Lineworks Engineering, LLC v. Aerial Surveying, Inc.

Filing 21

MEMORANDUM OPINION AND ORDER Based on the court's de novo review of the portions of the report and recommendation to which ASI objected and the court's review for clear error of the portions to which ASI did not object, the court ADOPTS the magistrate judges report and ACCEPTS his recommendation. ASI's motion to dismiss (Doc. 3) is DENIED. This action is referred back to the magistrate judge for further proceedings. Signed by Judge William M Acker, Jr on 9/18/15. (SAC)

FILED
2015 Sep-18 PM 01:41
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
LINEWORKS ENGINEERING, LLC,
Plaintiff,
v.
AERIAL SURVEYING, INC.,
Defendant.

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CIVIL ACTION NO.
2:14-cv-2018-HGD

MEMORANDUM OPINION AND ORDER
On August 31, 2015, the magistrate judge entered a report and
recommendation (Doc. 19) in this action, in which he recommended
that the court deny the motion to dismiss for lack of personal
jurisdiction (Doc. 3) filed by defendant Aerial Surveying, Inc.
(“ASI”). ASI objected to the report and recommendation on September
14, 2015. (Doc. 20). The clerk randomly selected the undersigned
judge to review the objections to the report and recommendation.
When a party objects to a magistrate judge’s report and
recommendation, “[a] judge of the court shall make a de novo
determination of those portions of the report or specified proposed
findings or recommendations to which objection is made.” 28 U.S.C.
§ 636(b)(1) (2012). The portions of the report and recommendation
from which no objection is taken are reviewable only for clear
error. Macort v. Prem, Inc., 208 Fed. App’x 781, 784 (11th Cir.
2006).
This case concerns a subcontractor agreement entered into

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between plaintiff Lineworks Engineering, LLC (“Lineworks”), an
Alabama LLC, and ASI, a one-owner Hawaiian corporation. (Doc. 1 at
8).

Lineworks,

a

general

contractor,

contracted

with

ASI,

a

subcontractor, for ASI to perform aerial surveying of transmission
lines operated by Maui Electric Company in Hawaii. (Id.). Lineworks
alleges that ASI failed to properly perform under the terms of the
contract and brought suit in Alabama. (Id.). Importantly, Lineworks
alleges that the parties’ agreement contains a forum selection
clause, which

provides:

“Any

dispute

arising

out

of

the

SMA

[Subcontractor Master Agreement] or any Work Authorization issued
thereunder shall be brought in the State of Alabama in a court of
competent jurisdiction.” (Doc. 1 at 9, ¶ 6b). Apart from this
clause,

it

sufficient

appears
contacts

without
with

dispute

Alabama

to

that
be

ASI

does

subject

to

not

have

personal

jurisdiction here.
ASI moved to dismiss under Fed. R. Civ. P. 12(b)(2), arguing
that, notwithstanding the forum selection clause, the action should
be dismissed for lack of personal jurisdiction. The magistrate
judge entered a report and recommendation, in which he recommended
that the motion to dismiss be denied because the forum selection
clause is applicable and enforceable. ASI timely objected on two
grounds: (1) because Lineworks did not produce the entire contract,
but only included a few portions in the complaint, the magistrate
judge erred in determining that it constituted a valid contract;

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and (2) ASI made a strong showing that the forum selection clause
should not be enforced because it is unreasonable and violates
public policy. The court has considered the portions of the report
and recommendation to which ASI did not object and finds no clear
error to be present.
First,

ASI

argues

that

“[w]hether

there

is

a

valid,

enforceable contract is . . . a threshold issue,” (Doc. 20 at 2),
and this determination can only be made by examining the entire
contract, so Lineworks’ failure to produce the entire agreement
precludes reliance on the forum selection clause. This argument is
without merit. ASI did not cite, and this court cannot find, a
single case in which a plaintiff seeking to rely on a forum
selection clause was required to produce the entire contract at the
pleadings stage, under penalty of dismissal. Importantly, ASI
nowhere contests that the parties actually agreed to or signed the
contract, that any offer, acceptance, or consideration was in fact
lacking, or that the forum selection clause did not appear in the
contract exactly as Lineworks reproduced it. Instead, without
citing any relevant authority, ASI seeks dismissal simply because
Lineworks did not attach the contract to its complaint. The court
will not impose such an artificial barrier.
Next,

