979 F.3d 1070
5th Cir.2020Background
- PCL was general contractor on a Louisiana DOTD public-works project under a Prime Contract that incorporated the 2006 Standard Specifications, including Section 107.01 requiring that “any litigation” be instituted in the 19th Judicial District Court for East Baton Rouge Parish.
- PCL subcontracted work to Command; the Subcontract expressly incorporated the Prime Contract by reference.
- Command obtained a performance Bond from Arch naming PCL as obligee and incorporating the Subcontract by reference.
- PCL sued Arch in federal court (diversity) seeking payment under the Bond after Command’s alleged default; Arch moved to dismiss on forum non conveniens relying on Section 107.01.
- The district court found the forum clause mandatory and enforceable (the Bond incorporated Section 107.01 via the Subcontract and Prime Contract), dismissed without prejudice, and PCL appealed.
- PCL argued the Bond did not incorporate Section 107.01 and that Article 12.9.5 (location is the county where the Project is located) should control; the court rejected these arguments.
Issues
| Issue | Plaintiff's Argument (PCL) | Defendant's Argument (Arch) | Held |
|---|---|---|---|
| Whether the forum-selection clause is mandatory or permissive | Clause does not mandate venue for this dispute | Section 107.01 uses “shall” and is mandatory | Mandatory — “shall” construed as mandatory under Louisiana law |
| Whether the forum-selection clause is enforceable | Clause is unreasonable or not incorporated; avoid enforcement | Clause is incorporated and enforceable; resisting party bears heavy burden | Enforceable — PCL failed to show fraud, grave inconvenience, unfair law, or contravening public policy |
| Whether the Bond (and thus dispute) incorporates Section 107.01 | Bond does not incorporate that specific provision; Article 12.9.5 governs (county where Project located) | Bond incorporates Subcontract, which incorporates Prime Contract and Section 107.01; Article 12.9.5 is displaced by Section 107.01 | Bond incorporates the Subcontract and Prime Contract; Section 107.01 governs and supersedes Article 12.9.5 as the parties agreed in writing |
| Whether federal public-interest factors require keeping the case in federal court | Public-interest factors support retention | Forum-selection clause shifts burden; plaintiff must show public factors favor federal forum | Waived on appeal — PCL did not challenge district court’s Atlantic Marine public-interest balancing, so argument forfeited |
Key Cases Cited
- Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49 (2013) (forum non conveniens enforces forum-selection clauses)
- Weber v. PACT XPP Techs., AG, 811 F.3d 758 (5th Cir. 2016) (de novo review of whether clause is mandatory/enforceable; abuse-of-discretion for public-interest balancing)
- Ginter ex rel. Ballard v. Belcher, Prendergast & Laporte, 536 F.3d 439 (5th Cir. 2008) (resisting party bears heavy burden to show clause unreasonable)
- Haynsworth v. The Corporation, 121 F.3d 956 (5th Cir. 1997) (grounds to invalidate forum-selection clauses)
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) (contractual forum clauses generally enforceable absent unreasonableness)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (foundational principles on forum-selection clause enforceability)
- One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011) (instruments expressly incorporated are construed together)
- United States v. Young, 872 F.3d 742 (5th Cir. 2017) (failure to raise an argument constitutes waiver)