The opinion of the court was delivered by: JOHN KEENAN, Senior District Judge
MEMORANDUM OPINION and ORDER
This matter is before the Court on the Motion of third-party
defendant 1050758 Ontario, Inc., d/b/a/ S.M. Freight ("S.M.
Freight") to dismiss the Third-Party Complaint because of
improper venue under a forum selection clause. For the reasons
that follow, S.M. Freight's motion to dismiss is granted.
Plaintiff Zurich Insurance Company ("Zurich") is the cargo
insurer for the consignment of a shipment of pharmaceuticals
owned by plaintiff Boehringer Ingelheim (Canada), a subsidiary of
plaintiff Boehringer Ingelheim International BmgH (collectively
"Boehringer"). The pharmaceuticals were delivered to defendant
Prime, Inc. ("Prime") in Oklahoma and placed in a container for
shipment by road to Boehringer's premises in Burlington, Ontario,
Canada. Prime was given instructions to maintain the temperature
of the pharmaceuticals at ° C.
When the shipment arrived at Burlington, the temperature graphs
within the container showed that temperatures as low as -15° C
and -28° C had been reached. Thus, the pharmaceuticals had to be
declared a constructive total loss and were destroyed. Boehringer
submitted its claim for damages to its insurer. Zurich paid the
claim and sued Prime for damages in the amount of $140,000 plus
interest and costs. Prime then brought a third-party action
against S.M. Freight, alleging that S.M. Freight was the actual transporter of the pharmaceuticals pursuant to a
"Contract Carrier Agreement" ("CCA") between Prime and S.M.
Freight, and seeking indemnification.
S.M. Freight now moves to dismiss, based on Fed.R.Civ.P.
12(b)(3) or, alternatively, 28 U.S.C. § 1406(a), for improper
venue. The CCA contains a forum selection clause that states,
"The Agreement shall be governed and construed under the laws of
the State of Missouri, and all disputes arising hereunder shall
be heard by a Court of competent jurisdiction in Greene County,
Missouri." CCA ¶ 14. S.M. Freight argues that this forum
selection clause makes venue in New York improper for the
Prime argues that S.M. Freight should not prevail because, as a
third-party defendant, S.M. Freight does not have standing to
object to venue. Prime also contends that it would be a waste of
judicial resources to litigate the third-party action in another
court while the principal action proceeds in this court. Finally,
Prime argues that, because the motion lacks merit, S.M. Freight
should pay Prime's costs in defending this motion.
I. Proper Procedural Framework
The qusetion of the proper framework within which to examine a
motion to dismiss a complaint based on the enforcement of a forum
selection clause has not been definitively answered. See Mercury West A.G., Inc. v. R.J. Reynolds Tobacco Co., No. 03
Civ. 5262 (JFK), 2004 WL 421793 at *2, 2004 U.S. Dist. LEXIS 3508
at *4-5 (S.D.N.Y. Mar. 5, 2004) (citing New Moon Shipping Co.,
Ltd. v. MAN B & W Diesel AG, 121 F.3d 24, 28-29 (2d Cir. 1997);
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.")). 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. Jockey
Int'l, 217 F. Supp. at 450; Tech. Express, Inc. v. FTF Bus.
Sys. Corp., No. 99 Civ. 11692 (LAK), 2000 WL 222628 at *3,
2000 U.S. Dist. LEXIS 2006 at *9-10 (S.D.N.Y. Feb. 25, 2000).
S.M. Freight brings the instant motion under Rule 12(b)(3) and,
alternatively, 28 U.S.C. § 1406(a). Neither party has offered
materials outside the pleadings.*fn1 Although Prime contends
that § 1406(a) does not apply, it does not object to treating the
motion as one brought pursuant to Rule 12(b)(3). The Court will
therefore treat the motion as one to dismiss under Rule 12(b)(3). II. Third Party Standing to Object to Venue
Ordinarily, a third-party defendant does not have standing,
absent specific statutory authorization, to object to venue. See
First Fed. Sav. & Loan Ass'n v. Oppenheim, Appel, Dixon & Co.,
634 F. Supp. 1341, 1349 (S.D.N.Y. 1986) (citing cases and
treatises). However, it is not clear that this doctrine applies
in the face of a forum selection clause, as courts in this
circuit and beyond have allowed third-party defendants to prevail
on motions to dismiss pursuant to valid forum selection clauses.
See generally Glyphics Media, Inc. v. M.V. "Conti Singapore",
No. 02 Civ. 4398 (NRB), 2003 WL 1484145, 2003 U.S. Dist. LEXIS
4387 (S.D.N.Y. Mar. 21, 2003); Laserdynamics Inc. v. Acer
America Corp., 209 F.R.D. 388 (S.D. Tex. 2002); Lafargue v.
Union Pacific R.R., 154 F. Supp. 2d 1001 (S.D. Tex. 2001).
Therefore, S.M. Freight has standing to bring this motion and the
Court now turns to the validity of the forum selection clause.
III. The Forum Selection Clause Is Valid and Enforceable
Forum selection clauses at one time were disfavored, but today
are presumptively valid. See M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 9-10 (1972); 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");
Mercury West, 2004 WL 421793 at *3, 2004 U.S. Dist. LEXIS 3508
at *6-7. In fact, the Court of Appeals for the Second Circuit has
developed a policy of honoring forum selection clauses. See
Strategic Mktg. & Communications, Inc. v. Kmart Corp.,
41 F. Supp. 2d 268, 270 (S.D.N.Y. 1998). Underlying this policy is an
understanding that forum selection clauses carry an economic
benefit to at least one of the parties that is typically
reflected in the overall economics of the contract. As such,
these clauses are bargained-for terms of ...