Axis Oilfield Rentals, LLC v. Mining, Rock Excavation and Construction, LLC et al

Filing 24

ORDER & REASONS: denying 15 Defendants' Motion to Transfer Pursuant to 28 U.S.C. 1404 or Alternatively Motion to Dismiss. Signed by Judge Carl Barbier on 9/30/15. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

AXIS OILFIELD RENTALS,
LLC

CIVIL ACTION

VERSUS

NO: 15-1627

MINING, ROCK, EXCAVATION
AND CONSTRUCTION, LLC,
ET AL

SECTION: “J”(4)

ORDER & REASONS
Before the Court is a Motion to Transfer Pursuant to 28
U.S.C. § 1404 or Alternatively Motion to Dismiss for Forum Non
Convieniens [sic] (Rec. Doc. 15) filed by Defendants, Mining,
Rock, Excavation and Construction LLC (formerly known as Atlas
Copco Construction Mining Technique USA LLC), individually and
on behalf of its business unit Chicago Pneumatic Construction
Equipment (“MREC”), and Atlas Copco Compressors LLC (“ACC”); an
opposition

thereto

(Rec.

Doc.

16)

filed

by

Plaintiff,

Axis

Oilfield Rental, LLC (“Axis”); and a reply (Rec. Doc. 23) filed
by Defendants. Having considered the motion and legal memoranda,
the record, and the applicable law, the Court finds that the
motion should be DENIED.
FACTS AND PROCEDURAL BACKGROUND
This action was filed by Axis in state court on March 25,
2015,

seeking

compressors

damages

from

related

Defendant

MREC.

to

Axis’s

(Rec.

Doc.

purchase
1-1.)

of

air

Defendants

removed the action to this Court on May 13, 2015. (Rec. Doc. 1.)
Axis

alleges

contract,

and

causes

of

negligent

action

for

redhibition,

misrepresentation

against

breach

of

Defendants

because of alleged defects in certain air compression equipment
allegedly manufactured, sold, and supplied by Defendants. (Rec.
Doc. 1-1, at 3-9.)
On August 7, 2012, Axis submitted a credit application with
MREC. (Rec. Doc. 15-2.) The credit application, signed by Axis’s
president,

stated

that

Axis,

“intending

to

be

legally

bound

hereby, herein agrees and will comply with Atlas Copco CMT USA
LLC’s Terms and Conditions of sale, located on page three (3) of
this application.” Id. The terms and conditions of sale on page
three of the credit application included the following forum
selection clause:
(d) Governing Law: . . . Any dispute, claim, or
controversy between Purchaser and Atlas Copco related
to these terms and conditions that cannot be resolved
through good faith negotiations may be adjudicated
only in a court of competent jurisdiction in Denver,
Colorado[.]
Id. at 4. Axis purchased a total of forty-one air compressors
from MREC; however, Axis claims it has never borrowed funds from
MREC under the credit application. (Rec. Doc. 16, at 2.)
The terms and conditions of sale, containing the same forum
selection clause, were also allegedly included on the reverse of
one invoice that Axis received in connection with a shipment of

2

the air compressors at issue. 1 (Rec. Doc. 15-1, at 2.) Defendants
claim

that

Axis

purchased

five

air

compressors

from

MREC

in

2013. (Rec. Doc. 15-3, at 2.) The invoice for this purchase,
dated May 7, 2013, allegedly included a forum selection clause
on the back side of the front page. However, the parties dispute
whether Axis ever received the back side of the invoice. (Rec.
Docs. 15-1, at 3 n.3; 16, at 2.)
Defendants filed the instant Motion to Transfer Pursuant to
28 U.S.C. § 1404 or Alternatively Motion to Dismiss for Forum
Non Convieniens [sic] (Rec. Doc. 15) on August 14, 2015. Axis
filed its opposition (Rec. Doc. 16) on September 14, 2015, and
Defendants filed their reply (Rec. Doc. 23) on September 23. The
Court now considers the motion on the briefs.
PARTIES’ ARGUMENTS
Defendants ask the Court to either transfer this case to
the United States District Court for the District of Colorado
pursuant to 28 U.S.C. § 1404(a) or, alternatively, to dismiss
this case pursuant to the doctrine of forum non conveniens. 2

