HEARTLAND PAYMENT SYSTEMS, INC. v. STEVES
Filing
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OPINION. Signed by Judge Stanley R. Chesler on 12/1/15. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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HEARTLAND PAYMENT SYSTEMS,
INC.,
Plaintiff,
v.
JESSICA STEVES,
Defendant.
Civil Action No. 15-3544 (SRC)
OPINION
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JESSICA STEVES,
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Counterclaim Plaintiff,
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v.
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HEARTLAND PAYMENT SYSTEMS,
INC.,
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Counterclaim Defendant.
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CHESLER, District Judge
This matter comes before the Court upon the motion filed by Defendant and
Counterclaim Plaintiff Jessica Steves (“Steves”) to transfer this action to the Southern District of
Texas, pursuant to 28 U.S.C. § 1404(a) [Docket Entry 21]. Plaintiff and Counterclaim Defendant
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Heartland Payment Services, Inc. (“HPS”) 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 Steves’ motion to transfer the action to the Southern District of Texas.
I.
BACKGROUND
Related to the current motion before this Court, the Complaint alleges as follows. HPS
employed Steves as a sales person in the Houston, Texas area for nearly eight years, first as a
Relationship Manager (“RM”) in May 2006 and later as a Territory Manager/Senior Territory
Manager (“TM/STM”) starting around December 2007. (Compl., Docket Entry 1, Ex. A. at ¶¶ 5,
15-17.)
Steves signed several agreements with HPS governing the terms of her employment.
Many of these agreements included forum selection clauses. The relevant text of those
agreements is reproduced below.
Any suit, action or proceeding arising out of or relating to this Agreement shall be
brought only in the Superior Court in the County of Bergen, New Jersey or the
United States District Court for the District of New Jersey and TM/STM hereby
agrees and consents to the personal and exclusive jurisdiction of said courts over
him or her as to all suits, actions and proceedings arising out of or related to this
Agreement, and TM/STM further waives any claim that such suit, action or
proceeding is brought in an improper or inconvenient forum.
(Agreement of December 14, 2007, ¶ 13(j) [Docket Entry 15, Ex. A.])
This agreement is made and entered into under the laws of the State of New Jersey
and the laws of that State shall govern the validity and interpretation hereof and the
performance by the parties hereto of their respective duties and obligations
hereunder. The exclusive jurisdiction and venue for any action or proceeding in
connection herewith or related hereto shall be the courts of Bergen County, New
Jersey or the United States District Court for the District of New Jersey. Seller
agrees and consents to the personal and exclusive jurisdiction of said courts as to
all such actions and Seller further waives any claim that such action is brought in
an improper or inconvenient forum.
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(Agreement of October 12, 2010, ¶ 6 [Docket Entry 15, Ex. B.]) 1
This agreement is made and entered into under the laws of the State of New Jersey
and the laws of that State shall govern the validity and interpretation hereof and the
performance by the parties hereto of their respective duties and obligations
hereunder. The exclusive jurisdiction and venue for any action or proceeding in
connection herewith or related hereto shall be in the State courts of New Jersey or
the United States District Court for the District of New Jersey. Seller agrees and
consents to the personal and exclusive jurisdiction of said courts as to all such
actions, and Seller further waives any claim that such action is brought in an
improper or inconvenient forum.
(Agreement of October 17, 2013, ¶ 6 [Docket Entry 15, Ex. C.])
Steves resigned from HPS in March of 2014, and, on April 7, 2015, HPS filed suit against
Steves in the Superior Court of New Jersey, Chancery Division, Bergen County, alleging fraud
and breach of contract for Steves’ conduct during and after her employment with HPS [Docket
Entry 1, Ex. A]. Steves removed this case to this Court on May 26, 2015 [Docket Entry 1].
Steves filed an answer and counterclaim on June 16, 2015 [Docket Entry 7], and amended her
answer and counterclaim on August 24, 2015 [Docket Entry 14], in response to HPS’s partial
motion to dismiss filed on July 21, 2015 [Docket Entry 10]. HPS filed a motion for a
preliminary injunction on September 11, 2015 [Docket Entry 15], and, as part of her opposition
to the preliminary injunction motion, Steves filed the instant motion on October 5, 2015 [Docket
Entry 21].
