CADS Construction, LLC v. Matrix Service, Inc.
4:21-cv-00513
N.D. Okla.Oct 12, 2021Background:
- CADS Construction (Louisiana) sued Matrix Service (Oklahoma corporation with Houston office) for breach of a subcontract relating to pipe fabrication/installation at Morgan Point, LaPorte, Texas.
- The subcontract (unsigned but treated as binding) contains a forum-selection clause: Oklahoma law governs and litigation "may be brought only" in Tulsa County, Oklahoma; parties waive venue/jurisdiction objections.
- CADS filed suit in Louisiana state court and contended the Oklahoma forum clause is voidable under Texas Bus. & Com. Code § 272.001 (which disfavors out-of-state forums for certain Texas construction contracts).
- Matrix moved to transfer under 28 U.S.C. § 1404(a) to the Northern District of Oklahoma to enforce the forum clause, alternatively to the Southern District of Texas for convenience.
- The court concluded the forum-selection clause is contractually valid for Atlantic Marine purposes, applied the modified § 1404(a) analysis (giving controlling weight to the clause), and granted transfer to the Northern District of Oklahoma.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of forum-selection clause (Texas § 272.001) | The clause is voidable under Texas law for construction contracts and CADS effectively voided it | The clause is valid, negotiated at arm’s length, and waives venue objections | Clause is contractually valid for Atlantic Marine purposes; CADS did not meet heavy burden to show unreasonableness or effective voiding |
| Applicability of Atlantic Marine modified § 1404(a) analysis | If clause invalid, apply ordinary § 1404(a) convenience analysis | Clause valid, so Atlantic Marine requires plaintiff to show transfer unwarranted; only public factors considered | Clause valid; apply Atlantic Marine (plaintiff bears burden; private factors largely disregarded) |
| Public-interest factors (local interest, familiarity with governing law, court congestion, conflict-of-laws) | Louisiana (plaintiff location) and Texas (site of construction; Texas policy) have local interests | Oklahoma forum chosen and subcontract selects Oklahoma law, favoring adjudication in Oklahoma | Public factors do not overwhelmingly disfavor Oklahoma; familiarity with Oklahoma law favors transfer; overall public factors permit enforcing the clause |
| Alternative transfer to Southern District of Texas (if clause invalid) | Keep case in Louisiana | Alternatively move to S.D. Texas for convenience | Court enforced forum clause and transferred to N.D. Oklahoma; alternative request not needed |
Key Cases Cited
- Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S. Ct. 568 (2013) (valid forum-selection clause gets controlling weight; modified § 1404(a) analysis)
- Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (state policy disfavoring forum-selection clauses treated as a public-interest factor in transfer analysis)
- In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (§ 1404(a) convenience factors and good-cause standard)
- In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004) (private and public transfer factors)
- Barnett v. DynCorp Int'l, L.L.C., 831 F.3d 296 (5th Cir. 2016) (discussion of law applicable to validity of forum-selection clauses)
- Haynsworth v. The Corp., 121 F.3d 956 (5th Cir. 1997) (burden on party attacking forum-selection clause; unreasonableness standard)
- Weber v. PACT XPP Techs., AG, 811 F.3d 758 (5th Cir. 2016) (choice-of-law rules apply when interpreting contractual clauses)
- Van Rooyen v. Greystone Home Builders, LLC, 295 F. Supp. 3d 735 (N.D. Tex. 2018) (application of unreasonableness factors to forum-selection clause challenges)