1
Although Axis alleges that it purchased the forty-one air compressors in two
sales, thirty-four compressors on March 6, 2014, and an additional seven on
April 30, 2014 (Rec. Doc. 1-1, at 3), Defendants claim that the forty-one air
compressors were actually sold in four separate sales: five compressors
shipped on May 7, 2013; twenty-seven shipped on March 4, 2014; seven shipped
on April 11, 2014; and two shipped on June 10, 2014. (Rec. Doc. 15-1, at 2
n.2.) Exhibit B attached to Defendants’ motion includes invoices dated May
2013, March 2014, April 2014, and July 2014, totaling forty-one air
compressors allegedly sold to Axis. (Rec. Doc. 15-3.)
2
The forum selection clause at issue does not mandate a federal forum, but
rather a forum located in Denver, Colorado. The United States District Court
for the District of Colorado as well as the Colorado 2nd Judicial District

3

Defendants

argue

that

Axis

expressly

agreed

to

the

forum

selection clause when it first sought to do business with MREC,
by submitting the credit application. (Rec. Doc. 15-1, at 4.)
Further,

Defendants

argue

that

Axis

is

bound

by

the

forum

selection clause “as a result of the course of dealings between
the parties” because the forum selection clause was contained on
the back of the invoice Axis received in 2013. Id. at 4-5.
Regarding the scope of the forum selection clause, Defendants
argue

that

the

clause

is

broadly

worded

to

apply

to

“any

dispute” related to the terms and conditions, which includes
Axis’s claims because they are related to the sale of the air
compressors. Id. at 6. Consequently, Defendants contend that the
forum selection clause is enforceable and that Axis bears the
burden of “showing why the court should not transfer the case to
the forum to which the parties agreed.” Id. at 8 (quoting Atl.
Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134
S. Ct. 568, 582 (2013)).
In response, Axis argues that the enforceability of the
forum selection clause is not at issue; rather, “[t]he presence
of

the

forum

determinative

selection
point,

clause

and

the

between
burden

the

parties

remains

is

with

the
the

Defendants.” (Rec. Doc. 16, at 4.) First, Axis argues that the
Court, a state court of general jurisdiction, are both located in Denver,
Colorado. Accordingly, Defendants ask that the Court transfer this case to
the federal forum pursuant to § 1404(a) or dismiss the case under the
doctrine of forum non conveniens. (Rec. Doc. 15-1, at 9 n.6.)

4

forum selection clause in the credit application does not apply
to its claims in this litigation. According to Axis, it never
borrowed any funds under the credit application, the purchases
at issue were not made pursuant to the credit application, and
its claims are not related in any way to the credit application.
Id. at 2. Axis contends that submission of a credit application
does

not

start

a

business

relationship

between

Axis

and

Defendants in which all possible future transactions between the
parties

are

governed

by

the

credit

application’s

terms

and

conditions. Id. Second, Axis argues that the parties did not
agree to a forum selection clause in the 2013 sale of equipment.
Id. at 3. Axis maintains that Defendants provided it with a sale
document for its signature via an email that included only the
front page of the May 7 invoice. Id. According to Axis, “The
email did not include the opposite side of the invoice which
stated terms and conditions, including a forum selection clause,
which were unknown to and not agreed to by Axis.” Id. Therefore,
Axis contends that the signed invoice, which did not include a
forum selection clause, is the contract between the parties. Id.
In their reply, Defendants argue that there is no language
in the credit application agreement limiting the application of
the forum selection clause to disputes arising out of the credit
application

