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ENFORCING FORUM SELECTION
CLAUSES IN STATE COURT
Michael D. Moberly*
Carolyn F. Burr**
I.
INTRODUCTION
The plaintiff in a civil case ordinarily has the right to select the forum
in which the parties‘ dispute will be heard,1 as long as it chooses a forum
with subject matter jurisdiction over the controversy2 and personal
jurisdiction over the defendant.3 However, parties to both commercial and
consumer transactions often attempt to alter this right by including forum
selection clauses in their agreements.4 If enforceable, such a clause may
negate the common law presumption in favor of the plaintiff‘s choice of
* B.B.A., J.D., University of Iowa; Shareholder, Ryley, Carlock & Applewhite, Phoenix,
Arizona.
** B.A., University of Colorado; J.D., University of Michigan; Shareholder, Ryley, Carlock
& Applewhite, Denver, Colorado.
1. See UIH-SFCC Holdings, L.P. v. Brigato, 51 P.3d 1076, 1078 (Colo. App. 2002); Crane
ex rel. Cook v. Mekelburg, 691 P.2d 756, 759 (Colo. App. 1984); cf. Cordillera Corp. v. Heard,
612 P.2d 92, 94 (Colo. 1980) (stating that ―the defendant does not have the choice of forum‖).
2. See Stone‘s Farm Supply, Inc. v. Deacon, 805 P.2d 1109, 1113 n.7 (Colo. 1991)
(―[W]hether the court has subject matter jurisdiction over a particular controversy depends upon
the competency of the court to determine controversies of the general class that are presented for
its consideration.‖).
3. Spencer v. Sytsma, 67 P.3d 1, 8-9 (Colo. 2003) (―In addition to subject-matter
jurisdiction, the court must be able to assert personal jurisdiction over the defendants.‖); see also
Purcell v. Bryn Mawr Hosp., 579 A.2d 1282, 1284 (Pa. 1990) (―[A] plaintiff generally is given the
choice of forum so long as the requirements of personal and subject matter jurisdiction are
satisfied.‖).
4. See Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1159 (Colo. App. 2006)
(observing that ―forum selection clauses appear frequently in commercial contracts‖); Walter W.
Heiser, Forum Selection Clauses in State Courts: Limitations on Enforcement After Stewart and
Carnival Cruise, 45 FLA. L. REV. 361, 361 (1993) (―Forum selection clauses are increasingly
common in interstate commercial and consumer contracts.‖).
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forum,5 although in some cases, a forum selection clause actually may
strengthen the presumption.6
Simply stated, a forum selection clause is a contractual provision
designating the particular forum or jurisdiction in which future disputes
between the contracting parties will be litigated.7 Its primary purpose is to
eliminate uncertainty about the court in which suit can be brought,8 thereby
―sparing litigants the time and expense of pretrial motions to determine the
correct forum and conserving judicial resources that otherwise would be
devoted to deciding those motions.‖9
Although forum selection clauses also serve other legitimate
purposes,10 American courts traditionally viewed these provisions with
disfavor, often refusing to enforce them on public policy grounds.11 The
principal premise underlying this view was that a forum selection clause
5. See Cable-La, Inc. v. Williams Commc‘ns, Inc., 104 F. Supp. 2d 569, 577 (M.D.N.C.
1999); M.K.C. Equip. Co. v. M.A.I.L. Code, Inc., 843 F. Supp. 679, 683 (D. Kan. 1994).
6. See, e.g., Winthrop Res. Corp. v. Scott & White Mem‘l Hosp., No. 07-CV-1765
PJS/RLE, 2007 WL 2377018, at *2 (D. Minn. Aug. 20, 2007) (―[T]here is a ‗double‘ presumption
that this lawsuit should remain in Minnesota—the presumption that a plaintiff‘s choice of forum
will be honored and the additional presumption that a valid forum-selection clause will be
enforced.‖); see also Newman/Haas Racing v. Unelko Corp., 813 F. Supp. 1345, 1348 (N.D. Ill.
1993) (―Forum selection clauses may give plaintiffs the exclusive and decisive right to select the
forum.‖).
7. See Great Big Color, Inc. v. Bishop Taylor Group, LLC, No. 07-CV-00233-MSK-CBS,
2007 WL 3407360, at *1 (D. Colo. Nov. 13, 2007); Volkswagenwerk, A.G. v. Klippan, GmbH,
611 P.2d 498, 503 (Alaska 1980); Edge Telecom, 143 P.3d at 1158-59; cf. ABC Mobile Sys., Inc.
v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985) (―Such a provision represents an attempt by the
parties to insure that the action will be brought in a forum that is convenient for them.‖(quoting
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80 cmt. a (1971))).
8. See Adams Reload Co. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1059 (Colo. App.
2005).
9. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 594 (1991), cited with approval in
Edge Telecom, 143 P.3d at 1163; see also Contraves Inc. v. McDonnell Douglas Corp.,
889 F. Supp. 470, 473 (M.D. Fla. 1995) (―[U]ncertainty in the enforceability of [forum selection]
clauses encourages the expenditure of resources that might otherwise have been conserved.‖).
10. See, e.g., Zurich Ins. Co. v. Prime, Inc., 419 F. Supp. 2d 384, 387 (S.D.N.Y. 2005)
(―[F]orum selection clauses carry an economic benefit to at least one of the parties that is typically
reflected in the overall economics of the contract.‖); Hauenstein & Bermeister, Inc. v. Met-Fab
Indus., Inc., 320 N.W.2d 886, 889 (Minn. 1982) (―[S]uch clauses allow parties to select a forum
convenient for both sides; they may choose the forum because of its neutrality, or because of its
expertise in the particular subject matter of their contract.‖).
11. See Frontier Airlines, Inc. Retirement Plan for Pilots v. Sec. Pac. Nat‘l Bank,
696 F. Supp. 1403, 1405 (D. Colo. 1988) (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S.
1, 9 (1972)); Moretti & Perlow Law Offices v. Aleet Assocs., 668 F. Supp. 103, 106 (D.R.I.
1987); Intermountain Sys., Inc. v. Edsall Constr. Co., 575 F. Supp. 1195, 1197 (D. Colo. 1983)
(quoting Bremen, 407 U.S. at 9).
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impermissibly divested, or ―ousted,‖ the constitutionally or statutorily
established jurisdiction of courts not designated in the clause.12
However, in most jurisdictions the traditional judicial hostility to forum
selection clauses has been displaced in recent years by the view that such
clauses should be enforced as long as they are reasonable.13 Colorado is
among the jurisdictions that embrace the modern view,14 and thus, under
most circumstances, the Colorado state courts will enforce a validly
executed forum selection clause.15
Despite this notable shift in the courts‘ perception of forum selection
clauses,16 judicial antipathy towards them is by no means dead.17 While
agreements to litigate in a particular forum are now presumptively valid in
most states,18 forum selection clauses are not always accorded the ―same
reverence‖ as other contractual provisions.19 Thus, the circumstances under
which these clauses will be enforced remain largely unclear,20 both in
Colorado and in other states.21
12. See Intermountain Sys., 575 F. Supp. at 1197; see, e.g., Vanderbeek v. Vernon Corp.,
50 P.3d 866, 868 (Colo. 2002) (―[T]he trial court concluded that a forum selection clause in a
partnership agreement between the parties deprived it of subject-matter jurisdiction over the
action.‖).
13. See Intermountain Sys., 575 F. Supp. at 1197 (quoting Krenger v. Pa. R.R. Co., 174 F.2d
556, 560-61 (2d Cir. 1949) (Hand, J., concurring)).
14. Although this Article focuses on the enforcement of forum selection clauses in the
Colorado courts, the analysis should be equally applicable in other states. See, e.g., Mut. Fire,
Marine & Inland Ins. Co. v. Barry, 646 F. Supp. 831, 833 (E.D. Pa. 1986) (―Pennsylvania [and]
Colorado . . . have similar law in connection with the enforceability of forum selection clauses.‖).
15. See Wilmot v. McNabb, 269 F. Supp. 2d 1203, 1210 (N.D. Cal. 2003) (―Colorado courts
have expressed a preference for upholding forum selection clauses.‖ (citing Vessels Oil & Gas Co.
v. Coastal Ref. & Mktg., Inc., 764 P.2d 391, 393 (Colo. App. 1988); ABC Mobile Sys., Inc. v.
Harvey, 701 P.3d 137, 139-40 (Colo. App. 1985))).
16. See Walker v. Carnival Cruise Lines, 107 F. Supp. 2d 1135, 1138-39 (N.D. Cal. 2000)
(―The forum selection clause has undergone a complete about-face in the eyes of the law—from
prima facie unenforceable to prima facie valid.‖); Wellmore Coal Corp. v. Gates Learjet Corp.,
475 F. Supp. 1140, 1142 (W.D. Va. 1979) (―The trend toward enforcing forum selection clauses
. . . reflect[s] a distinct change from the previous negative attitude courts had toward ‗jurisdictionousting‘ clauses.‖).
17. See Sterling Forest Assocs., Ltd. v. Barnett-Range Corp., 840 F.2d 249, 252 (4th Cir.
1988) (noting ―a continuing hostility to forum selection clauses‖); Intermountain Sys., 575 F.
Supp. at 1197 (asserting that ―traces of [the] general hostility to forum selection clauses still
occasionally surface today‖).
18. See Cummings v. Caribe Mktg. & Sales Co., 959 F. Supp. 560, 563-64 (D.P.R. 1997);
Caribbean Wholesales & Serv. Corp. v. US JVC Corp., 855 F. Supp. 627, 631 (S.D.N.Y. 1994).
19. Galli v. Travelhost, Inc., 603 F. Supp. 1260, 1264 (D. Nev. 1985); Kolendo v. Jerell, Inc.,
489 F. Supp. 983, 985 (S.D. W. Va. 1980).
20. See Couch v. First Guar. Ltd., 578 F. Supp. 331, 332 (N.D. Tex. 1984) (―Though the
verbal formulation of the law on [forum selection clause enforcement] is established, the
application of that law is unclear.‖); Walter W. Heiser, Forum Selection Clauses in Federal
Courts: Limitations on Enforcement After Stewart and Carnival Cruise, 45 FLA. L. REV. 553, 608
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In addition, despite the attention the issue has received in other
jurisdictions,22 there has not been a great deal of appellate litigation
involving the enforceability of forum selection clauses in Colorado,23 and
there also has been relatively little prior academic discussion of the issue.24
This Article is a modest attempt to fill the latter void.25
The Article begins with a discussion of the Colorado state courts‘
initial refusal to enforce forum selection clauses on public policy grounds.26
(1993) (observing that ―some uncertainty of judicial forum selection clause enforcement is
inevitable under current law‖).
21. The Colorado Court of Appeals has observed that ―decisions concerning the
enforceability of forum selection clauses require . . . analysis of fairness and public policy.‖
Adams Reload Co. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1058 (Colo. App. 2005). These
concepts are inherently imprecise, see, e.g., Rocky Mountain Hosp. & Med. Serv. v. Mariani,
916 P.2d 519, 525 (Colo. 1996), and ―imply a judicial responsibility for making discretionary
choices rather than applying hard-edged rules.‖ Acushnet Co. v. Coaters, Inc., 972 F. Supp. 41,
64 (D. Mass. 1997); see also Lambert v. Kysar, 983 F.2d 1110, 1118 (1st Cir. 1993) (noting that
the ―status of Massachusetts law on this issue has been termed ‗unclear‘‖ (quoting Geiger v.
Keilani, 270 F. Supp. 761, 765 n.8 (E.D. Mich. 1967))).
22. See Gilman v. Wheat, First Sec., Inc., 692 A.2d 454, 459 (Md. 1997) (―There have been a
plethora of cases involving the validity and enforceability of forum-selection clauses.‖). Unlike
Colorado, ―some states have enacted statutes that favor forum-selection clauses.‖ Jeffrey A.
Liesemer, Note, Carnival‟s Got the Fun . . . and the Forum: A New Look at Choice-of-Forum
Clauses and the Unconscionability Doctrine After Carnival Cruise Lines, Inc. v. Shute,
53 U. PITT. L. REV. 1025, 1030 (1992); see, e.g., Strafford Tech., Inc. v. Camcar Div. of Textron,
Inc., 784 A.2d 1198, 1201 (N.H. 2001) (quoting N.H. REV. STAT. ANN. § 508-A:3 (1997));
Gen. Elec. Co. v. Keyser, 275 S.E.2d 289, 292 n.2 (W. Va. 1981) (discussing W. VA. CODE
§ 46-1-105(2) (1974)).
23. See Mut. Fire, Marine & Inland Ins. Co. v. Barry, 646 F. Supp. 831, 833 (E.D. Pa. 1986)
(noting the lack of Colorado Supreme Court precedent addressing the issue). Colorado is not
entirely alone in this regard. See, e.g., Adams v. Bay, Ltd., 60 P.3d 509, 510 (Okla. Civ. App.
2002) (―The issue of the validity of forum selection clauses has not been specifically decided by
the Oklahoma Supreme Court.‖); Caperton v. A.T. Massey Coal Co., 679 S.E.2d 223, 234 (W. Va.
2008) (―This case presents the first opportunity for this Court to address substantive issues
involving forum-selection clauses.‖), rev‟d on other grounds, 129 S. Ct. 2252 (2009).
24. Commentators have addressed the enforceability of forum selection clauses in a handful
of states. See, e.g., Brian Mattis, Forum Selection Clauses in Florida, 6 ST. THOMAS L. REV. 247
(1994); Russell W. Piraino, Forum Selection Clauses in Missouri Courts, 47 J. MO. B. 130
(1991); James T. Brittain, Jr., Comment, A Practitioner‟s Guide to Forum Selection Clauses in
Texas, 1 HOUS. BUS. & TAX L.J. 79 (2001); Jeffrey T. Mains, Note, Forum-Selection Clauses in
Iowa: Re-evaluation of the Iowa Position in Light of Carnival Cruise Lines, 43 DRAKE L. REV.
191 (1994).
25. For previous academic discussions of the enforceability of forum selection clauses in
state courts generally, see Heiser, supra note 4; Young Lee, Note, Forum Selection Clauses:
Problems of Enforcement in Diversity Cases and State Courts, 35 COLUM. J. TRANSNAT‘L L. 663
(1997).
26. Colorado originally followed the ―common law rule . . . that the lawful jurisdiction of
courts cannot be ousted by the private agreements of individuals.‖ ABC Mobile Sys., Inc. v.
Harvey, 701 P.2d 137, 139 (Colo. App. 1985) (citing In re Brown‘s Estate, 176 P. 477 (Colo.
1918)).
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It then discusses Colorado‘s subsequent repudiation of this position in favor
of the view represented by The Bremen v. Zapata Off-Shore Co.,27 a highly
influential—but not directly controlling—United States Supreme Court
decision holding that forum selection clauses ordinarily should be
enforced.28
The Article next examines the principal limitations modern courts
impose on the enforceability of forum selection clauses, both in Colorado
and elsewhere.29 The Article ultimately concludes that Colorado has
adopted, and other state courts should embrace, a relatively liberal approach
to the enforceability of forum selection clauses that gives proper effect to
the parties‘ legitimate contract expectations.30
II. COLORADO‘S INITIAL HOSTILITY TO FORUM SELECTION CLAUSES
A Colorado court first addressed the enforceability of forum selection
clauses nearly a century ago, in In re Brown‟s Estate.31 The case involved a
challenge to the constitutionality of a state statute authorizing parties to
agree to litigate probate disputes in a court other than the one provided for
in the Colorado Constitution.32 The Colorado Supreme Court held that the
state legislature cannot authorize private parties to divest a court of its
constitutionally established jurisdiction.33 The court asserted that its
holding was consistent with the common law rule ―held generally, both in
England and the United States, that the lawful jurisdiction of courts cannot
27. 407 U.S. 1 (1972).
28. See Bense v. Interstate Battery Sys. of Am., Inc. 683 F.2d 718, 720 (2d Cir. 1982)
(―Bremen . . . [is] a landmark decision holding forum-selection clauses to be enforceable.‖);
cf. Prof‘l Ins. Corp. v. Sutherland, 700 So. 2d 347, 350 (Ala. 1997) (―Bremen does not mandate
that state courts enforce forum selection provisions outside of an admiralty context.‖).
29. See, e.g., McNeill v. Zoref, 687 A.2d 1052, 1055 (N.J. Super. Ct. App. Div. 1997)
(―There are . . . limitations to the enforcement of forum-selection clauses.‖).
30. See Banco Popular de P.R. v. Airborne Group PLC, 882 F. Supp. 1212, 1214 (D.P.R.
1995) (―[T]he courts‘ main concern should be to give effect to the legitimate expectations of the
parties, as manifested in their freely negotiated agreements, by specifically enforcing the forum
clauses.‖); Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1161 (Colo. App. 2006)
(observing that the enforcement of forum selection clauses ―is a matter of contract law, not
judicial discretion‖).
31. 176 P. 477 (Colo. 1918).
32. See id. at 478.
33. See id. at 479 (―[I]t is not within the power of the Legislature to direct that the parties
interested in . . . a [probate] case may or shall by agreement divest [a] court of . . . jurisdiction and
confer it upon another and different court . . . .‖).
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be ousted by the private agreements of individuals, and that such
agreements are illegal and void as against public policy.‖34
Several courts and commentators have associated this common law
rule with ―a supposed longstanding judicial antipathy to arbitration
agreements,‖35 which are, in effect, specialized types of forum selection
clauses in which the parties contractually agree to resolve their disputes in a
nonjudicial forum.36 In Wales v. State Farm Mutual Automobile Insurance
Co.,37 for example, the Colorado Court of Appeals observed that at common
law, arbitration agreements ―insofar as they were deemed to oust the courts
of jurisdiction, were against public policy and illegal.‖38 This view was
also a vestige of ancient English common law:
Some centuries ago, because of the jealousy of the English courts for their
own jurisdiction, they refused to enforce specific agreements to arbitrate
upon the ground that the courts were thereby ousted from their
jurisdiction. This jealousy survived for so long a period that the principal
became firmly embedded in the English common law and was adopted
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with it by the American courts.
34. Id.
35. In re Unterweser Reederei, GmbH, 428 F.2d 888, 899 (5th Cir. 1970) (Wisdom, J.,
dissenting) (citing ALBERT A. EHRENZWEIG, CONFLICT OF LAWS § 41 (1962)), vacated and
remanded sub nom. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); see also
Nat‘l Equip. Rental, Ltd. v. Sanders, 271 F. Supp. 756, 761 (E.D.N.Y. 1967) (observing that the
traditional judicial hostility to forum selection clauses ―has at least a suggestive historical
association with the obsolete principle that agreements to arbitrate are illicit as ousting the courts
of jurisdiction‖).
36. See City & County of Denver v. District Court, 939 P.2d 1353, 1362-63 (Colo. 1997)
(―[C]ommercial arbitration is a creature of contract. Parties, by agreement, may substitute a
different method for the adjudication of their disputes than those which would otherwise be
available to them in public courts of law. When they do so, they in effect select their own forum.‖
(alteration in original) (quoting In re Siegel, 358 N.E.2d 484, 485 (N.Y. 1976))); cf. Peterson v.
United Servs. Auto. Ass‘n, 955 P.2d 852, 855 n.2 (Wash. Ct. App. 1998) (―[A]rbitration is a
forum selected by the parties in lieu of a court of law.‖).
37. 559 P.2d 255 (Colo. App. 1976).
38. Id. at 257; see also Ringwelski v. Pederson, 919 P.2d 957, 959 (Colo. App. 1996)
(observing that arbitration agreements were once ―viewed with disfavor as an attempt to oust
courts of jurisdiction‖).
39. Sedco, Inc. v. Petroleos Mexicanos Mexican Nat‘l Oil Co., 767 F.2d 1140, 1145 n.12
(5th Cir. 1985) (quoting H.R. REP. No. 96, at 1 (1924)); see also Peter Kiewit Sons‘ Co. v. Port of
Portland, 628 P.2d 720, 722 (Or. 1981) (―At common law, the courts refused to enforce
agreements to arbitrate controversies upon the ground that such agreements unlawfully ousted the
courts from jurisdiction.‖).
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III. THE DECLINING JUDICIAL HOSTILITY TO FORUM SELECTION CLAUSES
A. Colorado‟s Rejection of the Ouster Principle
Despite the ouster principle‘s clear historical antecedents,40 American
courts eventually began to question its validity,41 both in arbitration42 and in
judicial forum selection cases.43 In Colorado, criticism of the principle first
appeared in Ezell v. Rocky Mountain Bean & Elevator Co.,44 an arbitration
case in which the court asserted that the enforceability of an agreement to
arbitrate future disputes was an issue of first impression in Colorado.45
The plaintiff in Ezell sought to avoid the effect of a contractual
arbitration provision by invoking the common law rule that such provisions
are void on public policy grounds as improper attempts to oust the courts of
jurisdiction.46 The Colorado Supreme Court noted that this view had been
―much relaxed in modern times,‖47 and ultimately rejected the ouster
principle upon which the traditional judicial hostility to arbitration was
40. See Carbon Black Export, Inc. v. SS Monrosa, 254 F.2d 297, 301 n.9 (5th Cir. 1958)
(noting the ouster principle‘s application ―in a great number of cases,‖ both ―in England and the
United States‖ (quoting 14 AM. JUR. Courts § 196 (1938))), cert. dismissed, 359 U.S. 180 (1959);
High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493, 496 (Mo. 1992) (―The early cases
in many jurisdictions that refused to enforce . . . forum selection clauses often relied upon an
‗ouster of jurisdiction‘ theory as the specific public policy argument supporting per se
invalidity . . . .‖).
41. See, e.g., Rueda v. Union Pac. R. Co., 175 P.2d 778, 787 (Or. 1946) (―[A] review of the
cases casts serious doubt upon the entire ‗ousting of jurisdiction‘ doctrine.‖); see also Kodak
Mining Co. v. Carrs Fork Corp., 669 S.W.2d 917, 921 (Ky. 1984) (discussing ―the oft criticized
. . . ‗ouster of jurisdiction‘ doctrine‖).
42. See, e.g., Park Constr. Co. v. Indep. Sch. Dist. No. 32, 296 N.W. 475, 477 (Minn. 1941)
(―[T]here appears never to have been any factual basis for holding that an agreement to arbitrate
ousted jurisdiction. It has no effect upon the jurisdiction of any court.‖).
43. See, e.g., In re Unterweser Reederei, GmbH, 428 F.2d 888, 904 (5th Cir. 1970)
(Wisdom, J., dissenting) (asserting that the ―concern that such agreements attempted to ‗oust‘
[courts] of jurisdiction was ill-considered‖), vacated and remanded sub nom. The Bremen v.
Zapata Off-Shore Co., 407 U.S. 1 (1972); Perini Corp. v. Orion Ins. Co. Ltd., 331 F. Supp. 453,
455 (E.D. Cal. 1971) (concluding that the ouster principle provided ―an unpersuasive rationale‖
for invalidating forum selection clauses).
44. 232 P. 680 (Colo. 1925).
45. See id. at 681. For a summary of the history of arbitration in Colorado, see ROBERT E.
BENSON, ARBITRATION LAW IN COLORADO § 2.2 (2006).
46. See Ezell, 232 P. at 681; see also Lilley v. Tuttle, 117 P. 896, 897 (Colo. 1911)
(discussing a Colorado trial court ruling ―evidently based upon the theory . . . that the right to
enter into a common-law arbitration does not exist in this state‖).
47. Ezell, 232 P. at 681; cf. Firelock Inc. v. District Court, 776 P.2d 1090, 1099 (Colo. 1989)
(observing that ―the presumption of disfavoring arbitration proceedings is outmoded‖ (citing
Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 480-81 (1989))).
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based.48 Accordingly, the court held that the plaintiff was bound by the
parties‘ agreement to arbitrate.49
In reaching this result, the court relied upon freedom of contract
principles that are deeply ingrained in the law of Colorado and other
states.50 In this regard, the court stated: ―Inasmuch as parties to a dispute
may decline to litigate, we see no reason why they may not contract to so
refrain, or contract to settle their differences in any other lawful manner.‖51
Another state court subsequently expressed the same view in the following
terms:
Arbitration simply removes a controversy from the arena of litigation. It
is no more an ouster of judicial jurisdiction than is compromise and
settlement or that peculiar offspring of legal ingenuity known as the
covenant not to sue. Each disposes of issues without litigation. One no
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more than the other ousts the courts of jurisdiction.
B. Colorado‟s Initial Approval of Forum Selection Clauses
Although subsequent Colorado cases reaffirmed the Ezell court‘s
favorable view of arbitration,53 the Colorado courts were slow to extend the
Ezell court‘s analysis to judicial forum selection clauses.54 Indeed, it was
not until 1976, when the Colorado Supreme Court decided Clinic Masters,
Inc. v. District Court,55 that a Colorado appellate court first upheld a
48. See Ezell, 232 P. at 681 (―The contention of plaintiff was once supported by the common
law. The reason upon which it was based does not appeal to us . . . . [T]he objection that . . .
arbitration ousts the courts of jurisdiction is without merit.‖ (citation omitted)).
49. See id.
50. See City & County of Denver v. District Court, 939 P.2d 1353, 1361 (Colo. 1997) (―The
right of parties to contract freely is well developed in our jurisprudence. The right of parties to
contract encompasses the correlative power to agree to a specific . . . procedure for resolving
disputes.‖ (citation omitted)).
51. Ezell, 232 P. at 681 (emphasis added).
52. Park Constr. Co. v. Indep. Sch. Dist. No. 32, 296 N.W. 475, 477 (Minn. 1941).
53. See, e.g., Wales v. State Farm Mut. Auto. Ins. Co., 559 P.2d 255, 257 (Colo. App. 1976)
(―[I]n Colorado, [the] judicial renunciation of arbitration has been consistently rejected . . . .‖
(citing Ezell, 232 P. at 681)); see also Colo. Permanente Med. Group, P.C. v. Evans, 926 P.2d
1218, 1234 (Colo. 1996) (Mullarkey, J., concurring in part and dissenting in part) (―Even
Colorado common law consistently recognized the benefits of arbitration.‖).
