Rucker v. Oasis Legal Finance, L.L.C
632 F.3d 1231
| 11th Cir. | 2011Background
- Oasis provides non-recourse funding to Alabama plaintiffs who signed purchase agreements selling a portion of their pending claims.
- Purchase agreements contain Alabama choice-of-law and a forum-selection clause to litigate in Cook County, Illinois.
- Plaintiffs filed a declaratory judgment in the Northern District of Alabama; Oasis moved to dismiss for improper venue.
- District Court denied enforcement of the clause as unreasonable; Eleventh Circuit reverses and remands to dismiss under improper venue.
- Court applies Bremen framework de novo, holding the forum clause presumptively valid and severable from the gambling-contract issue.
- Enforcement of the clause does not conflict with Alabama public policy and the clause is enforceable despite the contract being potentially void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for enforceability | Review for abuse of discretion. | Review de novo. | De novo review applied. |
| Governing law for enforceability | State and federal law conflict; harmonization needed. | Erie/Bremen framework governs; harmonized approach. | Erie/Bremen framework applied; no conflict. |
| Enforceability of the forum-selection clause | Clause would be unfair/unreasonable; Illinois forum burdens Alabama plaintiffs. | Presumptively valid; no strong showing of unreasonableness. | Clause enforceable; Bremen factors not satisfied to avoid enforcement. |
| Severability from potentially void contract | Clause tied to contract void under Alabama gambling-law. | Clause severable and enforceable even if contract voidable. | Clause severable; enforceable notwithstanding contract validity. |
| Impact on remedy/public policy | Enforcement would violate Alabama public policy against gambling contracts. | Public policy not infringed; Alabama law governs remedy regardless of forum. | No public-policy bar to enforcement. |
Key Cases Cited
- Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285 (11th Cir. 1998) (forum-selection clause in international context; de novo review)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (forum-selection clause enforceability framework)
- Krenkel v. Kerzner Int'l Hotels Ltd., 579 F.3d 1279 (11th Cir. 2009) (strong showing required to avoid enforcement; Bremen factors)
- P&S Boy. Machs., Inc. v. Canon USA, Inc., 331 F.3d 804 (11th Cir. 2003) (economic hardship alone not enough to defeat clause)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (investment of forum justified by foreseeable inconvenience)