Atlantic Marine Const. Co. v. U.S. District Court, 571 U.S. ___ (2013). This case offers a lesson in differentiating when, in a contract case where the applicable agreement contains a forum selection clause, it is appropriate to file a motion to transfer venue and when a forum non conveniens motion is the proper course of action. The parties to this case had included a forum selection clause in their contract, selecting the Eastern District of Virginia.
When plaintiff J-Crew Management, Inc. (“J-Crew”) sued in a federal court in Texas, defendant Atlantic Marine Construction Co. (“Atlantic Marine”) moved to dismiss the complaint under 28 U.S.C. §1406(a) (“wrong” venue) and Federal Rule of Civil Procedure 12(b)(3) (“improper” venue). Alternatively, Atlantic Marine moved to transfer the case to the agreed-upon venue, the Eastern District of Virginia, under 28 U.S.C. §1404(a). The district court denied Atlantic Marine’s motions. Presented with a mandamus request, the Fifth Circuit declined to alter the district court’s decision. The Supreme Court of the United States granted review and unanimously reversed in an opinion by Justice Alito.
The takeaways from the opinion are: (1) a forum selection clause does not render a venue other than the one agreed upon “wrong” or “improper” under section 1406 and Rule 12(b)(3); (2) section 1404(a) is available to enforce a forum selection clause when transfer is sought within the federal system, (3) a forum non conveniens motion is appropriate instead when transfer is sought to a state court or a foreign forum, and (4) on a section 1404(a) motion where there is a valid forum selection clause, the clause should be “given controlling weight in all but the most exceptional cases,” with the party seeking to violate the forum-selection clause bearing the burden of showing that public interest factors call for that party’s chosen venue. The parties’ private interests, other than those embodied in the forum selection clause, are not entitled to any weight in the analysis.
Here, the lower courts had placed the burden of proof on Atlantic Marine instead of on J-Crew. Moreover, the lower courts had mistakenly considered private interest factors other than those represented by the adoption of the forum selection clause. Applying the proper analysis, the Supreme Court reversed the decision below and remanded for further consideration of whether public interest factors existed that could overcome the forum selection clause.