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Ansell Healthcare Products LLC v. Glycobiosciences Inc.

United States District Court, D. New Jersey

January 26, 2018

ANSELL HEALTHCARE PRODUCTS LLC, Plaintiff,
v.
GLYCOBIOSCIENCES INC. Defendants.

          REPORT AND RECOMMENDATION

          HONORABLE JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE

         THIS MATTER comes before the Court on a motion by Defendant GlycoBioSciences Inc. (“Defendant” or “Glyco”) to transfer venue, or in the alternative, to dismiss Plaintiff's Complaint [ECF No. 18].[1] Plaintiff Ansell Healthcare Products LLC (“Plaintiff”) opposes Defendant's motion [ECF No. 27]. The Court has reviewed the parties' submissions, and has considered the motion without oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, it is respectfully recommended that Defendant's motion to transfer venue, or in the alternative, dismiss Plaintiff's Complaint [ECF No. 18] be DENIED.

         I. BACKGROUND [2]

         This matter arises from Plaintiff's allegations that Defendant breached a Patent Purchasing Agreement (“Purchase Agreement”) by failing to pay all amounts due and owing thereunder. Compl. ¶ 21, ECF No. 1. Specifically, Plaintiff alleges that Defendant owes $35, 000.00 in remaining “Milestone Payments” as well as additional royalty fees as set forth in the Purchase Agreement. Id. Defendant has moved to transfer this case to Canada, or in the alternative, to dismiss Plaintiff's Complaint [ECF No. 18]. Plaintiff opposes Defendant's motion [ECF No. 27].

         In support of its motion, Defendant claims that the parties' Purchase Agreement contains a forum selection and choice of law clause which prohibits Plaintiff from bringing any cause of action relating to the parties' contract outside of the Province of Ontario, Canada. The Purchase Agreement, in relevant part, provides “[t]his Agreement shall be subject to, governed by, construed and interpreted in accordance with the laws in force in the Province of Ontario.” ECF No. 1-1 ¶ 9.5 (the “Governing Law” clause). Defendant contends that the Governing Law clause of the Purchase Agreement is both a choice of law and forum selection clause, and accordingly, asserts that this matter should be transferred the Province of Ontario, Canada. ECF No. 18-1 at 1. Defendant alternatively seeks to dismiss Plaintiff's Complaint under the doctrine of forum non conveniens. See Id. at 8.

         Plaintiff argues that Defendant's motion is without merit and contends that “Defendant's motion fails to provide a legitimate reason as to why the District of New Jersey is so unfairly inconvenient as to justify the extraordinary remedy of dismissal.” ECF No. 27 at 4. Plaintiff further maintains that Defendant “erroneously and conveniently conflates a choice of law clause [] with a forum selection clause.” Id. Plaintiff finally asserts that because Defendant fails to establish that the Province of Ontario, Canada would provide an adequate forum, it cannot overcome Plaintiff's choice of forum within the District of New Jersey. Id.

         II. DISCUSSION

         A. Defendant's Motion to Transfer

         Pursuant to 28 U.S.C. § 1404(a), a district court may transfer an action to any other district “where it might have been brought” so long as the transfer is “[f]or the convenience of parties and witnesses” and “in the interest of justice.” Federal law governs the determination of whether to transfer venue pursuant to § 1404(a), as the issue is procedural rather than substantive. See Jumara v. State Farm Ins. Co., 55 F.3d 873, 877 (3d Cir. 1995).

         Ordinarily, in a case not involving a forum selection clause, a court evaluates a § 1404(a) motion using such factors as the convenience of the parties and the relevant public interests. Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. Tex., 134 S.Ct. 568, 581 (2013). “The calculus changes, however, when the parties' contract contains a valid forum-selection clause, which 'represents the parties' agreement as to the most proper forum.'” Id. (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988)). Because forum selection clauses are “bargained for by the parties . . . a valid forum selection clause [should be] given controlling weight in all but the most exceptional cases.” Id. (internal quotation marks omitted).

         Courts conduct a two-part analysis in determining whether to enforce a forum selection clause. First, a district court must determine whether the forum selection clause is valid and enforceable. Atl. Marine, 134 S.Ct. at 581. Forum selection clauses are “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances, ” for example, those that are undermined by “fraud, undue influence, or overweening bargaining power.” Foster v. Chesapeake Ins. Co., 933 F.2d 1207, 1219 (3d Cir. 1991) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972)).

         Second, courts must consider whether, pursuant to § 1404(a), “extraordinary circumstances” would hinder the enforcement of the forum-selection clause. Atl. Marine, 134 S.Ct. at 581. In considering whether extraordinary circumstances are present to avoid enforcement of a valid forum selection clause, a court may consider “arguments about public-interest factors only, ” including “the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; [and] the interest in having the trial of a diversity case in a forum that is at home with the law.” Id. at 581-82 n.6 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). “The party defying the forum selection clause . . . bears the burden of establishing that transfer to the forum for which the parties bargained is unwarranted, ” and must prove that public interest factors overwhelmingly disfavor transfer. Id. at 581.

         As a threshold matter, the Court finds that there is no forum selection clause in the parties' Purchase Agreement. Defendant contends that “[t]he operative contract broadly provides for operation of foreign law.” ECF No. 18-1 at 1. To support its argument, Defendant relies on the Governing Law clause of the Purchase Agreement, which provides “[t]his agreement shall be subject to, governed by, construed and interpreted in accordance with the laws in force in the Province of Ontario.” See ECF No. 1-1 ¶ 9.5. Contrary to Defendant's assertion, the Governing Law clause does not prescribe a forum, nor does it dictate jurisdiction or venue in Canada. Rather, it appears that the Governing Law clause is a choice of law provision that governs the interpretation of the parties' Purchase Agreement. Because the Governing Law clause does not prescribe a forum for an action, it does not constitute a forum selection provision.

         Even if the Court assumed for the purposes of the instant motion that the Governing Law provision is a valid forum selection clause, it is neither dispositive nor determinative of the proper forum. See Jumara, 55 F.2d at 880. That is particularly so in the instant matter because Defendant has not cited any authority upon which this Court may rely in order to transfer this matter to the Province of Ontario, Canada. Section 1404(a) only authorizes the transfer of a civil action to another district or division of a United States District Court. Defendant cites no authority to support a transfer to Canada and relies solely on the non-existent forum selection clause as a basis for transfer. Accordingly, because the Purchase Agreement does not contain a forum selection clause and because section 1404(a) does not ...


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