Petitioner Atlantic Marine Company was a contractor located in Virginia. It entered into a subcontract with J-Crew
Question:
Petitioner Atlantic Marine Company was a contractor located in Virginia. It entered into a subcontract with J-Crew Management, Inc., a Texas corporation, that contained a forum-selection clause requiring suit in Virginia. The subcontractor sued the petitioner in the Western District of Texas. The construction company filed a motion to dismiss the case or to transfer it to the District Court in Virginia. The motion was denied by the District Court. Defendants then filed a motion with the Court of Appeals for a Writ of Mandamus (an order telling the lower court to do its job, which in this case meant either transferring the case or dismissing it). The Court of Appeals denied defendants’ motion, and they appealed to the US Supreme Court.
JUSTICE ALITO The question in this case concerns the procedure available for a defendant in a civil case who seeks to enforce a forum-selection clause…. We reject petitioner’s argument that such a clause may be enforced by a motion to dismiss…. Instead, a forum-selection clause may be enforced by a motion to transfer under §1404(a), which provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” When a defendant files such a motion, we conclude, a district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer. In the present case, both the District Court and the Court of Appeals misunderstood the standards to be applied in adjudicating a §1404
(a) motion in a case involving a forum-selection clause, and we therefore reverse the decision below….
Although a forum-selection clause does not render venue in a court “wrong” or “improper”…, the clause may be enforced through a motion to transfer under §1404(a). That provision states that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” …§1404
(a) does not condition transfer on the initial forum’s being “wrong.” And it permits transfer to any district where venue is also proper (i.e., “where [the case] might have been brought”)
or to any other district to which the parties have agreed by contract or stipulation….
… the appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens. Section 1404
(a) is merely a codification of the doctrine of forum non conveniens for the subset of cases in which the transferee forum is within the federal court system;
in such cases, Congress has replaced the traditional remedy of outright dismissal with transfer.
… When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause.
Only under extraordinary circumstances unrelated to the convenience of the parties should a §1404
(a) motion be denied. And no such exceptional factors appear to be present in this case.
We REVERSE the judgment of the Court of Appeals for the Fifth Circuit. Although no public-interest factors that might support the denial of Atlantic Marine’s motion to transfer are apparent on the record before us, we remand the case for the courts below to decide that question.
CRITICAL THINKING:
What is the single fact that has the greatest impact on this decision? What is the logic of relying on this fact to such a large extent?
ETHICAL DECISION MAKING:
Building on your answer to the critical thinking question above, please identify the value that the court is leaning on to prop up its reasoning about why the courts should have acted to enforce the original agreement between the two contending parties.
Step by Step Answer:
Dynamic Business Law
ISBN: 9781260733976
6th Edition
Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs