Blueskygreenland Environmental Solutions, LLC v. Rentar Environmental Solution, Inc. et al

Filing 37

MEMORANDUM ON DISMISSAL GRANTING 18 MOTION to Dismiss 1 Notice of Removal, Defendant Rentar Environment Solutions, Inc's Motion to Dismiss MOTION to Dismiss 1 Notice of Removal, Defendant Rentar Environment Solutions, Inc's Motion to Dismiss.(Signed by Judge Keith P Ellison) Parties notified.(sloewe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BLUESKYGREENLAND
ENVIRONMENTAL SOLUTIONS,
LLC,
Plaintiff,
V.
RENTAR ENVIRONMENTAL
SOLUTIONS, INC., et al.,
Defendants.

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Civil Action No. 4:11-cv-01745

MEMORANDUM AND ORDER

Before the Court is Defendant Rentar Environmental Solutions, Inc.’s Motion to
Dismiss for Improper Forum and Lack of Personal Jurisdiction (“Motion”). (Doc. No.
18.) After examining the Motion, all responses and replies thereto, and the applicable
law, the Court determines that the Motion must be GRANTED.
I.

BACKGROUND

The Court previously issued a Memorandum and Order in this case, granting
Defendants 21st Century Planet Fund LLC and Gregory E. Georgas’ Motion to Dismiss
for Lack of Personal Jurisdiction. (Doc. No. 29.) Familiarity with the facts of this case, as
outlined in the Memorandum and Order issued on November 13, 2011, is assumed. One
of the remaining Defendants, Rentar Environmental Solutions, Inc. (“Rentar”), now
brings this Motion, seeking to dismiss all claims against it because of improper forum
and, alternatively, because this Court lacks personal jurisdiction. First, Rentar asserts that

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Rentar and Plaintiff Bluesky Greenland Environmental Solutions, LLC (“Bluesky”)
executed a contract which contains a forum selection clause requiring any lawsuit
between the parties to be filed in state court in Dade County or Palm Beach County,
Florida (“the Contract”). (Motion to Dismiss 1.) Specifically, the Contract’s jurisdiction
and venue clause states: “If any lawsuit between the parties should arise, the dispute will
be resolved exclusively in Florida State courts in Dade County or Palm Beach County
with each party responsible for its own legal fees and costs. Florida law shall govern
without regard to conflicts of law provisions. Each party waives any objection to venue,
jurisdiction, and inconvenient forum.” (Id. 4; Ex. B to Mot. Dismiss, Rentar Master
Distributer Agreement 2.) As the forum selection clause is reasonable, Rentar contends,
the Court should dismiss the claims against Rentar. (Id.) In addition, Rentar states that it
has no jurisdictional contacts with Texas. (Id.) Therefore, Rentar argues, the claims
against it should be dismissed under Federal Rule of Civil Procedure 12(b)(2). (Id. 5.)
In its Response, Bluesky insists that this Court does, in fact, have personal
jurisdiction over Rentar. (Doc. No. 19, Resp. to Mot. Dismiss 15-18.) Bluesky also filed a
Sur-Reply in which it argues that the forum selection clause is inapplicable because
Bluesky “is not suing over an order placed and paid for and a failure to ship by Rentar.”
(Doc. No. 24, Sur-Reply to Mot. Dismiss 2.) Rather, Bluesky contends, its Complaint
“focuses on actions by a group of defendants to induce [Bluesky] into performing acts for
the benefit of the defendants in their joint plan to launch a new business enterprise in
India.” (Id.) As “[t]he contents of the supply contract that [Bluesky] once had with
[Rentar] are irrelevant to [Bluesky’s] causes of action,” Bluesky avers, the mandatory
forum selection clause is irrelevant. (Id.)

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II.