54. See, e.g., Vessels Oil & Gas Co. v. Coastal Ref. & Mktg., Inc., 764 P.2d 391, 393 (Colo.
App. 1988) (―[W]e have not expressed a strong public policy favoring contractual forum selection
clauses, as in the case of arbitration provisions . . . .‖). The law has evolved similarly in other
states. See, e.g., In re AIU Ins. Co., 148 S.W.3d 109, 122 (Tex. 2004) (Phillips, C.J., dissenting)
(―While Texas public policy has always encouraged arbitration, it has not always favored the
forum selection clause.‖).
55. 556 P.2d 473 (Colo. 1976).
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judicial forum selection clause.56 Even then, the court reached this result
without expressly repudiating the ouster of jurisdiction principle.57
In Clinic Masters, the parties‘ contract contained a forum selection
clause stating that ―in the event of litigation, the exclusive venue and place
of jurisdiction shall be the State of Colorado, and more specifically, El Paso
County, Colorado.‖58 When the petitioner brought suit against the
defendant in Colorado in accordance with the terms of the clause, the
defendant moved to quash service of process.59
The defendant argued that despite the language of the forum selection
clause, the Colorado courts lacked personal jurisdiction over him because
he signed the agreement in Missouri, and was never physically present in
the state of Colorado.60 The trial court granted the defendant‘s motion and
quashed service, finding that the forum selection clause was void because
the parties to an action cannot confer jurisdiction on a court by consent or
agreement. 61 The petitioner then appealed the trial court‘s ruling.62
The Colorado Supreme Court vacated the order quashing service of
process on the defendant.63 The court acknowledged that the trial court
could not exercise subject matter jurisdiction over the parties‘ dispute solely
by virtue of their private agreement.64 However, the trial court‘s subject
matter jurisdiction was not in dispute,65 and the Colorado courts have long
56. See id. at 475-76.
57. See id. at 475 (observing that private parties lack the ―power to confer upon a judicial
tribunal jurisdiction of the subject-matter which it does not possess under the constitution and
statutes of the state‖ (emphasis added) (internal quotation marks omitted) (quoting Bd. of
Comm‘rs v. Denver Union Water Co., 76 P. 1060, 1063 (Colo. 1904))). This principle has been
characterized as the converse of the view that parties ―cannot oust the courts of jurisdiction vested
in them by law.‖ Sausman Diversified Invs., Inc. v. Cobbs Co., 208 So. 2d 873, 875 (Fla. Dist. Ct.
App. 1968), disapproved in Manrique v. Fabbri, 493 So. 2d 437, 440 (Fla. 1986).
58. Clinic Masters, 556 P.2d at 474.
59. See id.
60. See id. at 474; cf. New Frontier Media, Inc. v. Freeman, 85 P.3d 611, 614 (Colo. App.
2003) (―[T]o confer jurisdiction, the contract typically must either require activity by the
defendant in the forum state; have been negotiated in-state pursuant to substantial and significant
contacts; have been executed by the defendant in-state; or have been solicited by the out-of-state
defendant.‖ (citations omitted)).
61. See Clinic Masters, 556 P.2d at 474, 475.
62. Id. at 474.
63. See id.
64. See id. at 475 (citing Triebelhorn v. Turzanski, 370 P.2d 757 (Colo. 1962); McCoy v.
McCoy, 336 P.2d 302 (Colo. 1959)); cf. Ruggieri v. Gen. Well Serv., Inc., 535 F. Supp. 525,
528 n.2 (D. Colo. 1982) (―[S]ubject-matter jurisdiction cannot be consented to by the parties
because it relates to the court‘s inherent power to hear and decide the case.‖).
65. See Clinic Masters, 556 P.2d at 475 (citing COLO. CONST. art. VI, § 9(1)); cf. N. Ave.
Ctr., L.L.C. v. City of Grand Junction, 140 P.3d 308, 310 (Colo. App. 2006) (―In Colorado,
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held that parties can waive a court‘s lack of personal jurisdiction under
those circumstances.66
In addition, the parties can agree to such a waiver—that is, to a court‘s
exercise of personal jurisdiction over them—in advance of a dispute by
executing a forum selection agreement.67 As one court explained: ―[S]ince
a defendant is deemed to waive (that is, he forfeits) objections to personal
jurisdiction . . . simply by not making them in timely fashion, a potential
defendant can waive such objections in advance of suit by signing a forum
selection clause.‖68
The Colorado Supreme Court concluded that this is precisely what
occurred in Clinic Masters.69 The court‘s analysis reflects the view
prevailing in other jurisdictions as well:
[O]ne must distinguish between personal and subject matter jurisdiction.
Federal courts and most state courts . . . have expressly held that a choice
of forum clause constitutes consent to personal jurisdiction. Personal
jurisdiction, unlike subject matter jurisdiction, may be conferred by
agreement, even though the selected court might otherwise lack
70
―minimum contacts‖ under the due process clause.
C. The Supreme Court‟s Decision in Bremen
As in Ezell v. Rocky Mountain Bean & Elevator Co.,71 the analysis in
Clinic Masters reflects a long-standing Colorado policy favoring party
district courts are courts of general jurisdiction authorized to hear all civil matters unless
otherwise excepted in the state constitution.‖).
66. See Clinic Masters, 556 P.2d at 475 (citing Sarchet v. Phillips, 78 P.2d 1096 (Colo.
1938)); see also Luebke v. Luebke, 143 P.3d 1088, 1092 (Colo. App. 2006) (―Issues that may be
waived include lack of personal jurisdiction . . . .‖).
67. See Whelan Sec. Co. v. Allen, 26 S.W.3d 592, 595 (Mo. Ct. App. 2000) (―Parties to a
contract may agree in advance to submit to personal jurisdiction in a given court by means of a
forum selection clause because personal jurisdiction is an individual right capable of being
waived.‖).
68. Nw. Nat‘l Ins. Co. v. Donovan, 916 F.2d 372, 375 (7th Cir. 1990).
69. See Clinic Masters, 556 P.2d at 475 (―Parties may even agree in advance of litigation to
submit to a particular court‘s jurisdiction, as was done here.‖); cf. Ruggieri, 535 F. Supp. at 529
(―[C]ontracting parties may expressly consent to litigate issues regarding the contract in a
particular forum and this clause will normally be binding unless it is unfair or unreasonable.‖).
70. Voicelink Data Servs., Inc. v. Datapulse, Inc., 937 P.2d 1158, 1162 (Wash. Ct. App.
1997) (footnote omitted); see also Packaging Store, Inc. v. Leung, 917 P.2d 361, 363 (Colo. App.
1996) (―A nonresident‘s contractual consent to the jurisdiction of Colorado courts will be enforced
if the terms of the consent are clear, and such consent can confer jurisdiction even if the minimal
contacts test is not met.‖).
71. 232 P. 680 (Colo. 1925); see supra notes 44-51 and accompanying text.
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autonomy and individual freedom of contract,72 which holds that parties are
entitled to bargain away their personal rights when they deem it beneficial
to do so.73 The Clinic Masters court‘s application of this policy to uphold
the parties‘ forum selection clause also reflected an emerging trend in the
judiciary‘s view of such clauses.74 This trend culminated in the United
States Supreme Court‘s decision in The Bremen v. Zapata Off-Shore Co.,75
a case actually decided four years before Clinic Masters, but not directly
addressed in the latter case.76
Bremen involved an agreement to tow a drilling rig from Louisiana to a
location off the coast of Italy, in the Adriatic Sea.77 The parties‘ contract
provided for the litigation of any ensuing disputes in an English court.78
When the drilling rig was damaged during a storm in the Gulf of Mexico,
its owner brought suit against the towing company in a Florida federal
court.79 The court denied the towing company‘s subsequent motion to
dismiss, attaching virtually no significance to the parties‘ agreement to
litigate in England,80 and the Fifth Circuit affirmed.81
72. Forum selection decisions involve a weighing of competing interest the parties
themselves ―are best suited to conduct.‖ Cook v. District Court, 670 P.2d 758, 762 (Colo. 1983);
see Arrowhead Sch. Dist. No. 75 v. Klyap, 79 P.3d 250, 263 (Mont. 2003) (―[T]he principle of
freedom of contract holds that the parties themselves are in the best position to determine the
terms of a contract because the parties are free to get information and bargain the private law of
the contract in their own interest.‖); cf. Hauenstein & Bermeister, Inc. v. Met-Fab Indus., Inc.,
320 N.W.2d 886, 889 (Minn. 1982) (―[F]orum selection clauses . . . allow[] parties to tailor the
dispute resolution mechanism to their particular situation.‖).
73. See, e.g., COLO. REV. STAT. ANN. § 14-2-304(1)(i) (2005) (―Parties may contract with
respect to . . . the personal rights or obligations of either party, not in violation of public policy or
any statute imposing a criminal penalty.‖); see also Park Inn Int‘l, L.L.C. v. Mody Enters., Inc.,
105 F. Supp. 2d 370, 374 (D.N.J. 2000) (―[P]ersonal jurisdiction is a legal right protecting the
individual, not a limitation on the power of the Court. As such, a party may bargain it away where
the party perceives the bargain as advantageous.‖ (citations omitted)).
74. See ABC Mobile Sys., Inc. v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985); see also
Hoffman v. Burroughs Corp., 571 F. Supp. 545, 548 (N.D. Tex. 1982) (discussing the ―increasing
judicial acceptance and hospitality towards the forum selection clause, as an acceptable private
arrangement between contracting parties‖); Quick Erectors, Inc. v. Seattle Bronze Corp.,
524 F. Supp. 351, 355 (E.D. Mo. 1981) (discussing the ―modern trend‖ upholding the validity of
―freely negotiated forum selection clauses‖).
75. 407 U.S. 1, 10 (1972).
76. The Clinic Masters court did not discuss Bremen, but applied the Supreme Court‘s
reasoning sub silentio. See Vanier v. Ponsoldt, 833 P.2d 949, 958-59 (Kan. 1992) (citing Clinic
Masters as an ―application of the rule in The Bremen‖).
77. See Bremen, 407 U.S. at 2.
78. See id. at 2-3. The English court was chosen because it was a neutral forum with ―long
experience in admiralty litigation.‖ Id. at 12.
79. See Bremen, 407 U.S. at 3-4.
80. See id. at 6-7.
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Citing policy considerations inherent in international commerce82 (but
also relevant in domestic transactions),83 the Supreme Court vacated the
Fifth Circuit‘s ruling.84 The Supreme Court described the traditional view
that forum selection clauses impermissibly oust courts of jurisdiction as a
―vestigial legal fiction.‖85 Concluding that such clauses should be deemed
presumptively valid, the Court held that they ordinarily are enforceable
unless enforcement would be unreasonable, or the consent of the party
challenging the clause was obtained through fraud or overreaching.86
IV. COLORADO‘S ADOPTION OF BREMEN
Although Bremen arose under the federal courts‘ admiralty
jurisdiction,87 the Supreme Court‘s analysis had an enormous influence on
the enforceability of forum selection clauses in subsequent state court
litigation.88 As one court explained:
81. See id. The Fifth Circuit‘s decision is reported as In re Unterweser Reederei, GmbH,
428 F.2d 888, 896 (5th Cir. 1970), vacated and remanded sub nom. The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1 (1972).
82. See Bremen, 407 U.S. at 9.
The expansion of American business and industry will hardly be encouraged if,
notwithstanding solemn contracts, [the courts] insist on a parochial concept that all disputes
must be resolved under our laws and in our courts. . . . We cannot have trade and commerce
in world markets and international waters exclusively on our terms, governed by our laws,
and resolved in our courts.
Id.
83. See Giroir v. MBank Dallas, N.A., 676 F. Supp. 915, 920 (E.D. Ark. 1987) (―[T]he
reasons given by the Supreme Court in [Bremen] for honoring choice-of-forum clauses—freedom
of choice, the elimination of uncertainty, and the advisability of orderliness in business relations—
are equally applicable to domestic contracts.‖); cf. Wimsatt v. Beverly Hills Weight Loss Clinic
Int‘l, Inc., 38 Cal. Rptr. 2d 612, 618-19 (Ct. App. 1995) (―Forum selection clauses are important
in facilitating national and international commerce, and as a general rule should be welcomed.‖
(emphasis omitted)).
84. See Bremen, 407 U.S. at 20.
85. Id. at 12. Even before Bremen was decided, American courts had begun to recognize that
―such a provision does not oust the jurisdiction of the courts; in effect it merely constitutes a
stipulation in which the parties join in asking the court to give effect to their agreement by
declining to exercise its jurisdiction.‖ Cent. Contracting Co. v. Md. Cas. Co., 367 F.2d 341, 345
(3d Cir. 1966).
86. See Bremen, 407 U.S. at 10, 15. The Court noted that its holding was in accord with ―the
view . . . adopted by the Restatement of the Conflict of Laws.‖ Id. at 11 n.13 (citing
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80 (1971)); see also Gen. Eng‘g Corp. v.
Martin Marietta Alumina, Inc., 783 F.2d 352, 358 (3d Cir. 1986) (observing that ―Bremen relies
heavily upon the Restatement rule‖).
87. See Republic Int‘l Corp. v. Amco Eng‘rs, Inc., 516 F.2d 161, 168 (9th Cir. 1975)
(discussing Bremen).
88. See Gen. Eng‟g Corp., 783 F.2d at 358.
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Bremen had a profound effect on the way in which courts viewed forumselection clauses. After 1972, the literature abounds with decisions, from
both Federal and State courts, declaring such clauses valid, putting the
burden on the party resisting the clause to show that it is unreasonable, and
89
ultimately enforcing the clauses.
The Colorado courts are among those that embraced the analysis in
Bremen.90 In ABC Mobile Systems, Inc. v. Harvey,91 for example, the
Colorado Court of Appeals addressed the enforceability of a private
agreement to litigate in a state other than Colorado.92 The court noted the
trend represented by Bremen and other cases to adopt the Restatement‘s
favorable view of forum selection clauses.93 Under the Restatement
approach (as under Bremen),94 an ―agreement as to the place of the action
cannot oust a state of judicial jurisdiction, but such an agreement will be
given effect unless it is unfair or unreasonable.‖95
The federal courts in Colorado and elsewhere in the Tenth Circuit96
also have repudiated the traditional judicial hostility to forum selection
89. Gilman v. Wheat, First Sec., Inc., 692 A.2d 454, 461 (Md. 1996); see also Prof‘l Ins.
Corp. v. Sutherland, 700 So. 2d 347, 350 (Ala. 1997) (―[T]he courts of almost all . . . jurisdictions
. . . now find the Supreme Court‘s reasoning in M/S Bremen on this issue to be persuasive.‖).
90. See Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1158 (Colo. App. 2006).
91. 701 P.2d 137 (Colo. App. 1985).
92. See id. at 138; cf. Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507
(4th Cir. 1956) (―Citizens of different States may, if they deem it desirable, agree that any disputes
arising out of a commercial transaction between them shall be subject to the jurisdiction of the
courts of the State of one of the parties.‖).
93. See ABC Mobile Sys., 701 P.2d at 139; cf. Lambert v. Kysar, 983 F.2d 1110, 1116
(1st Cir. 1993) (―Washington state law on the validity and enforcement of forum selection clauses
is drawn from the Restatement . . . .‖); Prows v. Pinpoint Retail Sys., Inc., 868 P.2d 809, 812
(Utah 1993) (―The modern view adopted by a majority of courts and which we adopt today is set
forth in section 80 of the Second Restatement of Conflict of Laws . . . .‖).
94. The Colorado courts appear to have assumed that the presumptive enforceability of forum
selection clauses is the same under Bremen as it is under the Restatement. See, e.g., Edge
Telecom, Inc., 143 P.3d at 1158; see also Kubis & Perszyk Assocs., Inc. v. Sun Microsystems,
Inc., 680 A.2d 618, 624 (N.J. 1996) (asserting that the ―holding in The Bremen . . . is consistent
with the position adopted by the Restatement‖). Although the two standards may not be identical,
the distinction, if one exists, ―rarely will affect a court‘s decision to enforce a forum selection
clause.‖ Gen. Eng‘g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352, 358-59 n.6 (3d Cir.
1986).
95. ABC Mobile Sys., 701 P.2d at 139 (quoting RESTATEMENT (SECOND) OF CONFLICT OF
LAWS § 80 (1971)); see also Edge Telecom, Inc., 143 P.3d at 1159 (enforcing a forum selection
clause even though ―private parties cannot simply agree in a forum selection clause to deprive a
court of its subject matter jurisdiction‖).
96. Colorado sits in the Tenth Circuit. See 28 U.S.C. § 41 (2000). Thus, absent contrary
United States Supreme Court authority, Colorado‘s federal district courts are bound by the Tenth
Circuit‘s interpretations of federal law. See Cache La Poudre Feeds, LLC v. Land O‘Lakes, Inc.,
244 F.R.D. 614, 635 n.17 (D. Colo. 2007).
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clauses.97 In fact, these courts have gone further than many other federal
courts,98 holding that Bremen‟s presumption of enforceability applies not
only in cases in which federal jurisdiction is premised upon the existence of
a federal question (and federal law therefore governs),99 but also in diversity
cases in which the clause might not be enforceable under the potentially
applicable state law.100 Thus, in cases arising in Colorado, forum selection
clauses are presumptively enforceable regardless of whether the case is
being litigated in state or federal court.101
V. MANDATORY AND PERMISSIVE FORUM SELECTION CLAUSES
Not all forum selection clauses necessarily enjoy the benefit of
Bremen‘s presumption of enforceability.102 In Vanderbeek v. Vernon
97. See, e.g., Milk ‗N‘ More, Inc. v. Beavert, 963 F.2d 1342, 1346 (10th Cir. 1992); Excell,
Inc. v. Sterling Boiler & Mech., Inc., 916 F. Supp. 1063, 1065 (D. Colo. 1996), aff‟d, 106 F.3d
318 (10th Cir. 1997); Berrett v. Life Ins. Co. of the Sw., 623 F. Supp. 946, 948 (D. Utah 1985).
98. The federal courts ―have reached conflicting results on the question whether state or
federal law controls the validity of a forum-selection clause in a diversity case, with several
concluding that the matter is properly governed by state law.‖ Licensed Practical Nurses, Inc. v.
Ulysses Cruises, Inc., 131 F. Supp. 2d 393, 398 (S.D.N.Y. 2000); see also KaeRen
Accommodations, Inc. v. Country Hospitality Corp., 243 F. Supp. 2d 993, 995 (D.N.D. 2002) (―It
is not settled whether state law or federal law applies when a federal court, sitting in diversity, is
faced with the question of whether or not a contractual forum selection clause should be
enforced.‖).
99. See, e.g., K & V Scientific Co. v. Bayerische Motoren Werke Aktiengesellschaft,
164 F. Supp. 2d 1260, 1264 (D.N.M. 2001) (―In federal question cases, federal courts analyze the
validity of forum selection clauses under the familiar standards set forth by the Supreme Court in
M/S BREMEN . . . .‖), rev‟d on other grounds, 314 F.3d 494 (10th Cir. 2002); see Eisaman v.
Cinema Grill Sys., Inc., 87 F. Supp. 2d 446, 448 (D. Md. 1999) (―In federal question cases, the
validity and effect of forum-selection clauses is controlled by federal law.‖).
100. See, e.g., Wagner Int‘l, LLC v. Mandal Alt Co., No. Civ.A. 03-CV00195JLK, 2005 WL
1606900, at *5 (D. Colo. July 8, 2005) (―The Tenth Circuit has applied M/S Bremen . . . in
non-admiralty diversity cases . . . .‖); K & V Scientific Co., 164 F. Supp. 2d at 1268 (observing
that the Tenth Circuit ―appl[ies] The BREMEN standard in diversity cases‖); see QFA Royalties,
LLC v. Majed, No. 06-CV-01506-LTB-MEH, 2006 WL 3500618, at *5 (D. Colo. Dec. 1, 2006)
(concluding that federal law ―governs a forum selection clause in a situation where state law
disfavored such clauses‖).
101. See Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 320 (10th Cir. 1997)
(concluding that ―there are no material discrepancies between Colorado law and federal common
law‖ regarding the enforceability of forum selection clauses).
102. See, e.g., Kachal, Inc. v. Menzie, 738 F. Supp. 371, 376 (D. Nev. 1990) (―[E]ven under
the Bremen rule, this Court could decide not to enforce the forum selection clause . . . .‖);
Kolendo v. Jerell, Inc., 489 F. Supp. 983, 985 (S.D. W. Va. 1980) (―[I]t must not be assumed that
[the] prima facie validity [of a forum selection clause] means, in all but the most unconscionable
cases, certain enforcement. . . . [T]he courts [have] a certain power to consider mitigating
factors . . . .‖).
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Corp.,103 for example, the Colorado Court of Appeals held that only
mandatory forum selection clauses (i.e., those that designate ―a particular
state or court as having exclusive jurisdiction‖ over the parties‘ dispute)104
are presumptively enforceable.105 Permissive forum selection clauses (or,
as they are also sometimes known, ―consent to jurisdiction‖ clauses),106 on
the other hand, merely reflect the parties‘ agreement not to challenge the
designated court‘s exercise of personal jurisdiction over them.107
Accordingly, permissive forum selection clauses authorize the parties to
bring suit in the designated forum, but do not prohibit them from litigating
elsewhere.108
Although no specific language is necessary to support a finding that a
forum selection clause is mandatory, the Vanderbeek court indicated that
the clause must ―contain clear language showing that the appropriate forum
consists of that which has been designated.‖109 Stated differently, the clause
must establish that the agreed-upon forum is the only tribunal that can
adjudicate the parties‘ dispute.110 A common example is a clause stating
that the parties shall litigate in a particular forum,111 as opposed to one
stating only that they ―may‖ litigate in the designated forum.112
103. 25 P.3d 1242 (Colo. App. 2000), aff‟d, 50 P.3d 866 (Colo. 2002).
104. S & D Coffee Inc. v. GEI Autowrappers, 995 F. Supp. 607, 609 (M.D.N.C. 1997)
(emphasis added); see also Action Corp. v. Toshiba Am. Consumer Prods., Inc., 975 F. Supp. 170,
176 (D.P.R. 1997) (―A mandatory clause is a contractual provision whereby parties agree to a
preselected forum and assign that forum exclusive jurisdiction over all disputes . . . .‖).
105. See ADT Sec. Servs., Inc. v. Apex Alarm, LLC, 430 F. Supp. 2d 1199, 1201 (D. Colo.
2006) (―Colorado courts generally enforce mandatory forum selection clauses.‖ (citing
Vanderbeek, 25 P.3d at 1247-48)); cf. Davis Media Group, Inc. v. Best W. Int‘l, Inc., 302 F. Supp.
2d 464, 467 (D. Md. 2004) (―[O]nly mandatory forum-selection clauses will be enforced applying
the Bremen standard.‖).
106. See Johnston County v. R.N. Rouse & Co., 414 S.E.2d 30, 33 (N.C. 1992) (―A . . .
‗consent to jurisdiction‘ clause[] merely specifies a court empowered to hear the litigation, in
effect waiving any objection to personal jurisdiction or venue. . . . Such a clause is ‗permissive‘
since it allows the parties to air any dispute in that court, without requiring them to do so.‖
(alteration in original) (internal quotation marks omitted) (quoting Leandra Lederman, Note, Viva
Zapata!: Toward a Rational System of Forum-Selection Clause Enforcement in Diversity Cases,
66 N.Y.U. L. REV. 422, 423 n.10 (1991))).
107. See Zimmerman Metals, Inc. v. United Eng‘rs & Constructors, Inc., 720 F. Supp. 859,
862 (D. Colo. 1989); Sall v. G.H. Miller & Co., 612 F. Supp. 1499, 1501 (D. Colo. 1985).
108. Vanderbeek, 25 P.3d at 1248; cf. Great Big Color, Inc. v. Bishop Taylor Group, LLC,
No. 07-CV-00233-MSK-CBS, 2007 WL 3407360, at *1 (D. Colo. Nov. 13, 2007) (―[A]
permissive forum selection clause does not prohibit litigation outside of the parties‘ selected
forum.‖).
109. Vanderbeek, 25 P.3d at 1248.
110. See Great Big Color, Inc., 2007 WL 3407360, at *1; Action Corp. v. Toshiba Am.
Consumer Prods., Inc., 975 F. Supp. 170, 176 (D.P.R. 1997).
111. See, e.g., Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1158, 1163-64 (Colo.
App. 2006); see also Miro Gonzalez v. Avatar Realty, Inc., 177 F. Supp. 2d 101, 104 (D.P.R.
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The analysis in Vanderbeek reflects the prevailing view.113
Nevertheless, the Colorado courts‘ recognition of a distinction between
mandatory and permissive forum selection clauses is a departure from
Bremen,114 and suggests they have not entirely abandoned the traditional
judicial hostility to such clauses.115 As one federal court stated:
[F]orum selection clauses are not favored. Thus, [such] clauses . . . are
generally to be construed, if they can be, in ways that will not divest . . .
courts of jurisdiction.
The key is whether the language can only be interpreted as providing
for a mandatory and exclusive forum, or whether it can be construed as
permitting suit in additional fora. In interpreting the relevant language of
the contract, . . . courts have not hesitated to stretch the usual meaning of
the words used and have taken every opportunity to construe any possible
116
ambiguity as indicative of permissiveness.
2001) (―The words ‗shall‘ and ‗must‘ are mandatory terms that express the parties‘ clear intention
to litigate any disputes in the mutually agreed-upon forum . . . .‖).
112. See Intermountain Sys., Inc. v. Edsall Constr. Co., 575 F. Supp. 1195, 1198 (D. Colo.
1983) (―‗Shall‘ in other contexts has an ordinary meaning of imperative obligation, leaving no
discretion or choice for the actor. It is typically contrasted and distinguished from ‗may.‘ I know
of no reasons why a different result should obtain in a forum selection clause.‖ (citations
omitted)). However, the fact that a forum selection clause ―does not contain the words ‗shall,‘
‗exclusive,‘ or ‗only‘‖ does not invariably compel a finding that the clause is permissive in nature.
Vanderbeek, 25 P.3d at 1247-48.
113. See Zimmerman Metals, Inc. v. United Eng‘rs & Constructors, Inc., 720 F. Supp. 859,
861 (D. Colo. 1989). But see Snapper, Inc. v. Redan, 171 F.3d 1249, 1262 n.24 (11th Cir. 1999)
(asserting that ―Georgia law . . . makes no such distinction‖). For a collection of relevant cases,
see Marjorie A. Shields, Annotation, Permissive or Mandatory Nature of Forum Selection Clauses
Under State Law, 32 A.L.R.6th 419 (2008).
