Home Source Industries, LLC v. Freightquote.com, LLC et al

Filing 27

OPINION fld. Signed by Judge Stanley R. Chesler on 11/19/14. (sr, ) [Transferred from njd on 11/20/2014.]

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
:
:
:
:
:
:
:
:
:
:
:

HOME SOURCE INDUSTRIES, LLC,
Plaintiff,
v.
FREIGHTQUOTE.COM, INC.,
Defendant.

Civil Action No. 14-2001 (SRC)

OPINION

CHESLER, District Judge
This matter comes before the Court upon the motion filed by Defendant
Freighquote.com, Inc. (“Defendant” or “Freightquote”) to transfer venue pursuant to 28 U.S.C. §
1404(a). Plaintiff Home Source Industries, LLC (“Plaintiff” or “Home Source”) has opposed the
motion. The Court has considered the papers filed by the parties and proceeds to rule on the
motion without oral argument, pursuant to Federal Rule of Civil Procedure 78. For the reasons
discussed below, the Court will deny Defendant’s motion.

I.

BACKGROUND
This action arises out of the alleged failure by Defendant to make a timely delivery of

goods shipped by Plaintiff for a trade show in Las Vegas, Nevada. In or about August 2012,
Plaintiff, a wholesale distributor of home goods, enrolled as a customer of Freightquote, a
company engaged in the business of brokering shipping services for its clients using motor
1

carriers with which Freightquote contracts. The shipment order at issue was placed by Home
Source employee Rupinder Singh on March 6, 2014. He emailed Freightquote to request a quote
for shipping furniture to a trade show booth in Las Vegas, expressing the requirement that the
goods be delivered by March 13, 2014. In a series of emails traded between Freightquote and
Singh, Freightquote provided a price, Singh responded by directing the pick-up to be scheduled
and Freightquote acknowledged receipt of the order as well as assured Singh that delivery would
be made by the March 13 deadline. Freightquote sent a confirming email, which included details
of the order placed, a hyperlink to the “Terms and Conditions” of the transaction and a link to the
corresponding bill of lading for Home Source to print out and hand to the carrier when the
shipment was picked up. The shipment at issue was picked up from Home Source’s East
Rutherford, New Jersey warehouse on March 7, 2014. However, according to the Complaint,
Freightquote informed Home Source on March 13, 2014 that the shipment would not arrive at
the trade show by the required delivery date of March 13, 2014.
Home Source filed this action on March 31, 2014, asserting claims for breach of contract,
violation of the implied duty of good faith and negligent misrepresentation. The Court has
jurisdiction over this action pursuant to 28 U.S.C. § 1332(a).

II.

DISCUSSION
Freightquote moves to transfer this action to the Western District of Missouri pursuant to

28 U.S.C. § 1404(a). That provision states: “For the convenience of parties and witnesses, in 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). To transfer an action under § 1404(a), venue must be proper
2

both in the transferor court and the transferee court. Osteotech, Inc. v. GenSci Regeneration
Scis., Inc., 6 F. Supp. 2d 349, 357 (D.N.J.1998). The party seeking to transfer must show that the
alternative venue is not only adequate, but also more convenient than the current one. Jumara v.
State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir.1995); Ricoh Co., Ltd. v. Honeywell, Inc., 817 F.
Supp. 473, 480 (D.N.J.1993). The Third Circuit has held that “[s]ection 1404(a) transfers are
discretionary determinations made for the convenience of the parties and presuppose that the
court has jurisdiction and that the case has been brought in the correct forum.” Lafferty v. St.
Riel, 495 F.3d 72, 76–77 (3d Cir. 2007).
Freightquote’s motion to transfer venue properly falls within the purview of § 1404(a), as
both the District of New Jersey and the proposed transferee district would serve as proper venues
for this action. The statute governing venue, 28 U.S.C. § 1391, provides that a civil action may
be brought in “a judicial district in which any defendant resides, if all defendants are residents of
the State in which the district is located.” 28 U.S.C. § 1391(b)(1). The only Defendant named in
this lawsuit, Freightquote, is headquartered in Kansas City, Missouri, making the federal district
courts of the State of Missouri an appropriate venue for this action. The statute also provides
that a civil action may be brought in “a judicial district in which a substantial part of the events
or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2). In this case, a
substantial part of the events giving rise to this suit occurred in the District of New Jersey. Home
Source entered into an agreement from its New Jersey place of business for the shipment of its
goods from its New Jersey warehouse, and as part of the alleged breach of that agreement,
Freightquote in fact arranged for the goods to be picked up from the New Jersey warehouse.
To determine whether, in its discretion, the Court should order a transfer of the action
pursuant to § 1404(a), it must balance various private and public interests. Jumara, 55 F.3d at
3