ASI

argues

that

the

court

should

find

the

forum

selection clause to be unenforceable. “Forum-selection clauses are
presumptively valid and enforceable unless the plaintiff makes a

3

‘strong showing’ that enforcement would be unfair or unreasonable
under the circumstances.” Krenkel v. Kerzner Int’l Hotels, Ltd.,
579 F.3d 1279, 1281 (11th Cir. 2009). “A forum-selection clause
will be invalidated when: (1) its formation was induced by fraud
or overreaching; (2) [ASI] would be deprived of its day in court
because of inconvenience or unfairness; (3) the chosen law would
deprive [ASI] of a remedy; or (4) enforcement of the clause would
contravene public policy.” Id.
ASI argues that the forum selection clause is unenforceable
based on two of these grounds. First, it asserts that because it is
a single-owner Hawaii business which Lineworks sought out in
Hawaii, the contract was to be performed exclusively in Hawaii, and
all evidence and witnesses are located in Hawaii (some of whom may
be

outside

the

subpoena

power

of

this

court),

ASI

would

be

effectively deprived of its day in court should the case proceed
here. The magistrate judge rejected this contention, and this court
does the same. The Eleventh Circuit has plainly held that “[t]he
financial difficulty that a party might have in litigating in the
selected forum is not a sufficient ground by itself for refusal to
enforce a valid forum selection clause.” Rucker v. Oasis Legal
Finance, LLC, 632 F.3d 1231, 1237 (11th Cir. 2011) (quoting P&S
Bus. Machs., Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11th Cir.
2003)).

To

the

extent

ASI

complains

about

the

potential

unavailability of witnesses or other evidence at trial, “any

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inconvenience [ASI] would suffer . . . was foreseeable at the time
of contracting.” Rucker, 632 F.3d at 1237. In such a case, the
complaining party must show “grav[e] difficult[y].” Id. The fact
that some depositions may need to be taken in Hawaii and then
offered at trial in lieu of live testimony was a foreseeable
problem and does not rise to the level of grave difficulty. The
court will not now set aside the parties’ mutual agreement simply
because

ASI,

at

the

time

of

contracting,

underestimated

the

inconvenience involved.
ASI

also

argues

that

enforcement

of

the

clause

would

contravene public policy because this suit concerns work done on
behalf of Maui Electric Company, a Hawaii public utility, and
Hawaii

has

a

strong

interest

in

“governing

its

own

affairs

concerning public works and infrastructure.” (Doc. 20 at 6). The
magistrate judge concluded, however, and this court agrees, that
the contract is only tangentially related to the Hawaii public
utility and is certainly not sufficiently related as to somehow
confer exclusive jurisdiction upon Hawaii courts. The contract
required

ASI

to

conduct

an

aerial

survey

of

33

miles

of

transmission lines, and this suit primarily regards the timing of
ASI’s actions and the technological form in which ASI produced the
survey. Given that the issues raised by this case are largely
attenuated from the actual operation and regulation of Hawaii’s
power grid, and given that ASI has once again failed to cite any

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pertinent case law, the court finds that enforcement of the forum
selection clause will not contravene public policy.
CONCLUSION
Based on the court’s de novo review of the portions of the
report and recommendation to which ASI objected and the court’s
review for clear error of the portions to which ASI did not object,
the court ADOPTS the magistrate judge’s report and ACCEPTS his
recommendation. ASI’s motion to dismiss (Doc. 3) is DENIED. The
above-entitled action is referred back to the magistrate judge for
further proceedings.
DONE this 18th day of September, 2015.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

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