114. See Beckley v. Auto Profit Masters, L.L.C., 266 F. Supp. 2d 1001, 1004 (S.D. Iowa
2003) (observing that the Bremen Court ―was not called upon to consider a distinction between
mandatory and permissive clauses‖); Cambridge Nutrition A.G. v. Fotheringham, 840 F. Supp.
299, 301 (S.D.N.Y. 1994) (rejecting the contention that Bremen‟s presumption of enforceability
―is limited to so-called ‗mandatory‘ forum clauses‖).
115. See Appell v. George Philip & Son, Ltd., 760 F. Supp. 167, 168 (D. Nev. 1991) (stating
that the recognition of this distinction reflects a judicial reluctance ―to completely abandon the
ancient principle that ‗agreements which purport to exclude jurisdiction of courts other than those
specifically named . . . have been found to be against public policy and have not been enforced‘‖
(quoting Francis M. Daugherty, Annotation, Validity of Contractual Provisions Limiting Place or
Court in Which Action May Be Brought, 31 A.L.R.4th 404, 409 (1984))).
116. Weiss v. La Suisse, 69 F. Supp. 2d 449, 455 (S.D.N.Y. 1999) (citations omitted);
see, e.g., K & V Scientific Co. v. Bayerische Motoren Werke Aktiengesellschaft, 314 F.3d 494,
500 (10th Cir. 2002) (―Even if the clause were deemed to be ambiguous (i.e., capable of being
construed as either permissive or mandatory), the rule in this circuit and others is that the clause
must be construed against the drafter, in this case defendant. Accordingly, the clause would be
deemed permissive.‖ (citation omitted)).
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VI. OTHER LIMITATIONS ON THE ENFORCEMENT OF FORUM SELECTION
CLAUSES
If the language of a forum selection clause is mandatory, the clause is
presumptively enforceable under Bremen,117 and a party can avoid its effect
only by demonstrating that its enforcement would be unreasonable or
unfair.118 The Bremen Court itself did not provide a clear indication of
when this standard will be met.119 However, courts in other cases have
indicated that a forum selection clause is unenforceable if it was the product
of fraud, undue influence, or overreaching,120 if its enforcement would
violate a strong public policy of the state in which suit was brought,121 or if
litigating in the agreed-upon forum would be so inconvenient that, as a
practical matter, enforcement of the clause would deprive a party of its day
in court.122
A. The Clause Must Not Have Been Procured Through Fraud
In the case in which it adopted Bremen‘s presumption of enforceability,
ABC Mobile Systems, Inc. v. Harvey,123 the Colorado Court of Appeals
indicated, without elaboration, that the presumption can be overcome when
117. See HSU v. OZ Optics, Ltd., 211 F.R.D. 615, 618 (N.D. Cal. 2002); AmerMed Corp. v.
Disetronic Holding AG, 6 F. Supp 2d 1371, 1374 (N.D. Ga. 1998).
118. See Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 321 (10th Cir. 1997)
(citing ABC Mobile Sys., Inc. v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985)); Mut. Fire,
Marine & Inland Ins. Co. v. Barry, 646 F. Supp. 831, 833 (E.D. Pa. 1986) (―[T]he Colorado Court
of Appeals . . . adopted the Restatement (Second) of Conflict of Laws § 80 so that agreements as
to the place of an action will be given effect unless unfair or unreasonable.‖ (citing ABC Mobile
Sys., 701 P.2d at 139)).
119. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 591 (1991) (―The [Bremen] court
did not define precisely the circumstances that would make it unreasonable for a court to enforce a
forum clause.‖); cf. BVCIBC Funding, LLC v. La Jolla Texaco, No. 20011584C, 2001 WL
1524447, at *2 (Mass. Super. Ct. Sept. 26, 2001) (―Massachusetts appellate courts have not
addressed standards for determining a fair and reasonable forum selection clause.‖).
120. See, e.g., ABC Mobile Sys., 701 F.2d at 139 (quoting RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 80 cmt. a (1971)); see also Cameron v. Group Voyagers, Inc., 308 F. Supp.
2d 1232, 1237-38 (D. Colo. 2004); Caldas & Sons, Inc. v. Willingham, 791 F. Supp. 614, 617
(N.D. Miss. 1992).
121. See Intermountain Sys., Inc. v. Edsall Constr. Co., 575 F. Supp. 1195, 1197 (D. Colo.
1983); Adams Reload Co. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1059 (Colo. App. 2005);
Morris v. Towers Fin. Corp., 916 P.2d 678, 679 (Colo. App. 1996).
122. See Barton v. Key Gas Corp., No. 05-CV-01856-REB-PAC, 2006 WL 2781592, at *2
(D. Colo. Sept. 26, 2006); Intermountain Sys., 575 F. Supp. at 1198; Edge Telecom, Inc. v.
Sterling Bank, 143 P.3d 1155, 1162 (Colo. App. 2006).
123. 701 P.2d at 139.
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the forum selection clause was the product of fraud.124 The Colorado Court
of Appeals subsequently explained this limitation in Edge Telecom, Inc. v.
Sterling Bank,125 where it held that even a facially reasonable clause will
not be enforced if one of the parties was fraudulently induced into agreeing
to the clause.126
The Edge Telecom court also held, as a matter of first impression in
Colorado, that ―general contractual fraud‖—that is, fraud not specifically
related to the parties‘ execution of the forum selection clause—is
insufficient to invalidate such a clause.127 In concluding that enforcement
may be denied only if the clause itself was procured through fraud,128 the
court adopted the view taken by most other courts,129 as well as by other
Colorado state courts in the closely analogous arbitration context.130
In REO Sales, Inc. v. Prudential Insurance Co.,131 a Colorado federal
district court discussed the contrary view that general contractual fraud is
sufficient to invalidate a forum selection clause.132 This view is premised
on the assumption that the party alleging fraud agreed to the clause in
124. See id. at 140 (―Here, [the plaintiff] has not alleged or shown that the forum selection
clause was the result of . . . fraud.‖); see also Edge Telecom, 143 P.3d at 1162 (observing that the
ABC Mobile court discussed the fraud limitation on forum selection clause enforcement only ―in
passing‖).
125. 143 P.3d at 1162.
126. See id.
127. Id.
128. See, e.g., id. at 1163 (discussing cases in which forum selection clauses were invalidated
on the ground that ―the clause itself was procured by fraud‖); see also Barton v. Key Gas Corp.,
No. 05-CV-01856-REB-PAC, 2006 WL 2781592, at *2 (D. Colo. Sept. 26, 2006) (―A general
claim of fraud or misrepresentation concerning an entire contract does not affect the validity of a
forum selection clause. Rather, the party challenging the clause must demonstrate that the forum
selection clause itself is the product of fraud or coercion.‖ (citation omitted)).
129. The Edge Telecom court asserted that this is the view of ―every other court to have
addressed the issue.‖ Edge Telecom, 143 P.3d at 1162 (emphasis added). However, this is
something of an overstatement. See, e.g., SRH, Inc. v. IFC Credit Corp., 619 S.E.2d 744, 746
(Ga. Ct. App. 2005) (holding that ―the trial court erred in dismissing the case on the basis of a
forum selection provision in [a] contract alleged to have been procured by fraud‖); Lamb v.
MegaFlight, Inc., 26 S.W.3d 627, 631 (Tenn. Ct. App. 2000) (―[F]raud in the underlying
transaction renders a contract clause, such as the forum selection clause at issue here,
unenforceable.‖).
130. See, e.g., Ayers v. Prudential-Bache Sec., Inc., 762 P.2d 743, 744 (Colo. App. 1988)
(―[W]here no claim is made that fraud was directed to the arbitration clause itself, a broad
arbitration clause will be held to encompass arbitration of the claim that the contract itself was
induced by fraud.‖).
131. 925 F. Supp. 1491 (D. Colo. 1996).
132. See id. at 1493; cf. Dearborn Indus. Mfg. Co. v. Soudronic Finanze AG, No. 95 C 4414,
1997 WL 156589, at *10 (N.D. Ill. Apr. 1, 1997) (―A reasonable argument can certainly be made
that a forum selection clause in an agreement alleged to have been fraudulently induced should not
be enforced because the contract may be void.‖).
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exchange for other contract benefits it deemed more valuable.133 If this
assumption is accurate,134 the argument goes, any fraud in the inducement
of the underlying contract necessarily taints the forum selection clause as
well,135 because the defrauded party would not have assented to the forum
clause in the absence of the other party‘s fraudulent conduct.136
In Edge Telecom, the Colorado Court of Appeals implicitly rejected
this reasoning,137 even though that reasoning finds support in some earlier
Colorado cases.138 The court held that unless the forum selection clause
itself was induced by fraud,139 it is reasonable to compel the parties to
litigate any disputed matters, including fraud claims, in the forum to which
they agreed.140 As another court explained:
133. REO Sales, 925 F. Supp. at 1493 (discussing Hoffman v. Minuteman Press Int‘l, Inc., 747
F. Supp. 552, 557 (W.D. Mo. 1990)).
134. See, e.g., Intermountain Sys., Inc. v. Edsall Constr. Co., 575 F. Supp. 1195, 1198
(D. Colo. 1983) (―[The defendant] is presumed to have received appropriate consideration, in the
form of a lower price, for the venue selection clause.‖); see also Composite Holdings, L.L.C. v.
Westinghouse Elec. Corp., 992 F. Supp. 367, 371 (S.D.N.Y. 1998) (noting that ―a party‘s
agreement to a forum selection clause may be a concession to a suboptimal forum in order to
achieve some other, more desirable consideration‖).
135. See Snider v. Loan Star Art Trading Co., Inc., 672 F. Supp. 977, 983 (E.D. Mich. 1987)
(―[I]t would be unfair to enforce . . . a [forum selection] clause where the entire contract was
tainted with fraud . . . .‖); DeSola Group, Inc. v. Coors Brewing Co., 605 N.Y.S.2d 83, 84
(N.Y. App. Div. 1993) (―Since plaintiff‘s allegations of fraud pervading the agreement would
render the entire agreement void, the forum selection clause contained therein is unenforceable.‖).
136. REO Sales, 925 F. Supp. at 1493 (discussing Hoffman, 747 F. Supp. at 557); cf. Farmland
Indus., Inc. v. Frazier-Parrott Commodities, Inc., 806 F.2d 848, 851-52 (8th Cir. 1986) (rejecting
the contention that ―fraud will vitiate a forum selection clause only if the inclusion of that clause
was the product of fraud,‖ because it ―would be grossly unfair to . . . force [a defrauded party] to
comply with an agreement which never would have been made had the existence of the fraud been
known‖).
137. See Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1162 (Colo. Ct. App. 2006).
The REO Sales court had previously done so explicitly. See REO Sales, 925 F. Supp at 1493-94;
cf. Auto. Logistics Productivity Improvement Sys., Inc. v. Burlington Motor Carriers, Inc., 986 F.
Supp. 446, 449 (E.D. Mich. 1997) (rejecting the ―argument that [a] forum selection clause is
invalid because the entire contract in which it is contained is the product of fraud and/or
misrepresentation‖).
138. See, e.g., Meredith v. Ramsdell, 384 P.2d 941, 944 (Colo. 1963) (―Where a contract
involves several parts . . . yet they make up but one transaction, fraud in one part vitiates the entire
agreement at the election of the defrauded party.‖); Wright v. Nelson, 242 P.2d 243, 246 (Colo.
1952) (―If the contract be fraudulent in part, it is fraudulent in whole . . . .‖).
139. The plaintiffs instead alleged that ―the entire transaction was procured by fraud,‖ and
that the embedded forum selection clause was therefore ―necessarily the product of fraud.‖ See
Edge Telecom, 143 P.3d at 1162 (emphasis added).
140. See id.; cf. Composite Holdings, L.L.C., 992 F. Supp. at 369 (asserting that a party
agreeing to a forum selection clause necessarily ―knew . . . that litigation concerning the
transaction was a possibility,‖ and ―voluntarily agreed that any such litigation, even an action for
fraud, would take place in [the agreed-upon forum]‖).
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This rule necessarily follows from the premise that the intent of the parties
is to be respected. It would be illogical for a court to say that the parties,
bargaining with each other at arm‘s length, negotiated for a forum
selection clause which specifically encompasses all possible actions
relating to the contract, including suits to rescind on the ground of fraud in
the inducement of the contract, and then hold that the clause is invalid
141
because of fraud in the inducement of the contract.
The Edge Telecom court also reasoned that a contrary conclusion
would render forum selection clauses virtually meaningless,142 because a
party to a contract dispute could avoid the effect of such a clause simply by
making an allegation of fraud.143 This result would run afoul of the
Supreme Court‘s clear teaching in Bremen and other cases that forum
selection clauses are not to be lightly disregarded.144
In fact, in Scherk v. Alberto-Culver Co.,145 the Supreme Court itself
indicated that the analysis in Bremen does not contemplate the invalidation
of forum selection clauses in all cases in which fraud is alleged.146 The
Scherk Court held that such a clause instead is unenforceable only ―if the
inclusion of that clause in the contract was the product of fraud or
coercion.‖147 In Edge Telecom, the Colorado Court of Appeals relied on
this analysis in adopting the majority view as a matter of Colorado law.148
141. Crowson v. Sealaska Corp., 705 P.2d 905, 911 (Alaska 1985); see also Zions First Nat‘l
Bank v. Allen, 688 F. Supp. 1495, 1499 (D. Utah 1988).
Forum selection clauses are agreements by the parties concerning where disputes are to be
resolved. A suit for fraud is just one of many disputes that might arise. Absent proof that the
forum selection clause is the product of fraud the parties should litigate all claims, including
fraud claims, in the agreed on forum.
Id.
142. See Edge Telecom, 143 P.3d at 1162 (discussing REO Sales, 925 F. Supp. at 1495).
143. See Republic Credit Corp. I v. Rance, 172 F. Supp. 2d 1178, 1183 (S.D. Iowa 2001);
REO Sales, 925 F. Supp. at 1495; In re GNC Franchising, Inc., 22 S.W.3d 929, 930 (Tex. 2000).
144. See REO Sales, 925 F. Supp. at 1495 (citing The Bremen v. Zapata Off-Shore Co.,
407 U.S. 1 (1972) and Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988)); cf. A.I. Credit Corp.
v. Liebman, 791 F. Supp. 427, 430 (S.D.N.Y. 1992) (citing Bremen in holding that a ―party may
not . . . avoid the effect of a forum selection clause by merely alleging fraud or coercion in the
inducement of the contract at issue‖).
145. 417 U.S. 506 (1974).
146. See Crowson, 705 P.2d at 911 (discussing Scherk, 417 U.S. at 519 n.14).
147. Scherk, 417 U.S. at 519 n.14; see also GNC Franchising, 22 S.W.3d at 930 (―In Scherk v.
Alberto-Culver Co., the United States Supreme Court clarified the fraud exception to
enforceability mentioned in Bremen to require that the forum-selection clause itself must be
fraudulently induced, and not merely the agreement of which it was one provision.‖).
148. See Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1162 (Colo. Ct. App. 2006)
(citing Scherk, 417 U.S. at 519 n.14); cf. Miles H. Barber, Inc. v. Fact Servs., Inc., No.
C 94-20481 RPA, 1994 WL 723563, at *3 (N.D. Cal. Dec. 29, 1994) (―[T]he rationale in Scherk
for enforcing forum selection clauses, unless they themselves are the product of fraud, is based on
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As a result, in Colorado, as in most other jurisdictions, a forum selection
clause will rarely be invalidated on the ground that it was induced by
fraud.149
B. The Clause Must Not Be the Product of Undue Influence or
Overreaching
Closely related to the fraud limitation is the premise, also originating in
Bremen,150 that forum selection clauses are unenforceable if they are the
product of undue influence or overreaching.151 Once again, these
limitations were not specifically defined by the Bremen Court,152 and cases
invalidating forum selection clauses on these grounds are also relatively
rare.153 This undoubtedly is in part because, as in fraud cases, the undue
the assumption that forum selection clauses are not the result of fraud, even if the rest of the
contract is.‖).
149. See Hoffman v. Minuteman Press Int‘l, Inc., 747 F. Supp. 552, 557 n.3 (W.D. Mo. 1990)
(―[I]t is difficult to envision a situation where there could be fraud in the inducement of a forum
clause itself.‖).
150. See REO Sales, Inc. v. Prudential Ins. Co. of Am., 925 F. Supp. 1491, 1493 (D. Colo.
1996) (―[I]n The Bremen . . . the Supreme Court held that a forum selection clause should be
enforced unless it was obtained through fraud or overreaching.‖ (citing The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 15 (1972))); cf. Weidner Commc‘ns, Inc. v. H.R.H. Prince Bandar Al
Faisal, 859 F.2d 1302, 1309 (7th Cir. 1988) (―The [Bremen] Court stated that forum selection
clauses unaffected by ‗undue influence, or overweening bargaining power‘ are enforceable.‖
(quoting Bremen, 407 U.S. at 12)).
151. The Bremen Court referred to both ―overweening bargaining power‖ and ―overreaching.‖
Bremen, 407 U.S. at 12-13 n.14, 15. The two terms are often used interchangeably in this context.
See, e.g., E. & J. Gallo Winery v. Andina Licores S.A., 440 F. Supp. 2d 1115, 1126 (E.D. Cal.
2006); Thomas S. Mackey, Litigation Involving Damages to U.S. Plaintiffs Caused by Private
Corporate Japanese Defendants, 5 TRANSNAT‘L LAW. 131, 139 (1992).
152. See Haynsworth v. The Corp., 121 F.3d 956, 965 (5th Cir. 1997) (―[T]here is some
ambiguity as to the precise boundaries of what constitutes ‗overreaching,‘ a nebulous concept at
best . . . .‖); Miles H. Barber, 1994 WL 723563, at *2 (―Following The Bremen, confusion
abounded regarding the issue of what constituted fraud, undue influence and overweening
bargaining power.‖).
153. See, e.g., Assetworks, Inc. v. City of Cincinnati, No. SA 02 CA 0351 FB, 2003 WL
25463096, at *12 (W.D. Tex. Mar. 31, 2003) (―[T]he forum selection clause was not
unenforceable for overreaching in any case cited by [the plaintiff].‖); Fleming & Hall, Ltd. v.
Cope, 30 F. Supp. 2d 459, 463 (D. Del. 1998) (―The Supreme Court and the Third Circuit Court of
Appeals have been loathe to find forum-selection clauses to be the products of ‗overweening‘
bargaining power.‖); see REO Sales, 925 F. Supp. at 1494 (―[T]he party resisting enforcement of a
forum selection clause bears a ‗heavy burden of proof‘ on the issue of fraud or overreaching[.]‖
(citing Bremen, 407 U.S. at 17)).
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influence or overreaching sufficient to invalidate a forum selection clause
must be specific to the forum clause itself.154 As one court explained:
[A] party seeking to invalidate a forum-selection clause on grounds that
she was coerced or fraudulently induced into acquiescing to the clause
must specifically prove that but for the drafter‘s misconduct, it would not
have been included in the agreement. There is no reason why a party
claiming undue influence, a close cousin to fraud or coercion, should be
155
held to a more relaxed evidentiary standard.
1.
Nonnegotiable Forum Selection Clauses
In Colorado, the overreaching issue was first addressed in Clinic
Masters, Inc. v. District Court,156 where the Colorado Supreme Court
enforced a forum selection clause appearing in a preprinted form contract
purportedly offered to the nondrafting party on a ―take-it-or-leave-it‖
basis.157 Although not explicit in the court‘s opinion, the outcome in Clinic
Masters reflects the proposition that ―a ‗take-it-or-leave-it offer‘ goes to the
contract as a whole,‖158 rather than to the forum selection clause itself.159
154. See, e.g., Abramson v. Am. Online, Inc., 393 F. Supp. 2d 438, 442 (N.D. Tex. 2005);
Orozco v. Trinity Ship Mgmt., No. Civ.A.99-2810, 2000 WL 343360, at *2 (E.D. La. Mar. 31,
2000), aff‟d, 254 F.3d 1081 (5th Cir. 2001); Storm v. Witt Biomed. Corp., No. C-95-3718 SI,
1996 WL 53624, at *4 (N.D. Cal. Jan. 23, 1996); Banco Ambrosiano S.p.A. v. Banco de la
Provincia de Buenos Aires, No. 83 Civ. 4345 (WCC), 1985 WL 1880, at *3 (S.D.N.Y. July 11,
1985).
155. Sun Forest Corp. v. Shvili, 152 F. Supp. 2d 367, 381 (S.D.N.Y. 2001) (citations omitted);
see also Haynsworth, 121 F.3d at 963 (―Fraud and overreaching must be specific to the forum
selection clause in order to invalidate it.‖). But cf. Mercury Coal & Coke, Inc. v. Mannesmann
Pipe & Steel Corp., 696 F.2d 315, 317 (4th Cir. 1982) (―[T]he party attempting to thwart the
clause may attack the entire contract or the clause as invalid on traditional contract grounds, such
as fraud . . . or overreaching.‖).
156. 556 P.2d 473, 475 (Colo. 1976).
157. Id. Parties often make overreaching arguments in cases involving standardized form
contracts. See, e.g., Dentsply Int‘l, Inc. v. Benton, 965 F. Supp. 574, 578 (M.D. Pa. 1997);
L.A. Pipeline Constr. Co. v. Tex. E. Prods. Pipeline Co., 699 F. Supp. 185, 187 (S.D. Ind. 1988);
Aloha Leasing v. Craig Germain Co., 644 F. Supp. 561, 565 (N.D.N.Y. 1986); see Eads v.
Woodmen of the World Life Ins. Soc‘y, 785 P.2d 328, 331 (Okla. Ct. App. 1989) (―Although a
form contract ‗does not automatically amount to the overreaching proscribed by The Bremen,‘ it
may be evidence of unfair advantage of one party over the other.‖ (quoting Janko v. Outboard
Marine Corp., 605 F. Supp. 51, 52 (W.D. Okla. 1985))).
158. Haynsworth, 121 F.3d at 965; see also Morgan v. Bill Kay Chrysler Plymouth,
No. 01 C 3871, 2002 WL 31133102, at *4 (N.D. Ill. July 17, 2002) (―In general, arguments about
the ‗take it or leave it‘ nature of a transaction . . . go to the validity of the entire contract . . . .‖).
159. See, e.g., Carbajal v. H & R Block Tax Servs., Inc., 372 F.3d 903, 906 (7th Cir. 2004)
(―The whole deal, including [the forum selection clause], was offered on a take-it-or-leave-it
basis, . . . but few consumer contracts are negotiated one clause at a time. Forms reduce
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Thus, the fact that a forum selection clause appears in a form contract,
standing alone, provides no basis for refusing to enforce the clause.160
In Clinic Masters, the Colorado Supreme Court actually found no
evidence that the parties possessed greatly disparate bargaining power,161
that they had no opportunity to negotiate the terms of the contract,162 or that
the services to be provided under the contract could not have been obtained
elsewhere.163 On the contrary, the party seeking to invalidate the forum
selection clause signed the contract only after being fully advised of its
terms, and negotiating a modification of one of those terms.164
Under these circumstances, the court rejected the argument that the
parties‘ agreement was a contract of adhesion,165 and that the forum
transactions costs and benefit consumers because, in competition, reductions in the cost of doing
business show up as lower prices . . . .‖).
160. See, e.g., Assetworks, Inc. v. City of Cincinnati, No. SA 02 CA 0351 FB, 2003 WL
25463096, at *13 (W.D. Tex. Mar. 31, 2003) (―The [Haynsworth] Court rejected this ‗take-it-orleave-it‘ argument primarily because the argument went to formation of the contract as a whole
rather than specifically to the forum clause itself.‖ (citing Haynsworth, 121 F.3d at 965)); see
Smith v. Doe, 991 F. Supp. 781, 784 (E.D. La. 1998) (―It is well-established that inclusion of a
forum selection clause in a form contract is permissible.‖).
161. See Clinic Masters, 556 P.2d at 475. A mere disparity in bargaining power ―is not
sufficient to render a forum selection clause unreasonable.‖ Koninklijke Philips Elecs. v. Digital
Works, Inc., 358 F. Supp. 2d 328, 333 (S.D.N.Y. 2005). As with other contract terms, there
instead ―must be a showing that the parties had greatly disparate bargaining power or that there
was no opportunity for negotiation.‖ Ad Two, Inc. v. City & County of Denver, 983 P.2d 128,
132 (Colo. App. 1999) (emphasis added), aff‟d, 9 P.3d 373 (Colo. 2000); see also ABC Mobile
Sys., Inc. v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985) (―[A forum selection] provision . . .
will be disregarded if it is the result of overreaching or of the unfair use of unequal bargaining
power . . . .‖ (emphasis added) (quoting RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80
cmt. a (1971))).
162. Clinic Masters, 556 P.2d at 475-76; see also Lynn Guissinger, Note, Exculpatory Clauses
and Public Policy: A Judicial Dilemma, 53 U. COLO. L. REV. 793, 796 (1982) (asserting that
Clinic Masters involved ―two businesspeople who negotiated for a clause specifying jurisdiction
in the event of a lawsuit‖).
163. Clinic Masters, 556 P.2d at 476. The court was addressing whether the parties‘
agreement was an unenforceable ―adhesion contract.‖ Id. at 475; cf. High Life Sales Co. v.
Brown-Forman Corp., 823 S.W.2d 493, 497 (Mo. 1992) (―Many courts have refused to enforce a
forum selection clause on the grounds of unfairness if the contract was entered into under
circumstances that caused it to be adhesive.‖). The concept of adhesion contracts was introduced
into American law by a University of Colorado law professor. See Rory v. Cont‘l Ins. Co., 703
N.W.2d 23, 35-36 (Mich. 2005) (discussing Edwin W. Patterson, The Delivery of a Life-Insurance
Policy, 33 HARV. L. REV. 198 (1919)). The Colorado courts define such a contract as one
―drafted unilaterally . . . and forced upon an unwilling and often unknowing public for services
that cannot readily be obtained elsewhere.‖ Jones v. Dressel, 623 P.2d 370, 374 (Colo. 1981).
