Opinion
01 Civ. 7918 (RCC)
April 16, 2002
OPINION AND ORDER
Computer Services Group, Inc. ("Computer Services") filed this action against Apple Computer, Inc. ("Apple"), alleging that Apple wrongfully terminated certain agreements between the parties. Apple now moves to transfer venue of this action to the Northern District of California in accordance with the forum selection clauses contained in the agreements. In the alternative, Apple moves to dismiss the Complaint pursuant to Rule 12(b)(3) or 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, Apple's motion to transfer venue is GRANTED.
I. BACKGROUND
The Complaint alleges that in 1992 the parties entered into a Value Added Reseller Agreement (the "VAR Agreement"), which authorized Computer Services to repair and distribute certain Apple products. Complaint ("Compl.") ¶¶ 5-6, 9. In 2000, the VAR Agreement allegedly was replaced by two new agreements: an Apple Authorized Service Provider Agreement and an Apple Reseller U.S. Sales Agreement (the "Operative Agreements"). Id. ¶ 14.
Computer Services claims that in or about February 2001 it received a termination notice from Apple. Id. ¶¶ 15-16. According to plaintiff, the termination was in bad faith and breached the intent of the Operative Agreements. Id. ¶¶ 17-20. Plaintiff filed suit in New York State Supreme Court, seeking compensatory and consequential damages and contract reformation. Apple then removed the case to this court on the basis of diversity jurisdiction.
Apple now moves to transfer venue or, alternatively, to dismiss the case based on the forum selection clauses contained in the Operative Agreements. Specifically, both Agreements provide that:
This agreement will be governed and interpreted under the laws of California, U.S.A., without any regard to its conflict of laws provisions. Any litigation between the parties will take place in the state or federal courts in Santa Clara County, California, and both parties waive any objection to the jurisdiction of and venue in such courts.
Affidavit of Lawrence H. Cooke II dated September 17, 2001 ("Cooke Aff."), Exs. 2 3, Section 14.A. Computer Services does not challenge the validity of the forum selection provisions, but instead argues that they should not be enforced because litigation in California would gravely inconvenience plaintiff. See Affidavit of Vincent Filingeri dated September 21, 2001 ("Filingeri Aff.") at 1. Computer Services also argues that the Operative Agreements were not negotiated but rather were presented with the "implicit notion" that they be signed "as is." Id. As discussed below, plaintiffs arguments are insufficient to overcome a valid forum selection clause.
The VAR Agreement contained a substantially similar provision. See Cooke Aff. Ex. 4. Section 14.3.
II. DISCUSSION
It is well settled that forum selection clauses are "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A forum selection clause can bind the parties even where the agreement in question is a form contract and not subject to negotiation. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). In Shute, the Supreme Court upheld a forum selection clause printed on a ticket issued by a cruise ship line. The Court noted that the chosen forum was the company's principal place of business and that there was no indication of fraud or overreaching. Furthermore, plaintiffs had notice of the forum provision and therefore "presumably retained the option of rejecting the contract with impunity." Id. at 595.
Plaintiff has alleged nothing that would distinguish this case from Shute if anything, this action presents a more compelling case for enforcement. Plaintiff is a business entity that entered into several contracts with defendant Apple, each with a forum selection provision clearly contained within the body of the agreement. See Vitricon, Inc. v. Midwest Elastomers, Inc., 148 F. Supp.2d 245, 248 (E.D.N.Y. 2001) (enforcing forum selection clause printed on the back of an invoice form because, among other things, the clause was contained in numerous agreements between the parties). There is no allegation here that Apple engaged in any fraud or overreaching, or that plaintiff did not receive notice of the clause. Rather, Computer Services merely avers that "[n]ever did it dawn upon plaintiff that this agreement would ever be litigated." Filingeri Aff. at 1. The failure to anticipate litigation in no way provides a basis for dishonoring the clause.
The burden rests on the resisting party to "demonstrate exceptional facts explaining why he should be relieved from his contractual duty."Weiss v. Columbia Pictures Television, Inc., 801 F. Supp. 1276, 1278 (S.D.N.Y. 1992). Here, Computer Services has not made the requisite showing. Computer Services has provided nothing more than conclusory statements of generalized hardship, which are simply insufficient. Plaintiff argues that it has only 42 employees and would find it "impossible" to bring its employees or customers to California to serve as witnesses. Filingeri Aff. at 2. However, plaintiff fails to provide any facts to support its hardship argument. Plaintiff does not specify which, or even how many, of those employees or customers are necessary witnesses, nor does plaintiff indicate what the substance of their testimony would be. See Haskel v. The FPR Registry, Inc., 862 F. Supp. 909, 917 (E.D.N Y 1994) (holding that a party seeking to avoid the application of a forum selection clause must name the witnesses who would be unable to testify as well as provide a summary of their testimony) (citingFalconwood Fin. Corp. v. Griffin, 838 F. Supp. 836, 839 (S.D.N.Y. 1993)).
It should be noted that certain Apple employees with relevant knowledge are located in California. According to Apple, all of the files regarding the agreements are maintained by Apple in Cupertino, California, and the decision to enter into the agreements, to renew the agreements over the years and, ultimately, to not renew the Apple Authorized Service Provider Agreement were made by Apple personnel located in California and/or Texas. See Affidavit of Stephen Glaros dated September 28, 2001, at ¶ 3.
Furthermore, although certainly live testimony is preferable to that obtained through deposition, such a mechanism can be utilized if needed.See Strategic Mktg. Commun. Inc., v. Kmart Corp., 41 F. Supp.2d 268, 274 (S.D.N.Y. 1998) (refusing to ignore forum selection clause where the resisting party failed to demonstrate why the presentation of testimony by deposition would be inadequate); see also Haskel, 862 F. Supp. at 917 (same).
Lastly. Computer Services argues that its counsel of choice is based in New York. However, plaintiff cites no case in which the convenience of counsel provided a basis for disregarding a valid forum selection clause. Indeed, such a factor generally is accorded little weight in a transfer analysis even absent a binding forum selection provision. See,e.g., Invivo Research, Inc. v. Magnetic Resonance Equip. Corp., 119 F. Supp.2d 433, 438 (S.D.N.Y. 2001) ("[T]he convenience of counsel is not an appropriate factor to consider on a motion to transfer.").
Plaintiff here has not satisfied the heavy burden required to avoid enforcement of a forum selection clause. Computer Services cannot simply bypass contract terms which it deems undesirable in retrospect.
III. CONCLUSION
For the foregoing reasons, the forum selection clauses contained in the parties' Agreements are valid and enforceable. This district is therefore an improper forum for this dispute. In such situations, a court may use its discretion to transfer the case to a district where the action could have been brought. See 28 U.S.C. § 1406(a); see also Vitricon, Inc., 148 F. Supp. 2d at 249 (noting that the court may either dismiss or transfer). The Clerk of the Court is therefore directed to transfer this action to the Northern District of California.