Transport Systems, Inc. v. Amazon et al

Filing 19

ORDER granting defendant U.S. Express, Inc.'s Motion to Dismiss 11 Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TRANSPORT SYSTEMS, LLC,
Plaintiff,
CASE NO. 18-CV-11286
HON. GEORGE CARAM STEEH

v.
AMAZON and U.S. EXPRESS, INC.,
Defendants.
/

ORDER GRANTING DEFENDANT
U.S. EXPRESS, INC.’S MOTION TO DISMISS (Doc. 11)1
This diversity suit raises state law claims of breach of contract, claim
and delivery, conversion, and unjust enrichment arising out of an
agreement between Plaintiff Transport Systems, LLC (“Transport”) and
Defendant U.S. Express Inc. (“USX”). Amazon is also a named Defendant.
Now before the court is USX’s motion to enforce a forum-selection clause,
and to dismiss on that basis, pursuant to Federal Rule of Civil Procedure
12(b)(6). For the reasons set forth below, USX’s motion to enforce the
forum-selection clause and to dismiss shall be granted.

1

Although Defendant captions its motion as a motion for summary judgment, in its brief,
Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(6). Thus, the
court treats the motion as a motion to dismiss.
-1-

I. Background
Plaintiff is in the business of providing trucks and trailers for hire in
the trucking industry. Defendant USX is a broker licensed by the Federal
Motor Carrier Safety Administration. On October 17, 2017, Plaintiff and
Defendant USX agreed to a drop and hook shipment pursuant to a Load
Tender and Rate Agreement Sheet, which is attached to the Complaint as
Exhibit A. The Load Tender and Rate Agreement Sheet sets forth a
mandatory forum-selection clause:
This written Agreement contains the entire Agreement
between the parties and may only be modified by signed
written Agreement. If there is a signed Broker/Carrier
Agreement or signed accessorial Agreement in effect
between Broker and Carrier, any terms of such
Agreement that conflict with this Agreement shall take
precedence over this Agreement. Tennessee law,
venue and jurisdiction shall apply.
(Doc. 11-2 at PgID 86) (emphasis added).
On October 20, 2017, Plaintiff and USX entered into a general
Broker/Carrier Agreement which is attached to the Complaint as Exhibit B.
The agreement contemplated regular shipments. One such shipment was
on behalf of Defendant Amazon using Plaintiff’s 2016 Vanguard trailer
#4029. According to the Complaint, USX began using trailer #4029 for
other carriers without Plaintiff’s permission and that trailer is now missing.

-2-

Plaintiff filed suit in Wayne County Circuit Court, and Defendants removed
on the basis of diversity jurisdiction. Defendant USX now moves to enforce
the forum-selection clause and to dismiss.
I. Standard of Law
USX moves to dismiss under Federal Rule of Civil Procedure
12(b)(6). The first question for the court is whether Rule 12(b)(6) is the
appropriate method to seek enforcement of a forum-selection clause. In
Atlantic Marine Constr. Co., Inc. v. U.S. District Court for the W. Dist. Of
Texas, 571 U.S 49, 60 (2013), the Court held that the appropriate way to
enforce a forum-selection clause pointing to a state or foreign forum is
through the doctrine of forum non conveniens and held that such a motion
was not proper under Rule 12(b)(3) or 28 U.S.C. § 1406. The Supreme
Court did not reach the question, however, whether such a motion could be
brought under Rule 12(b)(6). Atlantic Marine, 571 U.S. at 61. Since
Atlantic Marine was decided, the Sixth Circuit has recognized that Rule
12(b)(6) remains a viable mechanism to enforce a forum-selection clause.
Smith v. Aegon Co. Pension Plan, 769 F.3d 922, 934 (6th Cir. 2014). Also,
in cases decided before Atlantic Marine, the Sixth Circuit suggested that
the proper mechanism for enforcing a forum-selection clause is a motion to
dismiss premised pursuant to Rule 12(b)(6) or a motion to dismiss for
-3-

