Caribbean Restaurants, LLC v. Burger King Corporation

Filing 56

OPINION AND ORDER granting 37 Motion to Change Venue. The Clerk of Court is ordered to transfer this case to the Southern District of Florida. Signed by Judge Juan M. Perez-Gimenez on 6/3/2014. (PMA)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF PUERTO RICO
CARIBBEAN RESTAURANTS, LLC,
Plaintiff,
v.

CIV. NO. 14-1200(PG)

BURGER KING CORPORATION,
Defendant.

OPINION AND ORDER
Before the court is the defendant’s motion to dismiss for failure to
state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the
alternative, to transfer venue to the United States District Court for the
Southern District of Florida pursuant to 28 U.S.C. § 1404 (“Section 1404”).
See Docket No. 37. For the reasons set forth below, the court GRANTS the
defendant’s motion.
I. BACKGROUND
Plaintiff

Caribbean

Restaurants,

LLC

(hereinafter

“Plaintiff”

or

“Caribbean”) is a Delaware limited liability company with its principal place
of business located in Cataño, Puerto Rico. See Docket No. 1, ¶ 1. On the
other hand, defendant Burger King Corporation (hereinafter “Defendant” or
“BKC” or “Burger King”) is a Florida corporation with its principal place of
business located in Miami, Florida. Id. at ¶ 2. As it stems from the
complaint,

between

May

24,

1976

and

December

1,

2013,

Caribbean,

as

franchisee, and BKC, as franchisor, entered into 182 franchise agreements
pursuant to which BKC licensed to Caribbean the right to operate 182 Burger
King restaurants in Puerto Rico. Id. at ¶ 7. The 182 Franchise Agreements are
generally comprised of two forms of agreement: Forty-One (41) of the franchise
agreements are the “Old Form Franchise Agreement” and One Hundred Forty-One
(141) of the Franchise Agreements are the “New Form Franchise Agreement.”
On March 12, 2014, Caribbean filed the above-captioned diversity suit
seeking damages and injunctive and declaratory relief. See Docket No. 1. In
summary, Caribbean claims that BKC violated the Dealer’s Contracts Act Law
No. 75 of June 24, 1964 (“Law 75”), P.R. LAWS ANN. tit. 10, §§ 278 et seq., and
breached some of the existing franchise agreements, the implied covenant of

CIV. NO. 14-1200(PG)

Page 2

good faith and fair dealing, and the obligation to negotiate in good faith.
Id. Specifically, the controversy herein stems from Burger King’s alleged
attempt to take control over Caribbean’s expenditure of funds for advertising,
promotion and public relations.
To that effect, Section 9 (3)-(5) of the Old Form Franchise Agreement
states:
(3) The Franchisee shall expend not less than four (4)
percent of Gross Sales on advertising, promotion and
public relations. …
(4) If at any time there is more than one franchisee in
Puerto Rico, Burger King shall have the right by notice
to the Franchisee to bring the following subclause (5)
into effect in relation to all Franchise Agreements and
new franchise agreements with the Franchisee in Puerto
Rico including those assigned or transferred.
(5) The Franchisee shall by the fifteenth (15th) day of
each month pay to Burger King or its designee, in the
currency of the country where the Franchised Restaurant
is located, an amount calculated by applying the
percentage stated in the Schedule to the Gross Sales
for the preceding calendar month. This sum, less
administrative expenses and any applicable taxes, will
be used for advertising, sales promotion and public
relations for the benefit of the Franchised Restaurant
including creative, production, media and clearance
costs of advertising and sales promotion materials, and
market research expenses directly related to the
development and evaluation of the effectiveness of
advertising and sales promotion. Alternatively, Burger
King may combine these moneys with payments from other
Burger King Restaurants to form an ad fund which will
be used on a fair and reasonable basis for advertising,
sales promotion and public relations in Puerto Rico.
The Franchisee is encouraged to participate in the
planning of advertising, sales promotions and public
relations for the Franchised Restaurant; however, all
expenditures of such payment moneys shall be at the
discretion of Burger King. In addition to the
percentage of Gross Sales, the Franchisee agrees to
transfer to Burger King or its designee for inclusion
in the market fund for the area in which the Franchised
Restaurant is located all advertising or promotional
allowances given by suppliers of products which are
sold in the Franchised Restaurant under a brand name
such payment to be made to Burger King or its designee
by the fifteenth (15th) day of the month following
receipt of the said allowance.
See Docket No. 1-8 (emphasis ours). On the other hand, the Section 9.2 of the
New Form Franchise Agreement states, in relevant part:

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Page 3

9.2. I Direct Expenditure Obligation. The Franchisee
shall expend, in the country where the Franchised
Restaurant is located, monthly advertising, sales
promotion and public relation services for the benefit
of Burger King Restaurants in the country where the
Franchised Restaurant is located, including creative,
production, media and clearance costs of advertising
and sales promotion materials, and marketing research
expenses directly related to the development and
evaluation of the effectiveness of advertising and
sales promotion. The amount expended for such
advertising and sales promotion and public relations by
the Franchisee will, at a minimum, be equal to the
amount
calculated
by
applying
the
advertising
percentage stated in Schedule I to the Gross Sales for
the preceding calendar month. Prior to hiring an
advertising agency or issuing any promotion or
advertisement, the Franchisee shall obtain the prior
approval of BKC. At the request of BKC, the Franchisee
shall provide BKC with a monthly and year-to-date
accounting of all such expenditures together with other
financial statements required pursuant to Section 10
below.
9.2.2 BKC’s Right to Administer Funds. Notwithstanding
the language in Subparagraph 9.2.1 above, BKC and the
Franchisee agree that at any time during the Term of
this Agreement BKC may, in its sole and absolute
discretion, require that the Franchisee, by the
fifteenth (15th) day of each month, contribute into one
or
more
advertising
funds
(collectively,
the
“Advertising Fund”) at the location(s) and in the
manner specified by BKC or its designee from time to
time and in the currency of the country where the
Franchised Restaurant is located, an amount calculated
by applying the advertising percentage stated in
Schedule I to the Gross Sales for the preceding
calendar month. Any monies contributed into the
Advertising Fund under this Subparagraph shall be
administered by BKC or its designee as provided in
Subparagraph 9.2.3 below. In the event BKC requires and
the Franchisee makes these contributions, the direct
expenditure obligation of Subparagraph 9.2.1 above will
be deemed fully satisfied.
See Docket No. 1-9 (emphasis ours).
According to the Plaintiff, BKC informed Caribbean on March 5, 2014 that
the latter should imminently begin contributing all of its required monthly
advertising expenditure, to wit, 4% of monthly gross sales from all of its 182
restaurants to Burger King. See Docket No. 1 at ¶¶ 26-27. Shortly thereafter,
the Plaintiff filed suit claiming that Defendant’s actions constitute a breach
of contract and a violation of Law 75 to the extent they are in detriment to
their established relationship.

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Page 4

In particular, the Plaintiff alleges that the Defendant has no right to
take control of Caribbean’s advertising funds or expenditures under the terms
of all forty-one Old Form Franchise Agreements because Plaintiff is the only
franchisee in Puerto Rico. Pursuant to the allegations in the complaint, other
than Caribbean’s 182 Burger King restaurants, the only other Burger King
restaurant in Puerto Rico is located on a U.S. Army base and operated by the
U.S. government, and is not a franchised restaurant as the term is used in the
Old Form Franchise Agreement. Id. at ¶ 29.
The Plaintiff’s claim that BKC failed to negotiate in good faith stems
from the former’s most recent round of refinancing of loans during which
Defendant allegedly conditioned its required approval of the same to, among
other things, Caribbean’s relinquishment of control over the advertising
funds, expenditures and activities. Id. at ¶¶ 19-22. Notwithstanding, Burger
King supposedly announced that it was dropping its demand to seize control of
Caribbean’s advertising expenditures and activities during a meeting at its
Miami headquarters on February 18, 2014, which lead Caribbean to believe that
the 40-year status quo (Caribbean expending its own advertising funds and
administering its own program) would continue to prevail indefinitely. Id. at
¶ 24. Yet, on March 5, 2014, after the refinancing transaction had already
closed, the Plaintiff alleges that BKC retracted. Id. at ¶ 25.
Now, the Plaintiff alleges that it will suffer irreparable harm as a
result of Burger King’s issuance of a notice of default against Caribbean,
which will result from Caribbean’s refusal to allow Burger King to take
control over the expenditure of funds for advertising, promotion and public
relations. Id. at ¶¶ 30-31. This, in turn, would constitute an event of
default under Caribbean’s loan agreements, resulting in additional interest
payments that would make it impossible for Caribbean to continue doing
business. Id. at ¶ 32. Therefore, in addition to filing the above-captioned
claim, the Plaintiff also filed a motion for temporary restraining order and
preliminary injunction seeking that this court enjoin Burger King from
declaring Caribbean to be in default or in breach of its agreements “for
refusing to comply with Burger King’s directive that, after 40 years,
Caribbean begin paying its required monthly advertising expenditure sums to
Burger King.” See Docket No 3 at page31.
A hearing in this case took place on March 24, 2014, after which the
court denied the Plaintiff’s request for a temporary restraining order, see
Docket No. 24, and a preliminary injunction hearing was set for April 21,

