859 F. Supp. 2d 999
S.D. Iowa2012Background
- Plaintiff CruiseCompete operates CruiseCompete.com linking consumers with member-agencies; consumers use it for free and Plaintiff earns from ads and revenue shares.
- S&A (Palm Coast Travel) and Smolinski joined CruiseCompete as a member-agency under an Agency Membership Renewal Agreement (AMRA) and signed on via Smolinski’s authority.
- AMRA incorporates CruiseCompete’s Terms and Conditions, including reporting obligations and a 15% liquidated-damages penalty for unreported bookings; it also contains a forum-selection clause for Iowa.
- Plaintiff alleges Smolinski and S&A breached the AMRA and Terms by underreporting bookings, and Smolinski allegedly created false user accounts to obtain quotes and misused information.
- Plaintiff asserts related Florida litigation involves overlapping issues but the AMRA contract and forum clause tie disputes to Iowa; Plaintiff seeks six causes of action including breach and CFAA.
- Defendants moved to dismiss, stay, or transfer to the Southern District of Florida; the court held hearings and ultimately denied the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause binds S&A for personal jurisdiction | Forum clause in AMRA is mandatory and Iowa venue is proper. | No valid forum clause; challenges authenticity of posted Terms. | Forum clause enforceable; S&A subject to Iowa jurisdiction. |
| Whether Smolinski is bound by the forum-selection clause | Smolinski, as CEO/officer, is closely related and bound. | No personal jurisdiction over Smolinski absent party status. | Smolinski bound; personal jurisdiction proper. |
| Whether venue is proper in the Southern District of Iowa | AMRA designates Iowa litigation; venue appropriate. | Events primarily Florida; non-Iowa venue. | Venue proper in Southern District of Iowa due to forum clause. |
| Whether Colorado River/First-Filed/Inherent Power abstention applies | Florida action should not block Iowa case; no parallelism. | Florida action parallel and priority should govern. | Abstention/First-filed/inherent power denied; no compelling parallelism. |
| Whether transfer to Florida is appropriate under § 1404(a) | Keep in Iowa; Florida witnesses/evidence not clearly superior. | Florida forum more convenient; Florida law governs many issues. | § 1404(a) transfer denied; keep case in Iowa. |
Key Cases Cited
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (mandatory forum-selection clauses are prima facie valid)
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) (forum clauses enforceable absent fraud or overreach)
- Dominium Austin Partners, L.L.C. v. Emerson, 248 F.3d 720 (8th Cir. 2001) (forum-selection clause as basis to establish venue and jurisdiction)
- St. Paul Fire & Marine Ins. Co. v. Courtney Enters., Inc., 270 F.3d 621 (8th Cir. 2001) (consent via contract supports jurisdiction/federal venue)
- Hicklin Eng., Inc. v. Aidco, Inc., 959 F.2d 739 (8th Cir. 1992) (two-step inquiry for personal jurisdiction; minimum contacts sufficiency)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (minimum contacts and foreseeability in due process for jurisdiction)