February 13, 2018 Practice Points

Seventh Circuit Reminds Litigants that Doctrine of Forum Non Conveniens Still "Has Continuing Application in Federal Courts"

The proper procedural vehicle to enforce such a clause is the "residual" common law doctrine.

Jeffrey B. Greenspan

While 28 U.S.C. 1404(a) is a codification of the doctrine of forum non conveniens for cases in which the transferee forum is within the federal court system, the Seventh Circuit stressed that the common law doctrine still is applied when a forum-selection clause requires suit in a specific nonfederal forum.

In Mueller v. Apple Leisure Corp., Case No. 16-2885, 2018 WL 563983 (7th Cir. Jan. 26, 2018), Natasha and Scott Mueller purchased from Apple Leisure Corp. an all-inclusive trip to Secrets Resorts in Punta Cana, Dominican Republic, for their honeymoon. The Muellers booked their trip through a travel agent located in Fond Du Lac, Wisconsin. Their contract with Apple included a forum-selection clause that expressly stated in boldface type that “[t]he exclusive forum for the litigation of any claim or dispute arising out of…[this] trip shall be the Court of Common Pleas of Delaware County, Pennsylvania.”

During their vacation, Natasha became ill as a result of eating contaminated fish served to her by the resort. The Muellers filed suit against Apple in federal court in the Eastern District of Wisconsin seeking damages for breach of warranty, negligence, and medical-insurance benefits. Apple moved to dismiss the complaint for lack of personal jurisdiction, improper venue, and failure to state a claim pursuant to Rules 12(b)(2), (b)(3) and (b)(6) of the Federal Rules of Civil Procedure. It contended that under the forum-selection clause contained in their contract, the Muellers were required to file their suit in Pennsylvania. Apple did not specifically invoke the doctrine of forum non conveniens in its motion to dismiss. Nonetheless, the district court judge applied the doctrine in accordance with the Supreme Court’s decision in Atlantic Marine Const. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. Of Tex., 134 S. Ct. 568 (2013), and dismissed the case.

The Muellers appealed on procedural grounds, objecting that the district judge raised the doctrine of forum non conveniens himself. The appellate court flatly rejected the Muellers’ contention and affirmed the district court’s ruling. 

Citing to Atlantic Marine, the Court explained that “when a forum-selection clause requires suit in a specific federal forum, ‘the clause may be enforced through a motion to transfer under [28 U.S.C. ] § 1404(a),’ which permits the district court to transfer the case ‘to any other district to which the parties have agreed by contract or stipulation.’” Section 1404 has replaced the traditional remedy of dismissal with transfer. The court, however, made clear that the common law doctrine still has continuing application in federal courts when a forum-selection clause requires suit in a nonfederal forum. In such cases, transfer is not an option under section 1404(a).

The court further expounded that in a traditional forum non conveniens motion where a forum-selection clause is not involved, the proper analysis includes an evaluation of both the convenience of the parties and various public-interest considerations. However, when the case involves a forum-selection clause, the court explained that “private interests drop out of the equation,” and “the analysis is limited to public interest factors,” which, except in the most unusual cases, are not strong enough to outweigh the parties’ preselected forum. The Muellers’ circumstances did not justify ignoring their contractual choice of forum. The appellate court found that because Apple had clearly invoked the forum selection clause, the district court was soundly within its discretion to treat Apple’s motion as one brought under the doctrine of forum non conveniens and dismiss the lawsuit.

Jeffrey D. Greenspan is a member at Cozen O'Connor in Chicago, Illinois.

Jeffrey B. Greenspan