CIV. NO. 14-1200(PG)

Page 5

2014, see Docket No. 33. Prior to the scheduled preliminary injunction
hearing, the Defendant moved to dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, or alternatively, to transfer venue to the
Southern District of Florida. See Docket No. 37. At the time of the hearing,
the Plaintiff’s response to said motion was not yet due, and thus, the hearing
was held. The parties discussed and set forth proof regarding the merits of
the preliminary injunction and the applicability of the forum-selection
provisions in the parties’ agreements. Shortly after the

hearing, the

Plaintiff filed its response to the Defendant’s request for a change of venue,
see Docket No. 47, and the Defendant replied, see Docket No. 53.
II. DISCUSSION
In its motion to dismiss, Burger King requests the dismissal of the
above-captioned claim under Rule 12(b)(6) of the Federal Rules of Civil
Procedure. In support of its request, it cited the undersigned’s ruling in
MARPOR Corp. v. DFO, LLC, No. 10-1312(PG), 2010 WL 4922693 (D.P.R. December
02, 2010), where this court granted a motion to dismiss under Rule(b)(6) filed
by a defendant seeking to enforce a forum-selection clause in the parties’
agreement that stated that any litigation had to be brought in South Carolina.
Alternatively, Defendant seeks that this court grant a transfer to the U.S.
District Court for the Southern District of Florida based on the parties’
contractual stipulation that said forum would constitute the exclusive venue
for litigation between them. See Docket No. 37 at page 2. This alternative
request is grounded on the United States Supreme Court’s recent ruling in
Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist. of
Texas, 134 S.Ct. 568 (2013), wherein the Supreme Court held that when parties
have agreed to a valid forum-selection clause, that clause should be given
controlling weight in all but the most exceptional cases, and a district court
should ordinarily transfer the case to the forum specified in that clause, see
id. at 581.
As part of its holding, the Supreme Court refused to consider whether a
Rule 12(b)(6) motion was an appropriate mechanism to enforce a forum-selection
clause, see id. at 580, but decidedly deemed that a motion to transfer under
Ҥ

1404(a)

and

the

forum

non

conveniens

doctrine

provide

appropriate

enforcement mechanisms.” Id. Section § 1404(a) provides that “[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

CIV. NO. 14-1200(PG)

Page 6

have consented.” 28 U.S.C. § 1404(a) According to the Supreme Court in
Atlantic

Marine,

“Section

1404(a)

