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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.: 0:17-cv-61657-DPG
ESSEX GLOBAL CAPITAL, LLC , )
)
Plaintiff, )
)
v. )
)
PURCHASING SOLUTIONS )
INTERNATIONAL, INC. , )
)
Defendant. )
/
ESSEX GLOBAL CAPITAL, LLC’S MEMORANDUM IN OPPOSITIO N TO
DEFENDANT’S AMENDED MOTION TO DISMISS
Plaintiff, Essex Global Capital, LLC (“Essex”), through undersigned counsel, submits
this Opposition to Plaintiff’s Amended Motion to Dismiss the Complaint and Demand for Jury
Trial (ECF No. 8):
I. INTRODUCTION AND BACKGROUND
Defendant’s Motion to Dismiss seeks to disturb Plaintiff, Essex’s chosen forum on the
basis of a permissive forum clause that would move the litigation to an overseas court unable to
compel personal attendance of key witnesses. As set out in the Complaint, Defendant,
Purchasing Solutions International, Inc. (“PSI”) was a purchasing agent, entrusted with the task
of procuring and delivering certain furniture, fixtures, supplies, and equipment (“FF&E”) for a
resort development known as Baha Mar. PSI contracted with Baha Mar, Ltd., the original
project development company of the Baha Mar Resort, t perform these services under a
Purchasing Agent Agreement (“PAA”). A portion of Baha Mar, Ltd.’s rights in the PAA
concerning a subset of the FF&E to be purchased were later assigned to Essex. Essex’s claims in
this litigation arise from PSI’s failure to properly use allocated funds for the procurement of
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materials under the PAA and failure to pay warehousemen and vendors, resulting in liens, forced
sales, and the subject goods being held in warehouss in Florida and elsewhere. Further, because
PSI has also failed to provide Essex with a requested and contractually-required accounting,
Essex is still unable to determine the full extent of PSI’s misconduct and the locations and
payment status of the subject goods. Accordingly, Essex has filed this lawsuit to obtain an
accounting from PSI and to recover its losses. To stymie those efforts, PSI moves to dismiss
Essex’s claim in favor of litigation overseas in The Bahamas. PSI’s Motion relies on a short
clause in the PAA which provides “Disputes will be r solved by litigation in a court of
competent jurisdiction in the Commonwealth of The Bahamas.” PAA at § 7.1. This clause does
not set out a proper basis to disturb Essex’s choice f forum. The brief provision does not
exclude other locations for litigation and lacks the “words of exclusivity” or compulsory
language that courts in the Eleventh Circuit consider in determining whether a forum selection
clause is mandatory or simply permissive. To the contrary, and in contrast to provisions of the
PAA that do use compulsory language, the provision in question simply makes a declarative
statement as to one location in which litigation may be pursued—substantively in line with
clauses found to be permissive by district courts. Further, even if the forum language of the
PAA was mandatory and not simply permissive, enforcement would be improper as doing so
would effectively deprive Essex of its day in court. Specifically, Essex will be severely
prejudiced if it is compelled to pursue its claims against PSI in The Bahamas without the benefit
of compulsory process for key domestic witnesses.
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II. ARGUMENT
A. Standard
1. Dismissal Is Improper Unless A Forum Selection Clause Is “Mandatory.”
“An action is only subject to dismissal based on a forum selection clause if the import of
the language of the clause as a whole is to provide a particular court or courts with ‘exclusive
jurisdiction,’” Wai v. Rainbow Holdings, 315 F. Supp. 2d 1261, 1270 (S.D. Fla. 2004). “There
are two types of forum selection clauses: mandatory and permissive. A
mandatory forum selection clause must be applied when not unreasonable or unjust. A
permissive forum selection clause suggests the parties' consent to a lawsuit in the location(s)
mentioned therein, but does not preclude litigation in other locations.” SRX Transcon., Inc. v.
Ocean Airlines, S.p.A., 07-61093-CIV, 2008 WL 113318 5, at *1 (S.D. Fla. Mar. 25,
2008)(internal citations and quotation marks omitted). “A mandatory clause prescribes a specific
forum in which litigation regarding the contracted-to subject matter must be brought; a
permissive clause, by contrast, identifies a forum in which such litigation permissibly may be
brought, but on a non-exclusive basis.” Cornett v. Carrithers, 465 Fed. Appx. 841, 843 (11th Cir.
2012). Courts “require quite specific language befor concluding that a forum selection clause is
mandatory, such that it dictates an exclusive forum for litigation under the contract.” Snapper,
Inc. v. Redan, 171 F.3d 1249, 1262 (11th Cir. 1999). Federal courts likewise “refuse to dismiss a
suit or transfer an action to the stated forum when t clause is deemed permissive.” Id.
