960 F.3d 200
5th Cir.2020Background
- Sierra Frac Sand (Texas) contracted with CDE Global (Northern Ireland) in 2017 for design, delivery, and assembly of frac-sand processing equipment for a Louisiana facility.
- Each page of the order acknowledgement referenced “CDE Global General Conditions – July 2017” and stated the order was “subject to the Standard Terms and Conditions of Sale” available upon request.
- CDE asserted that the referenced terms were the “CDE General Conditions – June 2016” addendum, which contains an exclusive-jurisdiction forum-selection clause for Northern Ireland.
- Sierra sued in the Eastern District of Texas for fraud, misrepresentation, and breach of contract; CDE moved to dismiss under forum non conveniens relying on the incorporated forum-selection clause.
- The district court found the 2016 addendum was incorporated by reference, enforced the forum-selection clause, dismissed the case without prejudice, and Sierra appealed.
- The Fifth Circuit affirmed: the 2016 addendum was incorporated and the forum non conveniens factors favored dismissal to Northern Ireland.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an external document was incorporated by reference into the order acknowledgement | The referenced “Standard Terms” was not the June 2016 addendum; Sierra never requested or received it | The order acknowledgement expressly made the agreement subject to CDE’s Standard Terms; CDE proffered the 2016 addendum and evidence it was the referenced document | Incorporated: court held the 2016 addendum was incorporated by reference into the agreement |
| Whether Sierra’s ignorance of the forum clause defeats enforceability | Sierra argued it never saw the clause and thus it should not bind them | CDE argued a signed agreement that incorporates terms binds the signer regardless of actual knowledge | Enforceable: signing and incorporation presumptions bind Sierra; mere unawareness does not invalidate the clause |
| Whether forum non conveniens dismissal to Northern Ireland was appropriate | Sierra contended Texas forum should be retained | CDE argued the forum-selection clause shifts private-interest factors entirely in favor of Northern Ireland and no unusual circumstances justify Texas | Dismissal affirmed: private-interest factors favor the selected forum; no abuse of discretion in weighing factors |
Key Cases Cited
- DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785 (5th Cir. 2007) (federal forum non conveniens standard in diversity cases)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (U.S. 1981) (forum non conveniens doctrine and its purposes)
- Barnett v. DynCorp Int’l, L.L.C., 831 F.3d 296 (5th Cir. 2016) (valid forum-selection clause shifts weight of private-interest factors)
- Weber v. PACT XPP Techs., AG, 811 F.3d 758 (5th Cir. 2016) (de novo review for interpretation and enforceability of forum-selection clauses)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (U.S. 1947) (plaintiff’s forum choice generally entitled to deference)
- Owen v. Hendricks, 433 S.W.2d 164 (Tex. 1968) (incorporation by reference requires clear referral)
- IBM Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224 (Tex. 2019) (contract may incorporate another document but the referenced document must be proved)
- In re Int’l Profit Assocs., Inc., 286 S.W.3d 921 (Tex. 2009) (unawareness of incorporated terms does not invalidate them)
- In re Lyon Fin. Servs., Inc., 257 S.W.3d 228 (Tex. 2008) (signer presumed to know contents of incorporated documents)