therefore

provides

a

mechanism

for

enforcement of forum-selection clauses that point to a particular federal
district.” Id. at 579. The Supreme Court found that “Section 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; in such
cases, Congress has replaced the traditional remedy of outright dismissal with
transfer.” Id. at 580.
Historically, in the First Circuit of Appeals, “a motion to dismiss based
upon a forum-selection clause is treated as one alleging the failure to state
a claim for which relief can be granted under Fed.R.Civ.P. 12(b)(6).” Silva
v. Encyclopedia Britannica Inc., 239 F.3d 385, 387 (1st Cir.2001). Burger King
filed such a motion here, but alternatively requested a transfer under Section
1404(a). Although, as noted, the Supreme Court specifically reserved the
question whether a defendant may use a Rule 12(b)(6) motion to dismiss to seek
enforcement of a forum-selection clause, the Supreme Court’s holding was
emphatic that a motion to transfer under Section 1404(a) was the appropriate
mechanism for such a purpose when the clause, as here, specified another
federal court as the appropriate venue. In light of this most recent holding,
and having been presented with the alternative, the court will now treat the
Defendant’s motion as a motion to transfer under Section 1404(a) and analyze
its request under the standard set forth in Atlantic Marine.
A. Forum Selection Clauses
“Section 1404(a) is intended to place discretion in the district court
to

adjudicate

case-by-case

motions

for

consideration

transfer
of

according

convenience

to

and

an

‘individualized,

fairness.’”

Stewart

Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citing Van Dusen
v. Barrack, 376 U.S. 612, 622 (1964)). Absent a forum-selection clause, “a
district court considering a § 1404(a) motion … must evaluate both the
convenience of the parties and various public-interest considerations.”
Atlantic Marine, 134 S.Ct. at 581. “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.’” Atlantic Marine, 134
S.Ct. at 581 (citing Stewart, 487 U.S. at 31). In such cases, the Supreme
Court has concluded that “a district court should transfer the case unless
extraordinary circumstances unrelated to the convenience of the parties
clearly disfavor a transfer,” Atlantic Marine, 134 S.Ct. at 575. As a result,

CIV. NO. 14-1200(PG)

Page 7

“a proper application of § 1404(a) requires that a forum-selection clause be
‘given controlling weight in all but the most exceptional cases.’” Id. at 579
(citing Stewart, 487 U.S. at 33).
The presence of a valid forum-selection clause requires district courts
to adjust their usual analysis under Section 1404(a) in the following three
ways:
First, the plaintiff’s choice of forum merits no
weight.
Rather,
as
the
party
defying
the
forum-selection clause, the plaintiff bears the burden
of establishing that transfer to the forum for which
the parties bargained is unwarranted.
…
Second, a court evaluating a defendant’s § 1404(a)
motion to transfer based on a forum-selection clause
should not consider arguments about the parties’
private interests.
…
Third, when a party bound by a forum-selection clause
flouts its contractual obligation and files suit in a
different forum, a § 1404(a) transfer of venue will not
carry with it the original venue’s choice-of-law rules
—a factor that in some circumstances may affect public—
interest considerations.
Atlantic Marine, 134 S.Ct. at 582. In sum, “the party acting in violation of
the

forum-selection

clause

…

must

bear

the

burden

of

showing

that

public-interest factors overwhelmingly disfavor a transfer,” id. at 583,
insofar as “all private interests … weigh in favor of the transfer.” Id. at
583-584.
The foregoing, however, presupposes that the parties have agreed to a
“contractually valid forum-selection clause,” Atlantic Marine, 134 S.Ct. at
581 n. 5, and so we must determine at the outset if the forum-selection clause
here is in effect valid before entering into the required case-by-case
analysis of the relevant public-interest factors.
The forum-selection clause in question here stems from the New Form
Franchise Agreement and the “Restaurant Development Agreement dated June 30,
2010 …, pursuant to which Burger King granted to Caribbean the exclusive right
to develop, open and operate Burger King restaurants in Puerto Rico for a term
of twenty (20) years.” Docket No. 1 at ¶ 12. Section 19.3 in the New Form
Franchise Agreement and Article XX of the Restaurant Development Agreement
provide as follows:
Governing Law/Jurisdiction. This Agreement shall become
valid when executed and accepted by BKC in Miami,
Florida. This Agreement shall be governed by and
construed in accordance with the laws of the State of

