On June 13, 2018, the United States District Court for the District of South Carolina denied a request for venue change. The plaintiff had filed in the forum indicated in a forum selection clause. The court found the clause mandatory and enforceable. ARCpoint Franchise Grp., LLC v. Blue Eyed Bull Inv. Corp.
In this case brought for breach of contract, Plaintiff was a SC limited liability company while Defendant was a Kansas corporation, authorized to do business in Missouri. Plaintiff initiated an action in SC, alleging various causes of action. Defendant moved to dismiss Plaintiff’s complaint and – among other requests – moved to transfer venue arguing that a trial in SC would be “gravely difficult and inconvenient”, according to the forum non conveniens doctrine.
The District Court had to determine whether the forum selection clause in this case was valid.
Importantly, the forum selection clause included an “exclusive choice of jurisdiction and venue provision” and stated that “all claims, except those covered by arbitration, “shall be brought in the appropriate state or federal court located in or serving Greenville County, South Carolina.”
Based on its language and the standard set forth by the Fourth Circuit (in Allstate Crane Rental, Inc. v. Paramount Equipment, LLC 2018 WL 2048361, May 2, 2018), the Court found that the forum selection clause was a mandatory forum selection clause. Therefore, the forum selection clause was presumed to be enforceable.
Furthermore, the Court found that the forum selection clause was in fact enforceable in this case
because its application would not be unreasonable under the circumstances. Although Defendants argue that they will be inconvenienced by having to transport witness to this District and pay for their travel, the Court finds that these issues are not so gravely difficult and inconvenient that Defendants will for all practical purposes be deprived of their day in court. Defendants have failed to overcome the presumption of enforceability. Therefore, the Court finds the forum selection clause in this case is valid, mandatory and enforceable”.
Depending on how the forum selection clause is drafted, a “mandatory” forum selection clause modifies the forum non conveniens burden of proof in opposing the Plaintiff’s chosen forum: a substantial burden if the clause is mandatory or a “lighter” forum non conveniens test.
ARCpoint Franchise Grp., LLC v. Blue Eyed Bull Inv. Corp., 2018 U.S. Dist. LEXIS 101528
