Adkins et al v. DeAngelo Brothers, LLC
Filing
14
MEMORANDUM OPINION AND ORDER granting in part and denying in part Defendant's 8 MOTION to Dismiss 1 Complaint or, in the Alternative, MOTION to Transfer to the U. S. District Court for the Middle District of Pennsylvania; GRANTING the motion to the extent it seeks to transfer this case to the Middle District of Pennsylvania, but DENYING the motion to the extent it seeks to have this case dismissed for failing to comply with the forum-selection clause; directing the Clerk to transfer this action to the Middle District of Pennsylvania. Signed by Judge Robert C. Chambers on 7/22/2016. (cc: counsel of record; any unrepresented parties) (jsa)
IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
MICHAEL A. ADKINS, an individual and
JANET HOLDERBY, an individual,
Plaintiffs,
v.
CIVIL ACTION NO. 3:15-13151
DeANGELO BROTHERS, LLC, a limited
liability company, formerly DeAngelo
Brothers, Inc.,
Defendant.
MEMORANDUM OPINION AND ORDER
On September 14, 2015, Plaintiffs Michael A. Adkins and Janet Holberby filed this
diversity action against their former employer Defendant DeAngelo Brothers, LLC. Thereafter,
Defendant filed a Motion to Dismiss or, in the Alternative, Motion to Transfer. ECF No. 8. Upon
consideration, the Court GRANTS the motion to TRANSFER.
I.
FACTS
Plaintiff Adkins is a citizen and resident of Cabell County, West Virginia, and
Plaintiff Holderby is a citizen and resident of Lawrence County, Ohio. Defendant is a Pennsylvania
limited liability company licensed to do business in West Virginia.1 Both Plaintiffs worked for
Defendant in its Huntington, West Virginia office.
According to the Complaint, Defendant’s principal place of business is in Hazelton,
Luzerne County, Pennsylvania.
1
When Plaintiffs began working for Defendant, they both signed Non-Disclosure
and Non-Competition Agreements. On or about 2015, Plaintiffs quit their positions with Defendant
and began working for Wilderness Environmental Services, a competitor to Defendant.
Subsequently, Plaintiffs were terminated by Wilderness Environmental Services as part of
settlement agreement it reached with Defendant in a lawsuit against another employee who left
Defendant to work for Wilderness Environmental Services. Plaintiffs were not parties to that
lawsuit. As a result of their termination from Wilderness Environmental Services, Plaintiffs filed
this action against Defendant for Tortious Interference of an Employment Opportunity and
Economic Expectancy and for Declaratory Relief. Defendant now moves to either dismiss or
transfer this action pursuant to a forum-selection clause contained in Non-Disclosure and NonCompetition Agreements Plaintiffs signed.
II.
DISCUSSION
In Atlantic Marine Construction Co. v. U.S. District Court for the Western District
of Texas, 134 S. Ct. 568 (2013), the United States Supreme Court held that enforcement of a forumselection clause should be treated as a motion to transfer under 28 U.S.C. § 1404(a), rather than a
motion to dismiss under Rule 12(b)(3) or 28 U.S.C. § 1406(a). 134 S. Ct. at 577. “Section 1406(a)
and Rule 12(b)(3) allow dismissal only when venue is ‘wrong’ or ‘improper.’ Whether venue is
‘wrong’ or ‘improper’ depends exclusively on whether the court in which the case was brought
satisfies the requirements of federal venue laws, and those provisions say nothing about a forumselection clause.” Id. More specifically, a court generally looks to 28 U.S.C. § 1391 to determine
whether venue is “wrong” or “improper.” Section 1391(b) provides that:
A civil action may be brought in—
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(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is
located;
(2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part
of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in which
any defendant is subject to the court’s personal jurisdiction with
respect to such action.
28 U.S.C. § 1391(b). In this case, Defendant has not challenged the propriety of venue under
§ 1391. Rather, Defendant focuses its arguments on whether this action should remain in this
District in light of the forum-selection clause. Therefore, pursuant to Atlantic Marine, this Court
will determine whether this action should be transferred.
In Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), the Supreme
Court held that “federal law, specifically 28 U.S.C. § 1404(a), governs the District Court’s decision
whether to give effect to the parties’ forum-selection clause[.]” 487 U.S. at 32. In deciding whether
an action should be transferred under this section, a court must “weigh in the balance a number of
case-specific factors[,]” and “[t]he presence of a forum-selection clause . . . will be a significant
factor that figures centrally in the district court’s calculus.” Id. at 29. However, the Supreme Court
has made it clear that the presence a forum-selection clause cannot make venue “wrong” or
“improper” under § 1406(a) or Rule 12(b)(3). Atl. Marine, 134 S. Ct. at 579.