164. Clinic Masters, 556 P.2d at 476.
165. Id. at 475-76; see also Ad Two, 983 P.2d at 132 (―[E]vidence of a willingness to negotiate
and bargain demonstrates that the agreements were not adhesion contracts.‖); High Life Sales,
823 S.W.2d at 497 (―[S]pecific negotiation on the forum selection clause . . . is not critical; the
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selection clause was unenforceable on this basis.166 Indeed, the parties‘
negotiation of one of the other contract terms belied the argument that the
forum selection clause was not negotiable,167 thereby negating any claim of
overreaching.168 In this sense, the analysis in Clinic Masters is both
economically sound169 and consistent with the Supreme Court‘s reasoning
in Bremen.170
In Edge Telecom, Inc. v. Sterling Bank,171 the Colorado Court of
Appeals subsequently relied on this analysis in Clinic Masters,172 as well as
the United States Supreme Court‘s intervening decision in Carnival Cruise
important factor is that the contract terms were generally arrived at under circumstances that
cannot be described as ‗adhesive.‘‖).
166. Clinic Masters, 556 P.2d at 476; see also Huizar v. Allstate Ins. Co., 952 P.2d 342, 350
(Colo. 1998)) (Scott, J., dissenting) (―Judicial restraint and the principles of freedom of contract
dictate that courts give effect to the express terms of commonplace contracts, even under
circumstances in which there may be a disparity of bargaining power, so long as the contract is not
a contract of adhesion.‖); Batterman v. Wells Fargo Ag. Credit Corp., 802 P.2d 1112, 1116 (Colo.
App. 1990) (―The remedies recognized for contracts of adhesion are to treat the contract as
unenforceable or to excise from the contract [the objectionable] term.‖).
167. See, e.g., P & J G Enters., Inc. v. Best W. Int‘l, Inc., 845 F. Supp. 84, 89 (N.D.N.Y. 1994)
(―There is no indication . . . that plaintiffs made any effort to negotiate the terms of the forum
selection clause, nor is there any indication that it would have been futile to so negotiate since
plaintiff had been successful in negotiating some of the other conditions . . . .‖); cf. REO Sales,
Inc. v. Prudential Ins. Co. of Am., 925 F. Supp. 1491, 1494 (D. Colo. 1996) (―[P]laintiff had at
least some bargaining power as evidenced by its ability to coax an amendment to the . . .
Agreement.‖).
168. See Adams Reload Co., Inc. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1061 (Colo. App.
2005) (concluding that ―a hand-written amendment‖ to the parties‘ two-page consulting agreement
―negates plaintiffs‘ assertion of overreaching‖ (citing Clinic Masters, 556 P.2d 473)). Other
courts have reached similar conclusions. See, e.g., Bassett Seamless Guttering, Inc. v.
GutterGuard, LLC, No. Civ. 1:05CV00184, 2006 WL 156874, at *4 (M.D.N.C. Jan. 20, 2006);
AC Controls Co. v. Pomeroy Computer Res., Inc., 284 F. Supp. 2d 357, 361 (W.D.N.C. 2003);
Park Inn Int‘l, L.L.C. v. Mody Enters., Inc., 105 F. Supp. 2d 370, 375 (D.N.J. 2000).
169. See, e.g., Danka Funding, L.L.C. v. Page, Scrantom, Sprouse, Tucker & Ford, P.C.,
21 F. Supp. 2d 465, 471 n.4 (D.N.J. 1998) (―[T]here is no reason to suppose defendant was unable
to do away with the forum-selection clause if it was willing to pay a higher rate.‖); see In re Grain
Land Coop, 978 F. Supp. 1267, 1276 (D. Minn. 1997) (―Even in those instances when contract
terms are standardized by a single contracting party, certain terms may nonetheless be left open to
negotiation.‖ (internal quotation marks omitted) (quoting Characteristics Distinguishing Cash and
Forward Contracts and ―Trade‖ Options, 50 Fed. Reg. 39,656, 39,658 (Sept. 30, 1985))), aff‟d sub
nom. Grain Land Coop v. Kar Kim Farms, Inc., 199 F.3d 983 (8th Cir. 1999).
170. See Ellwood City Iron & Wire Co. v. Flakt, Inc., Envtl. Sys. Div., 59 B.R. 53, 54 (Bankr.
W.D. Pa. 1986) (―In Bremen, the Court was clearly convinced that the forum selection clause was
a bargained-for part of the contract. While no specific negotiations on the forum selection clause
itself occurred, the Court recited that ‗this was not simply a form contract with boilerplate
language that Zapata had no power to alter . . . . Zapata did make alterations in the contract
submitted by Unterweser.‘‖ (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 n.14
(1972))).
171. 143 P.3d 1155 (Colo. App. 2006).
172. 556 P.2d at 475-76.
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Lines, Inc. v. Shute,173 to hold that a forum selection clause may be
enforceable even if it was not negotiable.174 The Carnival Cruise Lines
Court held that a forum selection clause appearing on a preprinted
passenger ticket issued by a cruise line was enforceable even though it was
not the product of bargaining between the parties.175
The Court
acknowledged that cruise passengers rarely, if ever, have the bargaining
power necessary to negotiate a modification of such a clause,176 but
reasoned that as long as passengers receive adequate notice of the clause,177
they can avoid its operation by declining to contract with the cruise line.178
Edge Telecom, in turn, involved a dispute arising under an equipment
finance lease.179 Citing Bremen, the plaintiff argued that a forum selection
clause contained in the lease was unenforceable unless the clause was the
result of bargaining between the parties.180 The court disagreed, noting that
the Supreme Court in Carnival Cruise Lines refined its analysis in Bremen
to make clear that negotiation is not a prerequisite to the enforcement of a
173. 499 U.S. 585 (1991).
174. See Edge Telecom, 143 P.3d at 1163; cf. Strategic Mktg. & Commc‘ns, Inc. v. Kmart
Corp., 41 F. Supp. 2d 268, 272 (S.D.N.Y. 1998) (―A forum selection clause can bind contracting
parties even when the contract in question is a form contract and not subject to negotiation.‖
(citing Carnival Cruise Lines, 499 U.S. at 593)).
175. Carnival Cruise Lines, 499 U.S. at 593; see also ABC Rental Sys., Inc. v. Colortyme,
Inc., 893 F. Supp. 636, 638 (E.D. Tex. 1995) (―In Carnival Cruise Lines, the plaintiffs . . . were
bound by a forum selection clause contained in their passenger ticket which was never negotiated
and provided on a take-it-or-leave-it basis.‖).
176. Carnival Cruise Lines, 499 U.S. at 593; cf. Thomas v. Costa Cruise Lines N.V.,
892 S.W.2d 837, 841 (Tenn. Ct. App. 1994) (―[I]t would be . . . unfair—and grossly inefficient—
to compel cruise lines and other common carriers to negotiate all contract terms with their many
passengers.‖).
177. See United Rentals, Inc. v. Pruett, 296 F. Supp. 2d 220, 225 (D. Conn. 2003) (―The Court
in Carnival Cruise Lines . . . acknowledged that sufficient notice is a prerequisite to a valid
forum-selection clause.‖); Miller v. Regency Mar. Corp., 824 F. Supp. 200, 202-03 (N.D. Fla.
1992) (―Although the issue of notice to the passenger of the forum-selection clause was not of
great concern to the Supreme Court in [Carnival Cruise], the tone of the case, nevertheless,
suggests that notice is required.‖).
178. Carnival Cruise Lines, 499 U.S. at 595; see, e.g., Interamerican Trade Corp. v.
Companhia Fabricadora de Pecas, 973 F.2d 487, 489 (6th Cir. 1992) (―[Plaintiff] could have . . .
walked away from the contract, being under no [obligation] to deal in [defendant‘s] products.‖);
Hunter Distrib. Co. v. Pure Beverage Partners, 820 F. Supp. 284, 287 (N.D. Miss. 1993) (―If
plaintiff found the forum selection clause objectionable, it could have sought negotiation on this
point . . . and, if defendant insisted on its insertion, then plaintiff could have rejected the
contract.‖).
179. See Edge Telecom, 143 P.3d at 1158.
180. The plaintiff relied on the Supreme Court‘s characterization of the clause enforced in
Bremen as having been ―freely negotiated,‖ thus ―implying that the clause was the result of
bargaining between the parties and not simply inserted without negotiation by one side.‖ Id. at
1163 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972)).
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forum selection clause.181 The Edge Telecom court adopted the same view
as a matter of Colorado law.182
This was also the conclusion reached in Mutual Fire, Marine & Inland
Insurance Co. v. Barry,183 a federal district court case construing Colorado
law184 several years before Carnival Cruise Lines was decided.185 The case
involved a breach of contract claim asserted by a surety company against
several limited partners who agreed to indemnify the company in
connection with a bond issued to the partnership.186 Two of the partners
moved to dismiss, arguing that their contacts with Pennsylvania, the forum
in which suit was brought, were insufficient to enable the court to exercise
personal jurisdiction over them.187
The surety company opposed the motion, arguing that the defendants
consented to the court‘s exercise of personal jurisdiction by virtue of a
provision in the indemnity agreement providing for the litigation of any
disputes in Pennsylvania at the company‘s option.188 The court agreed and
denied the defendants‘ motion,189 even though the defendants had not
negotiated with the surety company concerning the forum selection clause
or any of the other terms of the indemnity agreement.190
181. See id.; cf. Aral v. EarthLink, Inc., 36 Cal. Rptr. 3d 229, 240 (Ct. App. 2005) (stating that
Carnival Cruise is ―repeatedly cited to justify enforcement of forum selection clauses in
nonnegotiated form contracts‖).
182. See Edge Telecom, 143 P.3d at 1158-59. Carnival Cruise involved the application of
federal law. See Carnival Cruise Lines, 499 U.S. at 590. However, a number of state courts have
relied on Carnival Cruise in holding that ―a forum selection clause may be enforced even if it is in
a standard form consumer contract not subject to negotiation.‖ Dix v. ICT Group, Inc., 161 P.3d
1016, 1020 (Wash. 2007); see also Casavant v. Norwegian Cruise Line, Ltd., 829 N.E.2d 1171,
1180 n.14 (Mass. App. Ct. 2005) (observing that ―the refinements crafted in Carnival Cruise
comport with State law‖).
183. 646 F. Supp. 831 (E.D. Pa. 1986).
184. The court observed that in federal cases arising in the Third Circuit, the ―interpretation of
forum selection clauses, except in certain circumstances not presented here, is governed by state
law.‖ Id. at 833 (citing Gen. Eng‘g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352, 356-57
(3d Cir. 1986)).
185. Cf. Jones v. Dent Wizard Int‘l Corp., No. CL02-386, 2002 WL 32254731, at *2 (Va. Cir.
Ct. May 6, 2002) (―Missouri already rejected the claim that use of a preprinted form contract
alone is sufficient to constitute unfairness or overreaching prior to the Carnival Cruise Lines
decision.‖ (citing Chase Third Century Leasing Co. v. Williams, 782 S.W.2d 408, 412 (Mo. Ct.
App. 1989))).
186. See Mutual Fire, 646 F. Supp. at 832.
187. See id.
188. See id.
189. See id. at 832, 834. The court stated that ―[i]n actions involving forum selection clauses,
. . . analysis of the [parties‘] contacts with the forum state is inappropriate.‖ Id. at 832-33.
190. See Mutual Fire, 646 F. Supp. at 832, 833; cf. Intermountain Sys., Inc. v. Edsall Constr.
Co., 575 F. Supp 1195, 1198 (D. Colo. 1983) (―Whether [a party] discussed or specifically
bargained about the . . . provision is of little import.‖).
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Relying on the fact that in Colorado (as in other states),191 parties have
a duty to read their contracts before signing them, 192 the court concluded
that the defendants‘ alleged unfamiliarity with the agreement‘s terms did
not provide a persuasive reason for invalidating the forum selection
clause.193 The critical fact instead was that the defendants signed the
agreement voluntarily.194 In other words, the defendants were bound
because they could have avoided the operation of the forum selection clause
simply by reading the agreement and, if they objected to that provision,
refusing ―to accept the obligations contained in the proposed contract.‖195
A different result was reached in Cameron v. Group Voyagers, Inc.,196
where a Colorado federal district court refused to enforce a forum selection
clause contained in a standardized document issued to passengers by a
travel company in connection with a group bus tour.197 The court observed
that the clause appeared only in ―boilerplate language tucked away in the
tiny print of an ‗informational‘ document given to passengers with their
booking papers.‖198 There was no evidence the clause was explained to the
passengers,199 nor were they required to read or sign the document in which
it appeared.200
191. See, e.g., Horseshoe Entm‘t, L.P. v. Gen. Elec. Capital Corp., 990 F. Supp. 737, 741-42
(E.D. Mo. 1997) (citing Missouri law); Orix Credit Alliance, Inc. v. Mid-S. Materials Corp.,
816 F. Supp. 230, 232 (S.D.N.Y. 1993) (citing New York law); Info. Leasing Corp. v. GDR Invs.,
Inc., 787 N.E.2d 652, 657 (Ohio Ct. App. 2003) (citing Ohio law).
192. See B & B Livery, Inc. v. Riehl, 960 P.2d 134, 138 n.5 (Colo. 1998) (―[O]ne who signs a
contract without reading it is barred from claiming she is not bound by what she has signed.‖).
193. See Mutual Fire, 646 F. Supp. at 833 (citing Rasmussen v. Freehling, 412 P.2d 217, 219
(Colo. 1966)); see also Roberts v. Adams, 47 P.3d 690, 696 (Colo. App. 2001) (―By signing the
contract, [parties] are presumed to know its terms and should be bound by them.‖).
194. See Mutual Fire, 646 F. Supp. at 833 (observing that the defendants ―presented no
evidence that they did not freely enter into the Indemnity Agreement‖); cf. Nat‘l Union Fire Ins.
Co. v. Guardtronic, Inc., 64 S.W.3d 779, 783 (Ark. Ct. App. 2002) (―Even if it is true that the
contract provisions were non-negotiable, it does not follow that . . . execution of the contract was
involuntary.‖).
195. Hunter Distrib. Co., Inc. v. Pure Beverage Partners, 820 F. Supp. 284, 287 (N.D. Miss.
1993) (applying The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), and Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585 (1991)); see also Cal-State Bus. Prods. & Serv., Inc. v. Ricoh,
16 Cal. Rptr. 2d 417, 426 (Ct. App. 1993) (―[T]he fact that [one party] had no power to change
this term of the contract is of no import so long as it signed the contract freely and voluntarily, and
possessed the power to walk away from negotiations if displeased with the provision.‖).
196. 308 F. Supp. 2d 1232, 1238 (D. Colo. 2004).
197. See id. at 1236-39.
198. Id. at 1237; cf. Tisdale v. Shell Oil Co., 723 F. Supp. 653, 655 (M.D. Ala. 1987) (―[T]he
contract appears to be a ‗form‘ contract, and therefore the forum selection clause could be
considered ‗boilerplate‘; . . . in reviewing such contracts a court must be very sensitive to the
strong possibility of overweening bargaining power.‖).
199. Cameron, 308 F. Supp. 2d at 1237. The travel company‘s failure to explain the forum
selection clause, standing alone, does not adequately account for the court‘s refusal to enforce the
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Under these circumstances, the court held that the passengers had not
assented to the clause being part of their contract,201 and that enforcement of
the clause would be unreasonable under the standards announced in Bremen
on the ground of overreaching.202 Although this holding is not necessarily
inconsistent with Carnival Cruise Line‘s teaching that forum selection
clauses need not be negotiable in order to be enforceable,203 the Cameron
court‘s failure to discuss Carnival Cruise204—arguably the seminal federal
clause. See, e.g., Park Inn Int‘l, L.L.C. v. Mody Enters., Inc., 105 F. Supp. 2d 370, 374 (D.N.J.
2000) (―Failure to explain the terms of an agreement does not constitute fraud, overreaching or
unconscionability so as to void a forum selection clause.‖); see also Behavioral Health Indus.
News, Inc. v. Lutz, 24 F. Supp. 2d 401, 402 (M.D. Pa. 1998) (―A party to a contract is obligated to
read it before she signs it and cannot complain that the other party did not explain it to her.‖).
200. See Cameron, 308 F. Supp. 2d at 1237; cf. Sall v. G. H. Miller & Co., 612 F. Supp. 1499,
1501 (D. Colo. 1985) (declining to enforce a forum selection clause contained in ―a form contract
drafted by the defendant‖ where there was no evidence the plaintiff ―ever signed the form
contract‖).
201. See Cameron, 308 F. Supp. 2d at 1237; cf. Pierce v. St. Vrain Valley Sch. Dist., 981 P.2d
600, 603 (Colo. 1999) (―[T]he parties‘ signatures indicate[] their mutual assent to [the contract‘s]
terms.‖).
202. See Cameron, 308 F. Supp. 2d at 1237-38; see Leprino v. Intermountain Brick Co.,
759 P.2d 835, 836 (Colo. App. 1988) (observing that ―overreaching on the part of one of the
parties . . . results from an inequality of bargain power or other circumstances in which there is an
absence of meaningful choice on the part of the second party, together with contract terms
unreasonably favorable to the first party‖).
203. The Carnival Cruise Court ―alluded to—but did not directly address—issues of contract
formation that might arise in the adjudication of a forum selection clause.‖ New Moon Shipping
Co., Ltd. v. Man B & W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997); see also James J. White,
Default Rules in Sales and the Myth of Contracting Out, 48 LOY. L. REV. 53, 62 (2002)
(observing that Carnival Cruise ―did not address issues of contract formation‖). Indeed, the case
has been criticized on this basis. See Patrick J. Borchers, Forum Selection Agreements in the
Federal Courts After Carnival Cruise: A Proposal for Congressional Reform, 67 WASH. L. REV.
55, 75 (1992)); Amelia Boss, The Jurisdiction of Commercial Law: Party Autonomy in Choosing
Applicable Law and Forum Under Proposed Revisions to the Uniform Commercial Code,
32 INT‘L LAW. 1067, 1112 (1998).
204. The Cameron court cited The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972)
in holding that the passengers lacked sufficient notice of the forum selection clause to assent to
(or, more precisely, to be able to reject) the clause. See Cameron, 308 F. Supp. 2d at 1237-38.
However, Carnival Cruise is the more pertinent authority on this issue. See Casavant v.
Norwegian Cruise Line, Ltd., 829 N.E.2d 1171, 1180 (Mass. Ct. App. 2005) (―[I]n Carnival
Cruise, the Court weighed whether the cruise ticketing contract, with the embedded forum
selection clause, was reasonably and timely communicated to the passenger, so as to yield
sufficient notice, giving the passenger the opportunity to ‗reject[] the contract with impunity.‘‖
(quoting Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991))).
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precedent on this issue205—renders its analysis of relatively little value in
other forum selection clause cases in which overreaching is alleged.206
Indeed, the Colorado state courts may find the analysis in Cameron
particularly unpersuasive.207 In this regard, the Colorado courts have long
held that ―an agreement may be evidenced by several writings, which, when
connected, show the parties, subject matter, terms, and consideration.‖208 In
addition, a contracting party‘s duty to read is not necessarily limited to the
agreement it actually signs,209 but also may extend to other related
documents it receives from the other party to the contract.210 If these
principles were applied in Cameron,211 the passengers might have been
bound by the forum selection clause,212 assuming they received notice of
205. See Bank of Am., N.A. v. Hensley Props., LP, 495 F. Supp. 2d 435, 438 (S.D.N.Y. 2007)
(describing Carnival Cruise as a ―seminal case‖); Heinz v. Grand Circle Travel, 329 F. Supp. 2d
896, 903 (W.D. Ky. 2004) (characterizing Carnival Cruise as a ―seminal case‖).
206. Cf. Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216, 221 n.26 (5th Cir. 1998)
(declining to follow a lower federal district court decision that ―ignore[d] the Supreme Court‘s
decision in Carnival Cruise Lines‖).
207. Cameron and other lower federal court cases are not binding on the Colorado state courts.
See Brotman v. E. Lake Creek Ranch, L.L.P., 31 P.3d 886, 894 (Colo. 2001). Indeed, a federal
district court decision ―does not even bind another federal judge in the same district.‖ People v.
Barber, 799 P.2d 936, 940 n.3 (Colo. 1990).
208. Meredith v. Ramsdell, 384 P2d 941, 944 (Colo. 1963); cf. Nat‘l Union Fire Ins. Co. v.
Lumbermens Mut. Cas. Co., 385 F.3d 47, 55 (1st Cir. 2004) (observing that ―a contract ‗may
consist of several writings if one of the writings is signed and the writings in the circumstances
clearly indicate that they relate to the same transaction‘‖ (quoting RESTATEMENT (SECOND) OF
CONTRACTS § 132 (1981))).
209. See Kaustuv M. Das, Comment, Forum-Selection Clauses in Consumer Clickwrap and
Browsewrap Agreements and the „Reasonably Communicated‟ Test, 77 WASH. L. REV. 481, 485
(2002) (―The general rule is that parties to standard-form contracts are not relieved of their duties
simply because they did not read the terms contained therein. . . . Moreover, the duty to read
extends to contracts in which assent is manifested by some alternative act other than signing.‖
(footnote omitted)).
210. See, e.g., Berg v. State Bd. of Agric., 919 P.2d 254, 260 (Colo. 1996) (―[T]he failure to
read and review written materials furnished by a party to a contract in the context of assertion of a
breach by the other party has not been excused.‖); see also Concrete Metal Forms, Inc. v.
Cole-Farley & Assocs., Inc., No. Civ.A. 1980906RVS, 2000 WL 1848162, at *7 (S.D. Ala. Dec.
6, 2000) (―[A] contracting party has an affirmative duty to read the contracts and related legal
documents they sign or receive.‖).
211. The Cameron court cited no Colorado cases in support of its analysis. See Cameron v.
Group Voyagers, Inc., 308 F. Supp. 2d 1232, 1237-38 (D. Colo. 2004); cf. ADT Sec. Servs., Inc.
v. Apex Alarm, LLC, 430 F. Supp. 2d 1199, 1204 (D. Colo. 2006) (indicating that district courts
in the Tenth Circuit apply federal law in assessing the enforceability of forum selection clauses).
212. Under Colorado law, a contracting party‘s duty to read is generally excused only when
the other party engaged in fraudulent conduct, see B & B Livery, Inc. v. Riehl, 960 P.2d 134, 138
n.5 (Colo. 1998), as, for example, when it ―misrepresented or concealed the terms of the contract.‖
Loden v. Drake, 881 P.2d 467, 469 (Colo. App. 1994). There is no suggestion of such misconduct
in Cameron. See Cameron, 308 F. Supp. 2d at 1237. Indeed, the court‘s factual recitation
indicates that the document containing the forum selection clause was provided to passengers and,
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the clause in sufficient time to cancel their trip (i.e., to reject the contract)213
if they found the clause to be objectionable.214
2.
Nonreciprocal Forum Selection Clauses
Parties also occasionally argue that a forum selection clause was the
product of overreaching when the contractual obligation to litigate in the
designated forum is not reciprocal.215 In ABC Mobile Systems, Inc. v.
Harvey,216 for example, the plaintiff argued that a forum selection clause
was included in the parties‘ contract for the sole benefit of one of the
parties.217 Because the clause was thus allegedly subject to unilateral
waiver at that party‘s option,218 the plaintiff argued that it was
on its face, advised them to ―please read [this] carefully as it sets out the booking conditions for
your holiday.‖ Id.
213. In Carnival Cruise Lines, the Supreme Court indicated that parties will be bound by
non-negotiated forum selection clauses if they have ―the option of rejecting the contract with
impunity,‖ and fail to avail themselves of that opportunity. Carnival Cruise Lines, Inc. v. Shute,
499 U.S. 585, 595 (1991). Although it is not clear when the passengers in Cameron received the
document containing the forum selection clause, the Carnival Cruise standard presumably would
be satisfied if they received it sufficiently in advance of departure to enable them to cancel their
trip. See Heinz v. Grand Circle Travel, 329 F. Supp. 2d 896, 904-05 (W.D. Ky. 2004) (citations
omitted).
214. See, e.g., Adams Reload Co. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1061 (Colo.
App. 2005) (enforcing a forum selection clause that ―was part of the ‗boilerplate‘ of the contract‖
where the party objecting to the clause failed to establish ―that he was unaware of the clause or
objected to it‖); see also Feeney v. Am. W. Airlines, 948 P.2d 110, 113 (Colo. App. 1997)
(holding that airline passengers ―accepted the terms of [a] travel contract by accepting and using
the passenger tickets,‖ and thus no ―signature or other method of acknowledgment was required‖
to bind them to those terms).
215. See, e.g., Three Bros. Trucking, Inc. v. Exel Global Logistics, Inc., No. C 06-1816 WDB,
2006 WL 1329883, at *3 (N.D. Cal. May 16, 2006); Hartash Constr., Inc. v. Drury Inns, Inc.,
No. Civ.A. 00-1555, 2000 WL 1140498, at *2 (E.D. La. Aug. 11, 2000), aff‟d, 252 F.3d 436
(5th Cir. 2001); cf. Warner & Swasey Co. v. Salvagnini Transferica S.p.A., 633 F. Supp. 1209,
1213 (W.D.N.Y. 1986) (finding ―no evidence of . . . overweening bargaining power‖ where ―the
reciprocal nature of the clause is clear‖); High Life Sales Co. v. Brown-Forman Corp.,
823 S.W.2d 493, 497 (Mo. 1992) (―[A] factor that mitigates in favor of the fairness of enforcing
this forum selection clause is the neutral and reciprocal nature of this particular clause.‖).
216. 701 P.2d 137 (Colo. App. 1985).
217. Id. at 140; cf. Hoffman v. Minuteman Press Int‘l, Inc., 747 F. Supp. 552, 557 (W.D. Mo.
1990) (observing that a forum selection clause ―may very well benefit only one of the parties and
actually be a burden for the other‖).
218. See ABC Mobile Sys., 701 P.2d at 140; cf. Modern Woodmen of Am. v. Int‘l Trust Co.,
136 P. 806, 821 (Colo. App. 1913) (Hurlbut, J., dissenting) (―I know of no law or rule that
prohibits a party to a civil contract from waiving . . . conditions inserted therein for his own
benefit.‖).