In determining whether a contract’s forum language is mandatory or permissive, courts
look for “words of exclusivity”. Pace Properties, LLC v. Excelsior Const., Inc.,
3:08CV345/MCR/EMT, 2008 WL 4938412, at *3 (N.D. Fla. Nov. 18, 2008) (“The clause,
however, does not demand that litigation take place only in state court.
Absent words of exclusivity, the clause is permissive”). Absent express words of exclusivity that
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remove from consideration any other forum, a forum selection clause can be deemed mandatory
by way of language expressly requiring resolution of claims in a single identified forum.
Accordingly, courts have found exclusivity where th relevant language provides that disputes
“shall” or “must” be brought in a given court or forum. Cornett, 465 Fed. Appx. at 843 (“One
hallmark of a mandatory clause is the use of the imperative term ‘shall,’ which prescribes a
‘requirement.’”); Messmer v. Thor Motor Coach, Inc., 3:16-CV-1510-J-JBT, 2017 WL 933138,
at *3 (M.D. Fla. Feb. 28, 2017) (“The term ‘must,’ like the term ‘shall,’ is language of
requirement.”). In construing the mandatory or permissive nature of a forum selection clause,
courts apply traditional principles of contract construction and construe ambiguities against
parties involved in their drafting. See Wai, 315 F. Supp. 2d at 1272.
2. A Mandatory Forum Selection Clauses Is Not Enforceable If Doing So
Would Deprive a Party of Its Day In Court.
Even a mandatory forum selection clause will be dem d invalid or not subject to
enforcement if the party opposing it shows that enforcement would be “unreasonable or unjust
under the circumstances.” Bell v. Kerzner Int'l Ltd., 2011 WL 12656691, at *2 (S.D. Fla. 2011).
Enforcement is deemed unjust or unreasonable upon a strong showing that the clause “[1] was
induced by fraud or overreaching; (2) the plaintiff e ectively would be deprived of its day in
court because of the inconvenience or unfairness of the chosen forum; (3) the fundamental
unfairness of the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the
provisions would contravene a strong public policy.” Lipcon v. Underwriters at Lloyd's,
London, 148 F.3d 1285, 1292 (11th Cir. 1998).
In considering whether enforcement of a forum selection clause will deprive a Plaintiff of
its day in court, “a court should take into account the ‘convenience of the witnesses and those
public-interest factors of systemic integrity and fairness that, in addition to private concerns,
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come under the heading of ‘the interest of justice.’” Food Mktg. Consultants, Inc. v. Sesame
Workshop, 09-61776-CIV, 2010 WL 1571206, at *6 (S.D. Fla. Mar. 26, 2010), report and
recommendation adopted, 09-61776-CIV, 2010 WL 1571210 (S.D. Fla. Apr. 20, 2010).
Likewise, where the inconvenience arises from changed circumstances not foreseeable at the
time of contracting, a court may elect not to follow the forum-selection clause. See Id.; Van Zyl
v. Aviatour, Inc., 8:09-CV-151-T-23TGW, 2009 WL 2025159, at *4 (M.D. Fla. July 9, 2009).
B. The Purported Forum Selection Clause Is, At Most, A Permissive Forum
Selection Clause.
The forum language on which Defendant’s Motion relies is not mandatory and does not
make Essex’s chosen forum improper. The brief clause lacks the requisite “words of exclusivity”
that would allow the Court to determine that the parties conclusively excluded litigation in any
forum other than the one mentioned therein. See Pac roperties, LLC, 2008 WL 4938412, at *3
(“Absent words of exclusivity, the clause is permissive”); Cornett, 465 Fed. Appx. at 843 (“a
permissive clause . . . identifies a forum in which such litigation permissibly may be brought, but
on a non-exclusive basis”). There is no indication that the parties consented to the exclusive
jurisdiction of the courts of The Bahamas, or that such courts would be the “sole,” “only,” or
“exclusive” venue for litigation relating to the agreement. Bluesky Greenland Envtl. Sols., LLC
v. Rentar Envtl. Sols., Inc., 12-81234-CIV, 2013 WL 12095168, at *5 (S.D. Fla. Apr. 19, 2013)
(finding clause mandatory when it provided disputes “shall be resolved exclusively in a Florida
State court in Dade County or Palm beach County, Florida.”); Bovie Med. Corp. v. Livneh, 8:10-
CV-1527-T-24EAJ, 2010 WL 5297172, at *3 (M.D. Fla. Dec. 20, 2010) (finding mandatory
clause that “designate[d] the Courts of New York as the sole and exclusive forum for resolution
of any disputes arising under this Agreement.”).
