Ray v. McKinley
1:24-cv-01907
D. Colo.May 30, 2025Background
- Plaintiff Benjamin Douglas Ray worked as an independent contractor for Defendants, based on an agreement between his company, Eight Saints LLC, and Paystr, LLC.
- The agreement contained a forum-selection clause requiring litigation in Michigan state or federal court.
- Plaintiff alleges he completed work for Defendants but was not fully paid, leading to claims including breach of contract and wage violations.
- Plaintiff’s investment fund (STRT Fund, LP) also loaned money to one Defendant, which was mostly not repaid, resulting in additional claims including civil theft and conversion.
- Defendants moved to dismiss or transfer, arguing venue in Colorado was improper due to the forum-selection clause.
- Magistrate Judge recommends transferring the entire case to the Eastern District of Michigan under 28 U.S.C. § 1404(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Michigan forum-selection clause | Clause doesn’t apply to Ray personally | Clause is valid, covers plaintiff and his claims | Clause is valid and applies; transfer proper |
| Enforceability of forum-selection clause | Clause is unenforceable due to Colorado wage claims | No public policy bars enforcing; Atlantic Marine standard applies | Clause enforceable, public policy not barred |
| Separate handling of non-contract claims | Theft Claims not subject to contract’s clause | Whole case should be transferred, not split | Entire action must be transferred |
| Need to decide personal jurisdiction | Court should reach merits, not transfer | Court can transfer before resolving jurisdiction | Transfer appropriate without addressing PJ |
Key Cases Cited
- Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49 (2013) (forum-selection clauses are enforced under §1404(a), not by dismissal for improper venue)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are presumed enforceable unless enforcement is unreasonable or unjust)
- Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953 (10th Cir. 1992) (forum-selection clauses are prima facie valid and enforceable)