Power Products Sales and Service, Inc. v. Hydratight, Inc.

Filing 20

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: For the forgoing reasons, the motion of defendant Hydratight to transfer venue to the Eastern District of Wisconsin (Docket Entry No. 11 ) is ALLOWED. (Vieira, Leonardo)

United States District Court
District of Massachusetts
Power Products Sales and
Service, Inc.,
Plaintiff,
v.
Hydratight, Inc.,
Defendant.

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Civil Action No.
19-11502-NMG

MEMORANDUM & ORDER
GORTON, J.
This case involves a dispute between manufacturer
Hydratight, Inc. (“Hydratight” or “defendant”) and one of its
sales representatives, Power Product Sales and Service, Inc.
(“Power Products” or “plaintiff”).
Pending before the Court is the motion of Hydratight to
transfer the action to the United States District Court for the
Eastern District of Wisconsin pursuant to 28 U.S.C. § 1404(a)
(Docket Entry No. 11).
I.

Background
Hydratight, a Delaware corporation with its principal place

of business in Deer Park, Texas, manufactures industrial tools
used in several industries such as the maritime, nuclear power,
oil and gas, power generation, pulp and paper and refinery
industries.

Hydratight is a wholly owned subsidiary of Actuant
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Corporation which is headquartered in Wisconsin.

Power Products

is a Massachusetts corporation with its principal place of
business in Walpole, Massachusetts.
Since 1995, Power Products has been a sales representative
of Hydratight in the New England states and the Maritime
Provinces of Canada (collectively, “the Territory”).

In June,

2008, Power Products and Hydratight entered into a Sales
Representative Agreement (“the Agreement”) under which Power
Products is responsible for “solicit[ing] and promot[ing] the
sale of” certain Hydratight products within the Territory.

In

consideration, Hydratight pays Power Products commissions.
Section 22 of the Agreement constitutes the following forum
selection clause
The federal and state courts situated in Wisconsin
shall determine any claims, disputes, actions or suits
which may arise under or with respect to this
Agreement or the purchase and sale of Products, and
each party hereby voluntarily submits to the personal
jurisdiction of such courts for such purposes.
Power Products filed a complaint against Hydratight in
Massachusetts Superior Court in June, 2019.

Plaintiff avers

that defendant has “engaged in a surreptitious campaign” to push
Power Products out of the Territory by moving to a direct sales
model in some parts of the Territory and dealing with a
competitor in other parts.

Power Products further alleges that

Hydratight terminated a line of credit previously extended which

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“effectively prohibit[ed] Power Product[s] from engaging in any
sales activity on Hydratight’s behalf.”

Hydratight removed the

action to this Court in July, 2019.
Plaintiff specifically asserts six counts: breach of
contract (Count I); breach of the implied covenant of good faith
and fair dealing (Count II); unjust enrichment (Count III);
tortious interference with contractual relations (Count IV);
unfair and deceptive practices in violation Mass. Gen. Laws
c. 93A, § 11 (Count V); and failure to pay commissions in
violation of the Massachusetts Sales Representative Act, Mass.
Gen. Laws c. 104, § 9 (Count VI).
II.

Motion to Transfer

A. Legal Standard
The appropriate procedure to enforce a forum selection
clause in a contract is to file a motion to transfer under 28
U.S.C. § 1404(a). Atl. Marine Constr. Co. v. U.S. Dist. Court
for W. Dist. of Tex., 571 U.S. 49, 58-59 (2013).

Under

§ 1404(a), a district court may transfer a civil action to any
other district where it might have been brought “[f]or the
convenience of parties and witnesses, in the interest of
justice.” 28 U.S.C. § 1404(a).
In Atlantic Marine Construction Co., the United States
Supreme Court held that when a defendant files a motion to

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transfer pursuant to a forum selection clause a district court
should transfer the case unless
extraordinary circumstances unrelated to the
convenience of the parties clearly disfavor a transfer.
571 U.S. at 52.
When interpreting a forum selection clause, the
threshold question is “whether the clause at issue is
permissive or mandatory.” Claudio-De Leon v. Sistema
Universitario Ana G. Mendez, 775 F.3d 41, 46 (1st Cir.
2014).

The First Circuit Court of Appeals has found words

such as “shall” or “will be submitted to”, carry a
“mandatory sense” and demonstrate the parties’ exclusive
commitment to the named fora. Barletta Heavy Div., Inc. v.
Erie Interstate Contractors, Inc., 677 F. Supp. 2d 373, 376
(D. Mass. 2009) (citing Summit Packaging Sys., Inc. v.
Kenyon & Kenyon, 273 F.3d 9, 12 (1st Cir. 2001)).
Once it is determined that a forum selection clause is
mandatory, courts next ascertain the scope of the clause which
is a “clause-specific analysis.” Claudio-De Leon, 775 F.3d at
47.

A mandatory forum selection clause that encompasses the

dispute between the parties carries a “strong presumption of
enforceability”. Rivera v. Centro Medico de Turabo, Inc., 575
F.3d 10, 18 (1st Cir. 2009).