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The clause similarly lacks “imperative” terms like “shall” or “must” that are considered
“hallmark[s] of a mandatory clause.” Cornett, 465 Fed. Appx. at 843; Messmer, 2017 WL
933138, at *3. The absence of such terms from the forum language in the PAA is especially
significant because the parties to the PAA did select those imperative terms elsewhere. For
example, in identifying the substantive law governing the PAA, the parties selected the following
language: “This Agreement shall be governed by the law of the Commonwealth of The
Bahamas.” PAA at 10.1 (emphasis supplied). District courts have zeroed in on such disparities
in construing the effect of forum selection provisions. See Connectus, LLC v. Ampush Media,
Inc., 8:15-CV-2778-T-33JSS, 2016 WL 761036, at *2 (M.D. Fla. Feb. 26, 2016) (finding forum
language permissive and observing “[n]oticeably, the clause uses the word ‘shall’ when
addressing choice of law, but it does not do so with respect to forum.). Imperative language of
the type expected in a mandatory forum selection clause was fully available to the drafters of the
PAA. They elected to use it in some provisions and declined to do so with respect to forum.
In contrast to the “words of exclusivity” or imperative “shall” or “must” language, which
are the traditional indicia of mandatory forum clauses, the language in question offers a simple
declaratory statement about a location for litigation (“Disputes will be resolved by litigation in a
court of competent jurisdiction in the Commonwealth of The Bahamas”). Declaratory clauses
like the one relied on by Defendant are routinely found to be permissive and not mandatory. In
Citro Florida, Inc. v. Citrovale, S.A., the Eleventh Circuit Court of Appeal ruled that a forum
selection clause stating “Place of jurisdiction is Sao Paulo/Brazil” was not mandatory. 760 F.2d
1231, 1231 (11th Cir. 1985). Similarly, where the parties’ forum selection language provided
that “Any and all disputes arising from these contract documents shall be subject to litigation in
state court in Escambia County, Pensacola, Florida,” the court ruled that the clause simply
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identified one possible forum, did not exclude others, and was not mandatory. Pace Properties,
LLC, 2008 WL 4938412, at *3. Indeed, "[f]or a forum selection clause to be exclusive, it must
go beyond establishing that a particular forum will have jurisdiction and must clearly
demonstrate the parties' intent to make that jurisdiction exclusive." City of New Orleans v. Mun.
Admin. Services, Inc., 376 F.3d 501, 504 (5th Cir. 2004) (citing Keaty v. Freeport Indonesia,
Inc., 503 F.2d 955 (5th Cir.1974)) (emphasis supplied). The forum language cited by Defendant
does not exclude other jurisdictions, and it does not i clude restrictive language requiring
litigation in The Bahamas. To the contrary, like th permissive clauses in Citro, Pace, and City
of New Orleans, the language of the PAA is, at best, a declarative statement identifying a
location at which the parties contemplated and consented to litigation of disputes.
Finally, to the extent the Court determines that the forum language in question is
ambiguous, it should be construed against Defendant as a party involved in the initial execution
of the PAA. See Wai, 315 F. Supp. 2d at 1272. In Wai, the Plaintiff agreed by subsequent letter
agreement to adhere to the terms of an existing contract initially executed by defendant and a
third party. Id. at 1265-66. The court held that the forum selection clause in the initial
agreement should be construed more strongly against the defendant “as one of the parties to the
clause.” Id. at 1272. The plaintiff, by contrast, “agreed to the clause's terms after the fact, but it
was the SECD and [defendant] that were responsible for putting the clause in final form.” Like
the Plaintiff in Wai, Essex is now subject to the PAA by way of subsequent assignment.
Defendant, on the other hand, was involved in the original execution of the PAA. Ambiguities,
therefore, should be construed in favor of Essex and Essex’s chosen forum.
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C. Even if Mandatory, Enforcement of the Forum Selection Language Would
Effectively Deprive Essex of Its Day In Court.
If the Court construes the PAA’s forum language as mandatory, it should decline to
enforce it because doing so would effectively deprive Essex of its day in court. See Lipcon, 148
F.3d at 1292 (Enforcement deemed unjust or unreasonable upon a strong showing that “the
plaintiff effectively would be deprived of its day in court because of the inconvenience or
unfairness of the chosen forum.”). Here, the grave prejudice to Essex’s ability to pursue its
claims is not the cost or logistical inconvenience of litigating overseas but the inability of the
Bahamian court to compel attendance of witnesses central to Essex’s case. As set out in Essex’s
Complaint, Defendant’s failure to pay vendors and warehousemen in Florida and elsewhere in
the United States has resulted in goods central to the case becoming subject to liens, forced sales,
and retention in warehouses in various locations throughout the country.