APPLICABLE LAW

Rentar’s Motion to Dismiss implicates two legal standards: The enforceability of
forum selection clauses and personal jurisdiction.
A. Enforceability of Forum Selection Clauses
On a motion to dismiss for improper venue under 12(b)(3), this Court must accept
as true all allegations in Bluesky’s Complaint and resolve all conflicts in favor of
Bluesky. Braspetro Oil Services Co. v. Modec (USA), Inc., 240 Fed.Appx. 612, 615 (5th
Cir. 2007). “‘Federal law applies to determine the enforceability of forum selection
clauses in both diversity and federal question cases.’” Alliance Health Group, LLC v.
Bridging Health Options, LLC, 553 F.3d 397, 399 (5th Cir. 2008) (quoting Braspetro Oil
Servs. Co., 240 Fed.Appx. at 615). 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.’” Braspetro Oil Services Co., 240 Fed.Appx. at 615 (quoting
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972)). To determine whether a
forum selection clause is unreasonable, this Court must analyze whether:

(1) the incorporation of the forum selection clause into the agreement was
the product of fraud or overreaching; (2) the party seeking to escape
enforcement will for all practical purposes be deprived of his day in court
because of the grave inconvenience or unfairness of the selected forum;
(3) the fundamental unfairness of the chosen law will deprive the plaintiff
of a remedy; or (4) enforcement of the forum selection clause would
contravene a strong public policy of the forum state.

Calix-Chacon v. Global Intern. Marine, Inc., 493 F.3d 507, 511 (5th Cir. 2007) (quoting
Haynsworth v. Corporation, 121 F.3d 956, 963 (5th Cir. 1997) (citing Carnival Cruise
Lines v. Shute, 499 U.S. 585, 595 (1991))).

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B. Personal Jurisdiction
“Absent a rule or statute to the contrary, . . . a federal court [may] exercise
jurisdiction over only those defendants who are subject to the jurisdiction of courts of the
state in which the court sits.” Point Landing, Inc. v. Omni Capital Intern., Ltd., 795 F.2d
415, 419 (5th Cir. 1986), aff’d sub nom. Omni Capital Intern., Ltd. v. Rudolf Wolff & Co.,
Ltd., 484 U.S. 97 (1987). The Court’s constitutional due process inquiry into personal
jurisdiction also serves as an inquiry into personal jurisdiction under the Texas long-arm
statute. Command-Aire Corp. v. Ontario Mech. Sales & Service Inc., 963 F.2d 90, 93-94
(5th Cir. 1992).
Plaintiffs bear the burden of demonstrating facts sufficient to support personal
jurisdiction over any nonresident defendants. United Galvanizing, Inc. v. Imperial Zinc
Corp., No. H-08-0551, 2008 WL 4746334, at *3 (S.D. Tex Oct. 27, 2008). To comport
with constitutional due process, plaintiffs must show that: (1) defendants purposefully
availed themselves of the benefits and protections of Texas law, thereby establishing
“minimum contacts” with Texas such that defendants could reasonably have anticipated
being haled into court there; and (2) under the circumstances, the exercise of personal
jurisdiction does “not offend traditional notions of fair play and substantial justice.”
Command-Aire Corp., 963 F.2d. at 94 (citing Asahi Metal Industry Co. v. Superior Court
of California, 480 U.S. 102 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462
(1985); and Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784 (5th Cir.1990)). “‘There are two
types of minimum contacts: those that give rise to specific personal jurisdiction and those
that give rise to general personal jurisdiction.’” Johnston v. Multidata Systems Intern.