or

excluding

future

transactions

between

the

parties. (Rec. Doc. 23, at 2-3.) Next, Defendants argue that

5

even if Axis did not receive the back side of the May 7, 2013,
invoice,

Axis

was

put

on

notice

that

additional

terms

and

conditions applied to the sale because the front of each invoice
contained the statement, “THE ADDITIONAL TERMS AND CONDITIONS ON
THE NEXT PAGE OF THIS INVOICE ARE MADE PART OF THIS INVOICE.”
Id. at 4-5. According to Defendants, Axis’s argument ignores the
fact

that

it

already

agreed

to

the

terms

and

conditions

by

signing the credit application and received over one hundred
invoices that referenced those terms and conditions. Id. at 5.
Lastly, Defendants maintain that they dispute Axis’s contention
that it did not receive the reverse side of each invoice. To the
extent that this Court believes that factual disputes exist that
are material to the determination of the existence of a forum
selection clause in the parties’ agreement, Defendants contend
that an evidentiary hearing is appropriate. Id. at 5 n.8.
LEGAL STANDARD
The proper procedure for enforcing a forum selection clause
that points to a particular federal district is a motion to
transfer venue pursuant to 28 U.S.C. § 1404(a). 3 Section 1404(a)
states that “[f]or the convenience of parties and witnesses, in
3

The appropriate way to enforce a forum selection clause pointing to a state
forum is through the doctrine of forum non conveniens. Section 1404(a) is
merely a codification of the doctrine of forum non conveniens for the subset
of cases in which the transferee forum is within the federal court system.
Both § 1404(a) and the forum non conveniens doctrine from which it derives
entail the same balancing-of-interests standard. Therefore, courts should
evaluate a forum selection clause pointing to a nonfederal forum in the same
way that they evaluate a forum selection clause pointing to a federal forum.
Atl. Marine, 134 S. Ct. at 580.

6

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 or division to which all parties
have consented.” 28 U.S.C. § 1404(a). The moving party has the
burden

of

showing

demonstrating
parties

and

Volkswagen

that

“good
a

transfer

witnesses,

of

Am.,

cause”

in

Inc.,

is

the
545

for

a

transfer

“[f]or

the

interest

F.3d

304,

by

clearly

convenience

of

justice.”

315

(5th

In

Cir.

of
re

2008)

(quoting 28 U.S.C. § 1404(a)). Thus, if the transferee venue is
not

clearly

more

convenient

than

the

venue

chosen

by

the

plaintiff, the plaintiff's choice should be respected. Id.
In the typical case not involving a forum selection clause,
a court considering a § 1404(a) motion must determine whether a
transfer

would

serve

“the

convenience

of

the

parties

and

witnesses” and otherwise promote “the interest of justice.” In
making this determination, the court should consider the public
and private interest factors adopted by the Fifth Circuit. “The
private interest factors are: ‘(1) the relative ease of access
to sources of proof; (2) the availability of compulsory process
to

secure

the

attendance

of

witnesses;

(3)

the

cost

of

attendance for willing witnesses; and (4) all other practical
problems

that

make

trial

of

a

case

easy,

expeditious

and

inexpensive.’” Id. (quoting In re Volkswagen AG, 371 F.3d 201,
203 (5th Cir. 2004)). “The public interest factors are: ‘(1) the

7

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.’”
Id. The above-listed factors are not necessarily exhaustive or
exclusive,

and

none

should

be

given

dispositive

weight.

Id.

Furthermore, unless the balance of factors strongly favors the
moving

party,

the

plaintiff's

choice

of

forum

should

not

be

disturbed. Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th
Cir.1989).
The presence of a valid, mandatory forum selection clause,
however,

requires

the

court

to

adjust

its

usual

§

1404(a)

analysis in three ways. Atl. Marine, 134 S. Ct. at 581. “First,
the plaintiff's choice of forum merits no weight.” Id. “Rather,
as the party defying the forum-selection clause, the plaintiff
bears the burden of establishing that transfer to the forum for
which the parties bargained is unwarranted.” Id. Second, the
court should not consider the parties’ private interests; it may
consider only public interests. Id. at 582. “When parties agree
to a forum-selection clause, they waive the right to challenge
the preselected forum as inconvenient or less convenient for
themselves

