United States District Court, Eastern District of New York
July 10, 2001
VITRICON, INC. AND HANOVER SPECIALTIES, PLAINTIFFS,
MIDWEST ELASTOMERS, INC., DEFENDANT.
The opinion of the court was delivered by: Wexler, District Judge.
This is a breach of contract and breach of warranty action
brought pursuant to this court's diversity jurisdiction. The
parties hereto entered into contractual agreements pursuant to
which defendant, Midwest Elastomers, Inc., ("Midwest" or
"Defendant") an Ohio corporation, provided plaintiffs Vitricon,
Inc., ("Vitricon") a Delaware corporation and Hanover
Specialties, a New York corporation, (collectively "Plaintiffs")
with rubber products. These products were used to manufacture
and install rubberized floor surfaces at parks located in
Tennessee, Arkansas, Missouri, New York and California.
Presently before the court is the question of the
enforceability of a forum-selection clause, which requires that
any dispute arising out of the parties' agreement be commenced
in a federal or state court
in Ohio. Defendant seeks to dismiss the complaint for lack of
personal jurisdiction pursuant to FRCP 12(b)(2) or the failure
to state a claim upon which relief may be granted under FRCP
12(b)(6). Plaintiffs seek to retain the action in this court.
For the reasons set forth below, motion is denied but the Court
will exercise its discretion to transfer this matter to an
In June of 2000, the parties entered into the first of a
series of contractual agreements regarding the sale of rubber.
On the back of the Midwest order forms, which served as the
sales contract, was a list of terms and conditions of sale.
Included was the following provision regarding disputes:
Disputes: Any controversy arising in connection
between Seller and Buyer shall be governed by the
laws of the State of Ohio and a state or federal
court within Ohio shall have sole jurisdiction over
any litigation resulting therefrom.
(Terms and Conditions of Sale, ¶ 12) (emphasis added).
II. Plaintiffs' Complaint
Plaintiffs allege that the rubber they purchased from
Defendant was defective. Specifically, it is alleged that the
rubber discolored when a substance used to prevent the rubber
from clumping during shipping mixed with the rubber in its
packaging. Plaintiffs seek damages for loss of profits stemming
from the costs to repair the floor surfaces. They also seek
damages, alleged to be attributable to the loss in their
III. Defendant's Motion
Relying on the Terms and Conditions of Sale, as stated in each
sales agreement entered into, Defendant seeks dismissal of
Plaintiffs' complaint for lack of personal jurisdiction or for
failure to state a claim. Plaintiffs argue that venue in the
Eastern District of New York is proper and further, that the
forum selection clause does not apply to the claims raised here.
Plaintiffs further argue that the clause is and unenforceable
because it is boilerplate language contained in a shipping
I. Legal Principles
It is well settled that forum selection clauses that have not
been attained through fraud, overreaching or undue influence are
fully enforceable. M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 12-13, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972); Jones v.
Weibrecht, 901 F.2d 17, 18 (2d Cir. 1990). Such clauses control
the venue of a controversy unless the moving party bears its
heavy burden of showing that enforcement would be so
inconvenient as to deprive him of his day in court and would
offend public policy. M/S Bremen, 407 U.S. at 18, 92 S.Ct.
1907; Roby v. Corp. of Lloyd's, 996 F.2d 1353, 1363 (2d Cir.
1993). A forum selection clause stated in clear and unambiguous
language, although in fine print, is considered reasonably
communicated to the plaintiff in determining its enforceability.
Effron v. Sun Line Cruises, Inc., 67 F.3d 7, 9 (2d Cir. 1995).
Where a company conducts business in many states, a
non-negotiated forum selection clause included in a sales
contract may be enforced even if it was not the subject of
bargaining. Carnival Cruise Lines, Inc. v. Shute,
499 U.S. 585, 593-595, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991).
II. Disposition of Motion — The Forum Selection Clause is
Applying the aforementioned principles, the court holds that
the forum selection clause here is valid on its face. In
opposition to enforcement of the clause, Plaintiffs raise two
arguments. First, Plaintiffs argue the clause cannot be enforced
because it constitutes "boilerplate" language that was not
subject to negotiation. Second, Plaintiffs argue, even if the
clause is valid, it is too narrow to apply to the parties'
present controversy. Neither claim has merit.
