Sun Specialized Heavy Haul, LLC v. Ace Heavy Haul, LLC et al
Filing
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OPINION AND ORDER by Chief Judge Gregory K Frizzell ; granting 11 Motion to Dismiss (kjp, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
SUN SPECIALIZED HEAVY HAUL,
LLC,
Plaintiff,
v.
ACE HEAVY HAUL, LLC, et al.,
Defendants.
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Case No. 16-CV-491-GKF-PJC
OPINION AND ORDER
Before the court is the Motion to Dismiss of defendant Ace Heavy Haul, LLC (“Ace”).
[Dkt. #11]. For the reasons set forth below, the court grants Ace’s motion.
I. Procedural History
This dispute arises from a contract between Ace and plaintiff Sun Specialized Heavy
Haul, LLC (“Sun”). In broad terms, Ace and Sun executed an “Independent Contractor Lease
Agreement,” whereby Sun would provide tractors, trailers, and drivers to transport goods for
third parties on Ace’s behalf. [Dkt. #11-1].1 The agreement contains a choice of law/forum
selection clause, which states:
This Agreement shall be governed by and construed in accordance with the laws
of the State of New Jersey, without giving effect to the principles of conflict of
laws thereof. Any suit brought to enforce the terms or conditions of this
Agreement or otherwise arising from or connected with the subject matter of this
Agreement shall be governed by New Jersey law, and any suit is to be brought in
Burlington County, New Jersey.
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The court appropriately considers the Lease Agreement in ruling on Ace’s motion. Where a
“document is referred to in the complaint and is central to the plaintiff’s claim, the defendant
may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.”
Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 961 (10th Cir. 2001) (quotation marks
omitted).
[Dkt. #11-1, p.8]. Sun filed suit in Oklahoma state court on February 16, 2016, for breach of
contract, negligence, and fraud. The case was removed to this court on July 26, 2016. Ace now
moves to dismiss Sun’s petition, arguing that: (1) the agreement’s forum selection clause
compels dismissal under the doctrine of forum non conveniens; and (2) Sun’s fraud claim is not
pled with the particularity required by Fed. R. Civ. P. 9(b).
II. Legal Standard
“[Forum selection] clauses are prima facie valid and should be enforced.” Milk ‘N’
More, Inc. v. Beavert, 963 F.2d 1342, 1346 (10th Cir. 1992); accord Mengers v. Route 66 RB’s,
Inc., No. 14-CV-253-JED-TLW, 2014 WL 3341307, at *2 (N.D. Okla. July 8, 2014). Such
clauses generally come in two varieties—mandatory or permissive. Cardoni v. Prosperity Bank,
No. 14-CV-319-CVE-PJC, 2014 WL 3369334, at *5-6 (N.D. Okla. July 9, 2014). Mandatory
clauses contain “clear language showing that jurisdiction is appropriate only in the designated
forum.” Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 321 (10th Cir. 1997)
(quotation marks and citation omitted). Permissive clauses merely “authorize jurisdiction in a
designated forum, but do not prohibit litigation elsewhere.” Id. (internal quotation marks and
citation omitted). The court will enforce a mandatory forum selection clause unless “invalid” or
enforcement would be “unreasonable and unjust” under the circumstances. XETA Techs., Inc. v.
Exec. Hosp., Inc., No. 08-CV-197-GKF-PJC, 2008 WL 5070726, at *1 (N.D. Okla. Nov. 21,
2008).
“[T]he appropriate way to enforce a forum-selection clause pointing to a state . . . forum
is through the doctrine of forum non conveniens.” Atl. Marine Constr. Co. v. Dist. Court for the
W. Dist. of Tex., 134 S.Ct. 568, 580 (2013). That analysis “entail[s] the same balancing of
interests standard” used to evaluate “forum selection clause[s] pointing to a federal forum”—
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after all, 28 U.S.C. § 1404(a) “is merely a codification of the doctrine of forum non conveniens
for the subset of cases in which the transferee forum is within the federal court system.” Id.
Relevant factors ordinarily include: the plaintiff’s choice of forum; cost and convenience to
parties and witnesses; and public administration considerations. Id. at 581, n. 6 (quoting Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 241, n.6 (1981)).
A valid forum selection clause, however, changes the calculus. Atl. Marine Constr. Co.,
134 S.Ct. at 581. First, “the plaintiff’s choice of venue merits no weight.” Id. “[B]y
contract[ing] to bring suit in a specified forum—presumably in exchange for other binding
promises by the defendant—the plaintiff has effectively exercised its ‘venue privilege’ before a
dispute arises.” Id. Second, arguments about the parties’ private interests are irrelevant. “Where
parties agree to a forum-selection clause, they waive the right to challenge the preselected forum
as inconvenient.” Id. The court “accordingly must deem the private-interest factors to . . . favor
the preselected forum,” id. (emphasis added); the court “may consider arguments about publicinterest factors only,” id.
III. Analysis
Sun “carries a heavy burden” in opposing enforcement of the forum selection clause.
Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 957 (10th Cir. 1992). Sun argues
that the clause is ambiguous, and must be construed as permissive. The court disagrees.
