*1 690 S.E.2d Develop- CAPERTON, Harman
Hugh M. Mining Cor- Corporation, Harman
ment Sales, Inc., Sovereign
poration, Coal Below, Appellees,
Plaintiffs COMPANY, INC., COAL
A.T. MASSEY Inc., Indepen- Company,
Elk Run Coal Inc., Company, Coal Coal Marfork
dence Inc., Com-
Company, Performance Coal Company,
pany, and Coal Sales Below, Appellants. Defendants
No. 33350. Appeals of
Supreme Court Virginia.
West Sept. Remand 2009. Following
Submitted
Decided Nov.
Dissenting Opinion of Justice Workman 30, 2009.
Nov.
131 *6 Jr., Offutt, Burchett, Stephen
D.C. Randall Offutt, Saunders, Ashworth, Ryan Q. L. WV, Nord, Huntington, Fisher & Appellants. Berthold, Jr., Christina L.
Robert V. Berthold, O’Dell, Charleston, Smith, & Tiano WV, Fawcett, Ingersoll David B. Buchanan PA, Rooney, Pittsburgh, Appellees, for the & Development Corporation, Harman Harman Sovereign dismissing, an Corporation, and Coal circuit court to enter order Mining Sales, prejudice, against Massey Inc. this case A.T. Company Coal and its subsidiaries. Abdalla, Stanley,
Bruce E. Tarek F. Reed LLP, PA, Pittsburgh, Appellee, for the Smith
Hugh Caperton. M. I. Mick, Bradley Pyles, Pyles, Turner & J. WV, Logan,
LLP
for Amicus Curiae United
HISTORY
FACTUAL
Mine
of America.
Workers
dispute underlying
ap-
Central to the
Mine,
peal
underground
is the Harman
DAVIS, Acting Chief Justice:
County, Virgi-
mine located in Buchanan
coal
Appellants
herein and defendants be-
nia,
produced very high quality
metal-
low,
Company,
A.T.
Coal
lurgical coal. Prior to
the Harman
subsidiaries, appeal
its
from a
various of
by Inspiration
Corpo-
Mine was owned
Coal
March
order entered
the Circuit
(hereinafter
“Inspira-
ration
referred to as
County,
Court of Boone
which denied their
tion”) through three subsidiaries: Harman
post-judgment
judgment
motions for
as a
(hereinafter
Mining Corporation
referred to
law,
trial,
remittitur,
matter of
a new
Sales,
Mining”), Sovereign
as “Harman
Coal
response
entry
judgment
of a
of more
(hereinafter
“Sovereign”),
Inc.
referred to as
appellees
than
million
favor of the
$50
Kentucky Energy Company
and Southern
herein,
below,
plaintiffs
Hugh
Caper-
M.
(hereinafter
“Southern”).
referred to as
For
ton,
Development Corporation,
Har-
many years, all of the coal from the Harman
Mining Corporation,
Sovereign
man
Coal
Mine
been
Corpo-
had
sold to Wellmore Coal
Sales,
appeal,
Inc.
A.T.
In this
Coal
(hereinafter
ration
referred to as “Well-
Company
allege
and its subsidiaries
numer-
more”),
subsidiary
Corpora-
of United Coal
purportedly
ous
errors
occurred
April
Sovereign
tion.
and Southern
throughout
proceedings
below.
(hereinafter
supply agreement
entered
coal
presently
This case is
before this Court on
CSA”)
referred to as “the 1992
with Well-
Supreme
remand from the United States
CSA,
more. Under the 1992
Wellmore was
upon
thorough
Court.1 Based
our
consider-
*7
purchase
Sovereign
from
and Southern
parties’ arguments,
ation of the
the relevant
750,000
approximately
per year
of
tons
coal
law,
appeal,
ease
and the record on
years.
period
for a
of ten
concludes,
Court
upon
based
the existence of
(hereinafter
Hugh
Caperton
forum-selection clause contained in a con-
In
M.
directly
giv-
tract that
Caperton”),
plaintiff
related
the conflict
referred to as “Mr.
lawsuit,
ing
herein,
appellee
rise to the instant
that the circuit
below and
formed Harman
(hereinafter
denying
court
in
Development Corporation2
erred
a motion to dismiss
re
by
Company
filed A.T.
Coal
Development”).3
and its
ferred to as “Harman
In
Accordingly,
year,
subsidiaries.
Development pur
we reverse the
that same
Harman
judgment
in this
and
previously
case
remand for the
chased the three
mentioned sub
opinion
Caperton
Sovereign
1. The
filed in
first
connection with this
3.Mr.
had worked for
when
appeal
upon
subsequent
was vacated based
subsidiary
Inspiration.
it was a
of
As Sover-
voluntary disqualification
justices
of two of the
eign's employee,
Caperton
Mr.
sold coal on be-
participated
proceedings
who
in the earlier
in
Sovereign, including
half of
coal from the Har-
opinion
this Court. A second
ing
entered on rehear-
Caperton
Sovereign
man Mine. Mr.
left
to form
by
Supreme
was reversed
the United States
brokerage company,
his own coal
Dominion En-
upon
Court based
that Court's determination that
ergy. Through
Energy,
Caperton
Dominion
Mr.
justice
disquali-
an additional
should have been
continued to broker coal from the Harman Mine
Co., Inc.,
Caperton
fied. See
v. A.T.
Coal
Inspiration.
on behalf of
In
Dominion
— U.S.-,
129 S.Ct.
sidiaries 1992 CSA. Prior to the of the 1992 Southern, thereby CSA, Sovereign5 and and be in March of a new CSA with a (hereinafter higher per the Harman Har price came owner of Mine.6 ton of coal re- CSA”) Development, Mining, Harman Sov man and ferred to as “the 1997 negotiated below, ereign Wellmore, plaintiffs Sovereign, are all to this action between and Harman (hereinafter appellees Mining.7 herein collec The 1997 CSA towas be in effect tively Compa period referred to as “the Harman for a years, five commencing retro- nies”). improve actively in order to fund January included, 1997. It Mine, ments to the among things, majeure clause,8 Harman the Harman other a force Companies sold all Harman Mine re and a requiring forum-selection clause Virginia Corporation, serves to Penn brought “[a]ll in actions connection with this Agreement then leased back those reserves that could be shall be filed in and by decided mined a cost-effective manner. Court of County, Circuit Buchanan Virgi- nia.” From the the Harman Companies time owners until During CSA, became of the Harman Mine the course of the 1992 and at pur- executed, coal from the Harman Mine was the time CSA was one of by chased Wellmore accordance primary Wellmore’s customers was LTV floods, Mining Virginia corporation 4. Harman plosions, outages is a or breakdowns of or transacts business in West is a damage preparation plants, equipment to coal wholly-owned subsidiary Develop- facilities, of Harman interruptions pow- or or reduction to ment. supplies transportation er (including, or coal to, shortages) but not limited car railroad em- Sovereign corporation 5. is a Delaware that has bargoes, military and acts of or civil authori- principal place Beckley, its of business West ties, wholly prevent partly which or the min- Virginia. Sovereign wholly-owned is a subsid- ing, processing, loading delivering of and/or iary Development. of Harman SELLER, wholly partly the coal or which or prevent receiving, storing, pro- accepting, plan Development The established for cessing shipment of the coal BUYER.... the Harman to mine Mine was the reserves in a BUYER, Pertaining to maj- the term "force way that would allow convenient to ad- access eure" as used herein further shall include oc- joining Compa- reserves owned Pittston Coal currence(s) majeure any of a force event at ny. appellees explain that it is common- facilities, plants BUYER'S customer's place mining industry ex- companies for coal cept majeure that the properties effects of such force operators to sell or lease their to other justify reducing event when it shall BUYER makes economic sense to allow its someone purchase greater topography propor- else mine their coal. Due to the coal hereunder area, provided purchased the Harman Mine ac- better tion than coal to be hereunder cess to the reserves supply, Pittston than Pittston itself all bears to BUYER'Ssources includ- Thus, hoped day mines, had. ing Mr. to one lease BUYER'Sown BUYER'S metal- However, agree- the Pittston reserves. no lease lurgical producers. coal sold to domestic coke *8 ment was ever executed between and Pittston promptly notify SELLER and BUYERshall any Companies. of the Harman following maj- other of a commencement force majeure eure. If because of a force SELLER specified 7. The 1997 CSA that Wellmore would BUYER, respectively, carry is unable to out coal, 573,000 purchase tonnage a minimum of obligations Agreement its under this and if per year, gave option tons and also Wellmore the Party give promptly such shall to the other purchase produc- all to of the Harman Mine’s Party majeure, written force notice of such Historically, purchased tion. Wellmore had all obligations Party giving then the of the such produced. of coal Harman that Mine corresponding obligations notice and of the Party suspended other shall be to the extent majeure nearly 8. The clause was to identical force necessary by majeure CSA, made such force and one that had been included the 1992 and continuance; however, (i) stated, during provided its part, in relevant obligations suspended only such shall majeure" [t]he term "force as used herein necessary by to the extent made such force reasonably shall mean and all causes be- continuance, majeure only during BUYER, and its and yond the control of SELLER or (ii) Party giving notice such shall act applicable, SELLER which cause or BUYERto hereunder, as, promptly in manner perform [sic] reasonable to elimi- fail to such not but to, God, majeure____ nate force such public limited acts of acts of the insurrections, riots, enemy, epidemics, labor strikes, closures, disputes cotts, government boy- and 9.This is identical clause to one fires, shortages, labor and material ex- that had been included in the 1992 CSA. “LTV”). actions, quenee Massey’s buy- ceased (hereinafter to as of LTV referred Steel Thereafter, nearly shipped on Au- ing two-thirds from sold and coal Wellmore. Wellmore purchased 1997, Wellmore, from Harman the coal gust of at the direction of plant to coke located Companies LTVs Compa- to Massey, gave notice the Harman July On Pittsburgh, Pennsylvania.10 stating did in nies letter that if LTV fact it intended to LTV announced Pittsburgh plant, then close its Wellmore Pittsburgh plant coke due to its close tonnage anticipated pro rata reduction promulgated change regulations in emissions majeure under the force Agency. Protection by the Environmental CSA. (hereinafter Massey Company Coal AT. August 5th Subsequent to let- Wellmore’s “Massey”), a defendant below to as referred ter, Massey negotiations entered into with herein, tried appellant had unsuccessful- and Companies purchase of Harman years ly to sell its West for several During course the Harman Mine. of Due lack directly coal to LTV.11 to its mined negotiations, these confidential information own, selling on of success to LTV its regarding operations, Harman in- Mine’s Massey acquire suppli- determined to LTVs adjoin- cluding eventually to mine its desire er, Wellmore, parent corporation, and its reserves,14 ing Pittston as well as confidential (hereinafter re- Corporation United Coal pertaining the finances information “United”).12 Massey purchased ferred to as Companies Caperton, Harman and of Mr. July United Wellmore personally, Massey. was shared with long-term agreement Since there was no be- Companies expressed to Harman also Mas- Wellmore, Massey hoped tween LTV sey disagreement their that the LTV closure its own coal for the Harman Mine substitute Pittsburgh plant its coke constituted a supplying to coal that Wellmore had been majeure event. Massey An internal memorandum ad- LTV. force during Massey un- mitted trial revealed Thereafter, on December Well- plan, to its most derstood there were risks more, direction, Massey’s at declared force notably possibility relationship that the majeure based on closure of its Pitts- LTVs might not con- between LTV and Wellmore burgh plant, and the Harman coke advised Massey ownership of tinue under Wellmore. 