1
Complaint at ¶¶10-28.
Representatives of these third-parties are central witnesses in Essex’s case and necessary to assist
in unwinding the web of debts and obligations arising from Defendant’s breaches of the PAA,
conversion, and other tortious conduct. As non-parties and non-Bahamian nationals, located in
the United States, these witnesses are not subject to compulsory process by the courts of The
Commonwealth of The Bahamas. Courts have recognized that the inability to compel personal
attendance of key witnesses subjects a party to severe prejudice. See Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 511 (1947)("Certainly to fix the place of trial at a point where litigants cannot
compel personal attendance and may be forced to try their cases on deposition, is to create a
1
PSI has breached its contractual obligation by withholding information as to the whereabouts and statu
of the subject goods and Essex is therefore only able to pinpoint the location of a portion of the relevant
goods and the geography of various key witnesses. See Complaint at ¶10-19. Essex anticipates that
discovery will identify additional third-party vendors and warehouses and associated key witnesses.
Essex expects the majority of these witnesses to bemor within the reach of compulsory process of a U.S.
District Court than the courts of the Commonwealth of The Bahamas.
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condition not satisfactory to court, jury or most litigants.")
2
; Miyoung Son v. Kerzner Intern.
Resorts, Inc., 07-61171-CIV, 2008 WL 4186979, at *9 (S.D. Fla. Sept. 5, 2008) (“Where several
of the Defendants are outside of the compulsory process of this Court and where those witnesses
are the Kerzner Defendants' main witnesses to challenge Plaintiffs' claims of liability, as in this
case, the Court believes that the Kerzner Defendants would be severely prejudiced in their ability
to defend their case.").
Not only is the unavailability of compulsory process in The Bahamas for key witnesses a
real and material impediment to Essex’s ability to pursue its claims, the need for such process is
a largely unforeseeable circumstance brought on by Defendant’s breaches and improper conduct.
The litigation does not center around a mere failure of one party to pay funds owed to another or
other similar failure to perform. Rather, Defendant has breached the contract and otherwise
acted in such a way so as to implicate the deliveries, debts, supplies, and communications of
third-party vendors in various geographies. Complaint t ¶¶ 10-28. Because the inconvenience
and procedural impediments for Essex to litigate in The Bahamas were unforeseeable, the PAA’s
forum language should not be enforced even if the Court determines that it is stated in mandatory
terms. See Id.; Van Zyl, 2009 WL 2025159, at *4.
III. CONCLUSION
The forum language on which Defendant bases its Motion to Dismiss does not make this
Court an improper forum because it lacks “words of exclusivity” or imperative terminology
required by courts in the Eleventh Circuit. It likewise demonstrates neither an express nor
2
Although the court in Miyoung Son considered the compulsory process issue in the context of a forum
non conveniens analysis, this court has noted that the prejudice analysis is the same for a party opposing
(footnote continued to next page)
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implied intent to make the courts of the Commonwealth of The Bahamas the sole location for
litigation arising from the relevant agreement. Further, even if it had been crafted as a
mandatory forum selection clause, enforcement would be improper because doing so would have
the practical effect of depriving Essex of its day in court on account of the unavailability of
compulsory process for key non-Bahamian witnesses.
s/ Fredrick H.L. McClure
Fredrick H.L. McClure
Florida Bar No. 147354
J. Trumon Phillips
Florida Bar No. 84568
DLA PIPER LLP (US)
3111 W. Dr. Martin Luther King Jr. Blvd.
Suite 300
Tampa, Florida 33607-6233
Phone: 813-229-2111
Fax: 813-229-1447
Email: fredrick.mcclure@dlapiper.com
trumon.phillips@dlapiper.com
sheila.hall@dlapiper.com
Attorneys for Plaintiff
(footnote continued from previous page)
a motion to dismiss based on a foreign forum selection clause. See Food Mktg. Consultants, Inc. v.
Sesame Workshop, 09-61776-CIV, 2010 WL 1571206, at *6
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on September 28, 2017, I electronically filed the foregoing
document with the Clerk of the Court using the CM/ECF system which will automatically send
e-mail notification of such filing to the attorneys of record listed below:
Capri Trigo
GORDON & REES
SCULLY MANSUKHANI
100 SE Second Street, Suite 3900
Miami, FL 33131
Phone: 305-428-5323
Fax: 877-644-6209
Email: ctrigo@gordonrees.com
Attorneys for Defendant
s/ Fredrick H.L. McClure
Attorney
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