or

their

witnesses,

or

for

their

pursuit

of

the

litigation.” Id. Therefore, the court must “deem the private-

8

interest factors to weigh entirely in favor of the preselected
forum.” Id. Third, a transfer of venue premised on enforcement
of a valid forum selection clause “will not carry with it the
original

venue’s

choice-of-law

rules—a

factor

that

in

some

circumstances may affect public-interest considerations.” Id.
In

Atlantic

Marine,

the

United

States

Supreme

Court

adjusted the typical § 1404(a) analysis because “a valid forumselection clause [should be] given controlling weight in all but
the most exceptional cases.” Id. at 581 (quoting Stewart Org.,
Inc.

v.

Ricoh

Corp.,

487

U.S.

22,

33

(1988)

(Kennedy,

J.,

concurring)). The party who is acting in violation of the forum
selection clause bears the burden of showing that the public
interest factors “overwhelmingly disfavor a transfer.” Id. at
583. Because the public interest factors will rarely defeat a
transfer motion, “the practical result is that forum-selection
clauses should control except in unusual cases.” Id. at 582. In
sum, when a defendant files such a motion, “a district court
should

transfer

the

case

unless

extraordinary

circumstances

unrelated to the convenience of the parties clearly disfavor a
transfer.” Id. at 575.
DISCUSSION
The
signed

parties
by

Axis

do

not

through

dispute
its

that

the

president

on

credit
August

application
7,

2012,

contained a mandatory forum selection clause; they do, however,

9

dispute its scope. Before a court will enforce a forum selection
clause, it must first determine “whether the clause applies to
the

type

of

claims

asserted

in

the

lawsuit.”

Braspetro

Oil

Servs. Co. v. Modec (USA), Inc., 240 F. App'x 612, 616 (5th Cir.
2007) (quoting Terra Int’l, Inc. v. Miss. Chem. Corp., 119 F.3d
688, 692 (8th Cir. 1997)). The court must “look to the language
of the parties’ contracts to determine which causes of action
are

governed

by

the

forum

selection

clause[].”

Id.

(quoting

Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216, 222 (5th
Cir. 1998)). “[I]f the substance of [the plaintiff’s] claims,
stripped of their labels, does not fall within the scope of the
clause[], the clause[] cannot apply.” Roby v. Corp. of Lloyd's,
996 F.2d 1353, 1361 (2d Cir. 1993).
Page
“Terms

three

and

of

the

Conditions

credit
of

application

Sale,”

includes

agreement,
a

forum

titled

selection

clause. (Rec. Doc. 15-2.) The forum selection clause states,
“Any dispute, claim, or controversy between Purchaser and Atlas
Copco

related

to

these

terms

and

conditions

that

cannot

be

resolved through good faith negotiations may be adjudicated only
in a court of competent jurisdiction in Denver, Colorado.” Id.
at

4.

“Purchaser”

is

defined

as

“the

party

purchasing

any

machine, rig, equipment, material, parts, accessories, or any
other

item

or

services

(‘Products’)

10

from

Atlas

Copco.”

Id.

“Atlas Copco” refers to MREC, which was formerly known as Atlas
Copco Construction Mining Technique USA LLC. See id.
The operative language of the forum selection clause in the
credit application is “[a]ny dispute, claim, or controversy . .
. related to these terms and conditions.” As a general rule,
courts read forum selection clauses broadly, “in keeping with
the public policy favoring their use.” Chalos & Co., P.C. v.
Marine Managers, Ltd., No. 14-2441, 2015 WL 5093469, at *5 (E.D.
La. Aug. 28, 2015) (quoting Paduano v. Express Scripts, Inc., 55
F. Supp. 3d 400, 432 (E.D.N.Y. 2014)). Furthermore, the use of
expansive language such as “any dispute” is generally indicative
of

the

broad

scope

of

a

forum

selection

clause.