205,- only Companies purchase that it would that, spite The circuit court of this found 573,000 tons of the minimum tons coal risk, despite knowledge that LTV required According under the 1997 CSA. “extremely change long- reluctant findings the express of the circuit court on established, in- coal blend” that successful point, Mine, Massey coal from Harman cluded [ojnly Massey’s marketing after efforts “provided price nevertheless LTV with firm did Mines, caused loss LTVs business Mas- mainly quotes Massey for coal from sey coal, maj- direct Wellmore declare “force insisted that LTV Harman, Massey provider against make its via a eure” a declaration which sole-source long-term put coal contract.”13 As a conse- knew would Harman out of Wellmore, 10. LTV purchased premium Massey's acquisition from Wellmore a and further Mine blend of coal from the Harman other, mixed motivated to eliminate the Harman Com- quality panies lesser coals. The circuit court competitors destruction as its via the *9 expressly ”[c]oal found that from the Harman companies. those metallurgical very Mine is coal with favorable coking prized characteristics steelmakers like Massey notwithstanding 13. made these demands LTV.” knowledge historically its that LTV had demon- preference multiple suppliers for and strated quality in 11. This coal inferior to the coal multi-year supply had entered coal contracts. from Harman Mine and to LTV obtained sold Additionally, price firm for its coal that Mas- through Wellmore. sey quoted represented to LTV "a handsome improvement” Massey prices which over at Companies Caperton 12. The Harman and Mr. selling had been its coal. presented trial to establish Mas- evidence at LTV, sey had for some to sell time desired coal opined supra 14. note 6. and that it was this desire that motivated See Massey that Mr. Massey, had also learned acknowledged Massey Well- business. personally guaranteed a num- Caperton had purchase and sell readily able to more was Companies’ obligations.16 coal, the Harman chose to ber of but instead Harman Companies filed majeure” Subsequently, the Harman “force declare have Wellmore Massey bankruptcy. analysis for upon a cost benefit based it would indicated performed which Thereafter, May Mining in Harman by doing so. Further- profits increase its in Sovereign sued the Circuit and Wellmore more, the declara- Massey directed before County, Virginia, alleging of Buchanan Court Massey concealed majeure”, of “force tion and of action for breach of contract causes lost business was fact that the LTV and good of the covenant of faith for breach termi- Massey delayed Wellmore’s dealing arising from declara- fair Wellmore’s late in contract until of Harman’s nation However, majeure. Harman tion of force virtually knowing it would be year, Sovereign voluntarily Mining and withdrew alternate Harman to find impossible Following trial prior claim to trial. their tort point in time. at that buyers for its coal claim, jury in contract found favor on the suddenly stopped purchas- Once Wellmore Mining Sovereign and awarded Harman had no abil- output, Harman ing Harman’s damages.17 in million $6 meantime, In the stay in business. ity to Massey sold Wellmore. II. negotiations with the Massey in continued HISTORY PROCEDURAL Caperton for Companies and Mr. Harman filed, Mine, Virginia action was Shortly after the Harman
Massey’s purchase of the Development, Harman on October the transaction on agreed to close Caper- Mining, Sovereign and Mr. 31,1998. However, Massey delayed Harman January ton, found, individually, filed the instant action “ultimately and, circuit court as the County, Boone West the Circuit Court of a manner so the transaction such collapsed Compa- against Massey A.T. Coal Virginia, fi- Companies’] Harman [the as to increase Inc., Inc., Company, Inde- addition, Elk Run Coal Massey ny, uti- distress.”15 nancial Company, Mar Fork pendence Coal it had ob- information lized the confidential Inc., Performance Coal Com- Company, Coal Companies to take the Harman tained from Company, Inc. Massey Coal Sales actions, pany, narrow purchasing such further (hereinafter “the collectively referred to as reserves surround- the Pittston coal band of Defendants”).18 The first amended Massey to make the Mine order ing the Harman Decem- action was filed on complaint to others and unattractive Harman Mine of tortious and asserted claims nego- ber During the thereby decrease its value. existing contractual rela- Mine to interference of the Harman tiations for the sale trial, representations false presented on numerous According testimony dur- detriment at 15. example pur- by Massey. of such false Massey's potential One ing negotiations made Mine, by Massey lead Massey represented representations was that it made chase of the reserves to close Caperton the Harman coal believe that it intended that it would assume Mr. However, just Virginia January "as-is.” purchase Penn Harman Mine on lease from its fact, closing Massey's pur- 1998, when, already prior deter- to the scheduled had Mine, Massey demanded chase of the Harman not to close the transaction. mined the Har- changes material terms of to numerous agreement Vir- Companies' with Penn lease man the Su- appealed the verdict Wellmore could not ginia. and Penn however, appeal Virginia; preme Court of therefore, terms; Massey's purchase agree grounds. See Wellmore on technical was refused completed. Mine was never the Harman Mining Corp., Corp. 264 Va. v. Harman Coal 568 S.E.2d obligations In- personal had 16. Mr. Industries), (now as Terra spiration Coal known Inc., Independence *10 Company, Bank, 18. Elk Run Coal Financial, Grundy and National Senstar Inc., Company, Company, Coal Financial, Mar Fork Coal Inc., among circuit others. The Vision Massey Company, and Performance Coal steps many expressly of the found court Massey Company, of are all subsidiaries per- Sales Caperton Coal at Mr. were directed took Company, Massey Inc. Coal Caperton A.T. sonally, had relied to his and that Mr. tions, prospective participated deciding appeal tortious interference with in the voluntari- relations, ly themselves, misrepre- disqualified contractual fraudulent two circuit court sentation, conspiracy, negligent judges misrep- designated civil were to sit on this Court resentation, damages. punitive Though temporary assignment and purpose for the pre-trial deciding numerous motions were filed in the the rehearing, case on and the No- action, 21, underlying particular 2007, opinion in one is rele- vember of the Court was vant to our of this resolution matter: in vacated. The was ease submitted on rehear- 1998, Massey 12, 2008, ing December the on Defendants filed March and the opin- Court’s ion, again reversing a motion to dismiss. their judgment memorandum the the motion, support in Massey of the the circuit remanding entry Defen- court for and alia, argued, dants dismissing prejudice inter the forum- order with the ease Defendants, required against selection clause of the 1997 CSA Massey the on was filed 3, April this action to in County, be filed Buchanan 2008.22 Virginia. The circuit court denied the Mas- Thereafter, Caperton Mr. and the Harman sey Defendants’ motion dismiss. Companies petition filed for writ of certio
Ultimately, only
three
the
rari
in
Supreme
theories of
the United States
Court
liability
present-
action
asserting
acting
Benja
asserted
this
were
Chief Justice
jury
ed to the
for a verdict:19
grant
seeking
tortious inter- min’s refusal to
their motions
ference,
misrepresentation
disqualification
fraudulent
his
amounted to a violation of
2002,
1,
August
On
fraudulent concealment.
the Due Process Clause of the Fourteenth
jury
plaintiffs
found in
of all
favor
on all Amendment to
United
States Constitut
verdict,
grounds
three
returned a
ion.23
Supreme
granted
includ-
Court
peti
$50,038,406.00.
ing punitive
damages, of
Thereafter,
On tion on
November
2008.
30, 2002,
August
Massey
decision,24
Supreme
Defendants filed five-four
Court re
judgment
a motion seeking
as a
concluding
matter of versed and
remanded
case
law,
trial, or,
alternative,
a new
Benjamin’s participation
remit-
Justice
lengthy
Following
delay, by
titur.
order
decision of this case created an “unconstitu
entered
‘potential
March
the circuit
tional
Caperton
court
for bias.’”
v. A.T.
—Inc.,
post-trial
appeal
U.S.-,-,
denied the
motions. An
Coal
2252, 2262,
(2009)
this Court followed.20
129 S.Ct.
III.
A. Motion for Affirmance
STANDARD OF REVIEW
or Reconsideration of
Appeal
Petition for
dispositive
issue in this
case
denying
whether the circuit court erred in
Prior
reaching
appeal,
the merits of this
Massey
Defendants’ motion to dismiss on we
developed
wish to address an issue that
of the
the issue
forum-selection clause.
disqualification
as a result of the
of Justice
generally
“Courts
consider motion to dis Benjamin from this
In
case.
motions filled in
miss,
clause,
upon
based
a forum selection
following
this Court
the reversal of the case
improper
motion
dismiss for
venue.” by
Court,
Supreme
the United States
Davis,
Cleckley,
Franklin D.
Robin J.
&
Companies
Harman
Caperton
and Mr.
Palmer, Jr., Litigation
J.
Louis
Handbook
sought, in
part,
relevant
judg-
“affirmance of
Procedure,
on West
Rules
Civil
or,
alternative,
ment
for reconsidera-
12(b)(3)[5]
(2d ed.2006).
§
at 376
“This
petition
tion and denial of the
appeal.”
for
a trial
Court’s review of
court’s decision on a Although this
Court denied the motions
improper
motion to
dismiss
venue is for
3, 2009,
September
order entered
we never-
Syl. pt.
abuse of discretion.”
United
grounds
theless wish to discuss our
for so
Bank,
Blosser,
Inc. v.
218 W.Va.
624 doing,
procedure
and to establish a clear
S.E.2d 815
applied
in the event that similar circum-
stances
arise
the future.
issue,
deciding
In
this
we must first
motions,
In
Caperton
their
Mr.
and the
applicability
enforceability
determine the
Companies argued,
part,
that the
of the forum-selection
at
In
issue.
affirmed,
jury verdict should be
because the
regard,
this
we now hold that
review
“[o]ur
disqualification ruling by the United States
applicability
enforceability
of [a]
Supreme Court
left the case with a non-
Hugel
forum[-]seleetion clause is de novo.”
majority split
denying
vote
two-two.
In
v.
Lloyd’s, 999 F.2d
Coloration of
motion,
explained
this Court
in its Order
(7th Cir.1993) (citing Northwestern Nat’l Ins.
3, 2009,
September
(7th
Donovan,
Co. v.
916 F.2d
Cir.
1990); Riley
Kingsley Underwriting
[asking
retroactively
this Court
im-
to]
Ltd.,
(10th
vote,
Agencies,
pose[
Corporate
969 F.2d
Cir.
a tie
Appellees
]
1992)).
Syllabus point
Chrystal
Caperton
R.M.
Compa-
[Mr.
and the Harman
Cf.
A.L.,
nies],
v. Charlie
contrary well-accept-
W.Va.
459 S.E.2d
in a manner
(1995) (“Where
appeal
principles
procedure,
the issue on an
ed
appellate
seek
clearly
from
circuit
question
court is
...
to constrain this Court’s discretion to
involving
interpretation
stated,
law or
an
proceed
Plainly
of a stat
on remand.
this
ute,
review.”).
apply
yet
we
a de novo standard of
Court has not
reached a final decision
ingly,
appellants
25. The
Mr.
motions
and the Har-
this Court directed the
to "com-
Companies additionally sought
man
to have this
ply with the
order
circuit court’s
forthwith.”
post
Court order the
appeal
Defendants to
eighty-five
bond in the amount of
million
justices currently sitting
26. The
on the Court to
motion,
Court,
denying
dollars.
its
Acting
decide
instant case are:
Chief Justice
3, 2009,
September
Order dated
noted that "the
Davis,
Workman,
Margaret
Robin Jean
L.
Justice
July
Order of the circuit court entered
Ketchum,
Justice Menis E.
