Academic journal article Northwestern University Law Review

Forum Non Conveniens: A Vehicle for Federal Court Enforcement of Forum Selection Clauses That Name Non-Federal Forums as Proper

Academic journal article Northwestern University Law Review

Forum Non Conveniens: A Vehicle for Federal Court Enforcement of Forum Selection Clauses That Name Non-Federal Forums as Proper

Article excerpt

INTRODUCTION

A Hypothetical1

A men's clothing manufacturer in London and a Chicago retailer enter into a long term business relationship in which the London manufacturer will design and construct suits in England, and the Chicago retailer will sell the product in the United States. The contract formalizing this arrangement includes a forum selection clause specifying that all disputes between the parties will be resolved in a court in London.

Several months after entering into the agreement the London manufacturer breaches the contract by refusing to ship certain suits to the Chicago retailer. In response, the retailer files suit for breach of contract in the Federal District Court for the Northern District of Illinois, and in the process, violates the forum selection clause that calls for all disputes to be resolved in London.

The manufacturer replies to the suit by filing a Federal Rules of Civil Procedure 12(b)(2) motion to dismiss for lack of personal jurisdiction. Nine days later, the manufacturer files an additional motion to dismiss, this one based on a Rule 12(b)(3) claim for improper venue. In support of its 12(b)(3) motion, the manufacturer cites the forum selection clause and Seventh Circuit caselaw that says 12(b)(3) is the exclusive vehicle used in the circuit to enforce such clauses.2 The Chicago retailer objects to both motions and specifically challenges the 12(b)(3) motion to dismiss for improper venue on grounds that the defense was waived pursuant to Rules 12(g) and 12(H)(1) when the London manufacturer filed its first 12(b) motion to dismiss for lack of personal jurisdiction.

After weighing the issue, the court properly denies the manufacturer's 12(b)(3) motion because it was, as the Chicago retailer argued, not properly consolidated with the London manufacturer's first 12(b) motion. Thus, despite the forum selection clause, the London manufacturer will most likely have to litigate the suit in the Northern District of Illinois.

The above hypothetical involved a straightforward scries of procedural events; however, if the clothing retailer was located in Boston rather than Chicago, the result would have been dramatically different. The First Circuit, in contrast to the Seventh, utilizes the Rule 12(b)(6) defense of failing to state a claim upon which relief can be granted to enforce forum selection clauses that name non-federal forums as proper.4 This is significant because 12(b)(6) motions are not subject to the consolidation requirements of 12(g) nor the strict waiver requirements of 12(h)(1);5 thus, a 12(b)(6) motion would have enabled the London manufacturer to "escape the clutches of Rule I2(h)(1)"6 and in all likelihood enforce the forum selection clause despite its failure to consolidate.7

Unfortunately, this divergence between circuits is common and there is little uniformity, even within circuits, on which procedural "vehicle"8 should be used to enforce mandatory9 forum selection clauses that name non-federal forums as proper.10 A survey of caselaw is illustrative of this confusion. Circuit courts have affirmed dismissal by district courts, or prescribed specific methods of dismissal that should have been used, using numerous vehicles, including lack of subject matter jurisdiction (typically enforced using 12(b)(1) motions), improper venue (typically enforced using 12(b)(3) motions), failing to state a claim upon which relief can be granted (typically enforced with 12(b)(6) motions), and forum non conveniens.

This lack of uniformity results in disparate treatment of litigants because the various vehicles used for dismissal differ in terms of waivability, evidentiary restrictions, presumptions used to interpret evidence, disposition of the case post-dismissal, and standard of review on appeal. In turn, this disparate treatment encourages forum shopping and injustice because similarly situated parties may face drastically different outcomes depending on where their action is initially brought. …

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