Arro Consulting, Inc. v. Bennett, Brewer & Assoc.
Arro Consulting, Inc. v. Bennett, Brewer & Assoc. No. 1673 MDA 2016
| Pa. Super. Ct. | Sep 5, 2017Background
- ARRO (Pennsylvania engineering firm) and BBA (Maryland land-development firm) contracted in 2009 for engineering services on a Maryland project.
- The Agreement included a “Governing Law” clause: “Any litigation arising in any way from this Agreement shall be brought in the Courts of Common Pleas of Pennsylvania having jurisdiction.”
- ARRO sued BBA for breach of contract in Lancaster County Court of Common Pleas in 2013.
- BBA filed a preliminary objection asserting the trial court lacked personal jurisdiction over it.
- The trial court interpreted “having jurisdiction” to mean personal jurisdiction, applied a minimum-contacts analysis, found insufficient contacts, and dismissed the complaint.
- The Superior Court reversed, holding the forum-selection clause consented to Pennsylvania personal jurisdiction and was enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause binds BBA to Pennsylvania courts and thus obviates a minimum-contacts inquiry | The clause’s mandatory language (“shall be brought”) shows consent to Pennsylvania courts, so BBA waived challenge to personal jurisdiction | The phrase “having jurisdiction” limits the clause to Pennsylvania courts that already have personal jurisdiction over BBA; minimum-contacts analysis is still required | Held: Clause is valid and enforceable; “having jurisdiction” refers to subject-matter jurisdiction of courts of common pleas, so BBA consented to personal jurisdiction in Pennsylvania |
| Whether enforcing the clause would be unreasonable or unfair to BBA | ARRO: enforcement is reasonable; BBA knowingly retained a PA firm and states border one another | BBA: litigating in PA is unduly burdensome because project is in Maryland and ARRO would not be prejudiced by MD forum | Held: BBA did not show fraud, extreme inconvenience, or public-policy violation; enforcement is reasonable |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (established minimum-contacts test for personal jurisdiction)
- Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (an individual right to personal jurisdiction can be waived by consent)
- Cont’l Bank v. Brodsky, 311 A.2d 676 (parties may agree in advance to submit to a given court’s jurisdiction)
- Frontier Leasing Corp. v. Shah, 931 A.2d 676 (forum-selection clauses render minimum-contacts analysis inapplicable when consent is shown)
- Autochoice Unlimited, Inc. v. Avangard Auto Fin., Inc., 9 A.3d 1207 (commercial forum-selection clauses presumptively valid)
- Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614 (forum-selection clause unenforceable only for fraud, extreme inconvenience, or public policy violation)