Justice Thomas E.
post
[which directed the
Defendants to
McHugh,
Judge
and Senior
James O. Hol-
surety
Status
Fifty-Five
in the amount of
Million Dol-
lars,]
liday, sitting
assignment.
by temporary
remains in full force and effect.” Accord-
*12
addressed in our state con-
therefore cannot be
fication issue is
matter and
in this
procedure.
appellate
and rules of
equally divided.
stitution
VIII;
Virginia
§
Art.
2 of the West
Under
addition,
motion was
we note that
“[wjhen
Constitution,
is stated
reasoning
upon the
properly denied based
justice
temporarily disqualified
is
or unable
Supreme Court in
by the United States
used
serve,
judge
justice may assign a
the chief
Lavoie,
Co. v.
475 U.S.
Aetna
Ins.
Life
ap-
a circuit court or of an intermediate
1580, L.Ed.2d 823
106 S.Ct.
pellate court to serve from time to time
Life,
Supreme
the United States
In Aetna
provided
It
further
in Rule
his stead.”
an
the issue of whether
Court addressed
Appellate Procedure
29(g) of the Rules of
have
Supreme Court Justice should
Alabama
that:
himself from the case. The United
recused
Supreme
concluded that
States
Court
any justice
disqualify himself
shall
When
re-
justice
disqualified
was
and should have
provisions pursuant
or herself
disqualifi-
As a result of the
cused himself.
rule,
acting
justice
the chief
or
chief
this
justice,
the vote in the case
cation of the
discretion, assign
justice may, in his or her
United States Su-
became four-four. The
justice,
judge,
circuit
a senior
senior
or
by
preme
opinion
determined that the
Court
disqualified justice.
judge to service for the
Supreme
Alabama
Court could not sur-
promptly notify
justice
The chief
shall
vive because of the four-four decision. Con-
Supreme
Clerk of the
Court of his or her
sequently,
Supreme
the Alabama
Court deci-
necessity
ap-
regarding
decision
remanded
sion was vacated and the case was
pointment
justice
and the
substitute
opinion in
proceedings.
for further
Aet-
Supreme
promptly
Clerk of the
Court shall
following procedure
na
cited the
Life
notify
justices
the other
and the
by
justice
was used
Alabama when a
such decision.
disqualified:
Thus, in accordance with our state
Embry
disqualified
If
him-
Justice
had
constitution,
appellate procedure,
our rules of
self, the decision of
trial court would
Supreme Court’s deci
and the United States
by
not have been affirmed
a vote of an
Lavoie,
sion in Aetna
Ins. Co. v.
we now
Rather,
equally divided
Ala.Code
court.
Life
that,
expressly
disqualifica
hold
where the
(1975),
§
ap-
12-2-14
which authorizes the
Court,
by
tion of a Justice of this
either
pointment
special justices
in the event
Supreme
decision of the United States
Court
disqualifications result
in an even-num-
by
personal
or
his or her
decision made after
evenly
bered court which is
divided on a
Court,
opinion
has been issued
this
matter,
presumably
would
have come into
vote,
renders the decision of this Court a tie
play.
Acting
then the Chief Justice or
Chief Jus
Life,
U.S. at
n.
106 S.Ct. at
Aetna
may, in
tice of this Court
his or her discre
remanded,
1589 n. 5. After the case was
tion, assign
justice,
judge,
a senior
senior
matter was reheard
the Alabama Su-
judge
place
circuit
in the
of the
serve
preme
again
af-
Court and
Court once
VIII, § 2
disqualified justice pursuant to Art.
plaintiff.
firmed the verdict for the
See Aet-
Virginia
of the West
and Rule
Constitution
Lavoie,
na
Ins. Co. v.
West
does not have a statute that
the Court observed that
expressly
disquali-
specific
proceed,
about how to
addresses the issue of the
directions
However,
justice.
disquali-
opinion
Supreme
Court of the United
fication of a
general
presents
opportu
constitutes a
than
This case
the first
States
—rather
*13
(Citing Syl. pt.
part,
nity
in
for this
to
limited —remand.”
Court
address substantive
Oxley Cummings,
involving
By
ex rel. Frazier &
issues
State
clauses.
(“Lim-
(2003))
definition,
way
recognized
it
record
this case
several
right
injured party
legal
of an
proper
that are
for the consideration of this
jealously guarded by
redress is
the courts.
Court,
appeal
properly
that
al-
was
Formerly,
agreement confining
no
VIII,
(Citing
Const. Art.
lowed.”
W. Va.
sec.
right
party
particular
of a
to sue in a
court
4).
or tribunal
or
or
courts
tribunals of
jurisdiction,
B. Forum-Selection
a certain
Clause
or to determine the
way
deprive
venue of a suit in such a
as to
Although numerous
issues have been
statutory privileges
the defendant of his
case,
appeal
raised
we find that the
enforced,
place
per-
of trial was
unless
may
matter
be resolved on the
instant
issue
haps
agreement
where the
after
made
of the forum-selection clause contained in the
the cause of
part
action had arisen and was
Sales,
Sovereign
1997 CSA between
Coal
compromise. minority
fair
of a
A
of courts
Corporation,
Coal
Har-
Wellmore
still follow this older rule.
Mining Corporation.
man
decades,
During
past
two
the rules
Sovereign,
governing
validity
The 1997 CSA between
“forum
various
Wellmore,
Mining provided
and Harman
selection” clauses have been relaxed con-
“[a]greement,
respects,
siderably,
following
in all
pattern
shall be
the courts
governed,
already
construed and
enforced
accor-
similar to that which has
been
dance with the
substantive laws of the Com-
discussed
connection with arbitration
Thus,
Virginia.
brought
today
monwealth of
All
actions
clauses.
while
remains true
Agreement
provision unreasonably
in connection with this
shall be
that a clause or
in and
improperly attempting
deprive
filed
decided
Circuit Court of
a court
enforced,
County, Virginia____”
pro-
jurisdiction
Buchanan
In the
of its
will not be
below,
ceeding
respect
Defendants filed a
modern trend is to
the enforceabil-
alleging,
part,
ity
containing
limiting
motion to dismiss
in relevant
of contracts
clauses
judicial jurisdiction,
nothing
the forum-selection clause in the 1997
if there is
un-
required
CSA
action related to that
fair or
them.
unreasonable about
This
agreement
brought
directly
be
in the Circuit Court of
trend
traceable
landmark
County, Virginia. Accordingly,
Buchanan
Zapata
case of
Bremen v.
M/S
Off-Shore
argued
Defendants
that the ac-
U.S.
92 S.Ct.
32 L.Ed.2d
[407
(1972)],
improperly
tion was
before
Circuit Court
in which the United States
County,
Virginia,
Supreme
upheld
validity
of Boone
West
and that
Court
of a
freely negotiated
instant
action should therefore be dis-
forum selection clause in
The circuit court
missed.27
denied the mo-
a commercial contract between an Ameri-
concern,
tion to dismiss.
can firm and a German
which
Wells,
proper procedural
filing
Deep
27. “A motion to dismiss is the
suit.”
Water Slender
Ltd. v.
Prod., Inc.,
enforcing
Exploration
mechanism for
a forum-selection
Int’l
&
234 S.W.3d
Shell
(citations omitted).
party
agreement
(Tex.App.2007)
that a
has violated
(2d
12(b)(3)[5],
any dispute
§
at
specified that
must
deter- Procedure
376-77
courts____
ed.2006) (hereinafter
English
mined
“Litiga-
referred to as
”) (“The Supreme
tion Handbook
Court has
Lord, A
7 Samuel
& Richard A.
Williston
passing
indicated in
forum selection
15:15,
§
at
Treatise on the Law Contracts
contrary
public policy.”
ed.1997) (footnotes omitted).
clauses are
(4th
290-301
(citing
Keyser)).
General Electric Co. v.
§
at
See also 17A Am.Jur.2d Contracts
(“While
contrary authority,
there is
255-56
impediment
Having found no
to the en-
*14
generally
will enforce forum-
modern courts
gen-
forcement of forum-selection clauses in
by parties
clauses entered into
to a
selection
eral,
specifically
we now must endeavor to
that
provided
contract
clauses are
determine whether
forum-selection
unfair, unreasonable,
unjust
or
under [the]
clause of the 1997 CSA should have been
(footnotes omitted)).
circumstances.”
enforced in the instant case.
Although this Court has not had occa
Limited,
Phillips
v. Audio Active
involving
sion to address substantive issues
(2d Cir.2007),
forum
say,
control
So.2d at 357-58. That is to
this clause
forum and should
to a selected
diction
unequivocally
mandate that a con-
that it should be set
does
strong showing
absent a
contrast,
troversy
dispute
litigated
forum
or
in Palm
permissive
In
‘a
aside....
contracting par-
County,
Beach
nor does it waive
other
clause indicates the
selection
dispute
jurisdiction.
language
their
territorial
consent to resolve
ties’
forum,
dispute
merely
party
allows
to file suit in Palm
given
require
but does not
”
forum____’
(internal
County.
Beach
be resolved
omitted)).
citations
at
894 So.2d
291-92.
question
whether a
Resolution
Thus,
mandatory,
to be enforced as
mandatory
per-
or
must do more than
a forum-selection clause
particular
requires scrutiny of the
missive
simply
jurisdiction;
mention
in addi
or list a
language used.
tion,
specify
it must either
venue manda
determining
forum selec-
whether a
tory language,
language
or contain other
mandatory
permissive,
clause is
tion
demonstrating
ju
parties’
intent make
language of the clause must be examined.
risdiction exclusive.
Quinones,
example, in
the Florida Su-
For
mandatory if
A forum selection clause is
found
the forum selec-
preme Court
specified
jurisdiction and venue are
mandatory,
permissive, not
tion clause was
mandatory
language.
or exclusive
John
provided
the creditor
because
*16
Son,
Spirits,
&
Boutari
Wines &
S.A. v.
“may”
legal
speci-
proceedings
institute
Distribs., Inc.,
51,
22
Imp. &
Attiki
F.3d
courts, not
it “shall” do so.
fied
that
(2d Cir.1994).
Boutari,
53
Second
(Overseas),
[Quinones
Corp.
v. Swiss Bank
general
held
rule in
“[t]he
Circuit
that
(em-
273,
(Fla.1987)
S.A.,
]
509 So.2d
275
containing
cases
forum selection clauses is
added)____ “Conversely forum se-
phasis
only jurisdiction
specified
is
[w]hen
clearly
which
or
indi-
lection clauses
state
generally
clause will
not be
enforced
litigation
any
must or
be
cate that
shall
language indicating
some
without
further
specified
in a
are mandato-
initiated
forum
parties’
jurisdiction
intent to make
ex-
Conn,
[P’ship
ry.” Shoppes Ltd.
v.
829
52____
Boutari,
clusive.”
