United States District Court, W.D. Louisiana, Lafayette Division
360 INTERNATIONAL, INC.
GOMEX OFFSHORE, LTD.
PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE.
pending is the motion to transfer venue (Rec. Doc. 14) that
was filed by the defendant, GoMex Energy Offshore, Ltd. The
plaintiff, 360 International, Inc., opposed the motion. Oral
argument was heard on July 11, 2019. Considering the
evidence, the law, and the arguments of the parties, and for
the reasons fully explained below, the motion is GRANTED and
this matter is transferred to the United States District
Court for the Southern District of Texas, Houston Division.
plaintiff, 360 International, and the defendant, GoMex,
entered into a Master Service Agreement (“MSA”)
in August 2014. Between August 2018 and January 2019, 360
International performed work for GoMex pursuant to the MSA.
In the complaint, 360 International alleged that it
“furnished labor, services, equipment, materials or
supplies, including but not limited to compressor rebuild,
re-engineering, repair and maintenance. . . in connection
with the drilling, completion, reworking or operation
of” certain oil or gas wells located on offshore leases
on the outer continental shelf. (Rec. Doc. 1 at 3-4). In its
briefing, 360 International described the work it performed
as “refurbishing compressors and repairing pumps and
tanks necessary to ensure GoMex's ongoing production
activities” including the installation and testing of
the refurbished and repaired equipment on fixed offshore
platforms. (Rec. Doc. 20 at 8).
International alleged that GoMex failed to pay the full
amount invoiced for the work it performed and further alleged
that GoMex now owes 360 International over two million
dollars. 360 International contended in its complaint that a
statutory lien and privilege exists under La. R.S. 9:4861,
et seq., and 43 U.S.C. § 1333(a)(2)(A) for the
payment of the amount owed. By filing this lawsuit, 360
International seeks to have that lien and privilege
recognized and enforced by obtaining a writ of sequestration
or a money judgment.
plaintiff's complaint was filed in this venue. However,
the MSA contains a mandatory forum-selection clause, which
reads as follows: “Notwithstanding anything to the
contrary, the state and federal courts located in Harris
County, Texas shall be the sole venue for the resolution of
any disputes arising hereunder.” (Rec. Doc. 14-2 at 8).
Citing this provision of the MSA, GoMex responded to the
complaint by filing the instant motion, seeking to have this
lawsuit transferred to the federal district court in Houston,
Harris County, Texas.
Is the Forum-Selection Clause Mandatory?
contract's forum-selection clause is mandatory if it
requires that litigation arising from the contract be carried
out in a given forum. There is a strong presumption in favor of
enforcing mandatory forum-selection clauses. “For cases
where all parties signed a forum selection contract, the
analysis is easy: except in a truly exceptional case, the
contract controls.” In this case, there is no dispute that
the forum-selection clause in the parties' MSA is
mandatory. Both parties signed the MSA containing the
forum-selection clause, and the forum-selection clause states
that the sole venue for the resolution of any disputes
arising under the MSA is the state or federal courts in
Harris County, Texas. Furthermore, in their briefing, both
parties acknowledged that the clause is mandatory. (Rec. Doc.
14-1 at 1; Rec. Doc. 20 at 5).
Is the Forum-Selection Clause Reasonable?
presumption favoring the enforcement of mandatory
forum-selection clauses may be overcome by a showing that the
clause is unreasonable. A forum-selection clause may be
(1) the incorporation of the forum selection clause into the
agreement was the product of fraud or overreaching; (2) the
party seeking to escape enforcement will for all practical
purposes be deprived of his day in court because of the grave
inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law will deprive the
plaintiff of a remedy; or (4) enforcement of the forum
selection clause would contravene a strong public policy of
the forum state.
case, GoMex urged the court to enforce the forum-selection
clause while 360 International argued that enforcement of the
forum-selection clause would be unreasonable. More
particularly, 360 International argued that enforcement of
the clause would be unreasonable because it would deny 360
International its day in court, would deprive it of a remedy,
and would contravene a strong public policy of the State of
Louisiana. 360 International also argued that the dispute
underlying this lawsuit does not fall within the scope of the
MSA's forum-selection clause.
of Day in Court.
plaintiff alleged that the court has subject-matter
jurisdiction either (a) under 28 U.S.C. § 1331 because
the dispute arises under the Outer Continental Shelf Lands
Act, 43 U.S.C. § 1349(b)(1); or (b) under 28 U.S.C.
§ 1332 because the parties are diverse in citizenship
and the amount in controversy exceeds the statutory minimum.
The plaintiff further alleged that if subject-matter
jurisdiction is based on diversity, the substantive law of
the forum state would be applied - Louisiana law if the case
remains in this forum but Texas law if the case were
transferred. The plaintiff then argued in opposition to
the transfer motion that the application of Texas law would
deprive the plaintiff of its day in court and deprive it of
remedies available under Louisiana law.
International argued that it would be deprived of its day in
court and deprived of certain remedies if the case were
transferred to Texas because the relevant Texas lien or
privilege statute does not extend to production of
hydrocarbons and requires the posting of security (which 360
International alleged it is not in a position to post) while
the relevant Louisiana statute extends to the production of
hydrocarbons but does not require security to be posted.
While having to post security might be a financial burden
that 360 International might prefer not to incur and might
make litigation in Texas more onerous than litigation in
Louisiana, the statutory requirement for security under Texas
law is not an all-out bar to litigation that would deprive
360 International of its day in court. Therefore,
transferring this case to Texas would not result in 360
International being denied its day in court.
of a Remedy.
International argued that it would be deprived of remedies
available under the Louisiana Oil Well Lien Act if the
forum-selection clause were enforced and the matter
transferred to Texas. But the unavailability of some
particular remedy in the transferee court does not require
the forum-selection clause to be enforced. It is only when
transferring the case to a forum that would effectively
afford no remedy whatsoever that this factor should control.
“[T]he fact that certain types of remedies are
unavailable in the foreign forum does not change the calculus
if there exists a basically fair court system in that forum
that would allow the plaintiff to seek some
relief.” Therefore, transferring this case to Texas
would not result in 360 International having no remedies at
Strong Public Policy.
International argued that the MSA's forum-selection
clause is unreasonable and therefore should not be enforced
because it is contrary to a strong public policy of the State
of Louisiana, established in La. R.S. 9:2779. That statute
reads as follows:
The legislature finds that, with respect to construction
contracts, subcontracts, and purchase orders for public and
private works projects, when one of the parties is domiciled
in Louisiana, and the work to be done and the equipment and
materials to be supplied involve construction projects in
this state, provisions in such agreements requiring disputes
arising thereunder to be resolved in a forum outside of this
state or requiring their interpretation to be governed by the
laws of another jurisdiction are inequitable and against the
public policy of this state.
International argued that the MSA is a construction contract
and, therefore, the forum-selection clause is contrary to
public policy. However, Article 2779 does not define the term
“construction contract.” Therefore, 360
International compared the work done under the MSA to the
type of work that has been characterized as arising under a
construction contract. Notably, however, the parties did not
direct this Court to any case in which an MSA was held to be
a construction contract for purposes of Article 2779 or to
any case in which this same argument was previously made with
regard to an MSA. MSAs are very common in the oil and gas
industry, and Texas companies frequently use MSAs to contract
with Louisiana companies. Therefore, this Court finds it
curious that, if such contracts are construction contracts
under Article 2779, no court has previously been confronted
with this issue.
Louisiana statute does define the term “construction
contract.” La. R.S. 9:2780.1, which is found in the
same chapter of the Louisiana revised statutes as Article