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American Specialty Lab LLC v. GenTech Scientific Inc
2:17-cv-01458
D. Nev.
Nov 16, 2017
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Background

  • ASL purchased laboratory equipment from GenTech for $75,000 and alleges the equipment failed to perform to specifications, bringing breach of contract and breach of implied covenant claims.
  • The parties executed a one-page Customer Purchase Order signed by ASL that expressly incorporated GenTech’s online General Sales Terms and Conditions by reference.
  • Paragraph 30 of the incorporated Terms and Conditions contains a forum-selection clause designating state or federal courts in Wyoming County, New York for resolving disputes.
  • GenTech moved to dismiss for improper venue under Rule 12(b)(3) or, alternatively, to transfer under 28 U.S.C. § 1404(a) based on the forum-selection clause; GenTech also filed a separate Rule 12(b)(6) motion.
  • ASL argued the Terms and Conditions were an unenforceable "browsewrap" and that the clause was thus not incorporated; ASL also emphasized forum convenience and alleged fraud/duress tied to the clause.
  • The court treated the motion as one under § 1404(a), found the forum-selection clause contractually valid and enforceable, granted transfer to the United States District Court for the Western District of New York (Wyoming County), and declined to rule on the Rule 12(b)(6) motion.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Enforceability of forum-selection clause incorporated by reference into a signed Purchase Order ASL: Terms are a "browsewrap"/hidden online terms not reasonably communicated, so clause is not incorporated or enforceable GenTech: Purchase Order signed by ASL expressly limited acceptance to GenTech's Terms and Conditions; clause is clear and presumptively enforceable The clause is enforceable; signed PO + express incorporation provided adequate notice; ASL failed to meet heavy burden to show invalidity
Proper procedural vehicle to enforce forum-selection clause (dismiss v. transfer) ASL: emphasized forum convenience and other defenses (and sought to keep case in Nevada) GenTech: sought dismissal under Rule 12(b)(3) or transfer under § 1404(a) based on clause Court treated dispute under § 1404(a) per Atlantic Marine, granted transfer to district court in Wyoming County, NY and declined to rule on 12(b)(6) motion

Key Cases Cited

  • Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133 (9th Cir.) (court may consider matters outside the pleadings on a Rule 12(b)(3) motion)
  • Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (2013) (forum-selection clauses should be given controlling weight; directs adjusted § 1404(a) analysis)
  • Doe 1 v. AOL LLC, 552 F.3d 1077 (9th Cir.) (forum-selection clauses are presumptively valid; party resisting bears heavy burden)
  • Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir.) (distinguishes browsewrap agreements and explains when online terms are reasonably communicated)
  • Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (discusses forum non conveniens and framework for forum-selection considerations)
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Case Details

Case Name: American Specialty Lab LLC v. GenTech Scientific Inc
Court Name: District Court, D. Nevada
Date Published: Nov 16, 2017
Docket Number: 2:17-cv-01458
Court Abbreviation: D. Nev.