Still, N.C.App. S.E.2d action contains the sentence additional (2002))). stating any brought that “[v]enue of action illustrating a ease a forum- example An in ... hereunder shall deemed to be mandatory lan- clause that used selection Virginia.” language requires This enforce- Docksider, Technology, Ltd. Sea guage is [plaintiff] ment of the clause not because (9th Cir.1989). Ltd., In that 875 F.2d only jurisdiction consented case, entered into a contract with plaintiff Virginia, agreed state courts but further manu- equipment to distribute defendant mandatory language that the venue for by the defendant. The contract factured arising agree- all actions out of the license in- a forum-selection clause that contained Virgi- County, ment would be Gloucester “Li- following pertinent language: cluded the mandatory language This makes nia. hereby agrees consents to censee venue, suit, place clear that lies jurisdiction the State of courts of exclusively designated county. in the brought here- Virginia. action Venue Thus, might whether or several states be deemed to be Gloucester under shall jurisdiction otherwise have over actions Docksider, County, Virginia.” F.2d at stemming agreement, from the all actions dispute arose over the contract that 763. A prosecuted Virginia. filed and must be plaintiff filing an action resulted Docksider, F.2d at 763-64. against the defendant a federal district foregoing In accordance with the court dis- court in California. district *17 authorities, we now the determina hold that action, finding the forum- missed the that tion of whether a forum-selection clause is in required the case be filed selection clause mandatory permissive or an exami requires plaintiff appealed, a The ar- Virginia court. particular language nation of the contained guing that the forum-selection clause jurisdiction specified therein. If with man is permissive, mandatory. not The Court “shall,”28 datory such as or exclusive terms disagreed for the Ninth Circuit with Appeals “sole,” “exclusive,” “only,” as or terms such ruling the as plaintiff, follows: mandatory the clause will be enforced as a language critical in is [the clause] The However, jurisdic clause. if forum-selection any final sentence: action the “Venue by mandatory exclu tion is not modified brought hereunder shall deemed to be be language, sive the clause will be deemed County, Virginia.” The dis- in Gloucester permissive only. language judge concluded that this trict case, parties’ pursue Turning to the the fo represented the intent to instant mandatory lan litigation only Virginia. that in rum-selection clause utilized any arose interpretation guage jurisdiction that that identified the wherein [Plaintiff] contends this be disputes lan- tried: actions “[a]ll is erroneous because the contractual would Agreement guage any express brought man- in connection does not contain with “exclusively” datory term such as that filed in and decided the Circuit shall be (Em- parties’ County, Virginia.” to vest Buchanan would indicate intent Court of added). present- Accordingly, are jurisdiction. phasis we Virginia exclusive " Allen, omitted). 208 W.Va. recognized is See also v. *[i]t This Court has often that tion State "shall,” 87, (1999) ("Generally, established that word well S.E.2d 96 539 language showing contrary in- ... absence of mandatory 'shall' commands connotation ..., mandatory be conno- tent should afforded directory, is denotes that the described behavior ” 1, Matin, part, Syl. pt. E.H. v. 201 tation.' omitted)). (citations discretionary.” than rather 463, (1997) (internal cita- W.Va. 498 S.E.2d argued mandatory Companies forum-selection that as- ed with a clause. have the claims Inc., Holdings, parte Toys Ex Bad governed See serted this action are not (“The (Ala.2006) tort, forum-selec- So.2d they forum-selection clause because agreement purchase pro- clause in the contract, tion opposed disagree. claims. We any legal for action which ‘[v]enue vides that, recognized It has been may brought shall hereunder be deemed County, (empha- lie in Sullivan Tennessee’ seeks man- party [w]hen a to enforce a added). ... use the word ‘shall’in sis The clause, datory forum-selection a court must the forum-selection clause makes the clause question determine whether claims in mandatory, permissive.”); Town Ho- clause____The scope fall within of that Louisiana, mer v. United Healthcare of lan- court bases this determination on the (“We (La.Ct.App.2007) 948 So.2d guage of the clause and the nature the forum clause at find selection issue to be allegedly subject claims that are explicit. expressly clear clause clause. any proper legal venue states Wells, Deep Water Ltd. v. Int’l Slender Shell Rouge shall Baton action be East Parish. Prod., Inc., Exploration & 234 S.W.3d ambiguity mandatory There no in this (Tex.App.2007) (citing 687-88 Marinechance provision.”); County Polk Recreational Ass’n Sebastian, Shipping, Ltd. v. 143 F.3d Susquehanna v. Patriot Commercial Leas- (5th Cir.1998)). Phillips 221-22 See also Co., Inc., ing 273 Neb. N.W.2d Ltd., (2d Audio Active 494 F.3d (2007) (“The selection forum clause Cir.2007) (“[W]hen ascertaining applica- Thornridge provides lease action bility provision particular of a contractual concerning ‘shall brought the lease be’ claims, we examine the those substance of Pennsylvania. this forum We read selection claims, labels.”). Accordingly, shorn of their mandatory clause____”); be a Gen- that, expressly we hold to determine whether Siempelkamp eral Elec. Co. v. G. GmbH & certain within scope claims fall of a man- (6th Cir.1994) (“Be- 29 F.3d datory clause, deciding disputes cause clause states that ‘all’ court must its base determination on Siempelkamp’s principal place ‘shall’be at language of the clause and the nature of the business, jurisdiction it selects German court allegedly subject claims that are exclusively mandatory.”). Having and is de- clause. termined the forum-selection clause at clause, mandatory in this
issue
case is a
we
hand,
Turning to the case at
we
must now determine whether the claims and
*18
language
must first examine the
man
of the
parties
in
suit
governed by
involved
datory forum-selection clause at
Be
issue.
said clause.
expressly
cause the 1997 CSA
that it
states
3. Claims and
part
Parties.
third
“shall
...
...
be
construed
in accordance
analysis
our
is to determine whether the with the substantive laws of the Common
parties
claims and
in
involved
the suit are
Virginia,”
wealth of
we will scrutinize the
governed by the forum-selection clause. We
language
pursuant
Virginia
of the clause
questions separately.
address these
law,
law. Notably, under
“[w]ritten
written,
a. Are the
asserted
claims
in the in-
contracts are construed as
without
subject
suit
adding
by
stant
were
forum-selection
terms that
included
parties.
clause?29 Mr.
and the Harman
the terms in a
When
contract are
issue,
that,
point
complaint
29. At the outset of this
we
out
in
asserted
the amended
were further
trial,
because the forum-selection clause issue
developed during
was ad-
the course of the
such
dressed
circuit court
context of the
proper
facts are not
for our
consideration
dismiss,
Massey Defendants' motion to
this Court
See, e.g., Powderidge
review of this issue.
Unit
they
is constrained to
address
claims as
were
Ltd.,
Highland Props.,
Owners Ass’n v.
W.Va.
196
complaint.
asserted in the amended
cause the amended
ord that was before
This is be-
872,
(1996) (“To
S.E.2d
complaint represents
the rec-
clear, our review is limited to
as it
the record
circuit
court at the time
stood before the circuit court at the time of its
ruling
of its
on the
Defendants' motion to
ruling.”).
Although
pertaining
dismiss.
facts
claims
plain
unambiguous,
and
the contract
con-
Appeals
is
the United States Court of
for the
plain
according
meaning.
strued
to its
The Second Circuit was asked to determine the
parties
normally
words
used are
scope of a forum-selection clause that stated:
“
usual,
given
ordinary
popular
their
‘any legal proceedings
may
arise out of
meaning.”
Transportation
v.
Heron
Cas.
agreement]
brought
[the
are to be
Eng-
”
Co.,
274 Va.
Ins.
650 S.E.2d
702 land.’ Phillips, 494
at 382. In deter-
F.3d
mining
of,”
the meaning of “arise out
language
court contrasted
such as “in con-
The forum-selection clause of the 1997
being
nection with”
expansive:
as
more
“[w]e
plain
language
applies
CSA states
that it
do not understand the words ‘arise out of as
brought
actions
“[a]ll
connection with
encompassing all
pos-
claims that have some
Agreement.” Due
to the inclusion of the
contract,
relationship
sible
with the
including
actions,”
phrase
perceive
“all
we
no intent
to,’
may only
claims that
‘relate
be ‘associat-
agreement
to this
to limit in
’
with,’
ed
or ‘arise in connection with the
way
type
applies.
of actions to which it
Id.,
contract.”
494 F.3d at
(emphasis
Thus,
example,
apply equally
it would
added) (citations omitted).
In a different
claims,
claims,
statutory
contract
tort
ease, the Second
rejected
Circuit also
claims,
long
“brought
so
as such claims are
interpretation of a forum-selection clause
connection with” the 1997 CSA.
that utilized
phrase
“in connection with”
“usual,
Considering
ordinary
next the
applying only
as
to breach of contract claims:
popular meaning”
phrase
“in connec-
ample
There
precedent
is
scope
that the
with,”
tion
we
scope
find the intended
of clauses similar to those at issue here is
quite
clause to be
broad.
pure
not restricted to
breaches of the con-
Heron,
“in connection reasoned, remaining claims. support has that the Third Circuit evidence to also note the claims Accordingly, deciding whether case, interpret pro- we must In this “brought in connection were asserted below clause that forum selection vision CSA, limit our consid- the 1997 we will with” jurisdic- English courts exclusive gives the that ulti- only three claims eration to those arising ... in rela- “any dispute tion over claims, jury. three mately went to the Those The ordi- Agreement. tion to” the 1990 (1) tort, tortious inter- sounding in were: “arising in all phrase nary meaning of the ference; (2) misrepresentation; fraudulent say that a dis- simple. To relation to” is (3) upon Based fraudulent concealment. the 1990 and ... in relation to” pute “arise[s] claims, conclude tort we say origin of the our review of these Agreement is to that the i.e., “brought in connection agreement, they were indeed dispute related to that dispute has some origin of the with” the 1997 CSA. to the 1990 “logical causal connection” or in connection injuries alleged All of the Third New Inter- Agreement. Webster’s tort claims three aforementioned with the Dictionary, 1916 national directly from declaration flow Wellmore’s Int’l Wyeth & Bro. Ltd. v. CIGNA John inextricably majeure, an event that is force Cir.1997). (3d 1070, 1074 See F.3d Corp., 119 CSA. While the connected to the 1997 F.Supp.2d Corp., Xerox also Klotz v. methodically out nu- complaint sets amended (S.D.N.Y.2007) (concluding that & n. 4 pre-force maj- purported merous details scope challenge to the “[pjlaintiff raises no conduct, injury wrongful no resulted eure she, clause, nor could the forum selection alleged without the from of that conduct provi expansive language of the since the the 1997 majeure under declaration of force ‘[ajny covering action in connection sion— CSA. Employee’ plainly en Plan with the — example, I” of the amended For “Count claims”; further com compasses her complaint alleges tortious interference with “[pjlaintiffs law tort and menting that state relations, specifically existing contractual part are also of an ‘action contract claims existing contracts with Wellmore identifies Plan’ and are covered connection with the (the (the CSA), Virginia Penn lease (footnote omitted)); Doe Sea the clause” reserves), and the the Harman Coal UMWA Assoc., Inc., F.Supp.2d camp (a contract). Certainly a claim of inter- labor (“A (D.Mass.2003) law review of the case related to with the 1997 CSA itself is ference claims, too, tort leads me to conclude that the respect to the Penn that contract. With clause. the forum selection covered contracts, it was Well- and UMWA selection clause was worded The forum majeure that declaration of more’s force governed any claim related to that it indicate Companies and Mr. Ca- placed the Harman contract, subject arising from being unable to perton position of John which were the terms and conditions obligations. fulfill their contractual Without Seacamp.”); at Dexter Axle Doe’s enrollment relations majeure, those contractual force USA, 833 N.E.2d Co. v. Baan by the actions of would have been unaffected statutory (finding tort and (Ind.Ct.App.2005) Thus, this claim is Defendants. subject to forum-selection claims were “brought in with” the 1997 CSA. connection clause). case, complaint al- note that “Count II” of amended Turning to the instant we prospective leged tortious interference with issue was ad- the forum-selection clause *20 relations, again involving motion to contractual Well- below in the context of a dressed more, with dismiss; therefore, Virginia and the UMWA. As the claims as Penn we consider I, key claims remains com- Count to these they in the amended were asserted wrongful declaration Notably, though, only three of the Wellmore’s plaint.30 force of the declaration complaint majeure. amended In the absence claims asserted in the 30. See note 29. supra
149 Companies may not bound its terms. majeure, the Harman We dis- of force agree. bankruptcy into not have been forced would prospective contractual relation-
and their
addressing
Other courts
the issue of
impeded Mas-
ships would not have been
may
non-signatories
whether
to a contract
“brought
sey. Therefore this claim is
enforce,
to,
subject
or be
a forum-selection
with” the 1997 CSA.
connection
clause have found the clauses to be enforce-
able under certain circumstances. One such
Finally,
alleges
III”
fraudulent
“Count
Manetti-Farrow,
case is
Inc. v.
