Stone et al v. Barclays Bank PLC et al

Filing 74

ORDER Transferring Case to the United States District Court for the Southern District of New York granting 27 Motion for Transfer; Directing Clerk of Court to Transfer this Case to the United States District Court for the Southern District of New York; Closing Case. Signed by Judge Robin L. Rosenberg on 2/28/2017. (ls)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 9:16-CV-81875-RLR
RICHARD STONE & LESLEY
BLACKNER,
Plaintiffs,
vs.
BARCLAYS BANK PCL, BARCLAYS
CAPITAL INC., JOHN CREGAN,
DENIEL L. WEINER, SUTTONVIEW
CAPITAL, LLC and MICHAEL WINSTON,
Defendants.
______________________________________/
ORDER TRANSFERRING CASE TO THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
THIS CAUSE comes before the Court on a Motion for Transfer by Defendants Barclays
Bank PLC, Barclays Capital Inc., and Cregan [DE 27]. Defendants Weiner, Suttonview Capital,
LLC, and Winston joined in the Motion to Transfer. DE 38, 67. The Court has reviewed the
motion, responses, and replies thereto. For the reasons set forth below, this action is transferred
to the United States District Court for the Southern District of New York.
I.

BACKGROUND

Plaintiffs, Richard Stone and Lesley Blackner, seek damages relating to losses they
allegedly suffered as part of a “swap” transaction in which they invested for several months in
2015. DE 1 at 1-2. Each Defendant in this case has a connection to the swap transaction and
Plaintiffs’ investment in the transaction. Defendant Barclay Bank was the “swap dealer.” Id. at
3. Defendant Barclay Capital Inc. is a firm affiliated with Barclay Bank and acted as Barclay
Bank’s agent in connection with the negotiation, documentation, and implementation of the swap

transaction. Id. Defendants Cregan and Weiner are former Barclay Capital Inc. employees who
were involved in the transaction. Defendants Winston and Sutton View Capital, LLC advised
Plaintiffs to invest in the transaction. Id. at 1-18. The gravamen of Plaintiffs’ complaint is that
the transaction was extremely risky, that Plaintiffs’ financial circumstances were such that they
were unqualified to participate in such a transaction, and that Defendants were aware or should
have been aware of Plaintiffs’ unsuitability for the transaction. The transaction was governed by
an International Swap and Derivatives Association Master Agreement (the “Master
Agreement”). That Master Agreement was amended by a schedule (the “Schedule”).1
The Schedule contains a choice-of-law provision, Section 4(h), favoring New York law:
Governing Law. This Agreement, as well as any claim or controversy arising out
of or relating to the agreement, will be governed by and construed in accordance
with the laws of the state of New York (without reference to choice of law
doctrine).
In addition to a choice-of-law provision, both the Master Agreement and the Schedule
contain clauses on court jurisdiction. The jurisdiction section appears in Section 13(b) of the
Master Agreement, entitled “Governing Law and Jurisdiction” and states:
(b) Jurisdiction. With respect to any suit, action or proceeding relating to this
Agreement, each party irrevocably:
(i) submits to the jurisdiction of the English courts . . . or to the nonexclusive jurisdiction of the courts of the State of New York . . ., if this
agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceeding brought in any court, waives any claim that such
Proceeding have been brought in an inconvenient forum and further
waives the right to object… that such court does not have any jurisdiction
over such party.

1

Because Plaintiffs argue that the Defendants have not provided the Court with the full agreements, the Court relies
upon the text of the agreements (not challenged by Defendants) provided by Plaintiffs in concluding that the forum
selection clause in this case must be enforced. DE 44-1.

2

Nothing in this agreement precludes either party from bringing Proceedings in
any other jurisdiction . . . nor will the bringing of Proceeding in any one or more
jurisdictions preclude the brining of Proceedings in any other jurisdiction
See DE 44-1 at 13 (emphasis added).2 While the Master Agreement requires the parties to
submit to the jurisdiction of the courts of the State of New York, the jurisdiction is nonexclusive. The dispute before the Court arises as result of amendments to this provision in the
Schedule.