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Corp., 523 F.3d 602, 609 (5th Cir. 2008) (quoting Lewis v. Fresne, 252 F.3d 352, 358
(5th Cir. 2001)).
Specific jurisdiction exists “[w]hen a nonresident defendant has purposefully
directed its activities at the forum state and the litigation results from alleged injuries that
arise out of or relate to those activities.” Cent. Freight Lines, Inc. v. APA Transp. Corp.,
322 F.3d 376, 381 (5th Cir. 2003) (citation omitted). “The non-resident’s purposefully
directed activities in the forum must be such that he could reasonably anticipate being
haled into court in the forum state.” Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir.
2010) (citing Burger King, 471 U.S. at 474). See also Choice Healthcare, Inc. v. Kaiser
Foundation Health Plan of Colo., 615 F.3d 364, 369 (5th Cir. 2010) (“The ‘purposeful
availment’ element ensures that a defendant will not be haled into court in a jurisdiction
solely as a result of random, fortuitous, or attenuated contacts or the unilateral activity of
another person or third party.”). Further, specific jurisdiction “requires a sufficient nexus
between the non-resident’s contacts with the forum and the cause of action.” Clemens,
615 F.3d at 378-79. Indeed, the non-resident defendant must purposefully avail herself of
the privilege of conducting activities in the forum state. Id. at 379.
General jurisdiction, in contrast, can be exercised when a defendant’s contacts
with the forum state are substantial, continuous, and systematic, though unrelated to the
litigation. Cent. Freight Lines, Inc., 322 F.3d at 381. The “continuous and systematic
contacts test is a difficult one to meet, requiring extensive contacts between a defendant
and a forum.” Johnston, 523 F.3d at 609.
Although the party seeking to invoke the power of the court bears the burden of
proving that jurisdiction exists, a prima facie showing suffices, and the plaintiff need not

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establish jurisdiction by a preponderance of the evidence. Luv N’ Care, Ltd. v. Insta-Mix,
Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citation omitted). Moreover, the “court must
resolve all undisputed facts submitted by the plaintiff, as well as all facts contested in the
affidavits, in favor of jurisdiction.” Id. (citation omitted). “‘The court may determine the
jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or
any combination of the recognized methods of discovery.’” Allred v. Moore & Peterson,
117 F.3d 278, 281 (5th Cir. 1997) (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th
Cir. 1985)).
III.

ANALYSIS

The Court concludes that the forum selection clause is enforceable and that it
applies to Bluesky’s claims. First, Bluesky has not succeeded in showing that the forum
selection clause is unreasonable. Indeed, Bluesky has “produced no evidence that the
forum selection clause was the result of fraud or overreaching, that it violates a strong
public policy of this forum, or that it would deprive [Bluesky] of [its] day in court.”
Financial Casualty & Surety, Inc. v. Mascola, No. H-11-0120, 2011 WL 3020934, at *2
(S.D. Tex. July 22, 2011). Bluesky has simply not met its “heavy burden of proof” to
show that the forum selection clause is unenforceable. Ginter ex rel. Ballard v. Belcher,
Prendergast & Japorte, 536 F.3d 439, 441 (5th Cir. 2008) (internal quotations omitted).
Second, the forum selection clause clearly applies to Bluesky’s claims. This Court
assumes “not only that ‘[f]ederal law governs the determination of whether an
enforceable forum selection clause exists[,]’ but also that federal law controls whether
[Bluesky’s] lawsuit falls within the scope of the forum selection clause.” Ondova Ltd. Co.
v. Manila Industries, Inc., 513 F.Supp.2d 762, 772 (N.D. Tex. June 16, 2007) (quoting

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Aerus LLC v. Pro Team, Inc., 2005 WL 1131093, at *1 (N.D. Tex. May 9, 2005) and
citing Jones v. GNC Franchising, Inc., 211 F.3d 495, 497 (9th Cir. 2000) (“In diversity
cases, federal law governs the analysis of the effect and scope of forum selection
clauses.”)). Notably, “[t]he scope of a forum selection clause is not limited solely to
claims for breach of the contract that contains it.” MaxEn Capital, LLC v. Sutherland,
No. H-08-3590, 2009 WL 936895, at *6 (S.D. Tex. April 3, 2009). This Court should
“look to the language of the parties’ contracts to determine which causes of action are
governed by the forum selection clauses.” Marinechance Shipping, Ltd. v. Sebastian, 143
F.3d 216, 222 (5th Cir. 1998). See also TGI Friday’s Inc. v. Great Northwest
Restaurants, 652 F.Supp.2d 750, 759 (N.D. Tex. 2009). “The language of the forumselection clause is particularly important,” as “[c]lauses that extend to all disputes that
‘relate to’ or ‘are connected with’ the contract are construed broadly, while clauses that
cover disputes ‘arising out of’ or over ‘the implementation and interpretation of’ the
contract are construed narrowly.” Pinnacle Interior Elements, Ltd. v. Panalpina, No.
3:09-CV-0430-G, 2010 WL 445927, at *5 (N.D. Tex. Feb. 9, 2010) (quoting Pennzoil
Exploration and Production Company v. Ramco Energy Limited, 139 F.3d 1061, 1067
(5th Cir. 1998); MaxEn Capital, LLC v. Sutherland, 2009 WL 936895, at *6 (S.D. Tex.
Apr. 3, 2009)). Therefore, “[w]hether a forum selection clause encompasses other claims
depends principally on how broadly the clauses are worded.” MaxEn Capital, LLC, 2009
WL 936895, at *6.
Following Fifth Circuit precedent, this Court thus looks to the language of the
Contract’s forum selection clause to determine whether Bluesky’s claims fall within its
scope. The forum selection clause states: “If any lawsuit between the parties should arise,