Amer-
Gucci
and concealment
misrepresentation, deceit
(9th Cir.1988).
ica, Inc.,
F.2d
509
The
maj-
either related to the declaration
force
Manetti-Farrow case involved a contract be-
subsequent negotia-
or related to
eure itself
corporation,
tween a California
Manetti-Far-
Companies
between the Harman
tions
row,
Parfums,
corpora-
and Gucci
an Italian
“regarding
in-
Defendants
their
subsidiary
tion that was a
of another Italian
agreement
to enter into a settlement
tentions
(hereinafter
Gucci,
corporation,
S.p.A.
Guccio
Harman in connection with the 1997
Gucci”).
referred to as “Guccio
The contract
Insofar as this claim either relates
CSA”
included a forum-selection clause that stated:
directly
majeure
declaration
force
controversy
regarding interpreta-
“[f]or
CSA,
parties’
under the 1997
or to
efforts
contract,
present
tion or fulfillment of the
respect
to reach a settlement with
jurisdiction.”
Florence has sole
Court of
CSA,
“brought in
with”
it is
connection
Manetti-Farrow,
further that two of the can to Gucci Par- tion clause action, fums, Development only sign and Mr. defendant to this which was the (in However, range capacity), are not the contract. “a of trans- his individual and, therefore, non-par- signatories participants, to the 1997 CSA action might agree proposition were while we with this 31. Some courts have concluded that forum- only applicable narrowly presented clause is to tort claims selection where the resolution of the claim we with a more tailored fo- requires inter "arising applying rum-selection clause to claims Manetti-Farrow, pretation of the See contract, contract. "arising out of” the we see under” or America, Inc., v. Gucci 858 F.2d Inc. rule in the context of no need for such a narrow (9th Cir.1988) ("Whether a forum selection broadly clause such as worded forum-selection depends applies whether to tort claims Nevertheless, presently we before us. do the one interpretation resolution of the claims relates to that, insofar as the claims asserted note (citing Weidner of the contract.” Communica wrongful allegedly decla- action all flow from the tions, Faisal, F.Supp. Inc. v. majeure, they require would inter- ration of force (N.D.Ill.1987); Berrett v. Ins. Life pretation whether the contract to determine (D.Utah 1985); F.Supp. Clinton v. 948-49 wrongful. the declaration was indeed (N.D.Ill.1984))). Janger, F.Supp. *21 150
ties,
subject
Lloyd’s,
should benefit from and be
to
in the
a dispute
course of
between
Hugel
Lloyd’s, Hugel
forum selection clauses.” Clinton v. dan
and
alone involved
(N.D.Ill.1984)
ger,
F.Supp.
290
corporations
583
two
sup-
his
controlled
and
(citing
Corp.
Tilghman
plied
Coastal Steel
v.
allegedly belonging
information
to
Ltd.,
Wheelabrator
709 F.2d
202-03
corporations.
those
The district court
(3d Cir.),
denied,
cert.
464 U.S.
104
corporations
found that
owned and
(1983)).
L.Ed.2d
S.Ct.
78
315
We
by Hugel
closely
controlled
are so
related
agree with the district court that the al
dispute
they
equally
to the
that
bound
leged
non-parties
by
conduct of the
is so
the forum selection clause and must sue
closely related to the contractual relation
Hugel agreed
the same court in which
ship
applies
that the forum selection clause
findings
sue. We hold these
are not clear-
all
ly
defendants.
erroneous.
Furthermore,
at
Hugel
858 F.2d
514 n. 5.
151 paper deciding GmbH & and its when applies, to Feliz Sehoeller Co. whether the doctrine subsidiaries, of which was Schoeller- one only following ques- a court must answer the 2891981,at *1. The USA. 2007 contract WL party tion: reasonably should third fore- specifying included a clause forum-selection being by see bound the forum-selection jurisdiction disputes certain be that would relationships clause because of its to the Id., Warstein, Germany. 2007 WL signatory cause of action and the 2891981, provided at *7. Constab defective (internal quotations forum-selection clause?” USA, products to Sehoeller and Sehoeller omitted)); Compana and citations LLC v. USA, insurer, through filed Cali- its suit in SAS, Mondial Assistance No. 3:07-CV- that, rejecting argument fornia.34 In as 1293-D, (N.D.Tex. 190522, *4 WL at non-parties to the contract Great Northern 2008) (“The 23, recognizes Jan. Fifth Circuit could not Schoeller-USA enforce estoppel two theories of can that bind a clause, reasoned, court a nonparty contract to the contract’s arbi- Northern nor [n]either [its insured] Great tration or forum selection clause. The first signatories Schoeller-USA is theory’ called an ‘intertwined claims However, Agreement. enforcement equitable estoppel, grants non-signa- which a clearly the forum clause is “fore- selection tory right to a contract to enforce a given relationships seeable” between provision against signato- of the contract parties upon plain- basis and the which ry____The recognizes Fifth Circuit another Therefore, tiff this suit. has commenced estoppel-‘direet form of estoppel’ benefits the Court that the forum finds selection grants which a signatory to a contract the may against plaintiff.... be invoked right provision against to enforce a contract 2891981, at *8. See WL also Hellenic (internal non-signatory.” citations omit Fund, Veritas, Inv. Det Inc. v. Norske ted)); Inc., Aspitz Sys., v. Witness No. C 07- Cir.2006) (5th F.3d (enforcing forum RS, (N.D.Cal. 2007 WL at *3 against non-signatory selection clause 2007) Aug. (observing party fact did non-signa the contract on basis that the agreement sign controlling is not as to tory performance benefitted from the of the whether forum-selection clause would be en contract); v. Z Marano Enters. Kansas forced); Prot., Mortg. LLC v. Tar Affiliated (8th Rests., L.P., Teca 254 F.3d een, 4908(DRD), No. Civ. A. 2007 WL Cir.2001) (concluding non-signatory to con (D.N.J. 2007) *4 at Jan. “closely disputes tract was related to the (“[WJhere party’s closely a third conduct is arising agreements out properly relationship, related to contractual provisions” bound the forum-selection due applies forum selection clause to the third “shareholder, to his status of officer and (internal party.” quotations and citation omit (internal corporate signatory director” of ted)); Tucows, Inc., No. Novak 06CV1909 omitted)); Medtronic, quotations and citation (JFBXARL), at WL *13 Endologix, Inc. v. F.Supp.2d (E.D.N.Y. 26, 2007) (“[A]t March least two (D.Minn.2008) (“[A] may party 1056-57 third courts within this Circuit held that [i]t have be bound a forum-selection clause where range is well established that a of transaction closely dispute it is related such that it parties participants, non-parties, should becomes foreseeable will subject benefit from and be to forum selec majority bound.... It is true non-party agree tion A clauses.... binding party cases a third to a forum-selec may ment be bound a forum selection closely-related-party tion clause under the closely party clause where the is related to suing doctrine involved third as dispute such that it plaintiffs, becomes foreseeable being rather those than sued defendants____ (internal quotations it will be bound.” the Court not be- But does omitted)); Specialty lieve closely-related-party that the citations First Ins. doctrine Indeed, plaintiffs. Corp. limited to third-party v. Admiral Ins. CV 07 408 No. resulting provided indemnity product 34. Great Northern insurance for its from the defective losses and, subrogated to Schoeller-USA in accordance with the and became to Schoeller-USA’s policy, compensated rights. insurance Schoeller-USA *23 152 (D.Or. 22, personally 1876516, request to be credited June MO, at *3 2007 WL Beck overcharged to allegedly participants, amounts
2007) (“[A] range of transaction has stand Assuming that Mrs. Beck by Co.... be bound non-parties, should including asserted, similarly she is underlying ing on the claims of an clauses forum selection provisions. selection subject to the forum ‘closely related conduct is if their agreement Moreover, relationship of the given the The fact relationship.’... to the contractual presented, and the circumstances not a Becks parties was one or both that either Mr. wholly inappropriate permit not would be underlying contract is signatory to in his omitted)); provision evade the forum (internal Beck to citations dispositive.” by initiating suit Aircenter, Inc., guaranty and elsewhere Aviation, L.L.C. v. Hasler (internal citations 2463283, Beck.” jointly with Mrs. 1:06-CV-180, at *6 2007 WL No. omitted)); Tune-Up (“Other Sparks 2007) 27, and footnote (E.D.Tenn. courts Aug. 5902,1994 Ctrs., Strong, No. 92 C WL Inc. v. forum selection a contractual have enforced 1994) (“The 12, 188211, (N.D.Ill. May at *5 to the con against non-signatories clause a which hold that closely binding thread cases tract, were long as those so from and non-signatory party should ‘benefit dispute and it was foreseeable related is an (internal subject a selection clause quotations to’ forum they might be bound.” contracting prevent a omitted)); Telepa overriding concern to Weingard v. and citations Civ.2024(MBM), obligations party escaping from contractual Inc., 2005 WL 05 thy, No. (“Oth 7, 2005) agreed (S.D.N.Y. bargained for 2990645, he Nov. which at *5 and/or contractually- Dryclean-U .S.A. upon.”); Lu v. held that a er Circuits have of Califor 1493-94, 1490, nia, Inc., 14 Cal.App.4th 11 covers tort clause also based forum selection (1992) (“[P]laintiffs 906, ar Cal.Rptr.2d non-signatories if the tort against claims gue of the forum selection ultimately depend on the existence of enforcement claims two of signa unreasonable because relationship clause would be between a contractual defendants, Dry- Dryclean Franchise and the claims ... if resolution of tory parties, or U.S.A., contract, sign Agreement if did not clean interpretation relates Again, we are com operative containing the clause. involve the same the tort claims range disagree. A of transaction pelled for a breach of parallel claim facts as (internal non-parties, should participants, parties and cita quotations ... contract.” Solutions, subject selec omitted)); and be to forum Tech. benefit from tions Graham (internal Pictures, Inc., quotations and cita F.Supp. tion clauses.” Thinking Inc. v. omitted)); (N.D.Cal.1997) (“It Caputo, 957 Citigroup Inc. v. is well estab tion (“Even (Fla.Ct.App.2007) as partici So.2d range that a of transaction lished Citigroup not covered suming benefit were pants, parties non-parties, should may non-signatory Agreement, claus subject to forum selection Citibank from and be ____[T]he signatory’s forum selection Mr. Fuller invoke conduct of GTSI and es non-signatory signatory are where the closely the contractual rela [to] related related.”); TPI, In Deloitte & Touche v. Gencor tionship Mr. Graham and between (Fla.Dist.Ct. dus., Inc., 929 So .2d applies to both the forum selection clause (observing that the inter App.2006) “where spite of the fact that GTSI and Mr. Fuller (inter directly to or non-party are related signatories to the PSA.” ests of a they are not omitted)); con of those of the completely derivative quotations and citations Beck nal Inc., non-signatory Fin., tracting party, the is bound Civ. A. No. Group/Credit v. CIT clause.”); (E.D.Pa. 94-5513, contract’s forum selection at *6 1995 WL (“That Fancy, 29, 1995) Design-Build, Inc. v. Florida signed the Tuttle’s June Mr. Beck (Fla.Dist.Ct.App. So.2d 873-74 president of Beck Co. Security Agreement 1992) (recognizing forum-se given intimate that reasonable consequence little his is of against non- clause would be enforced the benefit to him lection relationship to Beck Martin, Ga.App. signatory); Brinson funding provided, the circumstances from the (Ga.Ct.App. S.E.2d 539-40 person he was giving rise to his claims that (“[Plaintiff] 1996) contends the Brinson also ally injured manner in which defen by the against dismissing claims erred in his agreement and his court performed dant under the apply does forum selection clause not argues regardless of wheth He Martin. disagrees. dispute court is applicable to them. This This Wood venue clause er the governed by the selection clause be apply claims forum men, to his clause would clearly the claims asserted arise out of cause interference with Martin for tortious against relationship plaintiffs only possible had unjust be enrichment relations and economic *24 Engagement Bear Let with Stearns —the not arise out of the those claims do cause ters.”); County Paymentech Bank v. Sevier were not parties and who involve contract Servs., Inc., Merch. No. E2005-02420-COA- [Djespite to contract---- signatories R3-CV, 2423547, (Tenn.Ct. at 2006 WL *9 claims attempt to characterize his Brinson’s (“We 23, 2006) agree App. Aug. "with the falling outside the business against Martin as federal court that a valid forum selection Woodmen, it clear relationship he with is had governs participants, clause all transaction complaint that the claims arose his from were regardless participants of whether directly indirectly from or his contract either signatories By actual to the contract. trans circumstances, Under these Woodmen. participant, mean an of employee action we if Martin persuaded are were we contracting parties individ one of who is clause, rely ac separate entitled to ually contracting party named another brought, possibly result likely be tions would arising containing a suit out of contract decisions, varying inconsistent with the ing in the forum selection clause. To hold other reasons, For justice. these administration nonsignatory employee, allow wise would a trial court did not err conclude that the we participant, who was a transaction to defeat rely may on the forum ruling that Martin company’s agreed-to by refusing to his forum case.”); v. Jim clause in this Grott selection employer’s be bound contract. This Inc., Log Sys.-Midwest, N.E.2d Barna 794 may be. We the trial court cannot conclude (“The (Ind.Ct.App.2003) Texas 1104-05 to all apply a valid forum selection clause Appeals applied forum-selection Court of has participants. transaction To conclude other to a who nonsignatories to contract clauses party bypass would enable a a valid wise meaning] ... participants[,] transaction by naming peti selection clause in its forum contracting parties employee one of the closely-related party who not a tion a was individually named another con who is contract.”); party to the Accelerated Chris tracting party arising in a suit out Educ., Corp., Inc. v. Oracle 925 S.W.2d tian containing the contract (“We (Tex.Ct.App.1996) 75 conclude (internal citations, quotations, clause.” may apply a valid forum selection trial court omitted)); Titan Indem. Co. v. footnotes To participants. clause to all transaction (Miss.2004) Hood, (quot 895 So.2d 148 party would enable a conclude otherwise ing approvingly comment from Accelerated bypass by nam a valid forum selection clause Educ., Corp., Inc. v. Christian Oracle petition closely-related party who ing in its (Tex.Ct.App.1996), stating S.W.2d (footnote party was not a to the contract.” agree federal that a with the court “[w]e omitted)), part grounds on other overruled governs clause all valid forum selection Tyco Systems, by In re Electronics Power participants, regardless wheth transaction Inc., 05-04-01808-CV, No. WL participants signatories were actual er the 2005) (mem.). (Tex.Ct.App. Feb. ...”); Dogmoch Corp. v. contract Int’l AG, Bank A.D.2d Dresdner upon foregoing, Based we now (“Although (N.Y.App.Div.2003) N.Y.S.2d range participants, that a transaction hold nonsignatory was a to the account defendant non-signatories, may signatories and benefit reasonably it agreements, foreseeable subject and be forum selection from selec that it would seek to enforce forum non-signatory In order for a to bene clause. given relationship clause the close be subject tion to a forum selection fit from or be subsidiary....”); Kelly clause, closely itself re non-signatory tween and its must be Bear, CONTROL dispute Stearns & Co. No. to the such it becomes lated (Pa.Com.Pl. may non-signatory at *2 bene WL foreseeable 2001) (“[Pjlaintiffs argue subject that as to the forum selection Dee. fit from or be Letters, non-signatories Engagement clause. to the foregoing holding
Applying the
Rebuttal. Because the forum-selection
case,
we
instant
first note
resisting
facts
clause
was communicated
that,
plaintiffs, Sovereign;
as to the
Mr. Ca
party,
mandatory
has
force
covers the
Sovereign;
perton,
president
Har
dispute,
claims and
involved in this
Mining
signatories
man
were
to the 1997
Thus,
presumptively
enforceable.
the final
CSA;
Development
Caper-
and Mr.
Harman
analysis
step to our
tois
ascertain whether
ton,
capacity,
in his individual
were not.
Companies
Caperton
the Harman
and Mr.
However, Sovereign
wholly-
and Harman are
presumption
have rebutted the
of enforce-
Development,
owned subsidiaries of Hannan
ability by making sufficiently strong
show-
Caperton
and Mr.
is the sole owner of Har
ing that enforcement
would
unreasonable
facts,
Development.
man
Under these
Mr.
unjust,
or that the
was invalid
Development
were
*25
such
as
overreaching.
reasons
fraud or
closely connected to the 1997 CSA such that
they
subject
it
would
regard,
recog
was foreseeable that
be
In this
it has been
to the forum-selection clause contained there
nized that
in.
preceding
As we determined in the
sec
Mandatory choice of forum clauses will
opinion,
tion of
factually-sup
this
three
they
be enforced
are
unless
“unreason-
ported claims asserted in the first amended
able.”
302
Group,
F.Supp.2d
Davis Media
complaint35 all
wrongful
flowed from the
dec
(citing
Zapata
at 466
Bremen v.
M/S
Off-
majeure
laration
under
of
the 1997
force
10,
1907).
Shore
power of a state’s
Bd.,
1403,
Tax
Cal.App.4th
Franchise
83
retrospective applica-
or
prospective
decision
509,
(2000) (“[T]he
1422,
Cal.Rptr.2d
100
525
offending [federal]
without
constitutional
tion
Maez,
general
judicial opinions is that
625,
rule as to
Lopez v.
98 N.M.
principles.”
Findley
retroactive.”);
v.
they
fully
632,
1269,
an-
651 P.2d
1276
Stated
460,
222,
454,
Findley, 280 Ga.
629 S.E.2d
way,
other
(2006) (“[W]e
apply
shall continue to
States Constitution neither
[t]he United
judicial
announc
general rule that a
decision
applica-
requires
nor
retroactive
prohibits
retroactive[.]”);
Aleckson v.
ing a new rule is
decision,
question
judicial
and the
tion of
Park,
82,
Village
Round Lake
Ill.2d
application
retrospective
prospective
or
N.E.2d
223 Ill.Dec.
judicial
litigation
decision to civil
state
(1997) (“Generally, when a court
issues an
law
in the state courts is a matter of state
presumed
apply
opinion, the decision is
when,
here,
question
the rule in
involves
retroaetively[.]”); Dempsey
v. Allstate
...
of a common-law tort and is not
a matter
Co.,
Ins.
217 104 P.3d
325 Mont.
statutory
based on federal constitutional
(2004) (“Therefore today we reaffirm our
law.
general
give
rule that
retroactive effect
[w]e
Lorenz,
Corp.
Martin Marietta
v.
P.2d
(internal
judicial
quotations and
decisions.”
(Colo.1992).
Harper
See also
omitted));
Ireland v. Worcester Ins.
citation
Taxation,
86, 94,
Virginia Dep’t
509 U.S.
656, 658,
N.H.
826 A.2d
580-81
(1993)
113 S.Ct.
125 L.Ed.2d
(2003) (“At
law, appellate
common
decisions
(“Nothing in the Constitution alters the fun-
presumed
apply
in civil cases are
retroac
‘retrospective operation’
damental
rule of
Haynes,
Montells v.
tively.”);
133 N.J.
*27
governed ‘judicial
for near
that has
decisions
(“The
295,
654,
(1993)
627 A.2d
660
final issue
” (citation
omitted));
years.’
a thousand
is whether our decision should follow the
Co.,
Ry.N.
v. Sunburst Oil &
Great
287
Ref
general
application^]”);
rule of retroactive
358, 364,
145, 148,
U.S.
53 S.Ct.
provisions invalid in Alabama and that the begin, Companies adopt To rule today we represents a funda- change and Mr. misunderstand the mean mental in the substantive law of “foreshadowed,” ing Therefore, claim, ap they as that term is this appli- state. plied present Foreshadowing context. cation against of the “new” rule them mean does not that “there has to clear would unfair application. be an retroactive precedent holding before can disagree. a be considered We clearly Depart foreshadowed.” Collins v. Corr., Mich.App. ment We conclude that fair apply it is required All N.W.2d that is enforcing rule forum selection clauses by prior is some indication of this decision parties in previ- this case. As noted “put Court or national trend that would ously, traditionally while American courts persons on [this Court] notice that could disfavored outbound forum selection claus- way[.]”
resolve the issue either
See
Id.
also
es,
trend,
overwhelming
following the
Res.,
v.
Founder
Cabinet
Human
Supreme
United States
Court’s decision in
(Ky.Ct.App.1999) (holding
S.W.3d
Bremen, supra, has been toward al-
M/S
judicial
prior
put plaintiff
decision
“on
lowing enforcement of those clauses. That
it
possible
filing
notice that was
that the
trend
adop-
nationwide
our
foreshadowed
complaint
with the
would
Commission
today
tion
the rule that such clauses are
Thus,
bar
separate
action in circuit court.
void,
per
providing
not
se
notice that Ala-
retroactively
was not error for the court to
might
thereby
bama
suit and
reduc-
follow
decision].”).
apply
helps
A
[a new
case which
ing
plaintiffs
the reliance these
rea-
could
meaning
illustrate
broad
of “foreshadow
sonably
placed upon
have
the continued
ing”
Corp.
Insurance
v. Suth
Professional
viability
the traditional
rule in Ala-
erland,
(Ala.1997).
So.2d 347
bama.