Cf.

Louis

Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d
218, 225 (2d Cir. 2001) (construing the language “[a]ny dispute”
in an arbitration clause). Similarly, the language “related to”
is typically defined broadly and does not necessarily signify a
causal connection. Coregis Ins. Co. v. Am. Health Found., Inc.,
241

F.3d

123,

128

(2d

Cir.

2001)

(finding

that

the

phrase

“related to” is equivalent to the phrases “in connection with”
and “associated with” and has a much broader meaning than the
phrase “arising out of”).
Here, the forum selection clause in the credit application
agreement is quite broad. Although Axis argues that the clause
only

applies

to

disputes

“arising

11

out

of

the

credit

application,” the clear language of the clause provides that it
applies to any dispute “related to these terms and conditions.”
Furthermore, Axis’s argument ignores the first paragraph of the
terms and conditions in the credit application, which states as
follows: “1. GENERAL. . . . These terms and conditions of sale
will govern the sale by Atlas Copco of all Products.” (Rec. Doc.
15-2, at 4.) This provision, when read in conjunction with the
forum selection clause, evinces the parties’ intent to resolve
all disputes related to Axis’s purchases from MREC in Denver,
Colorado,

not

application.

just

purchases

Therefore,

made

interpreting

pursuant
the

to

clause

the

credit

broadly,

the

Court finds that the language “[a]ny dispute . . . related to
these terms and conditions” encompasses all disputes associated
with Axis’s purchase of air compressors from MREC.
Defendants argue that the forum selection clause applies to
all of Axis’s claims and, therefore, the entire case should be
transferred. As Axis correctly points out, however, Defendants
acknowledge that only the terms and conditions in the credit
application and the invoice dated May 7, 2013, included a forum
selection clause. Beginning on January 1, 2014, MREC included an
amended “Terms and Conditions of Sale” that did not contain a
forum selection clause. (Rec. Doc. 15-1, at 2.) In fact, the
amended terms and conditions provided, “17. Miscellaneous. . . .
THESE

TERMS

CONTAIN

THE

ENTIRE

12

AGREEMENT

BETWEEN

SELLER

AND

BUYER WITH RESPECT TO TERMS AND CONDITIONS AND SUPERSEDE ALL
PREVIOUS

OR

CONTEMPORANEOUS

REPRESENTATIONS

WITH

Doc.

8.)

15-3,

at

RESPECT

STATEMENTS,
TO

TERMS

Accordingly,

by

AGREEMENTS,

AND

AND

CONDITIONS.”

looking

at

the

(Rec.

parties’

contracts, it appears that the parties did not agree to a forum
selection

clause

in

the

sales

of

equipment

after

January

1,

2014. Thus, the forum selection clause in the credit application
agreement and allegedly in the May 7 invoice can apply only to
Axis’s

claims

related

to

air

compressors

purchased

before

selection

clause

January 1, 2014. 4
Having

found

that

a

mandatory

forum

applies to some of Axis’s claims, the Court must now determine
whether

the

clause

is

enforceable.

Under

Atlantic

Marine,

a

district court should ordinarily transfer the case to the forum
specified, unless extraordinary circumstances unrelated to the
convenience of the parties warrant denial of a transfer. 134 S.
Ct. at 581. When determining whether extraordinary circumstances
exist, the district court may only consider the public interest
factors

of

the

traditional

§

1404(a)

analysis.

Id.

at

582.

Courts also consider judicial economy as an additional public
interest

factor.

That

is,

“whether

4

a

transfer

would

avoid

According to Defendants, Axis purchased only five air compressors in 2013.
(Rec. Doc. 15-1, at 2 n.2.) The other thirty-six were purchased in 2014,
after the forum selection clause was omitted from the terms and conditions of
sale. Id. However, Axis alleges in its complaint that all forty-one air
compressors were purchased in 2014. (Rec. Doc. 1-1, at 3.)

