The Shutes had bought tickets in Washington and signed a contract, with a forum selection clause mandating that injured parties would sue in Florida, to the exclusion of all other jurisdictions.

The United States Court of Appeals for the Ninth Circuit reversed because the cruise line had reached into Washington via advertising, and held that but for the defendant's solicitation, there would be no cause of action.

[2] The Court of Appeals also held that forum selection clause was void because of unequal bargaining power between the parties, and because it would be an undue hardship for the Shutes to have to go all the way to Florida to sue.

The Court noted that Florida is not a random jurisdiction - Carnival is headquartered there and does much business there, and Washington does not necessarily make sense in the context of an accident off the coast of Mexico on a ship that left from California.

Justice Stevens had several reasons for dissenting, including objections to contracts of adhesion created by parties who have unequal bargaining power, the fact that the notice of the forum selection clause was not made available to the purchaser until after payment was tendered and a lack of an opportunity for refunds at the point when the forum selection clause was disclosed.