United States District Court, N.D. California, San Jose Division
December 11, 2014
ABRAHAM PORTNOV, Plaintiff,
CARNIVAL CORPORATION, Defendant
Portnov Abraham, Plaintiff, Pro se, West Vancouver, BC.
For Carnival Corporation, Defendant: Andre Michael Picciurro, LEAD ATTORNEY, Attorney at Law, San Diego, CA.
ORDER GRANTING MOTION TO DISMISS (Re: Docket No. 19)
PAUL S. GREWAL, United States Magistrate Judge.
While Plaintiff Abraham Portnov may have valid claims against Defendant Carnival Corporation, these claims are not properly before the court because of a binding agreement between the parties that requires disputes to be arbitrated in Florida. The case is DISMISSED for improper venue.
Portnov purchased a cruise ticket from Defendant Carnival Corporation just over a month before his cruise was set to embark. Based on a dispute over whether Portnov needed a visa in order to board the cruise in Argentina, Portnov claims that Carnival discriminated against him by intentionally giving him the run-around. In his complaint, Portnov alleges that this series of events caused him significant stress and lasting physical harm. Carnival seeks to dismiss the complaint on the grounds that the court lacks subject matter jurisdiction, that the venue is improper, and for failure to state a claim.
This court has subject matter jurisdiction over these claims pursuant to 28 U.S.C. § 1331. The parties further consented to the jurisdiction of the undersigned magistrate judge under 28 U.S.C. § 636(c) and Fed.R.Civ.P. 72(a).
Under Fed.R.Civ.P. 12, " [e]very defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion: . . . (3) improper venue."  " [I]n the context of a Rule 12(b)(3) motion based upon a forum selection clause, the trial court must draw all reasonable inferences in favor of the non-moving party and resolve all factual conflicts in favor of the non-moving party.
In response to Portnov's claims, Carnival brings a jurisdictional challenge under Rule 12(b)(3). Specifically, Carnival asserts that this suit has been filed in the improper venue because of the existence of a binding arbitral clause requiring adjudication in Florida. Portnov counters that the agreement--and thus the arbitration requirement--does not apply to him because he never boarded the cruise ship and therefore was never a " guest" as that term is defined in the contract.
The primary question is whether the arbitration clause contained in the ticket contract is valid and enforceable. In relevant part, the ticket contract specifies arbitration in Miami-Dade County, Florida as the exclusive forum for resolution of " [a]ny and all disputes, claims, or controversies whatsoever, other than for personal injury, illness or death."  Carnival points out that this provision specifically contemplates claims of alleged discrimination--the precise claim that Portnov brings before this court. As a pure matter of contract interpretation, it is abundantly clear that Portnov's claim falls within the language of the arbitration contract. The only thing left for the court to determine is whether the clause is enforceable given the circumstances.
" [A]n agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum selection clause that posits not only the situs of the suit but also the procedure to be used in resolving the dispute."  Forum selection clauses are presumptively valid. The party challenging enforcement of the forum selection clause must " clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or over-reaching."  In the narrower context of cruise ship contracts, reasonable forum selection clauses are considered prima facie valid even if not freely negotiated.
The only argument Portnov makes to challenge the arbitration clause is that the contract does not apply to him as a guest because he had not yet boarded the ship. But the contract itself defines " guest" as " all persons or entities booking or purchasing passage and/or traveling under [the] [c]ontract."  In other words, Portnov was bound by the contract as soon as he purchased the ticket.
Further, there is no indication that the contract itself was unenforceable. In Bremen, the Supreme Court held that forum selection clauses should be held valid absent a showing that " enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching."  There are no indications that the transaction between Carnival and Portnov was untoward in any way.
First, in the Ninth Circuit, in order for a contract provision to be binding its terms must be " reasonably communicated."  Courts have found provisions to be reasonably communicated where the print was readable--even if small--and especially where the important terms are in a different color, are in bold font, or are referenced on the cover page of the contract. Here, the cover of the contract contains bold lettering that specifically directs customers to specific clauses in the contract that limit the customer's rights, including " forum selection, arbitration and waiver of jury trial for certain claims."  It is self-evident from the language of the contract that the only types of claims that are excluded from the arbitration clause are personal injury claims. Portnov cannot plausibly claim that he was duped into the contract or that he was unaware of its contents.
Second, Portnov cannot plausibly claim that he did not have the opportunity to freely negotiate the contract or that it was a contract of adhesion. Carnival uses the same terms for every ticket that it sells to Carnival passengers. In Carnival v. Shute, the Supreme Court held that in a situation where the " passage contract was purely routine and doubtless nearly identical to every commercial passage contract issued by petition and most other cruise lines . . . it would be entirely unreasonable . . . to assume that respondents--or any other cruise passenger--would negotiate . . .the terms of a forum selection clause in an ordinary commercial cruise ticket."  Under these circumstances, " [c]ommon sense dictates that a ticket of this kind will be a form contract the terms of which are not subject to negotiation, and that an individual purchasing the ticket will not have bargaining parity with the cruise line."  These kinds of contracts are not--in fact--unusual. If Portnov was displeased with the terms of the contract, he could have refused to purchase the ticket or he could have cancelled the ticket after purchase.
To the extent Portnov simply failed to read the terms of the contract, he cannot seek to benefit from a lack of diligence. In fact, courts have held that contract provisions--particularly in the context of those associated with cruise tickets--are binding regardless of whether the passenger had any knowledge of the contents of the terms. " It is misleading to focus on whether [an individual] actually read the contract; rather the proper focus is on whether she had the opportunity to read it. . . . That plaintiff chose not to read the ticket does not negate the fact that [defendant] reasonably communicated the terms of the contract."  Here, Carnival provided Portnov with a copy of the contract at the time of purchase--as it does with all of its guests. That Portnov failed to read it or was unaware of its contents does not suggest fraud or unreasonable conduct that would render the contract--or the arbitration provision contained within--unenforceable under the law.
Because the court has determined that both the contract and the arbitration clause are valid and enforceable, the terms of the forum selection clause must be honored. While this court is skeptical that venue in any court would lie, the Ninth Circuit has enunciated that " a determination of improper venue does not go to the merits of the case and therefore must be without prejudice"  and with leave to amend. Any amended complaint shall be filed within 21 days.