G4S Technology LLC v. WCC Cable, Inc. et al

Filing 15

MEMORANDUM AND ORDER - The Motion to Dismiss, ECF No. 6 is granted in part, as follows: The above-captioned action is hereby transferred to the United States District Court for the Western District of Virginia. Ordered by Chief Judge Laurie Smith Camp. (KLF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

G4S TECHNOLOGY, LLC, a Delaware
limited liability company;
8:17CV182
Plaintiff,
MEMORANDUM
AND ORDER

vs.
WCC CABLE, INC., a Virginia
corporation; and IRONSHORE
INDEMNITY, INC., a Minnesota
corporation;
Defendants.

This matter is before the Court on the Motion to Dismiss, ECF No. 6, filed by
Defendants WCC Cable, Inc., and Ironshore Indemnity, Inc. (Defendants).

For the

reasons stated below, the motion will be granted in part, and the case will be transferred
to the United States District Court for the Western District of Virginia.
BACKGROUND
The following facts are those alleged in the Complaint, ECF No. 1-1, Page ID 6–
9, and assumed true for purposes of the Motions to Dismiss.
Plaintiff G4S Technology LLC (G4S) is a Delaware limited liability corporation
with its principal office located in Omaha, Nebraska. Id. ¶ 1, Page ID 6. WCC Cable,
Inc. (WCC), is a Virginia corporation with its principal office located in Fredericksburg,
Virginia. Id. ¶ 2. Ironshore Indemnity, Inc. (Ironshore), is a Minnesota corporation with
its principal office in New York, New York. Id. ¶ 3. In September of 2014, G4S entered
into a subcontract agreement (the Subcontract) with WCC to perform work related to the
I-64 Active Traffic and Safety Management System Project (the Project), located in

Afton, Virginia. Id. ¶ 6, Page ID 7. Section 37 of the Subcontract stated that any
“dispute arising . . . from this Subcontract shall be resolved solely and exclusively in a
state or federal court located in Douglas County, Nebraska. Id. ¶ 8. As required by the
Subcontract, WCC obtained a performance and payment bond from Ironshore. Id. ¶ 7.
G4S alleges that WCC failed to meet the Project schedule and failed to perform
in accordance with the terms of the Subcontract. As a result, G4S sent WCC a formal
notice to cure (Notice to Cure). Id. ¶ 9. On September 25, 2015, G4S sent Defendants
a formal notice of default and claim against the bond, due to WCC’s failure to remedy
the deficiencies in performance described in the Notice to Cure. Id. ¶ 10, Page ID 8.
Due to WCC’s failure to perform under the Subcontract, G4S had to hire a supplemental
subcontractor and incurred liquidated damages imposed by the owner of the Project.
Id. ¶¶ 11–13.
On March 6, 2017, G4S filed this action in the District Court of Douglas County,
Nebraska, asserting two claims for breach of contract. Id. ¶¶ 15–20, Page ID 13–14.
Defendants removed the action to this Court and filed the present motion, seeking
dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2) and (3). Because the
Court will grant the motion due to improper venue under Rule 12(b)(3), it will not
analyze the issue of personal jurisdiction under Rule 12(b)(2).
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(3) permits a party to raise the defense of
“improper venue” by motion. “[V]enue of all civil actions brought in district courts of the
United States” is governed by 28 U.S.C. § 1391, which states:
A civil action may be brought in—

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(1) a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is
the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is
subject to the court’s personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b).
Venue is proper in “any judicial district in which any defendant is subject to the
court’s personal jurisdiction with respect to such action” only “if there is no district in
which an action may otherwise be brought as provided in” § 1391. Therefore, the fact
that a defendant is subject to personal jurisdiction in Nebraska does not make a
Nebraska court a proper venue unless there is no other district in which this action may
have been brought.