A. "Boilerplate" Language
Courts have consistently rejected the argument that forum
selection clauses contained in pre-printed contracts are
unenforceable. See Carnival Cruise Lines, Inc., 499 U.S. 585,
593-594, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991) (rejecting the
determination that a non-negotiated forum selection clause in a
form contract is never enforceable merely because it is not the
subject of bargaining); see also Effron, 67 F.3d at 9 (2d Cir.
1995) (reasonably communicated forum selection clauses in form
contracts do not violate notions of fundamental fairness). The
terms and conditions of sale, in which the forum selection
clause is found, were included on every invoice Vitricon
received from Midwest. Each term and condition, including the
dispute provision, was stated in clear and unambiguous language.
The placement of the forum selection clause on the back of the
invoice may not be construed as being hidden or buried as not to
alert the seller to the guidelines of the sale. The forum
selection clause is merely a term of the sale of goods, which
Vitricon agreed to repeatedly through the numerous agreements it
entered into with Midwest. Accordingly, the court must reject
the argument that the clause is unenforceable merely because it
is part of a pre-printed form.
B. Scope of the Clause
Plaintiffs second assertion that the forum selection clause
merely applies to the shipment of the goods itself and not to
any dispute concerning a product defect, breach of contract or
breach of warranty is also without support. In Albany Ins. Co.
v. Banco Mexicano, S.A., No. 98-9531, 1999 WL 533792 at *2 (2d
Cir. July 2, 1999), the Second Circuit addressed a similar
contention by plaintiff that a dispute concerning warehouse
receipts was not governed by forum selection clauses contained
in loan notes. The court found that since the warehouse receipts
and the loan notes combined formed an integrated contract, the
language of the clause applying to "any question [or matter]
related to this instrument" unmistakably covered plaintiffs
dispute. Id.; See also MIS Bremen, 407 U.S. 1, 20, 92 S.Ct.
1907, 32 L.Ed.2d 513 (1972) (court dismissed plaintiffs
contention that the forum selection clause should not be
interpreted as to apply to in rem actions).
Here, the language of the forum selection clause provides that
it pertains to "any controversy arising in connection between
Seller and Buyer." This language is plain and unambiguous and
clearly applies to Plaintiffs' dispute concerning a
manufacturing defect in the rubber. There is no reason to limit
the clause to shipping disputes merely because it is printed on
the sales invoice. If such limit was intended, appropriate
language could have been chosen. It was not. Just as in Albany
the sales invoice was a necessary component in the delivery of
the rubber. Therefore, the shipping invoice cannot be viewed as
a separate entity apart from the products being shipped.
III. Transfer or Dismissal Under 28 U.S.C. § 1406(a)
In light of the fact that the forum selection clause is valid
and should be enforced, it is apparent that venue is not proper
in the Eastern District of New York. Although Vitricon contends
that the case should be dismissed, the court has discretion to
transfer this matter to any district in which it could have been
brought. 28 U.S.C. § 1406(a); Minnette v. Time Warner,
997 F.2d 1023, 1026 (2nd Cir. 1993) (district court may either
dismiss or transfer the action to an appropriate court); Blass
v. Capital Intern. Security Group, 2001 WL 301137 at *2
(E.D.N.Y. Mar. 23, 2001). The decision made should facilitate
the timeliest disposition of the case on its merits. Cunningham
v. Hinds, 1999 WL 1129049 *2 (E.D.N.Y. Oct. 4, 1999).
Upon consideration, in the interest of justice and for the
timely disposition of the case, the court will exercise its
discretion to transfer this matter. The parties are to report to
the court within 20 days of the date of this order advising the
court of the venue of the appropriate Ohio District Court to
which this matter should be transferred.
For the foregoing reasons, Defendant Midwest's motion to
dismiss is denied. The forum selection clause is valid and
should be enforced, thus establishing proper venue in an Ohio
federal or state court. The parties are to advise the court as
set forth herein. The Clerk of the Court is directed to
terminate the motion to dismiss.
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