Brief of Professor Stephen E. Sachs as Amicus Curiae, Atlantic Marine Construction Co. v. U.S. District Court
67 Pages Posted: 25 Jun 2013 Last revised: 28 Dec 2014
Date Written: June 24, 2013
[This brief was filed in support of neither party in No. 12-929 (U.S., cert. granted Apr. 1, 2013).]
The parties in this case defend two sides of a many-sided circuit split. This brief argues that a third view is correct.
If a contract requires suit in a particular forum, and the plaintiff sues somewhere else, how may the defendant raise the issue? Petitioner Atlantic Marine Construction Company suggests a motion under Federal Rule of Civil Procedure 12(b)(3) or 28 U.S.C. § 1406, on the theory that the contract renders venue improper. Respondent J-Crew Management, Inc. contends that venue remains proper, and that the defendant’s only remedy is a transfer motion under § 1404.
Both sides are wrong. Forum-selection clauses have no effect on venue, which is defined by statute. While parties can waive their venue objections in advance, they cannot destroy proper venue by private agreement.
At the same time, an exclusive forum-selection clause does more than just inform a court's discretion under § 1404. If the clause is valid and enforceable, it waives the plaintiff's right to sue in an excluded forum, offering the defendant an affirmative defense to liability in that forum and the right to have the suit dismissed.
The Federal Rules already specify the correct method of raising this defense: it must be affirmatively stated in the answer, which the defendant may accompany with an immediate summary judgment motion. Often, as here, the parties' agreement will be incorporated in the complaint. In that case, the defendant may alternatively raise the defense in a pre-answer Rule 12(b)(6) motion to dismiss, or a post-answer Rule 12(c) motion for judgment on the pleadings.
The Rules' default procedures are practical as well as correct. They enable defendants to obtain quick and decisive enforcement of their forum-selection clauses, through the same procedures used to enforce binding prior judgments, settlements, or arbitral awards. And while there may be some practical advantages to treating forum-selection clauses as if they affected venue, these advantages have been greatly exaggerated -- and, in any case, provide no reason to misapply the Federal Rules.
Here, the parties agreed that their disputes "shall be litigated" in state or federal court in Norfolk, Va. J-Crew violated that agreement by suing in the Western District of Texas. Assuming, as the Court should, that the clause at issue is valid and enforceable, the complaint could have been dismissed by motion under Rule 12(b)(6). Instead, Atlantic Marine made this forum-selection defense under the label of Rule 12(b)(3). That may have been good enough to raise the issue, but the Court should leave such preservation questions to the court of appeals in the first instance. Because that court (and the district court) proceeded on the erroneous assumption that § 1404 was the only available remedy, this Court should identify the correct procedure, vacate the judgment, and remand the case for further proceedings.
[With Jeffrey S. Bucholtz and Daniel S. Epps.]
Keywords: forum selection, forum-selection clauses, venue, Federal Rules, Atlantic Marine, Supreme Court
JEL Classification: K12, K4, K40, K41
Suggested Citation: Suggested Citation