“[W]hen venue is specified, such as when the parties designate a particular county . . . and the
designation is accompanied by mandatory or obligatory language, a forum selection clause will
be enforced as mandatory.” Am. Soda, LLP v. U.S. Filter Wastewater Grp., Inc., 428 F.3d 921,
927 (10th Cir. 2005). The clause here does both. To start, it designates Burlington County, New
Jersey as the venue for suit. See id.; Excell, Inc., 106 F.3d at 321 (“Because the language of the
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clause refers only to a specific county . . . venue is intended to lie only in state . . . court.”). And
that designation is accompanied by mandatory language of exclusion: “Any suit . . . is to be
brought in Burlington County, New Jersey.” [Dkt. #11-1, p.8]; See Mann v. Auto. Protection
Corp., 777 F.Supp.2d 1234, 1242 (10th Cir. 2011) (finding “shall be filed” constitutes language
of exclusion); XETA Techs., Inc., 2008 WL 5070726, at *2 (finding “must take place in”
constitutes language of exclusion).
The caselaw cited by Sun—which interprets the word “shall”—is not to the contrary.
“To state that a court ‘shall have jurisdiction’ is admittedly not exclusive of courts of other
jurisdictions.” XETA Techs., Inc., 2008 WL 5070726, at *2. But the clause here does more—it
requires that “any suit . . . is to be brought in Burlington County.” [Dkt. #11-1, p.8] (emphasis
added). “This language necessarily excludes other jurisdictions and venues.” See XETA Techs.,
Inc., 2008 WL 5070726, at *2; Intermetals Corp. v. Hanover Int’l Aktiengesellschaft Fur
Industrieversicherungun, 188 F.Supp.2d 454, 461 (D.N.J. 2001) (“[T]he phrase ‘The court of
jurisdiction . . . is to be at the place’ is a clear indication that the drafter intended for the clause to
be exclusive.”) (emphasis in original). Accordingly, the court holds that the forum selection
clause is unambiguously mandatory.
Next, Sun asserts that the balance of private interests—including its choice of forum—
favors venue in Oklahoma. That ignores the teaching of Atlantic Marine. By agreeing to a
forum selection clause, Sun “waive[d] the right to challenge” venue in New Jersey as
“inconvenient or less convenient for [it]self or [its] witnesses.” See Atl. Marine Constr. Co., 134
S.Ct. at 582. Indeed, “[w]hatever ‘inconvenience’ [Sun] would suffer . . . was clearly
foreseeable at the time of contracting.” See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1,
17-18 (1972). For this reason, private interest factors “weigh entirely in favor of the preselected
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forum” as a categorical matter. Atl. Marine Constr. Co., 134 S.Ct. at 582. Nor does Sun’s
choice of forum merit consideration. Sun “effectively exercised its ‘venue privilege’” “by
contract[ing] to bring suit only in a specified forum.” Id. And the court will not “unnecessarily
disrupt the parties’ settled expectations” about where such legal action should take place. See id.
At 583.
“As the party acting in violation of the forum-selection clause, [Sun] must bear the
burden of showing that public-interest factors overwhelmingly disfavor” dismissal. See id.
Factors generally include: “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.” Piper Aircraft Co., 454 U.S. at
241, n.6. “In all but the most unusual cases . . . ‘the interest of justice’ is served by holding
parties to their bargain.” Atl. Marine Constr. Co., 134 S.Ct. at 583.
This is not an unusual case. Sun presents no evidence “that administrative difficulties or
court congestion will prevent . . . recei[pt] [of] a timely and fair trial in” the courts of Burlington
County. See Cardoni v. Prosperity Bank, No. 14-CV-0319-CVE-PJC, 2014 WL 3369334, at *8
(N.D. Okla. July 9, 2014). Nor does Sun dispute, as a general matter, that New Jersey courts
have a greater interest in applying New Jersey law—the law governing the agreement. See id.
Instead, Sun contends that: (1) Oklahoma courts can effectively apply New Jersey law; and (2)
Oklahoma law governs Sun’s fraud claim. Those arguments—which are inconsistent—wash
out. This court is not “aware of any exceptionally arcane features of [Oklahoma tort law] that
are likely to defy comprehension by” a sister-court in New Jersey. See Atl. Marine Constr. Co.,
134 S.Ct. at 584. And, in any case, it is far from clear that Oklahoma law applies—the contract
specifies that New Jersey law shall govern “[a]ny suit brought to enforce . . . this Agreement or
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otherwise arising from or connected with the subject matter” thereof. [Dkt. #11-1, p.8]
(emphasis added).
“Even though the Tenth Circuit has not addressed this issue, the United States Supreme
Court [and other Courts of Appeal] ha[ve] applied [ ] forum selection provision[s] in [ ] case[s]
involving tort claims.” Mann .v Auto. Protection Corp., 777 F.Supp.2d 1234, 1243 (D.N.M.
2011); accord Cass v. Balboa Capital Corp., No. CIV-13-483-SPS, 2015 WL 1428076, at *2
(E.D. Okla. Mar. 27, 2015). Put simply, “contract-related tort claims involving the same
operative facts as a parallel claim for breach of contract should be heard in the forum selected by
the contracting parties.” Lambert v. Kysar, 983 F.2d 1110, 1121-22 (1st Cir. 1993). Taken
together, then, the public-interest factors do not “overwhelmingly” disfavor dismissal. See Atl.
Marine Constr. Co., 134 S.Ct. at 583.
WHEREFORE, Ace’s Motion to Dismiss [Dkt. #11] is granted.2
IT IS SO ORDERED this 13th day of September, 2016.
2
Because dismissal is warranted under the doctrine of forum non conveniens, the court need not
reach Ace’s pleading argument.
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