had argued that this forum selection clause did not apply to its claims of RICO violation, fraud, unfair competition and tortious interference with Crescent's business relationships. The district court disagreed and dismissed the action. The Third Circuit affirmed, stating that "although only one of Crescent's claims is based on a breach of contract theory, all of them involve allegations arising out of the agreement implicating its terms." Id. The Court concluded that it is sufficient that "the claims asserted arise out of the contractual relationship and implicate the contract's terms." Id.
Similarly, in Coastal Steel Corp. v. Tilgham Wheelabrator, Ltd., 709 F.2d 190 (3d Cir.), cert. denied, 464 U.S. 938, 78 L. Ed. 2d 315, 104 S. Ct. 349 (1983), the plaintiff was a third-party beneficiary of a contract between two British firms which provided that "in the event of any dispute arising the same shall be determined by the English Courts of Law." Id., 709 F.ad at 193. The Third Circuit enforced this forum selection provision even though the plaintiff/third-party beneficiary asserted a claim not for breach of that agreement, which was for the purchase of machinery, but instead a claim based upon the allegedly defective design of the machinery, as well as claims sounding in tort. The Court held that the written agreement between the two British firms was "the basic source of any duty to [plaintiff]. There is no evidence suggesting that the clause was not intended to apply to all claims growing out of the contractual relationship." Id. at 203 (emphasis in original). See also Interamerican Trade Corp. v. Companhia Fabricadora de Pecas, 973 F.2d 487 (6th Cir. 1992).
Likewise, in the present case, the most recent and fundamental documents defining the parties' relationship contain the New York forum clauses such that it is fair to conclude that these clauses should receive substantial weight in determining the forum of all claims between these parties. It is most noteworthy that in the two most recent agreements embracing the parties' commercial relationship, the parties have agreed to New York as the appropriate forum for litigation. In any event, NMS can hardly claim any surprise at having to litigate against Canon in New York in the face of these two forum selection clauses. Further, for the reasons previously discussed, we find that each of these clauses sufficiently encompasses NMS's present claims.
B. Motion to Dismiss Under Fed.R.Civ.P. 12(b)(3)
Canon has moved to dismiss for lack of venue pursuant to Fed.R.Civ.P. 12(b)(3) based upon the forum selection clauses. This presents an interesting analytical question. Dismissing this case pursuant to Rule 12(b)(3) would hardly be a novel application of that rule. To be sure, many courts have granted motions to dismiss under Rule 12(b)(3) on the basis of a forum selection clause. See, e.g., Riley, supra, 969 F.2d at 956; Spradlin v. Lear Siegler Management Services Co., Inc., 926 F.2d 865 (9th Cir. 1991); Commerce Consultants Int'l, Inc. v. Vetrerie Riunite, S.p.A., 276 U.S. App. D.C. 81, 867 F.2d 697 (D.C.Cir. 1989); Grossman v. Citrus Associates of the New York Cotton Exchange Inc., 706 F. Supp. 221 (S.D.N.Y. 1989).
In our opinion, however, this is an improper application of Rule 12(b)(3).
Rule 12(b)(3) provides for a motion to dismiss for improper venue. See Fed.R.Civ.P. 12(b)(3). "Venue," in turn, is defined by statute at 28 U.S.C. § 1391, which sets forth where venue may properly be laid. The determination of the appropriate venue under § 1391 revolves around factors such as whether the court is acting within its diversity or federal question jurisdiction; whether the defendant is a citizen or an alien or a corporation; and the jurisdiction in which the defendants resides or in which a corporation does business. 28 U.S.C. § 1391. Section 1391 does not list "forum selection clauses" as a factor to be considered when determining where venue may be laid.
Venue, as that term is defined by Congress, is proper in this district. The defendant, Canon, is a corporation over which the State of New Jersey clearly has personal jurisdiction,
making the District of New Jersey a proper venue for this litigation. See 28 U.S.C. § 1391(c). The fact that the parties contractually agreed to litigate disputes in another forum is not a question of venue, but one of contract, which will be enforced unless fundamentally unfair, see Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 113 L. Ed. 2d 622, 111 S. Ct. 1522 (1991).
Congress has set forth, through 28 U.S.C. § 1391, where a dispute may properly be litigated in the absence of any ex ante agreement by the parties to litigate in a particular forum. While the plaintiff ordinarily enjoys the advantage of choosing, within the constraints set forth by § 1391, the forum within which to bring suit, venue is a personal privilege of the defendant. 15 Wright, Miller & Cooper, Federal Practice & Procedure: Jurisdiction 2d, § 3826 at 257 (1986). "In most instances, the purpose of statutorily specified venue is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial." Id. at § 3801 at 4 (emphasis in original).
