Bollinger Shipyards Lockport, LLC v. Huntington Ingalls Incorporated

Filing 164

ORDER AND REASONS denying 141 MOTION for Reconsideration re 124 Order on Motion to Dismiss Case ; or in the Alternative, for Transfer of Venue by Huntington Ingalls Incorporated. Signed by Judge Susie Morgan. (bwn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BOLLINGER SHIPYARDS
LOCKPORT, L.L.C.,
Plaintiff

CIVIL ACTION

VERSUS

NO. 08-4578

HUNTINGTON INGALLS
INCORPORATED,
Defendant

SECTION "E"

ORDER AND REASONS
Before the Court is Defendant Huntington Ingalls’s motion for transfer of venue.1
The Court has reviewed the briefs,2 the record, and the applicable law, and now issues
this order and reasons.
BACKGROUND
In the 1990s, the United States Coast Guard sought proposals for a “Deepwater
Program” to upgrade its fleet. It eventually awarded the prime contract to Integrated
Coast Guard Systems (“ICGS”), a joint venture between Lockheed Martin Corporation
and Defendant Huntington Ingalls, Incorporated (“HI”). ICGS then subcontracted with
HI for many components of the work. HI in turn sub-subcontracted with Bollinger
Shipyards Lockport, LLC (“Bollinger”) to convert a number of the Coast Guard’s 110foot vessels to 123-foot vessels. Bollinger completed work on eight vessels and had
begun work on another four when HI terminated the relationship.
In October of 2008, Bollinger filed suit in the United States District Court for the

1
2

R. Doc. 141.
Id.; R. Doc. 156; R. Doc. 160; R. Doc. 162; R. Doc. 163.

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Eastern District of Louisiana against HI seeking to compel arbitration of various claims
arising out of the sub-subcontract, which the parties have taken to referring as the
“termination claim” (for HI’s allegedly wrongful termination of the sub-subcontract with
Bollinger to overhaul 49 vessels), the “COMDAC claim” (for Bollinger’s extra costs
associated with adding a command display and control integrated navigation system
that HI designed and allegedly departed from the original scope of work), and the “Open
Items claim” (for unpaid invoices as detailed in R. Doc. No. 94-1, Exhibit B). A different
section of this Court granted Bollinger’s motion to compel arbitration, concluding that it
was “for the arbitrator to determine the scope of the arbitration clause in the first
instance” and advising that if any claims were not arbitrable, “the parties may return to
this Court for further proceedings.”3 In particular, the order and reasons noted that the
potential applicability of the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 601–613, was
implicated only through contractual incorporation and not by the terms of that Act
itself.4
The parties conducted extensive arbitration proceedings, including fourteen days
of hearings. The arbitrator issued findings in which he first decided the question of
arbitrability. The arbitrator held that two of Bollinger’s claims (the termination claim
and the COMDAC claim) fell within the scope of the narrow arbitration provision, which
allowed arbitration of claims arising from “the late delivery of information or equipment
by [HI], ICGS, or Lockheed Martin.”5 But the arbitrator also held that the remainder of
Bollinger’s claims (the Open Items claims)6 were not within the scope of the arbitration
R. Doc. 62 at p. 15.
Id. at pp. 5–6.
5 R. Doc. 87-2 at p. 2; R. Doc. 87-3 at pp. 15–16.
6 A list of these claims appears at R. Doc. 94-1, Exhibit B.
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provision.7
Following arbitration, the parties returned to this Court. The parties asked the
Court to confirm the arbitrator’s partial award limited to the termination and COMDAC
claims, which it did on January 31, 2012.8 On February 2, 2012, HI filed a motion to
dismiss Bollinger’s remaining, non-arbitrable Open Items claims pursuant to Rule
12(b)(6).9 The motion stated HI “reserve[d] the right to seek a transfer to the forum to
which the parties agreed” if the Court did not rule in its favor.10 While the motion to
dismiss was still pending, the matter was reassigned to this section of the Court.11
On June 28, 2013, this Court converted HI’s motion to dismiss into a motion for
summary judgment under Rule 12(d) of the Federal Rules of Civil Procedure.12 Rule
12(d) states: “If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings
are presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56.”13 The Court found both parties had substantially
relied on “matters outside the pleadings.” After converting the motion, the Court gave
both parties “a reasonable opportunity to present all the material that is pertinent to the
motion.”14
The Court ruled on HI’s converted motion on September 24, 2013.15 The Court
granted HI’s motion for summary judgment insofar as it concerned Bollinger’s non-

