Landstar Inway, Inc. v. Central Freight Lines, Inc.
6:20-cv-00020
W.D. Tex.Mar 17, 2020Background
- Plaintiff Landstar Freeway, Inc. (Delaware corp., principal place Jacksonville, FL) sued Central Freight Lines, Inc. (Texas corp., principal place Waco, TX) for breach of a shipping contract alleging unpaid consideration.
- Plaintiff filed in the Western District of Texas (Waco Division) on January 13, 2020; Defendant moved to dismiss or transfer venue on February 4, 2020, and alternatively sought transfer to McLennan County state court.
- The contract contains a forum-selection clause stipulating "the exclusive jurisdiction of the courts situated in McLennan County, Texas."
- Defendant argued the clause requires litigation only in McLennan County state court; Plaintiff contended the clause permits federal courts located in McLennan County.
- The court interpreted the clause as allowing "courts situated in McLennan County," including federal court, found venue proper under 28 U.S.C. § 1391, and denied dismissal under Rule 12(b)(3)/§ 1406.
- The court also denied transfer under § 1404(a): Defendant failed to show the McLennan County forum was clearly more convenient and § 1404 cannot be used to transfer to a non-federal forum.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper scope of forum-selection clause | Clause permits courts "situated in McLennan County," including federal courts; plaintiff may remain in federal forum | Clause mandates exclusive jurisdiction in McLennan County state court only | Clause unambiguous; "courts situated in McLennan County" includes federal courts; plaintiff's federal forum allowed |
| Whether venue is improper under § 1391 / Rule 12(b)(3) | Venue proper because defendant is resident in district and a substantial part of events (contract) occurred in district | Venue improper (urging dismissal/transfer based on clause) | Venue is proper under § 1391; 12(b)(3) dismissal denied; forum-selection clause does not make venue "wrong" |
| Applicability of § 1406 dismissal/transfer | § 1406 inapplicable because venue is proper | Move to dismiss/transfer under § 1406 | § 1406 authorizes relief only where venue is wrong; since § 1391 satisfied, § 1406 relief inappropriate |
| Transfer under § 1404(a) to McLennan County (state) court | Plaintiff defends choice of federal forum and relies on clause interpretation | Requests transfer as more appropriate/convenient (alternatively argued proximity) | Denied: Defendant failed to show transferee is clearly more convenient; § 1404 cannot transfer to non-federal forum (doctrine of forum non conveniens governs such transfers) |
Key Cases Cited
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49 (forum-selection clauses enforced via §1404; clause does not render chosen forum "wrong" for §1406 purposes)
- Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962) (district court may dismiss or transfer to cure improper venue; policy favors adjudication on the merits)
- In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004) (private and public factors for §1404 transfer analysis)
- In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (moving party must show transferee venue is clearly more convenient)
- Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are prima facie valid and should be enforced absent unreasonableness)
- CNH Indus. N.V. v. Reese, 138 S. Ct. 761 (2018) (an unambiguous forum-selection clause controls the forum question)