AURORA CASKET COMPANY, LLC v. CARIBBEAN FUNERAL SUPPLY CORP.
4:17-cv-00220
S.D. Ind.Nov 22, 2017Background
- Aurora Casket (Indiana) contracted with Caribbean Funeral Supply (Puerto Rico) under a Product Supply Agreement (PSA) containing a forum-selection clause requiring litigation exclusively in Dearborn County, Indiana.
- Aurora alleges Caribbean breached the PSA by failing to pay for delivered products; Aurora also asserts separate breach claims against JR Quality, Inc. and Rosa González arising from distinct contracts and a secured promissory note in Puerto Rico.
- Caribbean moved to dismiss or transfer based on the PSA forum-selection clause; Aurora opposed, arguing Law 75 (Puerto Rico Dealer’s Act) voids clauses requiring litigation outside Puerto Rico.
- Court treated the motion as a § 1404(a) transfer motion under Atlantic Marine and found the forum-selection clause contractually valid (no fraud/overreaching alleged).
- Public-interest factors (court congestion, local interest, familiarity with law) were analyzed; overall neutral for the Caribbean claim, but Puerto Rico is presumptively the proper forum for claims against non-contracting local defendants (JR and González).
- Court applied the Howmedica/Rolls Royce framework for mixed-party cases and severed Aurora’s claims against Caribbean for transfer to Indiana while retaining claims against JR and González in Puerto Rico.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of forum‑selection clause | Law 75 makes out‑of‑Puerto Rico forum clauses void for dealer contracts | PSA clause is valid and governs forum selection | Clause is valid and enforceable; no fraud or overreaching shown |
| Proper procedural remedy for enforcement | Case should remain in Puerto Rico; dismissal/other relief urged | Motion to dismiss or transfer under § 1404(a) based on clause | Court treated motion as § 1404(a) transfer per Atlantic Marine and granted transfer of Caribbean claims |
| Relevance of Puerto Rico public policy (Law 75) | Law 75 prevents enforcement of clause moving dispute out of Puerto Rico | Federal/Puerto Rico law align; clause doesn’t contravene public policy here | Law 75 does not overcome clause; public‑interest factors do not overwhelmingly disfavor transfer |
| Claims against non‑signatory local defendants (JR, González) | All claims should remain consolidated in Puerto Rico | Caribbean seeks transfer only as to parties bound by clause | Applied Howmedica framework: sever claims; transfer Caribbean claims to Indiana; keep JR and González claims in Puerto Rico |
Key Cases Cited
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (explains Erie doctrine and federal/state law allocation)
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (forum‑selection clauses are controlling; § 1404(a) transfer is appropriate remedy)
- Claudio‑De Leon v. Sistema Univ. Ana G. Mendez, 775 F.3d 41 (1st Cir.) (treats motions to enforce forum clauses as Rule 12(b)(6) style challenges in First Circuit)
- Silva v. Encyclopedia Britannica Inc., 239 F.3d 385 (1st Cir.) (use of federal common law to interpret forum‑selection clauses in diversity cases)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (choice‑of‑forum and public‑interest factors analysis)
- In re: Howmedica Osteonics Corp., 867 F.3d 390 (3d Cir.) (four‑step framework for handling forum‑selection clauses when some parties are non‑signatories)
- In re Rolls‑Royce PLC, 775 F.3d 671 (5th Cir.) (framework adopted and discussed by other circuits for mixed‑party transfers)