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unenforceable.219 Although the Colorado Court of Appeals ultimately
declined to address this question,220 courts that have considered similar
arguments have repeatedly found them to be unpersuasive.221
In Karl Koch Erecting Co. v. New York Convention Center
Development Corp.,222 for example, the court addressed the contention that
a forum selection clause was unenforceable because the plaintiff was the
only party required to litigate its claims in the designated forum.223 Relying
on now-discredited New York state court cases invalidating agreements that
required only one of the parties to arbitrate,224 and the fact that ―arbitration
agreements have been likened to forum selection clauses,‖225 the plaintiff
219. See ABC Mobile Sys., 701 P.2d at 140; cf. Vanderbeek v. Vernon Corp., 25 P.3d 1242,
1247 (Colo. App. 2000) (―[W]hen . . . only one of the parties has agreed to subject itself to a
particular jurisdiction, without more, [the forum selection clause] is generally viewed as
permissive.‖), aff‟d, 50 P.3d 866 (Colo. 2002).
220. The court instead found that the clause was ―plainly for the mutual benefit of the parties,‖
and thus could not be unilaterally waived by either party. ABC Mobile Sys., 701 P.2d at 140;
cf. Weiss v. Humphrey, 474 P.2d 632, 634 (Colo. App. 1970) (stating that ―terms of the contract
. . . for the benefit of both [parties]‖ cannot be ―waived by the unilateral action‖ of one of them).
221. See, e.g., Data Research Corp. v. Hernandez, 261 F. Supp. 2d 61, 72 (D.P.R. 2003)
(―[Plaintiffs] argue . . . that the forum selection clause binds only them, but that argument does not
help their cause. Even if that were the case, plaintiffs knowingly brought their claims in a forum
other than the one [to] which they agreed . . . .‖), overruled on other grounds in Educadores
Puertorriquenos En Accion v. Hernandez, 367 F.3d 61 (1st Cir. 2004); Silverman v. Carvel Corp.,
192 F. Supp. 2d 1, 6 (W.D.N.Y. 2001) (―[T]o the extent that there is a lack of mutuality in the
forum selection clause, it does not impose upon plaintiff such an unequal burden when compared
to defendant that enforcement of the clause . . . would be unreasonable or unjust.‖).
222. 656 F. Supp. 464 (S.D.N.Y. 1987), aff‟d, 838 F.2d 656 (2d Cir. 1988).
223. See id. at 467.
224. See id. (citing Cored Panels, Inc. v. Meinhard Comm. Corp., 420 N.Y.S.2d 731 (App.
Div. 1979); Firedoor Corp. of Am., Inc. v. R.K. & A. Jones, Inc., 366 N.Y.S.2d 443 (App. Div.
1975); Kessner & Rabinowitz, Inc., v. Winchester Textiles, Inc., 361 N.Y.S.2d 933 (App. Div.
1974); Hull Dye & Print Works, Inc. v. Riegel Textile Corp., 325 N.Y.S.2d 782 (App. Div.
1971)); cf. Kelly v. UHC Mgt. Co., 967 F. Supp. 1240, 1259 (N.D. Ala. 1997) (asserting that the
unenforceability of nonmutual arbitration provisions ―is largely limited to now overruled New
York law‖). Arkansas is one of the few other states—indeed, it now may be the only state—to
espouse this view. See, e.g., Asbury Auto. Used Car Ctr., L.L.C. v. Brosh, 220 S.W.3d 637, 641
(Ark. 2005) (―[W]here one party retains to itself the right to seek judicial relief, while the other
party is strictly limited to arbitration, there is no mutuality of obligations, and the arbitration
provisions are unenforceable.‖).
225. Karl Koch Erecting, 656 F. Supp. at 467 (citing Finkle & Ross v. A.G. Becker Paribas,
Inc., 622 F. Supp. 1505, 1511-12 (S.D.N.Y. 1985)); see also Merrill Lynch, Pierce, Fenner &
Smith, Inc. v. Shaddock, 822 F. Supp. 125, 128 (S.D.N.Y. 1993) (―An arbitration agreement is a
special type of forum-selection clause, and is subject to the same principles.‖); GMAC
Commercial Credit, L.L.C. v. J.C. Penney Co., 720 N.Y.S.2d 747, 749 (Super. Ct. 2001)
(asserting that there is ―no significant difference between enforcing a forum selection clause . . . as
compared to enforcing an arbitration clause‖).
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argued that a forum selection clause must be binding on both parties to be
enforceable.226
The court began its analysis by noting that the parties to an arbitration
provision are agreeing to forego important judicial procedures,227 including
the right to a jury trial228 and the right to traditional appellate review,229 in
exchange for the presumed efficiency and lower cost of arbitration.230 The
court indicated that the relinquishment of these procedural rights ―is a
substantial waiver that, should it only apply to one party, would be
substantially unfair.‖231
The court nevertheless concluded that it was reasonable to require the
plaintiff to litigate in the court to which it agreed,232 because the waiver of
procedural rights inherent in arbitration has no counterpart in the judicial
226. See Karl Koch Erecting, 656 F. Supp. at 467 (―[I]t is arguable that all forum selection
clauses must be mutual to be enforceable.‖); cf. Silverman, 192 F. Supp. 2d at 5 (acknowledging
the argument that ―a forum selection clause that expressly limits only one party is
unenforceable‖).
227. See Karl Koch Erecting, 656 F. Supp. at 467 (quoting Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)); cf. People ex rel. Kimball v. Crystal River
Corp., 280 P.2d 429, 432 (Colo. 1955) (―It is fundamental that arbitration in its very nature is a
method of settling disputes without court procedure.‖).
228. An arbitration provision effectively waives a contracting party‘s ―state constitutional
right to a jury trial.‖ McGuire, Cornwell & Blakey v. Grider, 765 F. Supp. 1048, 1051 (D. Colo.
1991). The same is true of the comparable federal right. See In re Currency Conversion Fee
Antitrust Litig., 265 F. Supp. 2d 385, 414 (S.D.N.Y. 2003); see also Cremin v. Merrill Lynch
Pierce Fenner & Smith, Inc., 957 F. Supp. 1460, 1471 (N.D. Ill. 1997) (―If the claims are properly
before an arbitral forum pursuant to an arbitration agreement, the jury trial right vanishes . . . .‖).
229. See Duncan v. Nat‘l Home Ins. Co., 36 P.3d 191, 192 (Colo. App. 2001) (―A court is
limited on review to modify or correct an arbitration award only on statutory grounds and may not
review the merits of the arbitrator‘s decision.‖).
230. See Karl Koch Erecting, 656 F. Supp. at 467; Peterman v. State Farm Mut. Auto. Ins.
Co., 961 P.2d 487, 493 (Colo. 1998) (observing that ―arbitration is a less costly and more efficient
method of dispute resolution‖ when ―used as an alternative to judicial proceedings‖ (emphasis
omitted)); City & County of Denver v. Denver Firefighters Local No. 858, 663 P.2d 1032, 1039
(Colo. 1983) (―Arbitration is an effective method of resolving disputes without the burden of
time-consuming court procedures.‖).
231. Karl Koch Erecting, 656 F. Supp. at 467; cf. Kinney v. United HealthCare Servs., Inc.,
83 Cal. Rptr. 2d 348, 354 (Ct. App. 1999).
The party who is required to submit his or her claims to arbitration foregoes the right . . . to
have those claims tried before a jury. Further, except in extraordinary circumstances, that
party has no avenue of review for an adverse decision . . . . By contrast, the party requiring
the other party to waive these rights retains all of the benefits and protections the right to a
judicial forum provides. Given the basic and substantial nature of the rights at issue, we find
that the unilateral obligation to arbitrate is itself so one-sided as to be substantively
unconscionable.
Id. (citation omitted).
232. The court designated in the parties‘ forum selection clause was ―the Supreme Court of the
State of New York, County of New York.‖ Karl Koch Erecting, 656 F. Supp. at 465. There is no
doubt that the plaintiff was constitutionally entitled to a jury trial in that forum. See Gardner & N.
Roofing & Siding Corp. v. Champagne, 265 N.Y.S.2d 707, 709 (City Ct. 1965).
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forum selection context.233 The Second Circuit subsequently affirmed this
ruling,234 agreeing with the lower court that the parties to a forum selection
clause have not bargained away their right to fundamental judicial
protections,235 but instead have merely confined their choice of forum to a
particular court.236
Other courts, including those in Colorado, are likely to reach the same
result.237 In fact, unlike in New York at the time Karl Koch Erecting was
decided,238 nonreciprocal arbitration clauses clearly are enforceable in
233. See Karl Koch Erecting, 656 F. Supp. at 467; cf. Frontier Airlines, Inc. Retirement Plan
for Pilots v. Sec. Pac. Nat‘l Bank, 696 F. Supp. 1403, 1405 (D. Colo. 1988) (―Unlike [an]
arbitration provision . . . , the [forum] selection clause does not preclude the plaintiff from seeking
relief in . . . court.‖); Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66, 75 n.12
(Tex. Ct. App. 1996) (―An arbitration clause, unlike a forum selection clause, completely deprives
the parties of any judicial forum for their complaints.‖).
234. See Karl Koch Erecting Co. v. N.Y. Convention Ctr. Dev. Corp., 838 F.2d 656, 660
(2d Cir. 1988); see also In re Lloyd‘s Am. Trust Fund Litig., 954 F. Supp. 656, 670 (S.D.N.Y.
1997) (―[U]nder New York law, the lack of mutuality in a forum selection clause does not render
it unenforceable . . . .‖ (citing Karl Koch Erecting, 838 F.2d at 659-60)).
235. See Karl Koch Erecting, 838 F.2d at 660. This reasoning does not necessarily apply in
cases involving foreign forum selection clauses, because ―very few countries provide for jury
trials in civil cases.‖ Holland Am. Lines Inc. v. Wartsita N. Am., Inc., 485 F.3d 450, 457 n.4
(9th Cir. 2007). In addition, ―most foreign courts do not provide for the same breadth of
discovery as American courts.‖ Johns Hopkins Health Sys. Corp. v. Al Reem Gen. Trading &
Co.‘s Representation Establishment, 374 F. Supp. 2d 465, 476 n.13 (D. Md. 2005). Accordingly,
―the selection of a foreign forum may result in the relinquishment of significant procedural
rights.‖ Regency Wines, Inc. v. Champagne Montaudon, 2002 WL 31788972 (Cal. Ct. App.
Dec. 13, 2002).
236. Karl Koch Erecting, 838 F.2d at 660; see Silverman v. Carvel Corp., 192 F. Supp. 2d 1, 6
(W.D.N.Y. 2001) (characterizing the Second Circuit‘s decision in Karl Koch Erecting); see also
Bank One N.A. v. Shumake, 281 F.3d 507, 516 (5th Cir. 2002) (―An arbitration clause that
attempts to foreclose any and all access to courts bears little resemblance to a forum selection
clause . . . .‖); Haynsworth v. The Corp., 121 F.3d 956, 967 (5th Cir. 1997) (observing that ―a
forum selection clause . . . acts only to deprive the aggrieved party of a ‗procedural right‘ to a
particular forum‖).
237. See, e.g., Indymac Mortgage Holdings, Inc. v. Reyad, 167 F. Supp. 2d 222, 245 n.27
(D. Conn. 2001) (citing Karl Koch Erecting, 838 F.2d at 660, observing that ―a forum selection
clause binding only one party is enforceable‖); Medoil Corp. v. Citicorp, 729 F. Supp. 1456,
1459-60 (S.D.N.Y. 1990) (―[T]he nonmutuality of [a] forum-selection clause does not render it
invalid.‖); see also Williams v. Deutsche Bank Secs. Inc., No. A106874, 2005 WL 1706551, at *6
(Cal. Ct. App. July 22, 2005) (―[Plaintiff] has cited no cases indicating that lack of reciprocity in
itself makes a forum selection clause unreasonable.‖).
238. The New York cases refusing to enforce one-sided arbitration agreements were virtually
―unique to that state,‖ and indeed were contrary to other New York authority upholding ―a
unilateral option to arbitrate a narrow contractual issue where the other obligations of the contract
are reciprocal.‖ Willis Flooring, Inc. v. Howard S. Lease Constr. Co. & Assocs., 656 P.2d 1184,
1185 n.5 (Alaska 1983) (citing Riccardi v. Modern Silver Linen Supply Co., 335 N.E.2d 856
(N.Y. 1975)); see also W.L. Jorden & Co. v. Blythe Indus., Inc., 702 F. Supp. 282, 284 (N.D. Ga.
1988) (observing that ―even the New York cases do not consistently adopt [the] approach‖ that
arbitration agreements are ―unenforceable for lack of mutuality‖).
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Colorado239 (as is also now true in most other states,240 including New
York241). In Rains v. Foundation Health Systems Life & Health,242 for
example, the plaintiff argued that an arbitration provision in an insurance
policy was unenforceable because the parties‘ obligations to arbitrate were
not reciprocal.243 In particular, the plaintiff claimed that other provisions of
the contract provided remedies to the insurer ―outside the arbitration
process,‖ while the plaintiff was obligated to arbitrate any claims she had
against the insurer.244
The Colorado Court of Appeals was not persuaded.245 The court noted
that courts in other states have rejected efforts to invalidate arbitration
agreements on the ground that they lack mutuality, as long as the parties
exchange consideration beyond the mere promise to arbitrate.246 These
cases, the Rains court noted, are consistent with Colorado case law holding
239. See, e.g., Dex Media, Inc. v. Nat‘l Mgmt. Servs., Inc., 150 P.3d 1093, 1100-01 (Or. Ct.
App. 2007) (applying Colorado law); Veliz v. Cintas Corp., No. C 03-1180 SBA, 2004 WL
2452851, at *22 (N.D. Cal. Apr. 5, 2004) (construing Colorado law).
240. See Harris v. Green Tree Fin. Corp., 183 F.3d 173, 180 (3d Cir. 1999) (observing that
many state courts ―have concluded that an arbitration clause need not be supported by equivalent
obligations‖); Veliz, 2004 WL 2452851, at *12.
Most states (e.g. Colorado, Illinois, New York) consider an arbitration clause to be mutual if
the agreement as a whole evidences an exchange of promises, whatever the promises are.
Other states, particularly Arkansas, consider an arbitration clause to be mutual only when
each party agrees that all of its claims against the other shall be arbitrable.
Id.
241. The New York courts have abandoned the view that ―arbitration agreements binding only
one party are not valid.‖ Medoil Corp., 729 F. Supp. at 1459 (citing Sablosky v. Edward S.
Gordon Co., 535 N.E.2d 643, 646 (N.Y. 1989)); see also Ramon E. Reyes, Jr., Comment, Medoil
Corp. v. Citicorp: Uncertainty Requires an In-Depth Inquiry into Forum-Selection Clause
Enforceability Issues, 17 BROOK. J. INT‘L L. 687, 707 (1991) (observing that the ―New York rule
invalidating nonmutual arbitration agreements‖ has been ―overturned‖ (citing Sablosky,
535 N.E.2d 643 (N.Y. 1989))).
242. 23 P.3d 1249 (Colo. App. 2001).
243. See id. at 1251, 1254. For broader academic discussions of this issue, see Christopher R.
Drahozal, Nonmutual Agreements to Arbitrate, 27 J. CORP. L. 537 (2002), and Laurent A.
Niddam, Unilateral Arbitration Clauses in Commercial Arbitration, 1996 ARB. DISP. RESOL. L.J.
147 (1996).
244. Rains, 23 P.3d at 1255.
245. See id. at 1254.
246. See id. at 1255 (citing Harris v. Green Tree Fin. Corp., 183 F.3d 173 (3d Cir. 1999);
Dorsey v. H.C.P. Sales, Inc., 46 F. Supp. 2d 804 (N.D. Ill. 1999)). Federal courts have employed
similar reasoning to reach essentially the same conclusion. See, e.g., Design Benefit Plans, Inc. v.
Enright, 940 F. Supp. 200, 205 (N.D. Ill. 1996) (applying Illinois law); Latifi v. Sousa,
No. CV95-H-2136-NE, 1996 WL 735260, at *5 (N.D. Ala. Dec. 23, 1996) (applying Alabama
law).
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that the parties‘ respective contractual obligations need not be reciprocal as
long as both parties provide some genuine consideration for the contract.247
In Rains, the consideration requirement was satisfied by the plaintiff‘s
payment of premiums to the insurer in exchange for its provision of
insurance coverage.248 Under these circumstances, the court held that the
arbitration provision was enforceable even though the insurer was not
required to arbitrate its claims against the plaintiff.249 Because the
perceived evils of nonmutuality may be even less significant in judicial
forum selection cases,250 Colorado courts presumably would reach the same
conclusion if the contractual provision at issue was a one-sided forum
selection clause, rather than a unilateral arbitration provision.251
C. The “Public Policy” Exception
In Morris v. Towers Financial Corp.,252 the Colorado Court of Appeals
adopted a public policy exception to the presumptive enforceability of
247. See Rains, 23 P.3d at 1255 (citing McCoy v. Pastorius, 246 P.2d 611 (Colo. 1952);
Sedalia Land Co. v. Robinson Brick & Tile Co., 475 P.2d 351 (Colo. App. 1970)); see also
Stanton v. Union Oil Co. of Cal., 142 P.2d 285, 288 (Colo. 1943) (―Nor is mutuality of obligation
essential, where there is any other consideration for the contract.‖); Modern Music Co. v. Ellis,
482 P.2d 1005, 1006-07 (Colo. App. 1971).
In order for a contract to be enforceable it is not necessary that each party to the contract
possess the same rights, powers and privileges under its terms. It is only where a contract
does not provide for performance on the part of each party that mutuality is lacking and the
contract is void. It is not a requirement that the duties be exactly equal.
Id. (citation omitted).
248. See Rains, 23 P.3d at 1255; cf. Shelter Gen. Ins. Co. v. Coppola, 824 P.2d 58, 59 (Colo.
App. 1991) (―An insurance contract is formed when the insurer agrees to provide coverage in
exchange for consideration consisting of the premium.‖), rev‟d on other grounds sub nom. Simon
v. Shelter Gen. Ins. Co., 842 P.2d 236 (Colo. 1992).
249. See Rains, 23 P.3d at 1255; cf. Harris, 183 F.3d at 181 (―It is of no legal consequence
that the arbitration clause gives [one party] the option to litigate arbitrable issues in court, while
requiring [other parties] to invoke arbitration.‖).
250. See Silverman v. Carvel Corp., 192 F. Supp. 2d 1, 5 (W.D.N.Y. 2001) (indicating that
―concerns about nonmutuality in [an] arbitration agreement [are] not implicated by forum
selection clauses‖). But cf. Frietsch v. Refco, Inc., 56 F.3d 825, 827 (7th Cir. 1995) (―Rejected in
recent times in areas of law ranging from contract to collateral estoppel, the principle of mutuality
retains undeniable appeal in regard to the scope of forum selection clauses.‖).
251. The federal district court in Colorado has implicitly recognized the validity of ―contract
language conferring the right of forum selection on only one party.‖ QFA Royalties, LLC v.
Majed, No. 06-cv-01506-LTB-MEH, 2006 WL 3500618, at *4 (D. Colo. Dec. 1, 2006); see also
City of N.Y. v. Pullman Inc., 477 F. Supp. 438, 442 n.11 (S.D.N.Y. 1979) (indicating that a forum
selection clause may give one party the ―power to force on its own terms the appropriate forum‖).
252. 916 P.2d 678 (Colo. App. 1996).
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forum selection clauses.253 Applying the Supreme Court‘s reasoning in
Bremen,254 the Morris court held that a forum selection clause is
unenforceable if its enforcement ―would contravene a strong public policy
of the forum in which suit is brought, whether declared by statute or by
judicial decision.‖255 The court‘s recognition of this exception is a logical
extension of Colorado‘s long-standing rule that contract terms contrary to
public policy are unenforceable.256
While the Bremen Court itself made no serious effort to define the
parameters of the public policy exception,257 the exception appears to
permit courts to invalidate a forum selection clause when enforcement of
the clause would be contrary to the interests of ―justice and fairness.‖258
Thus, the exception has the potential to be applied quite broadly,259
although in practice it has not often precluded the enforcement of forum
selection clauses.260
253. See Adams Reload Co. v. Int‘l Profit Assocs., Inc., 143 P.3d 1056, 1059 (Colo. App.
2005) (discussing Morris); cf. Cameron v. Group Voyagers, Inc., 308 F. Supp. 2d 1232, 1238
(D. Colo. 2004) (observing that ―a clause could be deemed unenforceable if it would result . . . in
negative public policy ramifications from its enforcement‖).
254. See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). Not all state courts
have followed Bremen‘s lead in recognizing this exception. See, e.g., Holeman v. Nat‘l Bus. Inst.,
94 S.W.3d 91, 97 (Tex. Ct. App. 2002) (―Texas law has no similar ‗public policy‘
exception . . . .‖).
255. Morris, 916 P.2d at 679 (citing Bremen). For a prior academic discussion of this
exception, see Michael Mousa Karayanni, The Public Policy Exception to the Enforcement of
Forum Selection Clauses, 34 DUQ. L. REV. 1009 (1996).
256. See Martin Marietta Corp. v. Lorenz, 823 P.2d 100, 109 (Colo. 1992) (―In light of
Colorado‘s long-standing rule that a contract violative of public policy is unenforceable, it is
axiomatic that a contractual condition . . . should also be deemed unenforceable when violative of
public policy.‖); Grossman v. Columbine Med. Group, Inc., 12 P.3d 269, 272 (Colo. App. 1999)
(Jones, J., concurring in part and dissenting in part) (―Courts will not enforce contracts or contract
terms that are . . . contrary to public policy.‖ (emphasis added)).
257. See Fisk v. Royal Caribbean Cruises, Ltd., 108 P.3d 990, 993 (Idaho 2005) (asserting that
the public policy exception evolved from ―a single sentence‖ in the Bremen opinion); Jason Webb
Yackee, Choice of Law Considerations in the Validity and Enforcement of International Forum
Selection Agreements: Whose Law Applies?, 9 UCLA J. INT‘L L. & FOREIGN AFF. 43, 81 n.202
(2004) (―Bremen and subsequent jurisprudence has failed to clearly specify how courts are to
identify ‗strong public policies.‘‖).
258. Walker v. Carnival Cruise Lines, 107 F. Supp. 2d 1135, 1139 (N.D. Cal. 2000); see also
Bo Foods, Inc. v. Bojangles‘ of Am., Inc., No. 86 C 4018, 1987 WL 5904, at *3 (N.D. Ill. 1987)
(―[Bremen] must be read to mean that it would be unfair to bind a party to a clause which is
contrary to the policy of the place where suit is brought or the policy of the sovereign by whose
authority the court hearing the matter sits.‖).
259. See Yackee, supra note 257, at 48-49 (―This ‗public policy‘ exception, explicitly
sanctioned by the Bremen decision, remains the most important potential limitation to [forum
selection clause] enforceability in the United States.‖ (footnote omitted)).
260. See S.K.I. Beer Corp. v. Baltika Brewery, 443 F. Supp. 2d 313, 324 (E.D.N.Y. 2006)
(―Public policy concerns abrogate a contracted-for forum selection clause only in exceptional
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Public Policy Expressed in a State Anti-Waiver Statute
In Morris, the Colorado Court of Appeals held that the Colorado Wage
Claim Act (―Wage Act‖)261 reflects a sufficiently strong public policy to
invalidate a forum selection clause.262 The Wage Act was ―designed to
require employers to pay wages earned by their employees in a timely
manner,‖ and authorizes employees to enforce this obligation by bringing
private civil actions in the Colorado courts.263 The Act also contains an
anti-waiver provision stating that ―[a]ny agreement, written or oral, by any
employee purporting to waive or to modify his rights in violation of this
article shall be void.‖264
The Morris court relied heavily on Lambdin v. District Court,265 where
the Colorado Supreme Court held that the anti-waiver provision prohibits
contractual waivers of an employee‘s substantive and procedural rights
under the Wage Act.266 Because an agreement to arbitrate a Wage Act
claim constitutes a waiver of the procedural right to enforce the Act in a
Colorado court,267 the Lambdin court held that such an agreement is
unenforceable.268 Extending this analysis, the Morris court held that
contractual forum selection clauses likewise cannot abrogate an employee‘s
statutory right to pursue a Wage Act claim in the Colorado courts.269
circumstances.‖); Rogers, Lynch & Assocs. LLC v. RiskFactor Solutions, Ltd., No. Civ.A
03-1399, 2004 WL 385064, at *6 (E.D. La. Mar. 1, 2004) (―‗[P]ublic policy‘ arguments will not
easily transcend the high hurdle facing the opponent of a forum selection clause even if there is a
state policy that is implicated by the enforcement of the clause.‖).
261. COLO. REV. STAT. ANN. §§ 8-4-101 to -123 (2003).
262. See Morris v. Towers Fin. Corp., 916 P.2d 678, 679 (Colo. App. 1996).
263. Id. (citing COLO. REV. STAT. ANN. § 8-4-123 (1986) (recodified at COLO. REV. STAT.
ANN. § 8-4-110(2) (2003))); see also Fang v. Showa Entetsu Co., 91 P.3d 419, 421 (Colo. App.
2003) (―The purpose of the [Wage Act] is to ensure that wages are paid in a timely manner and to
provide adequate judicial relief in the event wages are not paid.‖).
264. COLO. REV. STAT. ANN.§ 8-4-125 (1986) (recodified as amended at COLO. REV. STAT.
ANN. § 8-4-121 (2003)).
265. 903 P.2d 1126 (Colo. 1995).
266. See Morris, 916 P.2d at 679 (relying on Lambdin, 903 P.2d at 1130).
267. See Lambdin, 903 P.2d at 1131 (concluding that an arbitration agreement ―imposes a
waiver of [the] procedural right to pursue a civil remedy in court‖).
268. See id. at 1129-31. The court noted that the Wage Act reflects the legislature‘s intent to
authorize employees to recover past due wages ―by filing a civil action in the Colorado courts,‖
and held that the anti-waiver provision ―implements this policy by protecting employees against
contractual waiver or modification‖ of this procedural right. Id. at 1130 (citing COLO. REV. STAT.
ANN. §§ 8-4-123, -125 (1986) (recodified as amended at COLO. REV. STAT. ANN. §§ 8-4-110(2),
-121 (2003))).
