H.E.D. Inc v. Konica Minolta Business Solutions U.S.A. Inc. et al
Filing
62
ORDER and OPINION denying 22 Motion to Dismiss for Lack of Jurisdiction. Signed by Senior Judge James T Moody on 9/26/2016. (nal)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
H.E.D., INC., d/b/a SOUNDS
AND GRAPHICS,
Plaintiff
v.
KONICA MINOLTA BUSINESS
SOLUTIONS U.S.A., INC., et al.,
Defendants
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2:14 CV 311
ORDER and OPINION
Count II of the complaint initiating this case concerns a contract between the
plaintiff and defendant Konica Minolta Business Solutions U.S.A., Inc. (“KMBS”), for
maintenance of a color digital printing press. That contract, attached to the complaint as
Exhibit B, contains a choice-of-law and forum-selection clause at paragraph 20. The
clause states:
Applicable Law. This Agreement shall be governed by the laws of the
State of New York without regard to choice of law principles. In the event
of litigation or other proceedings by KMBS to enforce or defend any term
or provision of this Agreement, Customer agrees to pay all costs and
expenses incurred by KMBS, including but not limited to reasonable
attorney’s fees. Customer further agrees to litigate any dispute concerning
this matter in the courts of the state of New Jersey, consents to jurisdiction
in that forum and waives the right to jury trial.
(DE # 6 at 17.) KMBS (and a related defendant) have moved to dismiss Count II,
arguing:
In light of the agreed upon contract provisions set forth in Schedule A to
the Service Contract (Exhibit B to the Complaint), pursuant to which the
parties agreed to the forum where any dispute regarding or relating to the
Service Contract must be litigated, this Court is without subject matter
jurisdiction with respect to the dispute asserted in Count II of the
Complaint, and according to Rule 12(b)(1) of the Federal Rules of Civil
Procedure, Count II of such Complaint should be dismissed and Konica so
moves this Court. See also Atlantic Marine Construction Co., Inc. v. United
States District Court for the Western District of Texas, et al., 134 S. Ct. 568, 187
L. Ed. 2d 487 (U.S. 2013).
(DE # 23 at 2.)
This is a surprising argument, given that the case cited, Atlantic Marine
Construction, involved a motion to dismiss for improper venue pursuant to Rule
12(b)(3), and because the subject-matter jurisdiction of the United States courts extends
to all “Controversies . . . between Citizens of different States.” U.S. Const. art. III, § 2, cl.
2. In fact, KMBS admits that subject-matter jurisdiction exists by stating in its reply
memorandum that its removal of this case from state court shows that:
[T]his case could have been filed in federal court, had Plaintiff so chosen,
and thus removal is appropriate. . . . All the Petition for Removal
acknowledges is that, because diversity exists, this is a case where
jurisdiction in the federal courts (albeit not just this one) is appropriate.
All the Petition for Removal says is that federal court, in general, has
original jurisdiction over this matter. Notwithstanding this, the fact
remains that the allegations of Count II of the Complaint, based upon the
agreement of Plaintiff set forth in the Maintenance Contract at issue in
Count II of the Complaint, belongs in a federal court in New Jersey.
(DE # 30 at 2-3.) Saying that “jurisdiction in the federal courts” is “appropriate” admits
that subject-matter jurisdiction exists: The scope of this court’s subject-matter
jurisdiction is the same as a federal district court sitting in New Jersey. The question of
proper venue is entirely different.
2
Even if KMBS had moved to dismiss for improper venue pursuant to Rule
12(b)(3), the case it cites, Atlantic Marine Construction, holds that doing so would have
been an incorrect method to enforce the forum-selection clause in the parties’ contract:
Atlantic Marine contends that a party may enforce a forum-selection
clause by seeking dismissal of the suit under § 1406(a) and Rule 12(b)(3).
We disagree. Section 1406(a) and Rule 12(b)(3) allow dismissal only when
venue is “wrong” or “improper.” Whether venue is “wrong” or
“improper” depends exclusively on whether the court in which the case
was brought satisfies the requirements of federal venue laws, and those
provisions say nothing about a forum-selection clause.
Atlantic Marine Construction, 134 S. Ct. at 577 (emphasis added). Atlantic Marine
Construction goes on to explain that whether venue is “wrong” or “improper” is
delineated by 28 U.S.C. § 1391. Id. Here venue would be proper under that statute
because “a substantial part of the events or omissions giving rise to the claim occurred”
in this district. 28 U.S.C. § 1391(b)(2).
Atlantic Marine Construction also explains the method KMBS should have used to
attempt to enforce the forum-selection clause in the parties’ contract. “Although a
forum-selection clause does not render venue in a court ‘wrong’ or ‘improper’ within
the meaning of § 1406(a) or Rule 12(b)(3), the clause may be enforced through a motion
to transfer under § 1404(a).” Atlantic Marine Construction, 134 S. Ct. at 579. Here, KMBS
has not moved for transfer. Consequently, the parties have not addressed the questions
pertinent to the issue and the court will not consider whether a transfer would be
appropriate.
3
As explained, dismissal of count II on the basis of either a lack of subject-matter
jurisdiction or improper venue would be incorrect. Accordingly, KMBS’s motion to
dismiss (DE # 22) is DENIED.
SO ORDERED.
Date: September 26, 2016
s/James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT
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