Opinion
CIV. ACTION NO. 02-2375 c/w, 02-2392, SECTION "C"
February 28, 2003
On August 2, 2002, Carnival Corporation and the M/V Inspiration ("Carnival") filed an action against the Tug W.O. Watson, its owner American Commercial Barge Line, L.L.C., and their insurers (collectively "ACBL") for damages arising out of a collision occurring on August 5, 2001. Civ. Action No. 02-2375.
On August 5, 2002, Plaintiff McMillan and four other passengers ("Plaintiffs") traveling aboard the M/V Inspiration at the time of the 2001 collision sued Carnival and ACBL. Civ. Action No. 02-2392.
The above actions were consolidated by order of the Court on October 28, 2002.
Before the Court is Carnival's Motion to Dismiss and/or Transfer Plaintiffs' action as a result of a forum selection clause contained in Plaintiffs' contracts for passage. The litigants have filed motions addressing the effectiveness of that forum selection clause.
For the reasons set forth below, in Civ. Action no. 02-2392 Plaintiffs' claims against Carnival are severed. Carnival's Motion to Dismiss and/or Transfer is denied in part and granted in part.
Though Carnival availed itself of this forum as a result of the August 5, 2001 collision when it filed suit here prior to the filing of Plaintiffs' action, that procedural fact no longer carries import in this decision to dismiss or transfer: On January 31, 2003, American Commercial Barge Line, L.L.C. filed for protection under the United States bankruptcy laws in the Southern District of Indiana. Case no. 03-90307 (BHL-11). As a result, all actions pending against ACBL are stayed. 11 U.S.C. § 362. Despite the automatic stay in the litigation proceeding against ACBL, Plaintiffs have informed the Court that it remains their intention to pursue the litigation against Carnival, while the claims against ACBL are stayed.
Severance of the Defendants
The issue of whether to dismiss, transfer or retain Plaintiffs' action against Carnival first requires the Court to consider its power to sever parties and claims before it. A court has broad discretion to sever issues under Rule 21, Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir. 1994), and that discretion similarly allows for the severance and transfer of parties in the interest of justice and not merely as a result of misjoinder. Spencer, White Prentis, Inc. v. Pfizer, Inc., 498 F.2d 358, 361-62 (5th Cir. 1974). "In the situation where venue is proper for one defendant but not for another and dismissal is inappropriate, the district court has a choice . . . [One] alternative is to sever the claims, retaining jurisdiction over one defendant and transferring the case as to the other defendant to an appropriate district." Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 296 (3d Cir. 1994) (citing 15 Charles Alan Wright et al., Federal Practice Procedure § 3827, at 275-76 (1986 Supp. 1994)); see also Wyndham Assoc. v. Bintliff, 398 F.2d 614, 618 (2d Cir. 1968), cert. denied 398 U.S. 977 (1968). In the instant matter, dismissal is inappropriate as the effect may be to time bar the claim.
This action was filed against Carnival and ACBL and later consolidated with Carnival's earlier action against ACBL, against whom all actions pending have been stayed as a result of bankruptcy. Because Plaintiffs have expressed their interest to pursue their claims against Carnival regardless of the stay, separate trials would be necessary: one against Carnival and another against ACBL. Thus, the rationale for keeping Carnival in this jurisdiction because of the consolidation of the cases ceases to exist. It is not known whether Florida is a proper venue for ACBL. As a result, the Plaintiffs are in a position where proper venue as against ACBL remains with this Court, but may not exist as against Carnival, and vice versa if the case were transferred to Florida.
Carnival Corporation's claims against ACBL, Civ. Action no. 02-2375, are similarly stayed pursuant to 11 U.S.C. § 362. See discussion below.
Rule 21 of the Federal Rules, however, provides that "[a]ny claim against a party may be severed and proceeded with separately." Fed.R.Civ.P. 21. Despite that Rule's caption, severance under it is not predicated solely upon misjoinder of parties, but is proper where there are other valid reasons to sever. Wyndham Assoc., 398 F.2d at 818 (citing Sporia v. Pennsylvania Greyhound Lines, 143 F.2d 105 (3d Cir. 1944)). Because the claims against Carnival and ACBL must proceed separately in light of the bankruptcy, and where Plaintiffs' claims against Carnival may otherwise be time barred if dismissed without prejudice, it is in the interest of justice to sever the actions pursuant to Rule 21.
The Validity of the Forum Selection Clause
Plaintiffs entered into a contract in the form of a ticket for voyage aboard the M/V Inspiration. That contract contains a forum selection clause designating Miami-Dade County in the State of Florida as the sole jurisdiction in which Carnival's passengers are entitled to bring any cause of action against it or its vessels.
Carnival objects to Plaintiffs' choice of forum because of its apparent incompatibility with the forum selection clause entered into by the Plaintiffs and Carnival. Carnival refers the Court to the Supreme Court's holding in which the validity of this exact forum selection clause was reviewed. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). Finding such clauses to be the result of certain and necessary commercial realities, the Supreme Court enforced that forum selection clause. Id. at 591-92 (citing The Bremen v. Zapata Off-shore Co., 407 U.S. 1, 12-15 (1972)). The underlying principle of Shute was that, recognizing the nature of Carnival's business — travel — and its international client base, Carnival should be allowed to protect itself from defending actions in diverse fora. Id. at 593-94.
That rationale survives and is of equal force today as it was at the time Shute was decided. Moreover, since Shute was decided courts have applied the rule that such forum selection clauses are generally enforceable. See, e.g., Doran v. Carnival Cruise Lines, Inc., 2001 A.M.C. 1733 (E.D. La. 1999); Lemoine v. Carnival Cruise Lines, 854 F. Supp. 447 (E.D. La. 1994). The contractual provision the Plaintiffs seek to avoid was freely entered into, and has not been garnered by fraud or bad faith and is therefore enforceable. Shute, 499 U.S. at 595.
Transfer or Dismissal Pursuant to 28 U.S.C. § 1406(a)
While the Fifth Circuit has indicated that dismissal of an action to remedy an improper choice of forum in contravention of a valid forum selection clause is appropriate see Int'l. Software Sys., Inc. v. Amplicon, Inc., 77 F.3d 112, 114-15 (5th Cir. 1996) (citations omitted), transfer of such actions to the forum agreed to by the parties in their contract is also proper. Lemoine, 854 F. Supp. at 448 (transferring action pursuant to 28 U.S.C. § 1404(a)). Because Plaintiffs' action may be time barred if dismissed, the Court finds that, pursuant to 28 U.S.C. § 1406(a), it is in "the interest of justice" to transfer the Plaintiffs' claims as against Carnival, rather than dismiss them. See Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67 (1962) (finding transfer rather than dismissal proper to avoid "`time consuming and justice defeating technicalities'") (internal citations omitted).
ACCORDINGLY, IT IS ORDERED that Civil Action No. 02-2392, as against Carnival Corporation and the M/V Inspiration, is hereby SEVERED and TRANSFERRED to the United States District Court for the Southern District of Florida. Plaintiffs' claims in Civ. Action no. 02-2392 against the Tug W.O. Watson, American Commercial Barge Line, L.L.C., and their unnamed insurers are hereby RETAINED;
IT IS FURTHER ORDERED that Carnival Corporation's Motion to Dismiss and/or Transfer Civil Action 02-2392 is DENIED IN PART AND GRANTED IN PART as follows:
To the extent that Carnival Corporation's Motion to Dismiss and/or Transfer seeks dismissal of the claims against it pursuant to 28 U.S.C. § 1406(a), it is hereby DENIED;
To the extent that Carnival Corporation's Motion to Dismiss and/or Transfer seeks to transfer the claims against it contained in Civ. Action no. 02-2392, it is hereby GRANTED.