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Fucich Contracting, Inc. v. Shread-Kuyrkendall & Associates, Inc.

United States District Court, E.D. Louisiana

July 6, 2018

FUCICH CONTRACTING, INC. Plaintiff
v.
SHREAD-KUYRKENDALL & ASSOCIATES, INC. ET AL., Defendants

         SECTION: “E”

          ORDER AND REASONS

          SUSIE MORGAN, UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant St. Bernard Parish's motion to transfer, or in the alternative, motion to dismiss.[1] St. Bernard Parish seeks to transfer this case to the 34thJudicial District Court for the State of Louisiana pursuant to a forum selection clause in the contract between St. Bernard Parish and Plaintiff Fucich Contracting, Inc. The motion is opposed.[2] After considering the arguments of the parties, the terms of the contract, and the governing case law, the Court hereby DENIES the motion.[3]

         BACKGROUND

         This case arises out of a contract awarded by the St. Bernard Parish government (“SBP”) to the Plaintiff, Fucich Contracting, Inc. (“FCI”), to upgrade several pump stations for the Lake Borgne Basin Levee District in St. Bernard Parish.[4] St. Bernard Parish retained Defendant Shread-Kuyrkendall & Associates, Inc. (“SKA”) to provide the engineering services for the upgrade project, which involved the installation of four replacement engines in the pump stations.[5] Based on specifications provided by SKA, FCI submitted the lowest bid for the project, and was subsequently awarded a contract in the amount of $5, 009, 908 for the construction work (the “Contract”).[6] Plaintiff alleges the Defendants failed to issue change orders in response to various changed conditions during the construction work, and filed suit in this Court asserting claims of negligence and breach-of-contract.[7]

         SBP now seeks the transfer of this matter to the 34th Judicial District Court for the State of Louisiana.[8] SBP concedes this Court has diversity jurisdiction over the dispute, but argues the Contract's forum selection clause mandates that any suit arising out of the Contract be brought in the 34th Judicial District Court.[9] SBP also asserts that the case should be transferred pursuant to 28 U.S.C. § 1404(a) under the doctrine of forum non conveniens.[10] Alternatively, SBP seeks to have the case dismissed without prejudice under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a).[11]

         FCI opposes the motion.[12] FCI insists the Contract's forum-selection clause is permissive, rather than mandatory, and therefore does not require that this matter be brought in 34th Judicial District Court.[13] FCI further argues the forum non conveniens doctrine, which gives the Plaintiff's choice of forum considerable weight, requires a denial of SBP's motion.

         LAW AND ANALYSIS

         I. Forum Selection Clause

         If a forum selection clause is both mandatory and enforceable, then a party may seek to enforce it through 28 U.S.C. § 1404(a). “A mandatory [forum selection clause] affirmatively requires that litigation arising from the contract be carried out in a given forum.”[14] A clause is mandatory “only if it contains clear language specifying that litigation must occur in the specified forum.”[15] “For a forum selection clause to be exclusive, it must go beyond establishing that a particular forum will have jurisdiction and must clearly demonstrate the parties' intent to make that jurisdiction exclusive.”[16]

         The Contract in this case provides, “Contractor yields to the jurisdiction of the 34thJudicial District Court and formally waives any pleas of lack of jurisdiction, in the event of suit under this Agreement.”[17] SBP interprets this language to grant exclusive jurisdiction to the 34th Judicial District Court. SBP argues, “the active tense of ‘yields' signifies the act of ‘giving way to' the Thirty-Fourth Judicial District to the exclusion of the Eastern District of Louisiana, or any other alternate forum.”[18] According to SBP, construing this provision as a permissive forum selection clause would “rende[r] the use of the word ‘yield' meaningless.”[19]

         The Fifth Circuit interpreted a similar forum selection clause in City of New Orleans v. Municipal Administration Services, Inc.[20] In that case, the contract provided, “The undersigned Contractor does further hereby consent and yield to the jurisdiction of the State Civil Courts of the Parish of Orleans and does hereby formally waive any please of jurisdiction on account of the residence elsewhere of the undersigned Contractor.”[21]Noting that “[a] party's consent to jurisdiction in one forum does not necessarily waive its right to have an action heard in another, ” the court determined “the clause evinces conclusively no more than that [the Plaintiff] consented to jurisdiction and agreed not to raise pleas to jurisdiction.”[22] As a result, the court found the defendant was not entitled to a remand based on the forum selection clause.

         In light of City of New Orleans, the Court finds that the forum selection clause in this case is not mandatory. The clause does not expressly provide for a waiver of Plaintiff's right to sue in an otherwise proper forum, and does not state that FCI consents to the “exclusive” jurisdiction of the 34th Judicial District Court.[23] The clause in no way waives the jurisdiction of this Court, and it does not compel FCI to file suit in the 34th Judicial District Court. Rather, the clause waives only FCI's right to contest jurisdiction of the 34thJudicial Court. Accordingly, SBP is not entitled to a transfer of this case based on the Contract's forum selection clause.

         II. Forum non conveniens

         SPB also asserts the case should be “transferred under 28 U.S.C. § 1404(a) and the doctrine of forum non conveniens to the Thirty-Fourth Judicial District Court.”[24] SPB misunderstands the application of section 1404(a) and forum non conveniens to this case, however.

         The transfer-of-venue function of forum non conveniens has been superseded by 28 U.S.C. § 1404(a), which only permits transfer to another appropriate federal forum.[25]“For the federal court system, Congress has codified the doctrine and has provided for transfer, rather than dismissal, when a sister federal court is the more convenient place for trial of the action.”[26] SPB seeks transfer to a Louisiana state court, rather than a different federal district court. “For the . . . set of cases calling for a nonfederal forum, [section] 1404(a) has no ...


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