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Page 8

Florida, U.S.A. The parties hereto acknowledge and BK
agree that the United States District Court for the
Southern District of Florida, or if such court lacks
jurisdiction, the 11th Judicial Circuit Court (or its
successor) in and for Miami-Dade County, Florida, shall
be the exclusive venue and proper forum in which to
adjudicate any case or controversy arising, either
directly or indirectly, under or in connection with
this Agreement or related documentation and any other
agreement between the parties, and the parties further
agree that in the event of litigation arising out of or
in connection with this Agreement or related
documentation or any other agreement between the
parties in these courts, they will not contest or
challenge the jurisdiction or venue of these courts.
Dockets No. 1-7, 1-9 (emphasis ours).
“The general rule is that forum selection clauses are prima facie valid.”
MARPOR, 2010 WL 4922693 at *3 (citing M/S Bremen v. Zapata Off–Shore Co., 407
U.S. 1, 10 (1972)). In this context, the Supreme Court has held that a party
challenging a choice-of-forum clause would need to show “that the clause was
invalid for such reasons as fraud or overreaching.”1 Lambert v. Kysar, 983 F.2d
1110, 1119 (1st Cir.1993) (citing Bremen, 407 U.S. at 15). “Any alleged
overreaching must be based on something more than the mere fact that the
clause was a “boilerplate” provision printed on the back of a form contract.”
Lambert, 983 F.2d at 1119. Likewise, the fraud exception means that a
“forum-selection clause in a contract is not enforceable if the inclusion of
that clause in the contract was the product of fraud or coercion.” Id. at 1121
(citing Scherk v. Alberto–Culver Co., 417 U.S. 506, 519 n. 14 (1974)).
In its motion to dismiss/transfer, the Defendant argues that there is no
basis to deny enforcement of the forum-selection clause in this case insofar
as the clause is “plainly mandatory” and the “Plaintiff does not claim that
the forum clauses were obtained through fraud/undue influence.” Docket No. 37

1
In Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), the Supreme Court held that
federal courts sitting in diversity jurisdiction must apply state substantive law, but may
apply federal procedural rules. Notwithstanding, “[f]ederal courts have long enforced forum
selection clauses as a matter of federal common law.” Lambert v. Kysar, 983 F.2d 1110, 1116
(1st Cir.1993) (citations omitted). Seeing as this diversity suit was filed in this district
but all of the agreements in question contain Florida choice-of-law provisions, the court
notes that both Puerto Rico and Florida have adopted federal common law standards regarding
the enforceability of forum-selection clauses. See Silva v. Encyclopedia Britannica Inc.,
239 F.3d 385, 387 n. 1 (1st Cir.2001) (citing Unisys Puerto Rico v. Ramallo Bros. Printing,
Inc., 128 P.R. Dec. 842 (1991)); Manrique v. Fabbri, 493 So.2d 437, 439 (Fla. 1986).
Therefore, “as we discern no material discrepancy between … state law and federal law, we
need confront neither the choice-of-law issue nor the daunting question whether forum
selection clauses are to be treated as substantive or procedural for Erie purposes.”
Lambert, 983 F.2d at 1116 (citing Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709
F.2d 190 (3rd Cir.1983) (declining to reach Erie issue because state law and federal law did
not conflict)).

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Page 9

at page 9. The Plaintiff argues in response that this choice-of-forum clause
is null and void insofar as it violates Law 75,2 which provides, in relevant
part, that “[a]ny stipulation that obligates a dealer to … litigate any
controversy that comes up regarding his dealer’s contract outside of Puerto
Rico, or under foreign law or rule of law, shall be likewise considered as
violating the public policy set forth by this chapter and is therefore null
and void.” P.R. LAWS ANN. tit. 10, § 278b-2.3
Unfortunately for the Plaintiff, this court has already rejected the
argument they now advance “even when the case sets forth claims under [Law]
75.” D.I.P.R. Mfg., Inc. v. Perry Ellis Intern., Inc., 472 F.Supp.2d 151, 155
(D.P.R.2007) (citations omitted) (finding parties were bound by valid and
enforceable forum-selection clause in court action alleging violation of Law
75). “[T]he fact that a Puerto Rico statute prescribes the applicability of
forum selection clauses does not mean that the Court will automatically
disregard the parties’ freely-negotiated contractual obligations.” Diaz-Rosado
v. Auto Wax Co., Inc., No. 04-2296, 2005 WL 2138794, at *2 (D.P.R. August 26,
2005) (emphasis ours) (quoting Royal Bed & Spring Co., Inc. v. Famossul
Industria E Comercio De Moveis LTDA., 906 F.2d 45, 49 (1st Cir.1990) (finding
valid and enforceable forum selection clause in exclusive distribution
agreement under Act 75 designating Brazil as forum to litigate any action
under agreement)). See also Nike Int’l, Ltd. v. Athletic Sales, Inc., 689
F.Supp. 1235, 1238 (D.P.R.1988) (“[T]he legislature [of Puerto Rico] did not
intend that Law 75 be a safe haven for dealers to avoid the express terms of

