United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D.J.
accused Defendant of breaking the terms of an equipment lease
agreement and now seeks the recovery of rent, damages, and
return of the leased equipment. Defendant moves to dismiss
for lack of personal jurisdiction. In the alternative,
Defendant requests transfer under 28 U.S.C. § 1404(a) to
another venue. Per 28 U.S.C. § 1332(a), this Court has
jurisdiction. The matter was taken on submission without oral
argument. FED. R. CIV. P. 78(b). For the reasons below, the
motion to dismiss is DENIED in its entirety.
is a Delaware corporation with its principal place of
business in New Jersey. Compl. ¶ 1, ECF. No. 1, Ex. A.
Defendant is a Delaware Limited Liability Company with its
principal place of business in Texas. Id. at ¶
2. On July 15, 2016, Defendant and All Points Solution, Inc.
d/b/a 3i International (“3i”)-a non-party in this
action-entered into a Master Equipment Lease Agreement and
its associated Equipment Schedule No. xxxx5501 (jointly,
“Master Lease”) by which 3i leased equipment to
Defendant at its Texas corporate office. The Master Lease
contained a forum selection clause, which allowed “the
Lessor or its Assignee” to file suit with the Lessee
forever agreeing that, for any matter arising under the
Master Lease, judicial proceedings would take place in courts
of either the state of Lessor's or Assignee's
principal place of business, or the Lessee's state of
residence, or any court having jurisdiction over the Lessee
or its assets, “all at the sole discretion of the
Lessor.” Wellford Aff., Ex. G, ¶ 25. Also, at the
Lessor's election, the Lessee forever submitted to
jurisdiction of its chosen court. Id.
3i could, without notice to Defendant, sell, assign, or
otherwise transfer the Master Lease and its rights to the
associated Equipment. Id. at ¶ 21; Compl.
¶ 15. Upon executing the Master Lease, 3i assigned it to
Plaintiff. Cert. of Mark D. Elliott ¶ 6, ECF No. 15;
Wellford Aff. ¶ 19. Then, upon Plaintiff's request,
Defendant made recurring monthly lease payments to
Plaintiff's New Jersey office. Gruenert Aff. ¶ 16;
Wellford Aff. ¶ 28. When Defendant ceased making
payments, questioning Plaintiff's interest in the Master
Lease, see Gruenert Aff. ¶ 13; Wellford Aff.
¶ 29, Plaintiff filed suit in New Jersey Superior Court,
seeking to recover monies owed, damages, and return of the
leased equipment. Compl. ¶¶ 20-26. Defendant timely
removed the action here and filed this motion to dismiss for
lack of personal jurisdiction, arguing the Master Lease's
forum selection clause is not enforceable and that, should
this Court exercise personal jurisdiction over Defendant, the
matter be transferred to the Southern District of Texas.
waivable right, a party may give “express or implied
consent to the personal jurisdiction of the court, ”
Burger King, 471 U.S. 462, 472 n.14 (1985) (citation
omitted), by incorporating a forum selection clause in an
agreement. See, e.g., Nat'l Equip. Rental,
Ltd. v. Szukhent, 375 U.S. 311, 316 (1964). “Where
such forum-selection provisions have been obtained through
freely negotiated agreements and are not unreasonable and
unjust . . . their enforcement does not offend due
process.” Burger King, 471 U.S. at 472 n.14
(internal quotations and citations omitted). By agreeing to
such a clause, the parties acknowledge suit may be brought in
the chosen forum as to claims relating to or arising out of
an agreement. M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 10 (1972). It follows that a party seeking to
enforce a forum selection clause may do so through the
forum non conveniens doctrine. Atl. Marine
Constr. Co. v. U.S. Dist. Court, 134 S.Ct. 568, 579-80
(2013) (“Atl. Marine”). In applying the
“balancing-of-interests standard [like a Section
1404(a) transfer], courts should evaluate a forum-selection
clause pointing to a nonfederal forum in the same way that
they evaluate a forum-selection clause pointing to a federal
forum.” Id. at 580.
argues the Court has personal jurisdiction over Defendant
because, for disputes arising under the Master Lease, the
forum selection clause allows it to file suit in any court in
the Lessor's or its assignee's principal place of
business. On the other hand, Defendant argues the Court has
no personal jurisdiction because the clause is invalid and
that the Master Lease itself was procured through fraud.