The Schedule amends Section 13(b) by replacing 13(b)(i) with the following

language:
Jurisdiction. With respect to any suit action or proceeding relating to this
Agreement . . . each party irrevocably: (i) submits to the exclusive jurisdiction of
the courts of the State of New York . . .; In the event that the courts of the State of
New York…decline jurisdiction, a party may go to another appropriate forum to
hear the claim and (ii) waives any objection which it may have at any time to the
laying of the venue of any Proceedings brought in any court, waives any claim
that such Proceedings have been brought in an inconvenient forum and further
waives the right to object, that such court does not have any jurisdiction over such
party and.
DE 44-1 at 29 (emphasis added). The Schedule therefore requires the parties to submit to the
exclusive jurisdiction of the courts of the State of New York. However, the Schedule only
amended Section 13(b)(i) and left the other provisions in Section 13(b) intact. In its final form,
Section 13 was amended to read as follows:
(b) Jurisdiction. With respect to any suit, action or proceeding relating to this
Agreement, each party irrevocably:
(i) With respect to any suit action or proceeding relating to this
Agreement…each party irrevocably: (i) submits to the exclusive
jurisdiction of the courts of the State of New York . . .; In the event that
the courts of the State of New York . . . decline jurisdiction, a party may
go to another appropriate forum to hear the claim and (ii) waives any
objection which it may have at any time to the laying of the venue of any
Proceedings brought in any court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right

2

For the ease of the reader, certain irrelevant portions of contract provisions at issue have been omitted. See DE 44
at 5.

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to object, that such court does not have any jurisdiction over such party
and.
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceeding brought in any court, waives any claim that such
Proceeding have been brought in an inconvenient forum and further
waives the right to object… that such court does not have any jurisdiction
over such party.
Nothing in this agreement precludes either party from bringing Proceedings in
any other jurisdiction . . . nor will the bringing of Proceeding in any one or more
jurisdictions preclude the brining of Proceedings in any other jurisdiction
(emphasis added). The amended Section 13(b)(i) requires the parties to submit to the exclusive
jurisdiction of the State of New York, while the amended Section 13(b), states that: “Nothing in
this agreement precludes either party from bringing Proceedings in any other jurisdiction.”
Therein lies the less than clear language that the parties rely upon for their respective positions as
to proper venue for this case.
Defendants rely upon this language to argue in favor of transfer of this case to the United
States District Court for the Southern District of New York due to the forum selection clause in
Section 13(b). Plaintiffs oppose the motion and argue instead that the language supports their
position that their claims may be brought in any jurisdiction, including the Southern District of
Florida.
II.

LEGAL STANDARD

28 U.S.C. § 1404(a) provides, “For the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or division
where it might have been brought or to any district . . . to which all parties have consented.”
“[A] district court considering a § 1404(a) motion . . . must evaluate both the convenience 
of the parties and various public-interest considerations.” Atl. Marine Const. Co. v. U.S. Dist.
Court for W. Dist. of Texas, 134 S. Ct. 568, 581 (2013). The standard for transfer under §

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1404(a) leaves much to the broad discretion of the trial court. See Brown v. Connecticut Gen.
Life Ins. Co., 934 F.2d 1193, 1197 (11th Cir. 1991); see also Gonzalez v. Pirelli Tire, LLC, No.
07-80453-CIV, 2008 WL 516847 (S.D. Fla. Feb. 22, 2008) (collecting many of the cases cited
below). Congress authorized courts to transfer the venue of a case in order to avoid unnecessary
inconvenience to litigants, witnesses, and the public and to conserve time, energy, and money.
Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). The burden is on the movant to establish that
the suggested forum is more convenient. In re Richoh Corp., 870 F.2d 570, 573 (11th Cir.
1989). Generally, the factors to be considered are the “[p]laintiff’s initial choice of forum,
convenience of the parties and witnesses, relative ease of access to sources of proof, availability
of compulsory process for witnesses, location of relative documents, financial ability to bear the
cost of the change, and all other practical problems that make trial of the case easy, expeditious
and inexpensive.” Eye Care Intern, Inc. v. Underhill, 119 F. Supp. 2d 1313, 1317-18 (M.D. Fla.
2000) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)); see also Atl. Marine, 134
S.Ct. at 581 n.6.
However, the Supreme Court has held that a forum selection clause should be given
“controlling weight in all but the most exceptional cases” based on “extraordinary circumstances
unrelated to the convenience of the parties[.]” Id. at 581 (quoting Stewart Org., Inc. v. Ricoh
Corp., 487 U.S. 22, 33 (1988) (Kennedy, J., concurring)). Thus, where a forum selection clause
exists, the district court’s analysis of a § 1404(a) motion changes in three ways: (1) “the
plaintiff’s choice of forum merits no weight”; (2) the Court is not to “consider arguments about
the parties’ private interests”; and (3) a “transfer of venue will not carry with it the original
venue’s choice of law rules[.]” Id. at 581-82.

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III.

