Reagan v. Maquet Cardiovascular US Sales LLC et al
Opinion and Order. Defendants' Motion to Transfer Venue (Related doc # 4 ) is granted. This matter, in its entirety, is transferred to the United States District Court for the District of New Jersey. Judge Christopher A. Boyko on 2/9/2015. (H,CM)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
MAQUET CARDIOVASCULAR US
SALES LLC, ET AL.,
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J:
This matter is before the Court on Defendants’ Maquet Cardiovascular US Sales, LLC
(“Maquet”), Steve Gerrald (“Gerrald”), and George Sanders (“Sanders”) [collectively
“Defendants”] Motion to Transfer Venue (ECF #4). Defendants request that this matter be
transferred, in its entirety, pursuant to 28 U.S.C. § 1404(a), to the United States District Court
for the District of New Jersey. For the following reasons, the Court grants Defendants’
Motion to Transfer Venue and transfers this matter, in its entirety, to the United States
District Court for the District of New Jersey.
Plaintiff Michael Reagan (“Reagan”) was employed by Maquet as an Account
Manager for the Central (Midwest) region. On May 2, 2013, Reagan executed Maquet’s reissued “At-Will Employment, Confidential Information, Non-Solicitation, and Invention
Assignment Agreement” (“Agreement”). On May 9, 2013, Sanders, a Maquet Human
Resources Manager, executed the Agreement on behalf of Maquet. The Agreement contains
a forum selection clause at Section 12, which states:
Governing Law; Forum Selection; Consent to Personal Jurisdiction.
This Agreement, my employment, and its conclusion, will be governed by
the laws of the State of New Jersey without giving effect to any choice-oflaw rules or principles that may result in the application of the laws of any
jurisdiction other than New Jersey. I hereby expressly consent to the
exclusive personal jurisdiction and venue of the state and federal courts
located in New Jersey and agree that any lawsuit or claim concerning this
Agreement, my employment or the conclusion thereof, including but not
limited to, all statutory employment discrimination claims, will be brought
exclusively in either the state (Essex or Passaic counties, only) or federal
court (District of New Jersey, Newark Vicinage, only) of New Jersey. I
further agree that New Jersey is a convenient forum for any such lawsuit,
and waive any argument to the contrary.
On August 16, 2013, Maquet terminated Reagan’s employment. Gerrald, Reagan’s
direct supervisor, and Sanders informed Reagan that he was terminated for misconductrelated reasons. Upon notifying Reagan of Maquet’s decision, Sanders signed and issued
Reagan’s termination letter. Reagan disputes Defendants’ accusations of misconduct.
II. PROCEDURAL HISTORY
On February 11, 2014, Reagan filed a five-count Complaint in the Court of Common
Pleas, Cuyahoga County, Ohio, alleging that his employment with Maquet was unlawfully
terminated. In his Complaint, Reagan alleges claims of Retaliatory Discharge in Violation of
the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.; (Count I); Failure to Provide
Reasonable Accommodation (Count II); Wrongful Discharge Based on Disability
Discrimination (Count III); Wrongful Discharge Based on Age Discrimination (Count IV);
and Intentional Infliction of Emotional Distress (Count V). On March 12, 2014, Defendants
removed this matter to the Northern District of Ohio (ECF #1).
On March 13, 2014, Defendants moved to transfer this matter, in its entirety, to the
District of New Jersey (ECF #4). Defendants submit that transfer is proper because Reagan
executed the Agreement which contained the forum selection clause designating New Jersey
as the exclusive forum for all employment disputes. Defendants point to the United States
Supreme Court’s decision in Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist of Texas,
134 S. Ct. 568, 581 (2013) in which the Supreme Court held that forum selection clauses
should be given “controlling weight in all but the most exceptional circumstances.”
Defendants also contend that public interest factors weigh in favor of transfer.
Reagan responded to Defendants’ Motion on March 28, 2014 (ECF #6). In his
response, Reagan does not contest the validity of the Agreement or its forum selection clause.
Rather, Reagan argues that public interest factors weigh in favor of an Ohio venue. Reagan
further argues that even if the forum selection clause is enforceable as to Maquet, it is
unenforceable as to Sanders and Gerrald because they are not parties to, nor third party
beneficiaries of, the Agreement.
In their Reply of April 4, 2014, Defendants maintained that public interest factors
favor transfer (ECF #7). Defendants then argued that the forum selection clause is
enforceable as to Sanders and Gerrald for two reasons. First, Sanders signed the Agreement.
Second, under New Jersey and Ohio law, those individuals “closely related” to the
Agreement’s signatories are bound by forum selection clauses.
III. LAW AND ANALYSIS
The New Jersey forum selection clause is valid and enforceable as to Defendant
Maquet and the individual employee Defendants, Sanders and Gerrald.
The first question the Court must address is whether the New Jersey forum selection
clause contained in the Agreement is valid and enforceable.