269. See Morris, 916 P.2d at 679.
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In Grohn v. Sisters of Charity Health Services Colorado,270 the
Colorado Court of Appeals subsequently held that, where applicable, the
Federal Arbitration Act (―FAA‖)271 preempts contrary state law,272 and
requires Colorado courts to enforce agreements to arbitrate Wage Act
claims notwithstanding the holding in Lambdin.273 However, the FAA does
not preempt state laws pertaining to the enforcement of judicial forum
selection clauses,274 and there is no other federal statute purporting to
require the enforcement of such clauses.275 Accordingly, forum selection
clauses presumably continue to be unenforceable as a matter of state public
policy in Colorado Wage Act cases.276
270. 960 P.2d 722 (Colo. App. 1998).
271. 9 U.S.C. §§ 1-16 (2006).
272. See Grohn, 960 P.2d at 727 (noting that ―the Supremacy Clause of the United States
Constitution requires that the FAA prevail over any state law to the contrary‖). The FAA does not
apply to all arbitration agreements. See, e.g., 1745 Wazee LLC v. Castle Builders Inc., 89 P.3d
422, 424 (Colo. App. 2003) (―The parties may agree in certain circumstances that an arbitration
dispute will be governed by a state arbitration law rather than the FAA.‖).
273. See Grohn, 960 P.2d at 728 (noting that in enacting the FAA, Congress declared ―a
liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or
procedural policies to the contrary,‖ and thereby ―withdrew the power of the states to require a
judicial forum for the resolution of the claims which the contracting parties agreed to resolve by
arbitration‖); see also Byerly v. Kirkpatrick Pettis Smith Polian, Inc., 996 P.2d 771, 774 (Colo.
App. 2000) (―[W]e agree with the holding in Grohn and conclude that the FAA preempts [the
Wage Act‘s anti-waiver provision] to the extent that an agreement to arbitrate a dispute relating to
employee compensation is not void and that public policy is not thereby offended.‖).
274. See Byerly, 996 P.2d at 774 (―The FAA preempts state law only to the extent that such
laws purport to invalidate otherwise enforceable agreements to arbitrate.‖ (emphasis added)); cf.
Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 201 (3d Cir. 1983) (―It is not
entirely clear why, absent a statute such as the Federal Arbitration Act, the enforceability of a
contractual forum selection clause should properly be divorced from the law which in other
respects governs the contract.‖), overruled on other grounds by Germain v. Conn. Nat‘l Bank,
926 F.2d 191 (2d Cir. 1991).
275. See ADT Sec. Servs., Inc. v. Apex Alarm, LLC, 430 F. Supp. 2d 1199, 1202 (D. Colo.
2006) (observing that the FAA ―expressly endorses the validity of arbitration agreements and thus
clearly preempts state law,‖ while ―no . . . federal statute or Rule govern[s] the validity of forum
selection clauses‖); Weiss v. Columbia Pictures Television, Inc., 801 F. Supp. 1276, 1281
(S.D.N.Y. 1992) (―[F]orum selection clauses are not the subject of a federal statute compelling
their enforcement . . . .‖).
276. See Melamed, LLC v. Capital Coin Fund I, Ltd., No. 07-cv-00615-RPM, 2007 WL
1106102, at *1 (D. Colo. Apr. 11, 2007) (assuming, without deciding, that a ―Colorado Wage Act
claim is, under Colorado law, not subject to a forum selection clause‖).
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Other State Statutory Expressions of Public Policy
In Adams Reload Co. v. International Profit Associates, Inc.,277 the
plaintiffs argued that a forum selection clause requiring the parties to
litigate in a jurisdiction other than Colorado was unenforceable because
they were asserting a claim under the Colorado Consumer Protection Act
(―CCPA‖),278 which reflects a strong public policy protecting Colorado
consumers from deceptive trade practices.279 Although the CCPA was
intended to provide prompt, economical and readily available remedies for
consumer fraud,280 the Colorado Court of Appeals found no statutory
language, or any judicially declared public policy,281 precluding
enforcement of the parties‘ forum selection clause.282
While the CCPA contains a venue provision bearing some similarity to
its Wage Act counterpart,283 the CCPA contains no anti-waiver provision
comparable to the Wage Act provision that barred enforcement of the forum
selection clause at issue in Morris.284 The Adams Reload court held that in
the absence of an anti-waiver provision, the CCPA‘s venue provision did
not reflect a sufficiently strong public policy to preclude the enforcement of
277. 143 P.3d 1056 (Colo. App. 2006).
278. COLO. REV. STAT. ANN. §§ 6-1-101 to -1120 (2002). For a prior academic assessment of
the CCPA, see David Benjamin Lee, Note, The Colorado Consumer Protection Act: Panacea or
Pandora‟s Box?, 70 DENV. U. L. REV. 141 (1992).
279. See Adams Reload, 143 P.3d at 1059; see also Martinez v. Lewis, 969 P.2d 213, 222
(Colo. 1998).
The CCPA provides consumers who are in a position of relative bargaining weakness with
protection against a range of deceptive trade practices. . . . [The statutory] provisions protect
the public as consumers in situations where consumers do not have and cannot reasonably
gain access to truthful information relevant to a contemplated transaction unless it comes
from the person offering the good, service, or property.
Id.
280. See W. Food Plan, Inc. v. District Court, 598 P.2d 1038, 1041 (Colo. 1979).
281. See Yackee, supra note 257, at 81 n.202 (―While Bremen indicates that such policies may
be found in statutory and judge–made law, in practice courts principally examine statutory law for
evidence of ‗strong public policies‘ against [forum selection clause] enforcement.‖ (citation
omitted)).
282. See Adams Reload, 143 P.3d at 1059; cf. Haynsworth v. Lloyd‘s of London, 933 F. Supp.
1315, 1323 (S.D. Tex. 1996) (―Whatever policy may be embodied in a consumer protection act,
public policy strongly supports private [contract] law. . . . Contractually selecting a forum for
future litigation is not an impermissible waiver of rights and does not violate public policy,
especially when the contracting parties are knowledgeable.‖).
283. See Adams Reload, 143 P.3d at 1059. The CCPA‘s venue provision states:
[A]ctions instituted pursuant to this article may be brought in the county where an alleged
deceptive trade practice occurred or where any portion of a transaction involving an alleged
deceptive trade practice occurred, or in the county where the principal place of business of
any defendant is located, or in the county in which any defendant resides.
COLO. REV. STAT. ANN. § 6-1-103.
284. See Adams Reload, 143 P.3d at 1059.
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a private agreement to litigate CCPA claims in a forum other than
Colorado.285
This analysis is undoubtedly correct.286 As one federal appellate court
explained:
We are unconvinced that . . . a permissive venue statute constitutes the
kind of ―strong public policy‖ sufficient to invalidate a forum selection
clause under Bremen, since the primary purpose of a forum selection
clause is to opt out of the default venue set by such statutes. Moreover,
invalidating a forum selection clause because it conflicts with a statutory
venue provision ignores the strong countervailing public policy in favor of
287
holding parties to their agreements . . . .
In Barton v. Key Gas Corp.,288 a Colorado federal district court
employed similar reasoning in upholding an agreement to litigate claims
arising under the Colorado Securities Act289 in a Kansas court.290 Despite
the Colorado courts‘ undeniable interest in protecting the state‘s citizens
from securities fraud,291 the Barton court rejected the plaintiffs‘ contention
that requiring them to litigate in Kansas would violate public policy.292 The
court acknowledged that it might be ―somewhat easier‖ for a Colorado
285. See id.; cf. Sherman v. Pere Marquette Ry. Co., 62 F. Supp. 590, 593 (N.D. Ill. 1945)
(―Generally speaking, venue is a privilege which may be waived, but it may not be contracted
away in the face of a specific statute which prohibits such contracting . . . .‖ (emphasis added)).
See generally Francam Bldg. Corp. v. Fail, 646 P.2d 345, 348 (Colo. 1982) (―[I]t is well
established that, in the absence of an express statutory provision barring waiver or countervailing
public policy, parties may enter into contracts abrogating or limiting statutory provisions which
confer a right or benefit upon one or both parties.‖ (footnote omitted)).
286. See Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1164 (Colo. App. 2006)
(finding the reasoning in Adams Reload ―persuasive and dispositive‖ on the issue of whether the
CCPA reflects ―an expression of a public policy precluding enforcement of forum selection
clauses‖); cf. Jacobsen Constr. Co. v. Teton Builders, 106 P.3d 719, 725 (Utah 2005) (rejecting
the contention that a Wyoming venue statute expressed ―a strong policy interest‖ invalidating an
agreement to litigate in Utah).
287. Servewell Plumbing, LLC v. Fed. Ins. Co., 439 F.3d 786, 791 (8th Cir. 2006); see also
Wilfred MacDonald Inc. v. Cushman Inc., 606 A.2d 407, 411 (N.J. Super. Ct. App. Div. 1992).
We are . . . not persuaded that N.J.S.A. 56:10-10, authorizing an action under the [New Jersey
Franchise Practices] Act to be brought in the ―Superior Court of the State of New Jersey,‖
expresses an intent that such actions must only be brought in the New Jersey courts. . . . We
do not think the Legislature intended to prohibit otherwise reasonable forum selection clauses
by enactment of [such] penalty or enforcement provisions.
Id.
288. No. 05-cv-01856-REB-PAC, 2006 WL 2781592, at *1 (D. Colo. Sept. 26, 2006).
289. COLO. REV. STAT. ANN. §§ 11-51-101 to -908 (2003).
290. See Barton, 2006 WL 2781592, at **1-2.
291. See Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095, 1105 (Colo. 1995);
cf. GRM v. Equine Inv. & Mgmt. Group, 596 F. Supp. 307, 318-19 (S.D. Tex. 1984) (―Texas has
an exceptionally strong interest in providing its residents a forum to redress injuries caused by
fraudulent securities schemes which reach into Texas.‖).
292. See Barton, 2006 WL 2781592, at *2.
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court to adjudicate claims arising under the state act,293 but found nothing in
the statutory scheme to suggest that such claims cannot be litigated
effectively in other forums.294
This reasoning is, on its face, highly persuasive.295 The contrary view
that Colorado courts are uniquely suited to interpret and apply Colorado
substantive law296 reflects what the Bremen Court characterized as
―something of a provincial attitude regarding the fairness of other
tribunals.‖297 Courts in other jurisdictions are fully capable of construing
and applying Colorado law,298 just as Colorado courts can apply the laws of
other states.299 Thus, a forum selection clause should not be unenforceable
293. Id. at *3; see also Beckley v. Auto Profit Masters, L.L.C., 266 F. Supp. 2d 1001, 1006
(S.D. Iowa 2003) (―[T]he federal court in Colorado is likely more familiar with Colorado
law . . . .‖); cf. Cutter v. Scott & Fetzer Co., 510 F. Supp. 905, 908 (E.D. Wis. 1981) (―It is likely
that a court in this district is better prepared to consider a case under the [Wisconsin] Fair
Dealership Law than is a court in Ohio. . . . [T]he experience of a Wisconsin judge with this
statute is probably greater than that of any judge in Ohio.‖).
294. See Barton, 2006 WL 2781592, at *2. In this regard, the court rejected any suggestion
―that Kansas courts could not or would not resolve such claims fairly.‖ Id. at *3. This view is
consistent with the fact that courts in other jurisdictions have construed and applied the Colorado
Securities Act. See, e.g., Hughes v. BCI Int‘l Holdings, Inc., 452 F. Supp. 2d 290, 304-05
(S.D.N.Y. 2006); DeNune v. Consol. Capital of N. Am., Inc., 288 F. Supp. 2d 844, 855-56 (N.D.
Ohio 2003).
295. Cf. Wilfred MacDonald Inc. v. Cushman Inc., 606 A.2d 407, 410-11 (N.J. Super. Ct.
App. Div. 1992).
We consider . . . the contention [that] enforcement of a forum selection clause resulting in
application of the [New Jersey Franchise Practices] Act by another state court is contrary to
public policy. Underlying this notion is the premise that only New Jersey courts are
equipped to properly interpret and apply the Act and that to allow other state courts to do so
would result in diverse and inconsistent applications. . . . Just as can our courts fairly and
competently analyze and apply other states‘ laws, we perceive no reason why the federal
district court of Nebraska or Nebraska state courts could not do the same.
Id. (citation omitted).
296. See, e.g., Flader v. Campbell, 207 P.2d 1188, 1193 (Colo. 1949) (―It seems clear that the
question . . . is a matter to be determined by the Colorado courts since it involves the construction
and interpretation of the laws of Colorado.‖); see also Detroit Coke Corp. v. NKK Chem. USA,
Inc., 794 F. Supp. 214, 219 (E.D. Mich. 1992) (―It is axiomatic that the construction of state law is
best given to a court most familiar with it.‖).
297. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972).
298. See, e.g., Sparks v. Goalie Entm‘t, Inc., No. 4:06-cv-00602-JEG, 2007 WL 962946, at *6
(S.D. Iowa Mar. 30, 2007) (―Iowa courts are capable of applying Colorado law.‖); Tebo v.
Elephant Bar Rest., Inc. (In re Elephant Bar Rest., Inc.), 195 B.R. 353, 358 (Bankr. W.D. Pa.
1996) (―[T]his Court is equipped to interpret and apply pertinent Colorado state law . . . with a
minimum of difficulty . . . .‖).
299. See, e.g., Lohn v. McDonnell-Douglas Corp., 543 P.2d 1315, 1316 (Colo. App. 1975)
(―Defendant . . . asserts that Missouri courts can best interpret Missouri law. We are confident,
however, that if Missouri law is to be applied, Colorado courts will properly apply it.‖); see also
Beckley v. Auto Profit Masters, L.L.C., 266 F. Supp. 2d 1001, 1006 (S.D. Iowa 2003) (observing
that a ―federal court in Colorado . . . is capable of applying Iowa law‖).
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on public policy grounds simply because its enforcement would require a
court in another state to apply Colorado law.300
However, the analysis in Barton ignores the fact that, like the Colorado
Wage Act,301 the Colorado Securities Act contains an express anti-waiver
provision invalidating agreements purporting to waive compliance with the
Act.302 The result in Barton is thus at least arguably inconsistent with the
Colorado Court of Appeals‘ application of the public policy exception in
Morris v. Towers Financial Corp.,303 as well as with the analysis in other
state court cases construing other similar state anti-waiver provisions.304
On the other hand, Barton is consistent with other federal cases
rejecting the argument that the enforcement of forum selection clauses
would violate public policies expressed in state anti-waiver statutes.305 This
dichotomy suggests that the Colorado state courts may interpret Bremen‘s
―public policy exception‖ more broadly than their federal counterparts,306
presumably because state courts are likely to be more familiar with,307 and
300. See U.S. ex rel. Tech Coatings v. Miller-Stauch Constr. Co., 904 F. Supp. 1209, 1214 n.5
(D. Kan. 1995) (―The court knows of no decision finding a forum selection clause unenforceable
simply because its enforcement would require a court sitting in one state to apply the law of
another state.‖).
301. See supra note 264 and accompanying text.
302. See COLO. REV. STAT. ANN. § 11-51-604(11) (2003) (―Any condition, stipulation, or
provision binding any person acquiring or disposing of any security to waive compliance with any
provision of this article or any rule or order under this article is void.‖).
303. 916 P.2d 678 (Colo. App. 1996); see supra notes 252-76 and accompanying text.
304. See, e.g., Hall v. Superior Court, 197 Cal. Rptr. 757, 762 (Ct. App. 1983).
California‘s policy to protect securities investors, without more, would probably justify
denial of enforcement of [a] choice of forum provision, although a failure to do so might not
constitute an abuse of discretion; but [the statutory anti-waiver provision], which renders
void any provision purporting to waive or evade the Corporate Securities Law, removes that
discretion and compels denial of enforcement.
Id.
305. See, e.g., Pong v. Am. Capital Holdings, Inc., No. CIV. S-06-2527 LKK/DAD, 2007 WL
657790, at **5-7 (E.D. Cal. Feb. 28, 2007) (rejecting the plaintiff‘s contention that a ―forum
selection clause violate[d] California‘s ‗anti-waiver‘ statute for securities fraud actions‖); see also
Rogers, Lynch & Assocs. LLC v. Risk Factor Solutions, Ltd., No. Civ.A 03-1399, 2004 WL
385064, at *6 (E.D. La. Mar. 1, 2004) (―[T]he Fifth Circuit [has] enforced a forum selection
clause despite arguments that it violated federal and state public policy embodied in antiwaiver
provisions of federal and state securities laws.‖ (citing Haynsworth v. The Corp., 121 F.3d 956
(5th Cir. 1997))).
306. See Stephen J. Ware, Arbitration and Unconscionability After Doctor‘s Associates, Inc.
v. Casarotto, 31 WAKE FOREST L. REV. 1001, 1028 (1996) (―Some state courts may be less
willing than the Supreme Court to enforce forum-selection clauses . . . .‖).
307. See Jehovah‘s Witnesses in the State of Wash. v. King County Hosp. Unit No. 1
(Harborview), 278 F. Supp. 488, 505 (W.D. Wash. 1967) (observing that ―state courts ideally
should be better informed about state policies‖), aff‟d, 390 U.S. 598 (1968).
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therefore more protective of, any state policies that may be implicated by
the enforcement of a forum selection clause.308
3.
Judicial Declarations of Public Policy
The preceding cases illustrate the significance of state statutory
anti-waiver provisions in assessing the enforceability of forum selection
clauses under Colorado‘s public policy exception.309 However, a state
statute ―need not explicitly bar waiver by contract for the contract provision
to be invalid because it is contrary to public policy,‖310 as demonstrated by
the analysis in another important Colorado forum selection clause case,
In re C.G.G.311
C.G.G. involved a forum selection clause contained in a child support
agreement entered into in anticipation of the parties‘ dissolution of
marriage.312 Although the parties were both Colorado residents,313 their
marital dissolution was ultimately granted in Sweden, and the forum
selection clause provided that the Swedish courts would have exclusive
jurisdiction over any subsequent litigation to enforce the agreement, as well
as over any other disputes arising from the dissolution of the parties‘
marriage.314
Approximately one year after the dissolution was granted, the wife
brought suit against the husband in Colorado to recover unpaid child
308. See Kerobo v. Sw. Clean Fuels, Corp., 285 F.3d 531, 538 (6th Cir. 2002) (―[W]hen
considering a forum-selection clause . . . , a [federal] district court does not have the discretion to
hold that because the state public policy prohibits the enforcement of [such] clauses . . . , the state
policy will be categorically upheld and the clause will not be enforced.‖); Elite Physicians Servs.,
LLC v. Citicorp Payment Servs., Inc., No. 1:05-CV-344, 2006 WL 752536, at *5 (E.D. Tenn.
Mar. 17, 2006) (discussing cases finding ―the presence of a strong state policy disfavoring forum
selection clauses to be nonbinding on federal courts‖).
309. See Stanley v. Creighton Co., 911 P.2d 705, 707 (Colo. App. 1988) (―[T]he General
Assembly—by explicitly precluding waiver by contract—may indicate the preeminence of a
statutory public policy . . . .‖); cf. Wyatt Energy, Inc. v. Motiva Enters. LLC,
No. X01CV020467090S, 2002 WL 31374797, at *6 (Conn. Super. Ct. Sept. 27, 2002) (―One way
in which a forum state proclaims its strong public policy is to enact an anti-waiver clause as part
of a substantive statute . . . .‖).
310. Stanley, 911 P.2d at 707; see also Grossman v. Columbine Med. Group, Inc., 12 P.3d
269, 272 (Colo. App. 1999) (Jones, J., concurring in part and dissenting in part) (―Public policy
need not be explicitly set out in a statute in order to require the voiding of a contrary provision in a
contract.‖).
311. 946 P.2d 603 (Colo. App. 1997).
312. Id. at 604, 606.
313. Id.at 604.
314. Id.
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support.315 The husband, in turn, initiated a contemporaneous action in
Sweden challenging the validity of the parties‘ child support agreement.316
The Colorado court subsequently stayed its proceedings pending the
outcome of the Swedish action,317 in which the parties‘ agreement
ultimately was upheld.318 Once the Swedish action concluded, the wife
moved to lift the stay in Colorado in order to pursue her child support
claim.319
The husband opposed the wife‘s motion, arguing, in effect, that the
Swedish courts had exclusive jurisdiction over her claim for unpaid child
support.320 The trial court agreed, finding that Sweden was the appropriate
jurisdiction in which to adjudicate the parties‘ marital disputes.321 The
court therefore dismissed the wife‘s action on the ground that the Colorado
courts lacked jurisdiction over her claim,322 and the wife appealed.323
The Colorado Court of Appeals reversed.324 The appellate court
acknowledged that, by statute in Colorado, the parties to a child support
agreement can designate the jurisdiction whose law will govern their
agreement,325 and also can agree to other matters not violative of the state‘s
public policy.326 However, the court found that the parties‘ agreement
violated a state policy recognizing the needs of children as being of
―paramount importance‖ in Colorado.327 As a result, the forum selection
clause was unenforceable.
[A Colorado] court‘s authority to interpret and enforce this agreement [is
not] restricted by the provisions of the agreement that proceedings relating
to the agreement are to be submitted to a court in Sweden. The agreement
was drafted and entered into in the United States and the parties and the
315. Id.
316. Id.
317. See In re C.G.G., 946 P.2d at 604; cf. Cal-State Bus. Prods. & Servs., Inc. v. Ricoh,
16 Cal. Rptr. 2d 417, 427 (Ct. App. 1993) (observing that a ―forum-selection clause may properly
be enforced through a stay‖).
318. In re C.G.G., 946 P.2d at 604, 605.
319. Id. at 604.
320. Id.
321. Id. at 605.
322. Id. at 605, 606.
323. Id. at 604.
324. See In re C.G.G., 946 P.2d at 604, 606.
325. Id. at 606 (citing COLO. REV. STAT. ANN. § 14-2-304(1)(h) (1997)); cf. Ackerman v.
Foster, 974 P.2d 1, 9 (Colo. App. 1998) (Casebolt, J., concurring) (―Generally, in the absence of a
strong contrary public policy, the parties may choose which forum‘s law will govern an action.‖).
326. See In re C.G.G., 946 P.2d at 606 (citing COLO. REV. STAT. ANN. § 14-2-304(1)(i)).
327. Id.; see also In re Marriage of Miller, 790 P.2d 890, 892 (Colo. App. 1990) (―The law
and policy of this state is that the needs of the children are of paramount importance and cannot be
altered by the parties.‖).
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child are all residents of Colorado.
Accordingly, the restrictive
jurisdictional provisions in the agreement would be contrary to the public
328
policy of this state to provide for the support of children.
The result in C.G.G. reflects not only the importance of the particular
public policy at issue,329 but the fact that the Swedish proceedings had
concluded without an adjudication of the claim that was being asserted by
the wife in Colorado.330 In this regard, the Colorado Court of Appeals
indicated that if the Swedish court had addressed the child support issue (or
even if the issue was still pending in that forum), the Colorado courts might
have enforced the parties‘ agreement to litigate in another jurisdiction.331
Because the Swedish court did not consider the issue, enforcement of
the forum selection clause apparently would have left the wife (and,
derivatively, the parties‘ minor child)332 with no effective means of
recovering the allegedly unpaid child support.333 This outcome would have
been contrary to Colorado case law holding that ―parties cannot, by
contract, escape their responsibilities to provide adequate child support,‖ or
agree to preclude judicial consideration of their support obligations.334 In
other words, the public policy exception applied not because the parties
agreed to litigate in a jurisdiction other than Colorado,335 but because
328. In re C.G.G., 946 P.2d at 606 (citing COLO. REV. STAT. § 14-2-304(3)); cf. In re
Marriage of Salas, 868 P.2d 1180, 1181 (Colo. App. 1994) (―A child has a legal right to support
from both parents, and both parents have a continuing duty to provide reasonable support for the
child. Furthermore, parents may not by contract divest a court of . . . jurisdiction over the
custodial rights and duties of maintenance of children.‖ (citation omitted)).
329. The child support obligation at issue in C.G.G. reflects a ―general public policy of
mitigating the harm to spouses and children caused by the dissolution of marriage,‖ which has
been codified by the Colorado legislature. See In re Marriage of Foss, 30 P.3d 850, 852 (Colo.
App. 2001) (citing COLO. REV. STAT. ANN. § 14-10-102(2)(b) (2000)). The Colorado Supreme
Court has indicated that this policy ―outweigh[s] the parties‘ rights to freedom of contract.‖ In re
Marriage of Ikeler, 161 P.3d 663, 669 (Colo. 2007).
330. See In re C.G.G., 946 P.2d at 605.
331. See id. (―Even if jurisdiction attaches . . . , if there is a proceeding pending in a foreign
court, the trial court has discretion to decline to determine an issue that could easily and efficiently
be addressed by a foreign court.‖).
332. See Hall v. Hall-Stradley, 776 P.2d 1166, 1167 (Colo. App. 1989) (noting ―the public
policy concept that minor children have a beneficial interest in child support payments‖).
333. See In re C.G.G., 946 P.2d at 606. Indeed, this appears to have been precisely the
husband‘s objective. See id. at 604 (noting that the husband argued that ―exclusive jurisdiction
existed in Sweden‖ and that the wife ―waived the child support issue by failing to raise it in the
foreign proceedings‖).
334. Combs v. Tibbitts, 148 P.3d 430, 434 (Colo. App. 2006); see also In re Marriage of
Micaletti, 796 P.2d 54, 56 (Colo. App. 1990) (―Parents are under a legal obligation to support their
minor children, and the parents may not, by agreement, adversely affect their children‘s best
interests.‖ (citation omitted)).
335. In Adams Reload Co. v. International Profit Associates, Inc., 143 P.3d 1056 (Colo. App.
2005), the Colorado Court of Appeals declined to consider the argument that a forum selection
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enforcement of the agreement would have denied the wife (and child)
access to any forum for the enforcement of their state substantive rights.336
This interpretation of C.G.G. reflects the prevailing view that even
when they are embodied in a state constitutional or statutory provision,337
public policies favoring access to a state‘s courts are satisfied, or
outweighed, when a resident plaintiff voluntarily bargains away its right to
litigate in the local forum.338 As in the analogous arbitration context,339 the
plaintiff in this situation has merely waived the right in exchange for other
benefits it values more highly.340
A litigant‘s right to select the forum in which a dispute will be heard is
unquestionably a valuable one.341 The party possessing the right may be
able to compel litigation in the forum it deems most convenient,342 or whose
clause requiring Colorado residents to litigate in another state violated their ―constitutional right of
access to Colorado courts to enforce a specific substantive right under Colorado law.‖ Id. at 1060.
