26 F. Supp. 3d 482
W.D. Pa.2014Background
- Mannino (PA LLC) and Stone (LA LLC) executed a November 26, 2013 lease Agreement for railcars with a forum-selection clause consenting to suits in Pennsylvania or Louisiana state court.
- Mannino wired $124,000 for 40 cars on Dec. 4, 2013 and $31,000 for an additional 20 cars on Dec. 6, 2013; Mannino alleges Stone failed to deliver the 20 cars and retained the $31,000.
- Stone sent a termination letter Dec. 18, 2013 and filed a declaratory action in Louisiana state court on Dec. 19, 2013 seeking to declare the Agreement terminated.
- Mannino sued in Pennsylvania state court on Jan. 10, 2014 for breach of contract, tortious interference, and fraud; Stone removed and moved to dismiss for lack of personal jurisdiction.
- Stone contends the November 26 Agreement is not implicated (claims dispute arises from an oral promise), so the forum clause cannot support jurisdiction; Mannino asserts this suit arises under the Agreement and demands specific performance.
- Court considered whether the forum-selection clause consents to personal jurisdiction in Pennsylvania and whether the first-to-file rule requires dismissal or stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has personal jurisdiction based on forum-selection clause | Mannino: Agreement includes clear forum clause consenting to Pennsylvania jurisdiction for disputes under the Agreement | Stone: The dispute concerns an alleged oral agreement; the written Agreement is not implicated and cannot supply jurisdiction | Court: Denied 12(b)(2) at this stage — Mannino made a prima facie showing that the November 26 Agreement governs the dispute; denial without prejudice to renewal after discovery |
| Validity/enforceability of the forum-selection clause | Mannino: Clause is clear and prima facie valid; parties agreed suits must be in PA or LA state court | Stone: Did not challenge the clause's validity, only its applicability to the claimed wrong | Court: Applied federal law; clause prima facie valid and enforceable unless shown unreasonable or fraudulent; no such showing here |
| Whether plaintiff’s claims arise under the Agreement (i.e., applicability question) | Mannino: Allegations and damages (specific performance, withheld funds for 20 cars) arise from the Agreement | Stone: Claims are based on a separate/oral promise, not the Agreement | Court: Construed allegations in plaintiff’s favor and concluded the Agreement plausibly governs the dispute for jurisdictional purposes |
| Applicability of the first-to-file rule | Mannino: Louisiana action resulted in default judgment; no pending duplicative suit | Stone: Filed first in Louisiana; argues the rule requires stay/dismissal here | Court: First-to-file rule not applied — the actions were not duplicative and there was no pending Louisiana action to warrant stay/dismissal |
Key Cases Cited
- Burger King v. Rudzewicz, 471 U.S. 462 (forum-selection clauses can constitute consent to jurisdiction)
- Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (forum-selection clauses may obviate minimum contacts analysis)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (forum-selection clauses are prima facie valid and enforceable absent strong countervailing reasons)
- Coastal Steel Corp. v. Tilghman Wheelabrator, 709 F.2d 190 (standards for attacking forum-selection clauses: fraud, public policy, or serious inconvenience)
- Jumara v. State Farm Ins. Co., 55 F.3d 873 (federal law governs effect of contractual forum-selection clauses in diversity cases)
- Metcalfe v. Renaissance Marine Inc., 566 F.3d 324 (prima facie burden for personal jurisdiction at early stages)
- Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93 (plaintiff bears burden to establish jurisdiction once defendant raises the issue)
- Grider v. Keystone Health Plan Cent., Inc., 500 F.3d 322 (first-to-file rule requires duplicative, materially on-all-fours suits)