forum. Service of suit clauses are found in insurance policies, where they obligate the insurer to accept service of process in a stated jurisdiction but do not necessarily preclude suit elsewhere. See, e.g., International Ins. Co. v. McDermott Inc., 956 F.2d 93, 1992 AMC 2594 (5th Cir.), cert. denied, 506 U.S. 826 (1992) (insured and insurer each may choose in which forum to sue). But see Rokeby-Johnson v. Kentucky Agric. Energy Corp., 489 N.Y.S.2d 69 (App. Div. 1985) (treating a service of suit clause as the equivalent of forum selection).
2. Specific performance usually is mentioned in the forum clause cases without reference to equity. It has even been described as though it were a statutory modification of the common law. See, e.g., Southland Corp. v. Keating, 465 U.S. 1, 18 (1984) (Stevens, J., concurring in part and dissenting in part) (referring to the "common law rule against specific enforcement of arbitration agreements"). Of course, never offering such a remedy, the common law has had no occasion for such a rule.
3. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 1972 AMC 1407 (1972).
4. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 1991 AMC 1697 (1991).
5. Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 1995 AMC 1817 (1995).
6. Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16.
7. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. §§ 201-208; Inter-American Convention on International Commercial Arbitration, 9 U.S.C. §§ 301-307.
8. Vimar Seguros, 515 U.S. at 533.
9. See, e.g., Kossick v. United Fruit Co., 365 U.S. 731, 1961 AMC 833 (1961).
10. See, e.g., Mitsui & Co. (USA), Inc. v. Mira M/V, 111 F.3d 33, 1997 AMC 2126 (5th Cir. 1997); Bison Pulp & Paper Ltd. v. M/V Pergamos, 1996 AMC 2022 (S.D.N.Y. 1995).
11. See, e.g., Fireman's Fund Ins. Co. v. M.V. DSR Atlantic, 131 F.3d 1336, 1998 AMC 583 (9th Cir. 1997), cert. denied, 119 S. Ct. 275 (1998).
12. In Seven Seas Ins. Co. v. Danzas S.A., 1997 AMC 961, 962 (S.D. Fla. 1996), the court evaded this problem by saying that "its subject matter jurisdiction is limited to enforcement of the forum selection clause." But the jurisdictional statutes do not confer jurisdiction over discrete issues or segments of cases.
13. See, e.g., Vimar Seguros, 515 U.S. at 540.
14. See, e.g., Commerce Consultants Int'l, Inc. v. Vetrerie Riunite, S.p.A., 867 F.2d 697 (D.C. Cir. 1989); Kelso Enters., Ltd. v. M/V Wisida Frost, 8 F. Supp. 2d 1197, 1998 AMC 1351 (C.D. Cal. 1998) (and cases cited therein); Thyssen, Inc. v. M/V Alpha Jupiter, 1998 AMC 1102 (S.D.N.Y. 1997); Spira-Felts v. Carnival Corp., 1998 AMC 712 (C.D. Cal. 1996).
15. See, e.g., Launey v. Carnival Corp., 1998 AMC 579 (E.D. La. 1997); Colby v. Norwegian Cruise Lines, Inc., 921 F. Supp. 86, 1996 AMC 1752 (D. Conn. 1996); Villani v. Carnival Cruise Lines, Inc., 1996 AMC 1996 (W.D. Pa. 1996); Anderson v. Cunard Line Ltd., 1995 AMC 1499 (E.D. La. 1995); Compagno v. Commodore Cruise Line, Ltd., 1995 AMC 276 (E.D. La. 1994); Hicks v. Carnival Cruise Lines, Inc., 1995 AMC 281 (E.D. Pa. 1994); Moraites v. Royal Caribbean Cruises, Ltd., 1995 AMC 348 (N.D. Ill. 1994). In Cross v. Kloster Cruise Lines, Ltd., 897 F. Supp. 1304, 1996 AMC 1215 (D. Or. 1995), the court transferred the case to Florida in accordance with the clause, observing that the Florida court might then transfer it back to Oregon under 28 U.S.C. § 1404(a) for the convenience of parties and witnesses. But in Launey, supra, at 581, the court held that § 1404(a) applies only where the case is filed in a court with venue. See also Spira-Felts v. Carnival Corp., 1998 AMC 712 (C.D. Cal. 1996) (dismissing and refusing transfer under § 1404(a)).
16. See, e.g., Pomer v. Kloster Cruise Ltd., 1995 AMC 46 (W.D. Wash. 1994).
17. See, e.g., Cuizon v. Kedma, Ltd., 1997 AMC 2890 (S.D.N.Y. 1997) (forum non conveniens elements evaluated and motion denied).
18. The Bremen, 407 U.S. at 15 (noting that such exceptions consist of fraud or overreaching, unreasonableness, and contrariety to public policy).
19. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947) (explaining that such factors include both private interests - e.g., ease of access to proof, availability of compulsory process, cost of attendance of witnesses, possibility of viewing the premises, and ease of administration - and public interests - e.g., burden on courts, having local controversies decided at home, and the law to be applied).
20. See Great Am. Ins. Co. v. "Kapitan Byankin," 1996 AMC 2754 (N.D. Cal. 1996) (rejecting analysis under forum non conveniens and therefore refusing to impose condition of waiver of statute of limitations); Lejano v. K.S. Bandak, 705 So. 2d 158, 1998 AMC 692 (La. 1997), cert. denied, 119 S. Ct. 52 (1998) (enforcing clause and rejecting analysis as forum non conveniens).
21. See, e.g., Premier Cruise Lines, Ltd. v. Superior Court, 1997 AMC 2797 (Cal. Ct. App. 1996); Gerlach v. Royal Caribbean Cruises Ltd., 1998 AMC 235 (Cal. Super. Ct. 1997) (overriding federal law prevents applying forum conveniens factor of available alternative forum where time for suit remains open or is waived); Santos v. Royal Cruise Line Ltd., 1996 AMC 773 (Cal. Super. Ct. 1995).
22. See C. Wright & A. Miller, 5A Federal Practice and Procedure § 1352, at 127 n.4.1 (Supp. 1998).
23. Compare, e.g., Offshore Sportswear, Inc. v. Vuarnet Int'l, B.V., 114 F.3d 848 (9th Cir. 1997), Argueta v. Banco Mexicano, S.A., 87 F.3d 320 (9th Cir. 1996), Commerce Consultants Int'l, Inc. v. Vetrerie Riunite, S.p.A., 867 F.2d 697 (D.C. Cir. 1989), and Kelso Enters., Ltd. v. M/V Wisida Frost, 8 F. Supp. 2d 1197, 1998 AMC 1351 (C.D. Cal. 1998) (and cases cited therein) (venue) with Lambert v. Kysar, 983 F.2d 1110, 1112 n.1 (1st Cir. 1993), and Rawlins v. Clipper Cruise Lines, 1998 AMC 1254 (N.D. Cal. 1995) (failure to state a claim).
24. The ambivalence of one court of appeals, however, was between substance and procedure in a case falling within both admiralty and diversity jurisdiction. The court rejected state law on the substantive ground the charterparty was controlled by admiralty, and alternatively (if jurisdiction depended on diversity), that the question was one of federal procedure. See Sun World Lines, Ltd. v. March Shipping Corp., 801 F.2d 1066, 1988 AMC 1495 (8th Cir. 1986).
25. See, e.g., Farrell Lines Inc. v. Ceres Terminals Inc., 161 F.3d 115, 1999 AMC 305 (2d Cir. 1998) (shipper and insurer enjoined from suing anywhere but in New York due to forum selection clause).
26. The Bremen, 407 U.S. at 14 (footnote omitted).
27. See Southland Corp., 465 U.S. at 7.
28. Id. at 12-13, 14. See also First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 947 (1995) ("arbitration is simply a matter of contract between the parties"; "the basic objective" is "to ensure that commercial arbitration agreements, like other contracts, 'are enforced according to their terms,'"); Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989) ("FAA's primary purpose" is to "ensur[e] that private agreements to arbitrate are enforced according to their terms"); Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) ("substantive law of arbitrability"); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404-05 (1967) (rejecting comparison to Erie rules by explaining arbitration in interstate commerce is matter of federal substance rather than procedure).
29. Vimar Seguros, 515 U.S. at 533.
30. Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 123, 1924 AMC 418 (1924).
31. Id. at 121.
32. Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 278, 1932 AMC 161 (1932).
33. Shanferoke Coal & Supply Corp. v. Westchester Serv. Corp., 293 U.S. 449, 451 (1935) (referring to Red Cross Line). 34 Southland Corp., 465 U.S. at 13 (quoting Hearing on S.4213 and S.4214 before a Subcommittee of the Senate Committee on the Judiciary, 67th Cong., 4th Sess. 6 (1923)).
34. 487 U.S. 22 (1988).
35. Id. at 32.
36. See Lambert, 983 F.2d at 1116 n. 10.
37. See generally 3 W. Blackstone, Commentaries *430-33; J. Story, Commentaries on Equity Jurisprudence §§ 8-20 (1st Eng. ed. 1884).
38. See generally Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988).
39. 407 U.S. at 15.
40. Id.
41. See, e.g., Pope Mfg. Co. v. Gormully, 144 U.S. 224, 236 (1892) ("unconscionable, oppressive, or iniquitous contracts"); Cathcart v. Robinson, 30 U.S. (5 Pet.) 264, 276 (1831) ("concealment, misrepresentation, or any unfairness").
42. See, e.g., Pope, 144 U.S. at 233-35.
43. Id. at 237.
44. See, e.g., Sun World Lines, 801 F.2d at 1068 n.3; Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 280 n.4 (9th Cir. 1984).