Melissa Wylie v. Island Hotel Company Limited

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-10581
Non-Argument Calendar
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D.C. Docket No. 1:15-cv-24113-JLK
MELISSA WYLIE,
Plaintiff - Appellant,
versus
KERZNER INTERNATIONAL BAHAMAS LIMITED,
a Bahamian company, et al.,
Defendants,
ISLAND HOTEL COMPANY LIMITED,
a Bahamian company,
BREF BAHAMAS LTD.,
a Bahamian company,
ATLANTIS HOLDINGS (BAHAMAS) LIMITED,
Defendants - Appellees.
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Appeal from the United States District Court
for the Southern District of Florida
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(September 1, 2017)
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Before HULL, WILSON, and JORDAN, Circuit Judges.
PER CURIAM:
Melissa Wylie appeals the district court’s order enforcing a forum-selection
clause against her and dismissing her tort claims against Island Hotel Company
Limited, Atlantis Holdings (Bahamas) Limited, and Bref Bahamas Ltd. under the
doctrine of forum non conveniens. Following a review of the record and the
parties’ briefs, we reverse and remand this case to the district court for it to
consider the issues explained below.
I
Because we write for the parties, we assume their familiarity with the record
and only set forth what is necessary for our decision.
While in the Bahamas, Mrs. Wylie, her husband, and their minor daughter
visited the Atlantis resort to participate in the Sea Squirts Experience. Sea Squirts
allows participants to enter Atlantis’ fish nursery to feed and play with marine life.
In order to participate, Atlantis requires attendees to sign a release form that
includes a forum-selection clause requiring all disputes to be litigated in the
Bahamas. Mr. Wylie signed the release on behalf of his family, specifically listing
his wife and daughter as the family members in his group.
While accompanying her daughter on Sea Squirts, Mrs. Wylie slipped and
injured herself on a step leading into a feeding pool. Mrs. Wylie sued Island Hotel,
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Atlantis, and Bref in the United States District Court for the Southern District of
Florida. The defendants moved to dismiss the amended complaint on the basis of
forum non conveniens, asserting that the forum-selection clause in the release
between Mr. Wylie and the defendants required that Mrs. Wylie’s suit be litigated
exclusively in the Bahamas. The district court granted the motion. Mrs. Wylie
timely appealed.1
II
We review a district court’s decision to dismiss a suit on forum non
conveniens for abuse of discretion. See Aldana v. Del Monte Fresh Produce N.A.,
578 F.3d 1283, 1288 (11th Cir. 2009). We exercise plenary review over the
enforceability of a forum-selection clause. See Krenkel v. Kerzner Int’l Hotels
Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009).
III
At the district court, Mrs. Wylie argued, among other things, that a valid
forum-selection clause did not exist between her and the defendants because she
never signed the release. See D.E. 34 at 3. The district court ruled that the
forum-selection clause in this case was presumptively valid, and that Mrs. Wylie
could only overcome that presumption by showing that the formation of the
1
At the district court, the defendants argued that the release shielded all of them, even though
they were not all signatories, because they were related corporate entities whom Mrs. Wylie
alleged own the Atlantis resort. See D.E. 29 at 6. Without expressly passing on this issue, the
district court granted the defendants’ motion to dismiss pursuant to the release. See D.E. 37.
Mrs. Wylie has not challenged this on appeal.
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agreement containing the clause (the release) had been “induced by fraud or
overreaching.” D.E. 37 at 3 (quoting Krenkel, 579 F.3d at 1281). It then found no
foul play in part because the release prominently admonished the parties to read the
forum-selection clause before signing, and because it was foreseeable that
Mr. Wylie’s signature would bind Mrs. Wylie. See id. (citing Lipcon v.
Underwriters at Lloyd’s, London, 148 F.3d 1285, 1299 (11th Cir. 1998)).
