44 F.4th 635
7th Cir.2022Background
- Adam Roston was CEO of IAC Publishing (and later Bluecrew) and received stock appreciation rights (SARs); he signed a 2016 Employment Agreement with confidentiality, termination, and SAR provisions.
- The Agreement contained a choice-of-law clause (California) and a forum-selection clause requiring disputes "will be heard and determined" in federal or, if not maintainable, state courts in Alameda County, plus a separate "non-exclusive jurisdiction" phrase.
- After Roston’s termination he retained a company MacBook and Dropbox files; plaintiffs IAC/InterActiveCorp, IAC Publishing, and Bluecrew sued in the Northern District of Illinois for declaratory, contract, tort, and statutory relief (including CFAA and DTSA claims).
- Roston had filed related litigation in Alameda County, California; plaintiffs amended their Illinois complaint after discovering the retained laptop/files.
- The district court held the Agreement’s forum-selection clause was mandatory, covered all claims (including those by nonsignatory Bluecrew), and dismissed under forum non conveniens; the Seventh Circuit affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the forum-selection clause apply to the companies' claims even if the Agreement has expired or the claims implicate other instruments (e.g., the Incentive Plan)? | Clause expired or SARs arose from a separate Incentive Plan, so clause doesn't control. | Plaintiffs sued under and seek relief based on the Agreement; disputes "arise out of or relate to" it, so clause applies. | Clause applies to all claims that arise out of or relate to the Agreement; plaintiffs are bound. |
| Is nonsignatory Bluecrew bound by the forum-selection clause? | Bluecrew is not a signatory and thus not bound. | Bluecrew seeks relief under the Agreement and benefits from it, so it is bound as a nonsignatory. | A nonsignatory plaintiff pursuing contract-based claims is bound by the clause. |
| Is the forum-selection clause mandatory or permissive? | The Agreement’s "non-exclusive jurisdiction" language renders the clause permissive. | Mandatory venue language ("will be heard and determined" in Alameda County) makes the clause exclusive despite permissive jurisdiction language. | Clause is mandatory; mandatory venue language controls and renders the clause exclusive. |
| Was dismissal under forum non conveniens proper? | District court wrongly ignored plaintiffs' forum choice and private interest factors. | Under Atlantic Marine the plaintiffs' forum choice and private factors get no weight; only public interest factors apply and favor California. | Dismissal affirmed: court properly applied Atlantic Marine, considered public factors, and did not abuse discretion. |
Key Cases Cited
- Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (arbitration/tribunal clauses survive contract expiration for related disputes)
- Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49 (2013) (mandatory forum-selection clauses narrow forum non conveniens analysis; plaintiff's forum choice and private factors get no weight)
- Docksider, Ltd. v. Sea Tech., Ltd., 875 F.2d 762 (9th Cir. 1989) (mandatory venue language can defeat permissive jurisdiction language)
- Abbott Lab'ys v. Takeda Pharm. Co., 476 F.3d 421 (7th Cir. 2007) (broad forum-selection clauses cover disputes "related to" the agreement)
- Omron Healthcare, Inc. v. Maclaren Exports Ltd., 28 F.3d 600 (7th Cir. 1994) (disputes that turn on contract interpretation "arise out of" the contract for forum-selection purposes)
- Paper Exp., Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753 (7th Cir. 1992) (distinguishing consent to jurisdiction from mandatory venue language)
- Muzumdar v. Wellness Int'l Network, Ltd., 438 F.3d 759 (7th Cir. 2006) (nonexclusive jurisdiction clause does not negate a clear mandatory venue clause)
- In re McGraw-Hill Glob. Educ. Holdings LLC, 909 F.3d 48 (3d Cir. 2018) (nonsignatory plaintiff bound by forum clause when suing to enforce rights under the contract)