879. In Jumara, the Third Circuit provided a list of factors a district court should consider. The
private interest factors are: (1) plaintiff’s forum preference as manifested in the original choice;
(2) the defendant’s preference; (3) whether the claim arose elsewhere; (4) the convenience of the
parties as indicated by their relative physical and financial condition; (5) the convenience of the
witnesses (only to the extent that the witnesses may actually be unavailable for trial in one of the
fora; and (6) the location of books and records (only to the extent that the files could not be
produced in the alternative forum). Id. The public interest factors are: (1) the enforceability of
the judgment; (2) practical considerations that could make the trial easy, expeditious, or
inexpensive; (3) the relative administrative difficulty in the two fora resulting from court
congestion; (4) the local interest in deciding local controversies at home; (5) the public policies
of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity
cases. Id. at 879-80.
Freightquote’s motion relies heavily on a forum selection clause set forth in the Terms
and Conditions. Section 5 of the Terms and Conditions, titled “Forum Selection and Choice of
Law,” provides as follows:
Any claim, dispute or litigation relating to these TERMS AND
CONDITIONS, any shipment scheduled or tendered hereunder or through
the Company’s website, or relating to any and all disputes between the
Company and the enrolled Customer, Shipper and/or Consignee, shall be
filed in the Circuit Court of Jackson County, Missouri or in the United
States District Court for the Western District of Missouri, Western
Division and shall be subject to Missouri law. Customer hereby
irrevocably consents and submits themselves to the personal jurisdiction
of said courts for all such purposes.
(Brown Aff. Ex. 4.) The Terms and Conditions further provide that
the enrolled Customer, Shipper and/or Consignee (hereinafter collectively
referred to as “Customer”) agrees to these TERMS AND CONDITIONS
which no agent or employee of the parties may alter. These TERMS AND
4

CONDITIONS shall apply to all shipments scheduled by Customer, unless
and until these TERMS AND CONDITIONS are altered or amended by
the Company.
(Id.)
Freightquote argues that, prior to placing the subject order, Plaintiff was on notice of, and
had access to, Defendant’s “Terms and Conditions,” and therefore agreed to those terms by
virtue of placing the subject order. It notes that not only was a hyperlink to the Terms and
Conditions containing the forum selection clause included in the March 6, 2014 email
confirming Home Source’s order relating to the subject transaction, but also included in each of
the confirming emails relating to the previous ten times shipment orders had been placed by
Home Source. Moreover, Freightquote points out, the Terms and Conditions, containing the
quoted forum selection clause, were also accessible via a hyperlink included in the August 9,
2012 email which confirmed activation of Home Source’s account with Freightquote.
Home Source, in response, argues that the forum selection clause is not binding and does
not govern the subject transaction because Home Source never agreed to such a term. It asserts
that, while the a link to “Terms and Conditions” was included in various emails, including the
enrollment email, the emails did not direct Home Source to click on a link to assent to the terms
as part of the bargain of doing business with Freightquote or otherwise express its assent to those
terms in some other fashion. It further asserts that “at no point in time did anyone at Home
Source ever click on – let alone agree to, a ‘Terms and Conditions’ link found in any website
owned by the defendant.” (Evar Decl., ¶ 2.) Moreover, Plaintiff argues, it is not even clear
whether the Terms and Conditions on which Defendant relies would have even been accessible
to Plaintiff through those links, had Plaintiff in fact attempted to access the information. It is
undisputed that each bill of lading corresponding to the various shipment orders placed with
5