Sutherland,
(emphasis
It is Massey alleges Caperton ... and appel Development “the lower federal courts do not have Harman seeking are en- jurisdiction late over the state and alleged courts force for their own benefit claims solely their are not conclusive state bankruptcy decisions on which are assets of the courts, questions on of Mining Sovereign. even of federal law.” estates Harman and Robinson, 27, However, 319 Mont. 82 proceedings, Massey’s State P.3d these (2003). object appears judi- See also Cash Inc. v. real 30 Distrib. to be to obtain a (Miss.2007) Neely, So.2d 5 Virgi- n. cial determination that under West (“[S]tate supreme duty-bound Caperton are not nia Develop- courts law and Harman appeals’ interpre independent to follow federal of a court ment have no claims of their law.”). Thus, they pursue against tation of federal the federal own which can interpretation of bank alleged wrongful district court’s for its conduct. Because ruptcy binding is court’s order not on this such a determination can be better ren- so, Action, agree Virginia Court. Even we with the federal dered in the West this bankruptcy district that the hearing court court’s or Court from chooses abstain did any declaratory judgment der not address merits of issue these actions fa- by Massey’s attempted by or claim raised inter vor appropriate of resolution an West bankruptcy proceeding.47 forum, vention in the Virginia whether state or federal. bankruptcy Opin court’s Joint Memorandum following made findings:
ion ... important Most to this Court’s deci- By adversary proceeding, Massey adversary sion to abstain in these proceed- respective seeks a determination of the ings viability Caperton’s is that the of and ownership of interests and the Development’s Harman claims deter- bankruptcy of estates the Debtors by Virginia mined West state law and not currently being causes of action pursued bankruptcy Accordingly, federal law. all jointly by Caperton and the Debtors of these issues can be addressed satisfacto- Action____ West rily and appropriately most in the West
Virginia Action. proceeding, claims and asserted bankruptcy only defenses state court core court could proceeding. proposed findings issue of fact and conclusions law, subject which would be to de novo review point We should out that the federal district court, proposed findings the district and such hearing court abstained from claim or de- judicata would not be entitled res effect in proceeding fense asserted in state court un- subsequent litigation because there would have mandatory provision der the abstention bank- (internal judgment been final no on the merits." law, ruptcy litigation because the state law was SMI/USA, omitted)); citations Inc. v. Profile proceeding bankruptcy a purposes. not core Tech., Inc., (Tex.Ct.App. 38 S.W.3d held, Specifically, the federal district court 2001) ("Although bankruptcy judge may a hear Companies' [the The Court holds proceedings proposed non-core and make Find- Caperton's] and Mr. claims are be- non-core ings of Fact and Conclusions of Law to the 1) specifically cause: are claims not identi- Court, judge may District not a render final proceedings fied core under 28 U.S.C. result, judgment on such claims. a As bank- 157(b)(2); 2) § prior the claims existed ruptcy disposition proceed- court's of non-core filing Companies'] bankruptcy [Harman ings judicata subsequent is not res as to state 3) petitions; solely the claims are based claims.”). proceedings regarding court the same independent state law and therefore exist 11; provisions 4) Chapter par- Caperton's judicata 47. Mr. res claim would fail rights ties' not affected outcome of bankruptcy because the court did enter bankruptcy proceedings. judgment Massey’s final on the merits inter- Caperton, generally recog- 270 B.R. at 657. It is vention claims. Israel See Disc. Bank Ltd. v. judicata estoppel Entin, nized that res (11th Cir.1992) ("Res collateral F.2d only “bar[] claims that would judicata (1) constitute a core subsequent ... will abar if: action bankruptcy claim in earlier action." prior Cabrera decision was rendered a court of Wheaton, (2) v. First Ill.App.3d jurisdiction; Nat’l Bank competent there final merits; (3) judgment Ill.Dec. 753 N.E.2d on the were Durbin, Bank, suits; (4) also See I.A. Inc. v. prior Nat’l identical in both Jefferson (11th Cir.1986) (In same.”). present 793 F.2d "a non- causes of action are the
163 by judgment prior in the not barred bankruptcy court’s Joint Additionally, the of ei- bankruptcy Memorandum action under doctrines with the Joint filed Order following estoppel, conclusions of judicata ther res or collateral Opinion made granting the motion district court erred law: dismissing partial summary judgment his expressed in this reasons For claim.”).48 Opinion en- Court’s Joint Memorandum herewith, in the contemporaneously tered Harman Hugh Caperton event that and/or V. are determined
Development Corporation CONCLUSION alleged independent, non-deriva- to have law, pursuant to West tive claims body in the For the reasons stated this hereby DE- are causes of action those opinion, judgment in this case we reverse of the property to be bank- CLARED not and remand for the circuit court enter Mining ruptcy estate of either against AT. dismissing order this case Mas- Sales, In- Sovereign Coal Corporation or sey Company Coal and its subsidiaries with However, also for the reasons corporated. prejudice. Opinion, in such Joint Memorandum stated Reversed and remanded. deciding from Court ABSTAINS this properly al- any such claims whether BENJAMIN, having been Chief Justice validity. Accordingly, leged legal or have disqualified, participate in the did not adversary pro- that these it is ORDERED decision of this case. ceedings are DISMISSED. Judge sitting HOLLIDAY Senior Status bankruptcy Clearly it is evident that the by temporary assignment. Opinion and Joint court’s Joint Memorandum not the merits of Order did address dissents and reserves Justice WORKMAN claim, in the or defense involved state issue dissenting right opinion. to file a Further, proceeding. “[b]eeause court ... neither Justice, clause] selection issue was WORKMAN, [forum dissenting. necessary sup nor decided on the merits 2009) (Filed 30, Nov. bankruptcy judgment, we port court’s majority’s length Neither the sheer that the agree [the Defendants] cited opinion, large number of cases nor estoppel judi and res doctrines of collateral (but expan- erroneously applied), nor even its [raising the in this defense] cata do not bar statements, conclusory can obfuscate its sive Lucas, Kan.App.2d ease.” Cousatte reasoning legal and its result- lack of sound Ken 136 P.3d See also approach. driven Decatur, nedy Bank v. First Nat’l major points of enunciating eight new Ill.App.3d Ill.Dec. 473 N.E.2d (with (1985) (“[T]he retroactively no applying law and them doctrine of collateral a record opportunity for the to make estoppel not bar the issue of whether does (1) law), individually scrapping the new mountains injured because under [plaintiff] was give necessarily prior precedent deference actually or such issue was not (and making proceeding, of fact below instead bankruptcy finders decided level), (2) this re- expressly new factual determinations at Bankruptcy Court deter (whose conduct is jurisdiction warding the defendant that it had no over such mined by reprehensible) issue.”); Corp., seemingly recognized all as Mid Am. Fin. Inv. Eicher v. (2005) acts, and then spoils of its fraudulent 702 N.W.2d 270 Neb. “equitable,” (“Because characterizing the result [plaintiffs] claim in case was this However, (one judicata. opinions of res the additional issue 48. Prior issued this case upon grant- Judge make which was withdrawn ing this Court Status who the Justices and Senior rehearing, which reversed deciding and one of up Majority matter anew Supreme Court in the United States necessary ad- have determined that it is Co., Inc.,-U.S.-, v. A.T. Coal judicata dress the res issue. (2009)), L.Ed.2d 1208 addressed S.Ct. majority Virginia jurispru- plaintiffs has turned West serted should NOT be *34 governed by dence on its ear. the forum-selection clause contained in that contract. majority Specifically, the holds that Mas- (cid:127) Standard of Review—The new standard of sey, despite engaging wide-ranging fraud- departs dramatically review conduct, from extensive ulent both in connection with the prior precedent requiring (“the CSA”), deference to a Supply Agreement 1997 Coal fact, findings circuit it, sup- court’s apart separate well as from is entitled plants this Court as a de novo finder of to benefit from the forum-selection clause not fact. only regard relating with to matters to the CSA, respect but even with com- actions (cid:127) Retroactivity principles new of law —The pletely unconnected to that contract. The relating to the enforcement of forum-selec- majority despite reaches this conclusion tion applied clauses should NOT be retro- fact that the forum-selection clause is con- actively by this Court. Such retroactive Massey tained a contract to which was not application deprives plaintiffs party, Massey with which tortiously inter- opportunity present evidence to meet fered, Massey and under which never acted placed by majori- the burden on them the good doing, majority faith. In so and, ty’s thus, new test plain- violates the only deprives plaintiffs of the substantial Moreover, process rights. due tiffs’ in ret- damages rightful awarded to them roactively applying principles new these fact, County jury, finders of a Boone but also case, majority the instant makes its legal leaves them with no recourse which fact, findings own an act which should be Massey’s pattern to address extensive Finally, reserved for the circuit court. fraudulent similarly conduct. It eliminates majority’s announcement of these new any recovery plaintiffs’ for the numerous principles foreshadowed,” “clearly was not pending creditors in the bankruptcy three and their produces enforcement a substan- cases, to whom judgment most of the would tially inequitable result. gone.
have
Not
among
least
those creditors
Companies’
are the Harman
union miners
I. Facts
jobs
Massey’s
who lost their
as a result of
case,
plaintiffs
underlying
Har-
conduct,
fraudulent
Compa-
and the Harman
Development
man
Corporation, Harman
retirees,
nies’ hundreds of
to whom the Har- Mining Corporation,
Sovereign
Coal
Companies
man
previously paid pensions and Sales,
(collectively
Inc.
Compa-
“the Harman
medical benefits.1
nies”),
(“Mr.
Hugh
Caper-
M.
majority unjustly
Because the
strips Mas-
ton”),
sued A.T.
Company,
Coal
Inc.
sey’s
rightful
victims of their
verdict
cre-
(collectively
and several of its subsidiaries
ating
manipulating
extensive new law and
“Massey”) in the Circuit Court of Boone
existing
result,
law to achieve the end
I County,
Virginia.
West
The Harman Com-
following grounds:
dissent on the
panies alleged, among
things,
other
(cid:127) Forum Selection
Clause —Because much
engaged in tortious interference with
Massey’s
conduct bore no
Companies’
several of the Harman
and Mr.
fraudulent
CSA,
connection
contracts,2
Caperton’s
tort claims as-
existing
and further
with,
Companies' employees
others,
1. The
geous
relationships
among
and retir-
ees,
America,
the United Mine Workers of America
United Mine Workers of
with Penn
("UMWA”),
Industries,
and the
UMWA Health and Retire-
Company,
Coal
with Terra
among
largest
Bank,
ment Funds are
Grundy
creditors
with
National
and with
cases,
bankruptcy
the Harman
with combined
Corporation.
Wellmore Coal
As for Plaintiff
exceeding $15.8
claims
million.
Caperton,
clearly
the evidence was
sufficient
Jury
for the
to conclude that Defendants tor-
denying
its March
Final Order
with,
others,
tiously
among
per-
interfered
his
motions,
Massey’s post-trial
the circuit court
guaranty
Grundy
relationships
sonal
with
Na-
found that
Bank,
personal liability
tional
his
under the
clearly
[t]he evidence
personal
sufficient for the
Terra reclamation
... and
bonds
his
Jury
Further,
tortiously
relationship
to conclude that Defendants
with United Bank.
clearly
interfered with the Harman
Jury
Plaintiffs’ advanta-
evidence was
sufficient for the
gaged
replete
Massey engaged in fraudulent conceal-
in a web
of deceit
acts, many
misrepresenta-
sepa-
and made fraudulent
fraudulent
of which
ment
were
plaintiffs.
apart
dealings
tions in its
with the
After
rate and
from the declaration of
trial,
during
plaintiffs
majeure.
lengthy
which the
force
overwhelming
Massey’s
produced
evidence of
Specifically, the evidence introduced at tri-
acts,
jury
fraudulent
in Boone
intentional
Massey engaged
al showed that
in a wide-
County
plaintiffs
fifty
awarded the
more than
ranging
expand
scheme to
the market for its
in damages.3
million dollars
*35
coal,
own
obtain access to the Harman Com-
Early
litigation,
in
panies’
the course of that
Mas-
valuable coal reserves and eliminate
sey
Companies
filed a motion to dismiss based on im-
the Harman
Caperton
and Mr.
as
venue, arguing
proper
competitors
metallurgical
that a forum-selection
from the
coal mar-
CSA,
clause contained in the
a contract be-
aggressive competition
ket. While
and even
Companies
sharp practice
dealings
tween two of the Harman
and
in business
is cer-
(“Wellmore”),
itself,
Corporation
tainly
Coal
Wellmore
re-
not actionable in
and
it be-
quired
brought
that all actions
in connection
party engages
comes actionable when a
in
litigated
Virginia.
misrepresentations
with the contract be
in
fraudulent
and fraudu-
County
The Circuit Court of Boone
denied lent concealment
goals.6
achieve those
reverses, Here,
majority
that motion.4 The
developed
now
in
scheme which
holding
Massey’s alleged
simultaneously disrupted
that because one of
the Harman
Companies’ existing
supply
fraudulent acts —its fraudulent declaration of
coal
contract
Wellmore,
majeure5
performed “in
eliminating
connec- with
thus
the Harman
force
—was
CSA,
plaintiffs’ Companies’
revenue,
tion with” the
all of
primary
source of
while
claims,
fraudulent,
completely
engaging
even those
in
negotia-
unconnected
bad-faith
CSA,
brought Virgi-
should have
Caperton
been
tions with Mr.
for the sale of his
conclusion,
reaching
majori-
nia.
this
Companies’
interest
the Harman
assets.
ty
Massey’s
ignores
significant
Through
fraudulent
negotiations,
these fraudulent
Mas-
sey
Caperton
acts that were unrelated to the CSA but that
lured Mr.
and the Harman
Companies
security,
culminated
the financial destruction of the
into a false sense of
Companies
Caperton.
thereby deterring
Harman
and Mr.
