New Test for Forum Selection Clauses

One of the first issues litigants face in multiparty litigation is whether the plaintiff filed the case in the appropriate forum. This question can quickly become complicated when some, but not all, of the parties are subject to a forum selection clause.

In In re Howmedica Osteonics Corp., the U.S. Court of Appeals for the Third Circuit tackled the problem by establishing a new test for situations where both contracting and noncontracting parties are found in the same case. Although the new test is not flawless, it seeks to harmonize the competing private and public interests that govern such cases, say ABA Section of Litigation leaders.