Freightquote, including the subject order, stated that “Customer agrees to the organization’s
terms and conditions, which can be found at www.freightpaymentcent.com,” but it is also
undisputed that that particular website had been devoid of content since July 2013, months
before Home Source placed its first order with Freightquote. Home Source maintains that
Defendant has failed to demonstrate that this transaction is governed by a binding forum
selection clause because (1) the Terms and Conditions in which the clause is set forth were not
mutually agreed to but rather unilaterally presented as a link in an email sent after an order was
actually placed, i.e., after a shipment agreement was entered into between Home Source and
Freightquote and (2) there is no indication that the link would have taken Home Source to a site
containing the relevant clause.
As a threshold matter in the Court’s venue analysis according to the relevant private and
public interest factors, the Court must resolve the issue of whether Defendant, as the party
seeking to transfer this action, has demonstrated that the forum selection clause is a valid part of
the agreement pertaining to the shipment at issue. In a federal case grounded in diversity
jurisdiction, such as the case at bar, it is federal law – and particularly § 1404(a) – which governs
the district court’s enforcement of the forum selection clause in deciding whether to transfer
venue. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32 (1988). The Supreme Court has held
that in determining whether transfer of venue is proper, “[t]he calculus changes . . . when the
parties’ contract contains a valid forum-selection clause, which represents the parties’ agreement
as to the most proper forum.” Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of
Texas, 134 S. Ct. 568, 581 (2013) (citing Stewart, 487 U.S. at 31). The Supreme Court reasoned
that when the parties have agreed to a valid forum selection clause:

6

a district court may consider arguments about public-interest factors only. Because those
factors will rarely defeat a transfer motion, the practical result is that forum-selection
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.
Id. at 582 (internal citation and quotation marks omitted).
The Court concludes that Defendant has indeed demonstrated that the forum selection
clause applies to the transaction at issue. The Court so finds based on the enrollment email sent
to Home Source on August 9, 2012, confirming that Home Source had opened an account for
purchasing shipment services offered by Freightquote. That document directs the recipient to
“view our terms & conditions,” with “terms & conditions” underlined in the email to signal that
it is a hyperlink to additional pages. Though the terms of doing business are not set forth in the
email itself, the additional content is clearly identified in the email, such that the recipient cannot
claim surprise or hardship in ascertaining the terms. The terms and conditions are thus
incorporated by reference into the agreement between the parties for the purchase and sale of
shipment services. Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440, 447 (3d Cir.
2003).
Plaintiff protests that this clause is not enforceable because no agreement containing the
clause was executed. It argues that the enrollment email did not prompt Home Source to “click
through” the terms and conditions link, nor did Home Source ever affirmatively express its
acceptance of those terms. In Home Source’s words, it “was never required to agree to such
terms” and “there is no signed agreement and no ‘click through’ agreement regarding the
deliveries.” (Sur-Reply at 5-6.) This argument is belied by the content of the terms and
conditions and Home Source’s conduct, that is, its decision to do business with Freightquote
following receipt of the enrollment email. As quoted above, the “terms and conditions”
7

document expressly provides that those terms, which include the forum selection clause on
which Defendant relies, “shall apply to all shipments scheduled by Customer,” in this case,
shipments scheduled by Home Source. Home Source’s assent to the forum selection clause is
evidenced by its order of shipment services. The forum selection clause applies, therefore, to
each purchase and sale transaction entered into between Freightquote and Home Source pursuant
to the account opened by Home Source, including, the shipment transaction that is the subject of
this lawsuit.
Having entered into an agreement with Freightquote for the shipment at issue, the burden
falls on Home Source to demonstrate that the forum selection clause contained in that agreement
is invalid. It is well established that forum selection clauses are “prima facie valid and should be
enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the
circumstances.” The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972); see also Coastal
Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 203 (3d Cir. 1983), cert. denied, 464
U.S. 938 (1983), overruled on other grounds by Lauro Lines S.R.L. v. Chasser, 490 U.S. 495
(1989) (holding same). Forum selection clauses are routinely upheld, even in situations
involving adhesion contracts, unequal bargaining power, and the absence of negotiations over the
clause. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 594–95 (1991) (holding that
forum selection clause on back of cruise ticket was enforceable despite lack of bargaining over
the terms of the clause). To defeat enforcement, the objecting party must make a strong showing
“(1) that it [the forum selection clause] is the result of fraud or overreaching, (2) that
enforcement would violate a strong public policy of the forum, or (3) that enforcement would in
the particular circumstances of the case result in litigation in a jurisdiction so seriously

