INSURANCE (FORUM SELECTION CLAUSE VS. FORUM NON CONVENIENS CHALLENGE) / Forum selection clause in an aviation product liability insurance policy upheld by the 11th Circuit under landmark M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), against policy holder’s challenge based on forum non conveniens grounds.

Kostelac v. Allianz Global Corporate & Specialty AG, No. 12-13718, Slip opinion [“Do Not Publish”], (U.S. Court of Appeals for the 11th Circuit, April 17, 2013). Free copy available here.

Virginia citizen injured in an air crash in Florida where aircraft was German manufacturer and insurance company had issued aviation product liability insurance policy to that German manufacturer. Virginia citizen sues German manufacturer in U.S. District Court for the Southern District of Florida.

U.S. District Court below had not addressed insurance company’s stated ground of forum selection clause and instead “weighed the public and private interests in the litigation, determined that Germany was a more appropriate forum for the suit”, and then dismissed complaint on ground of forum non conveniens – i.e., that German tribunal better than Florida tribunal under these circumstances per the forum non conveniens doctrine .

The 11th Circuit ruled that this is simply governed by the forum selection clause in the insurance contract – after reviewing 4 possible grounds for possible invalidity of the clause:

(1)  Clause and contract formation induced by fraud or overreacing;

(2)  Plaintiff would effectively be deprived of his/her/its day in court due to the inconvenience or unfairness of the chosen forum;

(3)  Fundamental unfairness of the chosen law would deprive the plaintiff of a remedy; or

(4)  Enforcement of the forum selection clause would go against a strong public policy.  

Prior to its analysis the 11th Circuit’s opinion concluded that – this being a diversity jurisdiction case – there was no difference in substance between the law of Florida and U.S. federal law on the validity of a forum selection clause.