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the dispute will be resolved exclusively in Florida State courts in Dade County or Palm
Beach County with each party responsible for its own legal fees and costs.” (Rentar
Master Distributor Agreement 2.) As the forum selection clause applies to “any lawsuit,”
Bluesky’s claims clearly fall within it. Although the Court has not found a case involving
a forum selection clause with equally broad language, Fifth Circuit case law is clear that
the scope of a forum selection clause is determined by the clause’s language. Therefore,
the Court will not contravene a reasonable forum selection clause that states that any
dispute between the parties should be resolved in Florida courts. Indeed, it was the
parties’ option to enter into a broad forum selection clause; as the clause is reasonable,
the Court must respect it.
Finally, the Court disagrees that the forum selection clause is inapplicable if the
contract has expired, has been terminated, or has been breached. Indeed, such an
interpretation “runs counter to the law favoring forum-selection clauses.” Texas Source
Group, Inc. v. CCH, Inc., 967 F.Supp. 234, 237 (S.D. Tex. 1997). See United Natural
Foods, Inc. v. Hagen, No. 3:10cv809 (JBA), 2010 WL 3211070, at *3 n.2 (D.Conn. Aug.
13, 2010) (“Defendants assert a timeliness argument, similarly unavailing, regarding the
forum-selection clause. They argue that the entire Agreement, including the forumselection clause, expired on December 7, 2007. However, the forum-selection clause
contains no expiration date or temporal limitation at all.”); VERSAR, Inc. v. Ball, No.
CIV.A. 01-1302, 2001 WL 818354, at *2 (E.D. Pa. July 12, 2001) (“Unless otherwise
expressed, a choice of forum clause does not expire upon termination of the contract from
which it derives.”); Texas Source Group, Inc. v. CCH, Inc., 967 F.Supp. at 237 (“[I]t is
altogether inconsistent for the plaintiffs to now argue that the forum-selection clause is

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unenforceable based on an alleged breach of the Agreement…. Were the Court to rule
otherwise, a party could defeat a validly negotiated forum-selection clause by simply
alleging that the nonmoving party breached the contract, rendering the clause wholly
superfluous.”); Allied Sound, Inc. v. Dukane Corp., 934 F.Supp. 272, 275 (M.D. Tenn.
1996) (observing that “a choice of forum clause does not necessarily expire upon the
termination of the agreement from which it derives” and concluding that the forum clause
in that case had not expired because there was no “indication, express or implicit, that the
parties intended the choice of forum clause to become invalid upon termination of the
agreement”); Advent Electronics, Inc. v. Samsung Semiconductor, Inc., 709 F.Supp. 843,
846 (N.D. Ill. 1989) (“In the absence of contractual language expressly or implicitly
indicating the contrary, a forum selection clause survives termination of the contract.”).
The Court concludes that the forum selection clause is enforceable and that
Bluesky’s claims fall within its scope. As the Court makes this finding, it will not reach
whether it would otherwise have personal jurisdiction over Rentar.
IV.

CONCLUSION

For the reasons outlined above, Rentar’s Motion to Dismiss is GRANTED.
IT IS SO ORDERED.
SIGNED on this the 20th day of December, 2011.

_________________________________________
KEITH P. ELLISON
UNITED STATES DISTRICT COURT JUDGE

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