It is not uncommon that contracts will contain forum selection clauses to establish the place where a party can bring suit regarding a dispute or incident arising as consequence of the contractual relation.
As a general rule, a forum selection clause will be enforced unless the party opposing said clause “[can] clearly show that enforcement would be unreasonable and unjust or that the clause was invalid for such reasons as fraud and overreaching.” The Bremen v. Zapata Offshore Co., 407 U.S. 1,15 (1972).
Under First Circuit precedent, it had been ruled that a proper procedure to enforce a forum selection clause was through a motion to dismiss alleging failure to state a claim for which relief can be granted under Fed. R. Civ. P. 12(b)(6). Lambert v. Kysar, 983 F.2d 1110, 1112 n. 1 (1st Cir. 1993); LFC Lessors, Inc. v. Pacific Sewer Maint. Corp., 739 F.3d 4, 7 (1st Cir. 1984).
In Atlantic Marine Const. Co., v. U.S. Dist. Court, 571 U.S. 49 (2013), the United States Supreme Court ruled that the proper procedure to enforce a forum selection clause that requires that an action be filed within a particular federal district other than the one chosen by the plaintiff, is a motion to transfer the action under 28 U.S.C. § 1404(a). The Court went further to express that if the clause points to a State or a foreign forum, the analysis would then be under the doctrine of “forum non conveniens.”
In reaching its decision in Atlantic Marine, the Supreme Court, however, made it clear that it was not deciding whether a defendant could obtain a dismissal based on a forum selection clause under Fed.R.Civ.P. Rule 12(b)(6). The Court of Appeals for the First Circuit considered this reservation in the Atlantic Marine decision and stated that “absent a clear statement from the Supreme Court to the contrary, the use of Rule 12(b)(6) to evaluate forum selection clauses is still permissible in this Circuit.” Claudio-De León v. Sistema Universitario Ana G. Méndez, 775 F.3d 41, 46, n.3 (1st Cir. 2014).
Based on the above, it is still permissible after the decision of the Supreme Court in Atlantic Marine to move for the dismissal of an action filed in violation of a forum selection clause in a district court within the First Circuit. MD Distributors, Corp. v. Dutch Ophthalmic Research, 322 F. Supp.3rd 272, 275 (D.C.P.R. 2018).
Forum selection clause issues are common in the general litigation and maritime litigation practice at Jiménez, Graffam & Lausell. If you have any questions or concerns regarding proper language or enforcement of a forum selection clause, or any other contract issues, do not hesitate to contact us.