In-
seeking
them from
other
majority
Moreover,
buyers
stead the
declares that the fraudu-
for their coal.
majeure
actively
potential buyers
lent declaration
was the act
dissuaded other
and
force
plaintiffs’ damages
from which all of
steps
took
to ensure that the Harman Com-
simply
panies’
flowed. This is
not true. As deter-
reserves would be unattractive to
by
fully
anyone
Ultimately,
ensuring
mined
the fact-finders and
demon-
else.
after
below, Massey
Caperton
any
strated
the record
en- Mr.
would
be unable
find
engaged
performing
conclude that Defendants
in this in-
vented from
under the contract
aas
God,
specific purpose
public enemy,
tentional interference for the
of an act of
act
result
Plaintiffs,
financially
etc.,
destroying
corpo-
insurrection,
both
epidemic,
party
then that
rately
personally.
defaulting
could avoid
contractual obli-
its
gations by declaring
majeure."
"force
interest,
plaintiffs
3. With
the award due to the
eighty-five
would now exceed
million dollars.
misrepresentation
6.The
torts of fraudulent
require
Interestingly,
denying
fraudulent concealment each
no written order
the mo-
record,
plaintiff prove:
tion to dismiss can be found in the Court
any
ruling
nor was
oral
documented in this case.
(1) that the act claimed to be fraudulent was
throughout
history
Because
the tortured
of this
him; (2)
the act of the defendant or induced
appeal,
agreed
have
that the motion
false;
plaintiff
that it was material and
denied,
was
we must conclude that the lower
justified
relied on it and was
under the circum-
implicitly
court at least
denied the motion.
it;
(3)
relying upon
he
stances
that was
"
damaged because he relied on it.
majeure provision,
5. The CSA included a "force
Mull,
Syl.
part,
Pt.
Kidd v.
215 W.Va.
permitted
party
suspend
which
gations
either
obli-
its
(2004)
Tyree,
(quoting
valuable coal.10
its
how-
determinations,
majority simply
other
ever,
starting
in November
conclusory
makes
statements without
consistently
Caperton
led Mr.
believe
reasoning.
support or
would
reach
deal for the sale of
Approach
C. A Better
Caperton’s
Mr.
interest
Harman Com-
Importantly,
fraud,
case
this
involves
rath-
and, thus,
panies’
Massey effectively prevent-
negligence
straightfor-
er than an act
or
Companies
ed Mr.
and the Harman
ward breach of contract.
in many
Courts
seeking
from
buyers
pursuing
other
other
jurisdictions
other
have
refused
enforce
Clearly, Massey’s misrep-
avenues for relief.
plaintiff
forum-selection clauses where the
regarding
resentations
its intent to reach a
wide-ranging
has asserted claims of
agreement,
sale
as its
as well
failure to follow
fraudu-
cases,
lent conduct.
In such
the court con-
through
agreed-to closing
on the
date
sidering the forum-selection clause concluded
sale,
no
bear
relation to the CSA.
actions
“gist”
asserted claims exceed-
did, however, directly lead to the Harman
scope
ed the
containing
contract
Companies’
Caperton’s
and Mr.
declarations
*40
and, thus,
forum-selection clause
the court
bankruptcy.
of
to
the
refused
allow
defendant
to benefit
Finally, Massey’s
of
use
confidential infor-
the
from
clause.
mation,
during
negotiations
obtained
the sale
Caperton,
purchase
Industries,
Mr.
narrow
the
In Farmland
Inc.
Frazier-
Commodities,
(8th
band of
surrounding
coal reserves
the Har- Parrott
F.2d
mine, provides
Cir.1986)
Companies’
man
grounds
another ex-
(abrogated on
by
other
ample
any aspect
Chasser,
of conduct unrelated to
of Lauro Lines S.R.L. v.
490 U.S.
(1989)),
the CSA. As
admitted
its own
109 S.Ct.
venue based
Underlying
holdings in these cases is
the
court, however,
concluded
district
not reward
proposition
that courts should
“in connection
not “arise out of’ or
action did
by allowing them to benefit
wrong-doers
Id. at 338. It noted
the sale contract.
with”
fraudu-
they have
from contracts with which
suing
for breach
plaintiffs
were
Indeed, it is an immense
lently interfered.
contract,
performance,
alleging
lack of
of
directing
irony
Massey, in
the fraudu-
rights
disputing
party’s
either
or otherwise
majeure, treated the
declaration of
lent
force
contract,
were
but
obligations under
paper
it was
CSA like it was not worth
fraudulent activi-
alleging “a series of
instead
effort
in its now successful
written on. Yet
negotiation and execu-
that included the
ties
personal financial
corporate and
to wreak
In-
subject
Id.
of the
Sale Contract.”
tion
Companies and Mr.
Harman
ruin on the
deed,
alleged
of the
the action “arose out
Massey
the contract and
Caperton,
embraces
fraud,
acts
ranging
including numerous
wide
amorously.
clause almost
its forum-selection
of the Sale
committed before the execution
encourages
majority
this behavior
Thus,
concluded,
‘gist’
it
“the
Contract.” Id.
Massey
from the
callously allowing
to benefit
the breach
plaintiffs’ claims is not
of
of
destroy.
sought
it
contract
relationship, but the series
contractual
of
Application
III. Retroactive
of
resulting in the
acts
fraud.’’
defendants
Principles
Law
added).
the New
of
(emphasis
Importantly, it
Id. at 339
contract
signing
that the
of the sale
noted
that, un-
majority
if the
was correct
Even
aspect”
“merely
important
one
enforceability
relating to the
der its new law
Id. at 340.
defendant’s fraudulent scheme.
clauses,
this suit should
in
reasoning
I
of the courts
Farm-
find the
clearly
brought
Virginia,
have been
compelling
and the better
land
Armco
unjust
principles
enforce the new
of law
adopted
Court to have
in the
view for this
case,
by doing
particularly
so without
this
to the defendants
instant case. Similar
remanding
application
the case for
new
cases,
wide-rang-
Massey engaged in a
those
Indeed,
I am at a
test
the circuit court.
ing,
conduct for the
fraudulent course of
majori-
complete
understand how the
loss to
purposes
obtaining
access to new sources
ty
allow
to benefit-to the tune of
can
metallurgical
purchasers
and new
for
coal
fifty
plus
more than
million dollars
interest-
coal,
compet-
eliminating
while
one of its
in a
from a forum-selection clause contained
itors,
Companies,
process.
Massey actively sought to de-
contract that
end,
engaged in
To that
a series
majority
appli-
stroy. That the
considers the
acts,
maj-
which
declaration of
force
cation of the forum-selection clause
“merely
important aspect.”
eure was
one
beyond
“equitable result” is
case to be an
Armco,
F.Supp.2d at 340. Like the
See
comprehension.
Armco,
initiated their
defendants
who
A. Due Process Violation
plan
fraudulent
before the sale contract was
discussed,
majority
previously
As
signed, Massey developed and initiated its
adopts
legal
a brand new
test for determin-
prior
fraudulently
de-
fraudulent scheme
validity
ing
applicability
of a forum-
claring
majeure,
fraudulent con-
and its
force
clause,
necessarily re-
selection
a test which
until it
duct continued after that declaration
majority,
quires findings of fact. The
howev-
financially
Compa-
had
ruined the Harman
er,
application
refuses to remand the case
Caperton. Despite the clear
nies and Mr.
Instead,
by the circuit court.
of the test
scope
wide-ranging
evidence of the
of Mas-
flying
precedent,
in the face of clear
conduct,
majority
sey’s fraudulent
con-
majority
findings of fact in
makes its own
Massey’s
that was unre-
cludes that
conduct
test,
itself,
applying
providing
without
not, by
produce
lated to the CSA did
ap-
plaintiffs any opportunity to establish
injury,
the ultimate
and thus it should be
Accordingly,
Armco,
evidentiary
propriate
record.
disregarded. Under
Farmland
however,
crystal
plaintiffs
did not have
the entire
of conduct should
because
course
*42
case,
Application
early
they
B.
Retroactive
during
stages
the
of this
New
Test
ball
attempting to
precluded from even
com-
are
majority
The
now concludes that the exist-
legal principles set forth
port with the new
ing
determining
test for
when to retroactive-
by
majority.
the
law,
ly apply newly
principle
established
may
well-settled that “a State
It is
Bradley Appalachian
set forth
v.
Power
person
existing
of all
remedies for
deprive a
(1979),
163 W.Va.
174 “Clearly analyze
1. Decision Not
Foreshad-
carefully, clearly
like” to
them
for-
owed”
majority’s complete
eshadows the
overhaul of
relating
this Court’s law
to forum-selection
According
majority,
whether
particularly
clauses. This is
given
absurd
principle
new
resolution of a
of law has been
case,
the context of
party
this
in which the
“clearly
solely
foreshadowed”
turns
on
seeking to
engaged
enforce the clause
in a
party
whether a
should have known that the
wide-ranging
resulting,
fraudulent scheme
in
might
Court
im-
address
issue of first
part, in the fraudulent breach of the contract
Thus,
view,
pression.
majority’s
Moreover,
containing that clause.13
this
presence
foreshadowing”
or absence of “clear
specifically
Court has
de-emphasized placing
applies only
may
to whether the Court
decide
any importance
language
on
contained in
to resolve the issue at all and no foreshadow-
footnotes, stating
“language
in a foot-
ing
necessary
is
of what the actual new law
generally
note
should be considered obiter
might be.12
which,
definition,
by
dicta
language
is
‘unnec-
end, majority,
To
quoting
an inter
essary to the decision in the case and there-
appellate
mediate
Michigan,
court from
holds
precedential’
fore not
Black’s Law Dictio-
required
“[a]ll
is
is some indication
(7th ed.1999).”14
nary 1100
State ex rel.
by prior
decision of this Court or a national
Inc.,
Medical Assurance
Virginia,
West
v.
‘put persons
trend that would
on notice that
Recht,
213 W.Va.
583 S.E.2d
[this
could resolve the
Court]
issue either
(2003). Thus,
majority’s
finding
”
that the
Corr.,
way[.]’
Dept.
Collins v.
167 Mich.
Keyser
provides
footnote
the “clear foresha-
App.
421 N.W.2d
It
dowing” necessary
retroactively apply
then
foreshadowing”
finds “clear
in this
legal principles
new
announced
this case is
prior pronouncement,
Court’s
made more
simply
example
another
majority
of how the
twenty-eight years ago,
than
in the footnote
blatantly manipulates the law to achieve its
in Keyser that indicated that “contract claus
desired outcome.
es which affect
jurisdiction
matters such as
carefully analyzed.”
the like should be
additionally
I
support
find no
for the ma-
at
W.Va.
461 n.