Adema Technologies, Inc. v. Wacker Chemical Corp.
657 F. App'x 661
| 9th Cir. | 2016Background
- Adema Technologies entered a fixed-price supply agreement with Wacker Chemie AG that included an exclusive jurisdiction clause designating Munich as the forum for disputes.
- Adema sued in U.S. district court asserting claims including unfair competition (Cal. Bus. & Prof. Code § 17200), unjust enrichment, conversion, and aiding-and-abetting, alleging Wacker induced the contract knowing market prices would fall.
- The district court dismissed Adema's suit on forum non conveniens grounds, enforcing the contract's forum-selection clause.
- Adema appealed, arguing the forum-selection clause did not govern its non-contractual claims and that enforcing it would be unreasonable, unjust, or violate California public policy.
- The Ninth Circuit reviewed whether the broad forum-selection clause covered all claims and whether extraordinary circumstances defeated enforcement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the forum-selection clause cover non-contractual claims? | Clause limited; non-contract claims should proceed in U.S. | Clause is broad ("legal relations between the parties") and covers claims that relate to contract interpretation | Clause is broad and applies to all claims because resolution "relates to" contract interpretation |
| Must the court refuse enforcement for "extraordinary circumstances"? | Enforcement would be unjust or unreasonable due to hardship and law differences | No fraud/overreaching; agreed forum is reasonable; plaintiff bears burden to show otherwise | No extraordinary circumstances shown; enforcement appropriate |
| Would litigation in Germany effectively deprive Adema of its day in court? | Trial in Germany would be so difficult/expensive as to deny meaningful access | Adema bears heavy burden; prior participation in German proceedings undermines hardship claim | Adema failed to meet heavy burden; not effectively denied a day in court |
| Would enforcing the clause contravene important California public policy? | German forum/choice-of-law could bar vindication of California policies (excessive forfeitures, UCL enforcement) | No clear showing German law would be so deficient; German law can address unfair-competition claims | No showing of violation of California public policy; enforcement does not contravene policy |
Key Cases Cited
- Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509 (9th Cir.) (forum-selection clause can cover non-contractual claims that relate to contract interpretation)
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (2013) (when a valid forum-selection clause designates a foreign forum, enforce via forum non conveniens and modify the usual analysis)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are prima facie valid and enforceable unless enforcement is unreasonable or unjust)
- Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir.) (enforcement is unreasonable if clause results from fraud/overreaching, would deprive plaintiff of day in court, or contravenes strong public policy)
- Argueta v. Banco Mexicano, S.A., 87 F.3d 320 (9th Cir.) (plaintiff bears heavy burden to show forum non conveniens denial of meaningful day in court)
- Peterson v. Boeing Co., 715 F.3d 276 (9th Cir.) (forum-selection clause enforcement strongly presumed; hardship insufficient without heavy showing)