CASE NO. 3:16-cv-1510-J-JBT
THIS CAUSE is before the Court on Defendant's Motion to Transfer Venue, or in the Alternative Motion to Dismiss ("Motion") (Doc. 4) and Plaintiffs' Response thereto (Doc. 13). Based on a forum-selection clause, Defendant moves to transfer this action to the United States District Court for the Northern District of Indiana pursuant to 28 U.S.C. § 1404(a). (See Doc. 4 at 3-7.) Alternatively, Defendant moves to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) and for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). (Id. at 8-13.) For the reasons stated herein, the Motion is due to be GRANTED in part to the extent that this case will be TRANSFERRED to the South Bend Division of the Northern District of Indiana. Defendant's alternative Rule 12(b)(6) arguments will be DENIED without prejudice to reasserting them in the transferee court within thirty days of receipt of the case by the court in the Northern District of Indiana.
This action was originally brought by Plaintiffs in the Circuit Court in and for St. Johns County, Florida. (See Doc. 3.) Defendant removed the case to this Court on the basis of diversity of citizenship under 28 U.S.C. § 1332. (See Docs. 1 at 3 & 20 at 3.) Plaintiffs are husband and wife who are citizens of Florida. (Id.) Defendant is incorporated under the laws of Delaware and has its principal place of business in Indiana. (Id.) This matter arises out of Plaintiffs' December 30, 2014 purchase of an allegedly defective motor coach manufactured by Defendant and sold by Camping World RV Sales in St. Augustine, Florida. (Doc. 3 at 2.) In the Complaint, Plaintiffs assert Florida state law claims for strict liability, breach of various express and implied warranties, negligence, misrepresentation, and violation of Florida's Motor Vehicle Warranty Enforcement Act, Fla. Stat. § 681.10 et seq. (Florida's Lemon Law). (Id.)
When they purchased the motor coach, Plaintiffs signed a Registration and Acknowledgement of Receipt of Warranty and Product Information form ("Acknowledgement"), which provides in part: "Before I purchased this vehicle, I received, read and agreed to the terms and conditions of [Defendant's] 1 page Limited Warranty, published within its Owner's Manual, and the Chassis Limited Warranty." (Doc. 4-1 at 4.) The Limited Warranty referenced in the Acknowledgement contains a forum-selection clause, which states in bold letters: "Unless prohibited by state law . . . any legal action to enforce warranty rights against warrantor must be brought within the State of Indiana." (Id. at 5.) Based on this forum-selection clause, Defendant moves to transfer this action to the United States District Court for the Northern District of Indiana pursuant to 28 U.S.C. § 1404(a). (Doc. 4 at 3-7.)
Defendant does not specify a division within the Northern District of Indiana to which the case should be transferred. However, it appears that the South Bend Division is appropriate, as Defendant's principal place of business is in Elkhart County, Indiana, which is in the South Bend Division of the Northern District of Indiana.
A valid forum-selection clause "may be enforced through a motion to transfer under § 1404(a)." Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 579 (2013). Section 1404(a) provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." In Atlantic Marine, the Supreme Court held that when a defendant files a motion to transfer under § 1404(a) based on a valid forum-selection clause, "a district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer." Atl. Marine, 134 S. Ct. at 575.
A district court considering a motion pursuant to § 1404(a) would ordinarily "evaluate both the convenience of the parties and various public-interest considerations." Id. at 581. However, in Atlantic Marine, the Supreme Court stated that "[t]he presence of a valid forum-selection clause requires district courts to adjust their usual § 1404(a) analysis in three ways." Id.
