P C L Civil Constructors, Inc. v. Arch Insurance CP C L Civil Constructors, Inc. v. Arch Insurance C
Before CLEMENT, HIGGINSON, and ENGELHARDT, Circuit Judges.
PCL Civil Constructors, Inc. (“PCL“) appeals a judgment of dismissal without prejudice based on forum non conveniens. The district court enforced a disputed forum selection clause requiring litigation in the 19th Judicial District Court in and for the Parish of East Baton Rouge, Louisiana. Because the forum selection clause is mandatоry and enforceable, and because the appellant has waived any argument that public interest requires retention of this lawsuit in the federal court system, we AFFIRM.
I.
The disputed forum selection clausе applies to the parties before the court by way of three contracts that incorporate each other‘s terms: (1) the “Prime Contract” —a contract between PCL, a general contractor, and its client, the Louisiana Department of Transportation and Development (“DOTD“); (2) the “Subcontract“—a contract between PCL and a subcontractor, Command Construction Industries, LLC (“Command“); and (3) the “Bond” —a contract detailing the terms of a performance bond between Command and a surety company, Arch Insurance Company (“Arch“).
First, PCL entered into a contract with the Louisiana DOTD to perform work on a public works project (the “Prime Contract“). The Prime Contract enumerates a list of “Contract Documents” that are incorporated into the Prime Contract, including the Louisiana Stаndard Specifications for Roads and Bridges, 2006 Edition (the “2006 Standard Specifications“). Section 107.01 of the 2006 Standard Specifications provides the disputed forum selection clause: that “any litigation arising under or related to the contract or the bidding or award thereof shall be instituted in the 19th Judicial District Court in and for the Parish of East Baton Rouge, State of Louisiana.”
In turn, PCL, as general contractor, entered into a contract with subcontractor Command to perform certain work on the DOTD project (the “Subcontract“). The Subcontract incorporates the Uniform Special Conditions to Subcontraсt, and Article 1.1 of Uniform Special Conditions to Subcontract provides that all provisions of the Prime Contract are incorporated into the Subcontract: “The Prime Contract is incorporated herein by reference and made an integral part of the Subcontract.”
In short, the Bond incorporates the Subcontract in its entirety, whiсh incorporates the Prime Contract in its entirety.
The instant dispute arose when, resting on diversity jurisdiction, PCL sued Arch in the United States District Court for the Western District of Louisiana, alleging that Command had defaulted under the Subсontract and seeking payment under the Bond from Arch. Arch filed a motion to dismiss on the ground of forum non conveniens, arguing that any dispute must be brought in the 19th Judicial District Court in and for the Parish of East Baton Rouge, as provided in the Prime Contraсt. The district court granted Arch‘s motion, and PCL appealed.
II.
Forum non conveniens is a doctrine under which a court may decline to exercise its jurisdiction and dismiss a case that is otherwise properly before it so that thе case can be adjudicated in another forum. Forum non conveniens is “the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 60 (2013).
When reviewing forum non conveniens rulings involving forum selection clauses, “[w]e review de novo the district court‘s conclusions that the [forum selection clause] was mandatory and enforceable.” Weber v. PACT XPP Techs., AG, 811 F.3d 758, 766 (5th Cir. 2016). Then, “[w]e
review for abuse of discretion the district court‘s use of Atlantic Marine‘s balancing test” of public-interest factors. Id.
A.
We first consider, de novo, whether the forum selection clause is mandatory or permissive. Id. at 768. A forum selection clаuse is mandatory if it “affirmatively requires that litigation arising from the contract be carried out in a given forum.” Id.
Here, the forum selection clause provides that “any litigation arising under or related to the contract or the bidding or award thereof shall be instituted in the 19th Judicial District Court in and for the Parish of East Baton Rouge, State of Louisiana” (emphasis added). Under Louisiana law,1 the word “shall” is routinely construed as mandatоry. See, e.g., Bateman v. Louisiana Pub. Emps. Council No. 17 of Am. Fed‘n of State, Cty. & Mun. Emps., AFL-CIO, 94-1951 (La. App. 4 Cir. 7/26/95); 660 So. 2d 80, 82 (affirming a trial court‘s interpretation of the word “shall” as “mandatory” in a contract provision); cf.
