A Troubling Decision in the Fifth Circuit

Image by Janet Reddick from Pixabay

The Fifth Circuit has issued a number of opinions over the years relating to the enforceability of forum selection clauses in transnational cases. Its recent decision in Matthews v. Tidewater, Inc. is among the most troubling.

Background

The plaintiff, Marek Matthews, worked as a seaman and captain from 1982 to 2016 on offshore supply vessels allegedly managed by Tidewater, Inc., a company incorporated in Delaware with its principal place of business in Texas. Matthews, a native of Honduras, became a permanent U.S. resident in 2007.

In February 2021, Matthews sued Tidewater in Louisiana state court. He alleged that he had developed a number of serious medical conditions – including end-stage renal disease and prostate cancer – after being exposed to hazardous chemicals while working on Tidewater vessels in the Red Sea. The case was removed to federal court, at which point the company moved to dismiss on the basis of forum non conveniens. In support of its motion, the court noted that the employment agreement required any lawsuits to be brought in the High Court of Justice in England. The district court dismissed the case. Matthews appealed to the Fifth Circuit.

The Appeal

On appeal, Matthews argued that the forum selection clause should not be enforced because enforcement would be unreasonable under the circumstances. He pointed out that (1) he had Stage IV cancer, (2) his kidneys were failing, (3) the forum selection clause called for litigation outside the United States, and (4) none of the litigants had any connection to the chosen forum. The Fifth Circuit rejected these arguments. It held that enforcing the clause was, in fact, reasonable under the circumstances:

Matthews’s health conditions do not prevent the enforceability of the forum-selection clause. Notably, plaintiffs may remotely litigate in foreign forums because of modern technology. We need not examine the logistics of litigation in England. We simply conclude Matthews’s health conditions, though serious, do not give him a right to bring suit in Louisiana state court. His physical limitations do not render the forum-selection clause unreasonable under the circumstances.

This decision is troubling for a number of reasons.

A Critique

First, the decision ignores language in the Supreme Court’s seminal decision on the enforceability of forum selection clauses — The Bremen v. Zapata Off-Shore Co. — where the Court held that when two Americans agree to resolve their dispute in a “remote alien forum” to which neither party has a connection, then “the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in determining the reasonableness of the forum clause.” That was precisely the situation presented in Matthews: a U.S. permanent resident and a U.S. company agreed to litigate in England, a country to which neither party had any connection. Nevertheless, the Fifth Circuit held that the clause was enforceable.

Second, the decision is troubling because it goes much further than the Supreme Court’s (frequently criticized) decision in Carnival Cruise v. Shute. In that case, the Court held that a forum selection clause written into a contract of adhesion choosing the home jurisdiction of a cruise company (Florida) was enforceable against a slip-and-fall plaintiff who sued the company in Washington. The facts of Matthews are more troubling than those in Carnival Cruise in three important respects. First, the plaintiff’s alleged injuries were far more serious. Second, the clause selected the courts in a foreign country rather than the courts in another U.S. state. Third, neither party had any connection to the chosen forum (England).

Third, the plaintiff in Carnival Cruise provided virtually no evidence to support her argument that litigating in Florida would be inconvenient. The only such evidence entered into the record was the following statement from the plaintiff: “The expense of proceeding with this lawsuit against Carnival Cruise Lines in Florida, including the transportation of witnesses thereto, would be prohibitively burdensome both financially and physically. I doubt that I would be able to pursue my lawsuit if it were transferred to Florida.” On these facts, the Supreme Court was correct to hold that the plaintiff had failed to carry her burden of proving the clause was unreasonable on the basis of inconvenience. In Matthews, by comparison, the plaintiff presented credible evidence of serious medical conditions — Stage IV cancer and kidney failure — that would make it extremely difficult for him to litigate in England.

Fourth, the opinion is troubling because it fails to provide a reasoned explanation for why litigating in England is feasible on these facts. The Fifth Circuit specifically declined to examine the “logistics” of litigating in England. This is puzzling because these logistics are obviously relevant to any inquiry into inconvenience. The court also provided no explanation as to why “modern technology” made it possible for the plaintiff to litigate in England. Finally, the Fifth Circuit cited to prior circuit precedent to observe that the plaintiff’s health conditions are irrelevant to the enforcement inquiry. The notion that a plaintiff’s health is irrelevant to the inquiry is, however, impossible to square with the Supreme Court’s holding in The Bremen, as a number of other federal courts have recognized.

Conclusion

If it is “reasonable” to enforce a forum selection clause on the facts presented in Matthews v. Tidewater, Inc, then the concept of reasonableness no longer has any real meaning. Going forward, the rule in the Fifth Circuit would seem to be that a forum selection clause choosing England will be enforced even when (a) the plaintiff is a U.S. resident dying of cancer allegedly caused by the defendant, (b) the clause selects the courts of a foreign country to which neither party has any connection, (c) the defendant is a U.S. company with a market capitalization of $5 billion, and (4) the forum selection clause was written into a contract of adhesion drafted by the defendant.