The opinion of the court was delivered by: Freeh, District Judge.
On October 9, 1991, this Court granted defendant Mahmood
Choudhury's ("Choudhury") motion to dismiss this action for
lack of personal jurisdiction. 776 F. Supp. 123. Pursuant to
Local Rule 3(j), plaintiff Generale Bank ("Generale") moved to
reargue the matter, which motion was granted on October 28,
1991. The Court having reviewed the parties' supplemental
briefs and the recent cases of the United States Supreme
Court, defendant's motion to dismiss for lack of personal
jurisdiction is now denied.
The facts of this case were set out in the Court's October
9th opinion, and will not be repeated here. Suffice it to say
that defendant Choudhury, a Pennsylvania resident, signed two
promissory notes which obligate him to pay some $90,000 to the
lender or its assignee, Generale. When Choudhury defaulted on
those notes, Generale brought this action. Choudhury moved to
dismiss for lack of personal jurisdiction on the grounds that
his contacts with New York State were insufficient to warrant
an exercise of personal jurisdiction.
In its original opinion, the Court found that payments of
installments due under a promissory note, without more, were
insufficient contacts with the state to establish personal
jurisdiction in the New York courts. (October 9, 1991 Order
and Opinion at 4). The Court further found that, because the
forum selection clauses contained in the numerous documents
signed by Choudhury did not appear to be "freely negotiated,"
those clauses were not binding. See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 n. 14, 105 S.Ct. 2174, 2182, 85
L.Ed.2d 528 (1985) ("Where . . . forum-selection clauses have
been obtained through `freely negotiated' agreements and are
not `unreasonable or unjust,' their enforcement does not offend
due process.") (quoting The Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 15, 92 S.Ct. 1907, 1916, 32 L.Ed.2d 513 (1972)).
Accordingly, Choudhury's motion to dismiss was granted.
In its motion to reargue, Generale relies on Carnival Cruise
Lines, Inc. v. Shute, ___ U.S. ___, 111 S.Ct. 1522, 113 L.Ed.2d
622 (1991), a recent Supreme Court case which was omitted from
its prior pleadings. Because Carnival impacts the cases upon
which the Court relied in its earlier decision, that decision
must be reconsidered and now reversed.
It is agreed by and between the passenger and
the Carrier that all disputes and matters
whatsoever arising under, in connection with or
incident to this Contract shall be litigated, if
at all, in and before a Court located in the
State of Florida, U.S.A., to the exclusion of the
Courts of any other state or country.
Based on this language, the defendant moved for summary
judgment in the Washington action. Id.
The District Court granted the defendant's motion on the
grounds that the defendant had insufficient contacts with the
State of Washington to support an exercise of personal
jurisdiction. Id. The Ninth Circuit Court of Appeals reversed,
finding sufficient contacts to justify continuing the case in
Washington. Id. at 1525. The Court of Appeals also found that
the forum selection clause was not binding because that clause
had not been freely negotiated and because the plaintiffs were
incapable of pursuing the litigation in Florida. Id.
The Supreme Court reversed on the forum selection issue. The
Court specifically rejected the Ninth Circuit's finding that
"a nonnegotiated forum-selection clause in a form ticket
contract is never enforceable simply because it is not the
subject of bargaining." 111 S.Ct. at 1527. Rather, the Court
found that such clauses must be reviewed for "fundamental
fairness." Id. at 1528. Factors to be considered in determining
whether a particular forum-selection clause is unfair include a
"bad-faith motive" on the part of the party seeking to enforce
that clause, or evidence that one party "obtained [the other
party's] accession to the forum clause by fraud or
Applying these factors to this case, it is clear that
Choudhury is obligated by the forum-selection clause contained
in the promissory note. That clause states as follows:
This Note shall be construed in accordance with
and governed by the laws of the State of New York
. . . For any dispute arising under this Note or
in connection herewith, the Payor hereby
irrevocably submits to, consents to, and waives
any objection to, the jurisdiction of the courts
of the State of New York or the United ...