We next consider, de novo, whether the forum selection clause is enforceable. Weber, 811 F.3d at 766. Federal law applies to determine the enforceability of forum seleсtion clauses in diversity cases. All. Health Grp., LLC v. Bridging Health Options, LLC, 553 F.3d 397, 399 (5th Cir. 2008). Under federal law, the party resisting enforcement of a forum selection clause bears a “heavy burden of proof,” Ginter ex rel. Ballard v. Belcher, Prendergast & Laporte, 536 F.3d 439, 441 (5th Cir. 2008) (quoting Haynsworth v. Corporation, 121 F.3d 956, 963 (5th Cir. 1997)), and this court “applies a strong presumptiоn in favor of the enforcement of mandatory [forum selection clauses],” Weber, 811 F.3d at 773. When “a litigant in federal court attempts to have a case dismissed based on a contractual provision requiring suit to bе filed in state court, the forum-selection clause should be upheld unless the party opposing its enforcement can show that the clause is unreasonable.” Ginter, 536 F.3d at 441. A party may show the disputed clause is unreasonable if
(1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement “will for all practical purposes be deprived of his day in court” because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state.
Haynsworth, 121 F.3d at 963 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12–13, 15, 18 (1972)). Here, PCL has not presented any argument that supports a
finding that the forum selection clause is unreasonable. The district court correctly held thаt the forum selection clause is enforceable.
C.
Finally, in a typical case involving a mandatory, enforceable forum selection clause, we would “review for abuse of discretion the district court‘s use of Atlantic Marine‘s balancing test” of public-interest factors. Weber, 811 F.3d at 766. However, PCL does not challenge the district court‘s balancing of the public-interest factors and thus waives this argument on appeal. United States v. Young, 872 F.3d 742, 747 (5th Cir. 2017).
III.
PCL‘s primary argument in the district court and on appеal is that the forum selection clause in Section 107.01 of the 2006 Standard Specifications simply does not govern the instant suit. Specifically, PCL argues that the Bond does not incorporate the portion of the Prime Contract that contains the forum selection clause (Section 107.01 of the 2006 Standard Specifications), so the clause cannot govern the dispute between PCL and Arch. In response tо this argument, the district court held that it is “unambiguously clear from the governing documents at issue that the Bond incorporates Section 107.01 through Plaintiff‘s underlying Subcontract with Command, which thereby incorporates the Prime Contract itself.” Whether a contract is ambiguous, as well as the interpretation of an unambiguous contract, are questions of law that are reviewed de novo. Texas v. Am. Tobacco Co., 463 F.3d 399, 406 (5th Cir. 2006) (citing Stinnett v. Colorado Interstate Gas. Co., 227 F.3d 247, 254 (5th Cir. 2000)).
Russellville Steel Co. v. A & R Excavating, Inc., 624 So. 2d 11, 13 (La. Ct. App. 1993) (citing Action Fin. Corp. v. Nichols, 180 So. 2d 81, 83 (La. Ct. App. 1965)). Here, the Bond specifically incorporates the Subcontract (“Subcontract is by reference made a part hereof“), which in turn specifically incorporates the Prime Contract (“The Prime Contract is incorporated herein by reference and made an integral part of the Subcontract.“). Indeed, as this court has previously recognized, “where a contract expressly refers to and incorporates another instrument in specific terms which show а clear intent to incorporate that instrument into the contract, both instruments are to be construed together.” One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 267 (5th Cir. 2011). We find that the district court correctly held that the Bond incorporates the forum selеction clause in Section 107.01 of the 2006 Standard Specifications.
Nevertheless, PCL argues that a forum selection clause in a different provision, Article 12.9.5 of the Uniform Special Conditions to Subcontrаct (incorporated in the Subcontract), should govern this dispute rather than Section 107.01. Article 12.9.5 provides that “[a]ny mediation, arbitration or legal proceeding permitted hereunder shall be commenced and proceed in the county in which the Project is located, unless the parties agree in writing to a different location.” The district court rejected this argument, explaining that Article 12.9.5 “exprеssly states that it will not apply if the parties agree in writing to a different location, which the parties have plainly done as provided in Section 107.01.”
Under Louisiana contract law, “[e]ach provisiоn in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole.”
interpretation that, as contemplated by Article 12.9.5, the parties before the court, and as incorporated in the relevant governing documents, have “agreed in writing to a different location” for litigation: the 19th Judicial District Court in and for the Parish of East Baton Rouge, as provided in Section 107.01.
IV.
The forum selection clause contained in Section 107.01 of the 2006 Standard Specifications governs the dispute at issue, is mandatory, and is enforceable. Appellant has waivеd any argument that public-interest factors require retention of this suit in the federal court system. The district court‘s dismissal without prejudice on the ground of forum non conveniens is AFFIRMED.