2
The Plaintiff’s argument, however, presupposes that the protection afforded to
dealers by Law 75 is triggered by the facts in the case at hand.

3
In its response, the Plaintiff also contends that there is “no valid enforceable
forum selection clause on which Defendant can rely with respect to forty-one (41) of the
franchise agreements (“Old Form Franchise Agreements”) at issue … .” Docket No. 47 at page
2. According to the Plaintiff, thus, the Defendant lacks a valid basis upon which to seek
dismissal with regards to the claims that arise from the Old Form Franchise Agreement. First
of all, this argument is inapposite to the question of whether the choice-of-forum clause
is invalid because it fails to raise issues of fraud or overreaching, which are the only
relevant factors in the determination of the validity of a forum-selection clause. Second,
the Plaintiff’s argument is unavailing to the extent the New Form Franchise Agreements and,
more recently, the Restaurant Development Agreement signed by the parties stipulates that
the United States District Court for the Southern District of Florida shall be the exclusive
venue in which to adjudicate any case or controversy arising under or in connection with any
agreement between the parties. This court agrees with the Defendant’s argument in its reply,
wherein it states that under both Puerto Rico and Florida law of contracts, the terms of the
agreements are clear and should be interpreted to include all controversies, including those
stemming from the Old Form Franchise Agreements. See Docket No. 53 at pages 3-4; see also
Vulcan Tools of Puerto Rico v. Makita U.S.A., Inc., 23 F.3d 564, 567 (1st Cir.1994) (citing
P.R. LAWS ANN. tit. 31, § 3471 (1990)); Burger King Corporation v. Hinton, Inc., 203 F.Supp.2d
1357, 1361-1362 (S.D.Fla. 2002) (citing Murry v. Zynyx Mktg. Communications, 774 So.2d 714,
715 (Fla. 3d DCA 2000)).

CIV. NO. 14-1200(PG)

Page 10

the contracts to which they willingly subscribe.”). “When parties have
contracted in advance to litigate disputes in a particular forum, courts
should not unnecessarily disrupt the parties’ settled expectations. … In all
but the most unusual cases, therefore, “the interest of justice” is served by
holding parties to their bargain.” Atlantic Marine, 134 S.Ct. at 583.
The record here is devoid of any allegation or evidence that the clause
in dispute was the result of fraud or overreaching. Caribbean does not dispute
that they freely chose to adopt the contracts. In fact, during the preliminary
injunction hearing, Mr. Aniceto Solares (“Mr. Solares”), Caribbean’s Chief
Executive Officer and President and a sophisticated businessman, testified
under oath that during the course of negotiations pertaining to the signing
of the New Form Franchise Agreement, the Plaintiff’s representatives were
properly advised by legal counsel. Although he claims to have raised a concern
regarding the presence of this forum-selection clause in the agreement to
Plaintiff’s attorneys and Burger King, the Plaintiff decided to go ahead and
sign those agreements containing said clause despite whatever reservations he
had. As a result, there are no allegations of fraud or overreaching that would
lead this court to find that the forum-selection clause in both the New Form
Franchise Agreements and the Restaurant Development Agreement was not valid
for purposes of our analysis infra.
Having analyzed this threshold issue, the court must now consider the
public-interest factors courts have found to be relevant to the analysis under
Section 1404(a), which may 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.” Id. at 581 n. 6.
As to the first enumerated factor to consider, it is not unknown that
“[t]he District of Puerto Rico has one of the most congested criminal and
civil dockets in the nation.” Miranda-Lopez v. Figueroa-Sancha, 943 F.Supp.2d
276, 279 (D.P.R. 2013). See also Rivera-Carmona v. American Airlines, 639
F.Supp.2d 194, 198 (D.P.R. 2009) (“Further, this Court is heavily congested
with an ever expanding criminal docket.”); Marquez v. Drugs Unlimited, Inc.,
737 F.Supp.2d 66, 68 (D.P.R. 2010)(“In this extremely congested district, both
on the civil and criminal dockets, it is thus extremely important for the
court to effectively manage its caseload.”). Therefore, this factor weighs
heavily in favor of transfer.

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Page 11

As it pertains to having localized controversies decided at “home”, the
Plaintiff argues this factor favors this district because “this case concerns
the economic interests surrounding advertising, marketing and promotions in
the fast-food sector in Puerto Rico. Caribbean is a well-established company
in Puerto Rico that provides its goods and services to a majority of the
residents in Puerto Rico.” Docket No. 47 at page 14. The court disagrees with
the Plaintiff. This case is about a contractual dispute between Caribbean and
Burger King that stems from the multiple agreements they have signed over the
course of decades of business relationship, to wit, the Restaurant Development
Agreement, the Old Form Franchise Agreements and the New Form Franchise
Agreements, all of which state that they are executed and accepted in Miami,
Florida and that they shall be governed by and construed in accordance with
the laws of the State of Florida. See Article XX of Restaurant Development
Agreement, Docket No. 1-7; Article 19(3) of Old Form Franchise Agreement,
Docket No. 1-8; Article 19.3 of New Form Franchise Agreement, Docket No. 1-8.
The fact that the Plaintiff’s restaurants are in Puerto Rico is secondary to
the

crux

of

this

case.

Therefore,

we

find

that

for

purposes

of

the

interpretation of the parties’ multiple contracts, “home” is in Miami,
Florida.
Finally, regarding the interest in having the trial of a diversity case
in a forum that is at home with the law, the Plaintiff argues that this
court’s familiarity with local law, Law 75 in particular, weighs against
transfer. However, the court notes that all of the Franchise Agreements in
question and the Restaurant Development Agreement contain Florida choice-oflaw provisions. Therefore, if the Plaintiff was to have its way, this court
would apply local law with regards to Plaintiff’s Law 75 claim, but laws from
another state as to the rest of its causes of action. Once again, this court
disagrees with the Plaintiff. In light of the parties’ freely-negotiated
choice-of-law clause, we find that other than the Plaintiff’s Law 75 alleged
cause of action, Florida law applies to the parties’ dispute. A federal judge
in Florida would certainly be more familiar with Florida law than any federal
colleague sitting in the District Court of Puerto Rico. And as to the Law 75
dispute, this district has previously held that:
Although a court in Puerto Rico would surely be more
familiar with Law 75, courts in one forum are
oftentimes called upon to make rulings based upon the
laws from another forum. Moreover, a transfer in the
present case would not be the first time that a court
outside of Puerto Rico has heard a Law 75 claim.

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Page 12

Outek Caribbean Distributors, Inc. v. Echo, Inc., 206 F.Supp.2d 263, 269
(D.P.R. 2002)(string citations omitted). Because “federal judges routinely
apply the law of a State other than the State in which they sit,” Atlantic
Marine, 134 S.Ct. at 584, the court gives little weight to the Plaintiff’s
contentions regarding this court’s familiarity with Law 75.
In sum, the court is unconvinced by the Plaintiff’s arguments against
enforcement of the forum-selection clause, and we thus find it has failed to
meet its burden of establishing that transfer to the forum for which the
parties freely bargained is unwarranted. Instead, the court finds that all
relevant public-interest factors weigh in favor of transferring the present
case to the United States District Court for the Southern District of Florida,
Miami Division.
III. CONCLUSION
For the reasons stated above, Defendant’s motion (Docket No. 37) is
hereby GRANTED and the Clerk of Court is ordered to transfer this case to the
Southern District of Florida.
IT IS SO ORDERED.
In San Juan, Puerto Rico, June 3, 2014.
S/ JUAN M. PEREZ-GIMENEZ
JUAN M. PEREZ-GIMENEZ
SENIOR U.S. DISTRICT JUDGE