Mandamus FORUM SELECTION CLAUSES
Mandamus review of orders denying motion to dismiss on inconvenient forum grounds. An
adequate
remedy by appeal does not exist when a motion to dismiss for forum non conveniens is erroneously
denied.
See In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex. 2007).
As a general rule, forum-selection clauses are enforceable, and the party challenging the forumselection clause bears a heavy burden of proof. In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 675
(Tex.
2009) (citing In re Lyon, 257 S.W.3d at 231–32). A trial court abuses its discretion in refusing to
enforce the
forum-selection clause, unless the party opposing enforcement of the clause can clearly show that: (1)
enforcement would be unreasonable or unjust, (2) the clause is invalid for reasons of fraud or
overreaching, (3)
enforcement would contravene a strong public policy of the forum where the suit was brought, or (4)
the selected
forum would be seriously inconvenient for trial. Id. Applying this standard to the present case, we
conclude that
the trial court clearly abused its discretion by placing the burden of proof on IPA to demonstrate that it
showed the
forum-selection clause to Riddell. In re Hall, No. 07-0322 (Tex, Jun. 12, 2009) (Medina)(juvenile
justice, habeas
corpus, access to justice, free appointed counsel, statutory construction)
Forum-selection clauses are generally enforceable, and a party attempting to show that such a clause
should
not be enforced bears a heavy burden. In re Lyon Fin. Servs., Inc., 257 S.W.3d 228, 232 (Tex. 2008)
(per curiam)
(citing In re AIU Ins. Co., 148 S.W.3d 109, 113 (Tex. 2004)). A trial court abuses its discretion if it
refuses to
enforce a forum-selection clause unless the party opposing enforcement clearly shows that (1) the
clause is
invalid for reasons of fraud or overreaching, (2) enforcement would be unreasonable or unjust, (3)
enforcement
would contravene a strong public policy of the forum where the suit was brought, or (4) the selected
forum would
be seriously inconvenient for trial. Id. at 231-32; AIU, 148 S.W.3d at 112; see also M/S Bremen v.
Zapata OffShore Co., 407 U.S. 1, 15-17 (1972). Mandamus relief is available to enforce forum-selection
agreements
because there is no adequate remedy by appeal when a trial court abuses its discretion by refusing to
enforce a
valid forum-selection clause that covers the dispute. Lyon, 257 S.W.3d at 231; see also AIU, 148
S.W.3d at 11520. In Re International Profit Associates (Tex. 2009)(forum selection clause enforced by mandamus)
A motion to dismiss is the proper procedural mechanism for enforcing a forum selection clause
that a party
to the agreement has violated in filing suit. Phoenix Network Techs. v. Neon Sys., 177 S.W.3d 605,
610 (Tex. App.-
Houston [1st Dist.] 2005, no pet.). The Texas Supreme Court has held that a "forum [selection] clause
should
control absent a strong showing that it should be set aside." In re AIU Ins. Co., 148 S.W.3d 109, 112
(Tex. 2004)
(orig. proceeding) (citing The Bremen v. Zapata Offshore Co., 407 U.S. 1, 92 S. Ct. 1907, 1913, 32 L.
Ed. 2d 513
(1972)). A trial court abuses its discretion if it refuses to enforce the forum selection clause unless the
party
opposing enforcement of the clause can show clearly that (1) enforcement would be unreasonable or
unjust, (2)
the clause is invalid for reasons of fraud or overreaching, (3) enforcement would contravene a strong
public
policy of the forum where the suit was brought, or (4) the selected forum would be seriously
inconvenient for trial.
See In re Int'l Profit Assoc., Inc., 286 S.W.3d 921, 923 (Tex. 2009) (orig. proceeding). The burden of
proof is
heavy for the party challenging enforcement. In re Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010)
(orig.
proceeding).
When a party seeks to enforce a forum selection clause, the trial court must first determine whether
the claims
raised in the lawsuit fall within the scope of that clause. See In re TCW Global Project Fund II, Ltd.,
274 S.W.3d
166, 169 (Tex. App.-Houston [14th Dist.] 2008, orig. proceeding [mand. denied]). If the claims fall
within the scope
of the forum selection clause, the court then must decide whether the clause is enforceable. See id.
A claim is brought in contract if liability arises from the contract. See In re Kaplan Higher Educ.
Corp., 235 S.W.3d
206, 209 (Tex. 2007) (orig. proceeding). A claim is brought in tort if liability is derived from other
general
obligations imposed by law. Id. We are not to follow slavish adherence to a contract/tort distinction; to
hold to the
contrary would allow a litigant to avoid a forum selection clause with artful pleading. See In re Int'l
Profit Assoc.,
274 S.W.3d at 677 (citing Ginter ex rel. Bullard v. Belcher, Prendergast & LaPorte, 536 F.3d 439, 444
(5th Cir.
