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Royal Smit Transformers BV v. HC Bea-Luna

United States District Court, E.D. Louisiana

March 2, 2017

ROYAL SMIT TRANSFORMERS BV ET AL.
v.
HC BEA-LUNA M/V ET AL.

         SECTION I

          ORDER AND REASONS

          LANCE M. AFRICK UNITED STATES DISTRICT JUDGE

         Defendant Central Oceans USA, LLC (“Central Oceans”) has filed a motion[1] to transfer venue pursuant to 28 U.S.C. § 1404(a). Central Oceans requests a transfer of this entire case to the U.S. District Court for the Western District of Virginia, Charlottesville Division. If the entire case cannot be transferred, Central Oceans asks that the claims against it be severed and transferred. The motion is opposed by the plaintiffs and by the other defendants. For the following reasons, the Court transfers the plaintiffs' claims against Central Oceans to the Western District of Virginia.

         I.

         The plaintiffs claim to be the owners and/or insurers of three electrical transformers that were allegedly damaged while in transit from Rotterdam, the Netherlands, to St. Gabriel, Louisiana.[2] The plaintiffs contracted with Central Oceans for the transport of the transformers. Central Oceans, in turn, entered into contracts with the other defendants to provide transportation services as follows: ocean carriage aboard the MV HC BEA-LUNA by defendant Onego Shipping & Chartering BV (“Onego Shipping”); rail carriage by defendant Illinois Central Railroad Company (“Illinois Central”); and truck carriage by defendant Berard Transportation, Inc. (“Berard”). Onego Shipping transported the transformers from a port in the Netherlands to the Port of New Orleans, Illinois Central moved the transformers from the Port of New Orleans to St. Gabriel by rail, and Berard conveyed the transformers by truck from the rail cars in St. Gabriel to the Entergy substation in St. Gabriel where they were to be installed. The plaintiffs claim that after the transformers were delivered, an inspection determined that the transformers sustained at least $1.6 million in damages as a result of excessive vibration during shipment.

         II.

         The plaintiffs' contract with Central Oceans contains a forum-selection clause which provides:

         5. Law and Jurisdiction

Disputes arising under this MT Bill of Lading shall be determined by the courts and in accordance with the law at the place where the MTO [i.e., Central Oceans] has his principal place of business.

R. Doc. No. 5-4, at 2. No one disputes the validity of the forum-selection clause as to disputes arising between the plaintiffs and Central Oceans. No one disputes that the clause is mandatory as opposed to permissive. No one disputes that Central Oceans has its principal place of business in the Western District of Virginia. Nevertheless, the plaintiffs and the other defendants argue that the private interests of the parties and the interests of the public require that the litigation be maintained in this Court notwithstanding the forum-selection clause.

         First, the defendants opposing transfer stress that they are not subject to the forum-selection clause and argue that they are not subject to personal jurisdiction in the Western District of Virginia. See R. Doc. No. 21, at 1 (“Most importantly, no district court in Virginia could exercise personal jurisdiction over Berard because of the absolute lack of contacts between Berard and Virginia both generally and specific to this dispute.”); R. Doc. No. 23, at 3 (“[T]he Western District of Virginia cannot exercise personal jurisdiction over Onego, since Onego lacks the requisite minimum contacts with Virginia.”); R. Doc. No. 24, at 2 (Illinois Central “denies that it is subject to general personal jurisdiction in the . . . the Western District of Virginia as [Illinois Central] has not in any way purposefully availed itself of the privilege of conducting activities within Virginia.”).[3]

         Second, the parties opposing transfer argue that trying the case in the Eastern District of Louisiana will be more convenient and more efficient than trying the lawsuit in Virginia. According to Onego Shipping, because the transformers were delivered to the Port of New Orleans in this district and then transported to St. Gabriel in the Middle District of Louisiana, any surveys and/or inspections of the cargo would “presumably, ” therefore, have been performed in New Orleans and St. Gabriel, see R. Doc. No. 23, at 5, and discovery would be more convenient. Moreover, although the lawsuit involves parties from around the world, many of the witnesses and companies that actually handled the cargo-the stevedores, the railroad, the trucking company, and Entergy Louisiana, LLC-are likely located in Louisiana. See Id. The cost of obtaining testimony may thus be lower in the Eastern District of Louisiana. See id.; see also R. Doc. No. 21, at 6 (“Not a single portion of this voyage even remotely concerned the Commonwealth of Virginia.”). Further, the parties will have the ability to compel the attendance of potential non-party witnesses at trial if the litigation remains here. See Fed. R. Civ. P. 45(c)(1). They may not be able to do so if the case is transferred.[4]

         Central Oceans responds that the plaintiffs knew at the time they entered into the contract that Central Oceans would need to contract with other companies in order to fulfill its obligations. The contract itself provides that all of its provisions would be enforceable notwithstanding that eventuality. The contract reads:

         I. ...


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