The district court relied on Krenkel and Lipcon, two of our prior cases
dealing with forum-selection clauses, to reach its conclusion. In both cases, we
analyzed the enforceability of a forum-selection clause, presumed such clauses
were enforceable, and applied a four-prong test to determine whether enforcing the
clause would be “unfair or unreasonable under the circumstances.” Krenkel, 579
F.3d at 1281. That test, first developed in admiralty by the Supreme Court in M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), and refined in Carnival
Cruise Lines, Inc. v. Shute, 499 U.S. 585, 590–94 (1991), states as follows:
A forum-selection clause will be invalidated when: (1) its
formation was induced by fraud or overreaching; (2) the
plaintiff would be deprived of its day in court because of
inconvenience or unfairness; (3) the chosen law would
deprive the plaintiff of a remedy; or (4) enforcement of
the clause would contravene public policy.
Krenkel, 579 F.3d at 1281. Since then, the Supreme Court has clarified that “a
forum-selection clause pointing to a state or foreign forum is [enforced] through
the doctrine of forum non conveniens,” and that “forum-selection clauses control
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[the forum non conveniens inquiry] except in unusual cases.” Atl. Marine Const.
Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 580, 582 (2013).2
In relying exclusively on Krenkel and Lipcon, however, the district court
overlooked the nuances in the argument raised by Mrs. Wylie. Mrs. Wylie attacks
the premise that a valid forum-selection clause exists as to her. The crux of her
argument is that she never entered into an agreement with the defendants—her
husband did—so a forum-selection clause within that agreement cannot bind her.
This goes to the formation of a contract, and whether non-signatories can be bound
by a related third-party’s contract, not necessarily whether a forum-selection clause
is enforceable.
And this potentially presents a problem because, in a diversity case such as
this, see D.E. 25 ¶1, “state-law principles [generally] govern the formation of
contracts.” Bazemore v. Jefferson Capital Sys., LLC, 827 F.3d 1325, 1330 (11th
Cir. 2016) (applying Georgia law to determine whether the plaintiff entered into an
arbitration agreement). Yet, in deciding whether to enforce a forum-selection
clause, federal law governs even in diversity suits. See Atl. Marine, 134 S. Ct. at
576 (noting diversity jurisdiction), 580.
2
Krenkel and Lipcon also mentioned that, in addition to being presumptively enforceable,
forum-selection clauses are “presumptively valid.” D.E. 37 at 3. As we explain, however,
neither of those cases answered the precise question of whether, in diversity cases, validity is a
concept distinct from enforceability; and whether, if so, it is subject to a different source of
substantive law.
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It seems to us, then, that the analytical framework (and substantive law)
governing the forum non conveniens inquiry in this diversity case depends on
whether the validity of a forum-selection clause is distinct from, and antecedent to,
its enforceability, or whether the validity of such a clause is just part of the federal
law of enforceability, as developed in Bremen and expounded upon through
Atlantic Marine. As the Fifth Circuit recently recognized in Barnett v. DynCorp
Int’l, L.L.C., 831 F.3d 296, 300–02 (5th Cir. 2016), the Supreme Court has not
answered this question. And neither have we.
Atlantic Marine did not answer this question because it explicitly
presupposed a “valid” forum-selection clause. See 134 S. Ct. at 581 n.5. Bremen
and Carnival Cruise Lines were admiralty cases. See, e.g., Carnival Cruise Lines,
499 U.S. at 587. In Krenkel there was no dispute that both plaintiffs had executed
a valid agreement containing a forum-selection clause. See 579 F.3d at 1280–81.
And the district court in Lipcon had federal-question jurisdiction over the
plaintiffs’ claims under the “Securities Act of 1933, . . . the Securities Exchange
Act of 1934, . . . [and] the Racketeer Influenced and Corrupt Organizations Act.”
148 F.3d at 1289.
The Fifth Circuit, after concisely summarizing the “[s]upport . . . for each
choice-of-law position,” Barnett, 831 F.3d at 302, was able to side-step the issue.
We do not know if this can be done here, but we need not decide the matter in the
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first instance. The district court’s order missed the potentially thorny issues at play
in this case, affecting our ability to “proper[ly] perform[ ] . . . [our] review
function.” Clay v. Equifax, Inc., 762 F.2d 952, 957 (11th Cir. 1985). Because the
district court’s reasoned input, with the aid of further briefing from the parties,
most serves judicial economy, we reverse the order of dismissal and remand this
case to the district court for it to consider these questions.
REVERSED AND REMANDED.
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