However, under the state constitutional provision to which the court was alluding, ―only some
level of access to the judicial process is required.‖ Buckley Powder Co. v. Colorado 70 P.3d 547,
563 (Colo. App. 2002) (discussing COLO. CONST. art II, § 6).
336. Cf. Haakison & Beaty Co. v. Inland Ins. Co., 344 N.W.2d 454, 459 (Neb. 1984)
(White, J., concurring) (concluding that forum selection provisions did not violate a state
constitutional right of access to the Nebraska courts because the parties were afforded
―meaningful access to a judicial forum (though not a Nebraska forum)‖).
337. See, e.g., PMI Mortgage Ins. Co. v. Desert Fed. Sav. & Loan, 757 P.2d 1156, 1158 (Colo.
App. 1988) (observing that ―the interest of a state in providing a dispute resolution forum for its
own residents‖ is a ―public policy consideration‖ reflected in COLO. CONST. art. II, § 6 (citation
omitted)).
338. See, e.g., Koch v. Am. Online, Inc., 139 F. Supp. 2d 690, 695 (D. Md. 2000); Rini Wine
Co. v. Guild Wineries & Distilleries, 604 F. Supp. 1055, 1059 (N.D. Ohio 1985); Hopkinson v.
Lotus Dev. Corp., No. C 95-1389, 1995 WL 381888, at *4 (N.D. Cal. 1995); Smith, Valentino &
Smith, Inc. v. Superior Court, 551 P.2d 1206, 1209 (Cal. 1976); High Life Sales Co. v. BrownForman Corp., 823 S.W.2d 493, 496 (Mo. 1992).
339. See Allison v. Indus. Claim Appeals Office, 884 P.2d 1113, 1119 n.11 (Colo. 1994)
(―[B]inding arbitration [does] not violate [a party‘s] right of access to the [Colorado] courts under
Article II, section 6 of the Colorado Constitution.‖ (citing State Farm Mut. Auto. Ins. Co. v.
Broadnax, 827 P.2d 531 (Colo. 1992))); cf. Bastone v. Dial-A-House, Inc., 420 N.Y.S.2d 467, 468
(Super. Ct. 1979) (―In that the decision to submit disputes to arbitration is a voluntary act and a
creature of contract, constitutional . . . access to the courts can be waived in exchange for [other]
benefits . . . .‖).
340. See, e.g., Cal-State Bus. Prods. & Servs., Inc. v. Ricoh, 16 Cal. Rptr. 2d 417, 427
(Ct. App. 1993) (―[A] party which has contracted away its right to choose its home forum (as well
as all the concomitant conveniences of a home forum) has presumably done so because the value
it receives from the negotiated deal is worth the chance the party may be required to litigate
disputes elsewhere.‖).
341. See Gen. Instrument Corp. v. Tie Mfg., Inc., 517 F. Supp. 1231, 1235 (S.D.N.Y. 1981)
(―The bench and bar has [sic] always regarded choice of forum as a significant right.‖);
Nat‘l Equip. Rental, Ltd. v. Centra Cast Co., 270 F. Supp. 999, 1000 (E.D.N.Y. 1966) (noting that
―plaintiff‘s right to select the forum is a valuable one‖).
342. See Holmes Group, Inc. v. Hamilton Beach/Proctor Silex, Inc., 249 F. Supp. 2d 12, 17
(D. Mass. 2002) (―Where a plaintiff chooses his home forum, such a choice usually represents
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substantive law it perceives to be most favorable to its position.343 In some
cases, such as where a potentially applicable statute of limitations has
expired,344 a party‘s ability to select the forum may even enable it to dictate
the substantive outcome of litigation.345
However, the fact that forum selection rights are valuable does not
mean they should be non-negotiable;346 it merely impacts the value of the
benefits parties will insist upon receiving in exchange for relinquishing
them.347 This is clearly a permissible use of a party‘s forum selection
considerations of convenience . . . .‖); L.G. Elecs., Inc. v. First Int‘l Computer, Inc., 138 F. Supp.
2d 574, 589 (D.N.J. 2001) (―The rule of deferentially viewing plaintiff‘s choice of forum is
premised on the assumption that a home forum is inherently more convenient than [an alternative]
forum.‖).
343. See, e.g., Cargill Inc. v. Prudential Ins. Co. of Am., 920 F. Supp. 144, 148 (D. Colo.
1996) (―[Plaintiff‘s] principal reason for choosing Colorado as the forum for this action is the
more advantageous . . . law that exists in this circuit.‖ (internal quotation marks omitted)); Ruth v.
Purdue Pharma Co., 225 F.R.D. 434, 435 (S.D.N.Y. 2004) (―Plaintiffs are entitled to select a
forum they perceive as favorable . . . .‖); Olmstead v. Anderson, 400 N.W.2d 292, 303 (Mich.
1987) (―Presumably, plaintiffs will bring suit in the forum whose law is the most advantageous.‖).
344. The Colorado Supreme Court has held that a party generally ―cannot deduct from the
period of the statute of limitations applicable to his case the time consumed by the pendency of
[another] action in which he sought to have the matter adjudicated, but which was dismissed
without prejudice as to him.‖ King v. W. R. Hall Transp. & Storage Co., 641 P.2d 916, 920
(Colo. 1982). This view has significant implications for forum selection clause analysis.
See, e.g., Chan v. Soc‘y Expeditions, Inc., 123 F.3d 1287, 1295 (9th Cir. 1997) (―[A] dismissal of
the complaint without prejudice by a foreign court, in deference to [a] forum selection clause,
would not toll the limitations period.‖); see also infra notes 391-401 and accompanying text.
345. See Rahco Int‘l, Inc. v. Laird Elec., Inc., 502 F. Supp. 2d 1118, 1123 (E.D. Wash. 2006)
(―The designated forum and law can control the cost and outcome of potential litigation,
impacting the parties‘ substantive rights.‖); Standard Sec. Life Ins. Co. v. West, 127 F. Supp. 2d
1064, 1068 (W.D. Mo. 2000) (―Where and by whom a contractual dispute is resolved may have an
effect on the substantive outcome of the litigation.‖); cf. Edge Telecom, Inc. v. Sterling Bank, 143
P.3d 1155, 1159 (Colo. App. 2006) (observing that ―the question whether a forum selection clause
is enforceable may be a dispositive ruling‖).
346. See Licensed Practical Nurses of N.Y., Inc. v. Ulysses Cruises, Inc., 131 F. Supp. 2d 393,
397 (S.D.N.Y. 2000) (―[A] forum-selection clause has economic value, and is a potential subject
of bargaining between parties to a transaction . . . .‖).
347. See Metro E. Ctr. for Conditioning & Health v. Qwest Commc‘ns Int‘l, Inc., 294 F.3d
924, 929 (7th Cir. 2002) (―One aspect of personal liberty is the entitlement to exchange statutory
rights for something valued more highly. . . . The more valuable the right, the more the [holder of
the right] can get in exchange.‖); Cange v. Stotler & Co., 826 F.2d 581, 596 (7th Cir. 1987)
(Easterbrook, J., concurring).
The beneficiary of the statutory right may enjoy it or trade it for something he prefers . . . .
To forbid the contractual waiver is to make the class of statutory beneficiaries worse off, by
depriving them of the opportunity to obtain the benefits of the statutory entitlement by using
it as a bargaining chip in the process of contracting.
Id.
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rights,348 despite their constitutional (or, in some states, statutory)349
underpinnings.350 As one court explained:
A potential plaintiff‘s ability to choose a forum in which to bring her
claim is part of the bundle of rights under her ownership when she enters
contract negotiations, and the transfer of that right to the other party is a
valuable consideration, in return for which the potential defendant offers
351
valuable consideration of its own.
D. Serious Inconvenience
In ABC Mobile Systems, Inc. v. Harvey,352 the Colorado Court of
Appeals adopted the Restatement view that enforcement of a forum
selection clause would be unreasonable ―if the forum chosen by the parties
would be a seriously inconvenient one for the trial of the particular
action.‖353 However, the court also indicated that this exception to the
presumptive enforceability of such clauses is to be interpreted narrowly:
It should be incumbent on the party seeking to escape his contract to show
that trial in the contractual forum will be so gravely difficult and
inconvenient that he will for all practical purposes be deprived of his day
in court. Absent that, there is no basis for concluding that it would be
354
unfair, unjust or unreasonable to hold that party to his bargain.
348. See Batagiannis v. W. Lafayette Cmty. Sch. Corp., 454 F.3d 738, 741 (7th Cir. 2006)
(indicating that parties are entitled to ―surrender access to the courts in exchange for benefits
[they] value more‖); Global Travel Mktg., Inc. v. Shea, 908 So. 2d 392, 398 (Fla. 2005)
(observing that ―rights of access to courts . . . may be contractually relinquished‖).
349. Compare GA. CODE ANN. § 1-2-6(a)(6) (2000) (―The rights of citizens include, without
limitation, the . . . right to appeal to the courts . . . .‖), with Couch v. Parker, 630 S.E.2d 364, 366
(Ga. 2006) (―[T]here is no express constitutional ‗right of access to the courts‘ under the Georgia
Constitution.‖).
350. See generally People ex rel. Griffith v. Scott, 120 P. 126, 130 (Colo. 1911) (―That a party
. . . may waive a constitutional or statutory right is so well settled that it is hardly necessary to
quote any authorities.‖).
351. Varabiev v. Bank Leumi Le Israel (Switzerland), No. 03 CIV 3036, 2004 WL 936804, at
*3 (S.D.N.Y. 2004); see also W. Andrew Scott & R. Samuel Snider, California Populism,
Contract Interpretation, and Franchise Agreements, 24 FRANCHISE L.J. 248, 255 (2005)
(―[F]orum selection provisions . . . in contracts act as a private reordering of a bundle of rights
providing citizens access to courts.‖).
352. 701 P.2d 137 (Colo. App. 1985).
353. Id. at 139 (quoting RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80 cmt. a (1971)).
354. Id. (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 18 (1972)).
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Remoteness of the Agreed-Upon Forum
The Colorado Court of Appeals addressed the ―serious inconvenience‖
exception in more detail in Adams Reload Co. v. International Profit
Associates, Inc.355 The plaintiffs in Adams Reload brought suit against the
defendant in Colorado, despite the existence of a forum selection clause in
the parties‘ agreement requiring that any disputes between them be litigated
in Illinois.356 The plaintiffs asserted that the clause was unreasonable, and
therefore unenforceable, because the disputed events occurred in Colorado,
and they would suffer severe financial hardship if forced to litigate in
Illinois.357
The court rejected the plaintiffs‘ argument, noting that the
inconvenience of litigating in a remote forum is ordinarily insufficient to
establish the unreasonableness of a forum selection clause.358 To invalidate
such a clause, the claimed inconvenience instead must be so serious it
would effectively foreclose a remedy or otherwise deprive a party of its day
in court.359 The plaintiffs failed to make this showing.360 Under these
circumstances, the court concluded that any hardship they might suffer as
the result of being required to litigate in Illinois was foreseeable at the time
of contracting,361 and thus was a burden for which they presumably were
compensated.362
355. 143 P.3d 1056 (Colo. App. 2006).
356. Id. at 1058.
357. Id. at 1060.
358. Id.
359. Id.; see also Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1162 (Colo. App.
2006) (―For inconvenience to constitute unreasonableness, the party seeking to nullify the
provision must show that the party will, for all practical purposes, be deprived of a day in court.‖
(citing ABC Mobile Sys., 701 P.2d at 139)).
360. See Adams Reload, 143 P.3d at 1058, 1061. The court indicated that the ―location and
convenience of witnesses are generally not considered a serious inconvenience.‖ Id. at 1060
(discussing Alpha Sys. Integration, Inc. v. Silicon Graphics, Inc., 646 N.W.2d 904 (Minn. Ct.
App. 2002)); cf. REO Sales, Inc. v. Prudential Ins. Co. of Am., 925 F. Supp. 1491, 1495 (D. Colo.
1996) (concluding that the convenience of witnesses does not override the ―substantial weight‖ to
be accorded a forum selection clause).
361. See Adams Reload, 143 P.3d at 1061; cf. Smith, Valentino & Smith, Inc. v. Superior
Court, 551 P.2d 1206, 1209 (Cal. 1976) (observing that ―both [parties] reasonably can be held to
have contemplated in negotiating their agreement the additional expense and inconvenience
attendant on the litigation of their respective claims in a distant forum‖).
362. In a case the Colorado Court of Appeals cited with approval in ABC Mobile Sys.,
701 P.2d at 139, the Pennsylvania Supreme Court explained this presumption in the following
terms:
Such an agreement is unreasonable only where its enforcement would, under all
circumstances existing at the time of litigation, seriously impair plaintiff‘s ability to pursue
his cause of action. Mere inconvenience or additional expense is not the test of
unreasonableness since it may be assumed that the plaintiff received under the contract
consideration for these things. If the agreed upon forum is available to plaintiff and said
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Significantly, one of the cases upon which the Adams Reload court
relied, Alpha Systems Integration, Inc. v. Silicon Graphics, Inc.,363 held that
even a party‘s inability to secure the attendance of its witnesses at trial in a
remote forum will not invalidate a forum selection clause.364 Not only is
this particular inconvenience also foreseeable at the time of contracting,365
but it is ameliorated by the existence of procedures in most jurisdictions,
including Colorado,366 permitting parties to present the testimony of
unavailable witnesses by deposition.367 Although the presentation of live
testimony is generally preferred,368 the parties‘ ability to present deposition
testimony at trial constitutes a sufficiently adequate alternative to satisfy
their right to a ―fair day in court‖ under Bremen and its progeny.369
2.
Potential for Duplicative Litigation
On the other hand, the Alpha Systems Integration court asserted, and a
federal district court in Colorado has suggested,370 that the enforcement of a
forum can do substantial justice to the cause of action then plaintiff should be bound by his
agreement.
Cent. Contracting Co. v. C.E. Youngdahl & Co., 209 A.2d 810, 816 (Pa. 1965).
363. 646 N.W.2d 904 (Minn. Ct. App. 2002).
364. Id. at 909.
365. See Gen. Eng‘g Corp. v. Martin Marietta Alumina, Inc., 783 F.2d 352, 359 (3d Cir.
1986); cf. UIH-SFCC Holdings, L.P. v. Brigato, 51 P.3d 1076, 1080 (Colo. App. 2002) (―[T]he
difficulty in securing witnesses is not an unusual circumstance.‖).
366. See, e.g., Campbell v. Graham, 357 P.2d 366, 370 (Colo. 1960) (discussing COLO. R.
CIV. P. 26(d) and noting that a witness‘s trial testimony can be presented by deposition if ―the
witness . . . is absent from Colorado‖).
367. See Alpha Sys. Integration, 646 N.W.2d at 909 (indicating that ―deposition testimony can
be used without disadvantage if witnesses cannot travel to [the agreed-upon] forum‖); see also id.
(discussing Interfund Corp. v. O‘Byrne, 462 N.W.2d 86, 88 (Minn. Ct. App. 1990));
Int‘l Collection Serv., Inc. v. Gibbs, 510 A.2d 1325, 1327 (Vt. 1986) (holding that witness
unavailability does not invalidate a forum selection clause ―because deposition testimony can be
taken and used at trial if the witnesses are unavailable‖ (citing, inter alia, ABC Mobile Sys.,
701 P.2d at 139)).
368. Colo. State Bd. of Med. Exam‘rs v. Thompson, 944 P.2d 547, 551 (Colo. App. 1996);
see also Voelker v. Cherry Creek Sch. Dist., 840 P.2d 353, 355 (Colo. App. 1992) (indicating that
―a videotape deposition may not as effectively present the testimony of a party who could testify
in person‖), rev‟d on other grounds, 859 P.2d 805 (Colo. 1993).
369. Sun World Lines, Ltd. v. March Shipping Corp., 801 F.2d 1066, 1068 (8th Cir. 1986);
see also Norman Sec. Sys., Inc. v. Monitor Dynamics, Inc., 740 F. Supp. 1364, 1369 (N.D. Ill.
1990) (―[T]he mere loss of live testimony does not ordinarily constitute such ‗serious‘
inconvenience as would warrant setting aside a freely bargained for forum selection clause.
Although the testimony may not be as effective, the testimony of [nonparty witnesses] can be
presented through depositions, perhaps even video depositions.‖ (citation omitted)).
370. See Cameron v. Group Voyagers, Inc., 308 F. Supp. 2d 1232, 1238 (D. Colo. 2004)
(stating that a forum selection clause ―could be deemed unreasonable if it would result in the
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forum selection clause may be unreasonable if it would require the parties
to litigate related claims in more then one court.371 However, in Adams
Reload, the Colorado Court of Appeals stopped short of holding that the
risk of duplicative litigation precludes the enforcement of a forum selection
clause as a matter of Colorado law,372 despite acknowledging that the
litigation of related claims in a single lawsuit promotes judicial economy. 373
In fact, numerous courts (including another Colorado federal district
court)374 have rejected the contention that the prospect of duplicative
litigation precludes the enforcement of a forum selection clause.375 These
courts typically reason that the potential inconvenience of litigating in
multiple forums is foreseeable at the time of contracting,376 and that
invalidating a forum selection clause on this basis would enable a party to
avoid its contractual obligation simply by asserting claims, or joining
parties, that were not within the scope of the clause.377
litigation of the same issues in different forums‖ (citing Prows v. Pinpoint Retail Sys., Inc.,
868 P.2d 809, 813 (Utah 1993))).
371. See Alpha Sys. Integration, Inc. v. Silicon Graphics, Inc., 646 N.W.2d 904, 909 (Minn.
Ct. App. 2002) (citing Personalized Mktg. Serv., Inc. v. Stotler & Co., 447 N.W.2d 447, 452
(Minn. Ct. App. 1989)). Other courts have occasionally reached the same conclusion. See, e.g.,
Mylan Pharms., Inc. v. Am. Safety Razor Co., 265 F. Supp. 2d 635, 638 (N.D. W. Va. 2002);
Ex parte Leasecomm Corp., 886 So. 2d 58, 67 (Ala. 2003).
372. The court avoided the issue by ―interpret[ing] the forum selection clause as applying to
all of plaintiffs‘ claims.‖ Adams Reload Co. v. Int‘l Profit Assocs., 143 P.3d 1056, 1061 (Colo.
App. 2005); cf. Pegasus Transp., Inc. v. Lynden Air Freight, Inc., 152 F.R.D. 574, 576 n.3 (N.D.
Ill. 1993) (―[C]ourts have applied forum selection clauses to entire complaints where plaintiffs
have attempted to avoid the application of a contract‘s forum selection clause by stating claims
sounding in tort but related to the contract.‖).
373. See Adams Reload, 143 P.3d at 1061; see also Benton v. Adams, 56 P.3d 81, 86 (Colo.
2002) (observing that ―important state and private interests‖ are served ―by efficiently resolving
potential multiple actions in the same lawsuit, thereby conserving judicial and party resources‖);
In re Marriage of Graham, 574 P.2d 75, 79 (Colo. 1978) (Carrigan, J., dissenting) (―[T]he law
favors settling all aspects of a dispute in a single action where that is possible.‖).
374. See Cornice Techs., Inc. v. Affinity Dental Prods., Inc., No. 04CV01133EWNOES, 2005
WL 1712124, at *8 (D. Colo. July 21, 2005) (―Defendant argues that I should not enforce the
forum selection clause because it is unreasonable for this court to try the part of this case between
Plaintiff and Defendant, and for a California court to try the third-party part of the case. . . .
Defendant‘s argument as to this point is . . . unavailing.‖).
375. See, e.g., Allianz Ins. Co. of Canada v. Cho Yang Shipping Co., 131 F. Supp. 2d 787, 795
(E.D. Va. 2000); Union Steel Am. Co. v. M/V Sanko Spruce, 14 F. Supp. 2d 682, 696 (D.N.J.
1998); Truserv Corp. v. Flegles, Inc., No. 03 C3284, 2003 WL 22839812, at *4 (N.D. Ill. Nov. 25,
2003).
376. See, e.g., Fred Lurie Assocs., Inc. v. Global Alliance Logistics, Inc., 453 F. Supp. 2d
1351, 1356 (S.D. Fla. 2006); Street, Sound Around Elecs., Inc. v. M/V Royal Container,
30 F. Supp. 2d 661, 663 (S.D.N.Y. 1999).
377. See Fred Lurie Assocs., 453 F. Supp. 2d at 1357; Union Steel, 14 F. Supp. 2d at 696;
cf. ABC Rental Sys., Inc. v. Colortyme, Inc., 893 F. Supp. 636, 638 (E.D. Tex. 1995) (observing
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The Colorado state courts are likely to reach the same conclusion.378 In
Ingold v. AIMCO/Bluffs, L.L.C. Apartments,379 for example, the Colorado
Supreme Court recently held that ―claims that are subject to an arbitration
agreement must be arbitrated regardless of their joinder with non-arbitral
claims,‖ because a contrary rule would allow a party ―to avoid its
agreement to arbitrate simply by bringing a single non-arbitrable claim.‖380
Essentially the same reasoning applies in judicial forum selection clause
cases.381
These and other post-Bremen cases impose a heavy burden of proof on
a party challenging the reasonableness of a forum selection clause on the
ground of inconvenience,382 ―even when the designated forum is in a
geographically remote location‖383 or enforcement of the clause might
require the parties to litigate in multiple forums.384 Thus, a forum selection
clause requiring the parties to litigate some or all of their claims in the
that ―enforcement of forum selection clauses encourages parties to honor their contractual
obligations‖).
378. Cf. Breaker v. Corrosion Control Corp., 23 P.3d 1278, 1285-86 (Colo. App. 2001)
(―[T]he possible efficiencies to be gained by having one forum, rather than two, pass upon
common factual or legal issues could not justify refusing to enforce an agreement to
arbitrate . . . .‖ (discussing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985))), abrogated
in part on other grounds by Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116 (Colo.
2007).
379. 159 P.3d 116.
380. Id. at 125.
381. See, e.g., Alternative Delivery Solutions, Inc. v. R.R. Donnelley & Sons Co.,
No. Civ.SA05CA0172-XR, 2005 WL 1862631, at *15 (W.D. Tex. July 8, 2005) (―[A]s in the
context of arbitration clauses, to allow a party to ‗have it both ways‘ by asserting claims
intertwined with the agreement but denying the forum selection clause‘s applicability would ‗fly
in the face of fairness.‘‖ (quoting Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 528
(5th Cir. 2000))); Jacobson v. Mailboxes Etc. U.S.A., Inc., 646 N.E.2d 741, 746 (Mass. 1995) (―A
plaintiff should not be allowed to vitiate the effect of a forum selection clause simply by alleging
peripheral claims that fall outside its apparent scope.‖).
382. See Adams Reload Co. v. Int‘l Profit Assocs., 143 P.3d 1056, 1060 (Colo. App. 2005).
383. Bennett v. Appaloosa Horse Club, 35 P.3d 426, 431 (Ariz. Ct. App. 2001) (citing
The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17 (1972)); see also Voicelink Data Servs., Inc.
v. Datapulse, Inc., 937 P.2d 1158, 1161 (Wash. Ct. App. 1997) (―[E]ven where a forum selection
clause establishes a remote forum for resolution of conflicts, ‗the party claiming unreasonableness
should bear a heavy burden of proof.‘‖ (brackets omitted) (quoting Bremen, 407 U.S. at 17)).
384. See, e.g., Zichichi v. Jefferson Ambulatory Surgery Ctr., LLC, No. 07-2774, 2007 WL
3353304, at *8 (E.D. La. Nov. 7, 2007) (―Where a Court finds that some claims are subject to a
forum selection clause and some are not, it should dismiss or transfer the claims that should
properly be brought in a contractually agreed-upon forum, but maintain jurisdiction over the
others.‖); La Fondiaria Assicurazione, S.P.A. v. Ocean World Lines, Inc., No. 02 Civ. 40 JSM,
2002 WL 31812679, at *2 (S.D.N.Y. Dec. 12, 2002)) (―Admittedly, it might be more efficient to
dispose of the entire case in one court, but that is not the standard for overcoming a forum
selection clause.‖).
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furthest reaches of the United States—or, for that matter, even in a remote
foreign country385—is presumptively enforceable in the Colorado courts.386
This does not mean the inconvenience of litigating in an agreed-upon
forum can never invalidate a forum selection clause.387 Enforcing such a
clause might impermissibly deprive a party of its day in court if the
agreed-upon forum would be unable or unwilling to exercise jurisdiction
over the dispute,388 or for some other reason could not effectively adjudicate
the matter.389 The latter situation is perhaps most dramatically illustrated by
cases finding that litigating in the agreed-upon forum would pose a danger
for one or more of the parties or their witnesses.390
385. See, e.g., Paper Express, Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 758 (7th Cir.
1992) (refusing to invalidate an agreement to litigate in Germany because the party allegedly
inconvenienced by the agreement ―was presumably compensated for this burden by way of the
consideration it received under the contract‖); see also Effron v. Sun Line Cruises, Inc., 167 F.3d
7, 10 (2d Cir. 1995) (―The fact that [a] contract designates a foreign court as the forum for
adjudication does not change the inconvenience calculus.‖).
386. See, e.g., Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1163 (Colo. App. 2006)
(rejecting the contention that a forum selection clause was unenforceable because requiring
Colorado plaintiffs to litigate in New York ―would be inconvenient for their witnesses‖); see also
Hartash Constr., Inc. v. Drury Inns, Inc., No. Civ. A. 00-1555, 2000 WL 1140498, at *2 (E.D. La.
Aug. 11, 2000) (―The inconvenience of trying a case in one state versus another . . . is insufficient
to invalidate a forum selection clause.‖ (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585,
594-95 (1991))), aff‟d, 252 F.3d 436 (5th Cir. 2001).
387. See First Interstate Leasing Serv. v. Sagge, 697 F. Supp. 744, 747 (S.D.N.Y. 1988)
(discrediting the suggestion ―that inconvenience can never rise to a level sufficient to render the
forum selection clause ‗unjust‘ and unenforceable‖); Prows v. Pinpoint Retail Sys., Inc., 868 P.2d
809, 812 (Utah 1993) (indicating that a party seeking to invalidate a forum selection clause on the
ground of inconvenience bears a ―heavy‖ but ―not insurmountable‖ burden).