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Indeed, a valid forum selection clause is to be enforced in
all but the most exceptional cases. Atl. Marine Constr. Co., 571
U.S. at 63.

Accordingly, the plaintiff’s choice of forum in

this case “merits no weight” and the Court need not consider
arguments about the parties’ private interests because they are
subordinate to a valid forum selection clause. See id. at 64.
In deciding whether to transfer a case based on a mandatory
forum selection clause, the district court should consider only
the public-interest factors which will rarely defeat a motion to
transfer. Id.

Those factors include

the administrative difficulties flowing from court
congestion; the local interest in having localized
controversies decided at home; [and] the interest in
having the trial of a diversity case in a forum that
is at home with the law.
Id. at 62 n.6 (quoting Piper Aircraft Co. v. Reyno, 454 U.S.
235, 241 n.6 (1981)).

The burden of showing that the public-

interest factors overwhelmingly disfavor the requested transfer
rests on the nonmoving party. See id. at 67.
Finally, when a plaintiff who is contractually obligated to
file suit in a specific forum flouts that duty, a transfer of
venue under § 1404(a) “will not carry with it the original
venue's choice-of-law rules”. Id. at 64-65.
B. Application
Power Products does not contest that the Agreement is valid
and enforceable nor that the forum selection clause is mandatory
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and applicable to the current dispute between the parties.
Rather, plaintiff argues that the forum selection clause is
unenforceable because 1) it is against public policy, 2) it is
unreasonable and unjust and 3) its application is precluded by
the doctrine of forum non conveniens.
As an initial matter, the Court independently concludes
that the forum selection clause contains mandatory language
requiring any claim “which may arise under or with respect to”
the Agreement to be brought in the federal or state courts in
Wisconsin and that the forum selection clause sweeps broadly
enough to encompass the current dispute.
Power Products asserts that enforcing the forum selection
clause is against Massachusetts public policy because
enforcement would deprive it of the strong protections afforded
to Massachusetts businesses under Massachusetts law.

That

argument, however, contravenes established law that a forum
selection clause is generally respected
even if the forum state would substitute its own
remedy, so long as the chosen forum will itself provide
an adequate remedy.
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 16 (1972).
Indeed, Massachusetts courts regularly enforce forum selection
clauses against Massachusetts businesses. See e.g., Kebb
Management, Inc. v. Home Depot U.S.A., Inc., 59 F. Supp. 3d 283,
288 (D. Mass. 2014).

The mere fact that plaintiff views
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Massachusetts law as favorable to its position is insufficient
to demonstrate that enforcement of the forum selection clause is
against public policy. See Huffington v. T.C. Group, LLC, 637
F.3d 18, 25 (1st Cir. 2011).
As to Power Products’ second argument, to prove that
enforcement of the forum selection clause would be unreasonable
or unjust, it must demonstrate that such enforcement would be
“seriously inconvenient” or effectively “deprive[] [the
plaintiff] of [its] day in court.” M/S Bremen, 407 U.S. at 17;
Barletta Heavy Div., Inc., 677 F. Supp. 3d at 376.

Serious

inconvenience may be established by demonstrating that the
selected forum is “alien” to all parties and “largely
unconnected with the contractual relations at issue in the
case.” See Lambert v. Kystar, 983 F.2d 1110, 1120 (1st Cir.
1993).

A claim of serious inconvenience should be given little

weight, however, where it can be shown with “reasonable
assurance” that the parties to a freely negotiated contract
could have contemplated the claimed inconvenience at the time of
contracting. See M/S Bremen, 407 U.S. at 17-18.
Plaintiff argues that Wisconsin is “alien” to all parties
and largely disconnected with the contractual relations at issue
because no witnesses reside (and no relevant evidence exists) in
Wisconsin.

Power Products does not claim, however, that it

would be effectively deprived of its day in court if forced to
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litigate in Wisconsin.

Nor does it explain why the claimed

unreasonableness of litigating in Wisconsin was not contemplated
at the time of contracting.

The Agreement reflects a 24-year

collaboration to sell industrial products in the Territory.
This was not a contract of adhesion between parties of unequal
bargaining power.

Both parties are sophisticated business

entities operating in a specialized industrial field.
Accordingly, plaintiff has failed to establish that the forum
selection clause is unreasonable or unjust.
Finally, Power Products’ third argument that the doctrine
of forum non conveniens precludes the application of the forum
selection clause is unavailing.

It misconstrues the

relationship between forum non conveniens and § 1404(a).

A

determination of whether to transfer a case under either forum
non conveniens or § 1404(a) “entail[s] the same balancing-ofinterests standard.” Atl. Marine Constr. Co., 571 U.S. at 60.
Section 1404(a) is merely the codification of the doctrine of
forum non conveniens for cases in which the transferee forum is
another federal court as opposed to a state or foreign court.
Id.

Consequently, Power Products’ argument against transfer

under forum non conveniens fails for the same reason its
argument against transfer under § 1404(a) fails.

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ORDER
For the forgoing reasons, the motion of defendant
Hydratight to transfer venue to the Eastern District of
Wisconsin (Docket Entry No. 11) is ALLOWED.

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated October 9, 2019

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