CASE 3.1 FEDERAL COURT CASE Forum-Selection Clause Carter's of New Bedford, Inc. v. Nike, Inc. 790 F.3d 289, 2015 U.S. App. Lexis 10692 (2015) United States Court of Appeals for the First Circuit "The district court determined that Carter's did not Issue meet its burden to show that the forum-selection Is the forum-selection clause enforceable? clause would deprive Carter's of its day in court." -Torruella, Circuit Judge Language of the Court Facts The district court determined that Carter's did Nike, Inc. is a worldwide seller of shoes, apparel, and not meet its burden to show that the forum- other items carrying the Nike brand. Nike's headquar selection clause would deprive Carter's of its ters is in Beaverton, Oregon. Carter's of New Bedford, day in court. Carter's argues that it should not Inc. is a family-owned retail clothing and footwear busi- be required to finance a cross country legal ness that operates two stores in Massachusetts. Cart- battle against an international behemoth and er's has sold Nike products for 28 years. The agreement that it would face extreme hardship if forced between Nike and Carter's is contained in the invoices to go to Oregon. Carter's fails to persuade this that Nike provides to Carter's, which are agreed to court that enforcement of the forum-selection by both parties. The invoice agreements include a clause would make it practically impossible forum-selection clause that requires any claims that for it to litigate in Oregon. Carter's has with Nike to be brought in Oregon, not Massachusetts. When Nike notified Carter's that it was Decision terminating the parties' business relationship, Carter's The U.S. court of appeals affirmed the district court's sued Nike in Massachusetts court alleging that Nike decision that enforced the forum-selection clause and breached its agreement with Carter's. Nike argued that dismissed Carter's Massachusetts lawsuit against Nike. any claim Carter's has against Nike must be brought Critical Legal Thinking Questions in Oregon pursuant to the forum-selection clause and Do you think small retailers like Carter's will sue Nike in moved to have Carter's Massachusetts lawsuit dis- Oregon? Why or why not? Did Nike act ethically in enforcing missed. The U.S. district court dismissed the lawsuit. the forum-selection clause against Carter's ? Carter's appealed