Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC (22-500)

argument 22-500

Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC

Supreme Court of the United States 1h 10m 8 speakers 8 chapters transcribed 9 days ago official recording ↗

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What is the Supreme Court’s proposed rule for enforcing forum‑selection and choice‑of‑law clauses in maritime contracts?

John G. Roberts 0:00

We'll hear argument next in Case 22-500, Great Lakes Insurance v. Raiders Retreat Realty. Mr.

Jonathan Wall 0:07

Wall. Mr. Chief Justice, and may it please the Court, in the Bremen and Carnival, this Court held that forum selection clauses in maritime contracts are enforceable as a matter of federal law, except in the rare circumstances when they violate federal maritime policy. Almost all federal courts, including all of the major maritime courts, have taken the same approach for choice of law clauses. This Court should do the same for three reasons. First, logic and consistency. We're here talking about a federal exception to a federal presumption of enforceability. It stands to reason that federal exception would look to federal public policy, not state public policy. Raiders doesn't point to any analogous federal exception.

Jonathan Wall 0:50

It looks to state public policy, and it doesn't explain... Why choice of law in maritime should be any different from forum selection in maritime. Second, the consensus approach makes practical sense for the reasons that this Court gave in the Bremen. Judging choice of law clauses by reference to a uniform body of federal law accords with ancient concepts of freedom of contract, and it allows parties to gauge and price their risks, knowing what law will apply to their contracts. If 50 states may set aside parties' choices based on their own public policies, that would be a reference for uncertainty and forum shopping. Third, the consensus approach is clear and administrable. On our approach, a federal court would ask, does a choice of law clause offend federal admiralty policy?

Jonathan Wall 1:36

The answer to that question will almost always be no. On Rader's approach, the court would ask, what's the state with the greatest interest in the dispute? Does that state have a public policy with respect to the specific question at issue? And is that public policy fundamental? So, for instance, you could have a Florida district court asking whether Pennsylvania has a fundamental public policy sufficient to overcome the application of New York law. The answer to that will almost always be hazy, and that lack of clarity would disserve the admiralty world and federal courts. I welcome the court's questions.

Clarence Thomas 2:12

Mr. Wall, what effect does Wilburn Boat have on your argument?

Jonathan Wall 2:17

So I think you have to take Wilburn Boat as part of the background law. Wilburn Boat was a watershed decision, to be sure, and said state law occupies the space when there is no well-established rule of admiralty or no need to create one. But this court saw no tension with Wilbur and Boat in the Bremen or Carnival, where it said either there's a well-recognized rule in admiralty or we think we need to create one, whichever one the court was doing, when it said forum selection clauses are generally enforceable as a matter of federal law. So I see no tension between those two things. The question just remains, there was, the court in the Bremen perceived, either a recognized rule in admiralty for forum selection or a need to create one,

Jonathan Wall 2:58

And so the only question here is, should we have the same rule for choice of law clauses? I can't think of a single good reason why you would distinguish between the two. If anything, I would think it would be easier on the choice of law side because the forum selection question can really affect the party's practical ability to litigate. The choice of law question is just once you reach the forum, what law will the parties apply? It is worth noting, though, that it's not as if Great Lakes picked out here South Dakota law or Mongolian law. When they picked out New York law, that's a common choice among both marine insurers generally and surplus

Brett M. Kavanaugh 3:34

lines insurers. If we agree with you that there's a federal presumption and that federal law defines the content of the exception, so assume just for the question that, what then is the content of the federal exception? I think the briefs kind of dance around with a few different formulations. First of all, the restatement. Is that relevant? Particularly restatement 187.2b.