Justice Stevens reads the fine print

Before law school, I’d never been on a cruise. Though David Foster Wallace’s famous jour­nal­istic argu­ment against cruising had damp­ened my interest, first-year civil proce­dure utterly demol­ished it thanks to Carnival Cruise Lines vs. Shute, 499 U.S. 585 (1991).

First, some legal context. (Along with my usual proviso: though I am a lawyer, I am not your lawyer, and please do not take anything in this piece as legal advice.) Suppose a passenger boards a cruise at a port in the United States. The boat then sails from one desti­na­tion to another, often among multiple coun­tries, through inter­na­tional waters. This raises two ques­tions: what law applies to the boat and people on it, and where can they bring a legal claim if needed?

For the boat itself, there is a long and boring answer pertaining to the maritime law of the country where the ship is flagged. In the same way that busi­nesses often incor­po­rate in Delaware due to its compar­a­tively lenient rules, cruise ships tend to be regis­tered under foreign flags to avoid expen­sive US laws (e.g., little things like taxa­tion, wage & labor regu­la­tions, worker safety, etc.)

If you’ve ever wondered why there aren’t more cruise ships touring the Hawaiian islands—or why a west-coast US cruise always includes a stop in Mexico or Canada—it’s because under US federal law, a ship that only visits US ports must itself be flagged in the US. This is so econom­i­cally imprac­tical that there is only one ship so flagged.

But for the passen­gers, the answer is simple: the ticket is a contract, and these provi­sions are part of the contract terms. The choice of law provi­sion deter­mines which juris­dic­tion’s laws apply; the choice of forum provi­sion deter­mines where cases can be heard. And the two may have nothing to do with one another. For instance, the current Carnival terms adopt the “federal maritime law of the United States” and specify that all claims must be brought in federal court in Miami–Dade County, Florida (where Carnival is head­quar­tered, natu­rally).

Bringing us to Carnival Cruise Lines vs. Shute. Eulala Shute was a resi­dent of Wash­ington state. During her Carnival cruise, she “suffered injuries when she slipped on a deck mat” while sailing in “inter­na­tional waters off the Mexican coast”. Contrary to the choice-of-forum provi­sion in her ticket—printed, of course, in tiny type on the back—Shute filed an injury claim against Carnival in Wash­ington. The court granted summary judg­ment in favor of Carnival because Shute’s ticket contract required her to file her claim in Miami, and she had not.

On appeal, the Ninth Circuit reversed. It found that requiring Shute to liti­gate in Miami was unrea­son­ably incon­ve­nient, so the choice-of-forum provi­sion was invalid.

Corpo­rate America squealed in agony. The Ninth Circuit deci­sion would’ve had the prece­den­tial effect of forbid­ding many existing and future choice-of-forum provi­sions within the Ninth Circuit, which covers about 20% of the US popu­la­tion.

Thus the deci­sion was appealed to the US Supreme Court. The Supreme Court reversed again, restoring the judg­ment in favor of Carnival. The majority opinion gave more weight to the fact that Shute volun­tarily agreed to the choice-of-forum provi­sion. Though the provi­sion made liti­ga­tion less conve­nient for her, her incon­ve­nience was offset by other fore­see­able bene­fits. For instance, by consol­i­dating liti­ga­tion in one place, Carnival could handle injury claims at lower cost, thereby allowing it to reduce ticket prices. (Today, Carnival remains famous for its cheap fares and infa­mous for its ship disas­ters.)

Justice John Paul Stevens, however, was not persuaded. He filed a dissent. What was his leading objec­tion? The typog­raphy of the ticket:

The [majority opinion] pref­aces its legal analysis with a factual state­ment that implies that a purchaser of a Carnival Cruise Lines passenger ticket is fully and fairly noti­fied about the exis­tence of the choice of forum clause … only the most metic­u­lous passenger is likely to become aware of the forum-selec­tion provi­sion. I have there­fore appended to this opinion a facsimile of the rele­vant text, using the type size that actu­ally appears in the ticket itself.

And so we arrive at one of the greatest flexes ever by an Article III judge. If you visit a law library, get volume 499 of the United States Reports from the shelf, and open to the last page of the opinion, you will find the repro­duc­tion of the Carnival ticket—actual size, accu­rately folded—that has since been glued into every copy by order of Justice Stevens.

Was this neces­sary to make the point? No. Was it arguably a snippy and expen­sive gesture for a dissent? Perhaps. Never­the­less, I salute Justice Stevens for his empa­thetic cri de coeur against the lawyerly abuse of fine print.