This means that the Court must determine whether venue is

appropriate under subsections (1) and (2) of § 1391(b) before looking to subsection (3)
to determine if venue is proper.
With respect to § 1391(b)(1), the venue statute provides that a “natural
person . . . [is] deemed to reside in the judicial district in which that person is domiciled,”
and “an entity with the capacity to sue and be sued . . . [is] deemed to reside, if a
defendant, in any judicial district in which such defendant is subject to the court’s
personal jurisdiction with respect to the civil action in question.” Id. § 1391(c)(1), (2). “If
natural persons are involved, it is their residence at the time the action is commenced,
not when the claim arose, that is decisive in ascertaining the propriety of federal venue.”
14D Charles Alan Wright et al., Federal Practice and Procedure § 3805 (3d ed. 2012).
The time the claim arose is decisive in ascertaining the propriety of venue when an
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entity is involved. Great Am. Ins. Co. v. Lesser Enters., Inc., 353 F.2d 997, 1001 (8th
Cir. 1965).
With respect to § 1391(b)(2), “[t]he statute does not posit a single appropriate
district for venue; venue may be proper in any of a number of districts, provided only
that a substantial part of the events giving rise to the claim occurred there,” Woodke v.
Dahm, 70 F.3d 983, 985 (8th Cir. 1995) (citing Setco Ents. Corp. v. Robbins, 19 F.3d
1278, 1281 (8th Cir. 1994)), or that “a substantial part of property that is the subject of
the action is situated” there. 28 U.S.C. § 1391(b)(2). The question is not which is the
“best” venue, but “whether the district the plaintiff chose had a substantial connection to
the claim, whether or not other forums had greater contacts.” Pecoraro v. Sky Ranch
for Boys, Inc., 340 F.3d 558, 563 (8th Cir. 2003) (citing Setco, 19 F.3d at 1281).
DISCUSSION
Defendants move for dismissal of this action because venue is improper under
§ 1391. G4S admits that venue is not proper in Nebraska under § 1391. Opp. Brief,
ECF No. 11, Page ID 129. Yet G4S argues that the Court should allow the case to
remain due to Section 37 of the Subcontract.
The presence of a forum-selection clause has no bearing on the propriety of
venue. In re Union Elec. Co., 787 F.3d 903, 906 (8th Cir. 2015) (citing Atl. Marine
Constr. Co. v. U.S. Dist. Ct. for the W. Dist. of Tex., ___ U.S. ___, 134 S. Ct. 568, 583
(2013)) (“[A] forum-selection clause [can] not factor into an analysis under Rule
12(b)(3) . . . .”).

In Atlantic Marine, the U.S. Supreme Court carefully distinguished

between questions of venue, which must be resolved according to § 1391, and
enforcement of forum-selection clauses, which are to be analyzed under 28 U.S.C.

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§ 1404(a).1 Id. (quoting Atl. Marine, 134 S.Ct. at 577) (internal quotation marks omitted)
(“Whether venue is wrong or improper depends exclusively on whether the court in
which the case was brought satisfies the requirements of federal venue laws, and those
provisions say nothing about a forum-selection clause.”). Thus, if a court determines
that venue is improper, it must dismiss or transfer the case pursuant to § 1406(a)2
without ever considering the forum selection clause. See Atl. Marine, 134 S. Ct. at 577.
G4S argues that Atlantic Marine is distinguishable, because the case addressed
only whether an action that was filed in a proper venue should be dismissed because
the parties agreed in a forum-selection clause to litigate in a different court. Atl. Marine,
134 S. Ct. at 576–77. However, the Supreme Court’s interpretation of § 1391 squarely
applies to the present case. See Atl. Marine, 134 S. Ct. at 577 (“Whether the parties
entered into a contract containing a forum-selection clause has no bearing on whether a
case falls into one of the categories of cases listed in § 1391(b).”); id. at 578 (“The
structure of the federal venue provisions confirms that they alone define whether venue
exists in a given forum.”).
This conclusion comports with the interpretation of Atlantic Marine by the U.S.
In Union Electric, that court stated, “the

Court of Appeals for the Eighth Circuit.

propriety of venue . . . is to be determined ‘exclusively’ as a matter of statutory
interpretation.” 787 F.3d at 906 (quoting Atl. Marine, 134 S. Ct. at 577).
district courts that have examined the issue have held similarly.