II.
DISCUSSION
Steves has moved to transfer this action to the Southern District of Texas, pursuant to 28
U.S.C. § 1404(a), which states that “[f]or the convenience of parties and witnesses, in the interest
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The parties dispute whether Steves in fact signed an Agreement dated August 13, 2010 [Docket Entry 15, Ex. D].
Paragraph 6 of that Agreement contains a forum selection clause with the same language as the forum selection
clause included at Paragraph 6 of the Agreement of October 12, 2010, as reproduced above.
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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.” 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). In exercising its
discretion, the transferor court must evaluate whether a venue transfer would further the goals of
§ 1404(a), which are “to prevent the waste of time, energy and money and to protect litigants,
witnesses and the public against unnecessary inconvenience and expense . . . .” Van Dusen v.
Barrack, 376 U.S. 612, 616, (1964).
Steves’ 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 federal statute governing venue 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). It further provides that venue is proper
where a substantial part of the events or omissions giving rise to the claim occurred. Id. §
1391(b)(2). Steves resides in the Southern District of Texas, but has waived any objections to
the District of New Jersey as a venue for this action if the forum selection clause is valid and
enforceable. See 28 U.S.C. § 1406(b) (the venue statute will not “impair the jurisdiction of a
district court” where a party does not raise a timely and sufficient challenge to venue). As with
personal jurisdiction, an objection to venue may be waived. See, e.g., Huntington Learning Ctr.,
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Inc. v. Read It., N.C., Inc., No. 12-3598, 2013 WL 2404174, at *6 (D.N.J. May 30, 2013); Actega
Kelstar, Inc. v. Musselwhite, No. 09-1255, 2009 WL 1794793, at *3 (D.N.J. June 22, 2009);
Park Inn Int’l, L.L.C. v. Mody Enters., Inc., 105 F. Supp. 2d 370, 375 (D.N.J. 2000).
a. Validity and Enforceability of the HPS-Steves Forum Selection Clauses
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 [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 inconvenient as to be
unreasonable.” Coastal Steel Corp., 709 F.2d at 203. The Third Circuit has defined a forum
selection clause to be “unreasonable” if the party resisting the clause’s application can make a
strong showing that the selected forum is “so gravely difficult and inconvenient that he will for
all practical purposes be deprived of his day in court or that the clause was procured through
fraud or overreaching.” Foster v. Chesapeake Ins. Co. Ltd., 933 F.2d 1207, 1219 (3d Cir. 1991)
(internal quotations and citations omitted).
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Steves, as the party resisting the application of the forum selection clause to this dispute,
bears the burden to establish fraud or overreaching, violation of public policy, or that application
of the forum selection clause would be unreasonable. The plain language of the forum selection
clause encompasses this action in its scope and suggests that venue either in this Court or in the
state courts of New Jersey (specifically in Bergen County in several of the agreements) is
mandatory. The forum selection clause was part of a freely negotiated contract between two
sophisticated parties, and it is undisputed that Steves signed three agreements 2 containing a
forum selection clause granting mandatory jurisdiction to this Court or the state courts of New
Jersey during her employment with HPS. See The Bremen, 407 U.S. at 12.
Steves does not challenge the application of the forum selection clause to this litigation
for fraud, overreaching, or violation of public policy. Instead, Steves asserts that the forum
selection clause should not be enforced because it would be unreasonable for her to litigate this
case in New Jersey. Steves argues that litigating in New Jersey would be inconvenient for her,
given that relevant witnesses may not travel to New Jersey and that litigation will be more
expensive for her in New Jersey than it would be in Texas. Furthermore, Steves cites personal
considerations as justification for her request for this Court to not enforce the forum selection
clause. But:
Mere inconvenience or additional expense is not the test of unreasonableness since
it may be assumed that plaintiff received under the contract consideration for these
things. If the agreed upon forum is available to plaintiff and said forum can do
substantial justice to the cause of action, then plaintiff should be bound by his
agreement.
