Cagle v. Mathers Family Trust
2013 CO 7
Colo.2013Background
- Plaintiffs, Vermont/California/Illinois residents, bought oil and gas interests from HEI Resources and related entities through Texas-based salespeople.
- Each signed Application and Joint Venture Agreements containing Dallas County, Texas forum clauses and Texas law choice of law.
- Plaintiffs suffered substantial monetary losses; suits filed in Colorado alleging CSA and other state securities claims plus common-law claims.
- Trial court dismissed based on forum clauses; court of appeals reversed, finding CSA anti-waiver voids forum clause.
- Colorado Supreme Court granted certiorari to decide whether public policy or CSA anti-waiver voids forum clauses; held not void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do forum clauses get voided by Colorado public policy or CSA anti-waiver? | Clauses violate CSA anti-waiver and public policy. | Clauses are presumptively valid and enforceable under Bremen. | Not void; enforceable. |
| Should Bremen’s presumption apply given CSA coordination with federal law? | Colorado policy overrides federal approach against forum clauses. | CSA coordinates with federal law; Bremen applies; anti-waiver not voiding. | Presumption applied; enforceable. |
| Does CSA anti-waiver void forum clauses that require Texas forum? | Anti-waiver voids waivers of CSA protections; Colorado forum not acceptable. | Anti-waiver bars waivers of substantive rights only; procedural forum rights can be waived. | Void not; clauses valid as procedural waiver only. |
| Does the CSA public policy differ from CWCA/WWSDA public policy for voiding forum clauses? | CSA protects out-of-state investors; Colorado policy should void forum clause. | CSA’s purpose coordinates with federal law and does not express strong public policy to void. | CSA not strong public policy to void; clauses enforceable. |
Key Cases Cited
- Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (forum clauses presumptively valid unless unreasonable, fraud, or public policy)
- Scherk v. Alberto-CuIver Co., 417 U.S. 506 (U.S. 1974) (arbitration/forum issues tied to securities act limitations)
- Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477 (U.S. 1989) (arbitration vs. waiver of procedural rights under securities act)
- ABC Mobile Sys., Inc. v. Harvey, 701 P.2d 137 (Colo. App. 1985) (Colorado view of Bremen factors and forum clauses)
- Adams Reload Co. v. Intl. Profit Assocs, Inc., 143 P.3d 1056 (Colo. App. 2006) (enforceability of forum selections in Colorado context)
- Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318 (10th Cir. 1997) (persuasive federal caselaw on forum-selection clauses)
- BMW, v. Bayerische Motoren Werke Aktiengesellschaft, 314 F.3d 494 (10th Cir. 2002) (contract interpretation and forum clause standards)