KARAPET KAVOUKJIAN VS PRINCESS CRUISE LINES LTD.

Tentative Rulings

Case Number: 20STLC02978    Hearing Date: October 29, 2020    Dept: 26

Kavoukjian v. Princess Cruise Lines, Ltd., et al

MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

(CCP §§ 1281.2, et seq., 638)

TENTATIVE RULING:

Defendant Princess Cruise Lines, Ltd.’s Motion to Enforce Arbitration Clause and Stay Action is GRANTED.

ANALYSIS:

Plaintiff Karapet Kavoukjian (“Plaintiff”) filed the instant action for breach of contract and negligence against Defendant Princess Cruise Lines, Ltd. (“Defendant”) on April 2, 2020. Plaintiff filed a First Amended Complaint on June 3, 2020. On June 17, 2020, Defendant filed the instant Motion to Compel Arbitration and Stay Proceeding, or in the alternative, Dismiss the Action. Plaintiff filed an opposition on October 16, 2020 and Defendant replied on October 22, 2020.

Discussion

Existence of an Arbitration Agreement

The arbitration agreement invokes the Federal Arbitration Act and is governed by federal maritime law:

Under the FAA, a “written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Because arbitration is a matter of contract, the question of arbitrability is, in principle, an issue for judicial determination. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491, (2002). The court's role in addressing a question of arbitrability is “limited to determining (1) whether a valid agreement to arbitrate exists, and if it does, (2) whether the agreement encompasses the dispute at issue.” Chiron Corp., 207 F.3d at 1130. If the court finds that both of these requirements are met, the FAA requires it to enforce the provision in accordance with its terms. Id.

(Saperstein v. Thomas P. Gohagan & Company (N.D. Cal. 2020) 2020 WL 4464915, *4.)

Defendant presents evidence that Plaintiff booked a cruise through a travel agent, Expedia Cruiseship Centers (“Expedia”). (Motion, Black Decl., ¶5.) Defendant does not indicate when the cruise was booked. (Id. at ¶¶3-5 and Exhs. 1-3.) Defendant contends that the booking confirmation was sent to both Plaintiff and Expedia, but offers no documentary evidence to support this. (Id. at ¶¶4-5 and Exhs. 2-3.)

The booking confirmation expressly states that by booking a cruise every passenger agrees to the terms of the Passage Contract. (Id. at ¶¶5-6 and Exhs. 1-3.) Prior to the start of the cruise, every passenger is required to complete Defendant’s online “Cruise Personalizer,” in order to review and print travel-related documents. (Id. at ¶7.) Defendant’s records show that Plaintiff accessed the Cruise Personalizer and accepted the Passage Contract by checking the dialog box clicking the acceptance button on December 17, 2018. (Id. at ¶10 and Exh. 1.)

The introductory paragraph of the Passage Contract immediately directs the reader to Section 15, which contains the following arbitration provision:

All claims other than for emotional harm, bodily injury, illness to or death of a Guest, whether based on contract, tort, statutory, constitutional or other legal rights, including without limitation alleged violations of civil rights, discrimination, consumer or privacy laws, or for any losses, damages or expenses, relating to or in any way arising out of or connected with this Passage Contract or Guest's cruise, with the sole exception of claims brought and litigated in small claims court, shall be referred to and resolved exclusively by binding arbitration . . . .

(Id. at Exh. 4, § 15.)

Defendant cites the two-part test under federal law for whether a passenger is bound by the terms of the passenger contract, which exams the physical characteristics of the ticket/contract and “any extrinsic factors indicating the passenger’s ability to become meaningfully informed of the contractual terms at stake.” (Deiro v. American Airlines, Inc. (9th Cir. 1987) 816 F.2d 1360, 1364.)

For the first prong, as discussed above, the arbitration provision is plainly referenced at the start of the Passage Contract in bold type and capital letters. (Motion, Black Decl., Exh. 4, § 15.) The physical characteristics of the Passage Contract clearly put passengers on notice of the arbitration provision.