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As noted above, the parties dispute whether Steves signed a fourth Agreement containing a forum selection clause.
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Cent. Contracting Co. v. Maryland Cas. Co., 367 F.2d 341, 344 (3d Cir. 1966). The parties
agreed to litigate disputes in New Jersey per the terms of their agreements, and presumably
Steves was aware of the distance between the specified New Jersey forums and her home when
she signed the agreements. Also, Steves has not submitted evidence to support her claims of
inconvenience and expense for herself and witnesses, and generally such unsupported claims do
not satisfy the strict standard of proof required for a court to overturn a forum selection clause.
Danka Funding, L.L.C. v. Page, Scrantom, Sprouse, Tucker & Ford, P.C., 21 F. Supp. 2d 465,
471-72 (D.N.J. 1998) (citing Cent. Contracting Co., 367 F.2d at 344). Steves has not shown that
litigating in New Jersey would be so inconvenient to her so as to deprive her of her day in court.
The Court finds no basis to conclude that holding Steves to her bargain with HPS would
be unfair, unjust, or unreasonable, and thus concludes that the forum selection clauses in this
case are valid and enforceable.
b. Transfer under § 1404(a): Private and Public Interest Factors
The Third Circuit has provided district courts with a list of private and public interest
factors a district court should consider when deciding a motion to transfer under §1404(a). The
private interest factors are: (1) the 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). Jumara, 55 F.3d at 879. 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
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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. Steves bears the burden in this action to
demonstrate that this action should be transferred to the Southern District of Texas. Id. at 879.
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
Constr. Co., Inc. v. United States Dist. Court for the W. Dist. of Texas, 134 S. Ct. 568, 581
(2013) (citing Stewart, 487 U.S. at 31). When the parties have agreed to a valid forum selection
clause:
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 forumselection 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).
Steves has presented a number of arguments as to why this Court should transfer this
action, most of which relate to her preferences and convenience. In particular, Steves notes that
witnesses she believes will be important to the case are located in Texas, including her husband
and HPS employees. Steves also notes that her financial condition may impact her ability to fully
litigate the case in New Jersey, and that the claim itself arose based on actions in Texas. All of
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these considerations fall under the private interest factors listed above. Since this action is
governed by the valid forum selection clause Steves and HPS signed, this Court will not consider
private interest factors related to Steves’ convenience in the analysis of the motion to transfer.
On the public interest factors, Steves has asserted that this case is related to actions that
occurred in Texas, making Texas the appropriate forum given the local interest in deciding local
controversies at home. HPS counters that Steves has not adequately demonstrated that local
interests are at stake in this action. Further, HPS asserts that New Jersey has an interest in
governing the disputes of its citizens, including HPS, particularly given that New Jersey law will
apply to many of the claims at issue in this case. The Court finds that even if Texas has some
local interest in this dispute, New Jersey also has a local interest in the dispute, given that HPS is
at home in New Jersey. This factor may weigh slightly towards transfer, but does not outweigh
the effect of the valid forum selection clause in this action.
The familiarity of the trial judge with the applicable state law in diversity cases favors
retaining this Court as the litigation forum. As HPS points out, the employment contracts
governing Steves’ employment have choice of law provisions dictating that New Jersey law will
govern many of the claims at issue. Although district courts throughout the country apply
substantive state law from other states in diversity actions, this Court will have more experience
with the application of New Jersey state law than any other federal forum will.
The other public interest factors are neutral or do not apply in this action. There is no
evidence that a court in New Jersey or Texas would face issues with the enforceability of a
judgment in this case. Neither side has asserted any compelling public policy issues that differ
between New Jersey and Texas. And neither side has argued that court congestion would affect
the ability to reach a rapid resolution in this case in New Jersey or Texas.
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For the Court to grant this motion, Steves must demonstrate that this action should be
transferred, but venue in this action is governed by valid forum selection clauses. Steves has
failed to show that consideration of public interest factors in this case makes a transfer in the
interests of justice.
III. CONCLUSION
For the foregoing reasons, the Court will deny Steves’ motion to transfer this action to the
Southern District of Texas. An appropriate Order will be filed.
s/ Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: December 1, 2015
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