239 N.E.3d 842
Ind.2024Background
- Perdue Farms operates a poultry plant in Indiana and contracted with U.S. Security Associates, Inc. for security services.
- In 2018, a hazardous material delivery went awry due to security guards failing to check the bill of lading, causing significant property damage and plant shutdown.
- Perdue sued the transporter, the transporter’s driver, U.S. Security, and three security guards (not Perdue employees), alleging negligence and breach of contract (against U.S. Security only).
- The contract between Perdue and U.S. Security contained a forum-selection clause requiring disputes to be litigated in Maryland federal court.
- U.S. Security and its employees moved to dismiss based on the forum clause; the trial court granted dismissal, but the appellate court reversed, citing public policy concerns about splitting the litigation across states.
- On transfer, the Indiana Supreme Court affirmed enforcement of the forum-selection clause for U.S. Security but not for its individual employee guards, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Maryland forum-selection clause | Clause is unenforceable due to Indiana public policy and multiple lawsuits in different states | Clause is enforceable as freely negotiated by sophisticated commercial parties | Clause enforceable; Perdue must litigate claims against U.S. Security in Maryland |
| Application of forum clause to U.S. Security's employees | Employees are not parties to the contract and cannot invoke the clause | Employees are in privity with U.S. Security and can also benefit from the clause | Clause does not apply to individual employees; their cases remain in Indiana |
| Avoidance of forum clause by suing employees individually | Perdue can avoid the forum clause by framing claims against individual employees | This would permit strategic pleading and undermine forum-choice agreements | Court refuses to permit such avoidance, but limits impact due to lack of preserved argument on equitable doctrines |
| Public policy against splitting litigation | Multiple venues is contrary to Indiana public policy | Commercial parties should bear risks of multi-forum litigation they bargained for | Indiana public policy does not bar clause enforcement in this commercial context |
Key Cases Cited
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (sets the standard for enforceability of forum-selection clauses; requires showing of grave inconvenience)
- O’Bryant v. Adams, 123 N.E.3d 689 (Ind. 2019) (affirms Indiana’s strong presumption favoring enforcement of forum-selection clauses in commercial contracts)
- Sedam v. 2JR Pizza Enters., LLC, 84 N.E.3d 1174 (Ind. 2017) (discusses privity and respondeat superior in context of employer liability)
- ISP.com LLC. v. Theising, 805 N.E.2d 767 (Ind. 2004) (defines privity in Indiana contract law)