Neither party alleges any issues concerning the validity of the Agreement or its forum
selection clause, nor do the parties allege that the Agreement or clause is unconscionable or
was entered into under duress. In short, the validity of the Agreement and its forum selection
clause is unchallenged.
Similarly, neither party alleges that the Agreement or clause is unenforceable as to
Maquet. In his opposition brief, Reagan concedes that the Agreement can be reasonably read
to apply to claims that exist between Reagan and Maquet. Therefore, the enforceability of the
forum selection clause as to Maquet is also unchallenged.
Reagan does contend, however, that the forum selection clause is unenforceable as to
Sanders and Gerrald because they are not parties to, nor third party beneficiaries of, the
Agreement. Upon consideration of the Agreement and the parties’ arguments, the Court
disagrees with Reagan and holds that the forum selection clause is enforceable as to Sanders
and Gerrald because they are “closely related” to the Agreement and the current dispute.
As an initial matter, the enforceability of the Agreement’s forum selection clause is
governed by federal law, not state law. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32
(1988) (“[F]ederal law, specifically 28 U.S.C. § 1404(a), governs the District Court's decision
whether to give effect to the parties' forum-selection clause.”).
Under both New Jersey and Ohio federal law, a forum selection clause may be
enforced against a non-signatory to a contract if the non-signatory is closely related to the
contractual relationship or dispute. Donachy v. Intrawest U.S. Holdings, Inc., No. CIV.A. 10
4038 RMB, 2011 WL 2973543, at *2 (D.N.J. July 21, 2011) (“It is widely accepted that “nonsignatory third-parties who are closely related to [a] contractual relationship are bound by
forum selection clauses contained in the contracts underlying the relevant contractual
relationships.” (citing Sahara Sam's Oasis, LLC v. Adams Companies, Inc., No. CIV.A. 10
0881, 2010 WL 3199886, at *6 (D.N.J. Aug. 12, 2010))). Villanueva v. Barcroft, 822 F.
Supp. 2d 726, 737 (N.D. Ohio 2011) (“[A] non-signatory to a contract may be bound by “a
forum selection clause in that contract if the non-signatory is so sufficiently ‘closely related’
to the dispute that it is foreseeable that the party will be bound.” (citing Hitachi Med. Sys. Am.
v. St. Louis Gynecology & Oncology, LLC, No. 5:09-CV-2613, 2011 WL 711568, at *8
(N.D.Ohio Feb. 22, 2011))).
New Jersey federal courts have concluded that employees of a contracting party who
are not signatories or third-party beneficiaries are “closely related” and, therefore, bound by
valid forum selection clauses. Affiliated Mortgage Prot., LLC v. Tareen, No. CIV.A.06 4908
DRD, 2007 WL 203947, at *3 (D.N.J. Jan. 24, 2007) (holding that employees are “closely
related to the contractual relationship and, therefore, are bound by the forum selection
Ohio federal law is not so clear. Neither the Sixth Circuit nor this Court has explicitly
stated that employees of a contracting party are “closely related.” Rather, when determining
whether a non-signatory is closely related to a forum selection clause “a common sense,
totality of the circumstances approach” is utilized. Hitachi Med. Sys. Am., Inc., 2011 WL
711568, at *9 citing Regions Bank v. Wyndham Hotel Mgmt., Inc., No. 3:09-1054, 2010 WL
908753, at *6 (M.D.Tenn. March 12, 2010). Under this approach, a court must inquire
“whether, in light of [the] circumstances, it is fair and reasonable to bind a non-party to the
forum selection clause.” Id.
Regardless of whether New Jersey or Ohio law is applied, the same conclusion is
warranted—Sanders and Gerrald are bound by the forum selection clause because they are
both “closely related” to the Agreement and dispute.
Even though Sanders and Gerrald are non-signatories to the Agreement, because
Sanders and Gerrald are employees of Maquet they are considered “closely related” under
New Jersey law. The Court also concludes that Sanders and Gerrald are “closely related”
under Ohio law. Applying this Court’s “common sense, totality of the circumstances
approach” to the alleged facts in this case, Sanders and Gerrald appear to be directly related to
the Agreement and current dispute. Neither side disputes that Sanders was directly involved
with Reagan’s execution of the Agreement. Also, neither side disputes that Sanders and
Gerrald were directly involved with the decision to terminate Reagan. Moreover, Reagan’s
claims are derived from the alleged discriminatory actions taken by Sanders and Gerrald.
Thus, because Sanders and Gerrald had direct involvement with the execution of the
Agreement and Reagan’s termination, both are sufficiently “closely related” to the Agreement
and current dispute.
Therefore, as a result of being “closely related” to the Agreement and current dispute,
the Agreement’s forum selection clause may be enforced against Sanders and Gerrald.
Reagan correctly states that the Agreement could have been drafted more clearly.