2008)). Rather, we must determine the issue after undertaking a common sense examination of the
substance of
the claims made. See In re Int'l Profit Assoc., 274 S.W.3d at 677. Pleading alternative noncontractual
theories of
recovery will not alone avoid a forum selection clause if those alternate claims arise out of the
contractual
relations and implicate the contract's terms. Christian Educ. v. Oracle Corp., 925 S.W.2d 66, 72 (Tex.
App.-Dallas
1996, no pet.).
Recent Forum Selection and Forum Inconveniens Decisions of the
Texas
Supreme Court (Tex. 2008)(Tex. 2009)(Tex. 2010)
In Re Ensco Offshore Int'l Co., No. 09-0317 (Tex. May 7, 2010)(Tex. May 7, 2010)(per curiam)
(forum non conveniens mandamus granted)
IN RE ENSCO OFFSHORE INTERNATIONAL COMPANY, ENSCO INTERNATIONAL
INCORPORATED AND ENSCO
OFFSHORE COMPANY, INDIVIDUALLY AND AS SUCCESSOR-IN-INTEREST OF CHILES
OFFSHORE, INC.; from
Dallas County;
5th district (05-08-01092-CV, ___ SW3d ___, 08-19-08)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the writ of mandamus.
Per Curiam Opinion [pdf]
See Electronic Briefs in IN RE ENSCO OFFSHORE INTERNATIONAL CO.
In Re Lisa Laser USA, Inc., No. 09-0557 (Tex. Apr. 16, 2010)(per curiam)
(forum selection clause enforced by mandamus)
IN RE LISA LASER USA, INC. AND LISA LASER PRODUCTS, OHG.; from Travis County;
3rd district (03-09-00240-CV, ___ SW3d ___, 05-15-09)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the writ of mandamus.
Per Curiam Opinion [pdf]
(Justice Hecht not sitting)
eBriefs N/A
In re Laibe Corp., No. 09-0426 (Tex. Mar. 26, 2010)(per curiam)
(contractual forum selection enforced by mandamus, laches waiver argument rejected)
IN RE LAIBE CORPORATION; from Wise County;
2nd district (02-09-00089-CV, ___ SW3d ___, 04-24-09)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the writ of mandamus.
Per Curiam Opinion [pdf]
View Electronic Briefs in No. 09-0426 IN RE LAIBE CORPORATION
In re ADM Investor Services, Inc., No. 08-0570 (Tex. Feb. 19, 2010)(Opinion by Green) (forum
selection clause
enforced by mandamus) (poor health of elderly plaintiff as reason for keeping case in Texas rejected)
IN RE ADM INVESTOR SERVICES, INC.; from Rains County;
12th district (12-08-00125-CV, 257 SW3d 817, 06-30-08)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the petition for writ of mandamus.
Justice Green delivered the opinion of the Court. [pdf]
Justice Don R. Willett delivered a concurring opinion in In re ADM Investor Services, Inc.
Arb Agreement Likened to Forum Selection Clause
In Re Golden Peanut Co.,LLC, No. 09-0122 (Tex. Nov. 20, 2009)(per curiam)(mandamus compelling
arbitration
granted) (arbitration and nonsignatories, wrongful death plaintiffs bound by arb agreement signed by
worker killed
on the job as derivative claimants and must arbitrate claim against employer,
pre-injury waivers, forum selection vs. waiver of substantive rights)
IN RE GOLDEN PEANUT COMPANY, LLC; from Gaines County;
11th district (11 08 00215 CV, 269 SW3d 302, 11 13 08)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the petition for writ of mandamus.an agreement to arbitrate is a waiver of neither a cause of
action nor the
rights provided under section 406.033(a), but rather an agreement that those claims should be tried in
a specific
forum. See, e.g., Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974) (holding that arbitration
clauses are, “in
effect, a specialized kind of forum-selection clause”). See also Mitsubishi Motors Corp. v. Soler
ChryslerPlymouth, Inc., 473 U.S. 614, 628 (1985) (stating that, “[b]y agreeing to arbitrate a statutory claim, a
party does
not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral,
rather than
a judicial, forum”). Accordingly, section 406.033(e) does not render the arbitration agreement void.
In re International Profit Associates, Inc. No. 08-0531 (Tex. Jun. 12, 2009)(per curiam) (mandamus to
enforce
forum selection clause choice of law clause granted)(who has evidentiary burden in dispute over
forum selection
clause, where dispute should be litigated?) CITE: In re Int’l Profit Assocs., Inc., 274 S.W.3d 672 (Tex.
2009) (orig.
proceeding)
In Re G.E. Co., No. 07-0195 (Tex. Dec. 5, 2008) (Johnson) (forum non conveniens mandamus
granted, asbestos
suit) (we [previously] held that an adequate remedy by appeal does not exist when a motion to dismiss
for forum
non conveniens is erroneously denied. See In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex. 2007).
We review a trial court’s decision about whether to dismiss a case on forum non conveniens grounds
for an abuse
of discretion. A court abuses its discretion if its decision is arbitrary, unreasonable, or without
reference to guiding
principles. In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 676 (Tex. 2007).