forum non conveniens. See Wong v. PartyGaming Ltd., 589 F.3d 821,
824, 830 (6th Cir. 2009) (denying the defendants' Rule 12(b)(3) motion to
dismiss based on a forum-selection clause, and instead, dismissing the
action sua sponte on forum non conveniens grounds); Langley v.
Prudential Mortg. Capitol Co., 546 F.3d 365, 366 (6th Cir. 2008)
(remanding for consideration of whether forum-selection clause
enforceable as part of a motion to dismiss pursuant to Rule 12(b)(6));
Bracken v. DASCO Home Med. Equip., Inc., 954 F. Supp. 2d 686, 693-94
(E.D. Mich. 2013) (recognizing that Sixth Circuit permits motions to enforce
a forum-selection clause under Rule 16(b)(6) or forum non conveniens
grounds).2
Since Atlantic Marine was decided, district courts in the Sixth Circuit
have considered motions to enforce a forum-selection clause under both
Rule 12(b)(6) and under the doctrine of forum non conveniens. See
Branch v. Mays, 265 F. Supp. 3d 801, 807 (E.D. Tenn. 2017) (applying
forum non conveniens analysis sua sponte even though defendant moved
to dismiss under Rule 12(b)(6)); Ingenium Tech. Corp. v. Beaver

2

See also Security Watch, Inc. v. Sentinel Sys., Inc., 176 F.3d 369, 371, 374-76 (6th
Cir. 1999) (affirming district court’s dismissal pursuant to an unspecified subsection of
Federal Rule of Civil Procedure 12(b) to enforce a forum-selection clause).
-4-

Aerospace & Defense, Inc., 122 F. Supp. 3d 683, 689 (E.D. Mich. 2015)
(applying forum non conveniens standard); Kelly v. Liberty Life Assurance
Co. of Boston, No. 17-139-DLB, 2018 WL 558643, at *3 (E.D. Ky. Jan. 25,
2018) (recognizing Rule 12(b)(6) remains permitted, but not required,
procedural mechanism to enforce a forum-selection clause). Given the
uncertainty in the law as to whether dismissal under Rule 12(b)(6) is the
proper mechanism to enforce a forum-selection clause calling for bringing
suit in a state forum, or whether the court should analyze such a claim
under the doctrine of forum non conveniens, the court shall undertake both
analyses here. In doing so, the court notes that Plaintiff has addressed the
doctrine of forum non conveniens in its opposition brief, but USX denies
that doctrine is relevant to the court’s consideration. Because the court is
ruling in USX’s favor, there is no prejudice to USX for not moving to
dismiss on the grounds of forum non conveniens.
“On a motion pursuant to Rule 12(b)(6), the court only needs to
determine whether the forum selection clause is enforceable and
applicable; if it is, then the suit should be dismissed.” Bracken, 954 F.
Supp. 2d at 694. Here, the parties have not submitted any evidence
outside the pleadings regarding the convenience of the forum; thus, it is
appropriate to conduct review pursuant to Rule 12(b)(6). Here, the forum-5-

selection clause is set forth in the Load and Tender Rate Agreement which
is attached as Exhibit A to Plaintiff’s Complaint. Thus, it is appropriate for
the court to consider it in the context of USX’s motion to enforce the forumselection clause and to dismiss this action.
II. Analysis
Plaintiff opposes USX’s motion to dismiss for two reasons: (1) the
forum-selection clause is allegedly permissive, not mandatory, and thus
unenforceable; and (2) Tennessee is an inconvenient forum. Plaintiff’s
arguments are insufficient to overcome the presumption in favor of
enforcement of a forum-selection clause.
A.

Forum-Selection Clause is Mandatory

First, the forum-selection clause: “Tennessee law, venue and
jurisdiction shall apply” is mandatory. Courts have found that the use of the
term “shall,” as opposed to discretionary terms like “may” or “should,” when
used in forum-selection clauses make the requirement of a certain forum
mandatory, not permissive. See Gen. Elec. Co. v. G. Siempelkamp GmbH
& Co., 29 F.3d 1095, 1099 (6th Cir. 1994) (“Because the clause states that
“all” disputes “shall” be at [Defendant’s] principal place of business, it
selects German court jurisdiction exclusively and is mandatory”); Florida St.
Bd. of Admin. v. Law Eng’g & Env. Serv., Inc., 262 F. Supp. 2d 1004, 1009
-6-

(D. Minn. 2003) (“Generally, courts have found that use of the words ‘may’
and ‘should’ signify permissive clauses, while use of the words ‘shall,’ ‘will,’
or ‘must’ signify mandatory clauses”).
B.