Several

See Howmedica

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28 U.S.C. § 1404(a) states “[f]or 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.”
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28 U.S.C. § 1406(a) states “[t]he district court of a district in which is filed a case laying venue
in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any
district or division in which it could have been brought.”

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Osteonics Corp. v. DJO Glob., Inc., No. CV 16-2330, 2017 WL 1136671, at *3 (D.N.J.
Mar. 27, 2017) (citing Zaretsky v. Gemological Inst. of Am., Inc., No. 13-3807, 2014 WL
683983, at *1–2 (D.N.J. Feb. 20, 2014); Corp. Air, LLC v. Davis, No. 13-729, 2014 WL
516582, at *1–2 (W.D. Pa. Feb. 7, 2014); Prosperity Bank v. Balboa Music Festival,
LLC, No. 13-288, 2014 WL 1023935, at *2–3 (S.D. Tex. Mar. 13, 2014)).
G4S relies on Servpro Indus., Inc. v. JP Penn Restoration Servs., No. 3-16-0298,
2016 WL 5109947 (M.D. Tenn. Sept. 20, 2016), in which the court, citing Atlantic
Marine’s preference for enforcement of forum-selection clauses, denied a motion to
dismiss or transfer for improper venue. Id. at *2–4 (citing Atl. Marine, 134 S. Ct. at 577).
That court found that although venue was improper under § 1391, defendants had
waived their objection to venue in a forum-selection clause. Id.
The Subcontract is distinguishable from the forum-selection clause in Servpro.
There, the relevant language, in addition to a covenant to file in a specific court,
included an explicit waiver by both parties of any objection to venue. Id. at *1; see also
BMO Harris Bank, N.A. v. McM, Inc., No. CV 17-335 (DWF/KMM), 2017 WL 3443238,
at *1–4 (D. Minn. Aug. 8, 2017) (citing Servpro) (denying motion to transfer for improper
venue due to the presence of explicit contractual language waiving venue objections).
No explicit waiver language was discussed in Howmedica, or any of its cited cases, and
GS4 has not identified any such language in the Subcontract.

An application of

Servpro’s holding in situations where there is no express waiver of objections to venue
would allow virtually all forum-selection clauses to override the § 1391 venue analysis—
precisely what Atlantic Marine prohibits.

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Defendants note that a case is already pending between WCC and G4S in the
U.S. District Court for the Western District of Virginia, and Defendants suggest that
dismissal of this action is proper, rather than a transfer of the case. Reply Brief, ECF
No. 13, Page ID 198. However, it is not clear whether the Virginia case is identical to
the action at bar. Id. Transfer, not dismissal, is the preferred action under § 1406(a)
absent exceptional circumstances.

See Charles Alan Wright et al., 14D Federal

Practice and Procedure § 3827 (4th ed.).
G4S argues that transfer is futile as the transferee court in Virginia, under Fourth
Circuit law, will simply enforce the forum-selection clause and transfer the case back to
the District of Nebraska.

The court in Howmedica noted the potential for such a

scenario resulting from a “strict” interpretation of Atlantic Marine. Howmedica, 2017 WL
1136671, at *5 & n.6. This Court recognizes that the U.S. District Court for the Western
District of Virginia may conduct an analysis under 28 U.S.C. § 1404(a), and, in light of
the litigation between the parties currently pending in that court, will be in a better
position to determine whether a further transfer of the case is appropriate for the
convenience of the parties and in the interest of justice.
IT IS ORDERED:
The Motion to Dismiss, ECF No. 6, is granted in part, as follows: The abovecaptioned action is hereby transferred to the United States District Court for the
Western District of Virginia.
Dated this 10th day of October, 2017.

BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge

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