Alerts and Updates
Feggestad confirms that the doctrine in favor of finding forum selection clauses valid and enforceable is alive and well in the Eleventh Circuit, much to the chagrin of U.S. residents who are forced to litigate their tourist-related disputes in foreign courts.
The United States Court of Appeals for the Eleventh Circuit recently confirmed the enforceability of forum selection clauses utilized by foreign tourist businesses through their online reservation systems. In Feggestad v. Kerzner Int’l Bahamas, Ltd., 843 F. 3d 915 (11th Cir. 2016), the Eleventh Circuit affirmed the dismissal of a personal injury action against the Atlantis Resort located in the Bahamas despite the Appellants’ contention that a misrepresentation by resort personnel had prevented them from meaningfully reviewing and understanding the forum selection clause in their online reservation agreement and registration form.
James and Karen Feggestad (the “Feggestads”) made reservations at the Atlantis Resort on Paradise Island, Bahamas (“Atlantis”). Their email confirmation included a “Terms and Conditions” section that advised guests to follow a hyperlink to view other terms and conditions. The linked-page informed guests that any dispute between a guest and the Atlantis (or an affiliated company) would have to be litigated exclusively in the Bahamas. At check-in, a resort representative asked the Feggestads to sign a registration card and said that it was required for guests to charge incidentals to their hotel bill. Mr. Feggestad signed the card, but allegedly without reading the agreement written on the back, titled “ACKNOWLEDGEMENT, AGREEMENT AND RELEASE—READ BEFORE SIGNING.” The agreement contained a forum selection clause indicating that disputes would be litigated in the Bahamas.
Mr. Feggestad subsequently was injured when he slipped and fell on a wet sidewalk during his stay at the Atlantis. The Feggestads filed a complaint in the United States District Court for the Southern District of Florida alleging negligence against the owners and operators of the Atlantis, Kerzner International Bahamas Limited, Kerzner International Limited, Island Hotel Company Limited, Paradise Island Limited and Brookfield Asset Management Inc. (collectively “Kerzner”). Kerzner filed a motion to dismiss based, in part, on the forum selection clause in the registration agreement. The district court granted the motion to dismiss and the Feggestads appealed.
The Eleventh Circuit’s Analysis
The Eleventh Circuit began its analysis by recognizing that “[f]orum selection clauses are presumptively valid and enforceable unless the plaintiff makes a ‘strong showing’ that enforcement would be unfair or unreasonable under the circumstances.” Feggestad, 843 F. 3d at 918 (internal citation omitted). When the parties did not negotiate the forum selection clause, the court will use a two-part test to determine whether the clause was reasonably communicated to the consumer. This two-part test looks at (1) the clause’s physical characteristics and (2) whether the plaintiffs had the ability to become meaningfully informed of the clause and reject its terms.
Applying the two-part “reasonable communicativeness” test to the Atlantis forum selection clause, the Eleventh Circuit found that both prongs were satisfied. First, the Eleventh Circuit had already found that clauses with the physical characteristics of the Atlantis forum selection clause passed the reasonable communicativeness test. Second, the court found that the Feggestads had the ability to become meaningfully informed of the forum selection clause. The Feggestads argued that the resort personnel’s misrepresentation that the registration form was to allow for incidental charges prevented them from meaningfully reviewing and understanding the agreement. The court rejected this argument and found that the Feggestads had two opportunities to review the agreement; they could have followed the hyperlink sent to them via email, or they could have read the back of the registration agreement. Furthermore, the court concluded that the resort personnel’s instructions when signing the registration card did not prevent the Feggestads from reading the agreement, especially since the statement that the signature was required to charge incidentals was true. Thus, the Eleventh Circuit held that the forum selection clause was enforceable and affirmed the district court.
In closing, the court noted that “[t]he Feggestads cannot enter into a contract that is presented to them in plain language via two mediums and then claim that they were deceived.” Id. at 919. Feggestad confirms that the doctrine in favor of finding forum selection clauses valid and enforceable is alive and well in the Eleventh Circuit, much to the chagrin of U.S. residents who are forced to litigate their tourist-related disputes in foreign courts.