However, allowing bifurcation of his claims would set a dangerous precedent that could result
in forum-shopping. Future plaintiffs could simply avoid a valid forum selection clause by
naming a defendant, closely related to the contractual relationship or dispute, but who is not a
signatory or third-party beneficiary. Moreover, bifurcating Reagan’s claims would result in
undue delay and a significant financial burden on the parties.
This matter is transferred, in its entirety, pursuant to 28 U.S.C. § 1404(a), to the
United States District Court for the District of New Jersey.
Having determined that the forum selection clause is enforceable as to both Maquet
and the individual employees, Sanders and Gerrald, the Court must determine whether
transfer is appropriate. The United States Supreme Court’s decision in Atl. Marine Const. Co.
v. U.S. Dist. Court for W. Dist of Texas, 134 S. Ct. 568, 581 (2013) controls the weight a
district court should give a forum selection clause when considering dismissal or transfer.
In Atl. Marine, the Supreme Court first held that the proper mechanism for enforcing a
forum selection clause is 28 U.S.C. § 1404(a). The Supreme Court further held “[w]hen a
defendant files such a motion, we conclude, a district court should transfer the case unless
extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a
transfer.” Id. at 581. When a valid and enforceable forum selection clause evidences the
parties’ intent to bring an action in a particular federal district, the forum selection clause
must be given “controlling weight in all but the most exceptional circumstances.” Id. “Only
under extraordinary circumstances unrelated to the convenience of the parties should a §
1404(a) motion be denied.” Id.
In its decision, the Supreme Court considered the usual analysis of a § 1404(a) motion
In the typical case not involving a forum-selection clause, a district court
considering a § 1404(a) motion (or a forum non conveniens motion) must
evaluate both the convenience of the parties and various public-interest
considerations. Ordinarily, the district court would weigh the relevant factors
and decide whether, on balance, a transfer would serve “the convenience of
parties and witnesses” and otherwise promote “the interest of justice.”
Id. However, the Supreme Court concluded that the existence of a valid forum selection
clause changes the above analysis.
The calculus changes, however, when the parties' contract contains a valid
forum-selection clause, which “represents the parties' agreement as to the most
proper forum.” (Internal citation omitted). The “enforcement of valid forumselection clauses, bargained for by the parties, protects their legitimate
expectations and furthers vital interests of the justice system.” For that reason,
and because the overarching consideration under § 1404(a) is whether a
transfer would promote “the interest of justice,” “a valid forum-selection
clause [should be] given controlling weight in all but the most exceptional
cases.” (Internal citations omitted).
The Supreme Court described three ways the usual analysis of a § 1404(a) motion to
transfer changes when there exists a valid forum selection clause. First, plaintiff’s choice of
forum is accorded no weight because plaintiff is presumed to have expressed his desired
forum in the forum selection clause. Second, courts cannot entertain arguments on the
parties’ private interests as those are now deemed to weigh “entirely” in favor of the choice
of forum contained in the forum selection clause. As a consequence, a district court may only
consider arguments about public interest factors. Third, the law of the state wherein the suit
was filed, if different from the forum agreed to in a forum selection clause, will not follow the
case upon transfer.
Id. at 581-82.
Applying the Supreme Court’s new analysis to this matter, the Court finds that no
“extraordinary circumstances” exist and that this matter, in its entirety, is transferred to the
United States District Court for the District of New Jersey.
In light of Atl. Marine, Reagan’s choice of an Ohio forum merits no weight because
his initial choice of New Jersey deserves deference. All private interest considerations, such
as convenience of the parties and witnesses and fairness to the parties in light of the forum
selection clause, are deemed to favor transfer. Finally, the public interest also favors transfer.
The public interest of “having the trial in a forum that is at home with the state law that must
govern the case” favors transfer because the Agreement contains a choice of law clause
wherein the parties agreed New Jersey law would govern disputes. Braman v. Quizno's
Franchise Co., LLC, No. 5:07CV2001, 2008 WL 611607, at *6 (N.D. Ohio Feb. 20, 2008)
citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509 (1947). Additionally, the public
interest favors transfer because “the public has a strong interest in applying contracts as they
are written.” PolyOne Corp. v. Teknor Apex Co., No. 1:14CV0078, 2014 WL 4207671, at *6
(N.D. Ohio Aug. 25, 2014) citing First Solar, LLC v. Rohwedder, Inc., No. 3:04CV7518,
2004 WL 2810105 (N.D.Ohio Dec.8, 2004). Here, Reagan contracted in advance to litigate
disputes in New Jersey and “courts should not unnecessarily disrupt the parties’ settled
expectations.” Atl. Marine Const. Co., 134 S. Ct. 568 at 583. “[T]he interest of justice is
served by holding parties to their bargain.” Id.
Therefore, for the foregoing reasons, the Court grants Defendants’ Motion to Transfer
Venue and transfers this matter, in its entirety, to the United States District Court for the
District of New Jersey.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: February 9, 2015
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