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Summit Foods, Inc. v. Viking Packaging Technologies, Inc.

United States District Court, D. Oregon

September 28, 2018

SUMMIT FOODS, INC., Plaintiff,
VIKING PACKAGING TECHNOLOGIES, INC., dba Viking Masek Global Packaging Technologies, Defendant.

          James P. Laurick and Ross C. Van Ness, Kilmer, Voorhees & Laurick, P.C., Attorneys for Plaintiff.

          Emilie K. Edling, Houser & Allison, APC, Of Attorneys for Defendant.



         Plaintiff Summit Foods Inc., (“Summit”) brings this case against Viking Packaging Technologies, Inc., (“Viking”) alleging various breach of contract, breach of warranty, misrepresentation, and fraudulent inducement claims arising from Plaintiff's purchase of a piece of machinery from Defendant. Before the Court is Defendant's motion to dismiss or transfer venue to the Eastern District of Wisconsin under 28 U.S.C. §§ 1406(a) or 1404(a). Defendant argues that a mandatory forum selection clause in the parties' contract requires that the parties litigate this dispute in Sheboygan County Wisconsin, where the Eastern District of Wisconsin is located. For the reasons discussed below, Defendant's motion is denied.


         A. Dismissal or Transfer of Venue Under Section 1406(a)

         Under 28 U.S.C. § 1406, a district court, if it determines that a case has been filed in a district or division where venue is improper, can either dismiss the action or transfer it to a proper venue. Normally, 28 U.S.C. § 1391 governs venue and venue is proper in any “judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated.” 28 U.S.C. § 1391(b)(2). But 28 U.S.C. § 1441 governs venue of removed actions. See Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665 (1953). “Section 1441(a) expressly provides that the proper venue of a removed action is ‘the district court of the United States for the district and division embracing the place where such action is pending.'” Id. at 666. Actions that are first filed in state court and then removed to federal court are not “brought” in federal court under 28 U.S.C. § 1406. Id.

         B. Transfer of Venue Under Section 1404(a)

         Under 28 U.S.C. § 1404(a), a district court may transfer a civil action to any district in which the parties could have originally brought the case or to any district to which the parties have consented.[1] See 28 U.S.C. § 1404(a). When ruling on a motion to transfer venue under § 1404(a), a district court must find both that the requested venue is one in which the case might have originally been brought and that the transfer is appropriate, taking into account the convenience of the parties and the interest of justice. See First Interstate Bank v. VHG Aviation, LLC, 291 F.Supp.3d 1176, 1179 (D. Or. 2018). This requires “an individualized case-by-case consideration of convenience and fairness” weighing many different factors. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (quotation marks omitted). These factors may include:

The location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof.

Id. at 498-99.

         District courts must “weigh the relevant factors and decide whether, on balance, a transfer would serve ‘the convenience of parties and witnesses' and otherwise promote ‘the interest of justice.'” Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. Tex., 571 U.S. 49, 62-63 (2013) (quoting 28 U.S.C. § 1404(a)). But “[t]he ordinary analysis of a motion to transfer venue under § 1404(a) changes . . . when the parties have formed a contract that includes a valid forum-selection clause.” First Interstate Bank, 291 F.Supp.3d at 1179. Courts give a valid forum selection clause “controlling weight in all but the most exceptional cases.” Atl. Marine Constr. Co., 571 U.S. at 63 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy, J. concurring)). A contractual forum selection clause is “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable' under the circumstances.” Bremen v. Zapata Offshore Co., 407 U.S. 1, 10 (1972).

         Federal law governs the interpretation of a forum selection clause in a diversity case. See Manetti-Farrow, Inc., v. Gucci Am., Inc., 858 F.2d 509, 513 (9th Cir. 1988). Whether a forum selection clause is mandatory or permissive is a question of contract interpretation. See Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir. 1987). When interpreting a contractual provision such as a forum selection clause, “the plain language of the contract should be considered first.” Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999). Just because the parties dispute a contract's meaning does not mean that the contract is ambiguous: “it is only ambiguous if reasonable people could find its terms susceptible to more than one interpretation.” Id.

         If the text of the forum selection clause is mandatory, courts must enforce the clause, absent exceptional circumstances, and venue will lie in the chosen forum only. See Hunt Wesson, 817 F.2d at 77 (quoting Pelleport Inv'rs, Inc. v. Budco Quality Theaters, Inc., 741 F.2d 273 280 (9th Cir. 1984)). To be mandatory, a forum selection clause must contain wording suggesting that the parties intended to designate the specified forum as the exclusive forum. See N. Cal. Dist. of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037 (9th Cir. 1995); Docksider, Ltd. v. Sea Tech., Ltd., 875 F.2d 762, 764 (9th Cir. 1989). When the forum selection clause specifies only one permissible jurisdiction, however, “the clause will generally not be enforced without some further language indicating the parties' intent to make jurisdiction exclusive.” N. Cal. Dist. of Laborers, 69 ...

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