The opinion of the court was delivered by: JOHN KEENAN, Senior District Judge
Plaintiff Mercury West A. G., Inc. ("Mercury West") brought this action
seeking compensatory and punitive damages from Defendant R.J. Reynolds
Tobacco Company ("Reynolds"). Mercury West accuses Reynolds of breaching
a series of contracts, being unjustly enriched at Mercury West's
detriment, tortuously converting one of Mercury West's trademarks and
willfully engaging in deceptive business practices. Mercury West
initiated this action by filing a Summons and Complaint in New York State
Supreme Court. Reynolds timely removed the action to this Court. Reynolds
subsequently brought the present motion to dismiss the Complaint pursuant
to Rule 12(b)(3) of the Federal Rules of Civil Procedure ("Rule 12(b)
(3)") and 28 U.S.C. § 1406(a) (" § 1406(a)").
According to Mercury West, in October of 2001, Reynolds's Manager
Purchasing Operations Gregory Feron ("Feron") approached Mercury
West executives about doing business with Mercury West. Reynolds, claims
Mercury West, was interested in Mercury West's familiarity with overseas
markets. In particular, Reynolds was interested in taking advantage of
Mercury West's contacts in Russia, the Republic of Georgia and the Far
East to market Reynolds's cigarettes in those regions. See
Godelman Aff. ¶ 6. Reynolds disputes Mercury West's characterization
of the initial
contacts between the two companies, both with regard to how they
were initiated and their purpose. See Feron Decl. ¶ 4. In
light of the fact that this is a motion to dismiss, however, Mercury
West, as the party in opposition to the motion, is entitled to have all
of the relevant facts viewed in the light most favorable to it. See
New Moon Shipping Co., Ltd, v. Man B & W Diesel AG, 121 F.3d 24,
29 (2d Cir. 1997).
Shortly after October, 2001, Mercury West and Reynolds began some type
of business relationship. Representatives from each company attended
meetings in Moscow, Vienna and Washington, B.C. in 2002 in order to
discuss business possibilities. See Godelman Aff. ¶ 6. It
appears as though the relationship centered on Reynolds's production and
sale of cigarettes to Mercury West for Mercury West's distribution in
targeted overseas markets under the trademark of "Senator". Exactly how
it is claimed the business arrangement was structured is unclear from
Mercury West's submissions.
In April of 2002, Feron informed Mercury West that Reynolds wanted
Mercury West to enter into a Master Purchasing Agreement ("MFA"). Mercury
West Vice-President Alex Godelman claims that Feron told him the
agreement was one that Reynolds required all of its business partners to
sign and was little more than a mere "formality." See id. ¶
ll. On April 15, 2002, Godelman signed the MPA on Mercury West's behalf.
According to Godelman, he signed
the agreement without seeking the assistance of counsel. See
id. L. Joe Inman, Reynolds's Vice-President of Manufacturing,
signed the MFA on his company's behalf.
Among the provisions included in the MFA is what is commonly referred
to as a forum selection clause. In pertinent part, Section 11.3, entitled
The parties hereto hereby agree that all actions
or proceedings initiated by any party hereto
arising directly or indirectly out of this
Agreement shall be litigated only in the Superior
Court for Forsyth County, North Carolina with a
request that the case be assigned to the Honorable
Ben F. Tennille (or his successor), The Special
Superior Court Judge For Complex Business Cases.
Each party hereto hereby expressly submits and
consents in advance to such jurisdiction and venue
in any action or proceedings commenced by any
party hereto in such Court; agrees that
jurisdiction and venue is proper in such
Court; . . . . Each party hereto waives any claim
that said court is an inconvenient forum or an
improper forum based on lack of venue.
Relying on this clause, Reynolds contends that this Court is not
the appropriate forum for Mercury West's causes of action to be
prosecuted. By this motion, Reynolds seeks to enforce the forum selection
clause and have Mercury West's complaint dismissed.
I. Proper Procedural Framework
The initial issue that must be resolved is to determine what is the
proper framework within which to examine this motion. A motion to dismiss
a complaint based on the enforcement of a forum selection clause does not
fit neatly within any of the mechanisms
prescribed by the Federal Rules of Civil Procedure or the United
States Code. Although several courts have confronted this question, a
clear and definitive answer has not emerged. See New Moon Shipping
Co., Ltd., 121 F.3d at 28 (finding a lack of consensus on this issue
among circuit courts); Jockey Int'l, Inc. v. M/V "Leverkusen
Express", 217 F. Supp.2d 447, 450 (S.D.N.Y. 2002) ("The Second
Circuit has not decided what rule governs dismissals based on a forum
selection clause."). Motions to enforce forum selection clauses have been
brought pursuant to each of Rules 12(b)(1), 12(b)(3), 12(b)(6) and
§ 1406(a). Each provides a logical basis for supporting such a
motion, but none provide a perfect fit for a party seeking to enforce a
forum selection clause. Importantly, the scope of materials a court may
consider in reaching its decision differ depending upon which provision
governs. Nonetheless, courts of this circuit have made clear that courts
do possess the ability under either Rule 12(b)(3) or § 1406(a) to
dismiss a case upon a motion that a forum selection clause renders venue
in a particular court improper. Id.; Tech. Express, Inc.
v. FTF Bus. Sys. Corp., 2000 WL 222628 (S.D.N.Y. Feb. 25, 2000).
The instant motion is framed as both a Rule 12(b)(3) and § 1406(a)
motion and each side has offered supporting materials that go beyond the
original pleadings. Were the Court to deem the motion one governed by
Rule 12(b)(6), consideration of materials
not included as part of the pleadings would be prohibited. Mercury
West has not objected to the Court considering the additional materials
or treating the motion as one brought pursuant to Rule 12(b)(3) or §
1406(a). The motion will, therefore, be treated as such and all of the
supporting materials will be considered.
II. The Forum Selection Clause is Valid and Enforceable
At one time forum selection clauses were routinely greeted with
hostility by courts that viewed them as attempts to "oust" courts of
proper jurisdiction. Driven by the growth and development of
international commerce, this is no longer the case. See Bense v.
Interstate Battery Sys, of Am., Inc., 683 F.2d 718, 721 (2d Cir.
1982) (stating that "any such `general hostility' towards forum
selection clauses is today simply a vestigial remainder of an outmoded
doctrine."). In fact, in what represents a 180 degree turn, now when
confronted with forum selection clauses courts presume them to be valid.
See Ferraro Foods. Inc. v. M/V Izzet Incekara, 2001 WL 940562,
at *2 (S.D.N.Y. Aug. 20, 2001). The seminal case in terms of the current
presumption in forum selection clauses/ favor is M/S Bremen v.
Zapata Off Shore Co., 407 U.S. l (1972). In
Bremen, the Supreme Court held forum selection to be prima
facie valid and enforceable unless the party opposing the
clause can ...