388. See Yavuz v. 61 MM, Ltd., 465 F.3d 418, 430 (10th Cir. 2006) (noting the presumptive
enforceability of forum selection clauses ―at least absent special circumstances (such as, perhaps,
the chosen jurisdiction‘s refusal to hear a case that has no ties to the jurisdiction)‖); Datamatic
Servs. Corp. v. Bescos, 484 So. 2d 1351, 1360 (Fla. Ct. App. 1986) (describing ―a refusal of the
contractually selected forum to entertain jurisdiction as an example (certainly an extreme
example) of the type of serious inconvenience for trial . . . which would deprive a party of his day
in court‖), disapproved on other grounds in McRae v. J.D./M.D., Inc., 511 So. 2d 540, 543-44
(Fla. 1987).
389. See Long v. Dart Int‘l, Inc., 173 F. Supp. 2d 774, 776 (W.D. Tenn. 2001); cf. Cell v.
Moore & Schley Secs. Corp., 449 N.W.2d 144, 149 (Minn. 1989) (―In the context of forum
selection clauses, a forum is ‗seriously inconvenient‘ only where one party would be completely
unable to pursue or defend a claim if the forum clause were enforced.‖).
390. See, e.g., McDonnell Douglas Corp. v. Islamic Republic of Iran, 591 F. Supp. 293, 307
(E.D. Mo. 1984) (invalidating a forum selection clause providing for litigation in Iran, in part
because ―travel there is potentially hazardous‖); see also Argueta v. Banco Mexicano, S.A.,
87 F.3d 320, 326-27 (9th Cir. 1996) (acknowledging that a ―risk of physical harm‖ would
―militate[] against enforcement of [a] forum selection clause‖); Filanto, S.p.A. v. Chilewich Int‘l
Corp., 789 F. Supp. 1229, 1242 (S.D.N.Y. 1992) (―[F]orum-selection clauses may be invalidated
when the chosen forum has become seriously inconvenient or dangerous.‖), appeal dismissed,
984 F.2d 58 (2d Cir. 1993).
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Statute of Limitations Bar in the Agreed-Upon Forum
A Colorado federal district court has asserted that the enforcement of a
forum selection clause also may ―risk depriving parties of their right to sue
by operation of statutes of limitations or other procedural bars to suit‖ in the
agreed-upon forum.391 However, most courts have rejected this view,392
again reasoning that ―matters impacting upon the convenience of a
particular forum [that] were known to or foreseeable by plaintiff at the time
the contract was negotiated and accepted . . . do not justify a refusal to
enforce the clause.‖393
In one of the more prominent cases addressing the issue, Allianz
Insurance Co. of Canada v. Cho Yang Shipping Co.,394 the court held that
the plaintiff was bound by an agreement to litigate in Korea even though the
applicable Korean statute of limitations had expired.395 Because the
plaintiff was aware of its obligations under the forum selection clause396
(and, inferentially, of the applicable Korean limitations period),397 the court
391. Cameron v. Group Voyagers, Inc., 308 F. Supp. 2d 1232, 1238 (D. Colo. 2004); see also
Cateret Sav. Bank v. Shushan, 919 F.2d 225, 231-32 (3d Cir. 1990) (discussing the possibility that
a plaintiff would ―lose its day in court by reason of the running of the statute of limitations in
another forum‖); Hodes v. S.N.C. Achille Lauro ed Altri-Gestione, 858 F.2d 905, 916 (3d Cir.
1988) (suggesting that ―statutory or contractual limitations on time of suit‖ could result in a party
―being deprived of a meaningful day in court‖), cert. dismissed, 490 U.S. 1001 (1989).
392. See, e.g., Am. Home Assurance Co. v. M/V Jaami, No. 06 Civ. 287(LBS), 2007 WL
1040347, at *3 (S.D.N.Y. Apr. 4, 2007) (―Courts in this district have held repeatedly that a time
bar in a foreign jurisdiction is not a basis for invalidating a forum selection clause.‖); Gilman v.
Wheat, First Secs., Inc., 692 A.2d 454, 464 (Md. 1997) (―[C]ourts have enforced forum-selection
clauses in the face of arguments that the chosen forum would not provide a remedy because its
statute of limitations had run . . . .‖).
393. Gen. Elec. Co. v. G. Siempelkamp GmbH & Co., 809 F. Supp. 1306, 1314 (S.D. Ohio
1993), aff‟d, 29 F.3d 1095 (6th Cir. 1994); see, e.g., N.Y. Marine & Gen. Ins. Co. v. M/V
Admiralengracht, No. 97 CIV. 7402(JGK), 1999 WL 253628, at *3 (S.D.N.Y. Apr. 28, 1999)
(―[T]he plaintiff had notice of the clear forum selection clause and yet chose to bring this lawsuit
here rather than in the [agreed-upon forum]. . . . The defendants were entitled to have the claim
asserted against them within the statute of limitations in the forum to which the parties agreed.‖);
Knight v. Myers, 748 P.2d 896, 901 (Kan. Ct. App. 1988) (―Everyone is presumed to know the
law, including relevant statutes of limitation.‖ (citation omitted)).
394. 131 F. Supp. 2d 787 (E.D. Va. 2000).
395. Id. at 792, 793.
396. The court observed that the plaintiff ―had notice of the clearly written forum selection
clause,‖ which was ―unambiguous.‖ Id. at 793.
397. Id.; see, e.g., Gen. Elec. Co., 809 F. Supp. at 1314 (rejecting the contention that
―enforcement of the forum selection clause would deprive plaintiff of its day in court because the
statute of limitations under German law [had] run against plaintiff‘s claims,‖ because the
―applicability of German law . . . was known to plaintiff when it agreed to the forum selection
clause‖); cf. Lien Ho Hsing Steel Enter. Co. v. Weihtag, 738 F.2d 1455, 1461 (9th Cir. 1984)
(noting that the alleged ―injustice‖ of a potential statute of limitations defense in the agreed-upon
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assumed the plaintiff consciously chose to sue in an American forum, while
intentionally allowing the Korean statute of limitations to run.398 And even
if the plaintiff‘s failure to comply with the forum selection clause was
unintentional, it was bound by the consequences of its own procedural
error.399
For these reasons, the court held that the running of the Korean statute
of limitations provided no basis for declining to enforce the parties‘
agreement to litigate in that forum.400 As another court addressing this issue
explained:
[I]f a statute of limitations bar in itself would preclude enforcement of a
forum selection clause, then in many cases the party who did not favor the
clause could frustrate its application by the simple expedient of waiting
until after the expiration of the limitations period in the designated forum
to file an action in a more convenient forum where the limitations period
401
is longer.
forum was ―compromised by the fact that appellant should have known of the forum selection
clause‖).
398. See Allianz Ins., 131 F. Supp. 2d at 793; cf. Street, Sound Around Elecs., Inc. v.
M/V Royal Container, 30 F. Supp. 2d 661, 663 (S.D.N.Y. 1999) (―By bringing suit here and not in
Germany, plaintiffs have effectively chosen to ignore the forum selection clause that they
previously agreed to; plaintiffs will not be heard now to complain of any potential timelines
problems that this choice may have created.‖).
399. See Allianz Ins., 131 F. Supp. 2d at 793 (―Even if [the plaintiff] did not deliberately
ignore its obligations under the forum selection clause, defendants . . . should not be punished for
[the plaintiff‘s] procedural decisions and/or lapses. In other words, [the plaintiff], rather than
[defendants], should bear the burden resulting from [the plaintiff‘s] failure to comply with the
forum selection clause . . . .‖); cf. Great Am. Ins. Co. v. ―Kapitan Byankin,‖ No. C-96-0258 EFL
ARB, 1996 WL 756863, at *3 (N.D. Cal. Aug. 1, 1996) (―[W]hen a plaintiff initially files in an
improper forum despite a contractual obligation, plaintiff and not defendant should bear the
burden of the running of the statute of limitations.‖).
400. See Allianz Ins., 131 F. Supp. 2d at 793. Implicit in the court‘s holding is the assumption
that the plaintiff could have avoided any statute of limitations problem by filing in Korea as well
as in its preferred forum. Cf. Silgan Plastics Corp. v. M/V Nedlloyd Holland, No. 96 CIV.
6188(JSM), 1998 WL 193079, at *1 (S.D.N.Y. Apr. 22, 1998) (describing a plaintiff who,
challenging the validity of an agreement to litigate in a ―Dutch court,‖ nevertheless ―also filed suit
in the Netherlands to avoid a possible statute of limitations defense‖).
401. Gen Elec. Co., 809 F. Supp. at 1314; cf. Allianz Ins., 131 F. Supp. 2d at 793 (―[I]f Allianz
were permitted to proceed in another forum, it ‗would create a large loophole . . . [because
Allianz] could simply postpone its cause of action until the statute of limitations [had] run in the
chosen forum and then file its action in a more convenient forum.‘‖ (alterations in original)
(quoting New Moon Shipping Co. v. MAN B & W Diesel AG, 121 F.3d 24, 33 (2d Cir. 1997))).
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Other Procedural Limitations in the Agreed-Upon Forum
Courts also occasionally suggest that a forum selection clause might be
unenforceable due to inconvenient procedural limitations in the
agreed-upon forum,402 such as where a party would be unable to retain
counsel403 or conduct meaningful pretrial discovery in that forum.404 The
premise underlying this view is that parties may be prevented from having
their day in court if they cannot retain counsel405 or conduct discovery in the
agreed-upon forum.406
However, even these potentially significant
inconveniences407 should not invalidate a forum selection clause if they
were reasonably foreseeable at the time of contracting.408
402. See Nova Ribbon Prods., Inc. v. Lincoln Ribbon, Inc., No. 89-4340, 1992 WL 211544 , at
*9 (E.D. Pa. 1992) (―There are some cases finding [a] plaintiff‘s ability to pursue its cause of
action so seriously impaired as to render a forum selection clause unenforceable. . . . [T]hose
decisions are based on the ability of the plaintiff to assert its rights procedurally, rather than
substantively.‖).
403. See, e.g., McDonnell Douglas Corp. v. Islamic Republic of Iran, 591 F. Supp. 293, 305
(E.D. Mo. 1984) (refusing to compel an American corporation to litigate in Iran because the
revolutionary government there had ―dissuaded Iranian attorneys from performing work [for] or
rendering legal services to United States clients‖).
404. See, e.g., Peabody Holding Co. v. Costain Group PLC, 808 F. Supp. 1425, 1442-43 (E.D.
Mo. 1992) (refusing to compel plaintiffs to litigate in England because they ―would not have the
ability to take pretrial depositions and would be more restricted in documentary discovery‖);
cf. Ana Distribution, Inc. v. CMA-CGM (Am.) Inc., 329 F. Supp. 2d 565, 567-68 (S.D.N.Y. 2004)
(enforcing a forum selection clause requiring litigation in France because ―the French system . . .
provides procedures for reasonable discovery‖).
405. See Afram Carriers, Inc. v. Moeykens, 145 F.3d 298, 304 (5th Cir. 1998); Pearcy Marine,
Inc. v. Seacor Marine, Inc., 847 F. Supp. 57, 60 (S.D. Tex. 1993).
406. See, e.g., Lacey v. Cessna Aircraft Co., 932 F.2d 170, 185 n.12 (3d Cir. 1991) (―[T]he
unavailability of civil discovery in British Columbia highlights . . . the serious impediments that
[plaintiff] would face in gaining access to essential sources of proof at trial in that forum.‖);
cf. Laufman v. Oakley Bldg. & Loan Co., 72 F.R.D. 116, 121 (S.D. Ohio 1976) (―We should be
wary of denying the plaintiffs full and adequate discovery . . . lest we deny them their day in
Court.‖).
407. A forum‘s restrictive approach to discovery actually may not ―inconvenience‖ any
particular party. See Aero Sys. Eng‘g, Inc. v. Opron, Inc., 21 F. Supp. 2d 990, 1001 n.3 (D. Minn.
1998) (observing that ―a forum‘s treatment of the discovery process . . . relates to the parties‘
correlative obligations to share information—which would appear to cut both ways in terms of
convenience‖); Kempe v. Ocean Drilling & Exploration Co., 683 F. Supp. 1064, 1067-68 (E.D.
La. 1988) (―Bermuda‘s allegedly more restrictive discovery practices will impose no greater
burden on plaintiffs than they will on defendants, so plaintiffs cannot complain of being treated
unfairly . . . .‖), aff‟d, 876 F.2d 1138 (5th Cir. 1989).
408. See Interamerican Trade Corp. v. Companhia Fabricadora de Pecas, 973 F.2d 487,
489-90 (6th Cir. 1992) (―[S]peculative concern regarding fairness of a foreign court, which the
parties must have considered when negotiating the agreement, does not justify refusal to enforce
the clause.‖); Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 515 (9th Cir. 1988) (stating
that the possibility that a particular court would not ―adequately safeguard [a party‘s] rights‖ is ―a
concern which the parties presumably thought about and resolved when they included the forum
selection clause in their contract‖).
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Applying this reasoning, several courts have expressly rejected the
contention that a party‘s inability to retain counsel will invalidate a forum
selection clause.409 In Corsec, S.L. v. VMC International Franchising,
LLC,410 for example, the court rejected the plaintiff‘s argument that its
difficulty obtaining counsel rendered the parties‘ agreement to litigate in a
Spanish court unenforceable.411 Citing Bremen, the court concluded that
this potential inconvenience was foreseeable at the time of contracting, and
therefore insufficient to invalidate the parties‘ forum selection clause.412
Other courts have held that the alleged inadequacy of a forum‘s
discovery procedures is also insufficient to invalidate an agreement to
litigate in that forum.413 In Mendes Junior International Co. v. Banco do
Brasil, S.A.,414 for example, the court upheld the parties‘ agreement to
litigate in Brazil despite the plaintiff‘s contention that the Brazilian courts
would not permit them to conduct meaningful pretrial discovery.415 The
court reasoned that this procedural limitation was foreseeable at the time the
parties‘ contract was formed,416 and in any event was ―not so
insurmountable as to hamstring the litigation.‖417
409. See, e.g., Abramson v. Am. Online, Inc., 393 F. Supp. 2d 438, 442 (N.D. Tex. 2005)
(―[Plaintiff‘s] assertion that she may not be able to afford to retain counsel in Virginia is . . .
insufficient to demonstrate the unfairness or grave inconvenience of the Virginia courts.‖);
Talatala v. Nippon Yusen Kaisha Corp., 974 F. Supp. 1321, 1326-27 (D. Haw. 1997) (refusing to
invalidate an agreement to litigate in Japan despite the plaintiff‘s contention that he ―would be
deprived of his day in court . . . as he [had] no means to retain counsel in Japan‖).
410. 909 So. 2d 945 (Fla. Dist. Ct. App. 2005).
411. Id. at 946-47. The plaintiff apparently was unsuccessful ―procuring Spanish counsel to
represent it on a contingency fee basis.‖ Id. at 947; see also Gomez v. Banco Bilbao Vizcaya,
S.A., No. 92 Civ. 7863 (RPP), 1993 WL 204990, at *3 (S.D.N.Y. June 7, 1993) (―Spain does not
have a contingency fee system . . . .‖), aff‟d, 17 F.3d 390 (2d Cir. 1993).
412. See Corsec, 909 So. 2d. at 947 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S.
1, 17-18 (1972)); see also Homen v. M/V SCM Tepuy II, No. 05-61626-CIV, 2006 WL 3626301,
at *5 (S.D. Fla. Aug. 2, 2006) (―The possibility that Plaintiff is financially unable to retain counsel
because foreign attorneys rarely accept contingent fee terms does not present an inconvenience so
great that it renders the forum selection clause unreasonable.‖).
413. See Marra v. Papandreou, 59 F. Supp. 2d 65, 73-74 (D.D.C. 1999) (―A foreign forum is
not inadequate because of asserted deficiencies in its discovery rules generally or its documentary
discovery rules in particular. Nor is a foreign forum rendered inadequate because it offers little or
no opportunity for depositions.‖ (footnotes omitted)), aff‟d in part and dismissed in part, 216 F.3d
1119 (D.C. Cir. 2000).
414. 15 F. Supp. 2d 332 (S.D.N.Y. 1998), appeal dismissed, 215 F.3d 306 (2d Cir. 2000).
415. See id. at 337-38; see also Panama Processes, S.A. v. Cities Serv. Co., 650 F.2d 408, 411
(2d Cir. 1981) (―Brazilian courts provide more limited discovery than do United States
courts. . . .‖); In re U.S. Fin. Secs. Litig., 69 F.R.D. 24, 48 (S.D. Cal. 1975) (―‗[D]iscovery,‘ as it
exists in the United States, is unknown abroad. In most countries, there is no procedure for
discovery . . . .‖).
416. See Mendes Junior Int‟l, 15 F. Supp. 2d at 338; cf. Commence Consultants Int‘l, Inc. v.
Vetrerie Riunite S.p.A., 867 F.2d 697, 700 (D.C. Cir. 1989).
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Even the unavailability of a jury trial in the agreed-upon forum
ordinarily will not invalidate a forum selection clause.418 Despite the
exalted status of the right to a jury trial in most American jurisdictions, 419
including Colorado,420 the right can be waived by a contractual forum
selection clause,421 provided the waiver—like other ―inconveniences‖ of
litigating in the designated forum422—was within the contemplation of the
parties when they agreed to the clause.423 Because a forum selection clause
The sole ground upon which [plaintiff] seeks to avoid its agreement for trial in Verona is that
discovery proceedings in the Italian court would be inadequate to enable it to develop its
case. When [plaintiff] agreed . . . that litigation of contractual disputes would be conducted
in the courts of Verona, it also necessarily accepted the procedures that those courts follow.
Id.
417. Mendes Junior Int‟1, 15 F. Supp. 2d at 338; cf. Manela v. Garantia Banking Ltd.,
940 F. Supp. 584, 591 (S.D.N.Y. 1996) (―The unavailability of U.S.-style document discovery in
Brazil is far from dispositive on the issue of the adequacy of a Brazilian forum.‖).
418. See IFC Credit Corp. v. United Bus. & Indus. Fed. Credit Union, 512 F.3d 989, 994
(7th Cir. 2008) (―[P]arties may agree to a forum in another nation, where juries are unknown, but
this does not make forum-selection clauses suspect.‖); Gilman v. Wheat, First Secs., Inc.,
692 A.2d 454, 464 (Md. 1997) (observing that ―courts have enforced forum-selection clauses in
the face of arguments that the chosen forum . . . did not allow for a jury trial‖).
419. Every state affords litigants a right to jury trial in civil cases. See Bentler v. Bank of Am.
Nat‘l Trust & Sav. Ass‘n, 959 F.2d 138, 142 n.5 (9th Cir. 1992). Colorado is one of only two
states that does so by statute or court rule, rather than by constitutional provision. See RDO Fin.
Servs. Co. v. Powell, 191 F. Supp. 2d 811, 812 n.4 (N.D. Tex. 2002).
420. See Whaley v. Keystone Life Ins. Co., 811 P.2d 404, 404-05 (Colo. App. 1990)
(―Although not a protected right under the Colorado Constitution, the right to a jury trial in civil
cases has been an essential part of Colorado‘s justice system almost from its inception. The right
of a party to have his case tried by a jury is an important and substantial one.‖ (citation omitted)).
421. See Seaboard Lumber Co. v. United States, 903 F.2d 1560, 1563 (Fed. Cir. 1990)
(indicating that ―a private litigant may waive its right to a jury‖ through the ―acceptance of
contract provisions providing for dispute resolution in a forum where there is no entitlement to a
jury trial‖); Raskin, S.A. v. Datasonic Corp., No. 86 C 7596, 1987 WL 8180, at *3 (N.D. Ill. Mar.
16, 1987) (―The right to a jury trial can, of course, be waived, and that is exactly what [the
defendant] did when it consented to the forum clause . . . .‖).
422. See Plum Tree, Inc. v. Stockment, 488 F.2d 754, 758 n.7 (3d Cir. 1973) (―A valid forumselection agreement may be treated as a waiver by [a] party of its right to assert its own
convenience as a factor favoring a transfer from the agreed upon forum . . . .‖); Vanderbeek v.
Vernon Corp., 25 P.3d 1242, 1247 (Colo. App. 2000) (discussing a forum selection clause
whereby the plaintiffs ―waive[d], to the fullest extent possible, the defense of an inconvenient
forum to the maintenance of any . . . action or proceeding in the courts of any jurisdiction
specified‖ in the clause), aff‟d, 50 P.3d 866 (Colo. 2002).
423. See, e.g., Hoes of Am. v. Hoes, 493 F. Supp. 1205, 1209 (C.D. Ill. 1979) (holding that the
plaintiff ―accept[ed] trial without a jury‖ by agreeing to litigate in a jurisdiction in which the
unavailability of a jury trial was ―settled . . . at the time of contracting‖); Alternative Delivery
Solutions, Inc. v. R.R. Donnelley & Sons Co., No. Civ.SA05CA0172-XR, 2005 WL 1862631, at
*12 (W.D. Tex. July 8, 2005) (―[T]he fact that Mexico might not provide a jury was foreseeable to
Plaintiff, and Plaintiff voluntarily entered the contract to choose Mexico City as the forum . . . .
Thus, Plaintiff waived the right to a jury trial under federal or state law when it entered into the
contract . . . .‖).
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gives rise to legitimate contract expectations,424 this waiver ordinarily will
be enforced even if, in retrospect, it appears to have been ill-advised.425 As
the Colorado Court of Appeals has explained, a ―party may not be relieved
of its obligations under a contract simply because it struck a bad
bargain.‖426
In short, invalidating a forum selection clause on the ground that
litigating in the agreed-upon forum would inconvenience one of the parties
would enable that party to avoid a burden for which it was compensated.427
The other party, in turn, would be deprived of a benefit for which it
provided consideration,428 thereby upsetting the parties‘ privately negotiated
risk-benefit allocation.429 The reason for rejecting such a result was alluded
to in Bremen,430 and subsequently explained in the following terms by a
state court applying the Bremen Court‘s analysis:
424. See Tjontveit v. Den Norske Bank ASA, 997 F. Supp. 799, 805 (S.D. Tex. 1998)
(―[G]iving effect to the forum selection clause would appear to fulfill the reasonable expectations
of the parties.‖); Neo Sack, Ltd. v. Vinmar Impex, Inc., 810 F. Supp. 829, 833 (S.D. Tex. 1993)
(holding that a forum selection clause ―provides a clear indication of the parties‘ expectations‖).
425. See, e.g., Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1298 (3d Cir. 1996).
[T]here is no indication that Plaintiff was not aware, or could not have made itself aware, of
the consequences that would result from including the forum selection clauses in the
Agreements[,] including whether the chosen forum was adequate and convenient. Simply
because Plaintiff is unhappy, in retrospect, about the forum it designated is insufficient to
warrant a finding that the clauses are unenforceable.
Id.
426. Roberts v. Adams, 47 P.3d 690, 696 (Colo. App. 2001); see also Sedalia Land Co. v.
Robinson Brick & Tile Co., 475 P.2d 351, 354 (Colo. App. 1970) (―[I]f a party enters into a
contract . . . with sufficient mental capacity to understand it, and not under the influence of fraud,
coercion or imposition, the courts will not relieve him of the consequences of his act on the sole
ground that the bargain is improvident as to him.‖).
427. See, e.g., Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1163 (Colo. App. 2006)
(observing that parties ―would not agree to the inclusion of such a clause in their contracts if they
thought it would put them at a disadvantage . . . in [subsequent] litigation, unless they were
compensated for assuming that risk‖); id. (discussing IFC Credit Corp. v. Aliano Bros. Gen.
Contractors, Inc., 437 F.3d 606, 610 (7th Cir. 2006)); cf. Nw. Nat‘l Ins. Co. v. Donovan, 916 F.2d
372, 378 (7th Cir. 1990) (noting that parties compensated in advance for agreeing to a forum
selection clause ―will reap a windfall if they are permitted to repudiate the forum selection
clause‖).
428. See, e.g., Stewart Org., Inc. v. Ricoh Corp., 810 F.2d 1066, 1075 (11th Cir. 1987)
(Tjoflat, J., concurring) (―The law of contracts presumes that Ricoh has already compensated
Stewart, through lowered costs or some other method, for any inconvenience that Stewart or its
witnesses might suffer by trying this case in New York.‖), aff‟d, 487 U.S. 22 (1988).
429. See Hoffman v. Burroughs Corp., 571 F. Supp. 545, 549 (N.D. Tex. 1982) (―Mere
inconvenience or additional expense . . . are the burdens which were allocated by the parties‘
private bargain.‖ (internal quotation marks omitted)); Edge Telecom, 143 P.3d at 1163 (―[T]o
allow [parties to a forum selection clause] to avoid the effect of their bargain would upset the riskbenefit analysis to which they agreed.‖ (citing IFC Credit Corp., 437 F.3d at 610)).
430. See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 14 (1972) (―[I]t would be
unrealistic to think that the parties did not conduct their negotiations, including fixing the
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Where the inconvenience of litigating in another forum is apparent at the
time of contracting, that inconvenience is part of the bargain negotiated by
the parties. Allowing a party who is disadvantaged by a contractual
choice of forum to escape the unfavorable forum-selection provision on
the basis of concerns that were within the parties‘ original contemplations
would unduly interfere with the parties‘ freedom of contract and should
431
generally be avoided.
VII. CONCLUSION
Forum selection clauses were once disfavored as a matter of public
policy, and are still frequently challenged on public policy and other
grounds. However, these clauses are now routinely upheld by courts in
Colorado and other states, which have come to recognize their value in
reducing transaction costs by avoiding future jurisdictional disputes. This
evolution in the courts‘ treatment of forum selection clauses reflects
familiar freedom of contract principles, including specifically the
assumption that private parties are better suited than courts to evaluate, and
efficiently allocate, the burdens and benefits involved in the choice of a
forum for the resolution of any disputes arising out of their transactions.
monetary terms, with the consequences of the forum clause figuring prominently in their
calculations.‖).
431. Turcheck v. Amerifund Fin., Inc., 725 N.W.2d 684, 690 (Mich. Ct. App. 2006) (citing
Bremen, 407 U.S. at 16-17).