In many cases, though, especially one involving a corporation, a plaintiff may properly file his action in more than one venue, some of which may be less convenient to the defendant than others. Where a potential defendant has secured from a prospective plaintiff an agreement providing that any future disputes between the parties will be litigated in a particular, pre-specified venues, whether it be one prescribed by § 1391 or some other venue which would not be proper under § 1391, the defendant possesses a contractual, not a statutory, right to litigate in that pre-selected venue. The right asserted by Canon to defend itself in what is for it the more convenient venue of the Eastern District of New York, and not the plaintiff's chosen venue here in the District of New Jersey, arises from the forum selection clauses contained in the contracts NMS entered into with it, not from congress's solicitude for it as manifested by § 1391. Rule 12(b)(3) thus is not a proper means for enforcing NMS's contractual promise to file suit in the state or federal courts of New York.
See Lambert v. Kysar, 983 F.2d 1110, 1112 n.1 (1st Cir. 1993) (stating that motions for dismissal based upon forum selection clauses are founded on Rule 12(b)(6), not Rule 12(b)(3)).
This conclusion is bolstered by the Supreme Court's decisions in Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988). In Stewart, the Court addressed the question of whether a federal court sitting in diversity should apply state or federal law in adjudicating a motion to transfer a case to a venue provided in a contractual forum-selection clause. The defendant in that case had originally brought a motion in the district court for the Northern District of Alabama either to transfer the case under 28 U.S.C. § 1404(a) or to dismiss the case for improper venue under 28 U.S.C. § 1406. In a footnote, the Supreme Court, citing 28 U.S.C. § 1391(c) (venue proper in judicial district in which a corporation is doing business), noted that the parties did not dispute that the district court had properly denied the motion to dismiss the case for improper venue under 28 U.S.C. § 1406(a)
because the defendant apparently did business in the Northern District of Alabama, where the plaintiff had filed its suit. Id., 487 U.S. at 28 n.8, 108 S. Ct. at 2243 n.8. See also Crescent International, supra, 857 F.2d at 944 n.1 (citing Stewart).
Because venue is proper in this District, we will deny the defendant's motion to dismiss for improper venue under Rule 12(b)(3). For the reasons discussed below, however, we will grant Canon's motion to transfer this case to the Eastern District of New York pursuant to 28 U.S.C. § 1404(a).
C. Motion to Transfer Under 28 U.S.C. § 1404(a)
The Supreme Court held in Stewart Organization, Inc. v. Ricoh Corp., supra, that federal law, specifically 28 U.S.C. § 1404(a), not state law, governs a district court's decision whether to give effect to a forum selection clause and transfer an action to another court.
Id., 487 U.S. at 32, 108 S. Ct. at 2245 . As the Court noted, § 1404(a) calls upon the district court to weigh a number of case-specific factors when reviewing a motion to transfer. Id., at 29, 108 S. Ct. at 2244 . The Court stated that "the presence of a forum selection clause . . . will be a significant factor that figures centrally in the district court's calculus." Id. (emphasis added). "Thus, while other factors might 'conceivably' militate against a transfer, see [Stewart] at 487 U.S. at 30-31, 108 S. Ct. at 2244, the clear import of the Court's opinion is that the venue mandated by a choice of forum clause rarely will be outweighed by other 1404(a) factors." In re Ricoh Corp, 870 F.2d 570, 573 (11th Cir. 1989) (after remand from the Supreme Court).
We have already determined that the forum selection clauses in the 1990 Optical Disk Agreement and the 1991 Micrographics Dealer Agreement are valid and applicable to the plaintiff's claims. In accordance with Stewart, we accord the parties' contractual choice of venue significant weight in deciding whether to transfer this case to the Eastern District of New York. The forum selection clauses are not dispositive, however. Stewart, 487 U.S. at 31, 108 S. Ct. at 2245 . We must also consider other factors specific to this case to determine whether the court should transfer this action. Id. The terms of the statute suggest that three factors must be considered in transferring a case: (1) the convenience of the parties, (2) the convenience of the witnesses and (3) the interests of justice. See AT&T Co. v. MCI Communications Corp., 736 F. Supp. 1294, 1305 (D.N.J. 1990); Sandvik, Inc. v. Continental Ins. Co., 724 F. Supp. 303, 306 (D.N.J. 1989); Derry Finance N.V. v. Christiana Companies, Inc., 555 F. Supp. 1043, 1045 (D.Del. 1983).
A review of these factors reveals that this case would warrant transfer even in the absence of the forum selection clauses.
Canon is a New York corporation whose principal place of business and corporate headquarters is in the Eastern District of New York. NMS is a Maryland corporation which, although it does business in New Jersey, does not maintain an office in this State. In this Circuit, a plaintiff's choice of forum is of "paramount concern" in deciding a motion to transfer venue. Sandvik, 724 F. Supp. at 307 (citations omitted). Notwithstanding the deference accorded a plaintiff's choice of forum, though, its choice is by no means dispositive. AT&T, 736 F. Supp. at 1306 (citations omitted). "The preference for honoring a plaintiff's choice of forum is simply that, a preference; it is not a right." E.I. Du Pont de Nemours & Co. v. Diamond Shamrock Corp., 522 F. Supp. 588, 592 (D.Del. 1981). Moreover, as New Jersey is not NMS's home forum, NMS's forum choice is entitled to less deference than if it had chosen its home forum. Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473, 480 (D.N.J. 1993) (citations omitted).