Regarding the second prong,

[T]he circumstances surrounding the passenger’s purchase and subsequent retention of the ticket/contract may be of equal importance as the prominence of warnings and clarity of conditions in deciding whether a provision should be held to bind a particular passenger.” Id. at 865. The surrounding circumstances to be considered include the passenger's familiarity with the ticket, the time and incentive under the circumstances to study the provisions of the ticket, and any other notice that the passenger received outside of the ticket. Id. at 866.

(Ibid. [citing Shankles v. Costa Armatori, S.P.A. (1st Cir. 1983) 722 F.2d 861, 865-66].) Defendant offers no evidence that the booking confirmation was actually sent to Plaintiff or Expedia except for a single conclusory statement from a Manager in the Customer Relations and Communications Department. (Motion, Black Decl., ¶¶1, 4-5.) No documentary evidence supports the statement regarding transmission of the booking confirmation to either Plaintiff or Expedia, or the date on which this occurred. However, Defendant has demonstrated that the Cruise Personalizer mandates that passengers read the Passage Contract before printing boarding passes or boarding the ship. Defendant, therefore, has shown that Plaintiff had an opportunity to become familiar with the Passage Contract.

Therefore, Defendant carries its initial burden of proof to show that a valid agreement to arbitrate exists and that the agreement encompasses the dispute at issue.

Defense to Enforcement of Arbitration Agreement

The burden now shifts to Plaintiff to prove any facts necessary to defense of enforcement of the arbitration agreement. In opposition, Plaintiff argues that the evidence shows that he purchased the cruise tickets in September 2018 and therefore cannot be subject to an arbitration agreement that was purportedly added to the terms two months later. Plaintiff also argues that there is no evidence that Expedia was his agent for purposes of the consenting to the arbitration agreement, and in fact, Defendant’s evidence does not show that Expedia either received the Passage Contract or communicated its terms to Plaintiff prior to purchase of the tickets. As discussed above, Defendant provided Plaintiff with access to the Passage Contract. Plaintiff offers no federal authority with respect to the two-prong test and why access to the Passage Contract prior to purchase of the tickets is relevant under such authority. In fact, under federal law receipt of the contract after purchase of the tickets does not disprove reasonable notice. (Gonzalez-Martinez v. Royal Caribbean Cruises Ltd. (D.P.R. 2015) 94 F.Supp.3d 147, 154.) Receipt of the contract prior to embarking on the cruise is sufficient. (Ibid.)

Finally, Plaintiff argues that the arbitration agreement is unconscionable because he had no real choice in accepting it. Specifically, because upon paying for the tickets in October 2018, passengers are subject to a 50-75 percent cancellation policy, and therefore, cannot opt out of the arbitration agreement purportedly added two months later. Again, Plaintiff does not cite any federal authority to show that the cancellation policy renders the arbitration provision unenforceable.

The only federal case to which Plaintiff cites is Nguyen v. Barnes & Noble Inc. (9th Cir. 2014) 763 F.3d 1171, which is distinguishable from the facts of this case. In Nguyen, the Ninth Circuit Court of Appeals held that “where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.” (Nguyen v. Barnes & Noble Inc. (9th Cir. 2014) 763 F.3d 1171, 1178-1179 (emphasis added).) Here, passengers were required to take affirmative action to demonstrate assent to the Passage Contract and Plaintiff did so by checking the dialog box clicking the acceptance button on December 17, 2018. Even under the standard articulated in Nguyen, Plaintiff was provided reasonable notice of the Passage Contract.

Therefore, the Court finds Plaintiff has not carried his burden to prove facts necessary to defense to enforcement of the arbitration agreement.

Conclusion

Defendant Princess Cruise Lines, Ltd.’s Motion to Enforce Arbitration Clause and Stay Action is GRANTED.

Moving party is ordered to give notice.