13

duplicative litigation and prevent waste of time and money.”
Allen v. Ergon Marine & Indus. Supply, Inc., No. 08-4184, 2008
WL 4809476, at *2 (E.D. La. Oct. 31, 2008) (citing Van Dusen v.
Barrack, 376 U.S. 612, 616 (1964)). Although such cases are not
common,

district

courts

have

refused

to

transfer

a

case

notwithstanding the counterweight of a forum selection clause.
See, e.g., Bollinger Shipyards Lockport, L.L.C. v. Huntington
Ingalls Inc., No. 08-4578, 2015 WL 65298, at *4 (E.D. La. Jan.
5,

2015)

(finding

the

public

interest

in

judicial

economy

weighed heavily in favor of denying motion to transfer where
case had been pending in the district for six years and the
court had made substantive rulings).
Here,

the

Court

finds

that

the

public

interest

factors

warrant denial of a transfer. First, there is no evidence that
the first factor, administrative difficulties flowing from court
congestion, is a consideration in this Court or in the District
of Colorado. Therefore, this factor is neutral. Second, this
case does not involve a controversy raising localized concerns,
as the events relating to the suit happened in multiple states.5
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 terms and conditions of sale in

5

It is unclear what events, if any, happened in Colorado. Defendants simply
state, “Colorado also has a relationship to the dispute in that it is where
MREC’s headquarters is located.” (Rec. Doc. 15-1, at 8.)

14

the credit application agreement provide that they are governed
by

Colorado

dispute,

law.

and

this

However,
Court

is

this

is

equally

essentially
as

capable

a

contract

of

applying

another state’s contract law. Moreover, a majority of Axis’s
claims are not subject to the choice-of-law provision in the
credit application. Therefore, 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.
Thus, this factor is neutral.
This is an unusual case, in that only a portion of the
plaintiff’s

claims

are

subject

to

a

forum

selection

clause.

Defendants ask the Court to sever Axis’s claims that fall within
the forum selection clause pursuant to Rule 21 so that they may
be transferred. While Atlantic Marine noted that public factors,
standing alone, were unlikely to defeat a transfer motion, the
Supreme

Court

has

also

noted

that

§

1404

was

designed

to

minimize the waste of judicial resources of parallel litigation
of a dispute. In re Rolls Royce Corp., 775 F.3d 671, 679 (5th
Cir. 2014) (citing Cont'l Grain Co. v. The FBL-585, 364 U.S. 19,
26

(1960)).

considerations

“The

tension

suggests

that

between
the

these

need—rooted

centrifugal

in

the

valued

public interest in judicial economy—to pursue the same claims in
a single action in a single court can trump a forum-selection
clause.”

Id.

The

Fifth

Circuit

15

has

concluded

that

Atlantic

Marine does not categorically require severance and transfer in
all situation. Id. at 681. When considering a severance-andtransfer motion pursuant to Rule 21, a court must ask whether
the preliminary weighing is outweighed by the judicial economy
considerations

of

having

all

claims

determined

in

a

single

lawsuit. Id. Accordingly, a court “should not sever if . . .
partial transfer would require the same issue to be litigated in
two cases.” Id. at 680.
Although the first four factors are neutral, the judicial
economy

considerations

of

having

all

claims

determined

in

a

single lawsuit weighs heavily in favor of denying severance and
transfer.

Axis’s

claims

related

to

five

air

compressors

purchased in 2013 are the exact same as its claims related to
the other thirty-six purchased in 2014. Therefore, severance and
transfer would require the same issues to be litigated between
the same parties in two cases. 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

justify denial of the motion to transfer.
CONCLUSION
Accordingly,

16

of

the

parties

that

IT IS HEREBY ORDERED that Defendants’ Motion to Transfer
Pursuant to 28 U.S.C. § 1404 or Alternatively Motion to Dismiss
for Forum Non Convieniens [sic] (Rec. Doc. 15) is DENIED.
New Orleans, Louisiana this 30th day of September, 2015.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

17