Opinion
No. 00-CV-4034-DRH.
January 3, 2001
MEMORANDUM AND ORDER
I. Introduction and Procedural Background
This matter comes before the Court on Monsanto Company's motion to dismiss pursuant to Rules 12(B)(3) and 12(B)(6) or alternatively, transferring the case to the Eastern District of Missouri pursuant to 18 [sic] U.S.C. § 1404(a) or § 1406 (Doc. 21) and Plaintiffs' motion to modify motions to withdraw and substitute in light of consolidation, to identify purported class representatives and to identify lead and liaison counsel for plaintiffs (Doc. 83). Based on the reasons stated herein, the Court grants Monsanto Company's motion to transfer the case to the United States District Court for the Eastern District of Missouri, denies Monsanto Company's motion to dismiss pursuant to Rule 12(b)(3) and denies as moot Monsanto Company's motion to dismiss pursuant to Rule 12(b)(6). Further, the Court grants Plaintiffs' motion to modify motions to withdraw and substitute in light of consolidation, to identify purported class representatives.
On February 14, 2000, Randy Blades, Collin Cain, Frederick Samples, Mark A. Jent, and Roger Rivest d/b/a Rivest Farms (ESSEX) LTD., on behalf of themselves and other similarly situated persons filed a seven-count complaint against Monsanto Company ("Monsanto") in this Court (Doc. 1). This case arises out of Monsanto's sale of Genetically Modified ("GM") soybean and corn seeds to Plaintiffs, who are farmers. The sixty three page complaint alleges, inter alia, that Monsanto Company committed antitrust violations and violations of other laws in the pricing, selling, marketing and promotion of the GM corn and soybean seeds.
Prior to the filing of this case, two very similar purported class actions complaints were filed in other district courts against Monsanto Company: (1) Massey v. Monsanto Company, was filed in the United States District Court for the Northern District of Mississippi in November 1999; and (2) Higginbotham v. Monsanto Company, was filed in the United States District Court for the District of Columbia in December 1999. On May 22, 2000, Judge Colleen Kollar Kotelly, transferred Higginbotham to this judicial district to determine whether the case should remain in this judicial district or proceed in the Eastern District of Missouri. Subsequently, Judge Allen Pepper transferred Massey to the Eastern District of Missouri based on the forum selection clause contained in the Technology Agreements entered between Massey and Monsanto.
Higginbotham and Blades are virtually identical.
Judge Kollar Kotelly's Order states: "The parties agree that all three of these putative class-action lawsuits should proceed in the same forum. . . . In order to facilitate uniform treatment of these suits, the Court has determined that it would be in the interest of justice to transfer this case to the Southern District of Illinois where it can be consolidated with Blades for consideration of all pending motions. The Blades court is in a superior position to assess the propriety of trying these cases in the Southern District of Illinois or the Eastern District of Missouri." ( Higginbotham record, Doc. 42).
On August 4, 2000, this Court consolidated Higginbotham with this case and ordered that all further pleadings shall be filed in Blades, the lead case (Doc. 68). On August 28, 2000, Judge Rodney W. Sippel of the Eastern District of Missouri allowed Massey to amend his complaint, thereby, dropping the class action allegations that are similar to the issues in this matter. Thereafter, Plaintiffs moved to modify the motions to withdraw and substitute class representative members (Doc. 83). Specifically, Plaintiffs move to withdraw Randy Blades, Collin Cain, George Higginbotham, Mark Jent and Peggy Naylor as class representatives and to substitute Bob McIntosh, thereby making McIntosh and Peterson the named class representatives for Class I (Doc.83). Because Monsanto does not object to the motions to withdraw, the Court GRANTS Plaintiffs' motion to withdraw and substitute class representative members. Accordingly, McIntosh and Peterson are the purported named class representatives for Class I.
As of the date of the consolidation, the named plaintiffs in the Higginbotham case were George Higginbotham, C-K Farms (by and though Chris Peterson), George Naylor, Patrick De Kochko, and Peggy Naylor.