The applicable forum non conveniens statute provides:
If a court of this state, on written motion of a party, finds that in the interest of justice and for the
convenience of
the parties a claim or action to which this section applies would be more properly heard in a forum
outside this
state, the court shall decline to exercise jurisdiction under the doctrine of forum non conveniens and
shall stay or
dismiss the claim or action. In determining whether to grant a motion to stay or dismiss an action
under the
doctrine of forum non conveniens, the court shall consider whether:
(1) an alternate forum exists in which the claim or action may be tried;
(2) the alternate forum provides an adequate remedy;
(3) maintenance of the claim or action in the courts of this state would work a substantial injustice to
the moving
party;
(4) the alternate forum, as a result of the submission of the parties or otherwise, can exercise
jurisdiction over all
the defendants properly joined to the plaintiff’s claim;
(5) the balance of the private interests of the parties and the public interest of the state predominate in
favor of
the claim or action being brought in an alternate forum, which shall include consideration of the extent
to which an
injury or death resulted from acts or omissions that occurred in this state; and
(6) the stay or dismissal would not result in unreasonable duplication or proliferation of litigation.
Tex. Civ. Prac. & Rem. Code § 71.051(b).
In Re G.E. Co., No. 07-0195 (Tex. Dec. 5, 2008) (Johnson) (forum non conveniens mandamus
granted, asbestos
suit) (we [previously] held that an adequate remedy by appeal does not exist when a motion to dismiss
for forum
non conveniens is erroneously denied. See In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex. 2007).
IN RE GENERAL ELECTRIC COMPANY, ET AL.; from Harris County; 1st district (01-06-01105CV, ___ SW3d
___, 03-02-07)
stay order issued March 20, 2007, lifted
The Court conditionally grants the petition for writ of mandamus.
Justice Johnson delivered the opinion of the Court.
(Justice O'Neill not sitting)
In re Lyon Financial Services, Inc., No. 07-0486, 257 S.W.3d 228 (Tex. June 20, 2008)(per curiam)
(orig. proc.)
(mandamus, forum selection clause, motion to dismiss improperly denied)
IN RE LYON FINANCIAL SERVICES, INC.; from Hidalgo County; 13th district (13-07-00269-CV,
___ SW3d ___, 0531-07)
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally
grants the petition for writ of mandamus.
Per Curiam Opinion
Contrary to MNI’s position, mandamus is available to enforce a forum-selection clause. There is no
adequate
remedy by appeal when a trial court refuses to enforce a forum-selection clause, and such clauses can
be
enforced via mandamus. See In re AutoNation, Inc., 228 S.W.3d 663, 667-68 (Tex. 2007).
By entering into an agreement with a forum-selection clause, the parties effectively represent to each
other that
the agreed forum is not so inconvenient that enforcing the clause will deprive either party of its day in
court,
whether for cost or other reasons
Recent venue rulings of the Texas Supreme Court (Tex. 2008)
In re Team Rocket, LP, No. 06-0414 (Tex. May 23, 3008) (orig. proc.) (Opinion by Justice Green)
(mandamus granted to enforce first transfer of venue, nonsuit and refiling in third county disapproved)
Justice Wainwright delivered a concurring opinion
RECENT COURT OF APPEALS CASES (PETITION DENIED)
07-0858
DEEP WATER SLENDER WELLS, LTD., JAMES G. WOOD & PREDA CONSULTANTS, INC. v.
SHELL
INTERNATIONAL EXPLORATION & PRODUCTION, INC., JIM ADAM, GRAHAM
BRANDER, & MARK LEONARD;
from Harris County; 14th district (14-06-00165-CV, 234 SW3d 679)(challenges to forum selection
clause)
motion to strike exhibit dismissed as moot)
Until recently, Texas courts and federal courts used different analyses to determine the enforceability
of
mandatory forum-selection clauses.[3] See Phoenix Network Techs. (Europe), Ltd., 177 S.W.3d at
611B14.
However, the Supreme Court of Texas recently adopted the federal courts' analysis of these
clauses. See
Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 793 (Tex. 2005); In re Automated
Collection Tech.,
Inc., 156 S.W.3d 557, 558-59 (Tex. 2004); In re AIU Ins. Co., 148 S.W.3d 109, 111-14 (Tex. 2004);
Phoenix
Network Techs. (Europe), Ltd., 177 S.W.3d at 614.
Under the unambiguous language of the Consulting Agreement, Deep Water and Shell Services
agreed that the
courts of The Hague shall have exclusive jurisdiction to resolve any controversy or claim of whatever
nature
arising out of or relating to the Consulting Agreement. This is a mandatory forum-selection clause. In
deciding
whether to enforce a mandatory forum-selection clause, courts must determine whether the claims in
the case at
hand fall within the scope of the forum-selection clause and whether the court should enforce the
clause. In
addition to resolving issues of scope and enforceability, courts also may have to decide issues as to
whether
nonsignatories to the contract can enforce the forum-selection clause contained therein. In this case,
the Deep
Water Parties have asserted arguments in all three of these categories.