Kelvion, Inc. v. PetroChina Canada Ltd.
918 F.3d 1088
| 10th Cir. | 2019Background
- PetroChina Canada purchased ten heat-exchanger units from Kelvion in Oklahoma; the Purchase Order required shipment to Alberta and included a choice-of-law clause (Alberta law) and an exclusive forum-selection clause for Alberta courts.
- The Purchase Order provided fixed pricing, allocated risk of loss to Kelvion until delivery, and required official change orders for cost changes.
- Shipping delays and Canadian seasonal weight limits caused unanticipated additional delivery costs of $671,324; Kelvion did not obtain PetroChina approval via a change order.
- Kelvion sued in Oklahoma asserting breach of contract, quantum meruit, and unjust enrichment; it later dropped breach of contract and argued the forum-selection clause did not govern its equitable claims.
- The district court held the forum-selection clause applied to Kelvion’s claims and dismissed the case on forum non conveniens grounds; the Tenth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Purchase Order's forum-selection clause applies to Kelvion’s equitable claims | Kelvion: equitable claims arise from unforeseen expenses outside the contract and thus fall outside the clause | PetroChina: claims depend on the contract and its terms, so the clause applies | The clause applies; equitable claims are inextricably linked to the Purchase Order |
| Whether a forum-selection clause can be invoked when the contract is raised as a defense or when plaintiff pleads only equitable theories | Kelvion: forum clause inapplicable because contract is not the basis pleaded | PetroChina: a plaintiff cannot evade a forum clause by artful pleading; clause can be applied even if contract is raised defensively | Court rejected Kelvion’s rule; artful pleading does not defeat a valid forum-selection clause |
| Proper standard of review for clause interpretation and for dismissal decision | Kelvion: (implicit) de novo or abuse of discretion unspecified | PetroChina: (implicit) accept established standards—contract interpretation de novo; dismissal for forum non conveniens reviewed for abuse of discretion | Adopted bifurcated approach: de novo review for clause interpretation; abuse-of-discretion review for dismissal |
| Whether the district court abused its discretion in dismissing under forum non conveniens once the clause applied | Kelvion: dismissal was improper (no abuse argued regarding public-interest factors) | PetroChina: dismissal appropriate; private interests given no weight under Atlantic Marine; public-interest factors were considered | No abuse of discretion; dismissal affirmed |
Key Cases Cited
- Atl. Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49 (2013) (forum-selection clauses control forum non conveniens analysis; plaintiff’s forum choice and private interests given no weight)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) (forum non conveniens factors and adequacy of alternative forum)
- Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190 (3d Cir. 1983) (forum-selection clauses apply to claims depending on contractual relationship)
- Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509 (9th Cir. 1988) (claims whose resolution requires contract interpretation fall within forum-selection clauses)
- Weber v. PACT XPP Techs., A.G., 811 F.3d 758 (5th Cir. 2016) (adopted bifurcated standard: de novo review of clause interpretation; abuse-of-discretion review of balancing)
- Member Servs. Life Ins. Co. v. Am. Nat’l Bank & Tr. Co. of Sapulpa, 130 F.3d 950 (10th Cir. 1997) (quasi-contractual remedies like unjust enrichment are precluded where an express contract governs the dispute)