Opinion ID: 2733581
Heading Depth: 2
Heading Rank: 1

Heading: The Validity of the Forum-Selection Clause

Text: Forum-selection clauses are “presumptively valid and enforceable unless the plaintiff makes a ‘strong showing’ that enforcement would be unfair or unreasonable under the circumstances.” Krenkel, 579 F.3d at 1281. A forum-selection clause is unreasonable when, inter alia, “its formation was induced by fraud or overreaching.” Id. 3 When the forum-selection clause was not negotiated, we determine whether there was fraud or overreaching in its formation by looking to “whether the clause was reasonably communicated to the consumer.” Id. Applying this test, we conclude that the forum-selection clause the Pappases signed when they checked in at the Atlantis Resort is enforceable. The district court found that Kerzner reasonably communicated to the Pappases the contents of the forum-selection clause well before asking the Pappases to agree to the provision. Specifically, the district court found that the Pappases received notice of the clause twice—first through the terms and conditions webpage, which they clicked 3 We have also set forth three other instances in which a forum-selection clause may not be enforced, but the Pappases do not argue that any of these apply. See Krenkel, 579 F.3d at 1281. 8 Case: 14-11098 Date Filed: 09/17/2014 Page: 9 of 13 to acknowledge having read and agreed to, and second through the email they received after completing registration. The Pappases received these notices a month before Kerzner asked them to sign the forum-selection clause in person. On appeal, the Pappases take issue with the district court’s fact findings, but they have not shown that the district court clearly erred. The Pappases first contend that the website did not reasonably communicate to them that Kerzner would ask them to agree to the forum-selection clause at check-in because “[w]hen printed, the terms and conditions amount to 6 singlespaced small print pages” and thus, “[r]eading the terms and conditions [did] not provide the necessary emphasis to ensure the Pappases knew they would be forfeiting their right to sue in the forum of their choice.” The Pappases add that the notice about the forum-selection clause was only viewable if they scrolled through all of the terms and conditions, and that there was “no notice alerting them to do so.” However, regardless of how many terms and conditions Kerzner presented to the Pappases, the Pappases, during the online registration process, acknowledged that they had read and agreed to all the terms and conditions—one of which informed them that they would be asked to sign a forum-selection clause. If the Pappases did not in fact read the terms and conditions, then Kerzner cannot be faulted for the Pappases failing to do so and then falsely certifying that they 9 Case: 14-11098 Date Filed: 09/17/2014 Page: 10 of 13 had. To the extent the Pappases contend that there should be an exception to this rule here, where the online terms and conditions were “6 single-spaced small print pages,” we have previously held that a “failure to read . . . documents is not excused by the documents’ length.” See Franze v. Equitable Assurance, 296 F.3d 1250, 1255 (11th Cir. 2002) (statute of limitations for investors’ securities fraud claims began to run when investors received prospectuses and the investors’ failure to read the prospectuses did not prevent them from being on inquiry notice of the alleged fraud). The Pappases also attack the district court’s fact finding that Kerzner reasonably communicated the contents of the forum-selection clause to them via the confirmation email. The Pappases argue that they never received the email, but the district court found otherwise, based on the record evidence which included a copy of the email and the affidavit of a Kerzner employee. In light of the evidence to support it, we cannot say that the district court’s fact finding was clearly erroneous. The Pappases’ additional argument about the email also lacks merit. The Pappases contend that the email did not put them on notice of the forum-selection clause because the email itself did not contain the terms and conditions, which were only accessible if the Pappases clicked on a link. But, the Pappases do not 10 Case: 14-11098 Date Filed: 09/17/2014 Page: 11 of 13 dispute that the email clearly stated: “Click here to view our Terms and Conditions.” Thus, we cannot say that the district court committed reversible error in determining that Kerzner reasonably communicated to the Pappases that they would be asked to sign a forum-selection clause during check-in, and just what that forum-selection clause would entail. Contrary to the Pappases’ arguments, they did not see “for the first time the forum-selection clause in the registration materials.” Accordingly, the forum-selection clause signed by both Elaine and Nicholas Pappas during check-in was not obtained via fraud or overreaching. It is, thus, valid and enforceable. 4 B. Application of the Forum Non Conveniens Doctrine Atlantic Marine provides that Kerzner’s motion to dismiss for forum non conveniens was the proper means of enforcing the valid forum-selection clause here. 134 S. Ct. at 580. Atlantic Marine also makes clear that, because of the forum-selection clause, the Pappases had the burden of showing that 4 The Pappases also argue that the forum-selection clause is unenforceable because it is unconscionable under Florida contract law principles. But it is well-settled that the enforceability of a forum-selection clause in a diversity case is governed by federal law. P & S Bus. Machs., Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11th Cir. 2003). Even if we could consider Florida law, we would not find the clause unenforceable. Florida law requires that a contractual provision be both procedurally and substantively unconscionable to be unenforceable. See Gainesville Health Care Ctr., Inc. v. Weston, 857 So. 2d 278, 284–85 (Fla. 1st DCA 2003). A contract is substantively unconscionable only when its terms are “so ‘outrageously unfair’ as to ‘shock the judicial conscious.’” Id. The Pappases do not argue, and we see no basis for concluding, that the forum-selection clause’s terms rise to this exacting standard of unfairness. 11 Case: 14-11098 Date Filed: 09/17/2014 Page: 12 of 13 dismissal of the complaint for refiling in the Bahamas—“the forum for which the parties bargained”—was unwarranted. Id. at 581. The Pappases’ agreement to the forum-selection clause meant that “the private-interest factors . . . weigh[ed] entirely in favor of the preselected forum”— the Bahamas. Id. 5 Therefore, the only factors relevant to whether the Pappases met this burden were public interest factors, such as “the administrative difficulties flowing from court congestion[,] the local interest in having localized controversies decided at home[,] and the interest in having the trial of a diversity case in a forum that is at home with the law.” Id. at 581 n.6, 582 (alteration omitted). The district court correctly identified these principles and the relevant public interest factors. The district court concluded that each public interest factor counseled in favor of the Bahamas as the forum. The district court’s assessment was not unreasonable. Specifically, as noted by the district court, there is no dispute that the Bahamas is an adequate alternative forum, that the case has a substantial relationship to the Bahamas, or that Bahamian law governs the dispute. Further, the Bahamas has a strong interest in the case, which involves the safety of one of 5 Private interest factors relevant in considering a forum non conveniens motion when there is no forum-selection clause include: (1) “relative ease of access to sources of proof”; (2) “availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses”; (3) “possibility of view of premises, if view would be appropriate to the action”; and (4) “all other practical problems that make trial of a case easy, expeditious and inexpensive.” Atl. Marine, 134 S. Ct. at 581 n.6. 12 Case: 14-11098 Date Filed: 09/17/2014 Page: 13 of 13 the Bahamas’s tourist attractions. The facts that the Pappases are American citizens (albeit of New Jersey, not Florida) and that Kerzner is headquartered within the Southern District of Florida do not overcome the Bahamas undisputed strong interest in the case. Because the district court identified the correct public interest factors and reasonably weighed those factors, we must defer to the district court’s ruling.