Validity and Enforceability of Forum-Selection Clause

Having found that the forum-selection clause is mandatory, the court
next turns to the question of whether it is enforceable. The “enforcement of
valid forum-selection clauses, bargained for by the parties, protects their
legitimate expectations and furthers vital interests of the justice system.”
Atlantic Marine, 571 U.S. at 63. (internal quotation marks and citation
omitted). As a result, “a valid forum-selection clause [should be] given
controlling weight in all but the most exceptional cases.” Id. Such clauses
are “prima facie valid” and “should be upheld absent a strong showing that
[they] should be set aside.” M/S Bremen v. Zapata Off-Shore Co., 407
U.S. 1, 10 (1972).
In a diversity suit like this one, “the enforceability of the forum
selection clause is governed by federal law.” Wong, 589 F.3d at 828. The
Sixth Circuit has established a three-part test for determining whether a
forum-selection clause is enforceable. The court considers the following
factors: “(1) whether the clause was obtained by fraud, duress, or other
unconscionable means; (2) whether the designated forum would
-7-

ineffectively or unfairly handle the suit; and (3) whether the designated
forum would be so seriously inconvenient such that requiring the plaintiff to
bring suit there would be unjust.” Id. Also, it is presumed that the clause is
enforceable, and “the party opposing the forum-selection clause bears the
burden of showing that the clause should not be enforced.” Id.
Consideration of all three factors supports the conclusion that the
forum-selection clause here should be enforced. Plaintiff does not
challenge enforcement of the forum-selection clause based on the first two
factors. Indeed, there is no allegation that the clause was obtained by
fraud, duress, or other unconscionable means. In fact, the agreement was
reached by two sophisticated business entities. Also, Plaintiff does not
argue that Tennessee federal or state courts would ineffectively or unfairly
handle the suit. In fact, they are well equipped to handle this suit which is
governed by Tennessee law.
Plaintiff relies solely on the third factor and argues that Tennessee is
an inconvenient forum because Plaintiff is a local, solely owned motor
carrier; all of the routes run for USX, including the relevant route in this
case, were run in Michigan; Plaintiff’s books and records are in Michigan;
and the witnesses are located in Michigan. Plaintiff also points to the fact
that USX has greater resources than Plaintiff, does business in Michigan,
-8-

and has counsel located in Michigan as factors suggesting that Michigan
would not be an inconvenient forum for USX.
Plaintiff has not met the third factor either. The Sixth Circuit has held
that in order to satisfy the third factor, “the plaintiff must show that
enforcement of the clause would be so inconvenient such that its
enforcement would be unjust or unreasonable.” Wong, 589 F.3d at 829.
This is a heavy burden that is not met by showing mere inconvenience. Id.
In Wong, plaintiffs were Ohio consumers, not sophisticated business
entities, who sought to avoid enforcement of a forum-selection clause set
forth in a non-negotiated consumer contract requiring any suit to be filed in
Gibraltar. Id. Plaintiffs argued enforcement of the clause would be
unreasonable because they were not entitled to a jury trial in Gibraltar, nor
could they bring class action claims there. Id. at 829. The Sixth Circuit
affirmed the district court’s decision that the forum-selection clause was
enforceable, finding that even requiring plaintiffs to litigate in a foreign
country without the benefits afforded in the United States legal system
would not be so inconvenient as to render it unjust or unreasonable. Id.
District courts have found that parties opposing enforcement of
forum-selection clauses have failed to show that the chosen jurisdiction is
inconvenient in circumstances similar to those presented here. See, e.g.,
-9-

United American Healthcare Corp. v. Backs, 997 F. Supp. 2d 741, 747-48
(E.D. Mich. 2014) (rejecting argument Michigan inconvenient forum even
where party opposing enforcement of forum-selection clause had never
been to Michigan, the sale of stock took place in California, all documents
and witnesses were in California, and party seeking to enforce clause no
longer headquartered in Michigan); Ferris & Salter P.C. v. Thomson
Reuters Corp., 819 F. Supp. 2d 667, 668, 671-72 (E.D. Mich. 2011)
(enforcing forum-selection clause in which Canadian corporation with
principal place of business in New York and Michigan law firm agreed to
resolve disputes in Minnesota). Based on the above discussion, Plaintiff
has not overcome the presumption that the forum-selection clause should
control. Thus, the clause is enforceable.
C.

