Albemarle Corp. v. AstraZeneca UK Ltd.
628 F.3d 643
| 4th Cir. | 2010Background
- AstraZeneca UK Ltd. contracted to buy a large share of DIP from Albemarle Intl. Corp. (the marketing arm of Albemarle Corp.).
- Albemarle manufactured DIP in South Carolina; AstraZeneca used DIP to make Diprivan at its England plant.
- The 2005 contract included a forum selection clause stating the contract was subject to English law and the English High Court's jurisdiction, with a right-of-first-refusal for Albemarle if AstraZeneca switched to propofol.
- In 2006 AstraZeneca elected to switch to propofol; Albemarle sued in South Carolina for breach, and AstraZeneca removed to federal court, invoking the forum clause.
- A 2008 contract between the parties added a SC law and exclusive South Carolina forum for future disputes, plus an integration clause; Albemarle argued it superseded the 2005 contract’s clauses.
- The district court initially held federal law governed the forum clause and that it was permissive; later, it dismissed seeking enforcement of English-mandated forum and English law, basing it on English-law construction and exclusivity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2005 forum clause is exclusive or permissive | Albemarle: 2005 clause is exclusive under English law; English forum mandatory. | AstraZeneca: under federal law, clause is permissive unless exclusion language present. | Clause construed as exclusive under English law; enforced in England. |
| Effect of the 2008 contract on the 2005 contract’s clauses | 2008 integration/venue clauses terminate 2005 clauses; supersede them. | 2008 contract merely terminates some aspects prospectively; 2005 forum and choice-of-law rights survived. | 2008 contract did not nullify or supersede 2005 contract’s forum and English-law rights. |
| Choice of law and forum construction conflict resolution | Federal law governs interpretation of forum clauses in diversity; apply English-law construction via the 2005 clause. | Give effect to parties’ intent; English law governs construction; English forum mandatory. | Apply English-law construction; clause mandates English forum. |
| Public-policy or unreasonableness defense to enforcing a forum clause | South Carolina public policy disfavors forum clauses; enforceability should be constrained. | Bremen principles favor enforcement; no strong South Carolina policy overrides. | Strong public-policy exception not satisfied; enforce forum clause. |
Key Cases Cited
- The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum clauses presumptively enforceable unless unreasonable or unjust)
- Wong v. Party-Gaming Ltd., 589 F.3d 821 (6th Cir. 2009) (enforceability of forum clauses generally governed by federal law)
- Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509 (9th Cir. 1988) (interpretation of forum selection clauses involves federal law)
- IntraComm, Inc. v. Bajaj, 492 F.3d 285 (4th Cir. 2007) (general rule: exclusion language required to preclude other forums)
- John Boutari & Son, Wines & Spirits, S.A. v. Attiki Imp. & Distrib., Inc., 22 F.3d 51 (2d Cir. 1994) (language of exclusion relevant to forum designation)
- Mazda Motors of Am., Inc. v. M/V Cougar ACE, 565 F.3d 573 (9th Cir. 2009) (analyzed forum-selection clauses in context of overall contract)
- Yavuz v. 61 MM, Ltd., 465 F.3d 418 (10th Cir. 2006) (the governing law specified in contract governs construction of forum clause)
- Stewart Org., Inc. v. Ricoh, 487 U.S. 22 (1988) (venue rules and transfer principles; forum clauses treated as procedural)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (conflicts of laws rules in federal court must conform to state law)
- Nash v. Tindall Corp., 650 S.E.2d 81 (S.C. 2007) (South Carolina public policy considerations re: forum clauses)