130 So. 3d 851
La.2013Background
- Fidelaks filed a damages petition in Caddo Parish district court against Foreign & Classic Auto Centre, Inc. for a defective engine.
- Foreign & Classic asserted a third party demand against British Parts International (BPI) for reimbursement/indemnification; BPI is based in Houston, TX.
- BPI moved to declinatory exception of improper venue based on a website forum selection clause requiring disputes in Harris County, Texas.
- Foreign & Classic argued forum selection clauses are unenforceable in Louisiana or that there was no meeting of the minds since the engine was ordered by telephone and the contract was not read on site.
- The district court, and then the Second Circuit, held the forum clause valid and enforceable; the Supreme Court granted review to resolve venue objections by a third party in a principal action properly venued.
- The Supreme Court reversed, holding that a third party may not object to venue where the principal action is filed in the proper venue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May a third-party defendant object to venue when the principal action is properly venued? | Fidelak argues proper venue; BPI objects based on clause. | BPI asserts a third-party objection is permitted under art. 1034. | No; third party may not object to venue when principal action is proper. |
| Is the forum selection clause enforceable under Louisiana law in this context? | Clause enforceable as a contract term. | Clauses are unenforceable absent clear meeting of minds and proper formation. | Not necessary to decide here; the outcome rests on the venue rule. |
Key Cases Cited
- Lejano v. Bandak, 97-388 (La. 1997) (federal law governs enforceability in admiralty; generally enforceable)
- Sawicki v. KJS Stavanger Prince, 01-0528 (La. 2001) (La.R.S. 23:921 noted to limit enforcement in employment contracts)
- Power Marketing Direct, Inc. v. Foster, 05-2023 (La. 2006) (forum clauses enforceable absent unreasonableness or fraud; dicta)
- Rising Resources Control, Inc. v. Kie Commodities and Finance, L.L.C., 11-1026 (La.App. 1 Cir. 2011) (courts of appeal enforcement trend supporting enforcement)
- Vallejo Enterprise, LLC v. Boulder Image, Inc., 05-2649 (La.App. 1 Cir. 2006) (enforcement of forum clauses by appellate court)
- Barrett Auto Brokers v. Dealer Services Corp., 45,667 (La.App. 2 Cir. 2010) (enforcement in second circuit context)