ANALYSIS

The Court analyzes Defendants’ Motion to Transfer by determining: (A) what state’s law
applies to this dispute; (B) whether this matter must be transferred to another venue according to
the terms of the disputed forum selection clause; and (C) which Defendants, if any, should be
transferred to another venue.
A. The Choice of Law Clause
“The validity of a contractual choice-of-law clause is a threshold question that must be
decided under the relevant forum’s choice-of-law rules governing the effectiveness of such
clauses.” Fin. One Public Co. Ltd. v. Lehman Bros. Special Fin., Inc., 414 F.3d 325, 331 (2d
Cir. 2005). “Florida enforces choice-of-law provisions unless the law of the chosen forum
contravenes strong public policy.” Mazzoni Farms, Inc. v. E.R. DuPont De Nemours & Co., 761
So. 2d 306, 311 (Fla. 2000). Here, there is no argument of note that the enforcement of the New
York choice-of-law provision in this case violates a strong public policy of the State of Florida.
Furthermore, the validity or scope of the choice-of-law provision in this case is not challenged;
the challenge instead is directed to the forum selection clause in the Master Agreement.
Choice-of-law clauses “are presumptively valid.”

See Lipcon v. Underwriters at

Llloyd’s, London, 148 F.3d 1285, 1295 (11th Cir. 1998) (considering a choice-of-law clause in
the context of an international transaction). “This presumption of validity may be overcome,
however, by a clear showing that the clauses are ‘unreasonable under the circumstances.” Id. at
1295-96. A clause is unreasonable under the circumstances when: 1) its formation was induced
by fraud or overreaching, 2) the plaintiff would effectively be deprived of its day in court
because of the inconvenience and unfairness in the chosen forum, 3) the fundamental unfairness
of the chosen law would deprive plaintiff of a remedy, or 4) enforcement of such provisions

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would contravene a strong public policy. Id. at 1296. There is no argument before this Court,
and the Court can discern no basis for such an argument, that any of the four factors outlined
above apply in this case. As a result, the Court concludes that New York law applies to this
dispute.
B. The Forum Selection Clause
The Court has outlined above the facial conflict of terms in the Master Agreement that
resulted from the amendments imposed by the Schedule. More specifically, Section 13(b)(i)
requires the parties to file suit exclusively in the State of New York while Section 13(b) states
that: “Nothing in this agreement precludes either party from bringing Proceedings in any other
jurisdiction.” The Court concludes that the exclusive forum selection clause in Section 13(b)(i)
governs this dispute for two reasons.
First, under New York law “all parts of an agreement are to be reconciled, if possible, in
order to avoid inconsistency.” Conergics Corp. v. Dearborn Mid-W. Conveyor Co., 43 N.Y.S.3d
6, 18 (N.Y. App. Div. 2016); HSBC Bank USA v. Nat’l Equity Corp., 719 N.Y.S.2d 20 (N.Y.
App. Div. 2001). New York law holds that “a contract should be read as a whole, and every part
will be interpreted with reference to the whole.” Conergics Corp., 43 N.Y.S.3d at 18. Here, it is
possible to reconcile the facial conflict in such a way as to avoid inconsistency. This conflict
may be reconciled by concluding that (1) suit must be filed in the State of New York (which
Section 15(b)(i) requires), but (2) if the State of New York declines jurisdiction for any reason
(“In the event that the courts of the State of New York [decline jurisdiction]”) then (3) “a party
may go to another appropriate forum to hear the claim.” This reading of Section 15(b)(i)
reconciles any facial conflict because the statement in Section 15(b) that “[n]othing in this
agreement precludes either party from bringing Proceedings in any other jurisdiction” merely

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means that no party is precluded from bringing suit in other jurisdictions if a New York court
declines to exercise jurisdiction. Moreover, this reconciliation is consistent with a reading of the
Master Agreement and the Schedule as a whole because, when the documents are viewed in their
entirety, it is clear that the amendment in the Schedule was meant to vest exclusive jurisdiction
in the courts of the State of New York, albeit with imperfect tradecraft. In light of the above, the
Court concludes that the forum selection clause in this case is exclusive and must be considered.
The Court has a second basis for its decision to consider the forum selection clause. The
Master Agreement in Section 1(b) states that: “In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will
prevail.” The Master Agreement, in its original form, did not require the State of New York to
be the exclusive forum for litigation. The Schedule required the State of New York to be the
exclusive forum for litigation and the terms therein were not disguised in any way, contained in
fine print, or placed inside of an inconspicuous footnote. The Schedule amended the Master
Agreement. To the extent the amendment was implemented imperfectly in such a way as to
create a conflict between the terms of the Master Agreement and the Schedule, Section 1(b)
requires that conflict to be resolved in favor of the terms in the Schedule. For this reason, this
Court concludes that it must consider the exclusive forum selection clause.
Because the parties’ exclusive forum selection clause must be considered by this Court,
that clause should be “given controlling weight in all but the most exceptional cases.” Atl.
Marine Const. Co., Inc. v. U.S. Dist. Ct., 134 S. Ct. 568, 581 (2013). An exceptional case that
justifies invalidation of a forum selection clause is a case in which the public’s interest in the
plaintiff’s choice of forum outweighs the public’s interest in the contracted-for forum, but public
interest factors “will rarely defeat a transfer motion” and “the practical result” of a valid forum

