It has long been common practice for cruise lines to include forum selection clauses in their passenger tickets which require litigation to be brought in the State of their choosing. Another option open to cruise line operators is to extend this provision by inserting a forum selection clause designating a particular Federal District Court as the exclusive venue for bringing suit.
There are some practical differences between the State Courts and Federal Courts which a cruise line operator should take into account when considering the benefits of including such a clause.
Appointment
Federal judges are appointed by the President and serve a life term. Consequently they tend to be less influenced by those who may have contributed to their campaign fund and helped to get them elected, as can be the case with a State Court Judge; generally, State Court Judges tend to be more plaintiff-oriented.
Legal Resources
Federal judges are also more likely to dispose of cases on motions to dismiss or motions for summary judgment if there is a legal basis. State Court Judges do not have the same resources as Federal Judges to research legal issues, so their rulings are not always as well-reasoned or predictable.
Continuance and Discovery
Federal Judges are less likely to grant motions for continuance and extensions of time to complete discovery which means that cases settle or get to trial more quickly than is usually the case in the State Court. A Federal Judge tends to be more demanding in so far as requesting timely response to discovery is concerned and they are also may be more inclined to restrict the scope of that discovery. This sometimes encourages a plaintiff attorney to look to settle a case early and, hopefully, more economically from the shipowner’s point of view, rather then get tied up in time-consuming and expensive discovery.
Privilege
Work product privilege protects a party from having to turn over materials which were prepared in the anticipation of litigation to adversaries. State Court Judges typically uphold this privilege even if the document was prepared as a matter of course and not in specific response to the possibility of litigation. Federal Courts, on the other hand, generally look to the primary motivating purpose behind the creation of a document in determining the applicability of the work product privilege. If the motivating purpose behind the creation of the document is not overwhelmingly to assist in actual litigation, then Federal Courts will generally not find that the work product privilege applies. If the document was prepared during the course of litigation, the work product privilege will likely be upheld by a Federal Judge. Moreover, Federal Courts do not typically protect documents that simply record facts, as opposed to the mental impressions of an attorney or his agent. As a consequence, documents prepared by the cruise lines prior to litigation, such as incident reports, photographs and witness statements, have less protection in Federal Court.
Cost
The cost of defence in a Federal action will likely exceed that in a State matter. Federal Courts require mandatory discovery disclosures and every single motion must be supported by a memorandum of law. Similarly the costs of preparing for trial will be greater in Federal court.
Jury Trial
Finally, State Court preserves the plaintiff’s right to jury trial (when requested), whereas in cases brought in Federal Court under admiralty jurisdiction there is no automatic entitlement to jury trial; this is at the Federal Court's discretion. However, the cruise lines do not typically oppose requests for a jury trial in order to foreclose legal challenges to their forum selection clauses. In cases where the plaintiff is a citizen of another state, there is diversity jurisdiction in addition to admiralty jurisdiction. When there is diversity jurisdiction, plaintiffs are entitled to have their cases heard by a jury.
In sum, defendants are more likely to get a favourable outcome in Federal Court than in State Court, but the costs of taking this route will be greater.
