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Mark IV Transportation & Logistics, Inc. v. National Independent Contractor Association, Inc.

United States District Court, Third Circuit

January 9, 2014

MARK IV TRANSPORTATION & LOGISTICS, INC., Plaintiff,
v.
NATIONAL INDEPENDENT CONTRACTOR ASSOCIATION, INC., et al., Defendants.

OPINION

WILLIAM J. MARTINI, District Judge.

Plaintiff Mark IV Transportation & Logistics, Inc. ("Mark IV") brings this action against National Independent Contractor Association, Inc. ("NICA") and John Doe(s) 1-10 (together with NICA, "Defendants"), alleging breach of contract and seeking indemnification for certain tax liabilities. This matter comes before the Court on Defendants' motion to dismiss under Federal Rules of Civil Procedure 12(b)(3) and 12(b)(6) for improper venue. There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Defendants' motion to dismiss is GRANTED.

I. BACKGROUND

Mark IV is a transportation and logistics company based in New Jersey. (Compl. ¶ 1, ECF No. 1.) NICA, a company incorporated and headquartered in Massachusetts, provides employee benefits to independent contractors who provide services to other companies. (Compl. ¶¶ 2.) Mark IV entered into written agreement with NICA, under which NICA agreed to provide its program benefits to independent contractors who acted as drivers for Mark IV (the "Agreement"). (Decl. of Edward C. Cooley Ex. A, at 2, ECF No. 3-2.)

Mark IV alleges that under the Agreement, NICA was obligated to make tax payments for the drivers and to indemnify Mark IV for any tax assessments arising out of NICA's non-compliance with any tax laws. (Compl. ¶¶ 18, 28, 29.) NICA did not pay any New Jersey state taxes, including New Jersey State Unemployment Insurance payments, for the drivers. (Compl. ¶ 12.) The New Jersey Department of Labor is now seeking $692, 887.00 in unpaid taxes from Mark IV. (Compl. ¶ 15.) Mark IV filed the instant action seeking to recover that sum and related damages from NICA. (Compl. ¶¶ 30, 31.) NICA argues that it was not obligated to pay any taxes under the Agreement.

NICA moves to dismiss for improper venue. The Agreement contains a forum selection clause that requires the parties to litigate claims under the Agreement in Massachusetts state court.[1] (Decl. of Edward C. Cooley Ex. A, at 9.) Specifically, the Agreement provides:

20. CHOICE OF FORUM. It is understood and agreed by the parties hereto that the validity of this Agreement and the parties' performance or their respective obligations thereunder shall be governed by the applicable law of the Commonwealth of Massachusetts. Should it become necessary for the parties hereto to litigate their rights, obligations and duties thereunder, the parties agree to litigate in the state courts of Massachusetts.

( Id. ) Mark IV argues that the Court should refuse to enforce the forum selection clause because it was the product of undue influence and overreaching, violates New Jersey public policy, and would result in an unreasonable and inconvenient forum.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). A court must dismiss under Rule 12(b)(6) "[i]f as a matter of law it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).

III. DISCUSSION

This case illustrates the existing confusion regarding the method for enforcing a forum selection clause that specifies a state court where venue is proper in the current forum. NICA moves to dismiss under either Rule 12(b)(3) or Rule 12(b)(6). Mark IV argues that the correct way to evaluate a potential transfer to Massachusetts state court is through 28 U.S.C. § 1404(a).

In a recent case, the Supreme Court discussed how to enforce a forum selection clause in the circumstances at hand. Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 12-929, 2013 WL 6231157 (U.S. Dec. 3, 2013). Atlantic Marine confirmed that where venue is proper in the current forum, Rule 12(b)(3) is not a suitable mechanism for enforcing a forum selection clause specifying a state court. 2013 WL 6231157, at *6. Here, it is undisputed that absent the forum selection clause, venue would lie in this Court. Therefore, dismissal under Rule 12(b)(3) would be improper and the Court ...


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