AL Copeland Invs., L.L.C. v. First Specialty Ins. Corp.
884 F.3d 540
5th Cir.2018Background
- Al Copeland Investments and Diversified Foods (Al Copeland) operate a Louisiana food manufacturing facility that suffered property damage in 2015.
- Al Copeland submitted an insurance reimbursement claim to First Specialty Insurance, which was denied.
- Al Copeland sued in the U.S. District Court for the Eastern District of Louisiana to recover damages under the policy.
- The insurance policy contained a clause stating New York law governs and the parties submit to the exclusive jurisdiction of New York state courts.
- First Specialty moved to dismiss on forum non conveniens grounds, arguing the forum-selection clause requires litigation in New York state court; the district court granted the motion.
- Al Copeland appealed, arguing Louisiana law (La. R.S. § 22:868) reflects a public policy forbidding forum-selection clauses in insurance contracts and that public-interest factors counseled against dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether La. R.S. § 22:868 prohibits forum-selection clauses in insurance contracts | § 22:868 forbids depriving Louisiana courts of jurisdiction; its mandatory language and voiding provision show a policy against such clauses | The statute bars provisions that deprive Louisiana courts of jurisdiction, not venue; forum-selection clauses govern venue and are therefore not prohibited | Section 22:868 does not evince a public policy barring forum-selection clauses in insurance contracts; clause enforceable |
| Whether the forum-selection clause is enforceable generally | Clauses in insurance contracts should be void under Louisiana public policy | Strong presumption in favor of enforcing mandatory forum-selection clauses; only overcome in narrow circumstances (fraud, grave inconvenience, denial of remedy, or contravention of strong public policy) | Clause is enforceable; Al Copeland did not show any of the narrow exceptions apply |
| Whether public-interest factors justify refusing enforcement (forum non conveniens) | Louisiana has stronger local interest; case connections to New York are limited; risk of foreign law application | Plaintiff must show exceptional public-interest reasons; choice of law concerns alone do not suffice; burden on plaintiff to show administrative difficulties from congestion | Public-interest factors do not overcome the forum-selection clause; dismissal proper |
| Standard of review on appeal | N/A (procedural) | N/A | De novo review of clause enforceability; abuse of discretion review for balancing public- and private-interest factors |
Key Cases Cited
- Barnett v. DynCorp Int’l, L.L.C., 831 F.3d 296 (5th Cir. 2016) (discusses enforcement standard and review for forum-selection clauses)
- Weber v. PACT XPP Techs., AG, 811 F.3d 758 (5th Cir. 2016) (articulates presumption favoring enforcement and the public-interest factors analysis)
- Shelter Mut. Ins. Co. v. Rimkus Consulting Grp., Inc., 148 So.3d 871 (La. 2014) (holds forum-selection clauses generally enforceable under Louisiana law)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (rejects argument that forum-selection clauses improperly oust a court of jurisdiction)
- Atl. Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S. Ct. 568 (2013) (limits when choice-of-law concerns justify declining enforcement of a forum-selection clause)