R. Doc. 87-3.
R. Doc. 86.
9 R. Doc. 87.
10 R. Doc. 87; R. Doc. 87-1 at p. 12.
11 R. Doc. 110.
12 R. Doc. 112.
13 Fed. R. Civ. P. 12(d).
14 R. Doc. 112; Fed. R. Civ. P. 12(d).
15 R. Doc. 124.
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arbitrable Open Items claims for more than $100,000.16 The Court found the arbitrator
already had decided that the Open Items claims were not arbitrable because they “are
clearly caused by actions or inactions of the Coast Guard over which [HI] has no
control.”17 Thus, per the sub-subcontract, Bollinger was required to pursue its Open
Items claims through the CDA process. The Court found Bollinger had failed to comply
with the certification requirement contained in the CDA and granted HI’s motion for
summary judgment as to those claims.18 Because the certification requirement did not
apply to claims of $100,000 or less, the Court denied the motion for summary judgment
insofar as it concerned Open Items claims for $100,000 or less.19 The Court also denied
summary judgment on claims based on a payment guarantee by HI.20
On October 7, 2013, Bollinger filed a motion for interlocutory certification to the
Fifth Circuit under 28 U.S.C. § 1292(b).21 On October 25, 2013, HI filed a motion for
reconsideration of the Court’s September 24, 2013 ruling with respect to claims of
$100,000 or less and claims based on a payment guarantee by HI, or, in the alternative,
for transfer of venue.22 HI did not ask for reconsideration of the Court’s grant of
summary judgment in its favor with respect to the Open Claims over $100,000. Before
the briefing on HI’s motion was completed, however, this Court granted Bollinger’s

Id.
R. Doc. 87-3 at p. 16. Article 18 of the sub-subcontract incorporates a requirement that Bollinger pursue
such claims through the CDA process.
18 Contrary to HI’s assertion that “HI has never sought a judgment on the merits of the Open Item claims
but instead has sought dismissal without prejudice,” R. Doc. 162 at p. 8, HI’s motion to dismiss was
converted to a motion for summary judgment because both parties relied on matters outside the
pleadings. R. Doc. 112. The Court granted summary judgment on Bollinger’s claims for more than
$100,000—this was not a dismissal without prejudice. R. Doc. 124.
19 R. Doc. 124 at pp. 8–9.
20 Id.
21 R. Doc. 126.
22 R. Doc. 129.
16
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motion for interlocutory certification on November 8, 2013.23 The Court also stayed
proceedings in the case and administratively closed it pending completion of
proceedings in the Fifth Circuit.24 On February 14, 2014, the Fifth Circuit denied
Bollinger’s petition for permission to appeal, and the case was reopened on February 20,
2014.25 On March 12, 2014, HI filed its renewed motion for reconsideration, or, in the
alternative, for transfer of venue.26 The Court denied Defendant HI’s motion for
reconsideration on November 14, 2014 but deferred ruling on HI’s motion to transfer.27
HI contends the sub-subcontracts between HI and Bollinger contain an
unambiguous forum-selection clause, and the matter should be transferred the United
States District Court for the Southern District of Mississippi, the court the parties
originally agreed would be the exclusive venue for suits arising from the subsubcontracts.28 Bollinger responds that HI waived its right to challenge venue in this
district because it sought affirmative relief from this Court.29
LAW AND ANALYSIS
In 2013, the Supreme Court clarified in Atlantic Marine Construction Co., Inc. v.
U.S. District Court for the Western District of Texas that the proper procedure for
enforcing a valid forum-selection clause is a motion to transfer under § 1404(a).30 In
HI’s February 2, 2012 motion to dismiss pursuant to Rule 12(b)(6), which the Court
converted into a motion for summary judgment, HI requested dismissal rather than a