As for witnesses, while NMS has identified four potential witnesses, see NMS's Brief at 7, none of them reside in New Jersey. Two of the four are located in Maryland, one in Washington, D.C., and one in California. New Jersey may require a slightly shorter and more convenient commute for three of these four potential witnesses than New York, but not enough to outweigh the other factors favoring transfer, including the fact that Canon has identified at least five potential witnesses who work at Canon's headquarter's in New York, of whom one was, however, recently reassigned to New Jersey. See Ricoh v. Honeywell, 817 F. Supp. at 484-85 ; E.I. Dupont de Nemours, 522 F. Supp. at 592 .
Further, virtually all of the documents related to this litigation are located either at Canon's headquarters in New York or at NMS's offices in Maryland and Pennsylvania. NMS has not identified any documents which are situated in New Jersey. This fact also militates in favor of transfer. See Ricoh, 817 F. Supp. at 483-84 .
Further still, it appears that none of the "central facts of [NMS's] lawsuit occurred" in New Jersey. Indeed, NMS alleges that the meeting which purportedly resulted in the 1978 Oral agreement occurred in Maryland, not New Jersey. Also, the predominant sales to the federal government at issue in this suit occur in the Washington, D.C. area. "When the central facts of a lawsuit occur outside the forum state, a plaintiff's selection of that forum is entitled to less deference." Ricoh, 817 F. Supp. at 481 (citations omitted). In addition and related to this consideration is the principle that "the burden of jury duty 'ought not to be imposed upon the people of a community which has no relation to the litigation.'" Id. at 486 (quoting Ferens v. John Deere Co., 494 U.S. 516, 529-30, 110 S. Ct. 1274, 1282-83, 108 L. Ed. 2d 443 (1990) (citation omitted)).
In light of these facts, we believe it to be entirely appropriate to exercise this court's discretion to grant Canon's motion under § 1404(a) and transfer this case to the Eastern District of New York. NMS asserts that because Canon has--purportedly--failed to demonstrate any inconvenience to it by litigating this action in New Jersey, "the convenience of the parties' factor" weighs in NMS's favor. NMS's Brief at 33. Notwithstanding NMS's assertion, we believe that Canon has most certainly demonstrated that it is less convenient for it to litigate this case in Camden, New Jersey, the vicinage to which this case has been assigned, as opposed to the Eastern District of New York, in which Canon's corporate headquarters are located. Moreover, as the party moving for transfer, Canon would ordinarily bear the burden of demonstrating that the balance of § 1404(a) considerations weighs in favor of transfer. See In re Ricoh Corp., 870 F.2d at 573. The burden of persuasion is altered, however, where there is a valid forum selection clause. Id. As the Eleventh Circuit stated:
In attempting to enforce the contractual venue, the movant is no longer attempting to limit the plaintiff's right to choose its forum; rather, the movant is trying to enforce the forum that the plaintiff had already chosen: the contractual venue. In such cases, we see no reason why a court should accord deference to the forum in which the plaintiff filed its action. Such deference to the filing forum would only encourage parties to violate their contractual obligations, the integrity of which are vital to our judicial system.
Id. (citations omitted).
NMS, a Maryland Corporation whose attorneys are located in Cherry Hill, New Jersey, surely would be somewhat more inconvenienced by having to litigate this case in New York rather than here, plaintiff's most recent forum choice. But this relatively minor increased burden on NMS is inadequate to defeat canon's motion to transfer in light of NMS's prior contractual agreement to litigate in New York, and the other case-specific considerations. Virtually all of these considerations militate overwhelmingly in favor of transfer.
For the reasons discussed herein, we find that the forum selection clauses contained in the 1990 Optical Disk Agreement and the 1991 Micrographics Dealer Agreement encompass NMS's present claims. Because venue is proper in this District, we will deny defendant canon's motion to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(3). We will, however, grant Canon's motion to transfer this case to the United States District Court for the Eastern District of New York under 28 U.S.C. § 1404(a). The court finds that such transfer is warranted in light of the two forum selection clauses and all of the other case-specific considerations relevant to a court's § 1404(a) analysis which militate in favor of transfer.
An appropriate Order will be entered.
JEROME B. SIMANDLE, United States District Judge
Dated: June 30, 1993
ORDER - June 30, 1993, Filed
This matter having come before the court upon the motion of defendant Canon U.S.A., Inc., to dismiss for improper venue pursuant to Fed.R.Civ.P. 12(b)(3) or, in the alternative, to transfer this action to the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. § 1404(a); and the court having considered the submissions of the parties and having heard the arguments of counsel; for the reasons expressed in the Opinion of today's date; and for good cause shown;
It is on this 30th day of June, 1993, hereby
Ordered that defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(3) is DENIED; and it is
FURTHER ORDERED that the defendant's motion to transfer this action to the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. § 1404(a) is GRANTED and that this action shall be and it hereby is transferred to the United States District Court for the Eastern District of New York.
JEROME B. SIMANDLE, United States District Judge