Forum Non Conveniens Analysis

The court now considers whether the forum-selection clause should
be enforced via the forum non conveniens doctrine. Under that doctrine,
the district court weighs several factors, but the analysis is markedly
different when a forum-selection clause is in play. In a case in which there
is no forum-selection clause, the Sixth Circuit has held that the district court
must establish an adequate alternative forum, must weigh the relevant
public and private interests, and give deference to the plaintiff’s choice of
- 10 -

home forum. Wong, 589 F.3d at 830. However, where a forum-selection
clause is present, the forum non conveniens analysis changes in several
important respects, two of which are germane here: (1) the plaintiff’s choice
of forum merits little weight, and (2) the court must not consider the parties’
private interests but deems those interests to weigh entirely in favor of the
preselected forum. Atlantic Marine, 571 U.S. at 63.
Under the above factors, the court finds that enforcement of the
forum-selection clause here is appropriate. There is no dispute that
Tennessee courts are an adequate alternative forum. Indeed, they are in a
better position than this court to adjudicate the present dispute which sets
forth state law claims only, as the parties’ agreement contains a choice-oflaw provision which calls for the application of Tennessee law. There is no
dispute that Plaintiff is amenable to process in Tennessee as Plaintiff
consented to submit itself to the jurisdiction of Tennessee with the forumselection clause. Wong, 589 F.3d at 831. Also, as the Atlantic Marine
Court instructs, the court gives little weight to Plaintiff’s choice of forum,
571 U.S. at 63, or to its private interests as Plaintiff contractually agreed to
litigate in Tennessee, and thus, any inconvenience was clearly foreseeable
at the time of contracting. 571 U.S. at 64.

- 11 -

This leaves for the court to consider only the public interest factors
impacted by the forum-selection clause. The Supreme Court has
recognized that inquiry involves analysis of the following factors: “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. The
Court must also give some weight to the plaintiffs' choice of forum.” Id. at
62 n.6 (internal quotation marks and citation omitted)). The Sixth Circuit
has also identified as additional factors avoidance of conflict-of-law
problems or application of foreign law, and unfairness in burdening local
citizens with jury duty. Wong, 589 F.3d at 832.
Consideration of these factors weighs in favor of adjudication in
Tennessee. There has been no suggestion of court congestion in
Tennessee courts. There is no compelling local interest in having a breach
of contract case decided in Michigan as the parties, two sophisticated
business entities, agreed to try any dispute in Tennessee. Although the
court gives some weight to Plaintiff’s choice of forum, that weight is
overcome by the public’s interest in having a forum that is at home with the
law. As Tennessee law governs the instant dispute, the public interest is
served by having the matter litigated in Tennessee. A choice-of-law
- 12 -

provision will usually be given effect unless it would be contrary to a
fundamental policy of a state with a materially greater interest in the issue.
Wong, 589 F.3d at 832. There has been no suggestion that Michigan has
a fundamental policy with a materially greater interest in a garden variety
breach of contract action. Also, there are no conflict-of-law problems to
consider, nor any possibility of the application of foreign law. Finally,
Plaintiff argues that this is a straight forward collection case, and thus, this
court has a strong interest in presiding over matters concerning persons
and entities domiciled in this district. Plaintiff’s argument is insufficient to
overcome the Supreme Court’s admonition that “a valid forum-selection
clause should control except in unusual cases.” Atlantic Marine, 571 U.S.
at 582.
Plaintiff relies on a number of cases, (Doc. 16 at PgID 141-42),
including Servo Kinetic’s, Inc. v. Tokyo Precision Instruments Co., Ltd., 352
F. Supp. 2d 787 (E.D. Mich. 2004), for the proposition that dismissal is not
warranted under the doctrine of forum non conveniens based on deference
owed to Plaintiff’s choice of forum, and a careful weighing of public and
private interests. Those cases are not persuasive as they do not involve
forum-selection clauses which change the calculus for analysis under the

- 13 -

forum non conveniens doctrine by affording little weight to the plaintiff’s
choice of forum or private interests. Atlantic Marine, 571 U.S. at 63.
IV. Conclusion
Having found that the forum-selection clause is enforceable and that
dismissal is warranted under Rule 12(b)(6) and the doctrine of forum non
conveniens, USX’s motion to dismiss (Doc. 11) is GRANTED.
IT IS SO ORDERED.
Dated: October 16, 2018
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
October 16, 2018, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

- 14 -