R. Doc. 136.
R. Doc. 137.
25 R. Doc. 138.
26 R. Doc. 141.
27 R. Doc. 161.
28 R. Doc. 141-1 at p. 11.
29 R. Doc. 156.
30 Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 579 (2013).
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transfer under § 1404(a).31 It was not until HI’s October 25, 2013 motion for
reconsideration of this Court’s ruling denying in part its motion for summary judgment
that HI asked in the alternative for a transfer of venue.32 Under these circumstances, the
Court finds it appropriate to analyze HI’s request for a transfer as a § 1404(a) motion
under Atlantic Marine.33
The Supreme Court’s opinion in Atlantic Marine states:
The presence of a valid forum-selection clause requires district courts to
adjust their usual § 1404(a) analysis in three ways. First, the plaintiff’s
choice of forum merits no weight. Rather, as the party defying the forumselection clause, the plaintiff bears the burden of establishing that transfer
to the forum for which the parties bargained is unwarranted. . . . Second, a
court evaluating a defendant’s § 1404(a) motion to transfer based on a
forum-selection clause should not consider arguments about the parties’
private interests. . . . As a consequence, a district court may consider
arguments about public-interest factors only. . . . Third, when a party
bound by a forum-selection clause flouts its contractual obligation and
files suit in a different forum, a § 1404(a) transfer of venue will not carry
with it the original venue’s choice-of-law rules—a factor that in some
circumstances may affect public-interest considerations.34
Under Atlantic Marine, “[w]hen the parties have agreed to a valid forum-selection
clause, a district court should ordinarily transfer the case to the forum specified in that
clause. Only under extraordinary circumstances unrelated to the convenience of the
parties should a § 1404(a) motion be denied.”35
When determining whether extraordinary circumstances exist that warrant
denial of a transfer, the district court may only consider the public-interest factors of the

R. Doc. 87; R. Doc. 112. HI’s motion contained one line in which it “reserve[d] the right to seek a
transfer to the forum to which the parties agreed” if the Court did not rule in its favor. R. Doc. 87-1 at p.
12.
32 R. Doc. 141 at p. 1–2.
33 The parties were given an opportunity to brief Atlantic Marine’s impact on HI’s motion to transfer. See
R. Doc. 161; R. Doc. 162; R. Doc. 163.
34 Id. at 581–82.
35 Id. at 581.
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traditional § 1404(a) analysis, which include: “(1) the administrative difficulties flowing
from court congestion; (2) the local interest in having localized interests decided at
home; (3) the familiarity of the forum with the law that will govern the case; and (4) the
avoidance of unnecessary problems of conflict of laws [or in] the application of foreign
law.”36 Courts also consider judicial economy as an additional public-interest factor—
“that is, whether a transfer would avoid duplicative litigation and prevent waste of time
and money.”37 The Supreme Court stated in Atlantic Marine that “[b]ecause publicinterest factors will rarely defeat a transfer motion, the practical result is that forumselection clauses should control except in unusual cases. Although it is ‘conceivable in a
particular case’ that the district court ‘would refuse to transfer a case notwithstanding
the counterweight of a forum-selection clause,’ such cases will not be common.”38
The Court finds the public-interest factors in the § 1404(a) analysis, as modified
by the Supreme Court in Atlantic Marine, warrant denial of a transfer in this case.
First, there is no evidence the first factor, administrative difficulties flowing from
court congestion, is a consideration in this Court or in the Southern District of
Mississippi. Thus, this factor is neutral.
Second, this case does not involve a controversy raising especially localized
concerns, as events relating to the suit occurred in both Louisiana and Mississippi.
Thus, this factor is neutral.
Third, the familiarity of the forum with the law that will govern the case tends to
lean in favor of transfer because the sub-subcontracts provide they are governed by
In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (alteration in original) (internal
quotation marks and citation omitted).
37 See Allen v. Ergon Marine & Indus. Supply, Inc., 08-4184, 2008 WL 4809476, at *2 (E.D. La. Oct. 31,
2008) (Barbier, J.) (citing Van Dusen v. Barrack, 376 U.S. 612, 616 (1964)).
38 Atl. Marine, 134 S. Ct. at 582 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30–31 (1988)).
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Mississippi law. However, this is essentially a contract dispute, and this Court is equally
capable of applying another state’s contract law. This factor is neutral.
Fourth, maintenance of the suit in either forum will not create problems with
conflicts of law or in the application of foreign law. This factor is neutral.
Although the first four factors are neutral, the public interest in judicial economy
weighs heavily in favor of denying transfer. This matter has been pending in this district
for over six years and has been before the undersigned for over two and a half years.
During this time, HI has filed numerous motions on which this Court has ruled. This
Court is familiar with this case and has made substantive rulings in this matter as set
forth above.
Upon weighing the public-interest factors against the considerable weight of the
forum-selection clause, the Court finds there are extraordinary circumstances in this
case unrelated to the convenience of the parties that justify denial of the motion to
transfer.39
CONCLUSION
Defendant HI’s motion for transfer of venue is DENIED.40
New Orleans, Louisiana, this 5th day of January, 2015.

____
_______ ___________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

Because the Court finds the public-interest factors warrant denial of a transfer, it need not address
whether HI waived its right to enforce the forum-selection clause.
40 R. Doc. 141.
39

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