In Re Atlantic Marine Construction Co.
701 F.3d 736
5th Cir.2012Background
- In April 2009, the Corps of Engineers contracted with Atlantic for a Fort Hood project; Atlantic subcontracted with J-Crew for labor and materials.
- The Subcontract included a forum-selection clause designating Norfolk, Virginia federal court or the Eastern District of Virginia Norfolk Division; no choice-of-law provision.
- J-Crew filed suit in the Western District of Texas (Austin Division) for nonpayment, ignoring the forum clause.
- Atlantic moved to dismiss under Rule 12(b)(3)/§1406 or, alternatively, to transfer under §1404(a).
- The district court denied both dismissal and transfer, holding §1404(a) governs enforcement when a federal forum is designated; Atlantic petitioned for mandamus.
- Panel majority denies mandamus; concurrence argues §1406 or Rule 12(b)(3) should enforce the clause and criticizes the §1404(a) approach
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1404(a) is the proper vehicle to enforce a federal forum-selection clause. | J-Crew argues forum clause should be enforced via §1404(a). | Atlantic argues §1404(a) is correct, but should be §1406/Rule 12(b)(3) when venue is proper. | No; forum clause enforcement via §1404(a) is proper when venue is proper and clause selects an alternative federal forum. |
| Who bears the burden of proof when enforcing a forum-selection clause under §1404(a). | J-Crew contends burden should shift to Atlantic to justify transfer. | Atlantic contends burden remains on movant seeking transfer to enforce clause. | District court did not clearly abuse discretion; burden placement permissible to weigh forum clause. |
| Whether foreseeability of inconvenience at contracting is proper §1404(a) factor. | J-Crew should consider consequences of Virginia forum. | Foreseeable inconvenience cannot block enforcement under Stewart. | District court did not clearly err in considering institutional concerns; foreseeability allowed but not decisive. |
| Whether public interests favor enforcing the forum-selection clause. | Enforcement reduces litigation costs and confusions; public interests support enforcement. | Public-interest weight disputed; not properly raised or decided below. | The district court did not clearly err in weighing public-interest considerations; clause was a significant factor. |
| Whether the district court erred by not applying §1406 or Rule 12(b)(3) to a federal-forum clause case. | Clause should dismiss/transfer under 12(b)(3) or §1406; not §1404(a). | Majority view supports §1404(a) analysis for federal-forum clauses. | The court denied mandamus; analysis consistent with Stewart’s framework that §1404(a) applies when forum is proper. |
Key Cases Cited
- Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (forum-selection clause treated under §1404(a) in diversity case; clause central in transfer analysis)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are prima facie valid; enforce unless unreasonable or unjust)
- Shute v. Carnival Cruise Lines, 499 U.S. 585 (1991) (forum-selection clauses aid in avoiding forum confusion; enforceable in context of maritime tickets)
- Jackson v. West Telemarketing Corp. Outbound, 245 F.3d 518 (2001) (recognizes Stewart’s limited scope; forum clause can affect transfer outcomes)
- In re Volkswagen of Am., Inc., 545 F.3d 304 (2008) (en banc; mandamus standards and venue-transfer considerations in §1404/§1406 context)
- TradeComet.com LLC v. Google, Inc., 647 F.3d 472 (2011) (discusses Stewart and §1404 vs §1406; forum clauses enforcement nuances)
- Slater v. Energy Servs. Grp. Int’l Inc., 634 F.3d 1326 (2011) (supports §1404(a) for enforcing forum clauses; interplay with forum selection)
- Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898 (2005) (enforce forum-selection clause via Rule 12(b)(3) (arbitral) forums)
- Mitsui & Co. (USA), Inc. v. Mira M/V, 111 F.3d 33 (1997) (enforce forum-selection clause via Rule 12(b)(3) for foreign forum)