The Court notes that in response to the motion to modify the motions to withdraw and substitute, Monsanto argues that Plaintiffs' shuffling and changing of named class representatives reveals that this case is not proper for class certification. However, the Court need not address this argument for the purposes of addressing the motion to transfer.
Now before the Court is Monsanto's motion to transfer the case. Monsanto argues that based on the forum selection clause in the Technology Agreements, the proper venue for claims arising under the Technology Agreements is the Eastern District of Missouri, Eastern Division. The Court agrees.
II. Analysis
Monsanto asks the Court to transfer the case to the United States District Court for the Eastern District of Missouri in accordance with the Technology Agreement's forum-selection clause. Plaintiffs object to the motion to transfer. Based on the following, the Court finds that transfer to the Eastern District of Missouri is proper.
It is well-settled that contractual forum selection clauses are prima facie valid. M/S Bremen v. Zapata Offshore Co ., 407 U.S. 1, 10 (1977). Such a clause is enforced unless the provision was procured by fraud or overreaching or enforcement would be unreasonable. Paper Express Ltd. v. Pfankuch Maschinen GmbH , 972 F.2d 753, 757 (7th Cir. 1992). In essence, the clause will be enforced unless its enforcement would be a "serious inconvenience." Carnival Cruise Lines, Inc., v. Shute , 499 U.S. 585 (1991). The Seventh Circuit pronounced that "the law is clear: where venue is specified with mandatory or obligatory language, the clause will be enforced; where only jurisdiction is specified, the clause will generally not be enforced unless there is some further language indicating the parties' intent to make venue exclusive." Paper Express , 972 F.2d at 757. The existence of a forum-selection clause is a significant factor that figures centrally in the district court's calculus of whether to transfer a case. Stewart Organization Inc. v. Ricoh Corp ., 497 U.S. 22 (1988). Thus, "absent a showing that trial `in the contractual forum will be so gravely difficult and inconvenient that [the party challenging the clause] will for all practical purposes be deprived of his day in court,' "the parties will be held to their bargain as contained in the forum-selection clause." Heller Financial, Inc. v. Midwhey Powder Co ., 883 F.2d 1286, 1291 (7th Cir. 1989).
From 1998 to 2000, the Technology Agreements between Monsanto and purchasers of patented GM seed technology required all claims arising under those agreements to be litigated in the United States District Court for the Eastern District of Missouri. Specifically, the Technology Agreements contained the following forum selection clause:
"THIS AGREEMENT IS GOVERNED BY THE LAWS OF THE STATE OF MISSOURI AND THE UNITED STATES (OTHER THAN THE CHOICE OF LAW RULES). THE PARTIES CONSENT TO THE EXCLUSIVE JURISDICTION OF THE U.S. DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AND THE CIRCUIT COURT OF THE COUNTY OF ST. LOUIS, STATE OF MISSOURI, FOR ALL DISPUTES ARISING UNDER THIS AGREEMENT."
The forum selection clause is located and printed in all capital letters in four areas of the Technology Agreement: on the back of the second printed page of the Technology Agreement under the "General Conditions" section and on the back of the final three pages of the technology agreement which are the triplicate signature pages.
Here, the Higginbotham Amended Complaint alleges that C-K Farms, by and through Peterson, entered into a Technology Agreement with Monsanto. (Higginbotham Amended Complaint, ¶¶ 18-19). In response to the motion to transfer, Plaintiffs do not contest that Peterson, on behalf of himself and C-K Farms, signed a technology agreement which stated that the appropriate venue for any claim arising from that agreement between him and Monsanto is the Eastern District of Missouri. However, Plaintiffs claim that this forum selection clause should be given little or no weight since the contracts, on a "class-wide basis" were tainted by fraud. Plaintiffs assert that several of the signatures on these agreements have been forged. Thus, Plaintiffs cannot overlook the fact that one of the two named Plaintiffs, Peterson (on behalf of C-K Farms) who represents Class I, did sign the Technology Agreement. Therefore, these Plaintiffs cannot claim that his signature were obtained by fraud.
