Gregory Milanovich, Et Ux. v. Costa Crociere, S.P.A.
1993 A.M.C. 1034, 293 U.S. App. D.C. 332, 954 F.2d 763 (1992)
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Rule of Law:
A choice-of-law provision in a maritime passenger contract of adhesion is presumptively enforceable, even against the drafting party, unless that party can show that enforcement would be unreasonable or unjust, the clause is invalid due to fraud or overreaching, or enforcement would contravene a strong public policy of the forum.
Facts:
- Gregory Milanovich and Marjorie Koch-Milanovich, residents of the District of Columbia, booked passage for a Caribbean cruise on a vessel owned by Costa Crociere, S.p.A., an Italian corporation.
- The passage ticket, a form contract drafted by the cruise line, contained a clause designating Italian law as the 'ruling law of the contract.'
- The ticket also included a clause requiring any personal injury action to be commenced within one year from the date of the injury.
- Additionally, the ticket referenced Articles 1341 and 1342 of the Italian Civil Code, which render such liability-limiting clauses in adhesion contracts unenforceable unless the non-drafting party gives specific written assent.
- The Milanoviches did not provide specific written assent to the one-year limitation clause.
- On February 7, 1988, while the ship was in international waters, the deck chair Mr. Milanovich was sitting on collapsed, causing him serious injury.
Procedural Posture:
- Gregory Milanovich and Marjorie Koch-Milanovich filed a personal injury lawsuit against Costa Crociere, S.p.A., and Costa Cruises, Inc. in the U.S. District Court for the District of Columbia.
- The defendants moved for summary judgment, arguing the suit was filed after the one-year contractual limitation period had expired.
- The Milanoviches opposed the motion, arguing that the ticket's choice-of-law clause required the application of Italian law, under which the time limitation was unenforceable.
- The district court granted summary judgment for the defendants, applying U.S. law based on a 'center of gravity' analysis and finding the one-year limitation valid and enforceable.
- The Milanoviches, as appellants, appealed the district court's judgment to the U.S. Court of Appeals for the D.C. Circuit.
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Issue:
Does a choice-of-law provision in a cruise ship passenger ticket, which designates foreign law under which a contractual time-limitation for suits is invalid, govern the enforceability of that time-limitation clause?
Opinions:
Majority - Wald, J.
Yes, the choice-of-law provision governs the enforceability of the time-limitation clause. Applying principles from The Bremen and Carnival Cruise, a choice-of-law clause in a maritime passenger ticket is presumptively enforceable unless the party challenging it meets the heavy burden of showing enforcement would be unreasonable, unjust, fraudulent, or would contravene a strong public policy of the forum. Here, the cruise line itself, the drafter of the contract, seeks to invalidate the choice-of-law clause. The cruise line cannot argue fraud or overreaching against itself. Its public policy argument also fails; the relevant U.S. statute, 46 U.S.C. App. § 183b(a), only prohibits time limits of less than one year and does not establish a public policy against longer periods. Because the cruise line failed to show any valid reason to disregard the clause it wrote, the clause selecting Italian law is enforced. Under the uncontroverted expert testimony on Italian law, the one-year time limitation for filing suit is unenforceable without the passenger's specific written assent, which was not given. Therefore, the suit was timely.
Analysis:
This decision extends the 'reasonableness' standard for enforcing forum-selection clauses from The Bremen and Carnival Cruise to choice-of-law clauses in consumer maritime contracts. It establishes that such clauses are not merely one factor in a 'center of gravity' analysis but are presumptively dispositive. The case is particularly significant because it prevents the party that drafted an adhesion contract from disavowing its own terms when they prove disadvantageous. This reinforces the principle of contractual integrity and limits the ability of sophisticated commercial parties to selectively enforce their form contracts against consumers.