"First, the plaintiff's choice of forum merits no weight. Rather, . . . the plaintiff bears the burden of establishing that transfer to the forum for which the parties bargained is unwarranted." Id. Second, the court "should not consider arguments about the parties' private interests." Id. at 582. The Supreme Court explained that "[w]hen parties agree to a forum-selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation." Id. Therefore, the court must assume that the parties' private interests "weigh entirely in favor of the preselected forum." Id. The court "may consider arguments about public-interest factors only." Id. Because such factors will rarely defeat a forum-selection clause, "the practical result is that forum-selection clauses should control except in unusual cases." Id. "Third, . . . a § 1404(a) transfer of venue will not carry with it the original venue's choice-of-law rules—a factor that in some circumstances may affect public-interest considerations." Id. Indeed, "[a] proper application of § 1404(a) requires that a forum-selection clause be given controlling weight in all but the most exceptional cases." Id. at 579 (internal quotation marks and citation omitted).
In Atlantic Marine, the Supreme Court noted that "[f]actors relating to the parties' private interests include 'relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.'" Id. at 581 n.6 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, n. 6 (1981)).
1. The Forum-Selection Clause is Contractually Valid
The Supreme Court's analysis in Atlantic Marine "presupposes a contractually valid forum-selection clause." Id. at 581 n.5. Therefore, this Court must first determine whether the forum-selection clause in this case is contractually valid. Regarding the validity and enforcement of forum-selection clauses, the Eleventh Circuit has stated:
Forum-selection clauses are presumptively valid and enforceable unless the plaintiff makes a "strong showing" that enforcement would be unfair or unreasonable under the circumstances. A forum-selection clause may be invalidated when: (1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy.
Krenkel v. Kerzner Int'l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009) (internal citations omitted). "For each category, the complaining party bears a heavy burden of demonstrating unreasonableness." Davis v. Avvo, Inc., Case No. 8:10-cv-2352- T-27TMB, 2011 WL 4063282, at *2 (M.D. Fla. Sept. 13, 2011) (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 592 (1991)).
Since the Eleventh Circuit mixes the validity analysis with the enforceability analysis, it is not clear exactly how Atlantic Marine affects these factors. The Eleventh Circuit has not yet spoken on this issue. The Court will assume the second factor may survive Atlantic Marine wholly intact but that appears doubtful.
Here, Plaintiffs have not asserted that the agreement was induced by fraud or overreaching, that "the chosen law would deprive [Plaintiffs] of a remedy," or that enforcement of the clause contravenes public policy. Nor do Plaintiffs dispute that the forum-selection clause covers the causes of action set forth in the Complaint. Instead, Plaintiffs argue—in conclusory fashion—that "trial in the contractual forum, Indiana, will be so gravely difficult and inconvenient that they will for all practical purposes be deprived of their day in court." (Id.) First, it appears that Atlantic Marine precludes this argument. Second, this argument is so conclusory and lacking in factual support that it would not prevail even aside from Atlantic Marine. See Davis, 2011 WL 4063282, at *4 ("[T]here is no evidence that requiring [plaintiff] to litigate in a federal court in Washington would be unfair or so inconvenient as to effectively deprive him of a remedy."). In short, this case does not present an "exceptional situation" that would justify retention of this action in the Middle District of Florida. See In re Ricoh Corp., 870 F.2d 570, 574 (11th Cir. 1989). Therefore, the Court finds that the forum-selection clause is contractually valid.
2. The Forum-Selection Clause is Mandatory
Plaintiffs vaguely argue that the forum-selection clause is permissive, rather than mandatory. "A permissive clause authorizes jurisdiction in a designated forum but does not prohibit litigation elsewhere. . . . A mandatory clause, by contrast, dictates an exclusive forum for litigation under the contract." GDG Acquisitions, LLC v. Gov't of Belize, 749 F.3d 1024, 1029 (11th Cir. 2014) (internal quotation marks and citations omitted). In their Response, Plaintiffs merely point out the distinction between "mandatory" and "permissive" forum-selection clauses, but they do not point to any word or phrase in the instant clause that renders it permissive.