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selection clause is that the forum selection clause should control. Id. Here, there is no argument
of merit before the Court sufficient to warrant invalidation of the forum selection clause. Indeed,
as this dispute will be governed by New York law, the public’s interest in having this dispute
litigated in a New York court is significant. For all of the foregoing reasons, the exclusive forum
selection clause in this case must be enforced and this suit must be transferred to the State of
New York.3
C. The Applicability of the Forum Selection Clause to Defendants
Plaintiffs argue that only one Defendant in this case, Barclay Bank, was a signatory to the
contractual agreements and, therefore, the forum selection clause does not apply to the remaining
non-signatory Defendants. The Court concludes, however, that this matter should be transferred
pursuant to the forum selection clause as to all Defendants for two reasons.
First, under New York law a non-signatory to a contract can be bound by a forum
selection clause if that party has a “sufficiently close relationship with the signatory and the
dispute to which the forum selection clause applies.” Tate & Lyle Ingredients Americas, Inc. v.
Whitefox Techs. USA, Inc., 949 N.Y.S.2d 375, 377 (N.Y. App. Div. 2012). The most important
consideration in determining whether a non-signatory’s relationship is sufficiently close is
whether the non-signatory’s “enforcement of the forum selection clause is foreseeable by virtue
of the relationship between the [parties].” Id. Notably, the Master Agreement did not limit the
scope of the forum selection clause to disputes arising out of that agreement. Instead, the forum
selection clause applied to any dispute arising out of the underlying transaction. DE 44-1 at 29.
Here, each of the Defendants has a sufficiently close relationship with the signatory and the

3

Because the forum selection clause in this case requires a different federal forum, the clause must be enforced
through a motion to transfer in lieu of a dismissal. See Atlantic Marine, 134 S. Ct. at 580.

9

transaction to warrant transfer.4 Barclay Capital was an agent for Barclay Bank in connection
with the transaction.

Cregan and Weiner worked on the transaction as employees and

representatives of Barclay Capital.

As to these Defendants,5 the Court concludes that

enforcement of the forum selection clause was foreseeable by virtue of the relationship of these
Defendants with Barclay Bank.
The Court has a second basis for its decision to transfer this matter as to all Defendants.
The Court has broad discretion under 28 U.S.C. § 1404(a) to transfer any civil action to another
federal district court for the convenience of the parties and witnesses, in the interest of justice.
Here, the transfer of all of the Defendants in this case, in lieu of severance, satisfies “the policy
of statutory transfer, which is to avoid duplicative litigation, inconvenience, and unnecessary
expenses.” Meterlogic, Inc. v. Copier Sols., Inc., 185 F. Supp. 2d 1292, 1303 (S.D. Fla. 2002).
The facts of this case are intertwined with respect to all Defendants, including Defendants
Suttonview LLC and Winston. Sunntonview and Winston recommended the transaction at issue
to Plaintiffs and, ultimately, this case is about the inherent risk in the transaction, Plaintiffs’
individual financial circumstances and, most importantly, the propriety of Plaintiffs’ involvement
in the transaction in light of their personal financial circumstances. This is an issue with a
common factual nexus as to all Defendants. If the issues in this case were to be litigated in two
separate courts, there would be an unnecessary waste of time, energy, and money. See Van
Dusen v. Barrack, 376 U.S. 612, 615 (1964) (noting the purpose of section 1404 is to avoid
unnecessary waste). For all of the foregoing reasons, the Court concludes that this action should
be transferred as to all Defendants.

4

Alternatively, each of the Defendants has a sufficiently close relationship with the signatory and the contractual
agreements to warrant transfer.
5
The Court addresses Defendants Suttonview LLC and Winston below.

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IV.

CONCLUSION

It is hereby, ORDERED AND AJDUGED that Defendants’ Motion for Transfer [DE
27] is GRANTED. The Clerk of Court is hereby directed to TRANSFER this case to the
United States District Court for the Southern District of New York. All pending motions are
hereby TERMINATED. The Clerk of the Court shall CLOSE THIS CASE.
DONE AND ORDERED in Chambers, Fort Pierce, Florida, this 28th day of February,
2017.
____________________________________
ROBIN L. ROSENBERG
UNITED STATES DISTRICT JUDGE

Copies furnished to:
Counsel of record

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