Opinion ID: 2626358
Heading Depth: 2
Heading Rank: 2

Heading: The Bremen Factors

Text: Fisk's argument that Idaho law applies in the present case relies on her reading of the United States Supreme Court's decision in The Bremen v. Zapata Off-Shore., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). In Bremen, the dispute arose from a towage contract between Zapata Off-Shore, an American corporation, and Unterweser, a German corporation. 407 U.S. at 2, 92 S.Ct. at 1909, 32 L.Ed.2d at 516. Zapata contracted with Unterweser to tow a drilling rig from Louisiana to Italy. Id. After substantial negotiation between the parties, Unterweser undertook to do so using the deep-sea tug Bremen. Id. at 3, 92 S.Ct. at 1909, 32 L.Ed.2d at 516. As the Bremen and the drilling rig were passing through the Gulf of Mexico the rig was damaged in a storm, and Zapata instructed Unterweser to tow the rig to Tampa, Florida, the nearest available port. Id. While the Bremen was docked in Florida, Zapata brought suit against Unterweser in a Florida federal district court, alleging negligence and breach of contract. Id. at 3-4, 92 S.Ct. at 1909-10, 32 L.Ed.2d at 516-17. Unterweser moved to dismiss the action, invoking a forum selection clause in the towage contract which provided that any dispute between the parties must be adjudicated in the London Court of Justice. Id. at 4, 92 S.Ct. at 1910, 32 L.Ed.2d at 517. Unterweser's motions to dismiss or stay Zapata's suit in the United States were denied first in federal district court and later by the Fifth Circuit Court of Appeals. Id . at 6-8, 92 S.Ct. at 1911-12, 32 L.Ed.2d at 518-19. On review, the United States Supreme Court in Bremen chose to enforce the forum selection clause because it was contained in a contract resulting from an arms's-length negotiation by experienced and sophisticated businessmen, and there was no compelling and countervailing reason not to honor its terms. Id. at 12, 92 S.Ct. at 1914, 32 L.Ed.2d at 521. This reversal of the traditional reluctance to enforce such clauses resulted from the Court's reasoning that [t]he expansion of American business and industry will hardly be encouraged if, notwithstanding solemn contracts, we insist on a parochial concept that all disputes must be resolved by our laws and in our courts. Id. at 9, 92 S.Ct. at 1912, 32 L.Ed.2d at 519. The towed drilling rig, continued the Court, could have been damaged at any point along its long route between Louisiana and Italy, exposing the parties to liability in a host of different jurisdictions. Id. at 13, 92 S.Ct. at 1914-15, 32 L.Ed.2d at 522. Allowing the parties to agree to an appropriate forum in advance reduces uncertainties and is an indispensable element in international trade, commerce, and contracting. Id. at 13-14, 92 S.Ct. at 1914-15, 32 L.Ed.2d at 522-23. In substance then, Bremen established a rule that under federal law a forum selection clause will be enforced provided (1) it is freely negotiated, and (2) it is unaffected by fraud, undue influence, or overweening bargaining power. Id. at 12-13, 92 S.Ct. at 1914-15, 32 L.Ed.2d at 521-22. In addition to the two factors noted above, Fisk argues the Court in Bremen articulated a third factor barring enforcement of forum selection clauses if doing so would contravene a strong public policy in the forum in which the suit is brought. Idaho has articulated such a strong public policy against the enforcement of forum selection clauses by enacting I.C. § 29-110, and has buttressed that statute by case law such as Cerami-Kote v. Energywave Corp., 116 Idaho 56, 773 P.2d 1143 (1989). Therefore, the argument concludes, Bremen carved out an exception allowing this Court to apply Idaho Code § 29-110 and declare the forum selection clause at issue to be void. Fisk's interpretation of Bremen is incorrect as it relies on a single sentence pulled out of context and runs counter to the principles that led Congress and the framers of the constitution to mandate a nationally uniform admiralty law. Federal preeminence over maritime law was established in the constitution in order to establish a system of law coextensive with, and operating uniformly in, the whole country. It certainly could not have been the intention to place the rules and limits of maritime law under the disposal and regulation of the several states, as that would have defeated the uniformity and consistency at which the Constitution aimed[.] The Lottawanna, 21 Wall. 558, 88 U.S. 558, 575, 22 L.Ed. 654, 662 (1874). There remains the possibility that state law may supplement maritime law when maritime law is silent or where a local matter is at issue, but state law may not be applied where it would conflict with maritime law. Floyd v. Lykes Bros. S.S. Co., Inc., 844 F.2d 1044, 1047 (3rd Cir.1988). The test for determining when there is a conflict inquires as to whether the state law contravenes the essential purpose expressed by an act of Congress, or works material prejudice to the characteristic features of the general maritime law, or interferes with the proper harmony and uniformity of that law in its international and interstate relations. Southern Pacific Co., v. Jensen, 244 U.S. 205, 216, 37 S.Ct. 524, 529, 61 L.Ed. 1086, 1098 (1917) (superceded on other grounds by statute). The enforceability of forum selection clauses in cruise ticket contracts is in the realm of maritime law. Shute, 499 U.S. at 590, 111 S.Ct. at 1526, 113 L.Ed.2d at 629. Additionally, there are a number of policy rationales  such as allowing a cruise line to avoid the threat of litigation in many different fora in the event of a mishap  that would be undercut if an individual state were permitted to exempt its own residents from an otherwise uniform national system. See id. at 593-94, 111 S.Ct. at 1527, 113 L.Ed.2d at 631-32. Consequently, following Fisk's interpretation of Bremen would run counter to the traditional principles of federal maritime law. Then there is the matter of context. In Bremen, the sentence at issue appeared in context as follows: We note, however, that there is nothing in the record presently before us that would support a refusal to enforce the forum clause. The Court of Appeals suggested that enforcement would be contrary to the public policy of the forum under Bisso v. Inland Waterways Corp., 349 U.S. 85, 75 S.Ct. 629, 99 L.Ed. 911 (1955), because of the prospect that the English courts would enforce the clauses of the towage contract purporting to exculpate Unterweser [the German firm seeking to have the forum selection clause enforced] from liability for damages to the [drilling rig]. A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision. See, e.g., Boyd v. Grand Trunk W.R. Co., 338 U.S. 263, 70 S.Ct. 26, 94 L.Ed. 55 (1949). It is clear, however, that whatever the proper scope of the policy expressed in Bisso, it does not reach this case. Id. The sentence upon which Fisk relies states that [a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision. Id. This was the position of the Court of Appeals, flowing from its expansive interpretation of Bisso v. Inland Waterways Corp., 349 U.S. 85, 75 S.Ct. 629, 99 L.Ed. 911 (1955). See Bremen, 407 U.S. at 15, 92 S.Ct. at 1916, 32 L.Ed.2d at 523. Having stated the position of the Court of Appeals, the United States Supreme Court went on to reject it, at least in reference to international commercial agreements dealing with events outside of American waters. See id. at 15-16, 92 S.Ct. at 1916, 32 L.Ed.2d at 523. The Court stated [i]t is clear, however, that whatever the proper scope of the policy expressed in Bisso, it does not reach this case. Bisso rested on considerations with respect to the towage business strictly in American waters, and those considerations are not controlling in an international commercial agreement. Id. (emphasis added). The Court in Bremen thereby limited the scope of the Bisso public policy exception relied upon by the Court of Appeals, clarifying that the exception is not controlling in an international commercial agreement outside of American waters. Id. Here, the maritime contract at issue was international in nature as it involved a cruise to Mexico. We find therefore that Bremen provides no authority permitting this Court to apply Idaho law in place of federal maritime law.