Indeed, it is clear that the forum-selection clause in this case is mandatory, as it states that "any legal action to enforce warranty rights against [Defendant] must be brought within the State of Indiana." (Doc. 4-1 at 5 (emphasis added).) "The term 'must,' like the term 'shall,' is language of requirement." Lindner v. BiscayneAmericas Advisers L.L.C., Case No. 16-23153-CIV-ALTONAGA/ O'Sullivan, 2016 WL 5800258, at *4 (S.D. Fla. Oct. 3, 2016). Cf. Stateline Power Corp. v. Kremer, 148 F. App'x 770, 771 (11th Cir. 2005) (determining language that "the parties to this Agreement specifically consent to the jurisdiction of the Courts of the State of Florida" was permissive).
Although the Court does not rely on unpublished opinions as binding precedent, they may be cited throughout this Order as persuasive authority on a particular point. Rule 32.1 of the Federal Rules of Appellate Procedure expressly permits a court to cite to unpublished opinions that have been issued on or after January 1, 2007. Fed. R. App. P. 32.1(a). --------
3. The Forum-Selection Clause is Enforceable
Having determined that the subject forum-selection clause is valid and mandatory, the Court must next consider whether to enforce the clause under the altered § 1404(a) analysis of Atlantic Marine. In doing so, the Court may consider only public-interest factors. In Atlantic Marine, the Supreme Court noted that these factors may include: "'the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; [and] the interest in having the trial of a diversity case in a forum that is at home with the law.'" Atl. Marine, 134 S. Ct. at 581 n.6 (quoting Piper Aircraft, 454 U.S. at 241 n.6)).
Plaintiffs have made no argument with regard to the public-interest factors. Instead, the only arguments Plaintiffs make in opposition to the forum-selection clause are based on private-interest factors, which the Supreme Court has said do not apply when a valid forum-selection clause is present. (Doc. 13 at 7.) Specifically, Plaintiffs argue that:
[T]he claim arose in the State of Florida where the motor coach was purchased and where the initial "repairs" began on the motor coach. The witnesses who would be utilized to discuss the work done on the coach are located in Florida and the coach itself is located in Florida. Furthermore, any records related to the multiple "repairs executed on the coach are located in Florida."
(Id. at 8.) Here, Plaintiffs' assertions provide no assessment of the public-interest factors identified by the Supreme Court in Atlantic Marine or Piper Aircraft. Nonetheless, the Court has considered the public-interest factors and finds that this is not an "unusual" case in which these factors weigh so heavily against transfer so as to preclude it. Atl. Marine, 134 S. Ct. at 582.
Although the Court is sympathetic to the inconvenience and additional cost that Plaintiffs will likely experience by having this case transferred, the law is clear that the case must be transferred. Plaintiffs have not demonstrated the "extraordinary circumstances unrelated to the convenience of the parties" required for the Court to deny transferring this action pursuant to the valid forum-selection clause. Atl. Marine, 134 S. Ct. at 575. Plaintiffs have not met their high "burden of establishing that transfer to the forum for which the parties bargained is unwarranted." Id. at 581-82. Therefore, this case will be transferred to the South Bend Division of the Northern District of Indiana.
Accordingly, it is ORDERED:
1. Defendant's Motion (Doc. 4) is GRANTED in part to the extent that this action shall be TRANSFERRED to the United States District Court for the Northern District of Indiana pursuant to 28 U.S.C. § 1404(a).
2. Defendant's alternative Rule 12(b)(6) arguments are DENIED without prejudice to reasserting them in the transferee court within thirty days of receipt of the case by the court in the Northern District of Indiana.
3. The Clerk of Court is directed to transfer this case to the United States District Court for the Northern District of Indiana, South Bend Division, and to terminate all pending motions. After transfer has been effectuated, the Clerk should close the file.
DONE AND ORDERED at Jacksonville, Florida, on February 28, 2017.
JOEL B. TOOMEY
United States Magistrate Judge Copies to: Counsel of Record