Also, Defendant contends that even if the clause was deemed
applicable, this action should be transferred to the Southern
District of Texas.
Forum Selection Clause's Validity
diversity cases, federal law governs enforcement of a
contractual forum selection clause. Jumara v. State Farm
Ins. Co., 55 F.3d 873, 877 (1995). A forum selection
clause is presumptively valid and enforceable unless the
objecting party shows enforcing it would be
‘“unreasonable' under the
circumstances.” Foster v. Chesapeake Ins. Co.,
933 F.2d 1207, 1219 (3d Cir. 1991) (quoting M/S
Bremen, 407 U.S. at 10). To find a forum selection
clause “unreasonable, ” the defendant must make a
“strong showing, ” M/S Bremen, 407 U.S.
at 15, “(1) that it is the result of fraud or
overreaching, (2) that enforcement would violate a strong
public policy of the forum, or (3) that enforcement would in
the particular circumstances of the case result in litigation
in a jurisdiction so seriously inconvenient as to be
unreasonable.” Coastal Steel Corp. v. Tilghman
Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir. 1983),
overruled on other grounds by Lauro Lines v.
Chasser, 490 U.S. 495 (1989); see also M/S
Bremen, 407 U.S. at 15, 18.
here have failed to make a strong showing that enforcing the
forum selection clause would be unreasonable under the
circumstances. First, Defendant has not shown how enforcing
the clause would “contravene a strong public
policy” of New Jersey. See M/S Bremen, 407
U.S. at 15. Second, there lacks evidence to indicate
litigating the action in New Jersey “will be so gravely
difficult and inconvenient that he will for all practical
purposes be deprived of his day in court.” Id.
at 18. And third, there lacks evidence showing Plaintiff
“obtained [Defendant's] accession to the forum
clause by fraud or overreaching.” Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991). Instead,
Defendant argues the entire contract was procured by fraud
and questions whether Plaintiff, acting as the Lessor in the
Master Lease, has the right to collect the monthly payments.
Indeed, “even if it were procured by fraud, the venue
provision would be valid by analogy to the arbitrability of
disputes arising out of contracts procured by fraud when
there is no argument that the arbitration provision itself
was procured by fraud.” Stephan v. Goldinger,
325 F.3d 874, 879 (7th Cir. 2003).
3i and Plaintiff averring an assignment took place, even if
Defendant disputes such assignment, there is persuasive
authority showing that, so long as it is foreseeable for the
party against whom the clause would be enforced, a
“non-signatory may enforce or be bound by a
forum-selection clause.” In re: Howmedica Osteonics
Corp, 867 F.3d 390, 408 n.13 (3d Cir. 2017) (citing
Magi XXI, Inc. v. Stato della Citta del Vaticano,
714 F.3d 714, 717-20, 722-24 (2d Cir. 2013); Lipcon v.
Underwriters at Lloyd's London, 148 F.3d 1285, 1299
(11th Cir. 1998); Hugel v. Corp. of Lloyd's, 999
F.2d 206, 209 (7th Cir. 1993)). The record reflects Plaintiff
and Defendant commenced the Master Lease when Defendant
confirmed delivery and acceptance of the leased equipment,
Compl. ¶ 14; Wellford Aff., ¶¶ 21-22. Also,
the parties held subsequent post-contract discussions and
Defendant, at Plaintiff's request, sent monthly lease
payments to its New Jersey office. Wellford Aff. ¶ 28;
Gruenert Aff. ¶¶ 14-16. Thus, with a forum
selection clause being presumptively valid and enforceable
and the dispute arising out of the Master Lease, Defendant
has failed to carry its burden to show how enforcing the
clause would be unreasonable. As the Court finds the forum
selection clause valid and enforceable, it will now address
Defendant's request to transfer venue.