The Blades complaint also alleges that Randy Blades entered into a technology agreement with Monsanto. The Court notes that it did not consider the Blades Technology Agreement because he is no longer a named class representative.
Chris Peterson executed a single technology agreement on his own behalf and on behalf of C-K Farms.
Plaintiffs claim that both Cain and Higginbotham's signatures were forged on the technology agreements. However, Cain and Higginbotham are no longer named class representatives in this action.
Further, Plaintiffs claim that the Technology Agreement was a contract of adhesion, claiming there is no evidence that the Technology Agreement resulted from arm's length bargaining or that the clause was negotiable. Plaintiffs also claim that the Technology Agreement is a boilerplate contract which does not represent the agreement of the parties. The Court is not persuaded by these arguments.
The burden for showing that a contract is an unenforceable contract of adhesion is demanding. See Northwestern Nat'l Ins. Co. v. Donovan , 916 F.2d 372, 377-78 (7th Cir. 1990) ( upholding forum selection clause against challenge that it was unenforceable in contract of adhesion) . The "mere inequality of bargaining power does not of itself make every term of the contract unconscionable." Id . Courts should ask whether the parties had a reasonable opportunity to read and understand the term, and whether the term itself is unreasonable or oppressive. Id . Forum selection clauses contained in boilerplate contracts are "subject to judicial scrutiny for fundamental fairness." Carnival Cruise Lines , 499 U.S. at 595.
Here, the forum selection clause is printed in all capital letters and is legible. Moreover, the forum selection clause is not buried in the middle of a paragraph but is provided in four separate areas of the contract: (a) under the section titled "General Conditions" and (b) on the back page of the triplicate signature pages. Plaintiffs have not provided evidence that the forum selection clause was the product of fraud or overreaching. Plaintiffs merely argue that this is a classic contract of adhesion. Further, the record do not establish as a matter of law that the forum selection clause is unconscionable. Nor have Plaintiffs presented facts to support that Peterson did not have equal bargaining power. The Court cannot find that Peterson, on behalf of C-K Farms, signed the agreement due to fraud, undue influence or an overwhelming bargaining power.
Having found the forum selection clause in the Technology Agreements entered into by Peterson valid, the Court concludes that venue in this judicial district is not proper, but instead lies within the United States District Court for the Eastern District of Missouri. Specifically, the Technology Agreement exclusively provides for both venue and jurisdiction in the Eastern District of Missouri, Eastern Division. In the case at bar, the parties freely negotiated the contractually chosen forum. Plaintiffs have not shown any fraud or overreaching by Monsanto in the Technology Agreement between Peterson and Monsanto. Therefore, Plaintiffs should not be allowed to bypass the contractual agreement now by bringing suit in the wrong court.
28 U.S.C. § 1406(a) allows a district court to transfer a case filed in the wrong venue if it is in the interests of justice to do so. The case may be transferred to any judicial district where it could have been brought. 28 U.S.C. § 1406(a). A district court must dismiss such a suit if it denies the transfer. Id. Here, the Court finds that the forum selection clause signed by Peterson and Monsanto shall be enforced. Therefore, the Court finds that it is in the interests of justice to transfer the case to the Eastern District of Missouri.
III. Conclusion
Accordingly, the Court GRANTS in part, DENIES in part and DENIES as moot Monsanto Company's motion to dismiss pursuant to Rules 12(b)(3) and 12(b)(6) or in the alternative Monsanto Company's motion to transfer the case to the Eastern District of Missouri (Doc. 21). The Court DENIES Monsanto Company's motion to dismiss pursuant to Rule 12(b)(3), DENIES as moot Monsanto Company's motion dismiss pursuant to Rule 12(b)(6) and GRANTS Monsanto Company's motion to transfer the case to the Eastern District of Missouri. Pursuant to 28 U.S.C. § 1406(a), the Court TRANSFERS this case to the United States District Court for the Eastern District of Missouri. In addition, the Court GRANTS Plaintiffs' motion to modify motions to withdraw and substitute in light of consolidation, to identify purported class representatives (Doc. 83). Further, the Court DENIES as moot the remaining pending motions.
IT IS SO ORDERED.