8

inconvenient as to be unreasonable.” Coastal Steel Corp., 709 F.2d at 203. Plaintiff raises none
of these grounds for challenging the validity of the forum selection clause.
Instead, Plaintiff argues that the forum selection clause should not be enforced because
no one at Home Source clicked on the enrollment email’s hyperlink to access the pages
containing the terms and conditions nor was Home Source required to read them. This argument
is unavailing. It is the equivalent of arguing that the terms of purchasing services from
Freightquote should not apply to Home Source, or more particularly, to the shipment scheduled
by Home Source on March 6, 2014 – i.e., the subject of this litigation – because Home Source
failed to read through the entire document. A failure to read the terms and conditions, and
specifically, the forum selection clause, does not render the forum selection clause invalid or
diminish its force and effect as to each shipment scheduled by Home Source. Standard Bent
Glass, 584 F.3d at 447-48; see also Park Inn Int’l, LLC v. Mody Enters., Inc., 105 F. Supp. 2d
370, 374-75 (D.N.J. 2000) (holding that a party’s failure to read a contract it has entered into or
ignorance of its obligation will not excuse performance or invalidate a forum selection clause).
Indeed, it is hornbook law that failure “to read a contract does not excuse performance unless
fraud or misconduct by the other party prevented one from reading.” Toll Bros., Inc. v. Fields,
2011 WL 463090, at *3 (D.N.J. Feb. 4, 2011) (quoting Young v. Prudential Ins. Co. of Am., 297
N.J. Super. 605, 619 (App. Div. 1997). The commercial relationship between Plaintiff and
Defendant was established through electronic documents, rather than the traditional paper
format, but this does not excuse Home Source from its obligation to read the clearly identified
terms and conditions. Moreover, there is no indication that it was prevented from doing so by
any fraud or misconduct on the part of Freightquote. See, e.g., Park Inn Int’l, 105 F. Supp. 2d at
374 (“Failure to explain the terms of an agreement does not constitute fraud, overreaching or
9

unconscionability so as to void a forum selection clause.”) In this regard, Home Source has
argued that it should not be bound by the forum selection clause because clicking on the terms
and conditions hyperlink may have accessed a web page with no content, in light of
Freightquote’s undisputed failure to maintain an operational website beginning in July 2013.
This assertion implies that Freightquote did not actually make the terms and conditions available,
or otherwise prevented Home Source from reading them, but it amounts to speculation. The
record does not even suggest that the website or any links were disabled in August 2012 when
Home Source signed up as a Freightquote customer and received the enrollment email.
Pursuant to Atlantic Marine, the valid forum selection clause operates as a waiver of
Plaintiff’s right to challenge the federal or state courts of Missouri as an inconvenient venue.
Atl. Marine Const. Co., 134 S. Ct. at 582. This Court “must deem the private-interest factors to
weigh entirely in favor of the preselected forum.” Id. In light of the valid forum selection clause
applicable to this breach of contract action, the Court must conclude that the parties’ private
interests support transfer of this action to the Western District of Missouri.
This balance is maintained by the public interest factors bearing on the question of the
more convenient venue to litigate this action. An analysis of those public factors, as set forth by
the Third Circuit’s opinion in Jumara, demonstrates that they are overall neutral between the
competing fora of the District of New Jersey and the Western District of Missouri. The sixth
public interest factor, the familiarity of the trial judge with applicable law, if anything provides
additional support for transfer of this action. Assuming that the choice of law clause in the
Terms and Conditions is enforced, Plaintiff’s claims will be governed by the law of the State of
Missouri. Presumably, a federal district court judge sitting in the Western District of Missouri
would have greater familiarity with that state’s law than a judge sitting in New Jersey.
10

In sum, based on the forum selection clause and the public Jumara factors, this Court
concludes, in its discretion, that a transfer of this action to the Western District of Missouri
would promote the convenience of the parties and serve the interests of justice. Freightquote has
demonstrated that a transfer pursuant to 28 U.S.C. § 1404(a) is warranted.

III.

CONCLUSION
For the foregoing reasons, the Court will grant Freightquote’s motion to transfer venue.

This action will be transferred, pursuant to § 1404(a), to the United States District Court for the
Western District of Missouri. An appropriate Order with be filed together with this Opinion.
s/Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: November 19, 2014

11