Section 1404(a) specifically 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 have
consented.” 28 U.S.C. § 1404(a). Thus, § 1404(a) serves as an enforcement mechanism for forum-3-
selection clauses that designate a specific federal district and must “be ‘given controlling weight
in all but the most exceptional cases.’” Atl. Marine, 134 S. Ct. at 579 (quoting Stewart, 487 U.S.
at 33 (Kennedy, J., concurring)). More specifically, the Supreme Court explained that, “[w]hen the
parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the
case to the forum specified in that clause. Only under extraordinary circumstances unrelated to the
convenience of the parties should a § 1404(a) motion be denied.” Id. at 581 (footnote omitted).
This policy not only protects the legitimate interests of the parties, but also promotes the “‘vital
interests of the justice system.’” Id. (quoting Stewart, 487 U.S. at 33 (Kennedy, J., concurring)).
In essence, the Supreme Court stated that § 1404(a) is simply a codification of the
forum non conveniens doctrine for cases transferred within the federal court system. When a
forum-selection clause exists, however, courts must make three adjustments to a typical § 1404(a)
analysis. Id. at 581. First, a court must give no weight to a plaintiff’s choice of forum. Instead, the
plaintiff bears the burden to prove that a transfer to the contractually agreed upon forum is
unwarranted. Id. Second, the court will give no weight to the parties’ private interest in having an
action filed in a forum other than the one that was preselected in the contract. Any inconvenience
a party or their witnesses may experience “‘was clearly foreseeable at the time of contracting.’”
Id. at 582 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17-18 (1972)) (other citation
omitted). Although a court may consider the interest of the public in having an action filed in a
particular forum, it will be unusual for the public interest to outweigh the forum-selection clause.
Third, when a party contractually agrees to a forum-selection clause and then files an action in
contravention to the agreement, “the contractually selected venue should not apply the law of the
transferor venue to which the parties waived their right.” Id. at 583 (footnote omitted).
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In the present case, the Non-Disclosure and Non-Competition Agreements signed
by Plaintiffs provide, in relevant part:
It is acknowledged by the Employer and the Employee that the place
of this contract, its status and form, is at all times in the
Commonwealth of Pennsylvania, and any action at law, suit in
equity, or judicial proceeding relating to the validity, construction,
interpretation, and enforcement of this Agreement, or any provision
hereof, shall be instituted and determined exclusively in the courts
of the Commonwealth of Pennsylvania.
Non-Disclosure and Non-Competition Agreement, at ¶13 (ECF No. 8-2, at 9; ECF No. 8-3, at 9).
In addition, the Agreements state that:
If any term or provision of this agreement shall be invalid or
unenforceable to any extent or application, it is the intent of the
parties that the remainder of this Agreement shall be so construed as
to be valid and enforceable to the fullest extent and the broadest
application permitted by law.
Id. at ¶14. Here, Plaintiffs responded to Defendant’s motion by arguing that the non-compete
clauses in the Agreements are unenforceable for a variety of reasons. However, Plaintiffs make no
direct challenge to the validity of the forum-selection clause.
When a forum-selection clause exists, it is presumptively valid under the federal
standard and is generally binding and enforceable—unless such enforcement is “unreasonable
under the circumstances.” M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10 (1972) (footnote
omitted); see also Allen v. Lloyd's of London, 94 F.3d 923, 928 (4th Cir. 1996) (quoting M/S
Bremen). Forum-selection clauses may be determined to be unreasonable if:
(1) their formation was induced by fraud or overreaching;
(2) the complaining party “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 may deprive the
plaintiff of a remedy; or
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(4) their enforcement would contravene a strong public policy of the
forum state.
Allen, 94 F.3d at 928 (citations omitted). In order to avoid enforcement of a forum-selection clause,
the challenging party must make “a strong showing that [the clause] should be set aside.” M/S
Bremen, 407 U.S. at 15. In this case, the Court finds that Plaintiffs have made no such showing.2
Therefore, the Court finds that the forum-selection clause is binding and enforceable.3
III.
CONCLUSION
Accordingly, for the foregoing reasons, the Court GRANTS Defendant’s motion
to the extent it seeks to transfer this case to the Middle District of Pennsylvania, but DENIES the
motion to the extent it seeks to have this case dismissed for failing to comply with the forumselection clause. ECF No. 8.
The Court DIRECTS the Clerk to TRANSFER this action to the Middle District
of Pennsylvania and to send a copy of this Memorandum Opinion and Order to counsel of record
and any unrepresented parties.
ENTER:
July 22, 2016
2
In fact, Plaintiffs make no arguments with respect to the forum-selection clause in their
Response to Defendant’s motion. Instead, they focus solely on the enforceability of the restrictive
employment covenant, which is irrelevant to the issue of whether this action should be transferred.
3
This Court’s decision is limited to the enforceability of the forum-selection clause.
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